The new business secretary Greg Clark is being asked why the Post Office is in such a parlous financial state, as managers gear up for a strike ballot over detrimental changes to their pension scheme.
Unite, the country’s largest union, has told Greg Clark that it considers the Post Office is a ‘failed’ business, being starved of funds by its ultimate owner, the government.
The latest episode provoking concern is the Post Office’s decision to close its final pension scheme from next March which will mean reduced retirement incomes for the scheme’s 3,500 members, despite the scheme having a surplus of about £100 million.
Unite is preparing for an industrial action ballot, including strike action, of its 860 managerial members because of continuing redundancies, the franchising of a further 20 crown offices and the pension scheme closure. The ballot is expected to start in the middle of August.
In his letter to the minister, Unite officer for the Post Office, Brian Scott said that each of these decisions is challenging for Unite members, and that the attacks on jobs and pension benefits are ‘excessive and unacceptable’.
Unite’s Brian Scott said: “The rationale given for these decisions is the lack of funding available from government which, in reality, is also based on the failure of the Post Office to deliver a positive and effective business plan. It is our view that the Post Office has failed.
“We are also seeking commitment from government to examine how the public funding that has been provided has been used and to examine the value for money it has provided.
“Despite Unite and its members working extremely hard to get the business to break even, we are now told that the business is out of funds and is, therefore, unable to meet its commitments to its employees.”
There are about 3,500 staff affected by the proposed pension scheme closure and the Post Office has indicated that the total number of redundancies this year could reach 1,700, of which 1,100 are pension scheme members.
Unite calculates that under the defined contribution scheme from next April, based on the vagaries of the stock market, staff will lose about 30 per cent of their retirement income going forward – thousands of pounds a year. The defined contribution scheme is already in operation for other members of the Post Office’s 7,000-strong workforce.