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POST OFFICE LIMITED
BOARD REPORT
Title:
Chief Executive’s Report
Meeting Date:
24 January 2023
Author:
Nick Read, Group CEO
Sponsor:
N/A
CEO Narrative
December was a difficult month for Post Office. Christmas did not happen. Where other
retailers have reported positive Christmas Statements and the BRC have noted a 15%
increase in high street footfall across the country, Post Office saw a
reduction in footfall. Overall mails performed
jan budget and our numbers were only partially flattered by a strong
riving footfall into branches.
ur mails business a
ind an
ear on year
Industrial Action by Royal Mail workers over 7 days in December, resulted in a profound
IRRELEVANT.
Committee hearing on Tuesday su
implications for Postmasters is aI
outlook that is
EBSS support
consider that}
distracted elsewhere. The post-Christmas picture is no etter, indeed the cyber-attack at
i] has stagnated the international business for over a week so far, at a further cost
The outlook does not look encouraging, nothing that was said at the Select
olution was on the near term horizon. The
in December remuneration and a year-end
ntervention we made in August. The
April. There is
This all poses a funding challenge for Post Office which, of course, goes far further. The
third rephasing of the Ir
to Post Office will be i
iry suggests a conservative end date of mid- 2024. The oncost
} Conservatively this will be well
tover the funding period. Asa consequence I wrote to the Permanent
ember outlining this predicament and advising that we will need a
It was against this backdrop that I attended the BEIS Select Committee on Tuesday
alongside Dave Ward and Simon Thompson.
This was also on the back of Minister
Hollinrake stating at a Westminster Hall debate last Thursday his commitment to 11,500
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branches. Cake and eat it springs to mind. The session was lively and wide ranging but it
was essential to remind the Select Committee of the importance of Post Office both
commercially and socially as well as our Public Service ethos. It was important to play up
the business, the societal role we fulfil and our critical impact within the Infrastructure of
our nation. It is this that customer/constituents value us for.
Progress with compensation has been impressive. Simon Recaldin has done an
extraordinary job and we were able to articulate this at the Compensation Hearing on 8th
December. We met our targets and have delivered for Postmasters, although had you
listened to the BEIS oral address at the hearing you could have been forgiven for thinking
otherwise. They produced an inaccurate, inept and politically motivated response which
was quite unacceptable. They claimed to be “disappointed” with progress. After a
graceless period we eventually got them to write formally to the Inquiry and offer a full
apology.
At an operational level I feel confident that compensation and the Inquiry - now led by
Diane Wills - are in excellent hands. We have two leaders at the top of their game. NBIT
on the other hand is more challenging. We had a workshop with KPMG at their
Innovation/Ignition premises in Canary Wharf to road test our training and roll out plans
and it was clear there is still more to do from a leadership, structure, governance and
resource perspective and we will be working over the next 6 weeks on a ‘plan for a plan’.
We still have time but it will be tight and Belfast Exit and the Fujitsu relationship remain a
continuing hangover.
Not-withstanding the above our focus for this year, as it was in 2022, remains Rebuilding
Trust (and fixing the past), Branch Profitability and Transforming Technology. There is no
doubt this will remain our focus for the next 18-24 months
REPORT
[ Finance
Financial Performan
1. Trading profit o'
RELEVANT, Mails t
han forecast and
2. Total turnover was! to budget, with the Mails shortfall partly offset by a
strong payment services performance as the energy support schemes work through.
Customer sessions 0
icially low it in period due a significant
We expect this to be materially
o budget again in P10.
4. We are updating our forecasts for the full year, taking into account Postmaster losses
and the potential need for further provisioning. We need to decide if further
Postmaster support will be paid: we are considering targeted support to commercially
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important but struggling branches. BEIS is concerned that this may undermine our
case for additional funding.
