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FOR USE OF NATIONAL EXECUTIVE COUNCIL OFFICERS ONLY
NATIONAL FEDERATION OF SUBPOSTMASTERS
REPORT OF A
MEETING OF THE
COUNCIL
held on
13-15 JUNE 2016
at
HOLIDAY INN CAMDEN LOCK
LONDON
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Report of a Meeting of the
Council
held on Monday-Wednesday, 13-15 June 2016
at Holiday Inn Camden Lock,
London
Those present: Mr Jim Nott Chairman
Mr George Thomson _ Chief Executive Officer
Mr Tim Boothman
Ms Wendy Burke
Mr Calum Greenhow
Mr Paul Haines
Mr Nilesh Joshi
Mr Peter Montgomery
Mr Jim Nott
Mr lan Park
Mr Bharat Visani
In attendance: Mr Philip Bloor Finance Director
Apologies: None
The National President welcomed everyone to the meeting particularly to Calum and Peter
as it was their first meeting.
REPORTS & RESOLUTIONS
The Report of the Council meeting of 14-16 March 2016 was
signed as a true record.
The Resolutions passed at the Council meeting of 14-16 March
2016 were signed as a true record.
There were no matters arising.
The Report of the Council meeting of 16 March 2016 was signed
as a true record.
There were no matters arising.
The Report of the Council meeting of 8 May 2016 was signed as a
true record.
The Resolutions passed at the Council meeting of 8 May 2016
were signed as a true record.
There were no matters arising.
The Report of the Special Executive Council meeting of 8 May
2016 were signed as a true record.
The Resolutions passed at the Special Executive Council meeting
of 8 May 2016 were signed as a true record.
There were no matters arising.
The Report of the Council meeting of 11 May 2016 were signed as
a true record.
There were no matters arising.
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DECISION
DECISION
DECISION)
DECISION
[DECISION
DECISION
DECISION
DECISION
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2. FUTURE OF THE NETWORK
(a) Project regarding Commission Rates
° Discussions with POL regarding potential significant change i
to commission rates. Full day workshop to be held on I
24 June attended by George Thomson, Jim Nott and lan H
Park. !
e Any proposals would be taken to the NC first then the
Council before any agreement was reached. :
e Will be made clear that POL could not use the review as a
way to reduce spm pay. The idea was to realign rates
depending on what the clients pay.
¢ — Originally was going to be a root and branch review of rates
across the board on an open book basis to give fairness and
a clear understanding of the percentage to go to spms.
. POL have now indicated they do not want to do in one hit. €
They want to start with travel, currency and mails.
e NEFSP had been consistently wanting to look at what spms
were being paid but not for POL to take £20-25 million out of
spms pay.
e There were three possible reasons for the NFSP to fall out
with POL and break the Grant Agreement:
o NFSP ending up at war with itself (unlikely)
o NFSP struggled as an organisation to rebuild the
infrastructure of the organisation which was a key part of the
agreement (again, fairly unlikely)
o The most likely, is the NFSP fall out with POL under the
agreement. Once a campaign was taken into a public place,
technically it could negate the agreement. NFSP could
engage with politicians or Royal Mail but not in a public
scenario which could destroy the grant agreement.
e For new Council members, the situation on the Grant ¢
Agreement and potentially breaking it was further explained.
e The most likely event that the third point would come about
would be on a significant issue, for example, commission
rates. NFSP may have to go to war to stop POL reducing
them.
. Belief was that the review was not being undertaken for the
benefit of spms.
e There followed some discussion on whether the review
should be undertaken as one large hit or piecemeal, with
differing opinions being voiced.
* Pay structure in place that many bought into recently if they
became Main or Local and those people gave up the
opportunity to take 26 months compensation to leave. There
was still 2 years of NT to go.
e If the root and branch review was to take money out of the
network, the NFSP did not want a root and branch review.
Not needed unless it was to pay spms fairly.
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° Assurance given that discussions would be reported back to
the Council.
