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Thursday, 22 October 2009

Value versus cost

The news today that the Royal Mail staff have gone on strike today and tomorrow is saddening. It is something that has troubled me for a very long time - ever since the 1960's in fact and I first heard a Trade Union official demanding that commerce and industry should be compelled by government to create "full employment". The socialist dream that commercial and industrial enterprises can be manipulated to create this Utopian ideal that everyone everywhere can be found a job and it can all be paid for by cutting profits or by raising taxes is a complete nonsense - on a par in my mnd with the idea that someone with no knowledge of an operation can "manage" it.

The Royal Mail is the victim of envy in commerce, Civil Service incompetence and Union ideology. In the first, commercial interests saw a profit in some small parts of the delivery of mail, not all of it, just some parts and lobbied to get their hands on it. The Post Offices have been sold off and privatised, the most lucrative parts of the parcel delivery system went the same way. They don't want the ordinary mail or the ordinary parcels, they wanted the bulk commercial stuff, the bit that actually subsidised the personal and non-profitable bits. So the parcel deliveries were hived off, the bulk post was hived off by a Civil Service ever willing to please their lobbyists and the idiots in Westminster and both parties were too blinded by their own visions and ideology to see it. The Royal Mail was now rendered un-profitable according to the Whitehall "Managers" and the Treasury who now began to demand "Value for Money" which in their incompetent circles means "cheaper".

Enter the Unions. The Unions still cling to the idea that Government is about making jobs for everybody and demand that ever more tax money be funnelled into non-jobs and jobs for the boys. Here I have to say that the Postal workers are not among those I would put in this category, though there may well be "Spanish Practices" it must be said that in the main, the postal workers do a damned good job and a hard one very well and for very little in terms of wages. But there comes a point in which every "business" - and the Royal Mail is expected to operate like one by the Treasury - must cut its overheads or raise more money. Here again, Royal Mail is hamstrung, those same Whitehall W*nk*rs that carved out the profitable bits have saddled it with a restriction on how much it can charge. Worse, by insisting on "competition" they have made it almost impossible for the Royal Mail to survive. And the Union's strike action isn't going to help that at all.

The underlying problem here is the Treasury/Whitehall demand for "Value for Money" the mantra every inompetent in the Civil Service constantly chants. They know the cost of everything - or so they would have us believe - yet despite cuts in almost every service in real terms the cost of Whitehall continues to rise exponentially year on year. And its not just "inflation" though that is an element. The real problem is the Civil Service does not understand "value". Some things, like Defence, Fire and Emergency Services, Police, Education and Healthcare and the Royal Mail cannot operate on a "profit" basis. They cost, but the value is that the service is there when you need it and doesn't come as a nasty surprise in terms of a large bill. These things are the core of the problem with Whitehall, they throw money - our money - at arts, minority centres, research into "mulitculturalism", womens rights and the like - and demand that the Defence Budget is cut, that the Fire and Emergency Services operate on "value for money" that the Royal Mail turn a profit. They saddle schools with hugely expensive "Public Private Finance Initiatives" selling off the school buildings to commerce and then renting them back at huge costs. They've done the same all over Whitehall, not one department "owns" the buidings they occupy. Services, like the Royal Mail are like an insurance policy. I pay for it year on year in the hope I will never need to use it, but I wouldn't dream of going without it and though I might get it cheaper, I do have to look at the "value" rather than the cost - and the two are very different!

The people who set upthe Royal Mail in the 1860's recognised the need for a fully subsidised public mail system, a system that would and could deliver a letter anywhere in the UK in a reasonable time. It was never intended to be "profitable" it was and is a public service. It really is time we threw the entire ediface that is Whitehall into the Thames and returned control of our Public Serives to people who understand that they are 1) Public SERVANTS, 2) that they are there to deliver the SERVICES, not destroy them, and 3) that we who pay them, have a right to dismiss them when they screw up our services as they are doing with the Royal Mail.

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