10 January 2012

What does "recently" mean to Barnet Council?

It means 2004!

this real French stamp didn't come to Mr Mustard from Barnet Council ! Quelle surprise!

In one of his FOI requests Mr Mustard asked about the spend with the Royal Mail of £353,451 in the year ended 31 March 2011. He is told that EU procurement rules do not apply to this spend ( he hasn't checked but will accept that as a true statement ) and so a tender has not been advertised in the OJEU. That should not be the end of the matter though as this is an area which is ripe for savings ( it's low hanging fruit in management parlance - he expects that every senior manager at Barnet Council will have heard of this concept - they just haven't implemented it ).

In addition to the full year spend shown above the spend on postage from April to November 2011 was £212,367 so we are again looking at something in excess of £300k in a full year.

In 2012 it is possible to send your letters by other services of which the best known is probably TNT.

Now we have to do some maths, sorry, and we have to make some assumptions just to illustrate the possibilities.

Let us assume that all the spend in 2010/11 was on 1st class DL size envelopes ( DL is when you fold a sheet of A4 into 3 ). If you bought a stamp at the Post Office it would have cost you 41p ( it's now 46p - it won't be long before the penny post is the £1 post ) but if you used a franking machine you only paid 36p. Think of that as bulk discount and compensation for delivering lovely uniform well typed letters with clear postcodes.

So £353,451 would buy you 981,808 first class "stamps". Post is sent on 6 days a week, say 300 days a year which means about 3,270 items a day.

If you now go the TNT website here you can use their savings calculator. You have to drag your slider with the mouse to the right until you reach 3,000. That shows you a saving of £108,000 so for 3,270 items the saving would be £117,700.

However, TNT have shown the saving against the full price of postage so we need to take 981,808 times 5p = £49,090 off the level of saving shown ( Mr Mustard does try to be fair and accurate ) giving a potential saving of £68,610 which is still not to be sniffed at. It would pay for 6 months use of Craig Cooper the Commercial Director ( third class? ) who is in charge of procurement and whom, one would hope, has already thought about putting postage out to tender.

So, over 10 years, the usual period Barnet Council talk about for cashable savings, the council could save £686,000 ( more as prices rise ). 

Now of course the real saving will have to be based upon the actual mix of postage sizes and whether second class is used much and upon the negotiation skills of the senior management of procurement. TNT would love to have the volume, look, they even mention local government on their website. Perhaps certain types of bulk post could be put out to tender?

It's not as if Barnet Council haven't heard of TNT. They paid them £41,397 in the year to 31 March 11 and £15,721 in the following 8 months (going down?) although some of that was supposedly for stationery ( Mr Mustard finds the analysis of the over £500 lists to be wanting ).

So what caused this blog post? It was the words added into the FOI reply which were possibly meant to be spin. Once the answer was that the supply did not need to be tendered there was nothing more to add but someone, person or persons unknown who was feeling defensive, added the words:

"Until recently there was no option but to use Royal Mail for postage"

and yet TNT started doing mail in 2004!

When will the council look at this? Probably "as soon as possible". Mark your diary for about 2020.

Yours frugally

Mr Mustard


  1. TNT would only do the first stage, presumably, and then hand over to RM for the trip up the garden path?

  2. That is correct baarnett. You still get the same postie but at a lower price. I would think that 90% of the council's mail never leaves the borough. There might be scope for a local firm Barnet Mail ? or Baarnett Mail if you have time.


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