Who are ZCO, who want to run Acocks Green Post Office as a franchise? A Public Consultation in Acocks Green Library, held on 22nd October 2014, answered some questions but seemed to raise many more.
The Acocks Green Public Consultation about the franchise proposal from ZCO was striking for the number of ‘suits’ in the room as much as anything else. These were representatives from both ZCO and the Post Office. There were less people in the room at the Westley Arms Hotel when the Smart Route consultations take place c. 2010 with reps from Birmingham City Council, Atkins and Centro (and a lot more literature and displays.) This time there was absolutely nothing by way of brochures and leaflets and only a short film clip of a generic modified post office model – this appears to be being financed with government funds. There was also a sketchy drawing of an interior, which we cannot have a copy of because it is ‘confidential’ and competitors might steal it, so sshhh, but the Post Office activity would happen in the centre of the shop with retail sales along the left-hand side. Visitors to the room were swept away to separate tables to get the ‘treatment’ separately. (We managed to get two tables dragged together with several Acocks Green reps on them) We were told that Acocks Green Post Office is currently costing Â£1.83 for every pound it makes. ZCO , apparently, is the answer we have all been waiting for…
So who are ZCO? The most simple answer is that the company was set up in Bolton on May 12 2014, and has no record of any kind of activity to date. It is owned by one individual who lives in Bolton and who operates from the address shown above., which is also in Bolton. This individual holds 100% of the shares in the company.
The more complex answer is that the person who owns ZCO also owns another company called ‘Potent Solutions’. Oddly it is ‘Potent Solutions’ and not ZCO which appears to be putting forward its business record to support ZCO’s franchise offer on Acocks Green Post Office. This is the company we were told about. Potent Solutions also operates from the same building as ZCO, as do another fourteen companies. Here is the full list of those companies at Unity House ZCO, Potent Solutions and another six companies share the first floor of the building pictured above along, apparently, with a shared reception office.
Potent Solutions, despite the fact that it sounds vaguely as though it might be sending out discretely plain packaged items requested by customers with anxieties about certain personal failings is, seemingly a sort of Viagra of the Post Office world, engaged instead in providing staff to flagging post offices.
At the Consultation a bemused set of Acocks Green residents were told that when a post office is in trouble Potent Solutions rides in to the rescue and has many times ensured a promptly enhanced performance. The number of post offices Potent Solutions is involved with at any one period however varies and when asked how this works both Post Office and Potent Solution staff became almost as coy as if they had actually been supplying potency enhancing medications through the post in plain packages and began to look down and mumble about confidentiality when asked for a list of actual post offices.
To Acocks Green residents Potent Solutions is becoming a very confusing organisation, not least because it is listed at Companies House as having registered as a private limited company in 2011 but as having submitted no accounts – ever – and as ‘dormant’. When asked about this the Post Office and Potent Solutions reps explained that the company had continued to trade until January 2014 as a ‘sole trader’, which means that active accounts do not need to be filed at Companies House, but only the information that company accounts are ‘dormant’. When asked why this decision had been taken, i.e. to register as a limited company, and why they had then continued as a sole trader’ the answer we received was somewhat remarkable:
He took that decision.
rrrriiiight. Next time your partner asks you why you decided to move the tea towels to a different location you may wish to remember this handy answer.
Um, seriously, why though? Our informant, a Potent Solutions employee who had been called over by a slightly uncomfortable looking Post Office rep to answer our questions didn’t know – he was not party to that decision. End of. So we don’t know how just how potent Potent Solutions are when it comes to making money. We don’t know how good at running a business they really are. We don’t know whether they are making a profit or a loss, or what the size of that profit or loss may be. When we asked whether we could see their accounts anyway we were told that that information was ‘of course commercially confidential’. Why the ‘of course’?
Potent Solutions does indeed provide staff for post offices in difficulties. They told us at the Acocks Green consultation that they were presently operating in fifty-two post offices. We were definitely confused about exactly what this meant. Discovery and inspection of a hitherto unmentioned website seems to clear away a lot of fog and mist. In plain English Potent Solutions would appear to be operating as a temporary staff recruitment agency exclusively for the Post Office However, at no time in any discussion (and all Acocks Green reps seemed to be making it clear we were becoming desperate for concrete information) was http://reliefagency.co.uk/ mentioned at all. Note there is a helpful explanation on their ‘About’ page:
www.reliefagency.co.uk powered by Potent Solutions is a trading name of Potent Solutions LTD, whose registered office is at Unity House, 1st Floor, Fletcher Street, Bolton, BL3 6NE, England.
