Think that Royal Mail is bad? Wait until you see its privatised successors

The important task of getting crucial and confidential letters to people on time is jeopardised by profit-oriented thinking that prioritises getting postmen back to the depot to meet targets.

Last week marked the formal announcement by the Minister for Business and Enterprise Michael Fallon that the Royal Mail will be sold off by next April, setting the ball rolling on what is set to be the biggest privatisation for over 20 years.

This follows the deregulation of postal services in 2006, which has allowed companies such as TNT post to win contracts to deliver mail on behalf of private and public sector organisations. TNT post are in a pilot phase in West and Central London this year, providing competition to Royal Mail to deliver letters directly to the doorstep for the first time in Royal Mail’s 360-year history. They intend to expand their operation across the country in the coming years, aiming to employ up to 20,000 postal workers.

In light of recent changes in the postal system, upon hearing of problems with mail turning up late and sometimes not at all, I went undercover as a delivery operative for TNT post for Channel 4 Dispatches’ Secrets of Your Missing Mail (airing at 8pm tonight) to examine the quality of service provided by privately owned companies. I found cause for concern on several fronts, arising from the profit-driven privatisation of an industry that remains an important public service; the contracts up for grabs include the delivery of crucial letters for hospital appointments, benefit assessments, credit cards statements and household utility bills, so it is paramount that these letters are delivered reliably, punctually and securely.

However, I found that the important task of getting crucial and confidential letters to people on time jeopardised by profit-oriented thinking that prioritises getting postmen back to the depot to meet targets. On several occasions, I was called back to the depot in the early afternoon with bundles of mail left to deliver, frustrated as there were no logistical reasons as to why these letters couldn’t be delivered that day. This attitude, combined with the fact that TNT only deliver to each address every other day, means members of the public can be kept waiting unnecessarily for days or even weeks before receiving crucial letters. One of our contributors, for example, missed an appointment for a cancer test due to the late arrival of a letter from TNT Post, and was then made to wait agonisingly for three weeks to receive the letter with his results. Whilst TNT have not confirmed the reason for this delay, it is clear that if they are handling letters of this importance, mail should only be returned to the depot if there’s absolutely no other alternative.  

Furthermore, operating as private company - free from many of the regulations that bind the Royal Mail - allows TNT to operate on an uneven playing field. TNT are not obliged, like Royal Mail, to provide a universal service: Royal Mail are committed to delivering post up and down the country, six days a week, whether in Sheffield or the Shetland Islands, with a uniform pricing system allowing equal access to its services for everyone in the country. TNT, however, can simply cherry-pick highly profitable areas in which to operate, bidding only to deliver in dense urban areas such as West and Central London. There is a genuine concern amongst organisations such as the Communications Workers Union that this universal service will no longer be possible if private companies undercut Royal Mail for lucrative contracts, as it will leave Royal Mail unable to foot the bill for costlier deliveries in rural areas. Individuals and small businesses will be hardest hit, whilst the winners will be the large organisations that need to send out huge batches of mail.

Unlike Royal Mail, TNT have no obligation to meet the targets set by Ofcom, the independent regulator for the communications industry, so are not required to publish statistics or results on the quality of their service. Security practices were extremely poor at the depot in which I worked, as we delivered mail on bikes with no locks on the panniers containing the letters, leaving the bikes unattended in busy areas for lengthy periods of time whilst we walked large sections of our round. TNT hires temporary staff and students on zero-hour contracts and, whilst most of my colleagues were conscientious and honest, a combination of poor training, low pay and a transient attitude towards the job can only increase the likelihood of postal workers taking shortcuts and dumping mail, a practice that Channel 4’s Dispatches also exposed in this investigation.

Our investigation highlights worrying problems with privatised postal services; not only is our much-valued universal service under threat, but also the quality and integrity of services provided. If, as expected, privatisation continues to be rolled out across the country, the 29 million homes and businesses that rely on the service are entitled to expect better. 

Secrets of Your Missing Mail airs tonight at 8pm on Channel 4. 

A Royal Mail employee at the depot in Rathbone. Photograph: Getty Images

Paul Mills is a freelance journalist and filmmaker. He was the undercover reporter for Channel 4 Dispatches' Secrets of Your Missing Mail. His views are his own and he tweets @pmamills.

Photo: Getty
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George Osborne's mistakes are coming back to haunt him

George Osborne's next budget may be a zombie one, warns Chris Leslie.

Spending Reviews are supposed to set a strategic, stable course for at least a three year period. But just three months since the Chancellor claimed he no longer needed to cut as far or as fast this Parliament, his over-optimistic reliance on bullish forecasts looks misplaced.

There is a real risk that the Budget on March 16 will be a ‘zombie’ Budget, with the spectre of cuts everyone thought had been avoided rearing their ugly head again, unwelcome for both the public and for the Chancellor’s own ambitions.

In November George Osborne relied heavily on a surprise £27billion windfall from statistical reclassifications and forecasting optimism to bury expected police cuts and politically disastrous cuts to tax credits. We were assured these issues had been laid to rest.

But the Chancellor’s swagger may have been premature. Those higher income tax receipts he was banking on? It turns out wage growth may not be so buoyant, according to last week’s Bank of England Inflation Report. The Institute for Fiscal Studies suggest the outlook for earnings growth will be revised down taking £5billion from revenues.

Improved capital gains tax receipts? Falling equity markets and sluggish housing sales may depress CGT and stamp duties. And the oil price shock could hit revenues from North Sea production.

Back in November, the OBR revised up revenues by an astonishing £50billion+ over this Parliament. This now looks a little over-optimistic.

But never let it be said that George Osborne misses an opportunity to scramble out of political danger. He immediately cashed in those higher projected receipts, but in doing so he’s landed himself with very little wriggle room for the forthcoming Budget.

Borrowing is just not falling as fast as forecast. The £78billion deficit should have been cut by £20billion by now but it’s down by just £11billion. So what? Well this is a Chancellor who has given a cast iron guarantee to deliver a surplus by 2019-20. So he cannot afford to turn a blind eye.

All this points towards a Chancellor forced to revisit cuts he thought he wouldn’t need to make. A zombie Budget where unpopular reductions to public services are still very much alive, even though they were supposed to be history. More aggressive cuts, stealthy tax rises, pension changes designed to benefit the Treasury more than the public – all of these are on the cards. 

Is this the Chancellor’s misfortune or was he chancing his luck? As the IFS pointed out at the time, there was only really a 50/50 chance these revenue windfalls were built on solid ground. With growth and productivity still lagging, gloomier market expectations, exports sluggish and both construction and manufacturing barely contributing to additional expansion, it looks as though the Chancellor was just too optimistic, or perhaps too desperate for a short-term political solution. It wouldn’t be the first time that George Osborne has prioritised his own political interests.

There’s no short cut here. Productivity-enhancing public services and infrastructure could and should have been front and centre in that Spending Review. Rebalancing the economy should also have been a feature of new policy in that Autumn Statement, but instead the Chancellor banked on forecast revisions and growth too reliant on the service sector alone. Infrastructure decisions are delayed for short-term politicking. Uncertainty about our EU membership holds back business investment. And while we ought to have a consensus about eradicating the deficit, the excessive rigidity of the Chancellor’s fiscal charter bears down on much-needed capital investment.

So for those who thought that extreme cuts to services, a harsh approach to in-work benefits or punitive tax rises might be a thing of the past, beware the Chancellor whose hubris may force him to revive them after all. 

Chris Leslie is chair of Labour's backbench Treasury committee.