Freedom of Information Blog: How much does Royal Mail spend on storage?

By David on September 14th, 2010 | 1 Comment

Freedom of Information Blog: How much does Royal Mail spend on storage?

As part of its campaign to discover how much the public sector spends on self storage, Storage.co.uk recently submitted a Freedom of Information Act request to Royal Mail.

This resulted in a remarkable campaign to prevent us from finding out the answer, which seemed to suggest the organization itself is embarrassed by how much it spends on hiring storage space.

Hiding the cost of storage?

All the other organizations that have been asked this question (how much they spend on storage) have replied relatively efficiently with either a figure, or an explanation for why they do not need any storage. However, Royal Mail did neither of these things.

Instead they issued an odd letter, explaining that while they do know how much they spend on storage space, it would be commercially damaging for them to reveal the amount:

I can confirm that Royal Mail Group holds the amount spent on commercially hiring physical storage space during the 2009/10 financial year. However… although the total amount spent is reasonable and appropriate for a company of the size and type of Royal Mail, when compared to other organisations it may appear to be high. The information … is therefore likely to be compared unfavourably to the amounts spent by different companies. Adverse and negative publicity of this information could potentially constrain the effective management of Royal Mail.’

This is clearly against the spirit of Freedom of Information, given that one of its aims is to make the public sector more accountable by forcing it to reveal potentially embarrassing information about itself.

Yet it is also a contradictory argument: if the amount they spend on storage is entirely reasonable, as they insist, then they should have nothing to fear from negative publicity. It was also strange for them to take this attitude when both the NHS and the BBC, two larger organizations, had been asked about storage space and not had any problem revealing how much they spend.

Storage cost revealed on appeal

All these arguments for why they should disclose what they spend on storage were presented to Royal Mail in an appeal against their decision, and fortunately public interest won the day:

‘Having reviewed your request, Royal Mail has decided that this information should be disclosed to you. The amount spent by Royal Mail Group commercially hiring physical storage space during the 09/10 financial year was £1,907,774.50. This includes all types of storage across the whole of Royal Mail’s operations throughout the whole of the UK including secure records storage for the whole of Royal Mail Group, storage for Delivery Offices and Mail Centres nationwide and storage for uniform and other supplies. Commercial storage provides our business with additional space as and when it is required and is therefore far more cost-effective than permanent property & facilities costs.’

Storage costs paranoia?

£1.9 million is not really a huge amount of money for Royal Mail to be spending on storage space – given that the Royal Mail group made an operating profit of £404 million last year – so one might wonder why they were so sensitive about negative publicity if they released this information.

The answer is probably that storage costs were just part of a general panic about being seen to waste money, given the negative publicity surrounding Royal Mail’s imminent privatisation and its £8 billion pension deficit. Everyone at the top of the business is probably very keen to avoid revealing anything about what they spend in case their opponents in the press and the Communication Workers Union use it as a stick to beat them with.

Of course, this raises another interesting question. Given the level of reticence Royal Mail displayed about something as uncontroversial as storage space, what genuinely embarrassing spending figures have they got to hide?

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One Response to “Freedom of Information Blog: How much does Royal Mail spend on storage?”

  1. As is often the case with big firms that have gone, are going, down the tubes it is usually inept management not the workers that make the really crass decisions that really cost their companies dear. No doubt the intellectual maestro that made the decision to initially withhold the information requested is a highly paid senior manager with a gold plated pension, expense account etc

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