° Purely speculatively, and no offer made, but currently around
500 branches on preferential currency rates. Online rates
affected everyone as no one could compete with them. Big
issue. Felt that POL may suggest paying 1.2% on currency
at the current uncompetitive rates, but offer another an
exceptional rate but only pay 0.6% but at better exchange
rates to compete. It would pit one spm against another and
mean less commission for more sales.
° The public were confused enough with the different models
without confusing the picture further.
e POL also told that the NFSP will not countenance a situation
where big clients got a retrospective rebate. For example,
multiples getting a further payment once their collective
branches hit a certain figure.
e Again, it was stressed that the above scenarios were pure
speculation. NFSP would have a better idea after the
workshop.
(b) Currency Rates
Irrelevant
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© National Federation of SubPostmasters
(c)
(a)
Network Transformation
Difficult times. NFSP had to help members the best way
they could, hence the future Retail team. Retail sales of
some kind were the best way to boost the income of a post
office business.
The NFSP had always been a moderate organisation and
some felt it should become more militant. The fact was that
spms did not work for a successful company, the company
was in decline and had been for many years, in fact it had
been in managed decline.
Taking the CWU who were not a pushover. It was not about
how strong or weak the NFSP were. Despite continuous
threats from the CWU, the company were going ahead with
600 CIT job cuts, they were still reducing pensions from
around 17% per person to 5%, they were still slashing
hundreds of jobs at Finsbury Dials, and 61 more Crown
offices had been given to W H Smith. The actions were
purely down to the financial circumstances facing the
company. The circumstances would be no different if the
NFSP had been more hard line. The company was in a
financial crisis. The NFSP still made a difference and did the
best it could but it was difficult The NC could win an
argument but still not change things if the company ignore
the discussion as they could not afford what was being
asked. The NFSP had continually badgered PO to reduce
their central costs as they were unaffordable, and this was
now happening.
It had to be remembered that various governments had
spectacularly failed to deliver on their promises and were
taking work away from the network rather than making it the
front office of government. There was a huge hole in Post
Office’s finances, with nothing obvious to fill it.) Banking was
no doubt the best opportunity, but not at any cost, it had to
pay enough to make it worthwhile to all parties. The same
(or worse) issues were facing every post office network in
Europe, it was not just the UK.
The separation from Royal Mail had changed the economies
of scale and Post Office was being built from scratch. There
was no magic solution in the short term.
he Value of the Post Office Shopper
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(e) Ofcom Review of the Regulation of Royal Mail
(ACTION
3. FUTURE OF THE FEDERATION
{a) Membership
* Reported very close to auto-enrolment being signed off.
People will be able to opt out of joining.
. This would bring the membership to at least 9,000.
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(b)
(c)
* The NFSP can refuse applications for membership or
organisational representative of the organisation according to
the Articles of Association.
* Mark Baker applied some time back to be a member. Albeit
in a disingenuous way.
« The Executive Council of that time had made a unanimous
decision not to let Mark Baker join as a member or as an
organisational representative.
* Mark has cost the Federation in the region of £500,000 by
being instrumental! in taking the NFSP to the Certification
Officer, which resulted in a loss of Trade Union status and to
« After a lengthy debate around the table the unanimous
consensus of the Council was to remain with the original
decision to refuse Mark Baker membership or organisational
representation of the NFSP even if POL believe this not to be
the quid pro quo.
. Have at present a verbal agreement with POL that they will
not invoke the representation clause in the agreement
between them and the NFSP.
Infographics
@ The CEO thanked those present for their input at the two day
workshop held on 23 and 24 May.
° Infographics had been produced by Tracy Savage from the
outcomes of the workshop, which had been circulated.
There were more to follow.
Structure of Regional and Branch Meetings
» Tracy Savage has phoned most of the Branch Secretaries.
Some were saying that they were doing more meetings than
they did. Some work had been done on the actual meetings
held.
There are six branches that do not have branch secretaries.
. 41 other branches have not had a meeting since 2014.
« There are 53 to 54 branches. Believed could reduce the
number of branches to 35 by amalgamating some of the
branches that are moribund.
e@ The new retail team could possibly act as branch facilitators.
* Need to be cognisant that Branch and Regional Secretaries
are elected posts.
