To delay the privatisation of Royal Mail is simply wrong

[TrueBlueTerrier]

http://www.guardian.co.uk/commentisfree ... vatisation" onclick="window.open(this.href);return false;

While it's in the public sector, efforts to improve the company are doomed to failure

Nils Pratley argues that Royal Mail "is not a company in a condition to be sold" and that it should not be privatised for years (Privatise post-haste and regret at leisure, 15 June). It is a seductive argument – but wrong.

Privatisation should wait until "the detail of the new regulatory regime" is established, Pratley argues. "It is simply unrealistic to expect Ofcom to deliver business secretary Vince Cable's promise of a 'level playing field'." But why? Royal Mail has been subject to regulation for more than 10 years, since Postcomm was established in 2000.

No other utility had more than a year or two of shadow running under regulation before being privatised. If 11 years is not long enough, how long does Pratley want us to wait? For more than a decade there has been a series of unsuccessful attempts to improve Royal Mail's financial performance. My experience of almost 20 years of advising on commercialising public sector enterprises, including Royal Mail, is that such attempts are doomed to failure.

The constraints on management's ability to run enterprises commercially while in public ownership are just too great. Royal Mail cannot make commercial investment decisions or restructure its workforce without government say-so. What business in a competitive market can afford to wait over a year for its shareholder (government) to approve its business plan, as Royal Mail had to do in 2006-07? What private business would spend 15 years allowing Parcelforce to make losses while trying to turn it around, as Royal Mail did from the late 1980s? Under public ownership Royal Mail is like a runner trying to compete with his legs tied together.

And Royal Mail's experience is not unique. Compare the story of two similar businesses: the Laboratory of the Government Chemist (LGC Ltd) and the Forensic Science Service (FSS). LGC was privatised in 1996 and is now a thriving multinational enterprise – it employs six times more people than it did in 1996, but it still supplies excellent research services to government. The FSS was considered for privatisation in 2003, but the decision was taken to restructure and commercialise in the public sector first. The FSS is now set to close because of its mounting financial losses.

The National Audit Office, in its studies of past privatisations, has argued that if government wants to maximise its proceeds it should initially sell a majority stake in the company. This enables the private sector to take the necessary decisions to turn the business around without government constraints. The government can then sell its remaining shareholding, if it wishes, at a later date. This is a far more sensible approach than the one which Pratley advocates.

Pratley says: "If the government tries to rush privatisation, it will end up short-changing taxpayers." In fact, waiting years before privatising will short-change not only the taxpayer but also the employees of Royal Mail.

[Wessex]

Another Lib-Dem :vcfo :ncfo

If anyone thinks this is a Tory baby ,they are mistaken .Flogging off the Royal Mail and pleasing the Brussels Euro elites thereby is a long held Lib Dem aim imho

[chunk]

Royal Mail is like a runner trying to compete with his legs tied together.
A reference to the downstream access agreement perhaps? which was not a product of public ownership but ironically of regulation introduced to help privatization. .

And Royal Mail's experience is not unique. Compare the story of two similar businesses: the Laboratory of the Government Chemist (LGC Ltd) and the Forensic Science Service (FSS). LGC was privatised in 1996 and is now a thriving multinational enterprise – it employs six times more people than it did in 1996, but it still supplies excellent research services to government. The FSS was considered for privatisation in 2003, but the decision was taken to restructure and commercialise in the public sector first. The FSS is now set to close because of its mounting financial losses.

A rare story of a successfully privatized government department
and not one employing hundreds of thousands of people
Is the pace of change just not quick enough for some ? 60,000 job losses, thousands of post office counters and dozens of mail centres closures show
there is no resistance to change in rm. The problem is improvement =change but change doesnt (by itself) =improvement. recently change has just become
code for cut and slash as have the words modernization and efficiency.

[ziko]

Yes yes privatise quickly - No No No Nick, you really mean the quicker its privatised the quicker you and your mates at the Con/Dem house of fun get your bonuses...

[BELIAL]

Weekly delivery £10 a letter
Never happen;
gas prices up 500% electric up 650% ;trains ;water