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From: Minister HOLLINRAKE (DBT)[/O=EXCHANGELABS/OU=EXCHANGE ADMINISTRATIVE
GROUP
(FYDIBOHF23SPDLT)/CN=RECIPIENTS/CN=3F 131AB4A1E443368F392D196C626FAE-
5B2AC667-8A]
Sent: Thur 29/02/2024 11:37:26 AM (UTC)
To: Asha BALACHANDRAN2 (DBT
(DBT)f~
Subject: Nick Read Readout 29/02
Readout below:
Attendees
Nick Read (POL CEO)
Kathryn Sheratt (Interim POL CFO)
Tim McInnes (Transformation Director POL)
Lorna Gratton (UKGI)
Carl Cresswell (DBT Director)
Jamie Lucas (PS)
STARTS
Nick: pleased with our session and felt a bit like the rug got pulled from beneath us.
Kevin: fair to say, at a certain point in time have to take the gloves of and try to manage the info. I
think the select committee were weak with him, apart from Anthony Higginbottom. Sorry it was so
messy. keen to support in anyway we can, to make sure we get passed this. Hope he's discredited.
Anything else you think we need to do to make it easier?
Nick: look to Lorna on this
Lorna: need as much support as you can get from Ben Tidswell to try and get the board functioning
properly. We need to try and find a way through the project pineapple memo.
Nick: we'll have a board meeting tomorrow and will see where we can get to. postmaster NEDs may
use tomorrow as oppo to criticise on funding and anti-postmaster sentiment. Need to avoid tomorrow
morning being a proper road crash.
Kathryn: had a bit of a flavour of it on Monday, they think it did not do enough for postmasters. Elliot
mentions where the investment for the future of the business and postmaster rem is front and centre,
costs are rising, and this has been a theme of theirs for quite a while.
Nick: This goes back to whether the postmaster directors are playing a role of a director, or of a
trade union rep. I don't know where that is going to go. They are extremely exposed as a result of
project pineapple. Not sure how to patch this up. In a slight stand off,
Lorna: they are not in a good place and aren't operating in a way appropriate for the business.
Nick: how can they ensure their own self-interest doesn't cut across their role in supporting POL as a
business.
Kevin: keen to support anyway we can.
Nick: want to try to create an environment where we don't create a drama.
Kevin: these are businesspeople and i think that if i felt i had a business that was in terminal decline,
I'd be pretty worried as well. they are bound to look for solutions, radical ones, but what can we do to
try to spread a picture to the network that there is a more positive future. the more you can indicate
there is a sustainable future to this the better. We can all see with what's happened over the last few
weeks there is an appetite for change here and articulate it to your advantage, to set a new
perspective.
Nick: its a reasonable question, bottom line is if they step back what do they want? innovation, fit for
purpose product range, a bigger proportion of rem to go to postmasters. Is the investment
government is putting into the business going to POL or postmasters. Sale of the telco business that
went to fund the inquiry work. Getting over those hurdles is massively difficult.
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Kathryn: it's the postmaster proposition that we need to work on. we've got building blocks I think,
but haven't brought it all together. More of a postmaster proposition wrapper that might actually be
more helpful.
Nick: we don't have any leavers.
Kathryn: need to frame it correctly with what we've got.
Lorna: need to show that you are providing REM and being able to bring their costs down, show the
money that we've got is being invested.
Tim: they talk about automation, customer facing screens, we've got money for cash counters. NBIT
is an enabler but us saying that won't be accepted now.
Kevin: we are going to get a better deal at the banking framework and cut costs at the centre. If you
told me I'm going to buy a counting machine, i'd probably say I'm still going to go bust. We need
meat on the plans.
Tim: it's what are we trying to deliver for them and what is the evidence.
Kevin: need to articulate that it is your absolute focus and more of the cash will go down to
postmasters. this is also a moment of opportunity.
Carl: bit of a point about getting to the end of the inquiry and compensation.