Commercial
Mails and Parcels
5. Trading in P9 was materially ii
of strike action standing at
ted by industrial action, with the estimated impact
'W22-39). Last posting dates were brought
forward and service guarantees on Special Delivery were removed between 8-28
December.
budget and:
Sin the run-up to Christmas.
acceptance of Royal Mail Tracked
(although not guaranteed) delivery servi
7. Meanwhile, early indications are that in-
24/48 is driving new income, generatin nits since launch
on 17 November. We are also progressing new products including; Labels2Go’ by end
of January and in-branch sales of Royal Mail Tracked in the new financial year.
8. PUDO weekly volumes ros
volumes and income arez== =I
remuneration. While operat ady, launch of the Mails accep ance trial (“Full
PUDO”") with DPD was postponed until w/c 9 January as DPD wished to stabilise its
network after Christmas.
9. Since the
of whic!
in-branch Sales. Volumes were in line with expectations, given the proximity of go-
to Christmas and low customer awareness. Looking ahead, DPD Ireland and DHL
Express PUDO services will launch in Q4.
Banking, Payments and Transactional Products
10. Banking continues its strong YoY growth during P9. Deposits
were significantly impacted by the disproportionate implementation of deposit limits
by banks, in reaction to FCA pressure to tighten money laundering controls. Industrial
action across!
for retail.
11. We continue to put pressure on the FCA to change its approach and reduce the impact
of deposit limits. At our request, a full industry meeting chaired by the FCA was held
in December where we sought to establish a clear exceptions processes for known
good businesses. While some banks recognised the issue, others did not, and the FCA
has passed the problem back to UK Finance. We have secured a follow-up industry
12. There are now 28 Banking Hubs in the pipeline exclusively with PO, however, due to
issues with the banks, just two went live in 2022. More Hubs are expected to be
announced in this next qué he Enhanced Post Office concept is progressing well,
with the aim to get up t running during the first half of 2023. We also
intend to roll-out a furthe implementations by October 2023 in high-volume
locations.
13. Meanwhile, Payments revenue continues to exceed budget i
and YoY) thanks to the Energy Bills Support Scheme (EBSS). Some 4m
vouchers have been issued, with >75% redeemed, and we have exclusively secured
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Northern Ireland EBSS payments from January-March 202.
vouchers).
14. We have also identified 4,000 Postmasters to provide the new Western Union product
but getting them to respond to HMRC licencing requirements is proving challenging.
Lastly, the ATM replacement programme will be ramping up to a peak of c.100/month
during 2023, before our completion deadline of October 2024.
Platform Products
15. P9 Trading across Platform products was Ton budget, with Travel Insurance
accounts.
However, Credit Card sales will further i ‘a
I further in the current economic environment.
17. The Digital Identity team have entered a procurement process to provide the physical
network solution for their new GDS one-login process (Verify replacement).
Retail, Lottery & Government Services
18. ine with budg'
16.
} YTD) and forecast with a small boost
with Allwyn’s acquisition of Camelot expected to close in Qi 2023, subject to
approvals.
19. Government Services head of budget driven by strona performance. from
nd; IRRELEVANT
IRRELEVANT
anticipated passport surge in Q4. HMPO will raise passport fees from 1 February,
we have decided not to increase Check & Send charges. The risk remains that! IRRI
YoY) driven by
Customer Experience
22. The Christmas marketing campaign continued throughout December, informing _.
customers of changes to posting dates via branch and digital media. Ou’
incentive drove: icremental remuneration for branches and
(after costs).
23. Looking ahead, we are finalising our 2023 Marketing Plan. Our marketing spend in
Mails will increase to support new propositions. We are preparing to launch our second
Drop & Go customer offer, where customers will receive vouchers of up to £200 based
on usage.
[ Postmaster & Network
Network coverage and Drop & Collect roll-out
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24. Having peaked at 11,703 in November (including 140 Drop & Collect locations),
network numbers dropped to 11,671 in December as a result of the planned pause in
new branch openings during peak. We are expecting overall numbers to remain stable
at this level through to the end of the financial year, with the continued roll-out of
Drop & Collect offsetting the normal increase in churn we see in Q4 (including the
McColl’s closures).
