Abigail Townsend: Red-letter days and rural angst at the Royal Mail

The post bosses have delivered the goods. Now they must do the dirty

You couldn't move for stories about the Royal Mail last week - and for once, they weren't all bad.

But then, it really has been quite some turnaround for the state-controlled postal group. Just a few years ago it was haemorrhaging money, the service was shambolic (not that anyone is exactly calling the current service ideal), staff morale was shot to pieces and then some bright spark decided to call it Consignia.

Chairman Allan Leighton and chief executive Adam Crozier are to be applauded. They have slashed costs, dropping such hallowed institutions as the second post, and the job cuts have been tough at around 30,000. More work needs to be done, but the rewards were there to be seen last week with profits continuing to grow, to £609m.

Mr Leighton has even worked his gift of the gab on the Government. Despite proving it can make money all by itself, the Government has agreed to lend it £900m and allow it to use a previously ring-fenced £850m to prop up the pension deficit.

Yet not everything is rosy at the Royal Mail, and one of the biggest problems is the growing unrest of the union - never a good thing in such a people-intensive industry. The Communication Workers Union today ups its fight against Mr Leighton's plan to offer shares to staff, calling it a "charade" and pointing out that the 80,000 expressions of interest Mr Leighton received represents just 37 per cent of the workforce.

The union believes the share scheme is the first step to privatisation. I doubt that: neither Mr Leighton nor the Government want to be remembered for selling out the Royal Mail.

But the union's back is up, and the two sides are already locked in a row over pay. The Royal Mail really does not need this right now - because it is not just sorting offices and postmen, it's also the Post Office and this is still an utter mess. It loses money hand over fist, largely because of the 8,500 rural post offices that boast just a handful of customers a week - if they're lucky. Here, there can be no ambiguity over what Mr Leighton would surely love to do: close them down.

But for the Government, this is a tough call. It has already backtracked on a pledge to hold a public consultation over the future funding of rural post offices, and insiders tell me it's simply because it can't decide what exactly it's consulting on. Hardly decisive government at its best.

The fact is, the Royal Mail needs the union onside, for the only government decision that makes commercial sense will, sadly, involve the closure of rural post offices and the loss of jobs.

The Government is propping up the rural estate with cash, but this is not a long-term solution. The Royal Mail has trialled a variety of different formats, such as post offices in pubs, and more services are now processed electronically, such as payment of benefits. So now it is time for the Government to act. The Royal Mail knows rural post offices need closing, the Government surely must do too, so perhaps it is time to stop dithering and deliver some bad news.

The grind goes on

A forum of business experts, including representatives from the TUC and Chartered Institute of Personnel Development, last week argued that the nine-to-five "grind" - their word - will be replaced by a "24-hour office". Hmm, nice idea, the premise being that no one, in these technologically advanced days, need be tied to the office. They should be free to work when and where they like. Really? Business, sadly, does not work like that, and with the best will in the world - and indeed technology - it remains a mere pipe dream for most.

a.townsend@independent.co.uk