NFSP00000491 - Agenda of report of National Executive Council Meeting held on 19, 20 and 21 June 2006

Evidence on official site

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STRICTLY CONFIDENTIAL
FOR USE OF NATIONAL EXECUTIVE COUNCIL OFFICERS ONLY

NATIONAL FEDERATION OF SUBPOSTMASTERS

REPORT OF A
MEETING OF THE
NATIONAL EXECUTIVE COUNCIL

held on

19 - 21 June 2006

at ©

THE GRIMSTOCK COUNTRY HOUSE HOTEL

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© National! Federation of SubPostmasters Strictly Private & Confidential

Report of a Meeting of the
National Executive Council

held on Monday, 19 June to Wednesday, 21 June 2006
at the Grimstock Country House Hotel, Warwickshire

Those present: Mrs Sally Reeves National President and Chairman
Mrs Irene Bethell Mrs Kam Matharu
Mr Alan Butlin Mr David Milner
Mr Michael Darvill Mr John Morris (part)
Mr Norman Ferguson Mr John Peberdy
Mr Dave Foster Mr Keith Richards
Mr Phil Howorth Mr Geoff Simpson
Mrs Trish Jenkins Mr George Thomson
Mr Cyril Jones

In attendance: Mr Colin Baker General Secretary
Ms Marilyn Stoddart Assistant General Secretary
Mr John Willshaw Assistant General Secretary

Apologies: Mr Mervyn Jones
Suspended: Mr Mark Baker

THE PRESIDENT welcomed everyone to the meeting. She explained that
she had been approached by the South West region to clarify the situation
regarding Mr Mark Baker, and to lay down the terms and conditions for his
return to Executive Council meetings. This was not a matter for debate,
but was purely an update. The suspension would remain in place until the
matter with the Certification Officer was resolved.

It was a new Federation year, and as well as the agenda it was important
‘ to make sure Executive Officers were up fo date with other matters.

Everyone would need to be sure that they were clear on the position of the

Federation so they would give out the right clear message to members.

AM REPORTS AND RESOLUTIONS

@ The Minutes of the Executive Council meeting of 19, 20, 21
and 22 March 2006 were signed as a true record. DECISION

@ The Resolutions passed at the Executive Council meeting of
19, 20, 21 and 22 March 2006 were signed as a true record.

@ The Minutes of the Executive Council meeting of 21 May _
2006 were signed as a true record. [DECISION]

@ The Resolutions passed at the Executive Council meeting of
21 May 2006 were signed as a true record. DECISION)

Executive Council Meeting i 49-21 June 2006 Page 2 of 35

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@ The Minutes of the Executive Council meeting of 24 May ¢
2006 were signed as a true record. [DECISIONI
@ The Resolutions passed at the Executive Council meeting of
24 May 2006 were signed as a true record. DECISION
Al2 MATTERS ARISING
@ There were no matters arising.
AlZ REPORT OF THE NEGOTIATING COMMITTEE
¢

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Confidential

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RTO

)-21 June 2006 Page 4 of 35

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Page Sof 35

Executive neil Meeting 19.24 June 2006
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: ACTION

Irrelevant I

ACTION)

Executive Council Meeting 19-21 June 2006

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! ACTION)

Executive Council Meeting

79-37 dune 2006 Page
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ederation Of SubPOstMasters nen Strict: Pata. & Confidential...

Network Banking PC NB
\ (a) Bill Payment and On Line Banking PC NB 01

including Item 8(a) Television Licences & Paystation

@ Minor difficulties and differences of opinion over the
agreement with the Negotiating Committee on when
Nationwide came ‘on board’.

@ Not yet implemented but correct. I

@ Negotiating Committee had been resisting implementation
but were nearly in breach of the agreement with Post Office
Limited.

@  Hoped a greater number of Nationwide accounts were
serviced at Post Offices and that the Nationwide would have
advertised the facility far more than they had.

@ Post Office Limited did not achieve membership of LINK.

@ They have not given up, but banks now saying Post Office
are a competitor and maintaining it did not apply to ‘over the

( counter’ services.