Remuneration & Branch Profitability
25. Overall remuneration for January (based on December trading) is expected to fall by
c11% year-on-year, driven by the impact of Royal Mail industrial action and the
associated Mails underperformance. We are now forecasting limited growth in overall
remuneration for the financial year, up between 0 and 1% compared with 2021/22.
While material rates increases are expected in April (including the CPI indexation and
the flow-through of any RMG price increases), we are considering targeted support to
critical branches during Q4.
26. Following the well-received pilots during Autumn, we are rolling out ‘Branch
Profitability MOTs’ to 1k branches during Q4. These involve Area Managers providing
data-driven insights on optimising staff scheduling and operating hours based.
Back Office Postmaster Service & Support
27. The BSC’s SLAs were impacted in the first two weeks b
7 . _.4 Performance
recovered during the period, with 45% of calls answered within 60 seconds. 89%
(84% in P7) of calls were answered and the average speed to answer was just under
3 minutes (vs. 4.5 minutes in P7). Five new starters joining in the final week helped
support a very strong end to the period. The SLA averaged just over 66% in P9.
_. iod with lin P7)
28.
IRRELEVANT.
IRRELEVANT
29. Cases resolvéd within SLA performance remains strong at 76%. However the number
of open cases at period end continues to grow, up 9% to 663. Cases assigned from
branches using the review and dispute button and then failing to make contact, are a
key driver of the increased volumes. Opportunities to improve compliance are being
explored.
Postmaster Engagement
30. Following poor Christmas trading driven by the cost-of-living crisis and Royal Mail
strikes in both their Post Office and Retail businesses, Postmasters concerns are
focused largely on their own business viability. In early January we conducted a
survey acros: Regional Forum members to gain feedback on peak period
performance. tated performance has declined versus last year, with 80%
i IRI (ANT. ata from the monthly
NFSP member remuneration survey backs this up.
31. Ona positive note, 75% of Postmasters surveyed stated that Christmas
communications was the same or better than last year, 85% thought the amount of
marketing and being able to choose their own ‘point of sale’ was good or better than
last year and 83% said it was easier to order cash and stock than last year. More
broadly, there is a sense across the network that Post Office are doing as much as
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possible to support Postmasters during a challenging economic climate (e.g. lobbying
of HMG on extended energy bill support).
32. Discussions are ongoing with the NFSP on the signing of the Grant Fund Agreement.
The outstanding issue remains the treatment of VAT with both parties continuing to
seek advice. A meeting took place with their CEO, Martin Roberts and Tracy Marshall
to stress the importance of completing the revised agreements, with follow on
meetings planned.
33. More widely, new Postmaster satisfaction with the onboarding journey remains above
target at 83%. The average time taken to onboard a postmaster has remained at 145
days. Due to new legislation, suitability assessment completions have been taking
longer, as manual checks of IDs are required, resulting in a drop in service levels from
ield Teams
34. The key focus during the last period was very much around maximising peak trade
and managing the impact of RMG industrial action. As part of this, Area Managers
were focused on our ‘Let’s Talk Mails’ initiative which saw 8,400 visits made between
October and December to 5,500 key Mails branches. Branches that were visited have
consistently delivered an increase in penetration rates compared to non-visited
branches.
35. Operationally, we managed the impact of six days of RMG industrial action during
December well, with a minimal number of branches bulking out as a result of excess
mail, and Royal Mail continued to collect from 2k critical Mails branches. Action short
of a strike continues in our DMB network, with the CWU communicating a work to rule
and sales boycott to members. So far this has had minimal impact commercially or on
customers.
36. We are managing the impact of the McColl’s branch closures. Out of the 56 branches
(incl. one BAU closure), we have interest from 25 potential new Postmasters, 23 of
which have commenced onboarding, with two due to start soon. There is potential
interest in 7 branches from our strategic partners, with one branch proceeding so far.
AMs are supporting branches nearby to closed McColl’s locations where there is
additional footfall.