So Potent Solutions is being described in this ‘trading name’ website as ‘Ltd’ when its accounts at Companies House are officially ‘dormant’ because it is not trading as a limited company?
The website (unlike the reps present on 22nd October) informatively goes on:
To obtain a quote on this website is completely free of charge. It is vital that all forms are completed accurately in order for us to find you the best solution. […] Each member of staff provided by Potent Solutions will be held liable for their own stock units.Potent Solutions will provide a member of staff who is fully trained on the horizon terminal. If the Post Office has any additional service i.e. MVL, AEI Machine, Lottery etc. this should be clearly marked on the relevant forms. All staff are expected to provide a great customer experience.Relief Agency have the authority to request for a deposit payable prior to staff being organised. Full payment will be requested prior to the start date. In all cases payments are non-refundable.
As the website makes clear on more pages, people wishing to work for Potent Solutions must complete an application form and send a CV. These are then assessed by Potent Solutions (back in their rented cubby hole at Unity House, presumably) and suitable applicants are then matched with post offices across the country, who need staff. It would appear that no interviewing is carried out by Potent Solutions. We are advised at the Consultation that applicants must have five GCSEs. However, here just two are requested (English and Maths). We were advised at the Consultation that training is carried out. Here there is no reference to training.
There is an interesting discussion of exactly how this all operates on this 2012 government Freedom of Information response when somebody put in arequest for information on the operations of Potent Solutions and similar companies As is explained in the FOI answer, in such instances Potent Solutions is not itself legally engaged in the process of supplying the staff as a company. Rather, the individual engaged is contracted directly to the Post Office:
We do not appoint companies as temporary sub-postmasterâ€™s we only appoint individuals, who the contract would be held by and who is liable contractually as the temporary sub-postmaster. If individuals chose to create a company that is a matter of personal choice, therefore we would not issue a contract in the name of Potent Solutions but it would be issued to a named individual.
In this way the proud claim be running fifty-two branch post office ‘this week’ would appear to acquire a lot more clarity. They are involved in fifty-two Post Office branches in the same way in which (say) Pertemps may boast that they are involved in the running of hundreds of companies to whom they have supplied staff. Note:At the Acocks Green Ward meeting on 29 October 2014 a representative from The Post Office present to put the case for the franchise of Acocks Green Post Office said that they were aware of these arrangements between Potent Solutions and temporary Post Office staff, but that the ‘named individual’ would be the owner of Potent Solutions.
However, it would appear to be true that Potent Solutions may play a role in rescuing a failing Post Office branch. Here is thesad story of Oakham Post Office a sub-post office in a Leicestershire town, run by a sub-postmaster/mistress. In these difficult times this post office got into financial trouble and some very unwise and desperate actions were taken over a period of time which, when discovered, resulted in a prison sentence.
Potent Solutions became involved when they advertised for a replacement manager for Oakham Post Office. Although it is not clear from the advertisement, presumably this was a temporary post because later this Post Office re-opened in a newsagents shop nearby as a franchise operation now owned by the Martin McColl’s chain
The franchising process is described in a letter of a now not unfamiliar type, reproduced on the Oakham based Martin Brookes blogspot You will note the reference to a ‘temporary agent’. This is clearly Potent Solutions. Incidentally, you will also note the reference to a:
[…] three year and investment and support programme, the largest in the history of the Post Office Ltd which will see about 6,000 branches (About half of the Post Office Network) converting to the new style branches.
The Rutland Times description of the new McColl’s operation (see link above) will ring bells for those who attended the Acocks Green Post Office Consultation. These new branches would appear to be part of a new central Post Office investment scheme. The wording of this earlier letter (November 2013) is slightly more explicit than the wording on ours, which talks more vaguely of a […] programme to modernise and transform the Post Office network’. However, it is also worth noting that we were assured at our Consultation that the short video showing how the new franchise post office might look was ‘similar‘ to how ours would be: Potent Solutions/ZCO are not designing any post offices of their own. We were likewise urged to inspect the new WH Smith Post Office in Kings Heath, for similar reasons. In short, it would appear that we would not have ZCO (er Potent Solutions … ) to thank for the exciting new layout.
There is a little more here. We had a blogger-to-blogger chat with Mr Brookes of the Oakham community blog. He did not think that there were any particular complaints about the way that Potent Solutions operated the Oakham Post Office for the short period that they did. However, essentially we presume that what they were doing was sourcing a new manager for the same office in the same building. Mr Brookes says that the since this post office has moved to the newsagents shop it is not actually being operated by McColl’s but rather that the day-to-day running has been out-sourced to a third party company. (Not Potent Solutions) Despite the vaunted new and modern layout this has proved unsatisfactory with customers complaining about longer queues and (amazingly, and certainly something we never thought to ask about) their post box which, presumably, was close to the old post office, has disappeared! There is no replacement. This has caused understandable annoyance too. This is not to suggest that the Potent Solutions experience would automatically be a similar one, but just to note that the newly kitted out shops do not necessarily live up to the glossy expectations.
