Postal and communication strategies within local authorities. · ©2012 Neopost Page 3 Postal and...

Postal and communication strategies within local authorities.A White Paper from Neopost

Cut Costs

Improve Productivity

Communicate more effectively

Manage the mail process

©2012 Neopost

©2012 Neopost

Postal and communication strategies within local authorities | White Paper

IntroductionFollowing the 2010 Spending Review, in which Chancellor George Osborne announced public sector cuts of £81 billion, central and local Government have come under great pressure to save money and make existing operations more efficient.

At the same time, they are being encouraged to shrink their carbon footprint as part of a wider, legally binding commitment by the Government to cut greenhouse gas emissions by 80% (from 1990 levels) by 2050, with an interim target of a 34% reduction by 2020.

The scale of the financial and carbon savings involved has forced managers to re-assess all aspects of their operations, including postal communications, an area already undergoing significant change due to the rise of electronic messaging, the decline in postal volumes and the emergence of new service providers following liberalisation of the postal market in 2004.

Mail is a significant area of government expenditure: the Government Procurement Service (GPS) has calculated that the wider public sector spends more than £650 million each year on postage and postal services and that smarter procurement could cut these costs by between 9% and 30%.

Despite its many qualities and effectiveness as a communication medium, physical mail is also a source of greenhouse gas emissions.

Using mailing equipment and software to make mailing processes more efficient and less wasteful can clearly help public sector organisations with their cost- and carbon-cutting agenda. But to what extent is investment in the post room being integrated with these wider aims?

Postal & Communications Strategies Surveys 2012 Earlier this year, Neopost commissioned the Government Policy Hub (GPH) to carry out a series of surveys to build a detailed picture of the current state of postal & communications strategies within local authorities and to gauge the opinions of those whose job it is to develop and implement them.

The first of these, published here, focuses on postal and communication strategies within local authorities, which account for almost one third of the public sector's total annual expenditure on mailing.

In March 2012, GPH developed a 21-question survey which it sent to 5,000 A, B and C-level executives in more than 480 organisations throughout the UK. This generated a total of 248 complete responses from 38% of the local authorities targeted. All responses were reviewed and consolidated to produce the findings published in this white paper.

Mail is a

significant area

of Government

expenditure...

©2012 Neopost


Fewer than one

in five has a

written postal and

communications

strategy...

Postal & Communications Strategies Survey 2012: Local Authorities

Executive Summary

Cost cutting is at the top of the agenda for local authorities, but the failure of many to develop a comprehensive postal and communications strategy could prevent them from making the most of opportunities to save money and increase the effectiveness of postal and digital communications.

More than half the respondents to the first Neopost Postal & Communications Strategies Survey 2012 have reduced their postal budget in the last 18 months and 60% expect further cuts in the next year and half.

In addition, a majority of respondents plan to reduce volumes of both incoming and outgoing mail over the next 12 months.

These developments have serious implications for how local authorities communicate with the public. Yet, fewer than one in five has a written postal and communications strategy to help manage the transition to an integrated communications infrastructure that will be necessary as local authorities encourage people to switch from postal communications to digital channels in line with Digital Britain’s 2020 vision.

This is despite the fact that local authorities are already integrating mail processes with the broader information and communications technologies (ICT) infrastructure. Ten per cent of respondents have already centralised postal and electronic communications and more than half (54%) are either in the process of doing so or are actively gaining an insight into the subject.

Carbon reductionsA similar pattern is evident in local authorities’ approach to sustainability and carbon reduction strategies. Highlighting the impact that communications choices can have on greenhouse gas emissions, 70% of respondents plan to eliminate waste from mailing processes and a similar proportion expect to reduce mail volumes Yet, just 4% of respondents said that they had aligned postal communication services to meet carbon reduction targets, with another 4% in the advanced planning stage.

Working in isolationLocal authorities regularly engage with suppliers to find out about new mailing solutions, but still prefer in-house knowledge to external expertise when developing a postal and communications strategy: just 6% of local authorities have enlisted external advice when creating a strategy, with a further 5% planning to do so. This raises the question of whether local authorities could work more closely with suppliers to ensure that targets for efficiency savings and productivity gains are met.

Postal Communications Strategies

Fewer than one in five local authorities (17%) already has a written postal communications strategy, despite the National Audit Office’s recommendation that all public sector bodies should work towards developing one. Even so, the survey findings suggest that awareness of the benefits of having a strategy is increasing: half of existing policies have been written in the last 12 months and a further 12% of local authorities are currently in the process of creating one.