* Need to re-build the branch and regional structure of the
NFSP.
° Branch meetings need to be informative.
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(d) Multiples Engagement with the Federation
Reported four years ago Sue Barton who worked for POL
was cautious about bringing multiples into Federation
membership. POL have the same conundrum as the NFSP.
The NFSP need to ensure that it looks after independent
subpostmasters,
Multipies have a different viewpoint on the restrictions policy.
There had a meeting with the Coop in Manchester and they
have indicated they may wish to join.
Believed should attempt to bring the Coop into membership.
Coop could have a seat on the Board, however they also
wished to have a seat on the Negotiating Committee.
Consideration needed to be given as to whether Martin
McColls should be invited to come on board.
The Coop is made up of a number of societies running in
total 540 post offices including The Cooperative Group
(TCG) in Manchester which has 270 post offices.
Concerned that the multiples would be more vociferous than
independent members.
Could well be a conflict on Section 17, restrictions policy.
The NC should be an elected committee from the Council.
Pointed out that outreaches do not have representation on
the Council.
Had allowed when the company was established for two or
three seats on the Council for multiples if necessary.
Wendy Burke, Council member, already represents
multiples. However in the main she represents individuals as
she was elected through the region.
POL over the past five or six years had been talking about
having EPOS integration with Horizon. This has still not
happened.
The Cooperative Group in Manchester did a deal with
Paypoint and integrated Paypoint into their tills.
Post Office are very strict about restrictions with regard to
mail products. Royal Mail have told the Post Office that if
anybody that has a Post Office franchise and they try to put
My Hermes in or a Collect+ that they should be served notice
by POL.
Royal Mail pay £340 million a year to POL for providing the
mails service exclusively.
Would not like to be in a position where the multiples
dominate the NFSP.
Believed the need for straight co-opted multiples on the
Board not through regional structure.
If it were not for the Federation POL would not be in the bill
payment market still as it was at our insistence that
Paystations were put into all offices in the UK. Bill payment
is part of the restrictions policy.
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After a lengthy debate the overall consensus was to invite
the Co-op and other multiples on the Council Board, but
there should not be an automatic right to be part of the NC
as this should be an elected position and this should not
change to appease one group.
(e) Project Specific Grants
The CEO reported that under the agreement with POL the
NFSP receives £1.5 million a year core funding.
In addition there is a minimum of £1 million a year for project
specific grants.
The NFSP got an agreement that if the money was not used
in the year it was meant to be used it could roll on for a
further two years.
Last year was the first year that a minimum of £1 million
could be spent on project specific grants. This was not
spent.
The first project specific grant has been agreed for a
contribution to the expenditure of the SubPostmaster
magazine. The level of contribution is still being looked at.
The CEO, lan Park and Philip Bloor had met the previous
evening with Drew McBride, Nick Beal and Troy Gardner,
POL, to talk about the creation of the NFSP retail team.
POL are winding down its retail team as they are paid out of
the NT budget and they were initially taken on to help offices
that were transformed as part of NT with retail and upselling.
Agreed with the POL that the Federation would develop a
retail function to help members with their retail.
The Federation will potentially be taking on a new field team,
some from Post Office. Will also advertise the positions.
The team will start late September with a three year contract
funded by a project specific grant.
Anticipated there will be a Director of Retail and Commercial
and 7 officers in the field.
They will work closer with the Federation's branch structure
to be an additional resource for the Branch Secretaries.
Each will be responsible for 5 Federation branches.
One of the functions of the Retail and Commercial Director
will be to obtain the very best commercial deals for members
with some rebate for the NFSP.
Concern raised that when visits are made to Post Offices
they would be asked questions regarding the operation of the
post office. Provision will be made for real time contacts to
be available at HQ and in the regional/ branch network.
Reported from 1 July 16 the first project specific agreement
will be in place with Franchise Finance.
This will enable existing Subpostmasters selling their
business and future Subpostmasters buying a business.
Also how they could look after their finances better.
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¢ There will be 50 business health checks and will drill down
as to how robust finances are.
e There will be 10 cases of prospective purchasers who will
have their business finance application prepared by
Franchise Finance.