37. As we move into Q4, the focus for the field team is on supporting branch profitability
and completing Operation Reset to re-establish retail standards in our branches. AMs
will complete reviews in c.1,000 branches, covering staffing efficiencies and growing
income.
Strategic Partnerships (SPs) __
38. P9 income was:
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41. “Morrisons continue in their announced store closure programme where over 100
stores have already been closed including 22 PO branches (as at 06/01) the remaining
,33.stores..with PO.branches.will close.throughout-January...We.cantinue to.wark... :
IRRELEVANT
42. Weekly averaae.of cash inflows this financial year are now I!
payments. Pi0 ig forecast to be the highest volume period of the year - NatWest are
supporting with cash processing during this peak and G4S for CIT services.
43. 96.7% of available deposits were processed on Day A in cash centres YTD - ahead of
the 95% target. Meanwhile, CIT achieved Quality of Service Stats of 87.2% a decline
of 2% on last period. High volumes, action short of strike and staff absence are
presenting challenges.
BEIS Strategy Review
46. In early December, BEIS informed us that Ministers had decided to not proceed with a
public policy review, given the perceived risk associated with an announcement and
the lack of any intent to make significant changes to BEIS policy in the near term.
Aone, this does not mean work on the review (now a “strategy re
a:
AJ
m
r
Et
Db:
4
4
47. Notwithstanding this, the KPMG-run ‘Ignition Session’ with BEIS and UKGI still took
place in mid-December. This was a useful exercise to continue building the two teams’
understanding of our business, the challenges we face and the fact that this is a
shared problem. The workshop concluded with a constructive discussion involving me,
our Chair and CFO as well as Ci funding, where we set
out the component parts of a nd the uncertainties
around this.
48. We also reached agreement on three key next steps: (i) an early letter to the Perm
Sec signalling our need for funding, and outlining a preliminary near-term funding
ask; (ii) to engage with Minister Hollinrake on POL’s proposed Network Strategy, and
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the phases of implementation of this; and (iii) to work with BEIS to build a robust
investment case for POL funding, to assist medium-term discussions with HMT.
49. We sent a letter to the Perm Sec shortly before Christmas and we are awaiting
feedback, and I will be meeting Minister Hollinrake to discuss Network Strategy in late
January. While we do not intend to seek the Minister’s approval for the actions we
want to take, we are keen to ensure he is sighted on what we will be doing. Work on
building a robust investment case for POL funding is ongoing with BEIS and UKGI as
the teams, structures and activities stood up for the policy review still exist. We
continue to run workshops for BEIS on policy, network and commercial topics to
develop their thinking and we expect this phase of work to complete in March, with
BEIS officials putting advice to Ministers.
Change & Transformation .
50. At the end of November (P8) our YTD change spend for active projects was j!
(excl. HMU Settlement), jinecevantibelow our budget, due to various movements
the portfolios, many of which represent phasing of spend rather than savings. The
largest YTD variances were in the Legal and Historical Matters,
portfolios . P8 YTD incremental benefits for active projects was
budget.
Communications, Corporate Affairs & Brand I
Energy Bill Relief Scheme
51. In September 2022, Government announced the Energy Bill Relief Scheme and the
Review which would determine the scope of its continuation beyond March 2023. We
began to work up a campaign to ensure Postmasters continue to benefit from the
Scheme beyond March 2023 and demonstrate that we will fight for Postmasters’
interests.
52. Over three months, we generated 822 pieces of broadcast coverage, 35 pieces of
regional coverage, and 45 national stories. We helped Postmasters send 2,000+
letters, which were received by 492 different MPs, generating pressure on Ministers as
they made decisions.