In-house knowledge is preferred to external expertise when developing a postal communications strategy, with just 6% of local authorities having enlisted external advice when creating a strategy and 5% expecting to do so. This raises the question of whether more organisations would have written policies if they made more use of external expertise.

Q. Have you developed a postal communications strategy?

Q. If yes, when was it written?

Q. Have you or will you use external expertise to prepare the strategy?

©2012 Neopost


No: 111 (45%)

Not yet written: 29 (12%)

Don’t know: 66 (26%)

Yes: 42 (17%)

Under a year ago: 22 (9%)

1-3 years ago: 21 (8%)

Over 3 years ago: 4 (2%)

Don’t know: 201 (81%)

Have used: 14 (6%)

Will use: 13 (5%)

Will not use: (28%)

Don’t know: 152 (61%)

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©2012 Neopost


Postal Services BudgetsDespite the rising cost of postage, local authorities have seen significant reductions in postal budgets over the last 18 months. Less than a quarter of respondents said that their budgets were unchanged, compared to 30% that have seen cuts of at least 10%. As many as 6% have had their budgets reduced by more than 35%. This trend is set to continue over the next year and a half, with 28% of local authorities anticipating reductions of 10% or more. Just 12% have no plans to reduce postal budgets over the next 18 months.

Q. By how much have you reduced your postal services budget over the last 18 months?

Q. By how much do you expect to reduce your budget over the next 18 months?

Not reduced: 43 (22%)

1-5%: 15 (7%)

5-10%: 27 (14%)

10-20%: 38 (19%)

20-35%: 11 (5%)

More than 35%: 12 (6%)


No plans to reduce: 23 (12%)

1-5%: 17 (9%)

5-10%: 42 (21%)

10-20%: 34 (17%)

20-35%: 18 (9%)

More than 35%: 5 (2%)


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Mail VolumesLocal authorities depend on the post to communicate with residents and businesses. More than one third of those surveyed send more than 200,000 items each year and almost one in 10 send in excess of one million items. However, almost three quarters (73%) of local authorities expect to send fewer items over the next 12 months. More than half (57%) expect to receive less incoming mail, too, as the public choose to communicate by electronic methods. Despite the importance and cost of mail to local authorities, almost one third of respondents don't know how many items of mail they send each year.

Q. How many items of mail do you post on average per year?

©2012 Neopost


Q. Do you plan to increase or decrease outgoing mail over the next 12 months?

Increase: 6 (4%)

Decrease: 118 (73%)


Q. How many items of post do you receive on average per year?

Q. Do you plan to increase or decrease incoming mail over the next 12 months?

Increase: 5 (3%)

Decrease: 91 (57%)


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Less than 10k: 6 (4%)10-50k: 14 (9%)

50-100k: 20 (12%)100-200k: 15 (9%)

200-500k: 29 (18%)500-1M: 13 (8%)

More than 1M: 14 (9%)Don’t Know: 50 (31%)

Less than 5k: 6 (4%)5-25k: 14 (9%)25-50k: 6 (4%)

50-100k: 14 (9%)100-250k: 19 (12%)

250-500k: 9 (5%)Over 500k: 18 (11%)


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©2012 Neopost


The Post Room in Local Authorities

Post rooms in local authorities are still largely operated and managed in-house. Despite the trend for outsourcing non-core services, such as print, and third party providers’ promise of efficiency and cost-savings, just 3% of local authority mail rooms are fully outsourced, compared to 77% that are run internally. However, there is evidence of some flexibility, with more than one in 10 post rooms run either as a shared service with another organisation (4%) or as a partially outsourced operation (8%). The fact that four out of 10 local authority post rooms serve five or more sites may be a contributory factor to growing interest in the digitisation of incoming mail (see page 9).

Q. How many sites does your post room service?

Q. How many staff are employed in the post room?

Q. What best describes the status of your postal service?

Run internally: 120 (77%)

Shared service: 6 (4%)

Outsourced: 5 (3%)

A combination: 12 (8%)


1-5: 76 (49%)

5-10: 17 (11%)

10-15: 7 (4%)

More than 15: 37 (24%)


1-5: 83 (54%)

5-10: 33 (21%)

More than 10: 17 (11%)


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©2012 Neopost

Postal communications & the environment

Mindful of the need for more sustainable and cost-effective business practices, seven out of 10 respondents say that they are making efforts to reduce waste from mail processes. Perhaps due to the small number of organisations that have a written postal communications strategy, few have aligned such efforts with formal carbon reduction targets. Just 4% of respondents claim to have done so and a further 4% are in the advanced planning stage. Even so, awareness of the need to so do is high, with four out of 10 respondents either actively gaining insight into the issue or recognising that more planning is needed.

