HC Deb 31 March 1995 vol 257 cc878-9W
Mr. Waterson

To ask the President of the Board of Trade if he will make a statement about the performance targets for the Post Office. [18274]

Mr. Eggar

The Government have in recent years set the Post Office performance targets on a three-year basis. The current three year targets expire at the end of the 1994–95 financial year. I therefore need to set the board new targets.

During the current target regime, the Government carried out a review of the structure and organisation of the Post Office. But it is now several years since there was a detailed external study of the operational efficiency of the Post Office. A performance review would clearly be desirable before setting further three-year targets and my Department will be appointing consultants shortly to carry out such a review.

This review will not, however, be completed until the autumn. In order to ensure that the Post Office has targets applying from the beginning of the financial year, I have agreed with the Post Office board that the existing three year targets should be extended on an exceptional basis to create a four-year set of targets to cover the period 1992–93 to 1995–96.

I therefore propose to set the board the following targets:

Annual return on capital employed
Royal Mail Post Office Counters Parcelforce
18 per cent. 9.5 per cent. Break even (before exceptional items)

Reduction in Unit Costs (financial years 1992–93 to 1995–96)
Royal Mail Post Office Counters
5.5 per cent. 6.5 per cent.

This RUC target compares to a three-year target for Royal Mail and Post Office Counters of 4 per cent. and 3 per cent. respectively for the three years to 1994–95. They take account of progress towards those targets in the three years to date, which both Royal Mail and Post Office Counters are likely to over-achieve in the three years to 1994–95. Parcelforce is not set an RUC target as it is subject to the competitive marketplace.

I believe these performance targets are realistic and will continue downward pressure on the Post Office's costs in the interest of taxpayers and consumers. They will continue to be matched by stretching quality of service targets for both Royal Mail and Post Office Counters which are set after consultation with the Post Office Users National Council.