Postal savings for public and private sectors

By on 23/11/2010 in News

Having saved itself £570,000 in postage costs since January 2009, Birmingham City Council is now enabling other public sector bodies and potentially local businesses to benefit from its Royal Mail contract.

The contract with Royal Mail is the only one of its kind for a local authority and gives the city council a major discount on postage costs - of up to 40 per cent.

The council handles around 8,000,000 items of mail in a typical year and has the capacity to collect and process mail from other organisations within the West Midlands.

Typical savings are around 30 per cent for a letter weighing under 100g, compared to normal franking machine costs of 25p for a second class letter. The same letter processed through our wholesale mailing account costs on average 17.6p, saving 7.4p on each letter.

Cllr Randal Brew, Cabinet Member for Finance at Birmingham City Council said: “The system is very straightforward. Organisations contract with the council and follow simple mail preparation guidelines ready for processing by our in-house team.

“Royal Mail invoices the organisation direct, and the city council charges a small handling fee.

“It doesn't matter if it's one letter or many, there's a saving to be made on all of them - although the bigger the mailing, the bigger the savings.”

Several public sector organisations have already joined the council in this groundbreaking new venture, including Coventry City Council and West Midlands Fire Service. 

Cllr Phil Townshend, Cabinet Member for Corporate Services at Coventry City Council and responsible for customer services at the council, is amongst those giving his backing for the scheme.

He said: “At Coventry City Council we’ve been involving staff in helping us to become more effective and efficient right across all of our services. The wholesale postal contract is an important change in the way we manage our postal service.

“We expect to make around £128,000 worth of savings. It’s an excellent example of how our council can work with our partners to provide the best value services to our residents.

“I’m also grateful to our postal staff for their ongoing commitment to the changes taking place.”

West Midlands Fire Service said that a saving of 31 per cent on their postage costs has been achieved since they started working with Birmingham City Council.

The partnership arrangements with public sector organisations will contribute to Birmingham's costs in administrating the outbound mail service, forecast to be around £100,000 annually.

Members of Birmingham City Council's Cabinet are set to consider offering this new service to the private sector and help support local businesses in reducing their postage costs when discussing a report before them on November 29.

Cllr Randal Brew added: “We're all looking for cost-saving measures right now.

“Sometimes it's the smallest of decisions that can make the biggest of differences - and for Birmingham City Council that includes choosing not to reach for the postage stamps or put that letter through the franking machine, but to use our Outbound Mail service.”


For further information contact Kris Kowalewski on 0121 303 3621

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