Where next for the Post Office?

Trade and Industry Secretary Patricia Hewitt has confirmed that more job cuts are in the pipeline at Consignia on top of the 15,000 already announced.

Mrs Hewitt said that the redundancies were "unavoidable" and blamed mismanagement by the previous government for the postal service's problems.

Most of the job losses will be in the Parcel Force division - which is losing £15m a month.

The company is also likely to close more than 3,000 urban post offices and change its name back to Royal Mail, as part of a major shake-up aimed at cutting costs and ensuring the company's survival.

Unions have warned there could be strikes if the company uses compulsory redundancies to make the cuts.

Will these proposals help to reverse the decline of Britain's Post Office? Or do they pose a threat to the company's future?

This Talking Point was suggested by Kenneth Henry, UK :

Having moved to an area where I'm resigned to an infrequent morning delivery, is losing 40,000 staff really going to get the Royal Mail back on track nationwide? Will you use the Post Office or one of their (hopefully more publicly accessible) rivals for your post and parcel deliveries in future?

If you have any suggestions for Talking Points, please click here.

This debate is now closed. Read a selection of your comments below.

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Your reaction

I gave up on the postal service years ago. I try and use email as much as I can and only use snail-mail as a last resort. Email is faster, more efficient, and if you can't send it the first time, the re-send it. No postmen, no late deliveries and no rude staff at post offices. Simple.
Simon, London, UK

I work for Royal Mail myself and I totally agree with previous comments about the inaccurate information that is being rallied around by the media. Also it does indeed cost the company far more to deliver your letters than it does for you to post them. Do you really think it costs us as a business 27p to deliver mail to places like the Channel Islands and the Outer Hebrides?? Because I can assure you that it doesn't. I think the media should be more considerate with the feelings of the employees and their families before they start repeating hearsay.
Debbie, UK

So what if it's losing money? It's a public service. Public services usually lose money

Allan, UK

I've just thought of a great new name for 'Consignia' - 'Royal Mail' - that'll be one Million pounds please! So what if it's losing money? It's a public service. Public services usually lose money, but it's surely worth a few hundred million a year, or an extra couple of pence on a first class stamp, to protect tens of thousands of good quality jobs. Don't be fooled by the fact that many of these are "voluntary redundancies"; it's still one less job, a job that will never again exist in a labour market that can ill afford to lose full-time, permanent positions. Royal Mail/Consignia have for years been forcing out long-serving permanent staff. Staff who have pride in their work and know the job inside out; but staff who have permanent contracts, holiday entitlements, decent pension plans. These are not the kind of workforce that a new competitive postal service wants. They want temps. Easy-come/easy-go, 4-pound an hour, no-rights workers. Why on earth does the government want to open up the postal service to more competition? To make it as successful as the railways? Do we really think we'll have a better postal service when there are fifty different companies delivering our mail, employing low-paid staff that stick around for an average of six months? I'm sticking to email in the future.
Allan, UK

This is definitely a poor lunchtime decision. Consignia needs a labouresque u-turn, everyone will just forget it by tomorrow. OK? Try again? Bad call? No one admits to making mistakes anymore.
Andrew, UK

If the Government or the post office cannot sort out its problems then let in Federal Express, who has been knocking on their doors for months to buy them out
David Cavanagh, United Kingdom

I see Consignia are going to change their name again, to "Bankrupt"?
John, UK

So the PO is loosing money eh? Could it be that the infrastructure needs looking into? Every night between midnight and the wee hours, I have a constant flow of PO lorries passing my house. Why not just have one big lorry and get it over and done with? Instead of employing umpteen odd drivers and the necessary fuel costs surely a significant cost saving could be found by better managing the transportation. We used to have a PO that was world-renowned for it's "first class" service, excuse the pun. I think we may have lost that distinction now! I personally think that privatisation and EU meddling can be done without. What next? Are they going to demand that consumers only shop at one store once a week and shop at another later on in the week to increase competition? If customers choose one supplier, it must be because the supplier is doing something right. Not because the others can't be bothered.
Scott Kilmurray, Scotland, UK

Consignia is losing a penny on every first-class delivery, and yet wasted £1m on a name change? It seems obvious to everyone who's job should be lost at Consignia, and it's not the postmen.
Russell, UK

The business has always been too top heavy.

