The chairman of the Post Office has warned postmasters that the state-owned company faces a fight to deliver a previously pledged pay uplift this year amid protracted government funding talks.
Sky News has learnt that Nigel Railton, who was parachuted into the role last year, told thousands of Post Office managers this week that he had yet to gain certainty from Whitehall about a £120m increase for this year.
The sum was promised in November as part of a strategy to rebuild the Post Office in the wake of the Horizon IT scandal.
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However, in remarks made to sub-postmasters on Tuesday, Mr Railton is understood to have said: “Our funding discussions are positive and ongoing, but I want to be honest that we are operating in a challenging financial environment.
“We are able to pay an additional £17m in remuneration for April and May trading, representing a 25% year on year increase,” he said, according to one person who attended the online conference.
“The reality is that as we build towards delivering a further £100 million uplift is that we are likely to have a series of incremental announcements over the next 12 months, as we make progress with our funding submissions.”
Mr Railton is understood to have told managers that he anticipated a further update from the government “in the next few weeks, with a final decision likely in June,” the source said.
The Post Office chairman acknowledged that “this is far from ideal – I want to give you more financial certainty for future years”, they added.
The Post Office is reliant on funding from the government, and has outlined plans for an ambitious transformation plan which includes franchising more than 100 directly managed branches.
A substantial number of jobs are also being cut at the company’s head office as part of the restructuring.
