"Opening the Post: Postcomm and postal services - the risks and opportunities". A report from the National Audit Office - January 2002

The National Audit Office (NAO) report, “Opening the Post” looked at the risks to Postcomm’s strategy of improving services through competition and regulation.

Key risks identified at the time of writing (January 2002) were:

  • There may be insufficient competition to generate an improved service to most customers, as a result of the strength of Consignia’s brands and of its response to competitors.
  • Postcomm’s duty to ensure the continuation of a universal service at a uniform price could constrain its efforts to promote competition.

Risks linked with Postcomm’s regulation of Consignia’s prices and quality of service were:

  • Consignia’s efficiency may not improve significantly. The NAO advised that Postcomm would need to rely on creating incentives for Consignia to improve its efficiency.
  • Consignia may fail to meet its prescribed standards of service.
  • The Department of Trade and Industry – as the principal shareholder – may not apply sufficient pressure on Consignia to improve its performance and respond constructively to competition. The DTI may not be in a position to apply the same disciplines to Consignia as a private sector shareholder would.

The NAO concluded that Postcomm’s success in handling these risks would depend in part on the credibility of its actions. Key factors in establishing credibility included:

  • Adherence to the principles of good regulation.
  • Being seen to act in an impartial and independent way.
  • Employing staff with sufficient experience and expertise.
  • Obtaining sufficient robust and reliable information.

Links to full reports: