Present:
In attendance:
EXECUTIVE COMMITTEE
AGENDA
for the meeting to be held on 13 February 2014
in Room 501
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Paula Vennells (Chair), Martin Edwards, Mark Davies, Lesley Sewell, Chris Day, Kevin Gilliland,
Fay Healey, Nick Kennett, Alwen Lyons, Martin George, Chris Aujard, Neil Hayward
Sarah Hall, Stewart Fox-Mills, Brian Deveney, Tim Lloyd (Alsbridge)
Start time : 9.15 End: 17.30
Time Item ExCo Sponsor/Presenter
09.15 -11.05 Business Transformation - Operating Model and Strategic Chris Day/Lesley Sewell/
Cost Reduction Brian Deveney/ Tim Lloyd
(Alsbridge)
11.05 - 11.20 BREAK
11.20 - 12.50 Project Sparrow and Prosecuting Authority inc business Chris Aujard/ Kevin Gilliland
improvement
12.50 - 13.10 LUNCH
13.10 - 14.20 14/15 Budget - recommended KPI's Chris Day/Sarah
Hall/Stewart Fox-Mills
14.20 - 15.00 Public Purpose Statement Mark Davies
15.00 - 15.10 BREAK
15.10 - 15.50 Update on Network Transformation & Crowns inc NFSP legal I Kevin Gilliland
framework
15.50 -16.10 Industrial Relations inc Supply Chain Kevin Gilliland
16.10 - 16.35 Policies: Chris Aujard
e = Anti-Bribery
e External Data Protection Policy
e Data Sharing Policy
16.35 - 17.00 Noting papers:
e Acceptable Usage - Risk and Issues with Public Email
and Services Lesley Sewell
e Cyber Security and Information Assurance Report Lesley Sewell
e Data Centre update Lesley Sewell
e Pay & Reward Committee - TOR Fay Healey
17.00 - 17.30 AOB
17.30 CLOSE
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POST OFFICE AUDIT, RISK AND COMPLIANCE COMMITTEE
Prosecutions Policy
1. Purpose
The purpose of this paper is to:
. seek the ARC’s views on proposed changes to the prosecutions policy and the way in
which POL will prosecute criminal cases in the future; and
e update the ARC with respect to certain aspects of the Business Improvement Project.
2. Background
2.1 At its meeting on 19 November 2013, the Committee considered whether or not there was
merit in formally amending the prosecutions policy and if so what the substance of those
amendments should be. It was agreed at that meeting that before any firm decision could
be taken in this regard:
(a) further work needed to be done to understand the financial and other consequences of
amending the policy, particularly if it were the case that the amendments resulted in
fewer cases being referred to the criminal courts;
(b) the Committee needed a clearer understanding of the work that was being done as part
of the Business Improvement Programme (BIP) and the impact this would have on
detecting (and preventing) losses at an earlier stage; and
it would be helpful to understand how banks and other large companies dealt with
criminal loss caused by employees.
(c
2.2. In this connection it is probably useful to note that in a report for POL Brian Altman QC
observed that, “Post Office Ltd’s prosecution role is perhaps anachronistic...”, and that we
are “the only commercial organisation (albeit Government owned) I have been able to
identify (apart from RMG that retains a prosecution function) that has a commercially
based, sophisticated private prosecution role, supported by experienced and dedicated
teams of investigators and lawyers. To that extent it is exceptional if not unique.”
3. Activities/Current Situation
3.1 The way in which prosecutions have historically been brought was set out in some detail in
the paper on prosecutions considered by the Committee in November. In that paper it was
noted that typically we prosecute subpostmasters for False Accounting combined with
Theft, and/or Fraud. The prosecutions are brought in accordance with the Code for Crown
Prosecutors and the choice of charge is largely dependent on whether we have obtained an
admission of guilt, or other compelling evidence that the Defendant has taken money
directly from us, or have only secured evidence that the Defendant covered up losses by
falsely recording the branch’s financial position (e.g. to avoid paying losses back and/or to
keep their branch) on the Horizon system. As will be recalled, typically Defendants plead
guilty to a charge of False Accounting, with the charge of Theft then being dropped.
3.2 In terms of the volume and cost of cases, over the past few years we have averaged about
250 investigations into possible criminal conduct a year, of which about 50 resulted in
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criminal prosecutions. The financial losses (to POL) in those cases where a prosecution was
brought ranged between £1,738 and £175,260 per incident in 2012/2013, and £2,347 and
£192,990 in 2013/2014. The average cost of bringing a criminal prosecution the in 2012-
2013 financial period was about £7,500 (£3,600 for the costs of our internal security
investigators, plus £3,900 for our external solicitors).
3.3 The amount recovered from Defendants in respect of stolen, misappropriated or
unaccounted for stock or money in the cases closed so far in the 2013/2014 period was
£741,182, or approximately £10,500 per case. Total losses in those cases were £1,603,932,
implying a recovery rate of 46%. These figures must, however, be treated with a degree of
caution, as any amounts recovered must be seen as coincidental consequence of the
current policy on prosecutions. It is well established that the purpose of criminal
prosecutions is to punish and deter wrongdoing, not to recover financial loss: this must be
our guiding principle. Should we bring a prosecution for any other reason, Post Office and
its Board run the risk of being accused of abusing the Criminal Justice System, with
attendant reputational damage.
3.4 POL does however frequently initiate actions in the civil courts for debts it believes are due
and owing to it by subpostmasters. In 2012/13, the civil debt team (a team which is entirely
separate to the criminal team) recovered approximately £1.9 million, and instructed
external lawyers in 100 cases, at an average cost per case in 2012-2013 of about £1,200
(£400 for the costs of Former Agent Accounting Team, plus £800 for our exter nal solicitors).
It is not proposed at this stage to review the civil recovery process, as it outside the scope
of the work undertaken by Project Sparrow. That said, the way that POL interacts with
subpostmasters generally is in scope for the BIP.
4. Options Considered
4.1 As noted in the November paper, broadly the options considered comprised:
(a) Preserving the status quo — i.e. retaining prosecutorial capability and
continuing with a prosecutions policy which is substantially the same as that
which has been used in the past;
(b) Pursuing a prosecutions policy more focussed on more egregious misconduct -
e.g. higher value cases/cases involving vulnerable members of society/cases of
involving particularly wilful wrongdoing, and engaging with the police in relation
to other matters; and
(c) Ceasing all prosecutorial activities but instead actively involving the police/CPS
etc where it is felt that they are likely to take matters forward.
4.2 For a variety of reasons, option (a) did not gain a large degree of support from the
Committee at its meeting in November and for that reason is not the focus of this paper.
Similarly, given that we have been advised by leading Counsel that, due to budgetary
constraints, the CPS is unlikely to have an appetite to prosecute all but the most serious
cases, and there would be a substantial lead in time as we would need to open negotiations
with the Director of Public Prosecutions about implementation which would take time and
still leaves us in our current position. Also, if option (c) were commenced, it would not be
for Post Office to implement or review the policy but for the CPS. For these reasons option
(c) is not discussed in any great detail, though should the Committee decide that it is an
option worth exploring further much of the analysis in the following paragraphs, particularly
with respect to cost and financial implications will still be of relevance. Instead, the balance
of this paper focuses on option (b), and the possible “filters” that could be applied to our
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prosecution policy in order to ensure that only cases displaying an appropriate “fact
pattern” are prosecuted.
4.3 One of the “filters” that could be applied is financial: currently there are no formal financial
limits set out in our prosecution policy (though in practice de minis amounts are not
pursued), an approach which gives us a run rate of approximately 50 criminal cases a year.
If a financial filter were applied then (based on our analysis of historic cases) the number
prosecutions would (be likely to) reduce as follows:
e £15,000 - approx. 25 cases a year
© £20,000 - approx. 20 cases a year
e £30,000 - approx. a dozen a year
£100,000 - one or two cases a year (and these could possibly be of interest to the
CPS)
In order to ensure that an appropriate balance is struck between providing a suitable
deterrent, and POL not being viewed as being too heavy handed, it is recommended that a
financial limit be introduced into the policy as a matter to “take into account” when
deciding whether to initiate proceedings. The significance of this “guide” figure would be
that cases involving losses of an amount less than it would not typically be prosecuted save
where there are highly compelling or special circumstances (e.g. the victims of the conduct
are elderly or otherwise vulnerable members). It is proposed that this figure be fixed,
initially, at £20,000.
4.4 It is also suggested that factors other than financial ones should be expressly introduced
into any revised prosecutions policy. After discussion with our prosecutions team and taking
into account the fact patterns displayed in those cases that are being considered by the
mediation scheme, it is proposed that those factors include:
° whether the losses in question have been repaid;
. whether the facts disclose a pattern of deliberate conduct designed to
materially benefit him/her, or whether the fact pattern discloses
inadvertence/poor book-keeping skills or “muddle-headedness”;
e the degree of sophistication of the alleged wrongdoing;
. the number of incidents;
. the extent to which any members of the public suffered loss, and if so whether
they were from vulnerable groups in society;
° the period of the alleged offending;
. the cost of bringing the prosecution; and
° whether there are any alternative, more suitable, remedies available to POL.
4.5 It should be noted that, although POL is still currently able to bring cases where the
evidence concerned is extracted from the Horizon system, there is a strong risk that in such
cases a defence will be mounted to the effect that the Horizon system cannot be relied
upon. We have been advised that in these cases, there is a strong likelihood that such a
defence would be successful, at least until such time as a new independent expert is
identified and has familiarised himself with the system. This is likely to take around 12
weeks, and cost up to £200,000. Accordingly, at least until such time as the dimensions of
this work are fully understood, as a practical (i.e. evidential) matter court proceedings will
not be started in such cases. In addition there may be material on-going costs per case for
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the independent expert as the systems change through the usual business change
programmes.
4.6 For completeness, and at the request of the Committee, we have also considered how
other retailers, financial institutions and quasi-public organisations respond to criminal
conduct within their organisations. Although definitive information is hard to obtain, it
appears that:
. Most retailers and financial institutions maintain in-house security/investigative
functions, which pass evidence of crime (often CCTV footage) over to the police
and then support any actions taken by the external prosecutor (e.g. CPS). Other
than Royal Mail Group, we have not identified any commercial organisations
that habitually bring private prosecutions.
. Although Virgin Media recently conducted a high profile, high value (c. £144
million) private prosecution of a set-top box fraud, this was conducted with the
police and appears to have been an exceptional step rather than a “business as
usual” activity.
. Quasi-public organisations (e.g. TfL) and charities (e.g. RSPCA) are also known to
bring private prosecutions. However these are typically brought against
external persons (e.g. fare dodgers or animal abusers), and not employees or
others involved in the organisations’ day-to-day operations.
47 In the November paper, a number of other factors were identified as possibly relevant
to our approach to prosecutions (e.g. brand inconsistency, engagement with
subpostmasters). In addition to these, which remain relevant, the following should be
noted:
° Cost of Compliance with Duty of Disclosure: The continuing duty to act properly
as a prosecutor required us (through our external solicitors) to review the
prosecutions of 325 individuals to ensure that the Second Sight report did not
affect the safety of any convictions. The cost of this review was approx.
£180,000. We will need to do similar reviews every time new information
comes to light which may call into question the safety of a conviction. To seek
to minimise the need for this, we have instituted a weekly, cross-business
conference call at which branch accounting issues can be raised. The estimated
external cost of these calls is approx. £27,000 a year.
. Wasted management time and money: To date, we have spent approximately
£5million seeking to address the concerns raised over our Horizon system and
the criminal prosecutions. It has also taken up a considerable number of man
hours of senior management at a time of significant, strategic and fast change
in the company.
5. Commercial Impact/Costs
5.1 The immediate financial impact of the above policy approach, assuming that no other
changes are made, would be that the sums of money that are currently recovered via the
criminal law system (£741,182 in the 2013/2014 period), would no longer be as readily
recoverable. As explained in the November paper, however, it would be open to us to use
the civil courts to recover losses, though this is a more time consuming process, and there is
greater scope for assets to be hidden from view. The recovery rate per case pursued
through the Civil Courts will be difficult to ascertain given that a number of Subpostmasters
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subject to criminal proceedings are in financial difficulties, the impact of this on the
recovery process is unknown.
5.2 However, if POL can deal with problems that arise in subpostmasters’ offices before they
turn in to significant financial losses, the financial impact of any change in the prosecutions
policy should be greatly reduced. This in part is the aim of the BIP, the key elements of
which include:
. gathering better MI from the network systems;
° providing better training and support to subpostmasters and branch staff;
. identifying problem losses earlier;
. liaising with the relevant persons sooner; and
. reviewing how we respond when a subpostmaster has materially breached his
obligations to us.
5.3 Appendix A provides an overview of the BIP and the actions that have and will be taken.
5.4 It should also be noted that any decision made now with respect to the future conduct of
criminal prosecutions will have an immediate impact on so-called “in motion” cases. These
cases, which are the subject of the separate paper due to be considered at the next meeting
of the ARC/Board, are ones where no decision to prosecute has been made, but where the
subpostmaster concerned has been interviewed under caution, and is waiting to hear
whether or not a charge will be brought. Given that a number of cases now date back to
late summer last year, when a decision was made to suspend all prosecutorial activity, POL
should communicate its decision in this regard as soon as possible. The working assumption
is that there could be some adverse publicity as and when the decision is communicated to
subpostmasters and if delayed too long could lead to our management of the cases being
called into question. It is anticipated that the number of “in motion” cases will materially
reduce if we were to apply the filters referred to in this paper.
6. Proposal
6.1 It is proposed that:
a) A revised prosecution policy be implemented and applied against more stringent
financial and conduct criteria set out in paragraphs 4.3 and 4.4.
b) Consideration be given to whether the policy be published on our website and if so
what elements of it, to comply with best practice and transparency while not
undermining our ability to implement the policy.
c) The new policy, its interpretation and application be reviewed by a committee of
ExCo every twelve months.
d) An individual within Post Office Limited be appointed to take responsibility for
deciding whether or not an individual case should be prosecuted against that policy
(currently this accountability is shared across a number of individuals).
e) Any prosecutions be conducted through an external law firm.
f) The Communications team maintain a living strategy for dealing with all PR issues
arising from any and all prosecutions.
g) In conjunction with the BIP, we work to improve our civil recovery operation to
maximise the losses it can recover.
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7. Key Risks/Mitigation
These pertain mainly to the potential increased risk of fraud, and being seen to be “soft” with
public money, but should be capable of being addressed by enhanced MI and improvements to
the control framework etc.
8. Long term considerations — horizon scan
8.1 Not taking action now in relation to the prosecutions policy could lead to, or
exacerbate, the impact of further adverse publicity regarding Post Office’s treatment of
sub-postmasters.
8.2 Taking this action may assist in developing better stakeholder engagement.
9. Communications Impact
9.1 The Communications team is already heavily involved in Project Sparrow, and they have
seen this paper.
10. Recommendations
The ExCo/ARC is asked to approve the proposals set out in paragraph 6 above.
Chris Aujard
7 February 2014
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Appendix A
Business Improvement Programme
To ensure proper focus on both the Mediation Scheme and the Business Improvement Programme
(BIP), the BIP has been separated into an individual programme under separate governance reporting to
Kevin Gilliland.
Purpose & scope
The purpose of the BIP is to improve the effectiveness and efficiency of the support we provide to our
subpostmasters in the running of their Post Offices from an operational and engagement perspective
by:
e@ Reviewing the life cycle of the subpostmaster and all touch points with the business.
e Taking input from owners, users and recipients of Post Office policies and processes.
© Designing policies and processes that deliver improved ways of working with our subpostmaster
network in a cost effective and engaging way.
¢ = Reviewing all our interactions with Subpostmasters and making recommendations on structure
design for the network and admin support function touch points.
* Developing an implementation plan to move from existing to future state.
Quick Wins
In the process of mapping the “As is” and “To be” processes. Quick wins have already been
implemented with more planned for implementation in Q4. The key areas of change that are pertinent
to the prosecutions policy are our approach to Subpostmaster contract breaches and a pilot called
HORice that we are soon to run on testing the effectiveness of a real-time data tool from Fujistu to
support earlier identification and intervention of accounting and transactional anomalies
Precautionary Suspension approach — we have reviewed our approach in how we respond to
material contract breaches by Subpostmasters and made the following improvements:
- Our default position is to keep the Subpostmaster in post and the branch operational,
unless in the usually low number of cases where not to precautionary suspend the
Subpostmaster would carry a high risk of damage to POL’s reputation and / or a high risk to
POL’s assets, or where a customer has been directly involved in a potential fraud by the
Subpostmaster. The effect of this approach has resulted in a significant reduction in the
number of precautionary suspensions in 12/13 and especially in the second half of the year.
See graph below.
- Weare introducing in Q4 a new category of action in dealing with material breaches of
contract i.e. Suspended termination. This is where the Subpostmaster has materially
breached the contract and would have previously had their contract terminated. The new
Suspended Termination category is where mitigating circumstances are such that the
decision is to award a suspended termination is made; the Subpostmaster remains in post
on the condition that if a further breach of contract occurs in an agreed period (set by the
nature of the first breach and typically a year) then the contract termination is triggered.
- Where a potential breach of contract has occurred our approach is to work with the
Subpostmaster to establish the facts and then to take the appropriate action. Any
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investigation is carried out in a totally objective way treating the Subpostmaster at all times
with dignity and respect regardless of whether there is evidence to suggest any wrong
doing.
0
si oes ast
perse anaes rn ze
* oa ie
be 6 6
HORice
This is a real-time data tool from Fujistu to support earlier identification and intervention of accounting
and transactional anomalies which could be an indicator of non-conformance or fraud. The real-time
element will enable analysis to be undertaken at the point it happens rather than waiting for historical
data to be gathered. We are piloting this in March and if the results are as we expect this tool could nip
problems and losses in the bud - there have been specific historical cases of significant losses (i.e.
£185k) where having this data would have identified a pattern or behaviour within one to two months
rather than after 1 year.
Longer Term Changes
The Business Improvement Programme has 9 work streams that capture all the touch points the
Subpostmaster has with Post Office in running their branch. These are: pre-appointment process;
operational support; physical support; performance management; training; communication; IT; early
warning/intervention approach; leavers process.
The milestone plan for each of the workstreams is currently being scoped and will be completed by the
end of February 2014. Some of the workstreams will have longer timelines than others due in part to
the interdependency on other workstreams to complete or other business considerations — the IT
workstream is a good example of where delivery will depend on the requirements of the other
programme workstreams.
Review Mechanism
The proposed ways of working for each workstream will include an ongoing review mechanism that
ensures that continuous improvement is embedded into business as usual.
Measuring Success
The Programme has two main key performance indicators (KPIs) — Agent Engagement and Operational
Cost Reduction.
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e Agent Engagement - the formal measure is the Subpostmaster annual engagement and in
particular the support category of the survey. This will be supplemented with Pulse surveys
undertaken by Comms at quarterly intervals throughout the year. Reviewing the life cycle of the
subpostmaster and all touch points with the business
¢ Operational Cost Reduction - the cost of support to the network will be baselined as part of this
Programme. Headline numbers suggest that 40% of the current support to the network is spent
on recovery support ie correcting things that haven’t been done right first time
Each of the nine workstreams will have performance measurements that feed into the two main KPIs.
Branch User Forum
The purpose of the Branch User Forum is to provide a way for Subpostmasters and others to raise issues
and insights around business processes, training and support directly feeding into the organisation’s
thinking at the highest level. The forum is a forward looking mechanism to ensure the business
processes and approaches are fit for purpose for users and are in keeping with Post Office behaviours
and values. The Forum consists of 6 Subpostmasters, 2 Crown members and 4 PO Senior Managers.
The second meeting took place on 16 January and covered the communication approach that the forum
would take and a review of the initial inputs to the forum.
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POST OFFICE LTD BOARD
Business Improvement Programme
1. Purpose
The purpose of this paper is to:
1.1 update the Post Office Board on the Business Improvement Programme
2. Background
2.1 The Branch Support Programme was initiated in July 2013 to review the level of
support the Post Office provided to subpostmasters to operate their post offices
and to introduce improved levels of support having taken feedback from
subpostmasters.
2.2 As the findings of the Branch Support Programme unfolded it became evident
that the scope of this programme needed to be wider to ensure that the required
cultural change was to be embedded within the Post Office. Consequently the
Programme has been renamed the Business Improvement Programme with a
wider scope which is detailed within this paper.
3. Business Improvement Programme — Purpose and Scope
3.1 The purpose of the Business Improvement Programme (BIP) is to improve the
effectiveness and efficiency of the support we provide to our subpostmasters
and operators in the running of their Post Offices from an operational and
engagement perspective.
3.2 What is in and out of the scope of this programme is detailed below:
In Scope Out of Scope
Cash, stock & stores management Crown network as an entity
Finance Service Centre (FSC) Supply Chain as an entity
NBSC & HSD NTP as an entity
Training — design & delivery Wider business organisational design
Audit - design & delivery
Communications
Structure design for the network and
admin support function touch points
Spmr/operator selection process
Spmr contract breaches
Sales support — delivery methods
Product design, delivery & Comms
Crown — where the touch points are the
same for the Crown network then these
are in scope
Refinement of network operating models
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Programme Outputs — Quick Wins
In the process of mapping the “As is” and “To be” processes “Quick wins” have already
been / will be implemented by end March 2014. Our focus has been on addressing the
key issues raised in the Second Sight interim report and some of the themes from the
Mediation Scheme cases although a number of these improvements were already in
train within the Post Office.
44 Subpostmaster Contract Breaches - we have reviewed our approach to how
we respond to material contract breaches by Subpostmasters and made the
following improvements:
e Where a potential breach of contract has occurred our approach is to
work with the Subpostmaster to establish the facts and then to take the
appropriate action. Any investigation is carried out in a totally objective
way treating the Subpostmaster at all times with dignity and respect
regardless of whether there is evidence to suggest any wrong doing.
e Our default position is to keep the Subpostmaster in post and the branch
operational, unless in the usually low number of cases where not to
precautionary suspend the Subpostmaster would carry a high risk of
damage to POL’s reputation and / or a high risk to POL’s assets or where
a customer has been directly involved in a potential fraud by the
Subpostmaster. This has resulted in a significant reduction in
precautionary suspension and termination cases as evidenced at
appendix 1. Examples of some of the cases are detailed at appendix 2.
These branches are then monitored so if the initial problem were to
reoccur we can respond quickly.
e In March we are introducing a new category of action in dealing with
material breaches of contract i.e. Suspended termination. This is where
the Subpostmaster has materially breached the contract and would have
previously had their contract terminated. The new Suspended
Termination category is where mitigating circumstances are such that the
decision is to award a suspended termination is made; the
Subpostmaster remains in post on the condition that if a further breach of
contract occurs in an agreed period (set by the nature of the first breach
and typically a year) then the contract termination is triggered.
4.2 Early Identification Tool - this is a real-time data tool from Fujistu.
e It will support earlier identification and intervention of accounting and
transactional anomalies which could be an indicator of non-conformance
or fraud.
e The real-time element will enable analysis to be undertaken at the point it
happens rather than waiting for historical data to be gathered.
e The pilot called HORice will be run in March and if the results are as we
expect this tool could nip problems and losses in the bud - there have
been specific historical cases of significant losses (i.e. £185k) where
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4.4
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having this data would have identified a pattern or behaviour within one to
two months rather than after 1 year.
Accounting Losses Support — we have refined our processes to react more
responsively to reports of unexplained losses from Subpostmasters
Where unexplained accounting discrepancies are raised by
Subpostmasters either via NBSC or some other route eg flag case
these are passed to the Branch Support Team for resolution.
The Branch Support team will assess whether the case is satisfactorily
closed or whether further training is required.
If further training is required the Branch Support team will action this.
If further investigation is required the Branch Support team will pass to
the Mediation Case Managers for assessment and further investigation
as appropriate.
Longer term, calls to NBSC will be categorised and analysed
to establish root cause and resolution.
Training - we have improved the training approach by:
Introducing an introductory call to the new Subpostmaster two weeks
before they take up post.
Having earlier contact with the Subpostmaster following their initial
training and replacing the month 1 telephone call with a branch visit.
Reviewing the effectiveness of the balancing work-aid to help
Subpostmasters identify and hopefully resolve balancing problems
earlier.
Longer term, we are considering options on how best to optimise e-
learning in our initial training to agents and on an ongoing basis
5. Programme Outputs — Longer Term
5.1
5.2
5.3
The Business Improvement Programme has 9 work streams that capture all the
touch points the Subpostmaster has with Post Office in running their branch.
These are: pre-appointment process; operational support; physical support;
performance management; training; communication; IT; early
warning/intervention approach; leavers process.
The milestone plan including costs and benefits for each of the workstreams
will be completed by the end of February 2014, with interdependencies
mapped.
The proposed ways of working for each workstream will include an ongoing
review mechanism that ensures that continuous improvement is embedded
into business as usual.
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Success Criteria
6.1 The Programme has two main key performance indicators (KPIs) — Agent
Engagement and Operational Cost Reduction:
e Agent Engagement - the formal measure is the Spmr annual
engagement and in particular the support category of the survey. This
will be supplemented with Pulse surveys undertaken at quarterly
intervals.
« Operational Cost Reduction - the cost of support to the network will be
baselined as part of this Programme. Headline numbers suggest that
40% of the current support to the network is spent on recovery support ie
correcting things that haven’t been done right first time
6.2 Each of the nine workstreams will have performance measurements that feed
into the two main KPIs.
Interdependencies
7.1 Other business programmes identified as having key interdependencies with
this Programme are:
e Sparrow ie Initial Complaint Review and Mediation Scheme. Sponsor —
Chris Aujard. Programme led by Belinda Crowe
e Network Transformation. Sponsor — Kevin Gilliland. Neil Ennis,
Programme Director.
e Business Operating Model — Sponsor — Lesley Sewell. Programme led by
Brian Deveney.
Governance
8.1 The Business Improvement Programme will operate with a formal programmatic
approach supported by the necessary governance and resource. The rationale
for this is that a cultural change in behaviours will be required and therefore the
right support in each of the workstreams and business areas will be needed to
ensure that the changes are managed effectively and successfully embedded
within the organisation with pace.
8.2 The Programme Board will meet monthly with monthly updates provided to
ExCo and POL Board.
Kevin Gilliland
13” Feb 2014
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Appendix1
Agents suspended
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ine
oe pees sped s
oe
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Sesyhed ts Aud Tecmination — 60 88 B 8 Be a % 4
Seine a ee st ae os 2
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Appendix 2
Subpostmaster Contract Breaches — New Approach Examples
No Precautionary Suspension Examples — these are where under the previous approach
precautionary suspensions would have happened.
Date of Audit I Decision in respect of Contract breach
Audit result was £1112.98 short. As this was over the £1K threshold this
Sept 2013 would have previously led to a precautionary suspension pending
Risk Based investigation. Three cheques totalling £800 were missing — the response from
Audit Spmr was vague in relation to where they were. Rather than suspend, upon
making good the full amount of the loss on the day the branch was re-opened
and service maintained. The Spmr later attended a meeting with the
Contracts Advisor in relation to the contract breach.
Audit result was £5401.44 short which would have led to automatic
October 2013 I precautionary suspension. Spmr claimed historic stamp shortage (2008) and
Risk Based part Transaction Correction had been disputed. The loss was made good on
Audit day. The Spmr was kept in post. The investigation and the interview with the
Spmr taking place at a later date. Written warning was issued.
Audit result was £17,818.42 short. It was clear from Field Support Advisor
November (auditor) on site that this was down to OIC who failed to appear with safe keys
2013 which would have previously led to automatic precautionary suspension. The
Audit Spmr accepted full responsibility and undertook to repay at earliest
following opportunity in full (received within 7 days). The Spmr was kept in post and
cash check interviewed at a later date. The Spmr has since left as part of a commercial
escalation transfer.
Audit result was £36148.04 short. Staff member had been manipulating
December cheques within the account — these cheques were not being received by the
2013 processing centre. The staff member was son of the Spmr who had left him in
Special charge without proper controls. The Spmr accepted full responsibility for loss,
Request Audit I removed her son from the branch and entered into repayment arrangements
with us to repay the loss. Previously the Spmr would have been precautionary
suspended whilst the investigation was completed but in this instance the
investigation was but was done on the day. As the Spmr is a pluralist if
suspended she would have been suspended from both branches.
Precautionary Suspension Examples — these are cases that under the new approach
warrant precautionary suspension
Date of Audit I Decision in respect of Contract breach
Audit result was £33,388.14 short. During the audit the Spmr admitted taking
November £29k and giving it to his brother to buy a car. Precautionary suspension took
2013 place and following interview with Contract Advisor the Spmr’s contract was
Risk Based terminated. The debt is still outstanding. A temporary Spmr is running the
Audit branch.
Audit result was £7488.00 short. The Spmr admitted misuse of funds to keep
September business running as struggling to maintain. He was precautionary suspended
2013 because no reasonable explanation and funds would have continued to be at
Risk Based risk. He later resigned to avoid termination
Audit
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Purpose and Contents E>
Purpose
e The purpose of this session is:
@ Jo review and agree the measures to be used for POL in 2014-15
® To discuss bonus worthy metrics
e To agree next steps
Contents
e 2013-14 - Scorecard
® 2014-15 - Draft Scorecard for discussion and agreement
® Questions and timeline
2013-14 Scorecard - a reminder
Key Perf Indi Year to Date Full Year 2012-13
ey Performance Indicators Act Target Var ILatest view Target Var Outturn
Growth
Total Net Income (excl NSP) £m (Bonus 20%) 650.3 678.7 880.0 500.0 (a 9024
Operating profit £m (Bonus 25%) 86.1 74.6 102.0 102.0 94.2
Earnings before ITDA and Subsidy £m* (63.6) (74. (97.2) (97.2) (445.4)
Free cashflow £m 121.2 5.2 103.7 (16.3) 132.2
Customer
Customer Satisfaction** 87.5% 88.0% 88% 88% 87%
Easy to do business with (Bonus 20%)** 43% 44% 43% 44% N/A
Net Promoter score** (3) 5 (3) 5 N/A
Queue time % < 5 minutes - Top 1k branches 81.5% 79.1% 81% 81% 80.7%
Horizon availability 99.9% 99.7% 99.9% 99.7% 99.8%
Branch - Compliance (new basket) 98.4% 98.0% 98% 98% 97.8%
People
Engagement Index % (Once a year) (Bonus 10%) 51% 51% 56% 55%
(No.) % of BME appointments over total recruits at senior 10% 40% rm WA
leadership and senior manager
(No.) % of Female appointments over total recruits at senior 49% 19% 10% NYA
leadership and senior manager
Modernisation
Crown Profit (Loss) £m (Bonus 12.5%) (22.4)
NT Conversions - contract signatures (Mains & Locals) (Bonus 2.407
12.5%) ***
NT Branches Open (Mains & Locals)***
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Bonus worthy metrics
* ITDA Interest, Tax, Depreciation, Amortisation
** Monthly = 3 month average. YTD = 12 morth average.
*** YTD and FY = cumulative including prior years
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Draft 2014-15 Scorecard
Key Performance Indicators Status I Bonus % I Threshold Target Stretch JExCo owner Rationale
Growth
Total Net Income (excl NSP) £m (Bonus) Existing I 20% 910 925 940 Chris [Target is budget
Operating profit £m (Bonus) Existing I 25% 99 99 130 Chris [Target is budget
Earnings before Interest. Tax, Depreciation, Amortisation and Subsidy (64.0)
64.0) hris [Target is
lesiroas) em Existing (64.0 Chris arget is budget
Free cashflow £m Existing TBC Chris __IFinal figure TBC - Target will be budget
Customer
[Customer Satisfaction** Existing 88% Martin [Maintain current target - Externally reported metric
Easy to do business with (Bonus)** Existing I 20.0% 46% 48% 50% Martin See separate paper
55% (or 13-I 56% (or 13-]57% (or 13-
Engagement index % (Once a year) (Bonus) Existing 10.0% 14 outturn if} 14 outturn I 14 outturn Fay Target should be an improvement 2012-13 (prior to IR issues)
higher) I +1 if higher) I+2 if higher)
No.) % of BME appointments over total recruits at senior leadership.
National average is 11.9%, FTSE 100 average is 5.7% (POL last 3
land senior manager Existing m% Fay month average 6.7%)
to) 8 of Ferate appointments over total recut at senor leadership Pp ast fay _ [Nationa average is 81% ofthe population (POL last 3 manth average
land senior manager 44%)
Modernisat
Same as
crown Profit (Loss) £m (Bonus) Existing I 12.5% I “To TBC TBC I Chris/ Kevin [Await calculations from Clarity - to align with budget
INT Conversions - contract signatures (Mains & Locals) (Bonus) Existing I 12.5% TBC TBC TBC Kevin ITBC “ 0
INT Branches Open (Mains & Locals)*** Existing TBC Kevin }r8c Co _ ‘
Questions for discussion
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Scorecard
°
Are you happy with the new Subpostmaster Engagement score being added to the scorecard?
Should the Branch Compliance metric be re-worked from the current one to have more of a Financial
Services focus? (currently under review).
Should the current 4 customers metrics be reduced to the 2 as proposed by Commercial (dropping
Queue time and NPS - see separate paper) ?
Are there any other metrics that should be added? Eg cost reduction?
Are there any metrics that should be removed?
Confirm that NTP target remains based on signatures and not openings?
Bonus
Is the balance of bonus right?
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The ExCo is asked:
* Discuss and agree the measures to be included in the scorecard for 2014-15 and agree which are bonus
worthy metrics
* Agree next steps to complete target setting, link to bonus scheme (% split, threshold, stretch) and
communicate
* Consider approach for agreeing LTIP metrics
« Note the timeline below
* Timeline for 2014-15 Scorecard:
¢ Late January / Early February - Directorates look at key measure and objectives for the year ahead
based on the strategic plan and other operational requirements. At the same time Finance pull together
a first draft of the scorecard based on the strategic plan deliverables.
* 13% February - ExCo session to discuss/ review/ approve proposed metrics for 2014-15 scorecard
* End of February - ExCo approve final scorecard with targets including threshold and stretch targets (if
not completed on 13)
* 11 March (papers on 2™ March) - Remco to approve STIP and LTIP schemes
* 26th March - Board approve the budget
Early April - Agree STIP and LTIP targets with Shareholder
1. Purpose
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POST OFFICE LTD EXECUTIVE COMMITTEE
Statement of Public Purpose
The purpose of this paper is to invite ExCo to:
e note the results of the research undertaken as part of the Public Engagement
Exercise into the Public Purpose of the Post Office
e approve the proposal and arrangements for the next steps in agreeing and
publishing the Public Purpose of the Post Office
2. Background
2.1.
2.2.
2.3.
In the response to its consultation ‘Building a Mutual Post Office’ (July 2012)
Government set out that a definition of the public purpose, developed
collaboratively with stakeholders, should be undertaken as a first step towards the
potential mutualisation of the Post Office.
The response set out the Government's wish for the Post Office to engage with
stakeholders to create a statement capturing the business’ public benefit, referring
to the social need behind many of its services alongside the role of the network at
the heart of many communities.
The response stated that ‘mutual businesses...require a clear vision around which
the wide ownership base can coalesce”, citing Arup’s mission as a commitment to
good design, and John Lewis Partnership’s stated purpose as being the happiness
of its members. The response went on: “For the Post Office, defining an appropriate
level of service and those customers’ needs it must meet, alongside the interests of
those within the business who work to meet those needs, will be a vital prelude to
mutualisation. This will enable codification of the Post Office’s purpose within a
future mutual’s constitution.”
3. Activities/Current Situation
3.1.
3.2.
The Post Office established a Stakeholder Forum in October 2012 comprising
stakeholders and experts from a range of organisations to begin defining its public
purpose. Paula Vennells chaired the Stakeholder Forum, which comprised the
NFSP, CWU, Unite, Age UK, Consumer Futures, CAB, British Youth Council, Mutuo
and the BBC.
Two working groups were established to produce the content of the public purpose.
One group looked at the Public Purpose from the perspective of those delivering
post office services, the other from the perspective of the consumer. These
discussions resulted in two versions of a Public Purpose Statement and Principles
Annex 1. It was agreed that these two statements and principles would be tested
Public Purpose Mark Davies
February 2014
Page 1 of 8
3.3.
3.4.
3.5.
3.6.
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with the public and wider stakeholders through an engagement study across a
range of audiences.
A research agency, Truth, was appointed by the Post Office to conduct the research
and report back to the Public Engagement Working Group (this included the
communication leads for each of the members of the Stakeholder Forum).
The Public Engagement Working Group started an engagement and research
exercise on 30" August 2013 to get the views of the public and wider stakeholder
groups. The result of this was a very comprehensive piece of research which
covered all nations and included colleagues, subpostmasters, the general public,
customers, small businesses and those members of the public that are traditionally
hard to reach (elderly and the digitally excluded). The research included surveys,
workshops and interviews — a short selection of quotes from the research are
included in Annex 2. The full research document will be available on Boardpad.
The conclusions from the research were presented to the Public Engagement
working group in November and the Stakeholder forum in December 2013. The
research identified three broad themes which resonated with those who took part,
those of community, trust and accessible
We have reviewed the research, comments from the public engagement working
group and the Stakeholder Forum and drafted a Public Purpose Statement for
discussion with ExCo before consideration by the Board. This is at Annex 3
4. Options Considered
4.1.
4.2.
In developing this proposal we have considered (a) what other organisations say
about their Public Purpose, (b) sought to ensure that the language used is clear
and simple to understand, and (c) the Public Purpose complements the Post
Office’s Securing the Future: 2020 Strategy.
We have also considered governance issues in relation to the public purpose
statement. A number of potential measures would, subject to ExCo agreement, be
utilised in relation to delivery, ranging from network accessibility criteria to
customer satisfaction scores and engagement data. A summary of potential
measures is at Annex 4.
5. Proposal
5.1.
5.2.
The proposal is to take the draft Public Purpose statement to the Board on the 26”
February 2014. The statement would then be put to BIS with an eventual
announcement in March / April 2014, potentially alongside the launch of the Post
Office Advisory Council.
Further to this proposals will be developed in relation to governance
arrangements. The Board had previously considered this issue and felt that the
business should be held to account for delivery of the public purpose through the
Board or the ARC.
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February 2014
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6. Key Risks/Mitigation
6.1. There is the risk that that the Public Purpose may be misinterpreted or misused by
some organisations / individuals. In addition, there may be parties that do not fully
agree or sign-up to the Public Purpose statement. However, a thorough process
and research project has been undertaken, stakeholders were invited to take part
in that process and there was broad consensus on the key themes that should be
included in the Public Purpose statement.
7. Communications Impact
7.4 For the first time in our history we will have a clear definition of why the Post Office
exists and its public purpose: a definition forged by our customers and our people.
The Public Purpose represents a powerful opportunity for our organisation,
particularly within the context of the development of mutual ways of working. It will
present a vision around which we have the opportunity to motivate colleagues,
subpostmasters, stakeholders and most importantly customers.
7.2 Ultimately the Public Purpose statement will play a key communications role in
challenging perceptions about the business and will provide a vehicle around
which we will be able to articulate the ways in which we are different from other
businesses. Alongside the development of our brand through marketing activity, it
will support commercial priorities through demonstrating to our customers (existing
and new) that the Post Office is unique because of our public purpose.
7.3. The Public Purpose also strongly relates to the development of mutual ways of
working. We can use the Public Purpose statement to galvanise colleagues in all
parts of the business around a common purpose to increase engagement and
bring a renewed emphasis on customer excellence.
8. Recommendations
8.1. ExCo is asked to:
e note the results of the research undertaken as part of the Public
Engagement Exercise into the Public Purpose of the Post Office
¢ consider the proposed Public Purpose statement and arrangements for the
next steps in agreeing and publishing the Public Purpose statement
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February 2014
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Annex 1
Stakeholder Forum Output
As a mutual Post Office we will be accountable to the public, customers, our people and their representatives for the delivery of the
Putte Purpose
Public Purpose from the perspective of those who deliver
Post Office services
Public Benefit Purpose
‘The Post Office exists to deliver trusted, vital and valued
products and services which are universaity accessible
We witf do this by
+» Making 3 positive conmbution to the aff communities we
sewe
+ Developing a dynamic, enterprising. einical and
commercially sustainable business by continually evolving
ievesting in cur infrastructure, procucls, services and people
fo- ensure we secure the business for the fulure.
« Keeping our customers at the heart of what we do, buling
Telationships based on trust and integrity
+ Staying true to our core of nancial, goverment and postal
senices, continuing to modeenise and expand into new
markets: enswring we are always provkling our customers with:
relevant, value for money services
+ Proving a high quality, responsive service that olfers choice
tS meet the needs of our customers,
‘insping, engaging and fairly rewarding our people
Developing them to ensure they Nave the highest standards of
excellence and professionalism. They are proud te be a par of
the Post Office
‘The public purpose from the perspective of the Consumer
‘The public purpose of the Post Office
‘The Post Office is accessible and accountable to alt its.
‘customers, treating them fairfy and offering them the
products and services that they need and can trust.
Key elements
+Promises to provide the services people want and treat people
faty
Member involvement in the direction of the organisation
-+Sustainabitty
Fulure-proot business planning
+thical attitudes in ts behavious towards its customers and
dealings vith business partners
Public Purpose
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Annex 2
Public Purpose Research Quotes (from the Public Engagement Exercise)
“In our community it provides a much needed banking system. [Our] nearest town [is] 17 miles
away. It provides a person to answer many questions both financial and social.” Source:
Customers, qualitative questionnaire
“The Post Office plays such an important role in the communities they serve. They are often the
social fabric that glues the community together.” Source: Those delivering the service,
qualitative questionnaire
“I have given a score of 9 for both statements because I believe that the products and services
the Post Office provides are very important and affect the quality of life of many members of our
society.” Source: Customers, qualitative questionnaire
“It is not just a commercial set up like a supermarket the staff are normally local and care very
much about providing the ultimate service to their neighbours in the community.” Source:
Customers, qualitative questionnaire
“Always being open and honest, and always fighting to give customers the best customer and
best products and service.” Source: Customers, qualitative questionnaire
“PO provides access to key services associated with Government in a familiar and secure
environment The brand is one that most people recognise, and more importantly trust.” Source:
Customers, qualitative questionnaire
'The Post Office is the heart of most communities, it's not just about the service we offer it is a
social experience for many people as well, sometimes the only time some people get out and see
anyone’ Source: Those delivering the service, qualitative questionnaire
‘It is a focal point of any community as it deals with all aspects, pensions car tax, insurance,
posting letters and parcels. It is vital to all our communities as it keeps people together.” Source:
Customers, qualitative questionnaire
“I highlighted ‘keeps’ as well, because you want to keep your customers. I think you've got to
focus on how to keep them, throughout every Post Office not just individually.” Source:
Customers, qualitative workshop, Cardiff
“It's all about involvement. If you cut out your customers from your decision-making processes
you're going to alienate them.” Source: SMEs, qualitative workshop, Cardiff
“Everybody looks for value for money. And you feel you get it at the Post Office.” Source:
Customers, qualitative workshop, Belfast
“What's relevant to one person isn’t going to be relevant to another. It feels like a descriptive
word that doesn’t really have any value.” Source: SMEs, qualitative workshop, Belfast
“This is about everybody being treated the same, Black, White Protestant, Catholic etc.“
Source: Customers, qualitative workshop, Belfast
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February 2014
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“This is about more than just the service. It’s about the extra stuff — the meeting point, the
information point, the place that people can come and talk. More than the sum of its parts.”