Q. To what extent has your postal communications service been aligned to meet upcoming legislation targets around carbon reduction?


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Q. Are you exploring ways to reduce controllable waste further?

Not yet: 42 (28%)

Gaining insight: 28 (19%)

More planning needed: 30 (20%)

In advanced planning: 6 (4%)

Fully aligned: 6 (4%)


Yes: 105 (70%)

No: 9 (6%)


©2012 Neopost


Mail & Digital Communications

Recognition of the economic and productivity benefits of integrating physical and digital mail and offering customers a choice of communication method has made it a key focus for local authorities, with just 3% of respondents stating categorically that they would not centralise physical and digital mail. Although just 10% of respondents have already completed the process, more than half (54%) are either in the process of centralising postal and electronic communications or are actively gaining an insight into the subject. Similar take-up levels are recorded for the digitisation and electronic routing of incoming mail: a quarter of respondents have already implemented or are in the process of implementing scanning in the mailroom, with a further 47% exploring its possibilities.

Q. Has your organisation completed or are you looking into the centralisation of both physical and digital mail?

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Yes, completed: 15 (10%)

In process: 29 (19%)


No: 9 (6%)

No, will not centralise: 4 (3%)


Q. Has your organisation completed or are you looking into the digitisation of mail?

Yes, completed: 7 (5%)

In process: 26 (18%)


No, probably not: 15 (10%)


©2012 Neopost


Procurement

Framework Agreements are the preferred method of procuring mailroom equipment and services, cited by 58% of respondents. Yet awareness of individual professional buying organisations is low, perhaps reflecting their regional nature. Pro 5, a partnership of the largest public sector buying organisations with a combined purchasing power of more than £2 billion per annum that aims to create national framework agreements for local authorities and the wider public sector across England and Wales, is recognised by just 7% of respondents.

Q. Which providers have you talked to in the last 18 months with reference to innovations?

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FP Mailing: 19 (8%)

Neopost: 52 (23%)

Piney Bowes: 44 (19%)

Royal Mail: 68 (29%)


ESPO: 51 (22%)

GPS: 72 (31%)

GPS – Hybrid Mail: 33 (14%)

Pro5: 15 (7%)

YPO: 17 (7%)

None of the above: 45 (19%)

Q. Please select all the Framework Agreements you are aware of.

Q. Where available, are Framework Agreements your preferred procurement route?

Yes: 83 (58%)

No: 7 (5%)


Q. If no, why?

Not aware of any frameworks: 2 (28%)

They don’t offer value for money: 3 (43%)

Prefer other routes: 2 (29%)

©2012 Neopost


Mailroom Technology

The potential of modern mailroom equipment to improve productivity and cut costs from every aspect of the mailing process, from the opening and processing of incoming mail to the use of franking machines to maximise postal discounts, is reflected in local authorities’ investment priorities for the next 18 months. The desire to speed up the processing of incoming mail, integrate it with electronic records and reduce the amount of paper circulating around a business is generating great interest in the digitisation of incoming mail (cited by 55%). This might also explain the high reading for mail scanners (51%), if respondents confused document scanners and mail security scanners. Franking machines, folder-inserters (enveloping systems) and address data verification all scored highly, as did secure email, which combines the trustworthiness of a posted letter with paperless, electronic distribution.

Q. Please select from the list, solutions you will be looking at over the next 18 months.

About Neopost

Neopost is the UK’s and Europe’s number one supplier of mailing solutions. Our products and services are sold in more than 90 countries and in 2011 we recorded sales of 1 billion euros.

With expertise in traditional and digital communications, Neopost supplies the most technologically advanced solutions for franking, folding/inserting, addressing, logistics management and traceability, plus a full range of services, including consultancy, maintenance and financing solutions.

We are the only manufacturer from the postal solutions industry to have served local authority purchasing consortia, central government and the wider public sector on successive framework agreements for 15 consecutive years.

Neopost is an approved supplier to Pro5, a partnership of the UK’s largest local authority professional buying organisations (CBC, ESPO, NEPO and YPO) with a collective spending power of £2 billion per annum.

To find out more, please visit www.neopost.co.uk/public-sector

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Address data verification: 29%

Address printers: 14%

Digitisation: 55%

Downstream access: 22%

Franking machines: 37%

Enveloping systems: 29%

Letter openers: 15%

Mail scanners: 51%

Secure email: 28%

Shredders: 16%

What Next?To help local authorities identify how they can improve their mailing process, Neopost offers free, no obligation audits, from which we are able to develop bespoke communications solutions and strategies.