53. Although HMG has extended support at a much lower level than desired, our collective
effort made an impact. This is the first time we have partnered with Postmasters in a
joint campaign and our message resonated clearly with MPs, many of who made it
clear it had landed well with them too:
i. Reinforce post offices’ vital contribution to the UK: We secured
widespread coverage which underscored that post offices are a vital
part of the social and economic fabric of this country, and
communities would suffer without them;
ii. Ensure extended and inclusive support: The Chancellor had
initially suggested that any future support would be limited to a small
number of industries. Our campaigning ensured that post offices were
not overlooked; and
iii. Demonstrate that Post Office is on postmasters’ side: The
campaign demonstrated to Postmasters that the Post Office is on their
side, fighting on the issues that matter to them and celebrating the
vital role they play.
54. Despite the far less generous EBDS now having been announced, we will continue to
apply pressure on Government in the run up to the March Budget. We will also engage
with Ofgem in an effort to ensure that suppliers demonstrate flexibility for SMEs
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(including Postmasters) who may have concluded longer term contracts at peak
prices.
[ Historical Matters Unit (HMU) I
Inquiry Compensation Hearing
55. POL attended the Inquiry Hearing on Compensation on 8th December and HM Legal
have subsequently collated a summary of arising actions, and a paper was presented
to HRC on 15th December outlining the range of issues raised at the Inquiry. The
required actions will be tracked and actioned within HMU. Sir Wyn issued his response
to the hearing, electing not to issue an interim report, but did challenge the delay
generally and the Late Applications approach. He has scheduled a compensation
hearing in April later this year.
56. POL have constructively challenged statements made in the BEIS oral submission and
on reflection BEIS agreed to write to the Inquiry to provide clarity of their submission.
Overturned Historical Convictions (OHC)
57. In December, Board approved the remediation-based compensation process for
pecuniary claims. Work is underway to draft principles that can be shared with third
party legal firms, and internal guidelines for each key “Head of Loss” (HoL). The
principles will be presented to HRC for approval in January. Meanwhile non-pecuniary
claims continue to be settled.
Criminal
58. One appeal opposed in the Court of Appeal Criminal Division (CACD) was heard in
December, with judgment expected in early 2023. Another appeal was referred by the
Criminal Court Review Commission (CCRC) to the Crown Court, which may be a public
interest only case. The Public Prosecution Service NI (PPSNI) expect to concede an
appeal in January. Potential Future Appellant (PFA) triage continues, due to complete
in February. We anticipate the Met Police will start seeking production orders soon.
Historical Shortfall Scheme (HSS)
59. POL achieved its target to issue 95% of offers on 8th December 2022. Attention now
turns to the remaining 130 claims, including claims for Malicious Prosecution and
those where the shortfall led to the claimant becoming insolvent/bankrupt. The
development of Case Assessment Principles for these two remaining HoLs are
progressing.
60. BEIS funding for Late Applications was agreed and a plan has been circulated showing
the expected flow of Late Applications Offers, with an ambitious target of 100 Offers
by the end of March 2023. So far, 93 qualified Late Applications have been received.
61. Funding of}
now been a
paid is yet to be agreed with BEIS, noting that the removal of the funding end date of
31st March 2024 (a late notification from BEIS) from the letter is not negotiable. We
have argued for an extension as we believe funding will be required until at least
September 2024. An additional form of words has been agreed to temper the end
date and to ensure that if funding is required beyond this date, both UKGI and BEIS
will support. Board will be required to agree the wording prior to initial letters being
sent to Postmasters.
62. A Board Paper for offline resolution was circulated in December. The first letters to
confirm identity were sent to the first cohort of Postmasters, prior to the BEIS Select
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Committee on 17th January 2024. Additional tranches of letters will be sent soon, with
offers then expected to follow swiftly.
Postmaster Detriment: Outstanding Balances
63. HMU continues to work with BEIS on the business case for: ‘of funding
alongside obtaining a commitment to fund additional areas of Detriment, should they
arise. At December Board, it was decided that payments being made by Postmasters
towards outstanding balances should be paused. The project team are now assessing
the root cause of each outstanding balance. In cases where there has not been any
admission of misappropriation, payments will be paused.
Inquiry
Phase 2 Reflections
64. There were four key take-aways from Phase 2:
Phase 3 Hearings
65.