Source: Customers, qualitative workshop, Belfast
“I kept thinking promises can be broken. I don’t know why, it was at the back of my mind so I just
didn’t like the word.” Source: Those delivering the service, qualitative workshop, Cardiff
“What you want may not be possible.” Source: Customers, qualitative workshop, Belfast
“Most of it is about things you need not things you want. Post Office is straight-up, its not going to
come up with these ‘Buy One Get One Free’ type thing.” Source: Customers, qualitative
workshop, Belfast
“It's about good standards, morals, fair. It’s not like the banking service.” Source: Customers,
qualitative workshop, Belfast
“I like the word ‘secures’ the business. It's got to be secure. I like ‘future’. No future, no
existence.” Source: Those delivering the service, qualitative workshop, Cardiff
“Its fine for them to grow, just keep the customer at the heart.” Source: Customers, qualitative
workshop, Belfast
“I don’t really care what it invests in its infrastructure; I just want the service to be provided for
me.” Source: SMEs, qualitative workshop, Belfast
“Every other part of the high street is evolving and sometimes Post Office feels archaic. Its
important it evolves as otherwise it become s obsolete.” Source: SMEs, qualitative workshop,
London
“I thought it doesn’t really belong in the Public Purpose. The public going into any place, a shoe
shop or a Burger King, will expect the people there to be trained to do what they're doing. ”
Source: Those delivering the service, qualitative workshop, Edinburgh
“We don’t know what the future holds. We have a ten-year deal with the Royal Mail so maybe we
won't stay true to that, but we should stay relevant to providing services that customers want, that
are more important. ” Source: Those delivering the service, qualitative workshop, Belfast
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February 2014
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Annex 3
The Public Purpose of the Post Office — draft
The Post Office is a commercial multi-channel business set apart by its public purpose: that of
providing customers with key products and services through an unrivalled community presence
across the UK.
Our public purpose is driven by a belief in the power of communities and the crucial role they play
in all our lives in bringing collective focus which supports the common good.
To deliver our Public Purpose we will run our organisation by following four principles:
1. Keep customers at the heart of everything we do
2. Build relationships based on trust
3. Treat everybody with fairness, honesty and respond to different people’s needs
4
Make a positive social and economic contribution to all the communities we serve
As an organisation we pledge to:
¢ Maintain ethical attitudes in all our behaviours
e Provide access to vital and valued products and services in our branches, online and on the
phone
e Invest in the organisation to secure the business for the future
e Listen to the views of customers, colleagues and those with a special interest in the Post
Office
e Develop and engage ourselves and our partners to ensure they provide the highest level of
service
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February 2014
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Annex 4
Measuring our performance against the public purpose
The chart below sets out potential metrics for measuring our performance against the public
purpose statement.
Principle
Potential measures
Keep customers at the
heart of everything we do
Customer Panel
Customer Surveys and feedback
Government accessibility criteria
Assisted Digital development
Customer Satisfaction Scores
Net PromoterScore (and other brand metrics)
Customer Helpline numbers results.
Build relationships based
on trust
BREC Brand Study
Government Services offered
Engagement data/tools
Treat everybody with
fairness and honesty and
respond to different
people’s needs
Product Development: Customer Value Propositions
Customer satisfaction figures
Make a positive social and
economic contribution to
all the communities we
serve
CSR strategy/Your Charity
Community Enterprise Fund
Community index report
Investment in community branches
Product / Service awards won
Industry metrics
Pledge
Maintain ethical attitudes
in all our behaviours
Post Office staff values and behaviours
Engagement metrics
Provide access to vital
and valued products and
services
Product development and growth
Invest in the organisation
to secure the business for
the future
Strategy 2020
Community branch investment/development
Development of customer propositions
Business transformation
Listen to the views of
customers, colleagues
and those with a special
interest in the Post Office
Mutual Ways of Working:
- Post Office Advisory Council
- Branch User Forums
- Subpostmaster Engagement Survey
- Communications framework
-__Engagement metrics
Develop and engage
ourselves and our
partners to ensure they
provide the highest level
of service
Post Office Learning and Development Policy
Employee engagement survey
Public Purpose
Mark Davies
February 2014
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Elements tested in the qualitative engagement
The public purpose
statement
We assessed two iterations
_“The Post Office
_ exists to deliver
trusted, vital and
valued products and
services which are
universally
accessible.”
_ “The Post Office -
_ exists to be
accessible and
accountable to all its I
customers, treating
them fairly and
offering them the
_ productsand —
services that they
_ need and can trust.”
The principles
We assessed 18 principles describing an aspect of what and how the Post
Office needs to do to achieve its public purpose
it is important that the Post Office...
1 makes a positive contribution to all communities it serves
2 ..keeps customers at the heart of what it does
3 ..builds relationships based on trust and integrity.
4 . develops a dynamic, enterprising, and commercially sustainable business by continually evolving
5 ..invests in its infrastructure, products, services and people to ensure it secures the business for the future
6 .aStays true to its core of financial, government and postal services
7 »continues to modernise and expand into new markets
& .» provides its customers with relevant, value for money services
3 .. provides a high quality, responsive service
40 ..offers choice to meet the needs of its customers
4 ..inspires, engages and fairly rewards its people,
12 .. develops its people to ensure they have the highest standards of excellence and professionalism
13 ..ensures its people are proud to be a part of the Post Office.
14 .. promises to provide the services the public wants
as ..treats people fairly
16 involves its people and stakeholders in the direction of the organisation
47 ..has ethical attitudes in its behaviour towards its customers and in its dealings with business partners
18 . future proofs its business plans
truth
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Three broad themes emerged as central to people’s perceptions of
the role of the Post Office and what makes it unique
Accessibility
* Help and support (e.g. source of
information and advice)
° Service delivery (e.g. face to face, reliable)
* Superior customer service (friendly,
personal, caring, go the extra mile)
+ Wide range of product and services
+ Convenience (e.g. easy access / branch
network)
* For everyone (e.g. vulnerable groups,
people in later life, isolated areas)
+ Social / important role in communities
+ Vital to society and local / small
communities
+ At the heart of the community
truth
No refinement needed
More refinement needed
Content and
language
resonate
perfectly
Keeps customers at the
heart of what it does
Content needs
Builds relationships based
on trust and integrity
Treats people fairly
Provides a high quality,
responsive service
Provides it customers with
relevant, value for
Promises to provide the
services the public wants
Makes a positive
contribution to all
communities it serves
refining
z
i
Has ethical attitudes in its
behaviour towards its i i
customers and in its dealing I;
with business partners i
‘
Offers choice tomeet the
needs of its customers i
i
i
i
i
i
ii
Invests in its infrastructure, © :
products, services and i :
people to ensure it secures I;
the business forthefuture —!
:
i
i
i
i
i
t
a
+
Involves its people and
stakeholders in the
direction of the I
organisation i
Essence needs
refining
Stays true to its core of financial,
government
Develops its people to ensure
they have the highest standards
of excellence and professionalism
inspires, engages and rewards its
people
Develops a dynamic, enterprising,
and commercially sustainable
business by continually evolving
Continues te modernise and
expand into new markets
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Not relevant
for PPPO
Ensures its people are
proud to be a part of the
a. I ne
Future proofs its business
plans
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I Original principles Findings and implications How it could look like
Keep customers at the heart of what it
does
Builds relationships based on trust and
integrity
Treats people fairly
Provides a high quality, responsive
service
Provides it customers with relevant, value
for money services
Makes a positive contribution to all
communities it serves
Promises to provide the services the
public wants
Captures the essence of how people view the
Post Office — a public service that prioritises
people over profits
Trust lies at the heart of the principle’s popularity.
Demonstrating the value of building relationships
over time provides important reassurance for both
current and future PO customers
Essence resonates strongly but language and
benefits need to be more tangible to avoid feeling
vague and losing its meaning.
Language needs slight revision to emphasise the
commitment to delivering good service which is at
the core of the principle’s relevance
Essence perceived to lie more in accessibility of
value for money services rather than relevance.
Principle goes some way towards capturing the
vital role that PO plays in communities, but its
social and economic contribution needs to be
more clearly referenced to broaden appeal
Sentiment is admiral, but what makes PO different
is how they offer what people need rather than
what they want
Keep customers at the heart of
what it does
Builds relationships based on
trust
Treat everybody with fairness
and honesty
Provides a consistently high
level of service
Provides access to value for
money products and services
Makes a positive social and
economic contribution to all
communities it serves
Responds to different people’s
needs
6 Content and
language
resonate perfectly
truth
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ne Original principles Findings and implications How it could look like
Has ethical attitudes in its
behaviour towards its Whilst the sentiment of ‘ethical’ is valued, language needs to Maintains ethical attitudes in
customers and in its dealing better capture relevant essence and benefit to public. all its behaviours
with business partners
Concept of ‘choice’ can feel too broad and contradictory —
Offers choice to meet the essence lies more in being able to answer a wide range of
needs of its customers different needs. This essence was better captured by two
elements extracted from statement A “vital and valued”.
Provides access to vital and
valued products and
services
invests in its infrastructure,
products, services and people Essence is relevant but length and ‘corporate’ language
to ensure it secures the hinders resonance
_ business for the future
Invests in the organisation
to secure the business for
the future
Listens to the views of the
people delivering the
service regarding the future
involves its people and While the essence of ensuring key stakeholders feel they have f the Post Offi
stakeholders in the direction of a voice in the future of the organisation is relevant, the ay ve ice
the organisation ‘corporate’ language causes confusion and hinders resonance.
Listens to the views of key
communities regarding the
future of the Post Office
truth
prncple: Findings and implications
inspires, engages and
rewards its people
Develops its people to
ensure they have the
highest standards of
excellence and
professionalism
Stays true to its core of
financial, government
and postal services
Develops a dynamic,
enterprising, and
i = =6commercially
sustainable business by
continually evolving
Continues to modernise
and expand into new
markets
Ensures its people are
proud to be a part of the
Post Office
Future proofs its
business plans
While principle is clearly understood to deliver a relevant end benefit in good
service, the need for it to be explicitly stated within the Public Purpose of the
Post Office is questioned
Language requires refinement to better communicate core relevant benefits for
both colleagues and customers. However key essence of providing good
service potentially better communicated elsewhere.
Essence provides reassurance about the future of PO, however examples
perceived as restricting organisation's ability to adapt and survive in the future
‘Corporate’ tone and language does not resonate with perceptions of PO.
However ‘continually evolving’ perceived as a relevant way to talk about need
for change in the future, and ‘commercially sustainable’ is potentially accepted
as relevant if positioned as means to deliver PO's public purpose and valued
service.
While ‘modernise’ resonates in the context of providing good service and
ensuring survival of PO there is strong resistance to concept of expanding into
new markets
The reference to new markets was either misunderstood or viewed negatively
as being too commercially aggressive without being grounded in the public
purpose
While principle’s end benefit of good customer service is clearly understood and
deemed relevant, the need for it to be explicitly stated within the Public Purpose
is strongly questioned
While there is wide acceptance that the PO needs to change in order to survive,
the language and context of the principle was viewed as meaningless and
unfeasible
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How it could look like
Develops and engages its
people to ensure they provide
the highest levels of service
Continually evolves and
modernises to secure the
business for the future
Develops a commercially
sustainable business while
staying true to its core public
purpose
Removed
Removed
8
Essence Not
needs relevant
for PPPO
f
refining
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Agenda of the day
Content
1. Ata glance
2. Post Office in their own words
3. The response to the public
purpose statements
4. The response to the principles
5. Evidences pack
70
truth
Our ultimate goal
For all to commit to
a unique, universal & timeless
Public Purpose
Post Office’s reason to be
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The objectives of the qualitative engagement in detail
This stage enabled us to:
¢ Identify potential challenges in terms of
clarity and understanding to ensure the
I This stage aimed at capturing the
initial Fesponses of the public, language and terminology used are
businesses and those delivering comprehensible to all
the service to the outputs created + Assess if people’s emotional attachment to
_ by the members of the the Post Office is sufficiently reflected
I Stakeholder Forum _ + Identify potential points of divergence
I / / where consensus could be more difficult to
obtain
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Elements tested in the qualitative engagement
The public purpose The principles
statement We assessed 18 principles describing an aspect of what and how the Post
We assessed two iterations Office needs to do to achieve its public purpose
it is important that the Post Office...
(
o . . 1 makes a positive contribution to all communities it serves
- es . I 2 ..keeps customers at the heart of what it does
trusted, vital and ] 3 ..builds relationships based on trust and integrity.
valued products and ‘ 4 . develops a dynamic, enterprising, and commercially sustainable business by continually evolving
services which are j 5 ..invests in its infrastructure, products, services and people to ensure it secures the business for the future
universally j 6 ..Stays true to its core of financial, government and postal services
accessible.” 7 »continues to modernise and expand into new markets
I & .» provides its customers with relevant, value for money services
“The Post Office . , 3 .. provides a high quality, responsive service
_ exists to be I 40 ..offers choice to meet the needs of its customers
accessible and I 1 ..inspires, engages and fairly rewards its people.
accountable to all its ‘ 12 .. develops its people to ensure they have the highest standards of excellence and professionalism
customer: treating 1 ) 13 ..ensures its people are proud to be a part of the Post Office.
them fairly and @ 14 .. promises to provide the services the public wants
offering them the I as ..treats people fairly
products and I 16 involves its people and stakeholders in the direction of the organisation
services that they o 47 ..has ethical attitudes in its behaviour towards its customers and in its dealings with business partners
_ need and can trust.” “ee bei
I 18 . future proofs its business plans
° truth
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Qualitative engagement:
Overview of the 4 Nations’ workshops conducted
In the workshops we talked to:
+ 21x Colleagues
+ 48x member of the public
+ 48x business owners / key
decision makers
In addition to the workshops
8 x paired depth interviews (16
customers in total) were conducted
with hard to reach audiences
@Edinburgh
@ Belfast
‘ee
Ce ee lS
The public
The workshops listened to the voice of the public, capturing the div
population in terms of age, gender, working status, affluence, living area (urban, urban
deprived, rural, isolated rural). A broad spectrum of attitudes towards the Post Office and
usage frequency were recruited to ensure different views of Post Office were considered
ity of the UK
Hard to reach audiences (the public)
interviews were conducted with hard to reach audiences ~ those in later life with
lities and / or a carer, living in isolated rural locations — to ensure they were consulted
as part of the engagement process
‘The workshops listened to the voice of $ ‘This included talking to business owners and
key decision makers responsible for dealing with Post Office on behalf of their company. Each
workshop included businesses from different sectors and of varying size from across the UK ~
sole traders, micro-businesses (1-9 employees), small business (10-49 businesses)
Those delivering the service
Rach colleague workshop included an even mix of colleagues working in Crown branches,
sub-postmasters and those working in sub-post offices. In addition, the sessions captured the
views of people at different levels of seniority and length of time in the business
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Qualitative engagement:
Overview of the qualitative questionnaire survey
1,096
questionnaires
were completed
The high response rate
and diversity of
channels used for the
qualitative
engagement exercise
enabled us to capture
a wide range of
opinions across
different audiences
The public
‘The public responses combined answers fror existing PO customers (reached out to
via VoC survey), direct invites and the general public (via a press release and link
posted onto the Post Office website)
Sub-post office responses were collected through a range of different channels. This
may include people who work in sub-post offices as well as sub-post masters.
08 participants
POL employees’ responses covered those working directly for POL, from Crown
branch colleagues to admin staff, including field teams and supply chain. Their views
were collected using a sumber of different channels: PO intranet, PO Branch focus,
newsletters, direct e-mails to branch managers. 269 participants
Participating stakeholders
rn
Yage UK
=)
Age UK response represents the voice of those in later life. It combines the evidence base and
feedback of the Age UK research team, later life communities (collated by engaging with local
Age UK Partners) and speaking directly to those in later life (ineluding carers, people over 80
years old and those with more complex needs such as long term health problems and low
mobility). 30 participants
British Youth Council contribution includes members and representatives who were recently
elected. 18 participants
Citizen Advise Bureaus reflects the views of 5 internal experts
15
truth
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Purpose of today
To share all key sige and the recponee to the draft depen composing the
cole of ae das ee - Le Post fae
ee
Truth to share the following with the PEWG:
Key considerations and criteria for success
in terms of drafting the elements
The key evidence in the responses from the
general public, businesses and those delivering
the service informing key learnings
The suggestions of refinements of the
@- initial elements composing the public purpose
of the Post Office “How it could look like”
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Both strands of the qualitative engagement stage received an
engaged and rich response
e ehigh number, length a
ensthecninnwenon
rvices. wite-range—-—,,
ery Cres wiper
community!
armth and/or st ng aitachment
towards the organise
18
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All elements of the public purpose were assessed against a
consistent list of success criteria
In order to understand the potential exclusion of an element from the public purpose, we explored
how well both its content and its structure resonated amongst the different audiences:
The essence should be... The language should be...
* Credible and achievable
* Unique to Post Office and among other
principles
* Non-contradictory with other principles
* Relevant to the present and the future
* Clear and comprehensible
Meaningful
Unambiguous
Memorable
Engaging
19
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Summary of response to the Public Purpose of the Post Office
¢ Overall, there was a positive response to the proposed public purpose definition of the Post
Office across all audiences — the general public, businesses and those delivering the service
- Both statements were seen to broadly and equally capture the Post Office’s core reason
for being
- No principle was categorically rejected i.e. rated as ‘not important at all and should
definitely not be included in the definition of the public purpose’
* The strength of feeling towards the individual principles, and the extent to which they should
be included in the public purpose definition, showed some variation across specific audiences.
However, there was no strong divergence emerging within the overarching themes
in terms of their stated importance, particularly across the Nations
The qualitative engagement process confirms that whilst no critical aspects were felt to be
missing from the public purpose tested, there isa need for clarity around some of the
content and further pressure testing of the prioritisation of principles ir in order to maximise
its effectiveness _
* truth
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The engagement questionnaire was used across the qualitative
stage to assess the public purpose of the Post Office
Everyone who participated in the engagement process was asked to share their
thoughts on the public purpose of the Post Office.
What are the key reasons
why the Post Office needs to
exist in the UK today?
ite. why do you think the UK
needs the Post Office?
=]
What is it about the Post
Office that you believe
makes it different to other
organisations?
i.e. what it is the Post Office does
for individuals, communities
and society that is not done
elsewhere?
As the Post Office evolves,
what principles must it
protect and to continue to
uphold?
Le. what are the ideals and
principles that underpin what
the Post Office does and that
need to be protected for the
future?
22
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Three broad themes emerged as central to people’s perceptions of
the role of the Post Office and what makes it unique
Accessibility
* Help and support (e.g. source of
information and advice)
° Service delivery (e.g. face to face, reliable)
* Superior customer service (friendly,
personal, caring, go the extra mile)
+ Wide range of product and services
+ Convenience (e.g. easy access / branch
network)
* For everyone (e.g. vulnerable groups,
people in later life, isolated areas)
+ Social / important role in communities
+ Vital to society and local / small
communities
+ At the heart of the community
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Trust, Accessibility and Community:
in their own words
“Itis a unique mix of public and
private sector - a brand so
ingrained into the fabric of UK
society that nothing other than the
NHS comes close to in terms of
public affection and trust.”
Source: Those delivering the
service, qualitative
questionnaire
(“staving easy access to a national postal
and parcels service is vital, particularly
one which has customer service at it's
heart. It must provide a service across the
whole of society, taking into consideration
the needs of those less able and the elderly.”
Source: Age UK, qualitative
questionnaire
“In our community it provides a
much needed banking system.
fOur] nearest town fis] 17 miles
away. It provides a person to
answer many questions both
financial and social.”
Source: Customers, qualitative
questionnaire
“We know we are a trusted
brand with customers. This has
become especially important in
the current economic climate
where Banks/ Building societies
have lost trust among the general
public.”
Source: Those delivering the
service, qualitative
questionnaire
“PO provides access to key services
associated with Government in a familiar
and secure environment”
Source: Customers, qualitative
questionnaire
“The Post Office plays such an
important role in the
communities they serve. They are
often the social fabric that glues the
community together.”
Source: Those delivering the
service, qualitative
questionnaire
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These key themes need to be present within the public purpose of the Post
Office to ensure that it resonates across audiences and reflects its core
reason for being
Q3
ie Post Was mentioned at
4 nat principles least once by
if protect a participants
the key
the Post
to exist
2 need
Key themes inthe UK e to uphold?
Accessibility 69% 47% 42%
41% 32% 22%
39% 54% 61%
How to read these numbers: 69% of participants mentioned at least one aspect of accessibility as a key 87% of participants mentioned at
reason why the Post Office needs to exist in the UK today st one aspect of bility
across the three questions
28 Source: Post Office public engagement exercise — Qualitative Questionnaire conducted by Truth (all participants n=1,096)
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Reviewing the public purpose statements tested
Statement ®
“The Post Office exists
to deliver trusted, vital
and valued products
and services which are
universally accessible.”
“The Post Office exists
to be accessible and
accountable to all its -
customers, treating
them fairly and offering
them the products and
services that they, need
and can trust.”
27
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Both statements were positively received and often given equal scores
How well does each statement capture what you _
feel is the post office’s core reason for existing
Higher seore Equal i
given to sence given to
Statement A scores Statement B
@ 10- Perfectly captures it
Ms
Higher score
ms Promoters
m7 CF
6 Neutral
5
4 Rel
ot 3 ejecters
6-1
m2
@ 1 - Doesn't capture it at all
In essence, both statements are seen
to be reflective of Post Office’s purpose
and its essential role in society
Where a higher score is given to one
statement over the other, this is often
rooted in personal preference for the
language and / or tone of voice
The length of the statements was also
often a differentiating factor. For
example, some people’s preference for
Statement A was driven by its shorter
length in comparison to Statement B
28 Source: Post Office public engagement exercise — Qualitative Questionnaire conducted by Truth (all participants n=1,096)
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Response to statements:
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Supporting evidence from engagement exercise
“Both statements cover the ethos
of the PO and is what people see as
the purpose of the PO.”
Source: Those delivering the
service, qualitative questionnaire
“It is about being a trusted, accessible
provider of needed services. Both [of] these
descriptions meet that desire to a high
degree.”
Source: Those delivering the service,
“I gave the same score to both
as they both seemed to be
saying the same thing.”
Source: Customers,
qualitative questionnaire
qualitative questionnaire
(wor statements contain important principles.
Statement one is marginally better because it applies
universally whereas statement two only includes current
customers. Both would be improved if they addressed the
aspiration to promote financial and social inclusion. The
phrase treating customers fairly is used by the FCA to
regulate financial services firms and is now being used ina
similar way within the energy market, the Post Office may
want to avoid this term as a way of distinguishing itself
from the financial services industry.”
Source: Age UK, qualitative questionnaire
“Both statements equally capture the essence of
the Post Office role in the community. I prefer the first
comment because it's more snappy than the second,
which is rather long winded.”
Source: Customers, qualitative questionnaire
“T have given a score of 9 for both statements
because I believe that the products and services the Post
Office provides are very important and effect the quality
of life of many members of our society.”
Source: Customers, qualitative questionnaire
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“The Post Office exists to deliver trusted, vital and valued products and services which are
universally accessible”
Overall, this statement receives a
positive response from all audiences. The shortness of Statement A drives its appeal, increases
engagement and can also enhance belief in the commitment
to deliver. The overall tone was sometimes criticised for
having a more corporate feel, in part due to the oe a
explicit reference to people or customers
How well does ec tatement
capture what you f
office’s core reason for existing
Response to language
W@ 10- Perfectly captures it . . sue ge :
Trusted: considered the key differentiating factor at the heart of Post
Ms Office's unique role and values ~ as an organisation, the service it
is Promoters delivers and those delivering it. In this context it can feel more
a7 109 exclusively related to products and services
6 Neutral Vital & Valued: : reflects how many people feel about Post Office, but
5 87 can convey a more corporate / serious tone
Rejecters Universally accessible: not always understood or considered
3 6-1 accurate in relation to PO. “Accessible to all” or “accessible to everyone”
m2 were clearer
M 1 -Doesn’t capture it at all
30 Source: Post Office public engagement exercise — Qualitative Questionnaire conducted by Truth (all participants n=1,096)
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Response to Statement A:
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Supporting evidence from engagement exercise
Va
“{ don’t like the fact it doesn’t mention customers.
Ifwe don’t have customers we fall flat on our faces.”
Source: Those delivering the service, qualitative
workshop, London
(+ think the word “universal” implies this world
wide, so although we are dealing with letters and
parcels worldwide, not everyone in the world can access
all of our products and services as such.”
Source: Those delivering the service, qualitative
questionnaire
(sy think this one is better. It’s shorter, concise and to the
point. The other one goes on and on about what we're doing
which most people know. We don’t have to go into three four
sentences explaining what we do.”
Source: Those delivering the service, qualitative
workshop, Belfast
Va
“Trusted, vital and valued suggests they have a bigger
purpose than to make money, the sense that its part of the
fabric of our society, part of our heritage.”
Source: SMEs, qualitative workshop, London
(‘The two main things are TRUST and
ACCESSABILITY. Within walking distance
and staffed by people you know.”
Source: Customers, qualitative
questionnaire
“The first is shorter and more
concise. Not much difference in the
ultimate message, just shorter and
sweeter.”
Source: Customers, qualitative
questionnaire
“It's too short and
snappy. It doesn’t have
enough detail, enough meat
on the bones.”
Source: Those delivering
the service, qualitative
workshop, London
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“The Post Office exists to be accessible and accountable to all its customers, treating them
fairly and offering them the products and services that they need and can trust.”
Overall, this statement receives a , The warmth of Statement B is felt to be reflective of PO as an
positive response from all audiences. organisation. The addition of the word “customers” — absent
from Statement A — enhances this sentiment. The statement
is often criticised for being too long. Whilst largely seen to be
covering the same content as Statement A, some of the
terminology is too broad.
Accountable: Provides reassurance to some customers but can lead to
concerns from those delivering the service that the front line service
$ core reason would unfairly bear the brunt of this.
Accessible to all: Reflects one of the fundamental points of difference
that PO is seen to posses over other organisations and public services
@ 10 - Perfectly captures it
Bs Customers: Its presence adds a human touch not always felt by
Ws Promoters Statement A. But it is also criticised for not being inclusive — focusing on
a7 10-9 current customers rather than potential / future customers. Businesses
can also feel distant from the term
6 Treating them fairly: The tone can be viewed as slightly
5 condescending/ patronising, especially with the phrasing “them”,
4 Rejecters creating a distance between Post Office and the public. More explicit
3 by terminology is needed to communicate the full extent of its meaning i.e.
2 beyond face to face service in branch
1- Doesn't capture it at all Need: Preferred to “want”, which can give a sense of overpromising.
Implies business decisions respond to more genuine market needs
truth
32 Source: Post Office public engagement exercise — Qualitative Questionnaire conducted by Truth (all participants n=1,096)
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Response to Statement B:
Supporting evidence from engagement exercise
“[For “accountable”] Thad
visions of angry people
hunting for their parcels.”
“Sounds almost patronising
and condescending - separating
itself from the consumer.”
“Accountable means people can
blame us for everything that goes wrong
even when though it’s not my product.”
Source: Customer,
qualitative workshops,
Cardiff
Source: SMEs, qualitative
Source: Those delivering the service,
workshop, London
qualitative workshop, Belfast
“I like the fact the emphasis is on the accessibility not
the products. I can get everything in my post office elsewhere,
but I use it because if near where I live . On the other one the
universally gets in the way of the accessible.”
“Although the other is good and punchy
this feels more for the people. It comes
across as more caring.”
Source: Customer, qualitative
Source: Customer, qualitative workshop, London workshop, London
“It's really good, encapsulates everything we
do and the purpose we've been discussing all
afternoon.”
“The second [statement] states that the Post Office offers products
and services that the customers need and can trust. This is more
of a personal statement for customers than the first.”
Source: Those delivering the service,
Source: Customers, qualitative questionnaire ees
qualitative workshop, London
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In order to understand what truly resonates with people in terms of
language, tone and structure, there are a number of factors that need to be
explored
Further testing different lengths of statement to understand optimum balance of being
more engaging vs. more explicit
More formal vs. more emotional tone to understand which feels most relevant and
appropriate to PO/context of public purpose
Assessing the role the three key themes of trust, accessibility and community —~ e.g.
structuring statement to different degrees around the themes
Different tone and language to ensure content is more future facing and not rooted in the
present — e.g. replace ‘exists’ with ‘purpose’ upfront in the statement
Different tone and language to ensure inclusivity of future users, businesses and broader
stakeholders — e.g. use ‘people’ and ‘everyone’ rather than customers
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How the public purpose statement could look like if...
1. MORE FORMAL
“The Post Office's
purpose is to provide a_
trusted and accessible —
service that responds
to the needs of all
customers and
communities it
serves.”
2. MORE PUNCHY
“The Post Office gives
all communities access
to a trusted service
and the products they
need.”
3. MORE EMOTIONAL
“The Post Office's
purpose is to provide a
trusted and accessible
service that keeps
people and I
communities at the
heart of everything it
does.”
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Overall response to the principles was positive, with no principles strongly
rejected. Those with a more explicit benefit for the public tended to be
prioritised
It is important that the Post Office...
This principle is really important and it is
essential that it is included in the definition of
the public purpose Keeps customers at the heart of what it does
{\ This principle is (quite} important but it isn’t Treats people fairly
i essential /appropriate that it is included in .
the definition of the public purpose Builds relationships based on trust and integrity
Provides a high quality, responsive service
Provides its customers with relevant, value for money services
I This principle is not important at ail and
should definitely not be included in the
definition of the public purpose Promises to provide the services the public wants
Makes a positive contribution to all communities it serves
Has ethical attitudes in its behaviour towards its customers and in its dealings with business partners
Develops its people to ensure they have the highest standards of excellence and professionalism
Stays true to its core of financial, government and postal services
Offers choice to meet the needs of its customers
Ensures its people are proud to be a part of the post office
nd people to ensure it secures the business for the future
Inspires, engages and fairly rewards its people
Involves its people and stakeholders in the direction of the organisation
Future proofs its business plans
is in its infrastructure, produets, serv
Develops a dynamic, enterprising, and commercially sustainable business by continually evolving
Continues to modernise and expand into new markets
37 Source: Post Office public engagement exercise — Qualitative Questionnaire conducted by Truth (All participants n=1,096) t th
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Although some differences in the individual ranking of certain
principles, there were no overall critical differences in responses
Ce . _. delivering Sub- Those
This principle is really important and it is essential that it is The the post working
included in the definition of the PP publie service Offices for POL
Keeps customers at the heart of what it does 87% 88% 86% 89%
Treats people fairly 80%" 73% 79% 72%
Builds relationships based on trust and integrity 76% 80% 82% 80%
Provides a high quality, responsive service — 81%* 71% 73% 69%
Provides its customers with relevant, value for money serv: 79% 70% 70% 69%,
Promises to provide the services the public wants 78%* 65% 68% 63%.
Makes a positive contribution to all communities it serves 68% 68% 73% 66%
Has ethical attitudes in its behaviour towards its customers and in its dealings with business partners 67% 66% 70% 64%
Develops its people to ensure they have the highest standards of excellence and professionalism — 69%* 62% 67% 60%
Stays true to its core of financial, government and postal services 71%" 58% 70%" 53%
Offers choice to meet the needs of its customers 64% 62% 63% 62%
Ensures its people are proud to be a part of the post office 60% 58% 67%" 55%
invests in its infrastructure, products, services and people to ensure it secures the business for the future 57% 62% 69% 59%
inspires, engages and fairly rewards its people 54% 57% 6596" 54%
Involves its people and stakeholders in the direction of the organisation 44% 50% 60%" 46%
Future proofs its business plans 45% 43% 57%* 38%
Develops a dynamic, enterprising, and commercially sustainable business by continually evolving 41% AT% 41% 49%
Continues to modernise and expand into new markets 33% AE% 40% 48%
Source: Post Office public engagement exercise
service 73; Sup-post offices Those working for POL
* Significant difference at 95% confidence band
Qualitative Questionnaire conducted by Truth (The public n=612 ; Those delivering the
3) truth
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The elements of principles that resonated most strongly shared a
number of commonalities in terms of structure and content
« An approachable but appropriate tone
- People preferred a style that was formal but not corporate, emotional but not colloquial. This reflected the warmth
of people’s perceptions of the Post Office while also reassuring them that the principles would be committed to
« Clear articulation and comprehension of the idea
- The terminology and contextualisation were easily understandable and not confusing . For instance, business terminology
(e.g. stakeholders, commercially sustainable) were considered ambiguous and not understood by all
« Clear relevance to the Post Office in terms of what it does and what it stands for
- The essence of the concept was recognised as important, even where it may not be directly relevant to the individual (e.g.
Post Office’s role in communities)
* Broad and inclusive enough to ensure they remain relevant for all audiences today and in the future
- The essence of the concept was not too specific, without being vague, to allow Post Office to evolve in the future (e.g.
product offering, channels, etc.) and stay relevant, especially amongst businesses and younger audiences
* Conveyed a public benefit (explicitly or implicitly)
- Principles that directly related to internal matters (e.g. developing its people, taking pride in working for PO) were
commended, but not deemed as critical to be included by members of the public
* Provided reassurance about the future direction of the Post Office as an organisation and a business
~ Principles that were future facing were best received when linked with being essential to the preservation of Post Office
° truth
No refinement needed
More refinement needed
Content and
language
resonate
perfectly
Keeps customers at the
heart of what it does
Content needs
Builds relationships based
on trust and integrity
Treats people fairly
Provides a high quality,
responsive service
Provides it customers with
relevant, value for
Promises to provide the
services the public wants
Makes a positive
contribution to all
communities it serves
refining
z
i
Has ethical attitudes in its
behaviour towards its i i
customers and in its dealing I;
with business partners i
‘
Offers choice tomeet the
needs of its customers i
i
i
i
i
i
ii
Invests in its infrastructure, © :
products, services and i :
people to ensure it secures I;
the business forthefuture —!
:
i
i
i
i
i
t
a
+
Involves its people and
stakeholders in the
direction of the I
organisation i
Essence needs
refining
Stays true to its core of financial,
government
Develops its people to ensure
they have the highest standards
of excellence and professionalism
inspires, engages and rewards its
people
Develops a dynamic, enterprising,
and commercially sustainable
business by continually evolving
Continues te modernise and
expand into new markets
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Not relevant
for PPPO
Ensures its people are
proud to be a part of the
a. I ne
Future proofs its business
plans
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I Original principles Findings and implications How it could look like
Keep customers at the heart of what it
does
Builds relationships based on trust and
integrity
Treats people fairly
Provides a high quality, responsive
service
Provides it customers with relevant, value
for money services
Makes a positive contribution to all
communities it serves
Promises to provide the services the
public wants
Captures the essence of how people view the
Post Office — a public service that prioritises
people over profits
Trust lies at the heart of the principle’s popularity.
Demonstrating the value of building relationships
over time provides important reassurance for both
current and future PO customers
Essence resonates strongly but language and
benefits need to be more tangible to avoid feeling
vague and losing its meaning.
Language needs slight revision to emphasise the
commitment to delivering good service which is at
the core of the principle’s relevance
Essence perceived to lie more in accessibility of
value for money services rather than relevance.
Principle goes some way towards capturing the
vital role that PO plays in communities, but its
social and economic contribution needs to be
more clearly referenced to broaden appeal
Sentiment is admiral, but what makes PO different
is how they offer what people need rather than
what they want
Keep customers at the heart of
what it does
Builds relationships based on
trust
Treat everybody with fairness
and honesty
Provides a consistently high
level of service
Provides access to value for
money products and services
Makes a positive social and
economic contribution to all
communities it serves
Responds to different people’s
needs
4t Content and
language
resonate perfectly
truth
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ne Original principles Findings and implications How it could look like
Has ethical attitudes in its
behaviour towards its Whilst the sentiment of ‘ethical’ is valued, language needs to Maintains ethical attitudes in
customers and in its dealing better capture relevant essence and benefit to public. all its behaviours
with business partners
Concept of ‘choice’ can feel too broad and contradictory —
Offers choice to meet the essence lies more in being able to answer a wide range of
needs of its customers different needs. This essence was better captured by two
elements extracted from statement A “vital and valued”.
Provides access to vital and
valued products and
services
invests in its infrastructure,
products, services and people Essence is relevant but length and ‘corporate’ language
to ensure it secures the hinders resonance
_ business for the future
Invests in the organisation
to secure the business for
the future
Listens to the views of the
people delivering the
service regarding the future
involves its people and While the essence of ensuring key stakeholders feel they have f the Post Offi
stakeholders in the direction of a voice in the future of the organisation is relevant, the ay ve ice
the organisation ‘corporate’ language causes confusion and hinders resonance.
Listens to the views of key
communities regarding the
future of the Post Office
42
truth
prncple: Findings and implications
inspires, engages and
rewards its people
Develops its people to
ensure they have the
highest standards of
excellence and
professionalism
Stays true to its core of
financial, government
and postal services
Develops a dynamic,
enterprising, and
i = =6commercially
sustainable business by
continually evolving
Continues to modernise
and expand into new
markets
Ensures its people are
proud to be a part of the
Post Office
Future proofs its
business plans
While principle is clearly understood to deliver a relevant end benefit in good
service, the need for it to be explicitly stated within the Public Purpose of the
Post Office is questioned
Language requires refinement to better communicate core relevant benefits for
both colleagues and customers. However key essence of providing good
service potentially better communicated elsewhere.
Essence provides reassurance about the future of PO, however examples
perceived as restricting organisation's ability to adapt and survive in the future
‘Corporate’ tone and language does not resonate with perceptions of PO.
However ‘continually evolving’ perceived as a relevant way to talk about need
for change in the future, and ‘commercially sustainable’ is potentially accepted
as relevant if positioned as means to deliver PO's public purpose and valued
service.
While ‘modernise’ resonates in the context of providing good service and
ensuring survival of PO there is strong resistance to concept of expanding into
new markets
The reference to new markets was either misunderstood or viewed negatively
as being too commercially aggressive without being grounded in the public
purpose
While principle’s end benefit of good customer service is clearly understood and
deemed relevant, the need for it to be explicitly stated within the Public Purpose
is strongly questioned
While there is wide acceptance that the PO needs to change in order to survive,
the language and context of the principle was viewed as meaningless and
unfeasible
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How it could look like
Develops and engages its
people to ensure they provide
the highest levels of service
Continually evolves and
modernises to secure the
business for the future
Develops a commercially
sustainable business while
staying true to its core public
purpose
Removed
Removed
43
Essence Not
needs relevant
for PPPO
f
refining
truth
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Both statements score equally across all subgroups
How well does each statement capture what you
feel is the post office’s core reason for existing
All participants
The public
Those
delivering the
e
sub-post
offices
Those
working for
POL
Higher score Equal Higher score I
given to essa a - —_ given to
Statement A. SCORES Statement B
17% 17%
15% 14%
18% 20%*
13% 16%
20% 22%
9G Source: Post Office public engagement exercise — Qualitative Questionnaire conducted by Truth (all participants n=1,096; The
public n=612; those delivering the service n=373, Sub-Post Offices n=98; Those working for POL n=269)
truth
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The public tends to be slightly more engaged with both statements.
However, those delivering the service do not reject them either
‘The public Those delivering
the service
W@ 10- Perfectly captures it
Wo
Ms Promoters
. 10-9
7
Neutral
i 8-7
5
4 Detractors
m 3 6-1
© 2
@ 1 - Doesn't capture it at all
Sub-post offices
A
How well does cach statement capture what you feel is the post office’s core reason for existing _——
Those working
for POL I
Q7 Source: Post Office public engagement exercise — Qualitative Questionnaire conducted by Truth (all participants n=1,096; The
public n=612; those delivering the service n=373, Sub-Post Offices n=98; Those working for POL n=269)
truth
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Response to the principles amongst the public
co It is important that the Post Office...
This principle is really important and it is
essential that it is included in the definition of
the public purpose
Keeps customers at the heart of what it does
Provides a high quality, responsive service
This principie is (quite) important but it isn’t
essential /appropriate that it is included in
the definition of the public purpose Provides its custome’
Treats people fairly
EE}
's with relevant, value for money services
This principle is not important at ail and Prom to provide the the public wants
should definitely not be Included in the Builds relationships based on trust and integrity
definition of the public purpose
Stays true to its core of financial, government and postal services
Develops its people to ensure they have the highest standards of excellence and professionalism
Makes a positive contribution to all communities it serves
Has ethical attitudes in its behaviour towards its customers and in its dealings with business partnerd
Offers choice to meet the needs of its customers
Ensures its people are proud to be a part of the post office
and people to ensure it secures the business for the future
Inspires, engages and fairly rewards its people
Invests in its inf
structure, products, s
erVvices
Future proofs its business plans
Involves its people and stakeholders in the direction of the organisation
Develops a dynamic, enterprising, and commercially sustainable business by continually evolving
Continues to modernise and expand into new markets
9g Source: Post Office public engagement exercise — Qualitative Questionnaire conducted by Truth (The public n=612 }
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Response to the principles amongst those delivering the
service
co It is important that the Post Office...
This principle is really important and it is essential that it
is included in the definition of the PP.