For more information, please contact Antony Paul on 01708 714576 or email [email protected].

Neopost House South Street Romford Essex RM1 2AR

Tel: 0800 731 1334Fax: 01708 726361

www.neopost.co.uk.

©2012 Neopost


Survey Participants

Neopost and Government Policy Hub would like to thank the following organisations for taking part in the Postal & Communications Strategies Survey 2012: Local Authorities, with special thanks to those who took the time to offer additional insight through extra comments and observations.

Aberdeenshire CouncilAdult Social Care, Wrexham CBCArmagh City and District CouncilAshfield District CouncilAshford Borough CouncilBabergh District Council Ballymena Borough Council Basildon Borough Council Boston Borough Council Bournemouth Borough Council Bradford Council Brent CouncilBrighton & Hove City CouncilBristol City CouncilBroadland District CouncilBromsgrove Borough CouncilBroxbourne Borough CouncilBury MBCCambridgeshire County CouncilCamden CouncilCanterbury City CouncilCastle Point Borough CouncilCentral Bedfordshire CouncilCentroCheshire East CouncilCheshire West & Chester CouncilChichester District CouncilChristchurch Borough CouncilCity & County of SwanseaCity of Bradford MDCCity of Lincoln CouncilCity of York CouncilComhairle Nan Eilean SiarConwy County Borough CouncilCookstown District CouncilCorby Borough CouncilCornwall CouncilCouncil of the Isles of ScillyCoventry City CouncilCraigavon Borough Council CW & C Council Dacorum Borough Council Daventry District CouncilDerby City Council

Derbyshire County CouncilDevon County CouncilDundee City CouncilDurham County Council Ealing CouncilEast Cambridgeshire DCEast Hampshire District CouncilEast Hertfordshire District CouncilEast Northamptonshire CouncilEast Riding of Yorkshire CouncilEast Sussex County CouncilEastbourne Borough CouncilEastern Facilities Managament SolutionsEastleigh Borough CouncilEpsom & Ewell Borough CouncilErewash Borough Council ESCCExeter City CouncilFalkirk CouncilFenland District CouncilFife CouncilGravesham BCGreater London AuthorityHastings Borough CouncilHertsmere Borough Council High Peak Borough CouncilHinkley & Bosworth BCImprovement & Efficiency WM Improvement East Kent County CouncilKirklees CouncilLancashire County CouncilLancaster City Council LBBD Leeds City CouncilLeicester City Council Leicestershire County CouncilLewes District CouncilLincoln City CouncilLiverpool City LB Barking and Dagenham Council LB BarnetLB Bexley

LB BromleyLB Hammersmith & FulhamLB HarrowLB Havering LB Hillingdon LB Hounslow LB IslingtonLB Richmond LB Sutton upon ThamesMaldon District Council Malvern Hills District CouncilManchester City CouncilMid Devon District CouncilMid Suffolk District CouncilMiddlesborough CouncilMidlothian CouncilNeath Port Talbot County BC New Forest District CouncilNewport City CouncilNorth Ayrshire CouncilNorth Dorset District CouncilNorth East Derbyshire DC North Hertfordshire DC North Lincs Council North Warwickshire BC North West Leicestershire DC Nottingham City Council Oldham MBCPerth & Kinross CouncilPurbeck District Council RBWM Redcar & Cleveland BCRenfrewshire CouncilRochford District Council Royal Borough of Greenwich Rugby Borough Council Runnymede Borough Council Rutland County Council Sandwell MBC Scarborough Borough Council Sheffield City Council Shepway District Council Shetland Islands Council Slough Borough CouncilSomerset County Council

South Ayrshire Council South Kesteven District Council South Lanarkshire Council South Norfolk Council South Somerset District Council South Staffordshire Council S Yorkshire Joint Secretariat S Yorkshire PSE St Edmundsbury Borough Council Staffordshire County Council Staffordshire Moorlands DC Stockport MBC Stoke on Trent City Council Suffolk Coastal District Council Swale Borough CouncilSwindon Borough Council Tamworth Borough Council TfGM Three Rivers Council Thurrock Council Wakefield Council Walsall Council Warrington Borough Council Warwick District Council Warwickshire County Council Watford Borough Council WCBC Welwyn Hatfield Borough Council West Berkshire Council West Oxfordshire District Council West Somerset District Council Western Education & Library Board Wigan Council Wiltshire Council Winchester City Council Wirral MBC Woking Borough Council Wokingham Borough Council Worthing Borough Council Wrexham County Borough Council Wychavon District Council Wyre Borough CouncilWyre Council

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