Executive Council Meeting 19-21 June 2096 Page § of 35

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@ Figures for Nationwide were slowly growing, but were not as
large as originally hoped. Subpostmaster remuneration had ¢
grown in terms of automated banking. .
@ The 0.9p reduction had not been recovered by increased
transaction numbers.
@ Reduction had been resisted for as long as possible, but
would have to be accepted.
@ Nationwide customers unaware that they could withdraw
cash at Post Offices, and as there was no publicity,
Subpostmasters should do their best to make the facility
known.
@ Figures for automated banking had been received across all
offices. In April 2005 it was £2.3 million, and by March 2006
had increased to £3.3 million demonstrating steady growth.
® Figures for Nationwide banking transactions to be circulated
to the Executive Council if the ‘commercially confidential’ flag

was removed by Post Office Limited. (ACTION
@ Lloyds and Barclays had never informed their customers of (
the availability of cash withdrawal at Post Offices either. \

e@ South West Water had sent letter to customers directing
them to Paypoint ‘to avoid the queues’. Subpostmasters in
the South West region could not afford to lose the work.

@ Copy of the letter given to Post Office Limited who were
running it past their Legal Department to see if something
could be done about it.

@ South West Water were pushing their customers to the
cheaper options, the same as the banks preferring
customers to use ATM’S.

@ Subpostmasters were not expensive themselves, however
the supporting infrastructure was.

@ Rate card to banks per transaction was 45p, which was 19p
more expensive than an ATM.

@ — Paypoint advertising on local radio in Yorkshire citing length
of queues in Post Offices and their availability ‘after hours’.

@ BT sending out letters selling Direct Debit and also citing
queues in Post Offices and ‘time is money’.

@ nPower issuing cards that would only swipe at Paypoint.
When customers call nPower they were being told it was
because Horizon was unreliable.

@ Federation did not like reply on BBC/Paypoint debate sent
out by Post Office Limited (included in EC Minutes 21.05.06).

@ Letter did not give the correct message as it did not complete
the full picture.

e@ TV licences were not a restricted product because Post
Office Limited did not think they would lose the contract,
therefore Subpostmaster in private capacity can accept
payment.

@ Sought clarification from Post Office Limited, letter now going
out with Dave Miller’s signature, not to the network as a
whole, only in response to specific questions from specific
Subpostmasters. la

@ Could break down big brand as we know it. x

oN

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@ Fear is that Subpostmasters would break their contracts, be
mystery shopped and if they were attempting, even
unknowingly, to take a bill payment it would be a breach of
contract.

@ Would be easy to say have a Paypoint terminal that does not
do bill payment or restricted services, however it would mean
on line top ups and TV licences could be done for the going
rate.

@ Negotiating Committee of the belief that it would not be
possible because Subpostmasters could not have one
without bill payment functionality.

@ Customers were receiving letters listing Paypoint premises,
some of them Post Offices. Post Office Limited have stated
they would react to these situations.

@ The Negotiating Committee had accused Post Office Limited
of not supporting the Federation, when the Federation had
supported big brand.

@ The General Secretary had met with the Chief Operating
Officer and pointed out that they had to do something about
the situation or there would be a divided network and
destruction of big brand.

@ = Paypoint were plugging the holes in their network, but most
Post Offices would not be granted a terminal. Any Post
Office taking a terminal would be adding credibility to
Paypoint and making them stronger when bidding for future I
bill payment contracts and replacement to the POCA. !

@ Paystation should be available to any Post Office that
wanted one, and some new contracts that have been gained
on top ups and electric key recharging has meant rolling out
an extension of the Paystation network to cover the areas of
the client base.

@ Quantum changing functionality and would soon not work on
Horizon.

@ The costs of making the necessary changes to Horizon
would outweigh the returns.

@ = It was commented that the BT bill payments could be the
next major contract up for renegotiation and could be lost.

@ Some Post Offices had applied for waivers under the
restrictions for their Paypoint/Payzone terminals. They
should be either removed at the end of the waiver or have
most functionality removed.

@ Spar and Co Op encouraging branches to take Paypoint,
including Post Offices.

@ Danger that the Paypoint network would become bigger than
the Post Office network.

@ Another network reinvention of some kind would accelerate
that process, therefore Subpostmasters should be
encouraged to operate a Paystation wherever possible.

@ Post Office Limited should chase the ‘big boys’ and stop
them using Paypoint.

@ Suggested that a Federation branded Paystation may be an
option.

stive Council Meeting ~~ 49-24 dune 2006 Page 10 of 35

© National Federation of SubPostmasters

Paypoint made a breakthrough with the BBC contract and
would now chase every contract that Post Office Limited had
at a level that Post Office would not want to take.

Post Office Limited lose money overall on bill payment.

Board decision was to stay in the market for 2 years then
review the situation.

