Post Office (PO) CEO Nick Read has confirmed branch profitability, technology and rebuilding trust are the firms three main priorities for the year ahead.
The comments were made at the annual postmaster conference, which took place yesterday evening at the Etihad Stadium in Manchester. The event brought together over 100 postmasters, and 600 virtually, alongside senior PO staff, including postmaster non-executive directors Saf Ismail and Elliot Jacobs.
In his speech, Read acknowledged the current economic outlook, including inflation, rising energy costs and hikes to national insurance and National Living Wage all present challenges, and limit PO’s ability to invest.
However, he confirmed the firm is “making good progress”. “I am deeply conscious that many of you are finding trading tough,” said Read. “It is no surprise that our postmaster research has consistently shown that your top priority is your remuneration and overall profitability.”
Read stated improving branch profitability remains the PO’s “top priority” and the firm intends to “introduce commercial opportunities to grow” footfall and sales.
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“Whether that’s smoothly implementing our third party banking framework, continuing to expand our ‘pick up, drop off’ services or forging new payments partnerships like Western Union,” he said.
“We also need to look at the other side of the equation – at our costs to become simpler and more efficient. Bluntly, we understand that serving your community isn’t enough – being a postmaster must also generate an income and enhance your retail offer.”
In addition, Read revealed the PO’s second priority for the year ahead to be transforming technology, with a large part of this incorporating its new IT system replacing Horizon.
“Built with you, for you, the new system will be simpler and more intuitive to use, speed up transaction times and let you focus on what you do best: serving customers,” he said.
By the end of the financial year, Read confirmed the PO will have tested a training pilot for the brand IT ahead of a wider roll-out across the network later in 2023.
“We will also deliver other essential IT programmes, including improvements to BranchHub, to give you the most relevant insights at your fingertips.”
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Lastly, Read recognised the remaining priority needs to focus on rebuilding trust, in light of the Horizon IT scandal, noting “until we fully address the past, we cannot fulfil our future”.
He said this means giving “every possible assistance to the Horizon IT inquiry”, “delivering compensation to those impacted” and “continuing to deliver operational and cultural changes across the business”.
“To do this, over the anticipated end-to-end timeframe of providing redress for historical matters – from 2018 through to 2025 – the government has chosen to have us set aside over £300m in our accounts,” said Read.
“This is for the administration, management, and legal fees to delivery compensation to all those impacted – including some contributions to those settlements. It is a huge sum. But is a sum driven by the process we must follow and to ensure that full, fair, and final compensation is rightly paid.
“It pains me to say that it is therefore some £300m that is not available for investment in you and our network.”
Recently appointed group retail officer, Martin Roberts also had the opportunity to address those in attendance for the first time.
He told postmasters about his 40-year retail experience and said PO needed to “think, behave and act more like a retailer”. Roberts emphasised that “retailers move fast and they understand what the consumer wants” and he wants to “bring this mindset” into the firm.
For a full breakdown of all the main points from Read’s speech, please see RN’s 3 June issue.
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