Lorna: appeal stuff will make it go on along.
Kevin: GLO scheme obviously a DBT scheme, there's an appeal mechanism is in that. If we do one
on HSS I'd squeeze it into the GLO one. There are calls for the whole thing to be taken out of POLs
hands. Need to be pragmatic. OC2 will come to us in DBT
Nick: you'll have no pushback from me at taking that away. The only way they will start to be rebuild
is if it is ringfenced and removed.
Carl: HSS appeals and OC2 should be DBT run. OC1 (ongoing claims and HSS) should probably
stay with post office.
Nick: take it away as it is?
Simon: ring fence it and just change the report.
Carl: afraid its post office people doing it. that's the issue.
Simon: Ring fence the contractors.
Carl: it would not align with the government cost structure to bring in expensive contractors.
Carl: this needs to be thought about.
Simon: They do sit within the post office.
Kevin: lets park this for now. It could be a good story for the future of the network.
Kevin: in terms of other messaging, the mutualisation has died down a bit.
Nick: met them on Monday. VOTP etc. Their main point was about future of post office and
representation of postmasters. We are going to see some governance work done by Grant Thornton
in a few weeks' time.
Lorna: I don't think postmaster oversight of the board is worth it, I think there's good mileage for
more postmaster input in the retail part of the business.
Nick: then you get into the NFSP debate. We've tried to redesign relationship with them, but it isn't
really working.
Lorna: you've got your postmaster director in the building now and whether there is scope to do
more around that. I'm thinking about something more formal, with accountability. with some kind of
action focused back and forth.
Kevin: I think it's worth exploring, other thing it sounds radical - mutualisation, VOTP pitched it to us,
if you went to the network and said we've got this strategy to deliver more revenue to the postmasters
and we aren't against mutualisation would that be popular.
Nick: I got raised eyebrows when i raised mutualisation with the dept.
Tim: The last report said in principle mutualisation was a good idea, but people need to want to own
post office.
Nick: until we have a healthy business we are going nowhere. We can move deck chairs around.
Lorna: you can use the report to
Kevin: not going to happen before the election, of course. I wouldn't have a problem with announcing
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a review of mutualisation.
Carl: build it into the third phase of the review
Kevin: think it would be a relatively positive message.
Lorna: doing the policy review through the lens of the police review.
Kevin: central costs.
Kathryn: business plan being pulled together, going to board tomorrow. form that we are also going
to build 25/26. in process of reducing our headcount.
Kevin: can i see some numbers on this
Kathryn: reducing contractors from 373 to 160. and at Swindon.
Tim: Swindon is our retail distribution centre
Kathryn: reducing our DMBs. Want to do more though and working out how to fund that. Have done
Kevin: costs and the centre is important to me and postmasters. in terms of conversation with
postmasters. people want to see the large chains of directors thinned out.
Kathryn: Karen has all sorts of ideas on this and plans are afoot and waiting for the team to be in
place.
Lorna: you're holding money in the account for inquiry cost overruns]
Kathryn: nods
Kevin: headcount by salary is needed.
Kathryn: want it by 5 years and come march we'll have 25/26. What I want to do is have a 3/5 year
business plan view.
Lorna: we can do two rounds of business plan advice to you.
Kevin: it's vital.
Kevin: political element to this is making the network sustainable, but we need to visualise it by
being able to say what we are doing on central costs and shouting about other things.
Lorna: you're open to loans?
Tim: hesitant due to the nature of loans
£ figure/where the shortfalls went
Tim: how much money did people pay in, based on offers made for shortfalls on HSS and OC it's
£36m (claims processed, not ones not yet processed). We are working out
Tim: there is a variety of ways in which a transaction can be classified. Stamp example.
They are preparing a paper on this.
ENDS
Jamie Lucas I Deputy Head of Office and Private Secretary to Kevin Hollinrake MP, Minister for Enterprise, Markets and
Small BusinessI
siness and Trade I Old Admiralty Building I London SW1A 2DY I