Negotiating Committee would take whatever line the
Executive Council decided - to retain the business at
reduced priced or not to get the business at all.

Paystation would pay 7p per transaction and would not drive
core.

Horizon bill payment was currently 11.2p but would almost
certainly reduce to retain contracts.

Paystation contracts won were new work not traditionally
done on Horizon; Scottish Power including Manweb, nPower,
Yorkshire, Midland, Scottish and Southern Energy, Swalec.
Reduced payment believed to be 25p from client
(commercially confidential information) for bar coded bill but
doubtful that could be maintained. 19p from new contracts.
Key charging down to 15p and may drop below that level.
Frustrations of Executive Council to be raised at meeting
with Post Office Limited on 10 July as they do not appear to
be taking the matter seriously enough.

On bill payment the main issue was that market pressures
had created a situation where margins were no longer
available.

The loss of the BBC contract had partly been down to
arrogance on the part of Client Managers.

Post Office Limited Client Managers had not kept a good
relationship with their clients, and in the case of BT, Adam
Crozier had actually had to retrieve the situation.
Subpostmasters have indicated they would be prepared to
take a reduced transaction payment to remain in the bill
payment market.

Paystations need to be made available to every
Subpostmaster that wants one, to keep up the number of
outlets that Post Office Limited can claim when competing
against Paypoint.

7p payment would be above that received by Paypoint
agents.

If that rate does not retain the BT contract, at least Post
Office Limited will have tried.

If another major contract was lost to Paypoint there would be
little point in continuing.

Post Office Limited would need to reduce their central costs
to remain competitive in the market place.

Different Post Offices would be affected differently by the
loss of bill payment, but many would lose heavily particularly
urban deprived.

A situation regarding Manweb and Paystation was raised
and it was agreed to investigate the situation.

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Executive Council Meeting 49-21 June 2006

Page 17

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© National Federation of SubPostmasters

North East Region had debated whole issue of bill payment
and after much discussion felt that a payment between 7-8p
per transaction would be acceptable to keep the business,
however it would only be acceptable if Post Office Limited
took a similar reduction.

It would be signalled to Post Office Limited that any reduction
in remuneration for bill payment would have to part of a
package of measures, including (i) enforcement of
restrictions, (ii) more Paystations being made available, (iii)
reduction in Post Office Limited costs, and (iv) acceptance of
a reduction in Subpostmasters pay.

MR PEBERDY proposed ‘That a payment of no less than 7p
per transaction be negotiated for bill payment in order to
retain the business.’ The proposal was carried.

5. Network PC NW

, (a) Horizon Failures PC NW 06 01

Special sub Committee of the Negotiating Committee meet
representatives at Dearne on a regular basis.

Marilyn Stoddart and Lynda Willoughby have a good
relationship with the Post Office staff dealing with Horizon.
The failure after the Bank Holiday had been explained and
contrary to popular belief it was not caused by overload. It
was caused by an_ individual accidentally switching
something and messing up the system.

They were working on a solution whereby there is a back up
in case of failure.

The down time caused by failures was being reduced.
Negotiating Committee finding out about current situation
with the GSM solution to keep and office running in the case
of Horizon failure.

Printer failures highlighted as major frustration, and major
variations regionally on availability of replacements.

Post Office Limited looking at second generation Horizon,
and a reduction in costs from Fujitsu to retain the contract.
Some Horizon work sub-contracted and not all engineers
were trained to the same level, hence variation in service
levels.

Details of specific case raised by Mrs Bethell to be supplied
to Shoreham for follow up.

Strictly Private & Confidential

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DECISION

Executive Council Meeting 19-21 June 2006

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49-24 Ju Page 18 of 35

itive Council Mi

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3. MEMBERSHIP

(a) Recruitment FM MS 04

( ¢ The six months free membership to continue until such time ACTION
the Publicity and Development Committee come up with
some innovative ideas to increase membership.

incil Meeting 49 to 24 June 2008 Page 24 of

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{ational Federation of SubPostmasters Strictly Private & Confidential 1
* — Itis necessary to main a high level of membership to keep the
NESP’s credibility with Post Office Limited. (

«The Publicity and Development Committee are looking into
the feasibility of introducing the following bandings for
membership fees:- £7,500, £15,000, £30,000, £45,000 and
£60,000+.

