Bryn Jones wonders if mutualisation could be a silver lining
Reputations ruined. Bankruptcies imposed. Prison sentences inflicted. All this and worse hit the innocent sub-postmasters/mistresses in the Post Office – Horizon IT scandal. Official investigations into culpability continue but there is also a bigger political question. How could this happen in a publicly owned business accountable to Parliament and the government? Chicanery, lying, and financial extortion would not be unprecedented amongst big private businesses. Some past corporate scandals have been equally bad. But the Post Office (PO) is supposedly a public service with stricter codes of conduct and not hell-bent on profit at any cost. If nothing else positive emerges from the failed management of the PO then it ought to be a reappraisal of how the UK runs public enterprises with a more equitable, accountable and transparent model for their future; and the policies of the next Labour government. The Communication Workers’ Union and Co-operatives UK are already proposing a mutualised PO.
After discussions with them, government minister, Kevin Hollinrake admitted mutualisation is possible. Although he added ominously that changes would “need to take into account the costs and timing of . . . significant issues. . . not least the compensation schemes and investment in a new IT system.” Deja vu: the LibDem-Tory coalition government in 2011, mooted, then postponed conversion into a co-operative on the grounds that the business should first establish a sounder financial base. Despite waves of downsizing, asset selling, and service rationalisation finances are still shaky. Its operations are profitable but overall losses were £76 million in 2022 and it now faces enormous pay-outs, estimated at £127 million, to recompense falsely prosecuted sub-postmasters.
That 2011 Postal Services Act allows for the mutualisation of Post Office Ltd. Provided three conditions are met. 1) Its main purpose is “to act for the public benefit … by promoting the public use of Post Office services”. 2) Its membership includes customers, employees and sub-postmasters, or their representatives. 3) That it “makes arrangements to prevent” privatisation or sales of essential assets. Hollinrake has asked Co-operatives UK to submit a detailed case for an independent review into the practicalities of mutualisation. Absorbed in tax-cutting, election campaigns an economically besieged Tory government is unlikely to make this a priority. But even if it is omitted from the Tories’ manifesto, it should surely go into Labour’s.
Advocates of more public ownership should reflect on the failure of the ministerial accountability system in the Horizon scandal. One hundred per cent state ownership and direct access to the PO board made no difference. By contrast the “multi-stakeholder” mutual model, could give all PO staff, customers, the general public and government more control over its management and operations. As well as pressure to improve its performance and prevent another Horizon debacle, a mutualised PO could also provide an example for many other public-serving businesses within and beyond the state sector. If Labour can look beyond its pre-occupation with fiscal rigour, it could make the PO the harbinger of a more democratic economy.