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Timely decision

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15 minutes ago, dilligaf said:

Would you understand it better if I rearrange the words?

 (supposed benefit to the community, sound better?)

 

Yes that sounds better, because it has a completely different meaning to what you said initially.

Are you therefore saying there is no benefit to the community (other than monetary benefit) from things like sub post offices? 

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13 hours ago, Roger Mexico said:

So the 'saving' is costing money and that's even before you take into account the social benefits that might accrue in this case such as providing banking facilities in places that don't otherwise have them or helping keep sub-post offices open.

Social value is one aspect that is always ignored. I feel sorry for the post office management as they are being tasked to save money but then only seem able to do it by stopping services that are socially useful. Tynwald needs to give clear guidance on social purpose I’d say as it’s pointless them now beating the management up over this as they’ve stopped losing money on this deal which is what they’ve been asked to do - stop losing money! 

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On 3/8/2019 at 11:50 AM, MrPB said:

Social value is one aspect that is always ignored. I feel sorry for the post office management as they are being tasked to save money but then only seem able to do it by stopping services that are socially useful. Tynwald needs to give clear guidance on social purpose I’d say as it’s pointless them now beating the management up over this as they’ve stopped losing money on this deal which is what they’ve been asked to do - stop losing money! 

It's ridiculously top heavy on management though. As Roger Mexico said, they are looking for savings by cutting services while ignoring the elephant in the room that is responsible for the excessive overheads. The "loss" may only be a loss against unrealistic costs based on overmanning in management. I would not class the perpetuation of bloated management as a social purpose. The sub post offices would probably prefer the revenue, and certainly the cross selling which would come from having that footfall in the shop. Retail businesses rely on customers coming in for one thing and then buying other goods and services on the same visit. You stop them coming in for banking, you likely stop them coming in at all. Result: Even heavier losses.

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On 3/7/2019 at 10:39 PM, Roger Mexico said:

 The IOM Post Office is a different matter.  We know from questions that Hooper was asking last year that they have been losing a lot of commercial contracts - presumably because they have been unwilling offer realistic prices and so losing clients.  We actually had a very good example of this last month, where the client was no other than the IOM Government.  The contact was for the postal electoral registration where letters are sent out to all households.  ER Services, based in England[1], won the contract with a bid of £32,000.  The IOM Post price the previous year had been £66,000, so their 2019 bid might have been more than that.  The basic costs would actually be less if it was handled all on Island, so the amount of overheads/profit they are putting on these contracts looks like it must be fairly substantial.  Of course, unlike in a commercial company, there is no likelihood of being sacked if you lose a contract.  You can just brag about how mush money you are 'saving'.

The whole thing is also a splendid example of the silo thinking which the Manx bureaucracy seems to do more and more while complaining about it.  Because of course they have ended up paying out real money to a UK company and the UK Royal Mail where it could have gone to IOM Post and then come back to the government as profit (or reduced losses).  But I suspect the Cabinet Office were just pissed off with the Post Office charging whatever they felt like because they thought they had a captive market - and judging by what else we are hearing, so are a lot of their other clients. 

[1]  Electoral Reform Services Group are specialists in running postal ballots and organising voter registration and do the update of the electoral register for a lot of UK local authorities.  They were already managing the updating of the register online and by phone, so it's not like their area of expertise and software wasn't already being used and paid for before.  But previously the letters had been sent out and any returns processed by IOM Post and delivering letters is supposed to be what they are good at.

This affair struck me as totally ludicrous when I first heard about it. I expected there to be a shitstorm over it, but the fact that there really hasn't been shows how inured we have become to the bizarre.

You prefer to pay someone else who isn't even on Island £30k to do a job that you have the staff and facilities to do in-house? Really? To then boast about the "open tender process" and claim to be saving £30k is the economics of the madhouse. The same overhead will no doubt be there as before in the post office, so the £30k you think you saved will actually be £30k lost to the Island and paid to the ERS. They could have just asked for a commercial price from a number of operators rather than a formal tender process, and instructed the post office to do it for the best price, or even the average of the prices.

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8 minutes ago, woolley said:

This affair struck me as totally ludicrous when I first heard about it. I expected there to be a shitstorm over it, but the fact that there really hasn't been shows how inured we have become to the bizarre.

The trouble is that too many people (you saw it on here) blindly accept the "Look we're saving money" message without bothering to actually examine the situation and see whether the claim was plausible or just (at best) creative accountancy.  It's particularly ridiculous in this situation because the delivery of the post from ERS would still all actually be done by IOM Post - the bags probably went from their processing centre to the Island without the Royal Mail doing anything but sticking them in a van.  But they got the income and IOM Post the cost.