‘This principle is (qjuite) important but it ign't essential Keeps customers at the heart of what it does
I [appropriate that it is included in the d jon of the PP Builds relationships based on trust and integrity
I This principie is not important at ail and should definitely Treats people fairly
not be included in the definition of the PP Provides a high quality, responsive service
Provides its customers with relevant, value for money services
Makes a positive contribution to all communities it serves
Has ethical attitudes in its behaviour towards its customers and in its dealings with business partners
Promises to provide the services the public wants
Offers choice to meet the needs of its customers
Develops its people to ensure they have the highest standards of excellence and professionalism
Invests in its infrastructure, products, services and people to ensure it secures the business for the future
Stays true to its core of financial, government and postal services
Ensures its people are proud to be a part of the post office
Inspires, engages and fairly rewards its people
Involves its people and stakeholders in the direction of the organisation
Develops a dynamic, enterprising, and commercially sustainable business by continually evolving
Continues to modernise and expand into new markets
Future proofs its business plans
9Q Source: Post Office public engagement exercise — Qualitative Questionnaire conducted by Truth (Those delivering the service
sowre truth
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Differences in the order of the principles, but no critical
differences in responses
Those
This principle is really important and it is essential that it is delivering Sub- Those
inchaded in the definition of the PP The the post — working
public service Offices for POL
Keeps customers at the heart of what it does 87% 88% 86% 89%
Treats people fairly 80%* 73% 79% 72%
Builds relationships based on trust and integrity 76% 80% 82% 80%
Provides a high quality, responsive service 81%" 71% 73% 69%
Provides its customers with relevant, value for money services 79% 70% 70% 69%
Promises to provide the services the public wants 78%* 65% 68% 63%
Makes a positive contribution to all communities it serves 68% 68% 73% 66%
Has ethical attitudes in its behaviour towards its customers and in its dealings with business partners 67% 66% 70% 4%
Develops its peopie to ensure they have the highest standards of excellence and professionalism 69%* 62% 67% 60%
Stays true to its core of financial, government and postal services 7im* 58% 70%" 3%
Offers choice to meet the needs of its customers 64% 62% 63% 62%
Ensures its people are proud to be a part of the post office 60% 58% 67%* 55%
Invests in its infrastructure, products, services and people to ensure it secures the business for the future 57% 62% 69% 59%
Inspires, engages and fairly rewards its people 54% 57% 65%" 54%
Involves its people and stakeholders in the direction of the organisation 44% 50% 60%* 46%
Future proofs its business plans 45% 43% S7%6* 38%
Develops a dynamic, enterprising, and commercially sustainable business by continually evolving 41% 47% 4 49%
“ : : ~™ Continues to modernise and expand into new markets 33% ROK 40% ABS
Source: Post Office public engagement exercise ~ Qualitative Questionnaire conducted by Truth (The public n=612 ; Those delivering the
service
73; Sup-post offices Those working for POL
* Significant difference at 95% confidence band
truth
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Accessibility and products are stronger anchor points
amongst the public
What are the key
reasons why the Post
: needs to exis
in the UK today?
iL about the Post As the Post 0}
ae) jeve evolves, what principles
it different to must it protect and to
3? continue to uphold?
The public 61%* 46%* 40%*
Accessibility Those delivering
the service 52% 33% 32%
The public 33% 27% 22%*
Those delivering
the service 34% 29% 15%
The public 34% 49% 54%
Those delivering
the service 29% 38% 46%
‘The public 49%* 14%* 9%
Those delivering
the service 26% 7% 7%
4Q4 Source: Post Office public engagement exercise — Qualitative Questionnaire conducted by Truth (The public n=619; Those
delivering the service n=370)
* Significantly higher at 95%
truth
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Accessibility is a more critical principle to be protected
amongst those working for POL
As the Post 0}
evolves, what principles
must it protect and to
continue to uphold?
What are the key
ss why the Post
: needs to exis
in the UK today?
Sub-post offices 49% 34% 23%
Accessibility Those working
. s : ye
for POL. 54% 33% 35%
Sub-post offices 33% 29% 16%
Those working
ee orPor 34% 30% 15%
Sub-post offices 24% 39% 43%
Trust Those working
forPor, 30% 38% 48%
Sub-post offices 27% L2%* 7%
Those working
for POL 26% 6% 7%
4Q2 Source: Post Office public engagement exercise — Qualitative Questionnaire conducted by Truth (Sub-post offices n=98; Those
working for POL n=267) truth
* Significantly higher at 95%
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CONFIDENTIAL
POST OFFICE LTD EXECUTIVE COMMITTEE
Business Transformation Programme
1. Purpose
The purpose of this paper is to:
1.1. Update Executive Committee (ExCo) on progress to date with the Business
Transformation Programme;
1.2. Agree that this paper and presentation go forward to February's Post Office
Board meeting.
2. Background
2.1. Our market testing and visits to India in late 2013, and early 2014 confirmed our
approach that Post Office requires a new business operating model if we are to
become a commercially sustainable business. Advice from market testing was
that we should procure a transformation partner to help maximise the benefits of
this business operating model, bringing the capacity and experience we will need
to deliver the change.
2.2. In November 2013 we updated the Board and a programme was commissioned
to examine the business case for engaging a transformation partner; understand
the preferred engagement model and prepare for a partner selection exercise in
April 2014 (assuming the business case is compelling). We engaged Alsbridge
Consultants, who are experts in this area to support us in analysing the partner
market, build a business case and prepare us to go to market in April.
3. Activities/Current Situation
We have made good progress to date as outlined below:
3.1. Market Analysis and business readiness:
e Alsbridge have completed unattributed market engagement on behalf of Post
Office Ltd with 4 market leaders in this area, Accenture, Capgemini, HP &
IBM. Key feedback included:
o All 4 are interested in the opportunity;
o All are willing to invest if the scope is wide enough;
o Remuneration tied to business outcomes is acceptable to all;
o Restrictions and concerns around on-shore large scale TUPE.
e In January a second Post Office delegation, including Paula Vennells,
travelled to India to visit a number of transformation delivery organisations.
The group were again impressed by the capability of these organisations and
could see significant opportunities to assist in not only reducing our cost base
but also increasing our revenue.
« A Business Readiness Analysis exercise was carried out with a wide range of
senior stakeholders from across the business. This exercise informs the
overall transformation plan and the key activities we need to undertake. The
key outcomes show that we have significant gaps in our readiness to engage
Business Transformation Programme Chris Day & Lesley Sewell Page 1 of 4
10 February 2014
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CONFIDENTIAL
a transformation partner in key areas of, stakeholder alignment, clarity of
target operating model and consistency with business strategy. As part of the
programme, we are working with the ExCo subgroup to address these issues
and close the gaps.
3.2. We have completed a high level benefits analysis across the business which
shows that simple Business Process Outsourcing (BPO) will not deliver our
strategic plan. Significant change to our current operating model and how we do
business is required, this is where we would expect the partner to work with us
and invest in the transformation and change required. The benefits review
included:
e An extensive engagement across all Directorates of the business over the
last 6 weeks using the current organisation charts and the FY14/15 staff
budgets to build a picture of the potential opportunities in staff costs and
possible constraints that we may face. Early indications are clear that even
an aggressive approach to BPO will not produce sufficient savings to meet
the 2020 Strategy requirements. Early estimates are circa £20-25m by 2018
based on 50% reduction in all areas excluding Crown and Supply Chain
(Cash only). This level of cost reduction would only be achieved by
offshoring.
e The non-staff costs are still being investigated but no clear picture will be
available until the Target Operating Model (TOM) is clear and understood,
this is not likely to be until after the transformation partner is in place as they
will help to shape the final TOM. We estimate a further opportunity of approx.
£30m reduced costs by 2018.
e A key part of our strategy is delivering approx. £400m of additional revenue,
and if we use the assumptions from the Strategic Plan, this will drive an
additional £240m (60% of revenue) costs. Assuming 50% of this is Agents
Fee, there is a potential £120m of additional costs that could potentially be
incurred under our current operating model. We will expect the partner to
greatly reduce this potential cost increase, and help drive the revenue
increase through efficiency, automation, best practice and a digital agenda. In
addition, we will target the partner with a stretch on revenue of 7%, to be
driven through new products, speed to market and new channels.
3.3. Given the broad scope of business transformation we have looked at the other
major activities underway across the business to consider when the programmes
should or could merge to ensure we deliver a single effective, business wide
solution that is targeted on the future TOM:
e We are working closely with major programmes to ensure alignment to the
vision.
e Work is under way to align the current operating plans by pillar to ensure a
customer lens is applied, this is being led by Paul Brown and will form a key
input to the programme.
e Our future state operating model will be completed in conjunction with the
transformation partner, this will ensure we fully utilise their capabilities in this
area and that it will be flexible and quick to respond to market changes.
3.4. Business Process Mapping (BPM) to Level 2 detail is a pre-requisite activity for
any transformation programme. There are benefits to doing this early and with a
separate partner:
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10 February 2014
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CONFIDENTIAL
e The output will be used to inform the procurement dialogue process with the
transformation partner allowing more contractual certainty. It will accelerate
benefits delivery from the transformation partner (saving circa 3 months). It
will provide a High Level Transformation plan for comparison with the final
plan from our partner.
e A previous exercise carried out by PA consulting identified 17 Level 0
processes in Post Office. We intend to complete Level 2 mapping on 7 of
these in the business areas: Product Design and Introduction; Product Sales
and Support; Supply Chain (Not Cash); and Financial and IT support.
e This work will be carried out between March and June 2014 by an
independent partner.
3.5. Work is progressing on the procurement for both the BPM partner and the
transformation partner:
e The intention is to secure a BPM partner through the appropriate
Government framework; we should have a partner in place by early March.
e Weare on plan to deliver an OJEU and PQQ for the transformation partner in
early April.
4. Options Considered
4.1. Several options have been considered and examined to determine the best
market engagement for a partner. The options of Multiple Partners, Multiple Lots
and Single Partner have been analysed against time, complexity, cost and public
procurement rules.
4.2. We have also considered the different disciplines and specialisms in this area
such as IT, BPO & Customer Insight. The current landscape within Post Office
has several of these currently in flight:
e We are currently in the market for our IT Transformation through the towers
which will bring best of breed and a competitive tension between suppliers.
e Customer insight is being addressed through the Customer Management
programme led by Martin George and we will ensure close alignment to this
programme.
e The BPM activity as referenced earlier.
4.3. The output of the analysis showed that the best solution for Post Office was a
single transformation partner to deliver alternative sourcing strategies,
efficiencies through end to end process redesign, investment and innovation in
our transformation journey.
5. Commercials
5.1. Strategic Plan assumptions on attributable cost base:
FY 14115 15/16 16/17 17/18 18/19 19/20
Cost (£m) £516 £491 £476 £471 £464 £461
Target -£28 -£25 £15 -£5 -£7 -£3
Reduction*
(£m)
*Note — Target Reduction represents the required savings to the current cost base.
Revenue projections are not yet quantified and programme costs will be completed
as part of the business case in March.
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10 February 2014
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CONFIDENTIAL
6. Risk Management
6.1. Risks connected with the partner procurement are being managed through
careful design of commercial and contractual terms to drive the right behaviours.
6.2. The risk that Industrial Relations may be strained by the implications of business
transformation will be addressed through Stakeholder and Communications
plans.
6.3. Risks resulting from the scale and complexity of change will require focus from
ExCo and SLT and managed through the Transformation Committee.
6.4. A constant theme from all the market engagement activity is the importance of
having Supplier Relationship Management skills as a key element in delivering
this type of programme and ensuring on-going cultural change. As the TOM
design is progressed a key element will be the capacity and capability of the
retained organisation.
7. Communications
7.1. Due to the sensitivity of the programme and the potential people impact
communications are a major work stream.
7.2. The programme has engaged directly and early with both HR and the IR teams to
establish a communications strategy.
7.3. Early indications from both these teams is not to communicate anything formally
with any stakeholder group until such times as we have a clear execution plan.
8. Recommendations
ExCo is asked to:
8.1. Approve the sourcing of a single transformation partner and the BPM partner;
8.2. Note the progress made to date and our preparations to begin a procurement
exercise in April (subject to approval of the Business Case);
8.3. Agree that this paper and the presentation are presented to February's Board
meeting;
8.4. Note that the programme will return to the ExCo and Board in March to seek
approval to go to the market.
Chris Day & Lesley Sewell
10 February 2014
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10 February 2014
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B
e
)
ve
4
TIAL
0
Draft
.
.
OO
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Context - the 2020 Strategy
Why Change?
Proposed Approach
Our Asks of the ExCo
oF Ww nN FR
Q&A and Next Steps
CONFIDENTIAL Oe
Context - 2020 strategy
The 2020 strategy aims to deliver a sustamable business through 4
key strands of activity, Our focus is the Operating Model strand.
To deliver the two fundamental issues:
rategy, we must add
1. Our organisational model is structured on a traditional, product We will
structure. To make the transition from a channel business to a
retailer we need an organisation that is built around the
I market
customer -focused on delivering an excellent customer I presence, by
experience. I moving from I
2. While the Network Transformation Programme will increase the I a channel for)
proportion of our cost base which is variable, it will not be third partie
enough to secure a commercially sustainable future. We must toa retailer
also reduce central costs and e
income we are not adding fixed
ure that as we grow our
{ back in
Key Objectives:
* Deliver cost reductions
* Efficiency, agility, innovation
* Enable revenue growth via new capabilities
broaden and I
increase our
i & We will have an
digitalservices I ali ge & I of working
of Post Office I
branded
products
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We will
8 actively
organisation I 77 aaeae
and operating [nae ere
Streamlined
and cost
effective
Enablement
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Why Change? If we do not fundamentally change our operating model we ‘
will not have a sustainable business by 2020
A transformed Operating Model is essential to ensure Post Office:
* Has the ability to contain costs as income grows, and build margin
* Can Deliver at Pace & respond fast to changing customer needs
¢ Be modern and relevant by quickly adopting innovative new technologies
¢ Adopt new ways of working to become a truly flexible & agile business
* Has the capability and capacity to enter new market segments
M This is highly impactful and is not optional - incremental evolution will not
deliver the step change required for delivery of the Post Office 2020 strategy
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We need to be ambitious, recognise the scale of change and commit our
time and resource to it now
on fg Future Business Model is a key driver: )
ae YY ¥ \ - Brand Purpose A \
Lo ~ AY - Customer Propositions )
{f,.. oo \ - Customer Experience a
[ ee te - Omni-Channel & Digital Strategy ot
Pa functions together, share ~ Product Strategy
/ capabilities, standardise 2.
I and outsource as
\ appropriate
i : People - culture,
\ Also to stop activities which 3 organisation & ways
do not clearly align to the : : :
strategy 5 , of working, appetite :
\ ‘ r — ot : \. for outsourcing &
ett f ~ redundancies - will
ff
é
\. all need to shift
a : é
sad Financial - we need to be
thinking about the overall
bottom line, not costs &
income separatel
(
*
j
‘te, eo
“Sse
-
4
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Why Change? We need to be confident that we can meet our cost & revenue
targets, but must also challenge ourselves to do better! oa £1,406B
em
ee ee ee ee
=e
oe ee = =
. formation wa
ty from a Neeser en re’ £1.356Bn Revenue
ee
Further oppom’s
one7
-
“
—
al
al oe .
£932m Revenue -2=rrccs- em - Current strategy plan target / * Revenue growth £400m
13/14 tan / + Assumed Increase of
_ £240m in cost base (60%)
: + 50% Agent Fee
£516 i + 50% POL Cost
(-£28) 14/15 _+ Provides £120m target
_ for partner to reduce cost
=
=
.
=
£491 _ This will require:
(-€25m) 15/16 1. Anend to end digital service
re-design, across PO and our
product providers
_ 2. An overall bottom-line focus,
not income and costs
=
:
=
I
I
=
:
=
] separately
:
=
=
I
=
I
4
£476
(€15m) 16/17
£471
(-£5m) 17/18
Note: Numbers do not include any (-£7m) 18/19 £464 /
subsidy reduction
(-£3m)19/20
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Approach - we need to establish our common requirements of the new
operating model via Design Principles
Design Principles
1. We are easy to deal with when, where & how customers want with a consistent experience across channels
2. Our product / channel mix reflects customer needs, is profitable & meets the public purpose
3. We have a single view of and strong relationships with our customers
4. We are flexible, agile and scalable and have the capability to meet evolving market and customer needs
5. We manage our costs by standardising & sharing process, automation and effective sourcing
6. We will focus, challenge, prioritise and align all our activities to deliver the Post Office 2020 strategy
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Approach - we have started to elaborate on the conceptual target operating to
inform our sourcing & implementation activities
High level Corporate
Strategy and
Governance.
Corporate Centre
Corporate People Brand & Market 5 .
Strategy VT Strategy Financial Targets
Customer Centre Customer Value Format Channel Client Account Customer functions,
Propositions Strategy Management Management mainly the people
directly engaged in
Product marketing, product
Market to Customer Sell to Customer Service the roo management, also
Customer Management
isieigecs glee, front-office sales and
a a aa a a as a ee ee customer service
ee lts.r—CisCCWNWCNC‘i‘(.'.._COiCi'#CONCC(iCiCisCNCiCC(C(COiéCCO(tiéti(iC.C .. sss. Provides services,
Major Programme Supply to tools and capabilities
Management IT Delivery Customer?) Analytics & Insight to the Customer &
Marketi Call Contre ___ Corporate centres.
jarketing .
Operations Operations Risk Management Public Affairs Legal
‘ f I Corporate “Client / Partner ies '
. Finance Operations Procurement managed services Property & Facilities HR Services
Data Management
Functions which
benefit from scale &
market best practice @
Typically transformed),
and/or outsourced
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Approach - we will source a prime strategic partner to help us design, deliver
and integrate our target operating model
¢ The programme will source a strategic delivery partner
+ We will ask them to invest in return for benefits share
«They will be contracted for business outcomes
* They will work across our Operating Model
* Collaborate with PO to design the To-Be
¢ Deliver phased transition from As-Is to To-Be
* — Take a complete End-To-End view including clients
* Outcome - a Customer focused digital business
~The partner will work in collaboration with: Operating Model design will start with the customer
«Post Office lines of business and take an end-to-end view, including our product
New best of breed subcontractors provider ecosystem for a complete customer focused
.
Our IT services providers - sourced separately digital business transformation
Our clients and product providers
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Approach - Timelines will consist of waves of activity to deliver a phased business
transformation from 2014-20
Discovery & Initiation Design & Transform-Wave 1 Transform - Wave 2 Transform - Wave 3
Align current .
programmes f
Outsource -
Quick Wins
Consult é
Transform
: Customer > TBC é
Functions wa I LA
“ceeeeeeeneeres e i ee Planned
Target Operating Model
design & Blueprint
“Customer Customer /
: Management Management . TBC A
i capabilities é
People, culture & capabilities A j _A
organisation A Phi / cover tS, c I cocoa I
a é _ ]
Savings from current BAU costs, does not include new revenue
TOTAL: £38m
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Approach - BPM SCOPE & Output
¢ We need to understand the As-ls in order to design the To-Be Operating Model
« A Business Process Mapping activity is proposed to achieve that
¢ This will inform candidates for automation, centralisation or outsource
heeaase
ot aaa
ge
* Previous work carried out by PA consulting identified 17 level 0 processes
+ Our intention is to complete level 2 mapping on 7 of these clustered around:
* — Product Design and Introduction
* — Product Sales and Support
+ — Supply Chain (Not Cash)
¢ — Financial and IT support
¢ — This work will be carried out by an independent partner and will provide the following:
+ Accelerated benefits from transformation partner (circa 3 months)
* — High level Transformation plan for comparison with final plan from our partner
+ More robust input into the procurement dialogue process for more contractual certainty
The Proposal is to use the Government Framework and complete BPM in March
Approach - BPM SCOPE will be the processes in the white boxes
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Post Office Level O Processes, v1.
oS
: i F Develop Post Office
Vision & Strategy
Manage Business
Hanning
Manage Business
Performance
Manage Improvement
“ ‘Change
Develop , Manage &
Exchange
Sell to Customers ‘
Market Products and Transaction Data for
§ Services through Channels Settlement & Billing
6 >) la > ( +
Manage Facilities and Manage the Su Manage Information i
E ) eae ge hain Ply Manage Security Schnolouy Manage Services
Manage Financial
Resources
Manage Public
Relations & Comms
bey &
Develop & Manage
Human Resources
Cee.
Manage Legal &
‘Compliance
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Approach - Strategic Partner procurement timelines & activity
issue OIEU Notice issue high level FPO issue 1PSF Select referred supelier
34
PQQ responses duc
Strategic partner procurement is planned to complete
by mid-November 2014
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Approach - Without urgent consolidation and realignment of programmes i E>
to an integrated transformation, we will not deliver the strategic plan
a 2015/16
2014
Assisted Govt Transactions Tablets, Digital Training
Wi-Fi pilot Self Service strategy and pilots
Post Office ‘My Account’
Queue Management pilots
Customer Data Management -— various pilots Government IDA pilot
Counter Refresh pilot Pop-Up Shops
Independence & Separation —
a : , : a Clear Vision and
IT Transformation, CDP, Point of Service : blueprint for .
. aa 11" future business & \,
. operating model
Integrated Business Transformation:
Pilots
Crown & — aaa
Channel to Retailer
Digital Business with a network
New Operating Model
Contact Centre strategy
Mutual Ways of working
Strategic
Commercial & FS Operating Plans & Activities
Transition from current to new
Business Improvement Programme (Branch support)
Customer Management Programme
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Approach - we need to be clear on how radical we need to be - an incremental
approach will not deliver the required results
Case study NS&I outsourced the majority of their operation to Atos, reducing headcount from 4,000 to 150
“Back in the 1990s we needed to take radical steps to get the business on track, which included finding a partner
who could deliver an operational business and drive a change programme efficiently and effectively. This would
leave the NS&I management team free to concentrate on its core business, the business of competing in a financial
services market place.”
Operations and Commercial Management Director, NS&I
° Funds under management— from £63 billion to over £102 billion
_¢ In 1999 NS&I outsourced its entire operations
department, with 4,200 staff joining Siemens IT _ + Telephone sales — from 0 per annum to £2.3 billion in 2011-12
Solutions and Services” ~ now Atos ~ under TUPE i : » Internet sales - from zero per annum to £5.11 billion in 2011-12
regulations.