Irrelevant =

ACTION

7. Future Executive Council Meetings FM OG
(a) Dates of Future Meetings FM OG O2 02 r
\
¢ 2,3,4 October 2006 at the Grimstock Country House Hotel.
« 8,9,10 January 2007 at the Grimstock Country House Hotel.
« The Publicity and Development Committee are sourcing
another venue for Executive Council meetings from March
2007.
e Mr Willshaw moved the Publicity and Development
pene Committee's report.

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Executive Council Meeting 19 to 21 June 2006
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19 to 24 June 2006

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o"AI6. ~SPECIALMATTIERS ~~~ ~~~ ~SOtC~C;7;«SC SFSt*é<S*~S I
Al6(a) Finance

(a)  Treasurer’s Report FIAC 02 I
ae *___The Treasurer's report had previously been circulated. I

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~

° The Interim Financial Review dated 31 March 2006, showed
an improvement in membership levels to 73.41% of potential
members, however at the end of April this had fallen back to
73.19%.

e Mr Milner stated that it would be necessary for Branch
Officers to go out and recruit new Subpostmasters and non-
members face-to-face.

* The National Treasurer moved his report.

Irrelevant =

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Executive Counci

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Executive Council Meeting 49 to 24 June 2006
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SHARON MERRYWEATHER
LYNDA WILLOUGHBY
June 2006
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fe Council Meeting 49 to 24 June 2006

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Appendix A

Pricing in Proportion
Face to Face Training

Sarah Munro
Royal Mail Account Manager

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Royal Mail

Pricing In Proportion.

The new Wau to price mail

facelOface fe I
SS sone

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Royal Mail Pricing in Proportion :

The new way to price mail

© fecetOtece Royal Mail
2006 —_

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Agenda

1. Introduction

2. Pricing in Proportion
3. Break

4. Next steps

5

PostPak for
Pricing in Proportion

° ral
(53) facetOface

Lo

Mails Integrity
Summer Travel

Local Information
Crown your Colleague
Feedback

Close

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Introductions I

Introduce yourself to the rest of the table

¢ Name?
¢ Branch?

¢ Work area?

l cost facetOface
OFFICE ———=
Tove

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Objectives of the evening

Pricing in Proportion:
To understand the new way of accepting inland mail so that you are able
to cascade the training to your colleagues and help your customers with

the changes.

¥ facetOface eal

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Pricing in Proportion

What is Pricing in Proportion?

@ ee in

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Pricing in Proportion

What is Pricing in Proportion?

Pricing in Proportion is a way of pricing Inland Mail, that
takes into account the size, as well as the weight of an item,
rather than weight alone.

& facetOface we
=e reve ral

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Pricing in Proportion

The services affected by Pricing in Proportion are:
* Royal Mail 1st and 2nd Class Letters & Packets (inc BFPO)

The new categories are:

* 1st Class — Letters, Large Letters & Packets
¢ 2nd Class — Letters, Large Letters & Packets

& facetOface
> Royal Mail

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(~ = = ~

Pricing in Proportion

The services not affected by Pricing in Proportion:
* Royal Mail Special Delivery™

¢ Royal Mail Standard Parcels

« Royal Mail International Services

¢ Parcelforce Services

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Pricing in Proportion

How will this affect our customers?

oe) facetOface

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HOW OFOR — Emir)
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uoiModolg ul Huldig

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Pricing in Proportion

When does the change take place?

face tOface i
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2006 7

POST
OFFICE

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UoIodolg ul BUD,

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Pricing in Proportion

Large Letter

maximum sizes

seresescanneseosa

[353mm . 2hrera

Maximum
size

353 x 250mm

Maximum

thickness

25mm

Weight

0-100g

101-250g

251-500g

501-750g

£1.31

Price
IstClass
44p
65p i

90p

“Ond Class
37p
55p
75p

£1.09

If any one of these dimensions is exceeded, or if the weight is over
750g, the item becomes a Packet.

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2006

Royal Mail

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Pricing in Proportion

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se) facetOface

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Pricing in Proportion

Packet

Royal Mail

& facetOface

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uoIWOdolg Ul BUD

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uoiododd ul Huldidg
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The questions to ask the customer
when presented with an item of mail:

Pricin

¢ Where is it going?

g in Proportion

e When do you need it to arrive by?

¢ How much is the item worth?

* Would you like a signature on delivery?
* Would you like a Certificate of Posting?

@

faceltOface
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Royal

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Mail

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Pricing in Proportion

So far we have:
¢ Identified what the item is. Letter, Large Letter or Packet

¢ Learned to use the measuring template

* Reminded ourselves of the key questions to ask the customer

Now to process the transaction on Horizon, using smart post...

