A restructured, modernised Royal Mail and Post Office as a not-for-profit company would have the ability to borrow to invest in new technology, without affecting government borrowing limits, as does Network Rail. It would bring in new management and prevent the nonsensical separation of post offices from mail. Entrepreneurial new managers would seize the wasted commercial potential in post office spaces.

How do you get entrepreneurial motivation in a not for profit Polly?

Just askin\’ like…..

7 thoughts on “Erm…”

  1. I think the standard answer is something like that even in not-for-profits, managers are assumed to enjoy spending money (say, ‘doing good’, empire building, paying higher wages, vanity projects) hence have an incentive to increase the organisation’s surplus. You could even tie management salaries to surplus generation.

    Lots of models of not-for-profits even assume that mangers derive direct utility from the quantity of output produced (i.e. they care about what the organisation does). Such an assumption is debatable, obviously.

  2. Daft. They should just sell the whole thing off and liberalise the market. There’s no public benefit to having a monopoly in parcel delivery.

    Incidently, Network Rail funds itself through an SPV which only asset is a letter from the Secretary of State saying that the government guarantees everything. Such a structure provides absolutely no incentive to invest proceeds wisely as they can always borrower more to repay their debts using the government’s credit.

  3. “Just askin’ like…..”: oh no you’re not. You’re poking fun at the old cretin.

  4. “It would bring in new management and prevent the nonsensical separation of post offices from mail.”

    This completely contradicts the analogy with Network Rail, where the “natural monopoly” element (the rails) are operated as a not-for-profit, but the use of them is open to competition. You could even argue the same thing about the roads, which are operated by the state with people able to run competing buses (with the exception of London), taxis, haulage, etc. on them.

    If someone was trying to replicate the Network Rail model, they’d completely separate the post offices and the mail, operate the mail (which is the element with natural monopoly characteristics) as a not for profit and leave the supply of post offices to the market.

  5. Why should those in the cities subsidise the postal costs of those who choose to live in the country?

    Maybe a Postal Cost Tax could be worked out on a per property basis?

  6. Maybe a Postal Cost Tax could be worked out on a per property basis?

    Why should those who can live perfectly well without snail mail subsidize the postal costs of mass mailers?

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