Post Office unveils plan to add additional £250m annually to postmaster incomes

Post Office has on Wednesday set out an ambitious five-year Transformation Plan to deliver a ‘New Deal for Postmasters’ that significantly increases their total annual income through revenue sharing and strengthens their role in the direction of the organisation.

The ‘New Deal for Postmasters’ follows a strategic review initiated by Nigel Railton, chair of Post Office Ltd, in May. The Transformation Plan sets out an ambition to deliver a quarter of a billion pounds boost to postmasters’ income by 2030.

These improvements to remuneration are subject to funding discussions with government which the company said are “positive and ongoing”.

Alongside this, the Post Office is establishing a new Postmaster Panel where serving postmasters will help the business to improve the support and training it provides to postmasters. A new Consultative Council will also be established to work with the Post Office on the delivery of the Transformation Plan, and to challenge and feedback to ensure postmasters’ interests remain front and centre.

“The value postmasters deliver in their communities must be reflected in their pockets, and this Transformation Plan provides a route to adding more than £250 million annually to total postmaster remuneration by 2030, subject to government funding,” Railton said in a speech delivered to postmasters and Post Office staff.

“It begins a new phase of partnership during which we will strengthen the postmaster voice in the day-to-day running and operations of the business, so they are represented from the frontline to the boardroom.”

In the speech, Railton outlined the commercial, operational, cultural, and reputational challenges that must be addressed to deliver change for postmasters and learn the lessons from the Horizon IT public Inquiry.

“The Post Office has a 360-year history of public service and today we want to secure that service for the future by learning from past mistakes and moving forward for the benefit of all postmasters. We can, and will, restore pride in working for a business with a legacy of service, rather than one of scandal,” he said.

Railton stressed that that the Transformation Plan is a five-year journey encompassing a series of changes. These include:

• Strengthening postmasters’ commercial offer to their customers, particularly in banking, and to work with the government, banks, LINK and Cash Access UK to accelerate the roll out of banking hubs.
• Delivering a lower-risk, better-value new branch IT system for postmasters gradually.
• A major investment in the automation of cash and mails services in-branch to reduce postmasters’ cost-to-serve in their branches and to give customers the experience that they have come to expect from modern retailers.
• Creating a new operating model for the business in which a streamlined central organisation acts as a support function for postmasters, offering expert support in marketing, training, and technology to postmasters.

The Post Office added that it will continue to work through the details of the Transformation Plan with colleagues, postmasters, strategic partners and organisations that represent postmasters to refine the plan and implement the changes required to transform the business.

The Post Office’s branch network size consisting of 11,500 branches will not be impacted by the Transformation Plan and the Post Office said it remains committed to strengthening its branch network and making it work better for local communities, independent postmasters and partners who own and operate branches.

“This Transformation Plan is the first step in a five-year journey that will set up the Post Office for years to come,” Neil Brocklehurst, Post Office acting chief executive, said.

“There are many consumers who primarily shop online, but there also many who struggle to use online services or actively choose to shop on their local high street and who want to be served by a human being. Postmasters across the UK serve every generation and this plan not only improves their incomes but also the support that we provide to let them run their businesses and serve their communities.”

Elliot Jacobs, serving postmaster and a non-executive director on the Post Office Board, added: “The last few years have been challenging for many retailers and postmasters are no exception. We have faced cost pressures from rising energy prices, increased national minimum wage and national insurance contributions. It’s vital that the Post Office embarks on this major Transformation Plan so that we have a sustainable financial future, and one that benefits the thousands of postmasters who work tirelessly day-in, day-out to support the local people and businesses who rely on us for essential everyday services.”