~£530m claimed in cost savings
_ * This left ~150 Corporate Centre’ NS&I staff with all L Most tellingly, NS&l are extended their contract in 2012 through
other activity being outsourced. i to 2024
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Approach - we need to be ready for and committed to a radical transformation
with full awareness of the potential impacts
Impacts Industrial
Relations
¢ Depending on the scale of
Stakeholder Client transformation that we decide upon,
relationships relationships this will radically change the Post Office.
* The road to implementing a new
operating model will be challenging.
Business
Transformation
Programme
¢ We need to be sure we are fully aware
of the impacts and have the appetite
and commitment to see through and
deliver the scale of change that we
decide to commit to for this
transformation
Procurement Public
perception
People,
processes and
culture
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Approach - we need to be ready for and committed to a radical transformation ‘
with full awareness of the potential impacts
Activity Outsource Improve TUPE Redundancy Savings Comments
Process
Swindon Warehouse 100% No Yes Optional eee ooptions with
(Not Cash or Value Stock) v' building use
Marketing Engine (Admin 60% Yes No taen® £3m Retain core product
& support roles) cok Wwe? managers only
Managed Service & 70% Vere get Yes Yes £3m Combination of
Information Security improvements
Finance Service Centre 70% Yes Yes Yes £4m Combination of
improvements
HR Service Centre 60% Yes No Yes £1.5m — Unlikely to be on-
shore outsource
Network Support 60% Yes No Yes £3m Technology
replaces people
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What we need from you
* Key strategic inputs:
¢ Brand, Customer & Product Strategy - Martin
* Digital, Channel & Multi-Channel - Martin, Kevin
* Communications & Engagement - Mark
* People, culture & Organisation - Neil
* Alignment & Delivery
¢ All activities will need to align to the TOM
¢ We will need to shape and create an integrated programme
* Approach to be proposed by 31 March 2014
* Commitment
* Radical thinking, challenging everything and everyone
* Time & Resource from you, your SLTs and their teams
* Your proactivity in driving through this change and removing obstacles
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Confidential
POST OFFICE LTD BOARD
Network & Sales
1. Purpose
44
To update the POL Board on progress with Network Transformation, discussions
with the NFSP and Crown Transformation.
2. Network Transformation
241
2.2
2.3
24
2.5
2.6
The programme is on target to meet this financial year’s original targets, beating
the reduced targets that were foreseen as result of the announcement of the
revised strategy. At 31° January, there were 2730 contracts signed against a
target of 2579. This includes the deal to convert 191 McColls branches to the
local model, which is confirmation that the local model is attractive to good
retailers. As well as the ongoing pipeline of new operator and independent
converter contracts, further deals are under discussion with Blakemore and
Tesco for their Locals, and One Stop and McColls for their remaining Mains.
At 31% January, there were 1577 Main and Local branches open. The programme
is confident it can deliver the required beat rate of 47 a week to meet the year-
end target of 1950. We have placed a very strong focus on openings this financial
year, so a peak beat rate is now scheduled for late February and March of
consistently over 60 a week, which would give us over 2000 openings.
As expected, there was a big increase in agents completing the retail surveys just
before the deadline at the end of January. At survey close, over 8,000 agents
submitted — a 96% response rate, which was at the upper end of expectations. A
whole series of communications were used over the two month period; this
included letters, Horizon alerts, Subspace online, branch focus articles, field
engagement, workshops and repeated outbound calls as the deadline
approached. A further period of one week is being used to try once more to
contact the 300 or so agents who have not yet responded.
The programme is currently analysing the results of the survey in detail. Overall
results are in line with expectations; the most positive outcome is that the number
of branches whom we may need to advertise compulsorily is around half the
number expected. This is both because new branches have come forward to
convert, while also many branches with poor retail have recognised voluntarily
that leaving the business with enhanced compensation is their best option.
Locals who the survey shows have limited retail but who have not volunteered to
leave will either need to submit their plans to create a strong retail or Post Office
will advertise their branches. Careful engagement is planned to handle these
branches over the coming weeks, while the Communications team is prepared for
the expected media and stakeholder interest.
As planned, the closure of the survey allows the programme to refine its
estimates for future volumes — and therefore to refine the Stratplan targets with
BIS. Following these conversations during February, targets will be set for the
next financial year.
NT, NFSP & Crown Kevin Gilliland Page 1 of 4
February 2014
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3. Long term relationship with the NFSP
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
We are progressing completion of the MOU and the subsequent relationship
agreement. We have had a series of meetings over the last couple of weeks and
the main focus of these has been to resolve the main issue raised, namely pre-
agreed parameters relating to NFSP’s ability to maintain their independence and
make challenges to Post Office.
The original draft MOU made reference to NFSP not engaging in activities which
are actively detrimental to the Post Office. NFSP were looking to put some
parameters around this, as would we. The key point here is that whilst we would
not expect them to be silent on all issues, anything that undermines our
commercial position and the implementation of NT would be deemed
unacceptable.
It is clear that NFSP want to complete the deal and a revised form of words which
addresses this issue has been drafted — this is now with the lawyers for review.
This also addresses the board requirement to have a clear escalation/dispute
resolution process that could enable termination of the agreement.
George Thomson seems committed to completing the rest of the discussions
(primarily in conjunction with our respective lawyers) to enable signing by the end
of February. Our current thinking is that the agreement will be launched publicly
after NFSP conference — this minimises the possibility of challenges and tensions
through the sensitive period around March and April.
As well as the long term agreement, George’s main focus externally since special
conference has been on ensuring that his team are delivering support to the
Network Transformation workshops Post Office ran in December and January.
Feedback from Post Office teams at these events is that this support from NFSP
has been very strong — on message, proactive and prepared to stand up to
challenges from attendees.
We are working through with them how we engage on other aspects of the
implementation. This is primarily through: joint workshops to define their role in
support for delivering non-viable exits; identification of potential new locations for
volunteer exits; participation in community/commercial transfer/model type review
panels; and working groups in refining model design, models product set and
opening hours.
This is likely to take place in earnest now the retail survey is complete. NFSP are
updated regularly on the statistics via the NT team. These workshops will also
enable us to keep in dialogue around any issues they have (largely coming from
specific offices and anecdotally) around the shape of the network (i.e. number of
Mains vs. Locals) and model complexity (i.e. keeping them informed of our intent
towards product simplification).
The new Network Transformation structure includes a dedicated team analysing
data on each model's performance to refine and continue to develop our thinking.
George has had an initial meeting with the new General Manager Network
Transformation, lan Kennedy. Model performance information will be reviewed as
part of the programme and the NFSP will be able to input to and shape any
action that is needed following analysis.
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4. Crown Transformation
41
4.2
4.3
4.4
45
4.6
47
48
The full programme of branch transformations to the new Crown branch blueprint
got underway in September 2013. The programme delivered 46 completed
transformations by the end of December (against a target of 45). The programme
is confident that the target of 117 transformations by the end of the financial year
will be met.
Staff training to support transition to new ways of working in transformed
branches is well underway, with c750 staff trained as at 31st January, and an
average of 80 staff a week currently going through CTP’s two day off-site training
programme.
Significant progress has been made in the process to deliver cost savings
required in the 292 Crown branches that are being retained. A Voluntary
Redundancy (VR) preference exercise was oversubscribed and we have used
this to work with the CWU and select applicants for redundancy. All applicants
have now been notified whether or not they have been selected for VR. Staff
savings total 503 Full Time Equivalents, meeting our £12.7m target for counter
staff savings.
Securing CWU support for the redundancy process required extensive
engagement during the talks of the last two months. The programme’s
confidence in its required staff savings has increased significantly now that the
VR offers have been issued, and that this has been done with CWU support.
A large proportion of the staff saving benefit is linked to the rollout of anew NCR
Self Service kiosk which will replace the existing Wincor Post & Go kiosks in
greater numbers and with a wider product offering. The first new kiosk has been
in live operation in the Model Office since November. A small number of defects
emerging from live proving and a small number of changes required by Royal
Mail in order to secure their concurrence are being closed down before the rollout
to branches begins.
Branch mergers and relocations at Houndsditch, Derby, Sheffield and Milton
Keynes were successfully completed in May and June 2013. Five other mergers
have entered the public consultation process since then (Brazennose, Stockwell,
Kennington Park, Highbury / Islington, and Sutton). As consultations complete,
feedback is reviewed and engagement made with Consumer Futures before any
announcement is made.
The franchising project has moved on significantly since the last update, with 22
of the 70 branches in scope to franchise now forecast to ‘go live’ with new
partners by the end of March. The first franchise branches under CTP (Cannock
and Uckfield) opened to customers on 30th January. 32 franchise opportunities
were re-advertised in November 2013, creating c150 new expressions of interest
which the franchising team are working through.
We are seeing an unprecedented demand for detail from Consumer Futures on
the design for each franchise branch, as well as formal requests for information
used to justify the original decisions made as to which branches would be
franchised versus retained. The programme is working with the Exco and legal
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February 2014
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teams to find a middle ground on information sharing with Consumer Futures,
such that it does not introduce new programme risks, nor set onerous precedents
for future programmes.
4.9 Despite the progress of the programme, the Crown P&L for FY 13/14 is likely to
outturn at around a £27m loss versus our target of a £23m loss.
e On income, performance has been lower than projected for this financial year.
The £23m target was dependent on an increase in income of £2m, however
we now forecast to see a decrease in income of c£2m, resulting in a net gap
of c£4m against our start of year target.
e Oncosts, there have been a number movements on and off from the start of
year plan. Although there have been delays to in-year staff savings, these
have been mitigated by other cost savings that were not in the start of year
plan
4.10 The programme remains high risk but our target of a break-even P&L run rate by
the end of FY14/15 is still achievable. To achieve this will require income targets
to be achieved in line with next year’s income budget and with the strategic plan.
Kevin Gilliland
February 2014
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POST OFFICE LTD EXECUTIVE COMMITTEE
R&CC Policy Adoption Request
1. Purpose
The purpose of this paper is to request ExCo adoption of policies recently endorsed by the Risk
& Compliance Committee.
2. Background
At the meeting on 20" January 2014 the Risk & Compliance Committee reviewed and approved
the following policies for adoption by ExCo:
2.1 Anti-Bribery
This policy outlines the approach and responsibilities and sets the out the expected
standards of behaviour to minimise the risk of bribery for Post Office. The policy includes
an updated gifts and hospitality procedure which identifies that the Risk & Compliance
team will maintain a register of all gifts and hospitality given and received. The register
will be regularly reviewed and an annual summary reported to the Risk & Compliance
Committee
2.2 External Data Protection Policy (Information Security)
This policy outlines the approach and commitment to managing the personal
information, whether provided to us directly by our customers or by our business
partners, in a manner compatible with the obligation to comply with the Data Protection
Act 1998. It sets out Post Office's mandatory expectations of all those persons who have
access to personal information held by Post Office on how to handle such personal
information.
2.3 Data Sharing Policy (Information Security)
This policy sets out Post Office’s approach to sharing information with 3rd party
organisations and where that shared data is personal information ensures this is shared
in compliance with obligations under the Data Protection Act 1998.
3. Activities/Current Situation
These are new policies for the Post office and they are to be held centrally on the Post
Office Intranet and will be subject to review on an annual basis.
4. Recommendations
ExCo is asked to formally adopt the policies listed above.
Chris Aujard
27" January 2014
R&CC Policy Adoption Request
Page 10f1 27/01/2014
Post Office
Anti-Bribery Policy
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The purpose of this Policy is to set standards of behaviour that minimise the risk of bribery for
Post Office. The principles underpinning this Policy are the same in every country in which we
operate, regardless of business sector, local customs and practices. Anyone who is employed by,
or performs services for, or on behalf of, Post Office anywhere in the world in any capacity
(including contractors, agents and operators, and their assistants) is bound by this Policy.
Version History
Version Number Date Editor Status
O14 16/12/13 Georgina Blair Draft
0.2 34/12/13 Georgina Blair Draft
0.3 08/01/14 Georgina Blair Draft
04 09/01/14 Georgina Blair Draft
10 16/01/14 Rob Bolton Final
Anti-Bribery Policy Version 1.0 Final
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Version History
Date Version Updated by Change summary
Rob Bolton Amended to identify
as final version
Document Location
The latest version of this document can be found in the Post Office SharePoint Policy Library
For Sign-off - This document has been approved by the following people:
Name Title - Department Date of Sign off
David Mason Head of Risk Governance 13/01/2014
Chris Aujard General Counsel 16/01/2014
Risk & Compliance 20/01/2014
Committee
ExCo
For Information - This document will be distributed to the following people:
Name Title - Department
This policy will be reviewed annually. Next review date January 2015.
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Contents
1. Purpose 4
2. Scope and definitions 4
3. Governing principles 4
4. Business dealings and contacts 4
5. Reporting concerns 5
6. Roles and responsibilities 5
7. Risk 5
8. Contact 5
Appendix (A) Gifts and Hospitality Approvals Procedure 6
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1. Purpose
The purpose of this Policy is to set standards of behaviour that minimise the risk of bribery for
Post Office. The principles underpinning this Policy are the same in every country in which we
operate, regardless of business sector, local customs and practices
Business partners are expected to act ethically and may be required to comply with this Policy in
all their dealings with or for Post Office.
2. Scope and definitions
This policy applies to anyone who is employed by, or performs services for, or on behalf of, Post
Office anywhere in the world in any capacity (including agents, operators and contractors).
A bribe is any advantage (financial or non-financial) which is promised, offered or given and is
intended to induce improper performance (even if ineffective). Improper performance means
carrying out a function or activity in breach of an expectation of good faith, impartiality or trust.
3. Governing principles
Post Office has a zero tolerance policy on bribery. Anybody employed by or performing services
for or on behalf of Post Office
e must never promise, offer or give a bribe
e must never request or accept a bribe.
No employee will suffer demotion, penalty or other adverse consequences for refusing to pay or
receive bribes or for reporting the suspicion that bribes may have been offered or accepted to
Post Office, even if the refusal may result in Post Office losing business
All employees must adhere to the standards contained within Post Office’s Gifts and Hospitality
Approvals Procedure and the Conflicts of Interest Policy.
Any breach of this Policy, or any procedure implementing it, will be treated as a very serious
matter by the company and may result in disciplinary action, including termination of employment
and reporting to the appropriate authorities.
4. Business dealings and contacts
All dealings with public officials or private individuals and enterprises must be open and
transparent and conducted in a proper and appropriate way. This will ensure that no bribery or
corruption takes place, and will also avoid any appearance or suggestion of improper activity.
Post Office only works with business partners who have been approved as required by Post
Office's risk-based due diligence processes. Such third parties must agree contractually to comply
with this Policy or have an equivalent Policy in place.
Contractors must be asked to ensure that any subcontractor will comply with the principles set
out in this Policy and so on throughout any supply chain.
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Any remuneration payable to agents, operators, contractors or other business partners acting on
behalf of Post Office must be appropriate for the services carried out (which 5 to be determined
objectively as far as possible). All payments must be paid through bona fide channels, must not
be made in cash and must never be made through off-shore accounts.
5. Reporting concerns
Any Post Office employee with any knowledge of or suspicions that bribery or corruption has
taken place or may do so, anywhere within (or related to) Post Office, must immediately report
their concerns to
. their line manager in the first instance;
. the Risk & Compliance team if the line manager cannot be contacted or cannot resolve
the query; or .
. the external Speak Up line in complete confidence (Tel:
All reports of suspected bribery must be passed to the Risk and Compliance team to log.
6. Roles and responsibilities
All Post Office employees are responsible for complying with this Policy and with the Gifts and
Hospitality approvals procedure at Appendix A.
The Risk and Compliance team maintains a register of gifts and hospitality, and of suspected
incidents of bribery, and this is reviewed regularly and an annual summary provided to the Risk
and Compliance Committee and to the Post Office Board.
Any serious incidents of bribery will be escalated by the Head of Risk Governance to the Chairman
of the Audit and Risk Committee.
7. Risk
Post Office has zero tolerance for bribery and all processes and procedures are designed to
minimise the risk of bribery occurring. A risk assessment has been completed and the areas of
the business at highest risk of bribery have been identified as Commercial, Procurement and the
branch network. This policy is designed to target those areas but also applies throughout the rest
of the business.
8. Contact
For further information about this policy contact the Risk and Compliance team on
riskandcomplianceg _
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Appendix A
Post Office Limited Gifts and Hospitality Approvals Procedure
Gifts
No gift should be offered or accepted if it is intended to induce improper behaviour. In general
the giving and receiving of gifts is not permitted with the exception of low value promotional
items costing under £25 each, such as pens, calendars, diaries, notepads and paperweights.
e Inasituation where refusal to give or accept a gift would cause embarrassment or offence, such
as when giving or receiving a gift from an overseas postal administration in an official capacity as
a representative of Post Office, the gift must not appear lavish or extravagant and should not cost
more than £200.
¢ Before giving any gift costing more than £25, written approval must be obtained from your line _
manager and forwarded to the Risk & Compliance team at riskandcompliance@___._ GRO J
ef you receive a gift worth more than £25 you must notify your line man ind
forward the details to the Risk & Compliance team at riskandcomplianceg
«The Risk & Compliance team will maintain a Register of all Gifts given and received
Hospitality
Hospitality may only be given and accepted where it has a clear and demonstrable link with a
legitimate business purpose, e.g. an organised event or a meal at which business is to be
discussed. In relation to offers of hospitality, numbers on both sides should be limited to those
whose presence is necessary to progress the business in hand. The giving and receiving of
hospitality and entertainment is subject to the following rules:
e You must obtain prior permission from your line manager before accepting or giving hospitality.
«The hospitality must be reasonable (not lavish or extravagant), proportionate to its purpose and
must ordinarily be below £100 per person in value.
e You must send details of all hospitality offered and accepted, including details of the host business
(if not Post Office Limited), the number of people attending and the businesses they represent (if
Post Office Limited is the host), with details of the location of the hospitality and the cost per
person, along with written approval from your line manager, to the Risk & Compliance team at
riskandcomplianceG.
e The Risk & Compliance team will maintain a Register of all Hospitality given and received.
You must beware of accepting any hospitality and entertainment which might compromise your
performance of official business, or which might reasonably appear to have improperly influenced
a business decision. Any attempt at entrapment, blackmail, or any suggestion that preferential
treatment or divulgence of confidential information is expected in return for hospitality and
entertainment, must be reported to your line manager and the Risk & Compliance team
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EXTERNAL DATA PROTECTION POLICY
Document Control
clo Head of
Information
Security
01 Feb 2014
December 2013 02/12/2013
December 2014
2. Revision History
1. Overview
Vi Sep 2013 I Jacqueline Initial Draft
Gazey
v2 Dec 2013 I Michael Hall I Minor corrections and version history added
Data Protection Policy
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Contents
Introduction. 3
Purpose.
Scope.
Status of this policy.
Responsibility for compliance.
Governing principles.
Accountability...
Post Office’s Privacy Governance Structure .
Further advice
10 Policy Review .
Appendix (i) Supporting Informatio!
Requests for access to personal information
Respon: ies of Post Office Representatives
Training
Risk assessments and audits . on
Other Post Office standards, policies and procedures relating to data protection.
OOVNAMAWNE
adodroobuubaAanr
Data Protection Policy
Post Office Limited
External Data Protection Policy
1 Introduction
The processing and protection of personal information is of paramount importance to Post
Office Limited (Post Office) in order to safeguard its reputation as one of the countries most
trusted brands.
This Policy documents our approach and commitment to managing the personal information in
our care, whether provided to us directly by our customers or by our business partners, in a
manner compatible with our and our business partners’ obligations to comply with the Data
Protection Act 1998. It sets out Post Office's mandatory expectations of all those persons who
have access to personal information held by Post Office on how to handle such personal
information.
Adherence to this policy and associated standards is a mandatory requirement for all Post
Office Representatives). Failure to comply with this policy may affect our reputation and cause
our business partners not to trust our ability to manage the personal information which we
hold. Compliance with this policy is essential to maintaining the confidence in our brand and
our service.
2 Purpose
This Policy is aimed at all Post Office Representatives that handle personal information
The purpose of this policy is to outline the manner in which Post Office should process
personal information. It sets out Post Office’s expectations of its employees, sub-postmasters,
agents, contractors, consultants, suppliers, partners and other contracted third parties (Post
Office Representatives) when processing personal information entrusted to Post Office, in
meeting its governing principles (set out below in section 6) relating to the use of personal
information across Post Office, whether the information relates to Post Office Representatives,
customers or other individuals.
3 Scope
This policy addresses all processing of personal information by Post Office Representatives
whether this is information we hold directly on our customers or information we hold on
behalf of our business partners.
Personal information includes all information, whether processed in electronic or structured
paper form, relating to a living individual who can be identified from that information.
Processing of personal information includes the collection, use, processing, transmitting,
disclosure or storage and retention of personal information. Post Office, its suppliers and
contracted third must adopt procedures necessary to comply with this policy.
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4 Status of this policy
This policy has been approved by the Post Office Board. It is managed and maintained on
behalf of the Board and the Executive Team by Post Office’s Privacy Team.
5 Responsibility for compliance
Post Office handles personal information on its own behalf as well as that of its business
partners. The controller of the information is the party who is legally responsible for
complying with the Data Protection Act 1998.
Post Office is the controller of personal information relating to individuals such as its
employees, customers and prospective customers. In some cases this responsibility for
customer information is shared with our Joint Venture partners who are the providers of the
products and services we offer.
Where Post Office handles personal information on behalf of its business partners as a Data
Processor, such as our Front Office of Government proposition, the compliance requirements
will be dictated to Post Office by the appropriate Data Controller.