66. The Inquiry has so far only published a witness list for these first two weeks. No
current employees have been called to give oral evidence, however we anticipate that
current employees will be called later in Phase 3. We have requested the Retail Team,
led by Martin Roberts, put forward team members to observe each day of evidence, so
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that their insights as subject matter experts can be taken into account. In order to
demonstrate our engagement, the POL Inquiry team also continue to encourage
members of GE and Board to attend the hearings. It remains important to have our
Postmaster NEDs attend.
Wider Updates
67. Leadership of the POL Inquiry Team: Diane Wills began her role as the Post Office
Inquiry Director supported by Gemma Ludgate, Inquiry Operations & Strategy
Director.
68. Disclosure Updates: The hardcopy data reassurance work is underway. Forensic
searches of Finsbury Dials took place on 19 and 20 December and will begin again in
January. Initial review of the material identified suggests that there are some
documents which may be relevant to later phases of the Inquiry, but early indications
are that the majority will be duplicates. The work highlights the need for further
investment to better manage POL’s hardcopy and digital data. The failure to address
these issues has resulted in significant increase to legal costs and will continue to
drive costs if it is not resolved.
69. Budget Restrictions: The lifetime cost options paper will be presented at the Board
meeting on 24th January. We are currently working with HSF to identify further
savings and conducting pre-market engagement with alternative legal firms.
70. Legal Representation: Whilst HSF is not aware of any conflict of interest, the
Inquiry will examine the post-April 2019 period, including decisions taken in relation
to the structure and operation of HSS to date. HSF consider it prudent not to provide
support for Phase 5 and the executive recommendation is to appoint a new firm from
Phase 5 onwards.
LCG
Legal
71. Payzone: The Central Investigations Unit (CIU) have produced an interim
investigation report on PZ, which has been circulated to GE. As part of this
assessment, Legal need to summarise the existing legal issues for PZ, the legal issues
arising from legal integration and the impact legal integration would have.
72. Project Assurance: RMPP Pension Trustee has requested that POL enters into a
"standstill" agreement by mid Jan 2023 to preserve its limitation date (which the
Trustee believes falls in February 2023) to sue POL for a contribution towards its
which it puts at
a. POL has instructed Kings Counsel to advise. Separately, Trustees will write to
members in Q4 to advise them of the extent to which their pension will be corrected
(typically downwards), potentially generating adverse press, claims and complaints to
the ombudsman.
Compliance
73. End December POL received an additional 30 DSARS from Howe & Co. The majority
are party to the GLO and precludes the GLO Payment Scheme going live. The initial 10
were responded to within agreed timeframes. To ensure POL meet statutory
deadlines, we have moved 6 Data Protection FTE to process these requests. In
addition, we have started activities to ensure there is a sustainable HMU Data
Disclosure Team to deal with supporting BEIS in the GLO compensation scheme and
long-term disclosure activities.
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74. Historical Matters Assurance activities will be refocussed this month to pick up speed
and coverage on HIJ and CIJ Inquiry readiness.
Governance
Tos
. The
Shareholder Relationship Framework Agreement is due for review in March. A
preliminary meeting is scheduled for 18 January between UKGI and POL to determine
the review process.
76. As part of our ongoing improvements to Corporate Governance, the Retail and the
Technology GE sub-committees have been established. These Committees are due to
hold their first meetings shortly and dashboard reporting on key business metrics will
be provided to the GE and Board in due course.
[ Technology I
Core Service Performance
77. On printing issues, ticket volumes remain
ti
78. I
79. Lastly, December saw the start of the new dedicated Level 2 support team, which has
contributed to the good results above. The Technology function now has 4 support
agents responsible for the management of complex or multi-supplier incidents.
Technology Service Desk (ITSD) Performance
80. Calls to the Technology Service Desk were down 29% compared to November, which
correlates with the success stories above. Average wait times for December 2022
were the best for a number of years, at 5 mins 47 seconds on average.
