HEREFORDSHIRE Council has taken a hit over its controversial plan to cut postal costs, which won’t deliver as big a saving as first thought.
Estimates of annual savings the plan might make have been reduced from £70,000 to £25,000. But the contract has two more years to run and guarantees fees to the company involved.
Earlier this year, critics claimed costings for the plan – which sees mail service TNT sorting the council’s second class post for Royal Mail – didn’t add up.
Now, the council has confirmed that analysis of the “physical constraints” on some post rooms in its offices meant the estimate had to come down.
Councillor Harry Bramer, cabinet member for resources, has told the full council of his disappointment at the project not achieving the expected savings.
“But any reduction in administrative costs protects budgets for frontline services,” he said.
In May this year, Coun Bramer told the full council that he had “no doubt” about £70,000 being saved once all the benefits of the new contract kicked in. Instead, the savings estimate is closer to that pitched by Councillor Aubrey Oliver, a leading critic of the contract, who said, at the May meeting, that his sums had the plan falling short by well over £36,000.
Coun Oliver, who raised the issue again at the most recent full council meeting, based his case on the council’s current send out of second class post, which is around 1,400 items a day.
He told full council that, discounting Saturdays and Sundays, at least 3,800 items would have to go out daily to meet the £70,000 target.
Cutting postal costs is a key element of the council’s cash plans for the next few years as the authority aims for an overall year-on-year saving of at least £750,000.
The TNT contract sees the company collecting second class post from council offices and being paid a fee per item to sort it. Royal Mail then collects the sorted post and makes the final delivery.
According to the council’s figures, this arrangement saves around 7p an item compared to the previous deal with Royal Mail.