6 Governing principles
Personal information must always be handled by Post Office Representatives in accordance
with the obligations placed on us by the Data Protection Act 1998 whether directly or through
contract. This means that personal information must be:
processed fairly and lawfully
processed solely for the purposes it was collected for or where Post Office processes
personal information on their behalf as instructed to Post Office by our business
partners
e kept relevant, accurate and, where necessary, up to date
e Retained only for as long as it is necessary for the purposes it was collected, or as
instructed by our business partners
© Processed in accordance with the rights granted to individuals by the Act
©. The right to access personal information about the individual
© The right to demand the data controller cease processing likely to cause
unwarranted damage or distress
©. The right to stop direct marketing
© Rights in respect of fully automated decisions that significantly affect the
individual
© Right to claim compensation for damage (or damage or distress) caused by a
failure to comply with the Data Protection Act.
e be kept secure against unauthorised or unlawful access and against accidental loss,
destruction or damage by using appropriate technical and organisational measures —
this includes the following:
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the processing of personal information should not be outsourced to agents or
processors of Post Office without proper controls and contract clauses in place
as established by Post Office’s Privacy Manager (and the permission of the
relevant business partner, where necessary).
personal information should not be disclosed to any 3" parties without
consideration to the privacy and confidentiality commitment we have or
where Post Office processes personal information on behalf of its business
partners, the prior consent of that relevant business partner where required.
Managed in accordance with Post Office’s policies and procedures and where
Post Office is a Data Processor, with any specific instructions provided to Post
Office by the relevant Data Controller business partner.
Not transferred overseas without additional controls being adopted to protect the
rights and freedoms of the individuals as agreed with Post Office’s Privacy Manager or
where Post Office processes personal information on behalf of its business partners
the prior consent of the relevant business partner where required
7 Accountability
Each member of the Executive Committee is responsible for compliance within their area of
responsibility. Post Office’s Privacy Team has responsibility for supporting the delivery of this
policy and monitoring compliance with it. However, each Post Office Representative has
responsibility for ensuring that they adhere to the policy.
Any Post Office Representative who considers that this policy has not been followed should
raise this matter with the Privacy Team.
8 Post Office’s Privacy Governance Structure
This needs to be appended once POL Exco have agreed approach
9
Further advice may be ol
Further advice
Post Office’s Privacy Team who can be contacted by
10 Policy Review
This policy is scheduled for review December 2014.
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Appendix (i) Supporting Information
Requests for access to personal information
Any individual is entitled to make a subject access request for details of personal information
held about them. Where Post Office receives such requests for personal information
belonging to our business partners, the process for meeting such a request sits with that
business partner and Post Office will handle such requests in accordance with the instructions
from our business partner.
Responsibilities of Post Office Representatives
If any Post Office Representative has access to or uses personal information about other
people (e.g. customer or employee personal information) he or she must comply with this
policy and the requirements set out in all other Post Office data protection standards, policies
and procedures (see below).
Each Post Office Representative is responsible for ensuring that any personal information
which he or she accesses or uses is kept securely and not disclosed in any way to any
unauthorised third party.
Training
Where appropriate, training will be provided to Post Office Representatives on data protection
issues and the handing of our business partner’s personal information. Where required by our
business partner to deliver specific training, such as the business partners own data protection
training, Post Office will ensure that appropriate staff receive such training.
Risk assessments and audits
Periodic data protection risk assessments and audits may be carried out to assess compliance
with this policy and data protection laws.
Other Post Office standards, policies and procedures relating to data protection
. Post Office Data Protection Policy (Internal)
. Code of Business Standards
. Conduct Code
° Information Security Policy & Guidance
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Data Protection — Data Sharing Policy
Document Control
clo Head of
Information
Security
01 Feb 2014
December 2013 02/12/2013
December 2014
1. Overview
2. Revision History
Vi Sep 2013 I Jacqueline Initial Draft
Gazey
v2 Nov 2013 Ole Christensen I Draft with corrections
v3 Dec 2013 I Michael Hall Minor corrections and version history added
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Contents
Introduction ...
Background...
1. Limitations on use of the data
2. Obligation to ensure proportionality.
3. Obligations on the parties in respect of data quality ..
Rights of the individual .......
Security .....
Overseas Transfers...
nN 9 om Pp
Data Sharing using Data Protection Act 1998 exemptions...
8. Status of this Policy..
Appendix (i): Obligations on Recipient Organisations ....
Appendix (ii): Recipient Organisations.
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Introduction
This Policy sets out Post Office’s approach to sharing information with 30 party organisations
(Recipient Organisations) and where that shared data is personal information ensures this is shared
in compliance with obligations under the Data Protection Act 1998. Post Office will share
information in connection with:
e The Prevention & detection of crime and prosecution of offenders
e The prevention and recovery of any loss to Post Office or one of its business partners
e National Security matters
© Anti-Money Laundering
e The protection and safety of missing or vulnerable people
Any sharing by Post Office of information to 3 party organisations will be subject to considerations
of sensitivity, confidentiality, privacy, ownership and copyright. In becoming a recipient of Post
Office information, 3 party organisations agree to process that information in line with this Policy.
Post Office information consists of personal information and business sensitive information —
together referred to in this policy as “Shared Data”
Background
The Data Protection Act 1998 covers the processing of personal information and establishes rules to
protect individuals in respect of the security and use of their personal information.
Post Office shares information with a number of 3" party organisations in its endeavours to protect
its business, staff, customers, other individuals and its associates.
Data Sharing
Data sharing involves the disclosure of information from one or more organisations to a third party
organisation or organisations. Specifically for Post Office, data sharing can take the form of:
e¢ a systematic disclosure of information collected by Post Office to its key contacts on a
regular basis such as text blasts and reports
e Post Office and other organisations pooling information and making it available to each
other for a common purpose
e¢ exceptional, one-off disclosures of personal data by Post Office in unexpected or emergency
situations
¢ exceptional, one-off requests by 3" party organisations, such as solicitors, for information
held by Post Office
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Scope
This Policy covers all Post Office departments and 3" party organisations that share Post Office
personal information and business data for the purposes highlighted in section 1 below.
For the purposes of this Policy, personal information is considered to be any information that relates
to a living individual who can be identified directly from the information, or from the information
and other information, which is in the possession of, or is likely to come into the possession of, Post
Office or the recipient organisation. This includes any expression of opinion about the individual(s)
and any indication of the intentions of the Post Office or any other organisation in respect of the
individual(s).
Responsibility
It is the responsibility of the signatories to this Policy to ensure it is followed in respect of the
processing of shared data.
Policy.
1. Limitations on use of the data
Post Office will share information for the following purposes:
e@ The Prevention & detection of crime and prosecution of offenders
e The prevention, investigation and recovery of any loss to Post Office or one of its business
partners
¢ National Security matters
e Anti-Money Laundering
¢ The protection and safety of missing or vulnerable people
By accepting shared data from Post Office, 3" party recipients agree to limit their use of the shared
data to these purposes only.
Where the shared data is sensitive personal information relating to:
e health information,
racial or ethnic origin,
e religious or other similar belief,
¢ trade union membership,
e sexual orientation or
e offences or proceedings for an offence
the 3"? party recipient understands that the information may only be processed for:
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e the prevention and detection of crime where such processing is in the significant public
interest where such processing must necessarily be carried out without the explicit consent
of the individual;
e¢ meeting obligations placed on the organisations by way of S68 of the Serious Crime Act
207%;
any legal proceedings (including prospective legal proceedings).
e The protection and safety of missing or vulnerable people where the processing is in the vital
interest of the individual (or another person) in the case where consent is not available;
For shared data coming in to Post Office from one of its business partners, the same restrictions will
apply.
Where a recipient of Post Office shared data wish to use the information for other purposes, Post
Office’s prior permission should be sought on a case-by-case basis.
2. Obligation to ensure proportionality
Post Office recognises that it is likely to be reasonable and necessary to share data in its aim to
protect its staff, customers and business. Post Office will ensure that the nature of the data it shares
is proportional to the above aims and will not share identifiable personal information when other
methods that respect individuals' rights to privacy are viable.
3. Obligations on the parties in respect of data quality
Post Office will only share data where it is satisfied that the information is relevant to the purpose of
the sharing and, to the best of our knowledge, accurate.
Where there is a requirement to keep shared data up to date on an on-going basis, the 3" party
recipient must make provisions for updates to the data on a case-by-case basis or agree its update
requirements with Post Office through a bespoke data sharing arrangement
Post Office recognises that there is a requirement for information to be retained only as long as it is
necessary for the purposes outlined in section 1. All recipients of Post Office shared data should
have a documented retention policy outlining its intentions in respect of the archiving and
destruction of this information once it has served its purpose.
4. Rights of the individual
The Data Protection Act gives rights to individuals in respect of the processing of their personal
information and those key to a data sharing initiative are:
¢ Right of access to information;
e Right to demand an organisation cease processing personal information about them on the
grounds that it will cause (unwarranted) damage or distress;
* Please note - 68 of the Serious Crime Act makes it an offence to further disclose information covered by this
obligation.
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e Right to object to any fully automated decisions that significantly affect the individual;
¢ Right to claim compensation for any damage or damage and distress caused through a
breach of the Act.
In accepting personal information from Post Office, the recipient organisations accept that they will
be responsible for handling any requests they receive directly from individuals in compliance with
the requirements of the Data Protection Act 1998 and will adopt suitable procedures to react to
individuals exercising their rights.
5. Security
Post Office takes the security of shared data very seriously. It will ensure that any information it
shares with recipient organisations is transferred in a manner that protects the information, such
protection being appropriate to the nature of the information and any resultant harm that could
come from inappropriate disclosure, loss or destruction to that information.
Recipient organisations must ensure that shared data they receive from Post Office is adequately
protected by:
e¢ Adopting an Information Security Policy that recognises the controls required to protect this
information
e Taking physical, technical and organisation security measures to protect the information
e Providing training to staff that have access to this information on the importance of keeping
the information secure
¢ Checking the reliability of staff that are granted access to the information through formal
vetting procedures appropriate to the nature of the data the staff member can see.
The recipient organisation agrees to advise Post Office immediately if, as the recipient of
information, your contact information changes, your role changes or the need for sharing Post Office
information stops or changes
6. Overseas Transfers
Post Office’s written permission is required where Post Office shared data, disclosed to a recipient
organisation that is likely to hold or allow access to the data from overseas locations. Such
permission may be refused after considering the nature of the data, purpose of the processing and
Post Office’s obligations under the Data Protection Act 1998
7. Data Sharing using Data Protection Act 1998 exemptions
Where Post Office is approached by a 3 party organisation that is making a request for Post Office’s
Personal Information that may fall within the scope of an exemption within the Data Protection Act
1998, these requests will be considered on a case by case basis.
Post Office will apply the same considerations when using these exemptions to request other
organisations for personal information.
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8. Status of this Policy
This policy has been approved by the Post Office Executive Committee and is managed and
maintained on their behalf by Post Office’s Data Protection and Privacy Team.
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Appendix (i): Obligations on Recipient Organisations
In accepting shared data from Post Office, the recipient organisation understands that it must:
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a) Comply with its own obligations under the current and future Data Protection and Privacy
legislation in respect of the processing of any personal data being disclosed or shared.
b) Only use the shared data for the purposes established in this Policy and not to use it for any
other purpose without the prior written consent of Post Office.
c) Adopt adequate technical and organisational security measures to protect the shared data
from unauthorised or unlawful processing and accidental loss, destruction or damage.
d) Advise Post Office immediately if, as the recipient of information, the contact information
changes, recipients role changes or the need for sharing Post Office shared data stops or
changes
e) Ensure the reliability of staff that have access to the shared data and agree that only those
individuals that have a genuine business need to see that data will have access to it.
f) Only retain the shared data while there is a business need to process it and securely destroy
the data in line with a documented retention schedule, as required by this Policy.
g) With regard to shared data that is personal information, respect the rights granted to
individuals under the Data Protection Act 1998, adopting procedures to react to individuals
exercising their rights in order to comply with the requirements of the Act.
h) Take appropriate steps to maintain the quality of the shared data.
i) Not transfer shared data outside the European Economic Area without Post Office’s prior
written permission as outlined in section 6 of this Policy.
j) The recipient of shared data understand that Post Office Limited is subject to the Freedom
of Information Act 2000 and as such this Policy and information about those organisation
that share data may be subject to disclosure under this Act.
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ient Organisations
Post Office will share information with organisations, such as those that fall into the following
categories:
e Law enforcement agencies
e Government bodies and agencies
¢ Public authorities
e Post Office product providers, for example the Bank of Ireland
e Post Office business Associates, for example Transport for London.
© Financial Services institutions, for example High Street Banks
¢ Sub-Post Masters
© Royal Mail
e Credit reference and fraud prevention agencies
e Financial Conduct Authority
© Legal advisors
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Name of Organisation:
Nominated Signatory Name:
In accepting personal information from Post Office, the recipient organisation named above understands that
it must:
a) Comply with its own obligations under the current and future Data Protection and Privacy legislation
in respect of the processing of any personal data being disclosed or shared.
b) Only use the shared data for the purposes established in this Policy and nd to use it for any other
purpose without the prior written consent of Post Office.
c) Adopt adequate technical and organisational security measures to protect the shared data from
unauthorised or unlawful processing and accidental loss, destruction or damage.
d) Advise Post Office immediately if, as the recipient of information, the contact information changes,
recipients role changes or the need for sharing Post Office shared data stops or changes
e) Ensure the reliability of staff that have access to the shared data and agree that only those individuals
that have a genuine business need to see that data will have access to it.
f) Only retain the shared data while there is a business need to process it and securely destroy the data
in line with a documented retention schedule, as required by this Policy.
g) With regard to shared data that is personal information, respect the rights granted to individuals
under the Data Protection Act 1998, adopting procedures to react to individuals exercising their rights
in order to comply with the requirements of the Act.
h) Take appropriate steps to maintain the quality of the shared data.
i) Not transfer shared data outside the European Economic Area without Post Office’s prior written
permission as outlined in section 6 of this Policy.
j) The recipient of shared data understand that Post Office Limited is subject to the Freedom of
Information Act 2000 and as such this Policy and information about those organisation that share
data may be subject to disclosure under this Act
I acknowledge receipt of Post Office’s Data Sharing Policy V1 and agree to process Post Office information
in accordance with the standards recorded in this Policy.
Signed:
Dated:
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Strictly Confidential
POST OFFICE LTD EXECUTIVE COMMITTEE
Information Security and Assurance
1S03 - Acceptable Use Policy
1. Purpose
The purpose of this paper is to:
1.1 Update ExCo on the progress to gain approval, by all decision making parties, of
the Acceptable Use Policy (Appendix 1).
1.2 Seek approval of the Acceptable Use Policy from the ExCo.
2. Background
24 Risks to Post Office information are often mitigated by Policy. The Acceptable
Use Policy ensures that:
. Colleagues are aware of what is considered acceptable behaviour when
using Post Office Information Systems.
. Colleagues are aware of the consequences for failing to follow this policy.
e The risks associated with inappropriate use of Post Office Information
Systems are effectively managed.
3. Risks
3.1 Specific risks that have been highlighted during the sign-off process have been
predominantly around the communication of sensitive Post Office information via
personal email addresses and to personal web storage. An example of such
risks are that many email addresses result in information being taken outside the
European Economic Area, and in some cases email content is stored in US
which will put information in scope for Federal access.
4. Activities/Current Situation
4.4 When establishing the Acceptable Use Policy a number of factors have been
considered:
° Previous Policies were created by Royal Mail Group and therefore Post
Office had to establish appropriate Policies for the newly separated
organisation.
° The Board and ExCo, due to their existing ways of working and their
access to significant and highly sensitive company information will have to
change their current communication practices to comply with this Post
Office Policy.
. Non-Executive Directors (NED’s) often have to comply with a raft of
Policies from various companies they are associated with.
. Not all of the NED’s have a Post Office email account, or Post Office
mobile/iPad or Laptop.
° Not all of the NED’s want additional devices to carry around.
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° Board Pad is a secure application for distributing and annotating Board
level information. It is available to all Board members, irrespective of
whether they have a Post Office device or Post Office email account.
4.2 The challenge has been to ensure that existing activity is not unduly restricted,
and can be tailored to comply with the Policy without being too onerous.
4.3. The Policy has been reflected in the Training and Awareness Programme as well
as in HR materials and guidance and this activity is on-going.
5. Solution and Action Points
The proposal and actions are as follows:
5.1 All the NEDs to have Post Office email Accounts so that communications
complies with the user access policy
5.2 Board and ExCo where required to be offered a way to print documents from
their iPads if they require
5.3. If NEDs do not have printers and still want this facility Post Office will offer to
supply printers
5.4 Provide guidance to NED’s on accessing their email accounts via Web Mail if
required
5.5 Provide guidance or support to set up access to email account on Personal
Mobile Device if required
6. Summary Action
The Company Secretary, Chief Information Officer and the Head of Information Security and
Assurance, have started to engage with the NEDs to ensure that they are each comfortable
with the solution, actions, equipment and that their individual requirements are met in line with
the Policy.
7. Recommendations
The ExCo is asked to:
7.1 Note the update and actions set out above
7.2 Accept the Policy on the basis that the actions listed in sections 4 and 5 will be
completed under the guidance of the Head of Information Security.
Lesley Sewell
05 February 2014
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Information Security and Assurance Group
1SO3 - Acceptable Use Policy
Document Control
Overview
clo Head of Information
Security
10" Jan 2014 10" Jan 2014
Annually or major
change
Revision History
13 10/01/2014 Moyn Uddin Minor revision to insert new section 5.9.
12 30/05/2013 Duncan Godfrey Updates with comments from stakeholders.
Issued for ISPRC.
141 22/04/2013 Mark Pearce Consistency corrections
1.0 03/04/2013 Duncan Godfrey Updated with external review comments
from Post Office Legal department. For
approval.
04 13/02/2013 Duncan Godfrey Minor formatting and grammar changes.
Ready for approval by ISPRC.
03 28/12/2012 Mark Pearce Review.
0.2 27/12/2012 Duncan Godfrey New IS policy. Added comments from Mark
Pearce and Dave King
01 21/12/2012 Duncan Godfrey Reformatted from original HR release
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1 Purpose and Statement
The purpose of this policy is to present what is acceptable use of Post Office Information Systems.
All employees of Post Office are responsible for using Post Office information resources
responsibly and securely. The resources are primarily provided to support business activities.
This policy does not form part of employees’ contracts and may be amended at any time.
2 Goals
The goals of this policy are to:
e Communicate what is acceptable behaviour when using Post Office Information Systems.
e Communicate the repercussions for failing to follow this policy.
e Manage the impact of the risks associated with inappropriate use of Post Office
Information Systems, including: confidentiality breaches, legal claims, reputational
damage, and adverse impact to the availability and/or integrity of Post Office Information
Systems and loss of revenue.
3 Scope
The policy applies to all Post Office employees, agents, contractors, suppliers and consultants of
Post Office.
4 Roles and Responsibilities
4.1 Information Security and Assurance Group
The Information Security and Assurance Group (ISAG) will review this policy at least annually and
update accordingly to reflect changes to business objectives or risks.
4.2 Users
It is the responsibility of each user irrespective of their terms of employment or engagement to
adhere to this policy.
All managers are directly responsible for implementing Post Office policies within their business
areas and for their staff's adherence to them.
5 Policy Statement
The use of Post Office Information Systems is governed by relevant Information Security and
company policies. It is the responsibility of each user to comply with these policies at all times.
5.1 General System Use
Post Office Information Systems and all the information contained within are the property of Post
Office. Users are provided access to these systems for appropriate business use only.
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Users may only use resources for which they have authorisation. Users may only access systems
via their individual accounts and must not use another individual's colleague’s account to access
Post Office Information Systems.
Users are individually responsible for the resources assigned to them and are accountable to Post
Office for the use of such resources.
It is the responsibility of the user to protect their passwords or any other credentials. Do not write
down, display or disclose your user identity or password, or any other access code to any other
individual.
Non-Post Office owned devices must not be directly connected to Post Office Information Systems.
(see IS16 Mobile Device Policy).
5.2 Misuse of Post Office Resources
Users must not intentionally attempt to alter the configuration of any Post Office Information
System or interfere with any security control (for example anti-virus or patching updates). Users
must not conduct any monitoring of Post Office Information Systems unless this has been defined
as part of their role and the necessary impact assessments have been undertaken.
Users must not take any actions to anonymise their use of Post Office Information Systems.
Users shall not conduct any illegal or malicious activities using Post Office Information Systems.
This includes installing any tools that could support such an activity.
5.3 Email and Instant Messaging Acceptable Use
Email and Instant Messaging (IM) are tools for conducting Post Office business and shall not be
used for any other non-Post Office related business activity. All emails and IMs are archived and
retained as permanent records and are subject to disclosure to outside parties including
regulatory and legal authorities.
Users must not forward business information from business email accounts to their private non-
Post Office accounts. All business emails remain the property of Post Office and must only be
accessed via authorised channels.
The Email or IM facilities specifically must not be used for:
e Sending any message that others could consider indecent, offensive, threatening, insulting
or derogatory
e Sending any messages that could be considered as bullying or harassing other employees,
Post Office customers or any other third party;
e Sending a false and/or defamatory statement about any person or organisation;
e Sending discriminatory material;
e Distributing, disseminating or storing images, video, text or other materials that might be
considered indecent, pornographic, obscene or illegal
¢ Creating or distributing chain letters or unsolicited advertisements (SPAM)
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e Any other material that is likely to create any liability (whether criminal or civil, whether
for you or us).
Any conduct listed above is likely to be seen as gross misconduct and investigated under our
disciplinary procedure. Any such action will be treated very seriously and is likely to lead to the
summary dismissal of the user concerned (where the user is an employee) or termination of the
user’s contract (where the user is not an employee).
Only Post Office approved IM facilities shall be used for business messaging.
5.4 Web Acceptable Use
Access to the web has been provided to support business activities and must primarily be used for
this purpose. A certain amount of personal use is permitted (see section 5.8) but users must not:
e Access any content relating to: gambling, illegal drugs, pornography, criminal skills, hate
speech or any other indecent, obscene or offensive material
e Send offensive, bullying, harassing or discriminatory material or material which is
derogatory to others
e Post or otherwise transmit false or derogatory material
e Access any material which infringes copyright
e Access any material that is likely to create any liability (whether criminal or civil, whether
for you or Post Office).
Any conduct listed above is likely to be seen as gross misconduct and investigated under our
disciplinary procedure. Any such action will be treated very seriously and is likely to lead to the
summary dismissal of the user concerned (where the user is an employee) or termination of the
user's contract (where the user is not an employee).
All web access is monitored and archived; this record will be audited for compliance with this
policy.
5.5 Use of external file storage and synchronisation services
External unauthorised file storage services (such as Dropbox, Skydrive and Googledrive, Box etc.)
must not be used for storing Post Office information..
5.6 Authorised Software and Copyright Material
Users may only use the software provided to them by the Post Office IT service. No unauthorised
software is permitted on Post Office Information Systems
All users must comply with all intellectual property laws including copyright law. Any material
which has a copyright must not be used on Post Office Post Office Information Systems without
the correct licence. This includes: videos, audio files and any protected documents (such as
restricted PDFs).
5.7 Use of social media
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Post Office recognises that many of our people enjoy using social networking sites in their own
time. Comments we publish on these sites may reach a surprisingly wide audience, and so we
must all protect our brand and avoid doing anything that might bring the reputation of Post Office
into disrepute.
Everyone must be aware that information gained about Post Office as a result of your work for
the business must never be discussed or shared on social media sites.
5.8 Personal use of Post Office r esources
While Post Office Information Systems are intended for business use only, our policy does allow
for reasonable and occasional personal use. Any personal use must be kept to a minimum and
should not interfere with an employee’s business responsibilities and the resources they are
using.
Personal use remains a privilege and activity conducted on Post Office Information Systems is still
owned by the Post Office. The Post Office is not responsible for the recovery of any non-business
data on Post Office Information Systems and this data may be deleted at any time.
5.9 Use of Non -Post Office Equipment and Resources
Non-Post Office equipment (e.g. laptops, tablets, smartphones etc.) and or resources such as
email systems (e.g. external consultancy email system, Gmail, Outlook.com (Hotmail), Yahoo Mail
etc.) must not be used for Post Office business purposes unless explicitly authorised by the CIO.
This includes forwarding Post Office information to non-Post Office email systems.
5.10 Reporting Inciden ts
It is the responsibility of the User to report any security incident or suspicious activity to the IT
Service Desk. Advice can be sought from the ISAG.
5.11 Monitoring
Post Office Information Systems will be monitored and audited for compliance with this policy.
Monitoring is only carried out to the extent permitted or as required by law and as necessary and
justifiable for business purposes.
Where we have a reasonable suspicion that Post Office Information Systems have been used
improperly, in breach of the law, or if we need to assist the legal authorities or are otherwise
required to do so by law, we will extend this monitoring to the content of specific electronic
transactions. Only authorised individuals can undertake this activity through the Disclosure and
Access to Employee Information - the “P6 process”.
If an employee is concerned about personal privacy, they are advised not to use Post Office
Information Systems and equipment for personal correspondence or to store personally sensitive
or confidential information.
6 Exceptions
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As per the standard policy process, a policy exception must be applied for by contacting the ISAG.
These exceptions will be challenged and reviewed by the ISAG on an annual basis. Evidence must
be retained for both the exception and the annual review.
7 Violations
Any failure to comply with this policy will be seen as a violation of the policy and may be dealt with as
set out under Enforcement below.
8 Enforcement
The ISAG will regularly assess for compliance against this policy. Additionally, all Post Office
people have a responsibility to report any concerns that there may have been a violation of the
policy. Any violation of this policy will be investigated and is likely to be dealt with under our
disciplinary procedures. In particular, any serious breach of this policy is likely to be seen as gross
misconduct and could lead to the summary dismissal of the user (where the user is an employee)
or termination of the user's contract (where the user is not an employee).
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9 References
This document has the following references:
IS16 Mobile Device Policy
APPENDIX A: Glossary
Acceptable Use The rules on the use of Post Office Information Systems in a way
which protects the reputation of Post Office and the integrity of its
Information Systems and equipment.
Instant Messaging A system for real-time electronic messaging on the Internet or
(IM) over networks. The approved Instant Messaging tool in Post Office
is Microsoft Office Communicator.
Post Office Broadly defined and includes but is not limited to: computer
Information networks, Internet facilities, Instant Messaging systems, tablets,
Systems laptops, desktops, Personal Digital Assistants (PDA), podcasts,
forums, blogs, message boards, social communication websites,
newsgroups, remote access facilities and all communications
through such systems.
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POST OFFICE LTD Executive Committee
Cyber Security and Information Assurance
1. Purpose
The purpose of this paper is to:
14
1.2
1.3
Update the ExCo on UK Cyber Security industry initiatives;
Update the ExCo on key Information Security and Assurance Group (ISAG)
activities;
Outline risk reduction activities being implemented at Post Office in Cyber
Security.
2. Industry Initiatives
21
2.2
2.3
Since the inaugural Cyber Security noting paper dated 15 January 2014, Post
Office has participated in a Government Consultation for a new Standard to
address Cyber Security. The anticipated time to develop the Standard is 18
months. This is led by BIS with backing from all major Government Departments
and aims to develop a Cyber Security Standard for adoption across Public and
Private sectors. The consultation is in line with the intention set out in the
National Cyber Security Strategy! paper to address the increasing threat to UK
PLC.
The Consultation is in the early stages, but BIS are aware that Industry, including
Post Office, is appealing for a Standard that will;
° Not be too onerous to implement;
. Be applicable to organisations who have outsourcing arrangements and
have a reliance on supply chains;
° Provide real value in terms of measuring success against on-going and
emerging risks
. Include Mobile technology, which has the potential for severe compromise
if not managed adequately.
It is proposed, and supported by Post Office representation that the Cyber
Security Standard will be interoperable with current ‘good practice’ standards
such as 180270017, rather than inventing something new, this will limit the
impact on Post Office. ExCo will be updated on further developments that may
affect Post Office regarding the proposed Standard.
3. Activities/Current Situation
Building on from last month’s report on activities:
3.1
There are currently eleven active incidents or breaches that ISAG are aware of; at
this time none are assessed by ISAG as being of significant risk to Post Office.
These will be discussed at the next Information Security Committee.
National Cyber Security Strategy 2011 and 2013 Published by Cabinet Office
? 1$027001: An International Standard covering the specification and management of an organisation's I formation
Security Management System.
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3.2 Incident Summary
Following on from January's noting paper; during the period of mid January 2014
to the end of January 2014, there have been three new reported incidents all of
which are limited and contained.
Three of the eleven cases are on the Agenda for the next Information Security
Committee meeting for formal closure.
3.3 Contractual Due Diligence
ISAG are working with the Company Secretariat to ensure that there is adherence
by all parties to the sign-off process by ISAG (among other key teams) before
contracts are signed with suppliers.
Work is continuing with the Sourcing team and a Pre-Qualification Questionnaire
for Information Security has been introduced to tighten up the Information Security
requirements of new product and service acquisitions. All future procurements will
now include input from technical, data protection and compliance colleagues within
ISAG (dependent on the nature of the project).
A formal project gating certificate has now been drafted and will ensure ISAG
requirements are agreed prior to project sign-off.
3.4 Marketing Due Diligence
Regular engagement continues with Marketing due to the high level of reliance on
processing personal information. This is proving to be successful and helps
promote Post Office to our suppliers as an Information Security focussed
company.
3.5 IT Supply Chain Transition to ATOS
Regular meetings continue with the Atos team across many disciplines and
service categories, key areas include but are not limited to:
. Governance and Risk.
° Incident response and management.
. Business Continuity requirements.
. Segregation of responsibilities.
. Requirements and Controls are being assessed around data exports to
non-European locations.
3.6 Risks
Risk and Compliance Tool
A suitable tool has been selected for ISAG, which will help calculate and
manage risks in support of both internal policies and external certifications.
This is being put in place as a result of an audit finding from 2013.
Reporting Risk
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All Information Security and Assurance unmitigated risks continue to be
logged locally and escalated to the Risk and Compliance Committee as
appropriate.
Assessing the Cyber Security Threat Landscape
The information Security and Assurance Group actively participates in
industry events, providing valuable peer interaction and demonstrating
Post Offices commitment to protecting its organisation.
ISAG also maintains contact with a number of external authorities to gain
knowledge of known and emerging threats. These include but are not
limited to:
. CPNI — Centre for the Protection of the National Infrastructure —
access to their Secure Restricted Extranet for Cyber Security and
guidance updates.
. CESG — Communications and Electronic Security Group — regular
updates that are communicated to ISAG team members and other
colleagues as appropriate.
. British Computer Society Forensic Forum for Cyber Security —
regular updates are provided to ISAG team members.
. National Archives — Quarterly meetings for Senior Information Risk
Owner (SIRO), regular information updates are received and
communicated to appropriate colleagues.
3.7 Policies
All Information Security policies are now signed off, and have been communicated
to all colleagues, save for the Acceptable Use Policy which is subject to additional
supporting activity and is a paper for ExCo information and noting.
3.8 Training and Awareness
Key training and communication activities remain on schedule for April and July
2014 — rollouts to central and branch colleagues respectively.
ISAG are currently engaged with HR representatives to ensure ISAG Policies are
reflected in colleague communications and HR policies.
Request
44 The ExCo is asked to note the update and actions set out above.
4.2 The ExCo is asked to approve the paper for presentation to the Post Office
Board.
Julie George/Lesley Sewell
05 February 2014
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Executive Committee
Data Centre Tower Procurement
1. Purpose
The purpose of this paper is to:
1.1 Update the Executive Committee (ExCo) on the status of the procurement of a
Data Centre Tower.
1.2 Seek approval for onward submission of this paper to the Board.
2. Background
2.1 As previously agreed by the Executive Committee and the Board, Post Office is
re-procuring the IT supply chain to meet the demands of our business strategy
and Royal Mail Group separation activities.
2.2 Following previous ExCo approval, OJEU compliant procurements were initiated
(using a competitive dialogue process), for our whole IT supply chain, including a
Services Integrator.
2.3. The market was engaged to provide Data Centre services to meet our strategic
objectives; successful separation from RMG, improving timeliness and agility in
change delivery, introducing more variability into the cost base, lowering the cost
of IT service.
2.4 The Data Centre Tower services include the facilities, technology infrastructure
and supporting operational service capability on which we run our business
applications such as Horizon, core finance and HR systems.
25 To maximise efficiency providers typically offer services in a number of
configurations, described as Public Cloud, Private Cloud, Hosting and Co-
Location services. The key differences between them relate to the degree of
exclusivity required and who supplies the technology infrastructure (the provider
or the customer)'.
2.6 Post Office requires a mix of all four configurations to support the range of
technology and applications that are used across the business.
3. Activities/Current Situation
3.1 Four bidders (Fujitsu, Capita, CSC and HP) were invited to submit responses to
an Invitation to Submit Proposed Solution (ISPS). Only one bidder, Fujitsu
expressed an interest to bid, the remaining three bidders withdrew, predominantly
due to the high degree of Co-Location services Post Office required.
3.2 I The Programme Board reviewed the procurement and authorised continuing with
a sole bidder, Fujitsu. Following completion of dialogue and approval at
Programme Board an Invitation to Submit Final Tender (ISFT) was issued to
Fujitsu in November 2013.
' In a Public Cloud configuration there is little or no exclusivity and the infrastructure is delivered by the provider.
Private Cloud and Hosting provide different degrees of exclusivity, whilst, in a Co-Location configuration the provider
delivers exclusive use of a dedicated area (secure space and power) and the customer provides the technology
infrastructure.
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3.3 Fujitsu submitted a bid in December 2013 and a number of clarification requests
were made and meetings held. The bid was evaluated against price and quality
criteria, with scores moderated for consistency. To ensure price/value for money
could be assessed against a sole bid, Gartner was engaged to provide a Market
Price Assessment (MPA). The results of this evaluation indicated that the bid in
its current form did not meet Post Office’s objectives for a number of key
reasons:-
e The solution proposed did not reflect the Post Office’s requirement for a
leveraged, outcome based solution as set out in the ISFT.
e The time and quality of the implementation plan does not meet Post Office’s
stated requirements in the ISFT and placed obligations on Post Office that
cannot be met.
e It did not meet our value for money criteria based on the Gartner MPA. The
additional costs of the bid over the Gartner MPA were between £16m and
£18m over the term of the contract.
e It did not demonstrate a sufficient level of agility; there was no basis for
forecasting implementation costs and timescales for future change.
3.4 A range of options was carefully considered in reviewing the procurement
process and the risks and impacts to our strategic objectives, including
consideration of the impact to our relationship with Fujitsu.
e Accept the bid in its current form: The bid was not aligned to our strategy;
accepting it in its current form does not meet our delivery requirements or
achieve the strategic objectives and does not demonstrate value for money.
e Continue the process and propose a rebid: Post Office has a low
confidence in a revised bid meeting the required standard and Post Office
objectives; the impact to our Separation timelines was untenable.
e Cancel the procurement process and consider alternatives: This was
the preferred option; the current process was not meeting our strategic
objectives.
3.5 The IT Transformation Programme Board reviewed the procurement process and
considered whether to continue. It determined that the procurement, even if
continued, does not meet our strategic objectives. This decision was endorsed by
ExCo. The bidder was advised of Post Office’s decision in a meeting held on the
31° January. The procurement was formally cancelled on the 7" of February
2014 without award of contract.
Next steps
3.6 A plan is now being considered and taken forward to procure Data Centre
services through alternative methods; -
e Short term: Look at exploiting existing contracts to secure continuity of
services, and to enable us to meet our Separation activities.
e Medium term: Secure Data Centre services from a supplier appointed
through the Solutions Delivery Framework or through use of a framework
contract such as G-Cloud.
e Strategic Term: Review our IT supply chain strategy to accelerate provision
of hosting services within our existing Towers rather than through a single
Data Centre Tower.
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3.7. An Independent internal review of the procurement including lessons learnt will
be conducted in due course; the report and actions cascaded across our
Transformation Programmes and Commercial Teams and will be shared with
ExCo.
3.8 A detailed update of the changes to the IT Strategy and the impact of this
decision will be presented to the Executive Committee and Post Office Board in
April.
Options Considered
Covered in Section 3.4
Commercial Impact/Costs
5.1 Sunk costs associated with the Data Centre procurement are £1.1m for the
resource and legal costs.
5.2 Securing medium term Data Centre services costs are estimated at £0.5m and
legal costs £0.3m.
5.3 Cancelling the Data Centre procurement means that funding that was included in
the Transition Programme business case for Data Centre transition, totalling
£2.5m across 2013/14 and 2014/15, will not be utilised and can be used to offset
costs for securing short and medium term Data Centre services. Therefore, the
net impact on committed delivery plans in 2013/14 is a net saving of £0.9m, but in
2014/15 there is a net increase of £1.3m.
5.4 Funds for the above will come from IT Transformation repurposing £0.8m_ to
secure Data Centre services and associated legal costs. In addition, it is
estimated that there is a total requirement for £1.3m unbudgeted costs in
2014/15.
5.5 Benefit realisation in the IT Transformation Programme for Data Centre services
are expected to materialise in 2016/17 and it is expected that these would still be
realised.
5.6 In summary, the net impact on future cost is £1.3m in capital expenditure for FY
14/15. There is an anticipated cost of transitioning to our Strategic Data Centre in
FY 15/16 and beyond of circa £2.4m. There is an estimated uplift to our operating
costs in FY 15/16 of circa £850k to support the Data Centre services required for
our Separation activities. For FY16/17 and beyond we are anticipating a potential
£500k uplift due to the change in strategic approach. All of these costs are
subject to challenge during a detailed planning phase.
Key Risks/Mitigation
6.1 Cancellation of the procurement process carries the risk that Fujitsu may be
motivated to pursue a legal challenge to seek loss of profits and/or bid costs.
Fujitsu’s bid costs are estimated to be circa £1m. An award for damages may be
higher. Risk mitigations include:
e¢ The ISFT documents issued by Post Office specifically allow Post Office to
cancel the procurement process and preclude bidders from reclaiming costs;
however this may not prevent Fujitsu from seeking a route to challenge.
e Post Office engaged legal Counsel throughout the procurement to advise on
the procurement, associated risks and take appropriate mitigating actions.
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6.2 Fujitsu may seek to link our current Intellectual Property Rights (IPR) position
with the decision not to award a Data Centre contract. There is no commercial
link, as this would contravene Public Procurement Regulations.
Long term considerations — horizon scan
71 Fujitsu may use its position to leverage value from Post Office at the termination
or extension of current contracts.
7.2 Fujitsu are competing on other procurements and have responded with
expressions of interest on future procurements. The Data Centre procurement
decision does not impact our expectations or consideration of Fujitsu as a
strategic partner to Post Office.
Communications Impact
8.1 Cancelling the procurement sends a clear message to the Market and to our key
stakeholders that Post Office is a commercial organisation and mindful of the
need to ensure that procurements fully satisfy key strategic and commercial
objectives and extract maximum value for the ‘Public Purse’
8.2 There was a requirement to communicate this decision across the current supply
chain, to bidders involved in current and future procurements and to Royal Mail
Group. Consideration of Post Office’s longstanding relationship with Fujitsu has
been managed in the key messages.
8.3 Post Office Board have been advised.
8.4 Cancelling the Data Centre procurement does not impact customers, colleagues,
branches or unions.
Conclusion
9.1 Post Office has taken a decision to cancel a procurement process that does not
meet its strategic objectives or demonstrate value for money for the ‘public
purse’.
9.2 Plans for an alternative Data Centre solution will be taken forward.
9.3 Associated risks to time and cost are tolerable.
Recommendations
The ExCo is asked to note that:
10.1 The Data Centre procurement has been cancelled without award.
10.2 There will be an update to the IT Strategy shared with ExCo and the Post Office
Board in April 2014.
10.3 The impacts to the Benefits Case will be presented to the IT Transformation
Programme Board, Post Office Investment Committee, Executive Committee,
and Post Office Board in April 2014.
The ExCo is asked to approve this paper for onward submission to the Board.
Lesley Sewell
12 February 2014
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POST OFFICE LTD
Delegated Authorities for Remuneration Matters
1.0 Purpose
1.1 To delegate authorities for decisions relating to remuneration for Post Office
employees below SLP level.
2.0 Background
21 Remuneration decisions need to be made company wide and delegated authorities
therefore need to be updated to maintain fairness and to ensure that responsibilities
are clear at all levels.
2.2 Post Office will uphold the principle that no individual should be able to determine
his or her own remuneration.
2.3 For this reason, and in line with best practice in corporate governance, a
remuneration sub-group of the Executive Committee known as the Pay and Reward
Committee will be formed to recommend to the Executive Committee the
remuneration strategy for the Post Office employees below SLP level.
2.4 The delegated authorities detailed in 3 and 4 below form part of the terms of
reference to be agreed by the Pay and Reward Committee at their first meeting.
2.5 The Board will retain ultimate responsibility for approving the Post Office
remuneration strategy.
3.0 Pay and Reward Committee structure
3.1. The Executive Committee will agree the authorities of the Pay and Reward
Committee.
3.2 Membership of the Pay and Reward Committee shall be restricted to members of
the Executive Committee so that the policy of no employee can determine their own
remuneration shall be maintained.
3.3. The suggested members are Chris Day, Neil Hayward, Kevin Gilliand, Martin
George and Nick Kennett. The Committee will be Chaired by Neil Hayward.
3.4 The Pay and Reward Committee shall meet as required to fulfill its commitment,
normally quarterly and may consider urgent matters through correspondence.
3.5 Two members of the Committee shall be quorate.
3.6 The Secretariat function will be provided by the HR Team.
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4.0 Pay and Reward Committee authorities:
4.1 The Pay and Reward Committee shall:
4.1.1
4.1.2
ensure compliance of all bonus and incentive scheme payments in line with
legislative requirements and FCA guidelines.
agree the outturn of performance related pay arrangements for all
employees below Senior Leadership Population and approve payments
subject to normal Board, Remuneration Committee and Executive
Committee processes.
approve the introduction and removal of material contractual and non-
contractual benefit arrangements.
recommend, monitor and oversee the remuneration policy for all employees
below the Senior Leadership.
recommend the settlement of pay mandates and collective bargaining
arrangements to the Executive Committee.
recommend, monitor and oversee incentive plan design for employees
below the SLP.
recommend pension scheme design to Pensions Committee.
5.0 Total Remuneration Package
5.1 The elements that typically form an individual’s remuneration package include, but
are not restricted to:
e Base salary
e Short term incentive plan (annual bonus)
e Pension provision
e Benefits such as car, private health, holidays
e Contractual terms such as notice periods
6.0 Recommendation
6.1 The Executive Committee is asked to agree the delegated authorities.
Fay Healey
13 February 2014
‘The Senior Leadership is defined as those roles which are eligible to be invited to participate in the LTIP