CASH tight Herefordshire Council has a plan to save £70,000 a year by cutting postal costs – but critics say it can’t deliver.

A new contract means mail service TNT now sorts the council’s second class post for Royal Mail, with the saving put at around 7p an item toward an annual £70,000 saving. The council sends out around 1,400 items of second class post each day. But last week the council’s sums were questioned with claims that the new contract meant much more mail would have to go out to keep the savings target in sight.

Councillor Aubrey Oliver told a meeting of the full council last Friday that with an average 1,400 items going out each day the figures didn’t add up.

Coun Oliver said that, according to his sums, which discounted Saturdays and Sundays, at least 3,800 or so items would have to go out daily to meet the target. As it was, the plan fell short by well over £36,000, he said.

Councillor Harry Bramer, cabinet member for resources, said he had “no doubt” that £70,000 would be saved once the full benefits of the new contract were felt and the numbers of items handled grew.

Cutting postal costs is an element of the council’s cash plans for the next four years as the authority aims for an overall year-on-year saving of £750,000.

The TNT contract sees the company collecting second class post from council offices and being paid a fee per item to sort it. Royal Mail then collects the sorted post and makes the final delivery.

According to the council’s figures, this arrangement saves around 7p an item compared to the previous deal with Royal Mail.

At Friday’s meeting, councillors heard that the contract with TNT runs out in 2010 and fees paid to the company are guaranteed until then.

Coun Bramer told members that the contract gave the council “total flexibility” to pilot a new initiative. He said that around 1,400 items of second class post a day had been handled by TNT in the first month of operation, with this number expected to rise as more buildings were brought into the arrangement.

“Where the new arrangement proves not to be practical, the council will pursue cost reductions with Royal Mail, although we do not expect this to produce the same level of saving,” said Coun Bramer.

Reviewing the review.

Herefordshire Council called in two sets of consultants to sort out its postal services – one to carry out a review and the other to review the result.

On Friday, councillors heard that the consultancy company Civica UK was paid £16,000 for the initial review, with the cost shared equally between the council and the West Midlands Centre of Excellence, a regional body promoting procurement efficiency.

But the council didn’t have the in-house capacity to review Civica’s work so this was done by another firm, Stemnore, at a cost of £4,500.

The total one-off cost to the council for the entire review process was £12,500, said Coun Bramer.