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ysod Yes

suo! dues
sseI PUZ 8 ASL

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Pricing in Proportion

Proposed new
screen

New icons for
Large Letter
stamps

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Current screen
after selecting
smart post

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Royal Mail

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New Pricing in
Proportion screen
to appear next

& facetOface

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a DfOper0f &

Palajua uaag soy
jybiam sazfo
UaadIS JUALIND

uoIHodold ul HUIdId

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Current screen
display

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Pricing in Proportion

Question 2
What is the new maximum weight

for a 1st or 2nd Class letter?

a) 60g
b) 100g
c) 80g

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Pricing in Proportion

Question 4
What is the new maximum weight

for a 2nd Class packet?

a) 1kg
b) 750g
c) 500g

Royal Mail

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Pricing in Proportion

Question 6

A customer presents a birthday card which
includes £30 in cash.

Which service do you offer?

a) 1st Class
b) Recorded ‘Signed for’
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Pricing in Proportion

Quiz answers

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Pricing in Proportion

Question 2

What is the new maximum weight

fora 1st or 2nd Class letter?

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b) 100g
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Pricing in Proportion

Question 4
What is the new maximum weight for

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Pricing in Proportion

Question 6
A customer presents a birthday card which

includes £30 in cash.
Which service do you offer?

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Next steps

Training pack
¢ Workbooks
* DVD/Video/CD Rom

e Practical exercises

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Royal Mail communication plan

The communication to business commenced in August 2005
and has included:
¢ Advertising in business and industry-based magazines

¢ Direct Mail to many businesses
* Three million Small to Medium businesses were mailed
to in May

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: Media strategy

Stage 1 Stage 2 Stage 3

I 7 August 2006 —
i 28 August 2006

24 July 2006 ~
28 August 2006

10 July 2006 —
20 August 2006

Announce Inform

Remind

Outdoor :
Radio I

TV

Door Drop

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There will also be a
door drop to
almost every
household in the
country

(27 million
households)

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2006

size guide

The way postage is priced is changing.

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“Next steps

Ce) facelOface rene

Talk to your customers!
21 August 2006 Go live!

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New PostPak range detail

Brand new Pricing in Proportion sized products

¢ Large letter card envelopes

¢ DVD &CD mailers

* Large Air Mail standard mail box

* Poster ‘squares’ rather than tubes
Pricing in Proportion identified range
* Bubble & padded mailing bags

¢ Complete envelope range

* €xtra strong poly mailing bags

Simply contact ISA PostShop to order

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Training
© Workbooks were distributed to all Post Office® branches in April
* ALL Post Office® colleagues are required to:

- have completed their training by the end of May

- register they’ve completed their training use
Advanced Data Capture (ADO on Horizon

¢ Further use of ADC

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Security of mail

¢ Do not leave mail where it is accessible to the public

¢ Premium service items have to be kept in the designated secure area
whilst awaiting collection

¢ Make sure you verify the identity of any new postman/woman
collecting your mail

* If you are having trouble storing mail securely, please call the
NBSC to seek advice

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> re Royal Mail

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Minimise risk of damage & interference

* Ensure mail is properly addressed and securely packaged
before accepting it from a customer

* Make sure that items marked ‘Fragile’ or are apparently fragile,
are handled with care

* Please treat all items correctly and ensure they are not mis-handled

whilst in your care

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Summer travel campaign

The market

Number of trips abroad in 2004?

Post Office® market share

Foreign currency

Travel insurance

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61.2 million
25% ‘1st
8% 3rd

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Summer travel campaign

The opportunities
Cross sell
Foreign currency to travel insurance

Travel insurance to foreign currency

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19%

50%

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Foreign currency

Key features
0% commission

Over 70 currencies now available

Order in branch

,

Available at ‘on-demand’ branches

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Summer travel campaign

travel money card
Key features
Convenience
Budgeting

Security

Simple fee structure

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Summer travel campaign

June, July, August
Advertising

Point of sale in-branch

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Thank people who have made a difference!

Simply complete a nomination card and
they could win:

* £500 in vouchers

¢ Chocolate hamper

tte

* Luxury European break for two SMO GUE

Everyone who receives their first nomination
will receive a small gift.

Speak to your SAM for more information

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Feedback

Please complete the feedback sheet to tell us what you
thought about the evening.

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