TNT has won an �8m contract to deliver second-class mail
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The Royal Mail has been delivered a fresh blow after the Scottish government awarded a multi-million pound contract to a private firm. The £8m deal will see carrier TNT deliver mail for dozens of public bodies. A £17m first-class mail contract was awarded to Royal Mail but the second-class service was won by TNT. The Scottish government defended the move, saying the deal would save the public purse £2.95m a year. The government spokesman said that in a standard competition process which began in March, the government's procurement arm Procurement Scotland awarded the two contracts for mail services covering 89 public bodies. However, a Liberal Democrat MP held it up as an example of the "haemorrhaging" of business from Royal Mail.
Alistair Carmichael, MP for Orkney and Shetland, raised the issue in the Commons. He told Business Minister Pat McFadden: "Even without the impact of strike action we have the very alarming news in Scotland, that one of the major public sector contracts, the Procurement Scotland public sector contract which deals with the mail to NHS Scotland, colleges and most councils in Scotland is going to be given to a private sector operator. "What can he do to ensure that the haemorrhaging of business that we've seen from private business to which he has referred does not now spread to the public sector?" Mr McFadden told him: "Competition exists and it won't go away." He added: "What I want is a Royal Mail that is fit to win in that market rather than a Royal Mail that simply wishes competition to go away." The minister added: "The most fundamental challenge to Royal Mail is not competition from other mail companies - it's competition from other communication technologies and that must lie at the heart of the response to this dispute." 'Breathtaking complacency' But Mr Carmichael later called this "a breathtaking level of complacency". A Royal Mail spokesman said: "Royal Mail submitted as competitive a bid as possible for the contracts being tendered. "We are fighting hard to retain every letter we possibly can but we operate in a commercial market in which we are facing increasingly fierce competition. "That is why we urgently need to modernise our operations so we can compete and win business such as this." He said the Royal Mail's ability to compete was being damaged by the threat of "unnecessary" industrial action by the Communication Workers Union. The CWU is planning two UK-wide strikes on Thursday and Friday in a row over pay, conditions and modernisation plans.
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What I want is a Royal Mail that is fit to win in that market rather than a Royal Mail that simply wishes competition to go away
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