81. Digital platform contacts (Branch Hub and Colleague Portal) have declined in line with
the overall decline in calls. Unfortunately, that suggests we did not make progress in
December in shifting demand to digital and self-service channels.
82. Resourcing the desk and agent retention remains an ongoing challenge. There are 3
new starters in January, which will help improving the first-time fix rate, but the size
and quality remains below where it needs to be. However, engagement with CWU has
concluded and we have agreement for a higher starting salary to be more competitive
for attracting staff.
Cyber Security
83. There were 1048 security incidents in December, none of which remain open. The
average time to resolve was: which is well in excess of industry standards,
but reflects the limited working Haurs of the Security Operations Centre.
84. As an update to the major security incident in November (a so-called ‘brute force’
attack on our Office 365 domain), there has been no evidence of a breach. The
possible mitigations are in place to guard against similar attacks in the future and
monitoring remains ongoing.
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85. Additional highlights from the Cyber Security space: (i) A dedicated Security Task
Force was established to tackle a _ JR AN’
emerging on the early versions of NBIT (ii) Work with Fujitsu has been completed to
reduce its privileges to Horizon counters - a key HIJ requirement. Rollout began in
December and will complete in early 2023 (iii) Following ARC engagement, Disaster
Recovery testing for the Belfast Data Centres is now in-flight. Progress will be
reported to the Board regularly.
Horizon Operations
86. Overall, the performance of the Horizon system remains stable. While our field service
than with the previous supplier.
87. Discussions with Fujitsu are ongoing around extension of Data Centre Operations
beyond March ‘23 with formal agreements to be reached in January. Fujitsu change
delivery remains poor with protracted timelines to respond to requests for change
driven by internal Fujitsu governance steps, to be discussed at monthly account
governance meeting.
88. The primary scope and funding has been agreed for the next phase of HI)
Remediation, while additional scope remains under discussion. Progress across all
workstreams in line with plan (though some challenges with Fujitsu delivery as
highlighted above). Several narratives on HIJ remediation progress now in draft to
support Phase 6/7 preparation.
NBIT/ SPM
89. Overall, the programme remains on track I
and start rollout in 2024. The programme}
_junarzuzas Tne manrtocus
in the next months is the release in live environment (i.e. serving customers live) of
the second counter prototype, which will include payment capability and many
mails/banking products. Release 2 remains scheduled for April 2023, in line with the
programme plan.
90. The programme estimates that c.90% of activity planned for the last approved period
(Oct-Jan) has taken place, with 83% of the deliverables on track to complete in full.
Of the deliverables reported as ‘missed’, several will be largely completed by the end
of January.
The main imme
92. Over the last quarter, Branch Hub adoption by Postmasters continued to surge. Visits
to our digital portal for the quarter totalled 170K, which is more than twice the same
figure for last year. Usage of the newly created mobile app continues to increase as
well.
93. Branch Hub will release its next and last series of features in early 2023, including the
ability to view remuneration statements on Branch Hub and the launch of Branch Hub
on Horizon terminals. Unfortunately, the programme funding runs out in March 2023,
so no further improvements are currently planned, except for continued integration
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with NBIT. A small BAU team will remain to support the platform, while continuing to
push adoption.
People
Culture & Wellbeing
94.
95.
96.
A deep dive review on the culture change programme is taking place, with a review on
the behaviours and the recommendations from the Horizon Issue Judgements. An
analysis on the ‘real’ change being made to behaviours will be produced, looking at
impact on colleagues as well as Postmaster engagement. The latter will be shared
with the GE, with a proposed overarching action plan supported by local department
plans. A campaign to act on engagement feedback will be implemented from
February, with monthly updates.
The Culture Club is making progress. Monthly Culture Conversations with external
experts are commencing from 25th January with speakers focussing on culture change
to inspire colleagues. Postmaster engagement plans will be reviewed and brought into
to the culture programme. Meanwhile, an engagement campaign for the new office in
Wood Street starts on 16th January to educate and excite colleagues.