Despite Potent Solutions and the Post Office’s shared and considerable shyness about mentioning many of the P.O.s that Potent Solutions had been involved in we have collected together the following data about further post offices:
Kentish Town Road
This name was dredged up at the Consultation as a kind of reluctant afterthought. We have located two references to this link between Kentish Town Road P.O. and Potent Solutions both, somewhat bizarrely, on FaceBook On checking further, using the post code given here, we found that according to the Post Office itself, on the last information published on its website, the branch is operated by a franchise: Shieldex Ltd.
So what happened to Sheildex? The answer seems to lie in this page below here from Companies House. By 11th April this year Shieldex, who here are described as ‘in liquidation’ were in bad trouble and were facing a Court Order to wind up.
This again, would appear to be where Potent Solutions must have stepped in, presumably, as in Oakham, supplying temporary staff during a crisis period.
Coatbridge was not mentioned to us at the Consultation, but we tracked down a further story here Again, it is clear that Coatbridge P.O. was in trouble. Potent Solutions was asked to hold the fort, presumably (since that is what they do) by supplying temporary staff:
John Wilson MSP has since been re-assured that since Potent Solutions have temporarily taken over the operation of the Coatbridge Post Office, following the departure of previous operators CJ Lang, actions are being taken to improve and monitor service levels at the Coatbridge outlet.
We have written to Mr Wilson to ask if he can cast any more light on Potent Solutions’s subsequent performance at Coatbridge Post Office, but have, so far, received no reply.
Apparently Rochdale P.O. after being run by Potent Solutions, won the ‘Financial Services of the Year Award’. We can trace zero references to the ‘Financial Services of the Year Award’ itself, let alone to Rochdale Post Office (which Post Office in Rochdale, is there only one?) ever winning it. Anyone else able to help?
So, in summary, Potent Solutions are a temporary staff recruitment agency specialising in Post Office employment. They are called in when there is a crisis in a Post Office and then they supply staff, on a short-term basis: staff selected via an on-line application form and CV.
Why could this not have been made more clear in the ‘Consultation’? Why was everyone left slightly confused as to what they really did, or how Potent Solutions could be running fifty-two P.O. branches yet be prepared to part with so few names of branches whilst muttering instead about ‘confidentiality’. Why was the phrase ‘temporary staff recruitment agency’ never even mentioned, let alone the website? Does this suggest that some people were slightly uncomfortable with some aspects of the truth?
We were assured that one of the main ways in which the sparkling new ZCO could save more money than the present ailing Acocks Green Post Office would be by moving into cheaper premises. The present premises are very expensive, and the old Spot On site is cheaper, we learned. Well, hmm. it depends what you mean by cheap. Take a looksie at this: the rent on the building is Â£48,000 p.a. The rates are Â£22,75.70 p.a. That’s just over a cool 70K. a year to be found simply on legally keeping the building, without running costs. On the other hand, you might check outthese buildings in the Arden House complex which is where Acocks Green Post Office currently is. There is a slight variation on size of unit, but taking the largest one mentioned here (which is close to the largest available on the whole site) then the rent p.a. is Â£33,500. The rates (click on the Pdf sign) are Â£13,496.00 p.a. meaning the basic yearly cost is just under 47K. So the Spot On premises would cost around 23K more.
Ah, but, and there is a big but which we have not failed to notice: the Spot On premises at 2,232 square feet are slightly more than double the size of the Arden House shop unit at 1,083 square feet. So that’s good value for money then? Well, yes, obviously it could be. But it does not represent a saving. The extra money for this extra space will clearly have to be found, and more besides, in order not only merely to match-up to the loss-making running of the present expensive P.O., but in order to make a profit.
So, where else is the money to come from? Staff, we were told, would be cheaper. Unions at the moment ensure high rates of pay for staff. The Potential Solutions staff would be between 25% and 30% cheaper. However, whilst staff may come cheaper there will also need to be more of them in order to cover the longer serving hours of 7.00 am- 7 pm, and whilst yes, there will be fewer service points than at Acocks Green Post Office, the Acocks Green Post Office Manager (She was there at the Consultation to support ZCO) was at great pains to stress that these days it is very rare that more than five serving hatches at a time are staffed at the P.O. because of those staffing costs. So how much is really going to be saved in this way in order to off-set the Â£23,000 higher costs in space?