. Franchise Finance have good relationships with all the
banks.
. There will be workshops, including some POL staff, which
will go into depth on financing a post office.
The trial is for 3 months.
There will be a helpline set up to advice subpostmasters on
cashflow, capital and anything on financial issues.
. Julia Goatcher at Headquarters will take this on as part of
her job for three months.
. The cost is circa £80,000 to £100,000 including VAT.
« Nilesh Joshi had spent a day with Franchise Finance and
reported that it was very informative and highly rated Chris
Roberts, Franchise Finance.
° Working on apprenticeship project which will not start until
next year at the earliest.
« Also looking to have once a year in London on the House of
Commons terrace an event where about 100
subpostmasters will be invited. Some will be activist and
others will be those that are running very good post office.
They will meet the MP’s.
e — Will ask them to visit their MP prior to the event and tell their
MP that there will be an event in London and invite the MP to
be there as they themselves are attending.
* There will be assistance with travel and accommodation
costs.
° Could brand the event Federation only, Federation and POL,
or brand it through the All Party Group, which will be
{ invigorated when the new Communication Director, Jenna
Khalfan joins.
* The day event will be followed by an evening event at a
hotel, possible an award ceremony.
e Looking to get a £50,000 annual grant from POL for the day
event.
Looking to do this event March/April 17.
Could also incorporate an annual briefing for branch and
regional officials.
(f) Council Meetings
e Reported for the October 2016 Council meeting we are
committed to the present structure, starting at 14.00 on
Monday and running through to lunch on Wednesday.
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(a) Mails
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i
« Suggested that from 2017, the Council meetings will be for t
Monday starting at 14.00 and Tuesday, finish slightly earlier, I
only but add an additional meeting, workshop or classroom
study at the end of August/ start of September.
. Believed needed a workshop on__ suspensions/
reinstatements. !
. Suggested at the August/September meeting the Board I
members bring their partners and have a social event in the
evening.
° May consider having the October meeting later in the month.
4. REPORT OF THE NEGOTIATING COMMITTEE
©:
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P739’s/Mailwork
f
Irrelevant
PPI Type Mail
Banking
Full update at conference.
Spms cannot refuse banking transactions as it was part of
their contract.
On culpability, if a large and late payment is made in which
does not fit into the 40 minute safe it should be stored in the
most secure place possible. In the event of a
burglary/robbery if the situation can be justified with reasons
there would be no culpability.
On the subject of large REM's that would not fit into the safe,
if an office had serious problems the NFSP could try and get
them a larger safe. Again, should be put in the most secure
place possible. If a spm can justify why it was there, there
would be no culpability. It made sense to store notes in the
safe and move coins to the most secure other place in these
situations.
On ATM's, if filled during working hours, the shop should be
shut and have no customers present. ATM money should be
in the most secure place possible, like the coin cabinet, and
once the shop is closed the ATM can be filled.
Clarified that on culpability, PO are very fair. A spm just
needs to come up with valid and justifiable circumstances.
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Security
Irrelevant
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Irrelevant.
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Apprenticeships
&
Irrelevan
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OR)
ACTION
Council Meeting 13-15 June 2016 ° Page 15 of 20
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5. ANNUAL EXHIBITION/ANNUAL GENERAL MEETING/ANNUAL
CONFERENCE 2016
6. FEDERATION TRUSTEES
i ; DECISION
I I DECISION/ACTION
7. COMMERCIAL REPORT
(a) New Director Update
itis. PEGISIONACT ]
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({b) Community TV
8. REPORT OF THE TRUSTEES TO THE BOARD OF
BENEVOLENCE
9. FINANCE
. Reported that the final set of accounts for the former NFSP
to 31 March 2016 will be prepared and then submitted to the
Revenue.
« The accounting year end for the new company, NFSP
Limited, is 30 September 2016.
° The Trading Company will need to have a co-terminus year
end as it is a requirement to consolidate accounts.
° Working on the Annual Plan for 2017.
« Will build into the Annual Plan funding for a new membership
system.
