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Working
e DVLA and Government Services
© Government not providing the best use of their asset
© Government can't abdicate responsibility in relation to the PO by sitting back on this
and allowing another Governmental department to reduce the viability of the PO
network
© DBT need to promote the Post Office more and that it is a Governmental policy
decision to ensure the decline in PO services
¢ Outreach Closures
o Tim to lead
= Subisdy
e POL/ NFSP ways of working: Update following early July meeting
o POhave a strategy and need to validate that strategy and are using the Postmaster
Non-Executive Directors, the Postmaster Director and the Regional Forums to do just
this
co There has to be the ability for the NFSP to constructively say no to PO, if what PO
plan is not in good faith or is arbitrary, irrational or capricous.
°
e Postmaster Engagement: Reflection and Discussion
o Inquiry
o Metrics that PO used for their bonuses
o Lack of meetings between myself & NR
Details: 30" March 2023, 12:30-13:30, MS Teams
Attendees:
Minister Hollinrake (KH)
POL:
e Martin Roberts, Group Chief Retail Officer (MR)
¢ Tracy Marshall, Retail Engagement Director (TM)
e Jamie Park, Policy and Communications
NFSP:
e Calum Greenhow, CEO (CG)
e Ruth Buckley-Salmon, Public Affairs Manager
e Sue Edgar, Chair & NED Northeast
¢ Tim Boothman, NED Northwest (TB)
DBT policy officials:
* Beth White, Deputy Director
e Ed Baird, Policy Lead
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e Will Briant, Senior Policy Advisor
Cora Sweet, Private Secretary
ACTIONS:
- POL and NFSP to discuss Restrictions Policy.
- POL to consider NFSP’s suggestion to separate remuneration for Postmasters
and Payzone operators in Accounts.
- POL and NFSP to discuss Terms of Reference for Drop & Collect branches at
future meetings.
- DBT to schedule next working group meeting.
MEETING STARTS
Purpose of the working group:
« KH keen to hear views about how best to use forum. MR said POL values the
Minister's time in terms of talking about high level strategic topics, a structured
agenda for these meetings would be helpful. CG welcomes this forum to work
together to identify problems, be solutions-focused and ensure a viable network.
e MR noted that POL has stepped up engagement with NFSP over the past year. MR
explained that the POL Board has just signed off the joint Grant Framework
Agreement between POL and the NFSP which cements their relationship going
forward. CG welcomed this and said the focus will be on ways of working, to ensure
the relationship between POL and postmasters is as healthy as it can be.
Appreciating that POL operates at arm’s length from Government, CG views it as
important that HMG gets involved too as there are dangers where HMG can be too
hands-off with POL.
e KH said that POL senior management should be empowered to deliver their own
solutions, but of course with issues where more systemic or political intervention is
needed, very happy to be involved. Need to ensure everyone is on the same page
and working towards sustainability for the company and individual postmasters.
¢ CG noted that since 2013, full time and full-service post offices had reduced in
number to 9,500 and that postmaster remuneration had fallen 21%. KH said that the
Access Criteria ensures branches remain accessible to the population, but we need
to track changes in consumer behaviour and business costs as this impacts the
sustainability of the network.
POL’s commercial strategy
« MR said the final quarter of 2022 was a turning point due to the impacts of RM
strikes, a lack of consumer confidence and falling footfall on the high street. POL is
finalising their mails strategy, where the focus will be on facilitating diversification so
that the company isn’t so reliant on certain companies such as Royal Mail. POL is
looking at all types of commercial opportunities here e.g. partnership with Evri and
Western Union. POL is also focusing on banking services — the cash deposit limit
issue is really hurting postmasters’ income. MR noted that 43 Banking Hubs are
being planned with UK Finance — but that this number should be larger.
e KH shared that he met with HMT Ministers earlier today to discuss the deposit limits
issue. There will be another FCA roundtable with the banks on Friday, and it was
agreed that if the outlier banks still haven’t changed their policies, then this will be
escalated.
¢ CG echoed MR in saying that deposit limits are making a real impact on
postmasters. The NFSP supports the aim of the policy (to prevent money
laundering), but individual postmasters aren't able to spot suspicious activity at
across different branches.
¢ CG noted the NFSP’s concern around RMG. CG suggested that post offices should
be seen as parcel hubs for all carriers, to capitalise on changing consumer habits.
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KH welcomed this. CG noted that diversification of mails products should be rolled
out to the entire network as quickly as possible. CG noted that the increasing
volume of parcels means that postmasters require support to store parcels without
compromising their retail counters.
Network/Drop and Collect
¢ TB noted NFSP members’ concerns about difficult business conditions and noted
that members perceive new D&C branches as a real threat to their income. The
NFSP has seen evidence of D&C branches opening within 0.5 miles of an existing
branch. CG noted that effective dialogue between NFSP and POL is needed to
identify such issues — that is why NFSP would like a Terms of Reference on D&C
use.
¢ TB raised concerns about restrictive policies placed on postmasters regarding what
they can offer — they cannot compete with other retailers. MR said this is a
discussion that they could take away and discuss separately to this meeting.
e TB said that it would be prudent to start looking at the future of the network before it
is too late and the Post Office network's critical mass is lost. CG said that
transformation programmes shouldn't take place without consultation with the
NFSP.
¢ CG raised concerns that some Mains branches are being replaced by Drop &
Collect branches. MR said that Drop & Collect branches were never intended to
replace Mains branches, but that POL will continue to roll branches out to
communities where a full-service branch is not viable, as it is better to be in the
community with a D&C than not at all. MR noted that postmaster churn is at its
lowest level for 5 years, but POL monitors this weekly.
e MR said that an exclusion radius for existing branches would need to work for all
parties. TM said that now the POL/NFSP framework agreement has been agreed, it
is right that a Terms of Reference is discussed for Drop & Collect branches at
future NFSP/POL meetings.
¢ CG asked POL whether renumeration could be separated out to show figures for
postmasters and Payzone operators in POL’s accounts. TM said POL would take
this away.
AOB — Hard to Place
¢ CG expressed concern about POL’s strategy on hard to place postmasters.
Specifically, the fact that the leavers’ payment has been reduced from 26 months to
12 months. NFSP noted that it opposes this change and urges POL to reconsider to
ensure these individuals can leave with the full compensation. Exit costs including
mortgages, leases, staff and tax bills mean that they could end up with nothing.
¢ KH said his understanding is that the previous state of affairs left these postmasters
with nothing because they weren't able to exit, and we don’t want these branches to
close without a replacement, so this is a compromise.
e MR agreed and said that 131 hard to place branches have been in a ‘holding
pattern’ for over 10 years. POL is talking to these branches over the next day or so
and outlining the options to exit the contract with 12 months’ compensation. The
Board took the decision to offer 12 months. It’s a 6-month consultation: he thinks
1/3 will accept, 1/3 will decide to stay, and the final 1/3 will be relocated. MR
recognises it’s a commercial decision that won't be popular with everyone, but it will
be handled sensitively — for example he has sought the counsel of the postmaster
NEDs to get their views on how best to handle this. TM said POL notes the
concerns from NFSP and won't state publicly that NFSP are supportive of this.
Next Steps:
- DBT to schedule next working group meetings.
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- NFSP conference on 15" May: CG offered an open invitation to DBT to attend.
MEETING ENDS
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