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1 hour ago, woolley said:

It's ridiculously top heavy on management though. As Roger Mexico said, they are looking for savings by cutting services while ignoring the elephant in the room that is responsible for the excessive overheads. The "loss" may only be a loss against unrealistic costs based on overmanning in management. I would not class the perpetuation of bloated management as a social purpose. The sub post offices would probably prefer the revenue, and certainly the cross selling which would come from having that footfall in the shop. Retail businesses rely on customers coming in for one thing and then buying other goods and services on the same visit. You stop them coming in for banking, you likely stop them coming in at all. Result: Even heavier losses.

I’m not sure that’s the likely case. The cost seems to be in the cost of the sub post offices handling and accounting for the cash which suggests it’s not management cost but an administration cost. I read on Facebook somewhere that some businesses are allegedly paying in huge amounts of cash over the counter daily as the takings from cash businesses. They aren’t going to be buying any post office services at all other than turning up with a load of cash that it’s costly to count and account for so i think it’s unlikely to affect any other post offices services as it’s not apparently a load of old ladies paying £5 into their savings account when they pick up their pension. 

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2 minutes ago, MrPB said:

I’m not sure that’s the likely case. The cost seems to be in the cost of the sub post offices handling and accounting for the cash which suggests it’s not management cost but an administration cost. I read on Facebook somewhere that some businesses are allegedly paying in huge amounts of cash over the counter daily as the takings from cash businesses. They aren’t going to be buying any post office services at all other than turning up with a load of cash that it’s costly to count and account for so i think it’s unlikely to affect any other post offices services as it’s not apparently a load of old ladies paying £5 into their savings account when they pick up their pension. 

So what should be done in those places which no longer have a bank branch?  Do you tell those businesses that they have to close down or spend an hour a day driving into Douglas to hand in their banking?  And presumably the sub-post offices get paid something for handling it - and they're also a business which is handing out a lot of cash as well in any case.

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3 minutes ago, MrPB said:

I’m not sure that’s the likely case. The cost seems to be in the cost of the sub post offices handling and accounting for the cash which suggests it’s not management cost but an administration cost. I read on Facebook somewhere that some businesses are allegedly paying in huge amounts of cash over the counter daily as the takings from cash businesses. They aren’t going to be buying any post office services at all other than turning up with a load of cash that it’s costly to count and account for so i think it’s unlikely to affect any other post offices services as it’s not apparently a load of old ladies paying £5 into their savings account when they pick up their pension. 

Hmmmm. You get them in for one thing and then it is up to you to upsell. At least if you have footfall you get the opportunity. Most sub post offices are also convenience stores. The person paying in "huge amounts of cash" can buy himself/herself a sandwich or pie and a cake for lunch, box of chocolates and a bottle of wine for the evening, cigarettes, lottery ticket or even just a bar of chocolate. Maybe a fill of petrol in some instances. To a small store, it's the whole that is the sum of the parts. The post office salary is meagre in most cases and the proprietor has to make his living from the bolt-ons. Also, I suspect that some of the business is indeed old ladies who have their pensions paid into accounts and draw cash from the most convenient location, which might be the local post office - and perhaps buy a magazine or a newspaper.

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1 minute ago, Roger Mexico said:

   And presumably the sub-post offices get paid something for handling it - and they're also a business which is handing out a lot of cash as well in any case.

Exactly, and this is the kind of short-sighted nonsense that abounds nowadays. "We're handling all this cash so we have to charge double." Totally ignoring the fact that if they don't bring in the cash from that source, they'll have to get it from somewhere else to hand out benefits etc. - and actually pay for the privilege.

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Posted (edited)
1 hour ago, Roger Mexico said:

So what should be done in those places which no longer have a bank branch?  Do you tell those businesses that they have to close down or spend an hour a day driving into Douglas to hand in their banking?  And presumably the sub-post offices get paid something for handling it - and they're also a business which is handing out a lot of cash as well in any case.

But arent cash handling banking services up to the banks to provide? As I understand it the post office is providing a service that all the banks have stopped providing on cost grounds - under contract to Santander who also no longer want to incur the costs of providing the service directly either. If the banks can’t make money out of cash handling counter services (the IOM Bank has closed most of its village branches as well and even watered down its mobile bank van) how was the post office ever going to make it pay? The problem is now on this Island with it’s ridiculous AML requirements nobody wants to handle cash as it’s a pain in the ass to administer compliantly and cost effectively. That’s our government which has done that sadly to placate Moneyval etc.

If social-value is to provide services that no commercial enterprise wants to provide anymore as it isn’t worth their while then I suppose the post office should get some form of credit or subsidy from government for providing that social value as at face value it certainly cannot profitably provide such services as demonstrated by the fact that the banks can’t afford to offer that service anymore as they obviously lose money on it. Otherwise they wouldn’t be shutting down branches all over the IOM.

Edited by MrPB
Quote problem

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