Kevin, England

It comes as no surprise to me as a parcelforce employee for the last 12 years at the scale of job cuts proposed. The business has always been too top heavy. In my depot alone there are 10 managers and 13 supervisors out of 190 employees. If this represents consignia as a whole its no wonder we don¿t make a profit.
Kevin, England

P Gleave, UK: No it does not take an accountant to work out the price needs to go up but Consignia do not get to set the price! I am happy for the price to go up a couple of pence but they should also take the opportunity to become more efficient.
Andy, UK

All this for the sake of 1p per stamp. If consignia are losing 1p per stamp, it doesn't take an accountant to suggest that the cost must go up 2p to remove the loss and make a profit. Given that I use the postal service about once every month, then that will be an extra yearly cost of 24p for me to use first class post. Don't worry Consignia, just put the cost up to 30p, I won't miss my extra loss of 24p a year.
P Gleave, UK

Yet another privatisation venture gone wrong. How many times will it take for Labour to realise that some parts of the system just cant be privatised and are better off in public hands.
Matthew, France (British)

As a Consignia employee I am rejoicing at the thought that 65% of Parcelforce management are to go. When I worked for Parcelforce individually and collectively (as a depot) the drivers were reaching and exceeding their "targets" yet we kept being told that the business was losing money. There can only be two possible reasons for this, either we're not charging enough for the service or the business has too many "suits" to support. Ten years of mismanagement have resulted in low morale and, in collusion with the Union, pay levels which mean we can no longer attract staff to the business. No wonder the reaction of most workers is to ask how much they'll be getting in redundancy payments and how soon they can go.
Mike Hodges, England

The Post Office has been systematically ruined over the last few years on purpose

Vish, UK

Why don't people realise, we have an excellent postal service. The senior management will get their massive bonuses if Consignia is privatised and the MPs in charge of the privatisation will get their consultancy jobs when they decide to retire from office. The Post Office has been systematically ruined over the last few years on purpose by the senior management and the Government so that Joe Public will cry out to privatise it. Then when we have to pay £1 or £2 for next day delivery for a letter we will complain again. Do not let the Post Office be privatised. We let our utilities go, we let our public transport go, see what has happened there, terrible service and massive price increases. IF we, the public are stupid enough to let the post office go the same way, we deserve the bad service we will get.
Vish, UK

The Post Office is one of the few remaining companies in the power of the unions and thus has gross overstaffing with staff refusing to job share. For the Government to blame the previous Tory administration is a bit rich. They've now had enough years in power to stop blaming the previous government - wake up Tony, the problem is now yours!
Simon, UK

The blame for the current mess of the post office seems to lie with a bad management and a regulator who has opened up the profitable parts of the post service to competition while Consignia is required to provide the loss making universal delivery. Either give Consignia back its monopoly or force everyone who delivers mail in this country to provide a next-day delivery to every single address in the country. Then mail companies would have a level playing field.
Iain Ross, UK

Most Consignia employees see and accept the need for change, and yes that means job losses as well

Neale, Scotland

As an employee off Consignia, it saddens me to see some of the ill informed comments and stories in the media. Most employees see and accept the need for change, and yes that means job losses as well. The union and staff have been blamed, but explain this to me, how can a company go from £600m profit three years ago to £600m loss last year?
Neale, Scotland

I remember a few months ago hearing a Consignia representative saying that their troubles were caused because it was costing them 28p to delivery each 27p first class letter. Either I'm missing something, or I'm the only person who feels that 28p or even 30p is perfectly reasonable for next-day (on the whole) delivery. I can't see there being riots in the streets if a few pence is put on the charge for first class mail, and maintaining the price of second class mail would limit the detriment to those on a budget.
CM, UK

I agree with CM about the price of stamps. Today a price of 30p is a very small price to pay for getting a letter delivered the next day. People will probably pay more in petrol to drive to the post box to post it, and most will not blink at spending £1.50 or more on one greeting card. There will be complaints that a 3p price rise is four times the rate of inflation, but how can you apply percentages to such a small amount. I say bring the price of a letter into the real world before we lose the service forever. What's all this talk about a second post? I have not had a second post for over 15 years.
Stephen, Scotland

Increase the price of postage. No one charges pennies for anything anymore. Stop spending money on silly names, hike up the postage rate, then trim only the jobs that are clearly ineffective. Don't cut Parcel Force. Parcels are the one thing that cannot be sent by e-mail! It is not brain surgery. Shame on any company that cannot think beyond simply cutting jobs.
Philip, USA

It's all very well pointing the finger at the government but when it comes right down to it the buck stops squarely with senior management. Years of under investment in the front line staff and proper equipment have driven the service into the ground. 20 years of making massive profits with very little re-invested back into the people that matter, the front line delivery staff. Instead of two or three successful large companies we find several smaller ones each at the other's throats and struggling to survive. No other company in the UK will have to supply a universal service. Deliver to the good areas and charge what you like. Does this seem fair?
Alan, Scotland

