25 January 2002
A report from the public spending watchdog has stressed the tensions inherent in Postcomm's brief, which is to increase competition in the sector while boosting service standards for customers.
Since the Post Office, which was renamed Consignia, lost its monopoly status, Postcomm has issued short-term licences to rivals that have entered the marketplace. But NAO inspectors warned that this strategy could impede the development of robust competition among operators, because Consignia has the advantage of a 15-year licence.
Postcomm's obligation to make sure a universal postal service continues to exist at a uniform price is cited as another potential problem area. Consignia currently meets these criteria, but the NAO warned that if it were to lose business it might not be able to afford to maintain its service.
The regulator will shortly publish a consultation document outlining how it intends to improve services for customers. But, according to the NAO, Consignia has rarely met its targets in recent years, and is facing shrinking profits and ongoing industrial relations problems. In view of this, the watchdog says the document must be carefully examined to ensure it will achieve Postcomm's aims.
Sir John Bourn, comptroller and auditor general, said: 'For their strategy to be successful, and to ensure that postal services improve rather than decline, they need to address the risks I have identified.
'The proposals should be scrutinised with a view to ensuring that Postcomm are managing these risks successfully so that customers will indeed see improved services.'
PFjan2002