On wellbeing, Optima Health continues to support potential witnesses (and their
dependants) who are required to respond to the Inquiry with 121 support. We will
review our wellbeing strategy with support from the newly appointed lead
Occupational Health Adviser and will support a launch of Optima’s new wellbeing
portal with a spring campaign.
Talent, Diversity & Inclusion
97.
98.
99.
We are recommencing Leading to Serve training, with the programme on target to
deliver Module 2 to all Senior Leadership Group by the end of March, whilst also
completing roll out of Module 1 to 300 GE-2 colleagues by end of April. A full review
on our leadership interventions will be undertaken, aiming to have a plan of activities
over 12 months.
Succession Planning and Talent Development will be reviewed in the coming month,
with a view to launching a clear process at the beginning of the next financial year.
Meanwhile la Leadership Behaviour framework is currently being developed which will
be shared with the GE and built into the 360-feedback process, PDRs and ongoing
team development. An in-depth GE talent and succession review is taking place.
Following on from the successful launch of the Diversity and Inclusion Playbook, we
have been working with our partner, Diversity in Retail, to create an interactive
workshop. This will bring to life and embed the playbook recommendations into our
teams, to engage and to help overcome unconscious bias. 6 workshops will be held
over January and February.
Organisational Design
100. Pat Quinn has joined the team this month, with a view to reviewing the headcount/
organisational cost base. The intention is to work with each member of the GE to
draw up a consolidated view of short/medium/longer term actions. We will also review
the current Terms & Conditions of employment, with a view to putting in place
‘modernisation’ to reflect benchmark organisations. Some small-scale organisation
change is due to be executed within our central risk team in January.
Other items
101. Rewards: CEO Retention Bonuses were paid to 52 colleagues in December. STIP
metrics have been communicated via the SLG and a plan to formally communicate will
be agreed at the next RemCo in February (and LTIP plans will also be confirmed). The
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23/24 STIP plans and the out-turn of the 22/23 is likely to be dealt with in one
communication.
102. CWU Pay Dispute: An agreement looks unlikely, and we are prepared for more strike
action. We are using ACAS to try to get clarity on CWU demands, following which we
can decide whether a deal is affordable. We still believe our offer is the best we can
afford.
103. POL NED Search: A candidate has been identified for the ARC Chair position and due
diligence is taking place to allow for Ministerial approval to be sought ahead of an
offer being made. The recruitment process for the NED Remuneration Chair and
Senior Independent Chair provides us with an opportunity for more diversity on the
Board.
104. Contractor Managed Service Provider: During December we transferred c140
contractors from Intelligent Resource (IR) to Morson International, as we stood up the
contract for our new managed service provision. We faced some challenges around
contractual terms which meant that contractors had to be moved at short notice and
with little opportunity to engage the business. c140 contractors will be remaining with
IR for payroll due to conduct regulations. Lessons learnt have been reviewed to
prevent similar challenges in four years’ time.
[ Conclusion
105. Finally I would like to finish by highlighting a major risk for Post Office as we ramp up
the compensation process for OHC and the 555. Yesterday I met with Alison
Henderson and her husband. She, along with Jo Hamilton, are the first two Post
Masters to have formally ‘sett! ince their cases were overt in April 2021.
She achieved a settlement of Jo Hamilton achieved I This was a
difficult and harrowing meeting. 12 years on from her convi she is still visibly
distressed, unable to open communication from POL - all emails and letters were
opened and actioned by her very capable husband. She talked of the humiliation of
her community service and the mental stress that forced her to move village. She
also described the impersonal way she has been treated through the reconciliation
process. The brutality and lack of trust displayed by HSF and the ‘trauma’ of
attempting to recover compensation. Our culture and whether or not we have
‘changed’ will be a big issue in the later phases of the Inquiry. On this evidence it will
be difficult to suggest it has. We need to think more carefully how we can
demonstrably show we have changed - Truth and Reconciliation meetings or
something similar. We are not doing enough.
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