Is it sheer coincidence that the once great Post Office started going downhill after the Great British Public made it clear that they did not want to see it privatised? The service has now deteriorated to a level where privatisation seems almost tempting. In previous sell-offs of national assets it seems that the bosses of these publicly owned organisations have gained financially on a lottery scale once the business has been sold. If history repeats itself, the current bosses of this woefully mismanaged service would do very well if the Post Office went into private hands. It is the whole top tier of management that should be sacked.
Merx England, UK

Consignia has the earliest delivery time target in Europe, probably have the cheapest postage rates in Europe and USA for first class letters, only France and UK deliver twice per day, they are above many of their European competitors with delivery targets, they can't borrow as much money as their competitors on the money markets to invest in the business and they have to give a massive amount of their cash to the UK government. Forty thousand people are due to lose their jobs and people complain that the service is not good enough yet they only pay 27p for a next day delivery anywhere in the country - I really feel it is important to get some perspective here.
Dan S, England

The post office's performance has verged on the farcical over the last 18 months. 90% of the time 1st class delivery takes 2 or 3 day (if I wanted that service I'd buy a 2nd class stamp). Private companies rarely turn themselves around quickly (look at M&S), and they have far more flexibility in their approach. What hope has the dinosaur of Consignia - with a national service to keep afloat, huge losses and a union that will pounce on any non-compulsory redundancies? Add to that streamlined private enterprise coming into the market in the next few months, and you have a recipe for ruin. Part of me feels for the redundancies, but part of me is celebrating for the avenging of years of frustration.
Richard Rajkowski, UK

Take a look across to Europe - would we be happy with a fragmented non-universal postal service?

Andrew Perkins, England

People love to gripe about the Post Office as it is a national institution - but where would we be without it? Everyone needs to think about Britain without the Post Office or take a look across to Europe - would we be happy with a fragmented non-universal postal service? If the regulator is allowed to carry on with the allowing of "cherry picking" that is what we will end up with.
Andrew Perkins, England

When will New Labour realise that the private sector do not have all the answers to the UK's public service problems. By the time the whole Consignia mess is sorted out we will have a short-staffed, over-priced mail service, with fewer post offices and less frequent deliveries. I agree that the private sector has a roll to play in the future of public services, but not at a sacrifice of providing a quality service to the taxpayer.
Kenny Lang, Scotland

The post-office has a big problem - competition in the form of emails, faxes, SMS, phones, the Internet. The days of doorstep-deliveries of letters are gone, and the post-office needs to reinvent itself as a specialist courier to compete with the likes of FedEx/UPS/TNT. "Postman Pat" needs to sell his van, replace it with a decent motorbike, and charge ten pounds per package, anywhere in the world.
David Moran, Scotland/Australia

Anyone think this sounds remarkably similar to Dr. Beeching's railway cuts in the 1960s which made the service profitable but left many people without, which we are regretting 40 years later. I hope these cuts don't leave people without a postal service, or without local post offices, as that will no doubt be regretted in 40 years time as well, although I fear this is the beginning of the end for the post office.
Kevin, Scotland

So, the greatest shake-up in the Post Offices 300 year history - restructuring and redundancies - welcome to the real world where the rest of us have had to live with and face up to this threat for many years. And what is the postal workers reaction? Totally predictable: go on strike. The company I work for has already put in place an emergency plan for coping with a postal stoppage. If these alternative arrangements work well, how will the Post Office attract our business back? Rather than stubbornly resisting change, postal workers need to consider how to win back public confidence in this ailing service. Or 40,000 redundancies will be just the beginning
Geoff, UK

Is it so surprising that Consignia is in trouble?

Lisa, UK

Quite frankly, can Consignia get any worse? In the last year I've made 7 separate complaints to my local delivery office as a result of negligence by this company. It includes leaving a package on my doorstep containing study materials for my distance-learning degree course, worth around £300. I was away for a week (I didn't expect the package to be delivered that week), and it sat there in the wind and rain and was completely destroyed by the time I got back. An envelope marked 'do not bend' was folded to get through my letterbox. This contained my degree certificate. Another package of video tapes didn't turn up, and after 3 months the post office finally got my postman to admit he'd just left it on the doorstep, from where it was stolen. With attitudes like this, is it so surprising that Consignia is in trouble?
Lisa, UK

This is indicative of what has been wrong with Royal Mail for several years - poor senior management. Will any heads topple? Of course, the cannon fodder who actually deliver the service. The senior people will lurch from one bad decision to another and award themselves whopping pay rises.
Gerry, Scotland

Isn't it time that we all came to our senses and realise that our elected government is very quickly making a hash of our transport and communication systems. Time for a change perhaps?
Peter, UK