{ 10. NFSP COMMUNICATIONS
Irrelevant
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*
41. ANY OTHER BUSINESS
! (ACTION
Irrelevant ~~
regard to Freeths Solicitors who are asking subpostmasters
that they believe suffered losses as a result of Horizon to
allow Freeths to work on their behalf and take POL to court.
* The CEO explained that Freeths are basically ambulance >
chasers. Freeths are desperate to get subpostmasters to ‘.'
engage with them.
° Freeths also maintain that the Subpostmasters Contract is
unfair with regard to the Subpostmaster being responsible for
losses.
° It is up to the individual to decide whether they wish to sign a
contract or not.
° Legally a contract does not have to be fair.
* Reported that Horizon was set up to take 17.5 million benefit
customers to a plastic Post Office benefit card. The labour
government decided it was running over budget and wanted
benefit recipients to have their money paid into bank
accounts. The POCA was then introduced because of
pressure by the NFSP and POL.
° The Government then informed Royal Mail that they had to
purchase the Horizon system for £0.5 billion.
e« The NFSP's policy has always been that it is a robust system
and we have full confidence in it.
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‘
Do not believe the system is systemically faulty.
Most people that blame Horizon for losses are overinflating
their cash declarations, false accounting.
Subpostmasters take money sometimes and members of
staff also take money.
Reminded that members of the Council should adhere to
collective cabinet responsibility.
Tim Boothman raised the issue of purchasing currency with a
Bank of Scotland debit card in the region of £1,000 and the
transaction is declined even though the customer has the
funds.
Reported that it would depend on banks monitoring anything
not the normal average spend.
Tim Boothman reported th:
concernet at the branch had not been rolled over.
Arranged for a regional activist to do the rollover, but
unfortunately when they did this the office was £4,000 short.
The subpostmaster had borrowed money to keep the office
fi
i GRO
Had previously asked POL to provide soft loans to
subpostmasters, they were not prepared to do this.
A lot of Main offices that have converted, particularly ones
without retail, and given the front office of government
strategy has failed, given the financial service strategy is iffy,
have real concerns for these people.
Unfortunately once on a Main or Local contract the fixed pay
goes. There is not going to be any financial help available.
As an organisation we should encourage people to upsell
post office products the best they can and look at growth in
their retail. Maybe they could move premises and take on a
convenience store.
Calum Greenhow asked if payment for 2D barcodes would
be backdated. It is hoped this would be the case but not for
those that had already left the business.
lan Park reported that he had queried the issue with the cash
helpline and the long queues. He had received a response
being that typically on a Tuesday and Wednesday there are
2,000 to 2,500 calls and that last week it averaged 5,000.
Essentially the queues were because they had closed the
office at Leeds where they had second line operators and
those operators would help with first line queues.
Replacements for those lost have not to date come forward
in sufficient numbers, but they are recruiting. A lot of the
calls were repeated dialling because of abandoned cails.
Because a lot of offices are pre-funding they are now only
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*
asking offices to ring if they do not have enough money and
not they have too much.
« Jim Nott reported that auditors had turned up to an office.
The audit was fine, but the subpostmaster was then handed
a termination notice stating that the office was not open the
hours he had agreed when he signed the Mains contract.
Newrose were allowed to step in at the post office with the
subpostmaster's agreement. The subpostmaster has been
told that because it is within the 3 years of his contract and
work had been done that had payment had been made for
POL will be claiming back that money.
« — Another office has had their contract terminated because the
combi-till was not open the agreed hours. However the
temporary operator will only be able to do the same hours as
he was as they will only be able to serve from the fortress
position.
2 The CEO will speak to Kevin Gilliland on these issue. ©)
° The CEO reported for Locals POL do not have step in rights, x
as most do not have a fortress and the combi is combined
with the shop counter. Mains are completely different.
. There will be a NFSP workshop on suspensions and
appeals.
. The issue will also be taken up by the NC.
* Operators should open the hours they have agreed until they
make a successful appeal to have their hours reduced. They
must follow the process.
e Nilesh Joshi thanked the Chair for the way he had presided
over the meeting.
oN
Sharon Merryweather
Lynda Willoughby
June 2016
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