New figures show small firms stay loyal to Royal Mail but services need improvement

ROYAL Mail is still not delivering in its service to small businesses two years on from a review into the postal service, according to the Federation of Small Businesses (FSB).

In its response to the consultation ‘Review of developments in the postal market and Royal Mail since 2008’, the FSB is disappointed that the situation with Royal Mail remains the same as in 2008, and that the same key issues highlighted then are still prevalent now.

Chris Spies, Peterborough branch chairman of the FSB, said, “It is completely unacceptable that small businesses have to take the hit in poor services from the postal service. Two years ago, the Hooper report clearly stated that the Royal Mail and the postal service needed serious reforming to ensure that it is sustainable and provides the service small businesses and consumers deserve.

“Post Offices are the heart of many communities and act not only as a place to send invoices or to collect parcels, but as somewhere for small firms to network and meet like-minded business men and women as well as potential customers.

“It is simple – small firms are severely let down by the lack of business services available and are not provided with a fully operational service. The Government must commit to the importance of sustaining local communities and must step up and support Royal Mail and the Post Office Network by creating a Post Bank.”

Small firms are a loyal customer base that frequently visits the Post Office. In a survey of more than 1,200 members of the FSB-ICM ‘Voice of Small Business’ panel, the FSB found that 94 per cent of respondents want a UK-wide postal service and six in 10 (59%) want to continue to receive mail deliveries six days a week.

Adversely, the FSB is still concerned that the problems diagnosed two years ago are affecting the service received by small firms. The FSB believes that the following need urgent action:

• Part-privatisation needs to be announced quickly: other FSB research shows that a quarter (27%) of small businesses would consider part-privatisation as a way forward to saving the Royal Mail and if it meant that no more Post Offices would be closed.
• Set out plans to deal with the pension deficit: the FSB firmly believes that until the pension deficit is dealt with, Royal Mail will not be able to function to its fullest potential.
• A new regulatory regime should be put in place.
• No more lost days: previous strike action cost businesses between £500 and £5,000 and in this vital recovery period, small firms cannot face the risk of losing trade again.

Small businesses are not getting the services they need from the Post Office and the FSB has long been calling for a Post Bank – a state-run bank or mutual or trustee bank run through the Post Office network. FSB research shows that 38 per cent of members would leave their current bank for the Post Bank.

The FSB believes that it is only by expanding the Post Offices financial services that the network will become financially viable. If the Post Office network is to give small firms the service they need, the government must commit to creating a Post Bank.