Ah … but then there is to be the new retail side: the ‘newspapers, tobacco, confectionery and, um, ‘shopping’. This, surely, would be the way to make lots of money, and to recoup other costs? This is the whole point of the extra space? The problematic side of this has already been explored by us in ourmain post on this topic. How well is this particular set of commodities sales going to fare when surrounded by other similar businesses? We put this question to the Potent Solutions reps at the Consultation and were somewhat astonished by the response. A survey had been carried out, they said. The existing shops: chains like Supernews over the road for example, were quite happy with it all. So who had carried out this survey? Er, Costcutter and Spar: together it seemed. Could we have the details? No we’d have to contact Costcutter and Spar. Costcutter and Spar were referred to as names at this point so many times in the same breath that we probably all rather began to assume that there had been some kind of a merger, or acquisition in the recent past. Research however shows that although both chains have been in various discussions with other supermarkets like Mace and Morrison’s there is no hint or trace anywhere of any kind of a link between the two convenience store chains. Can anyone else spot one?
So did both Costcutter and Spar specialise in doing surveys for other organisations as a sideline? Did they carry out separate surveys? Did they both hire the same organisation to do a survey for them? All we could get from Potent Solutions was that we would have to contact ‘CostcutterandSpar’ to find out more. Could they at least give us some contact details? Nope. We’d have to look up CostcutterandSpar for ourselves.
Just as we were beginning to feel rather out of our depth at this bizarre and opaque feeling response they let slip something not mentioned anywhere before. It seemed to sort of come out before they could stop themselves. They were in negotiation with CostcutterandSpar about a kind of sub-franchise arrangement covering the none-post office side of the shop. They were not yet completely sure how it would work, or even what ranges of goods they would carry because CostcutterandSpar had not signed any contracts, and they would not be able to until the franchise arrangement was certain. They did not really want to run the shop side of things themselves: they have never done this before. If the negotiations with, er, CostcutterandSpar fell through, what then? Oh, they muttered, perhaps again before they quite realised what they were muttering … but Acocks Green has sharp ears … they would have to open new negotiations with another franchise partner. What was that? They would, er, have to try to find a new franchise partner and open up new negotiations.
So: let’s re-cap again so far: Potent Solutions are a temporary staff recruitment agency specialising in sourcing temporary staff for post offices, especially those finding themselves in sudden difficulty. This appears to be a useful service, although it is one they have been carrying on since just 2011 and their accounts are still ‘confidential’ and will remain so until 2015. Do they (as opposed to the various staff they source) have any experience of actually setting up and running all aspects of a post office, and managing all aspects of accounting. Have they ever done that from the cubby hole in Bolton? The answer would appear to be no. Beyond that, have they ever operated a shop of any kind whatsoever? They admitted they had not. Have they ever successfully negotiated and set up with another franchise holder as a partner? The answer is clearly no. Would CostcutterandSpar want to run what would be essentially a ‘Convenience Store’ of the type usually found in small blocks of suburban shops, off the main High Street, and in villages, right in the middle of a busy High Street shopping centre with an Iceland, a Sainsbury’s and a Supernews all very near-by? It is clear that not even Potent Solutions really know the answer to that question right now … which is exactly why, a few weeks before they would open this franchise post office/shop they cannot even comfortably differentiate between two different conveniences store chains, or say which one they might most likely be going with?
Beyond the somewhat niggling question of how ‘potent’ are the ‘solutions’ of Potent Solutions when it comes to taking over Acocks Green Post Office there are still yet a few other questions:
Potent Solutions and ZCO
Potent Solutions do appear to have a track record as a company, even if they do not have precisely the kind of background one might expect for actually opening and running a post office and general store operation. However, Potent Solutions is not ZCO, which has no track-record at all. Is Potent Solutions able and prepared to entirely finance ZCO? Not only do we know nothing about their accounts, we have no way of knowing whether or not the first company is able to take the second company under its wing. Do they not have their own running costs to worry about, and need their own staff for that?
However, ZCO seems confident about jumping in at the deep end. We understand that applications to run three post office franchise; two in the Midlands have been made: Acocks Green, Chelmsley Wood and another one: Huyton Post Office in Merseyside.
AA Postal Services and ZCO
There is also the puzzling story of AA Postal Services Ltd.
This company was started in 2005 and finally dissolved in 2010 – it applied to Companies House for a voluntary strike-off, initially in 2008, and then there was a request to suspend this and the company was finally struck-off in 2010. In its entire period of registration, and like Potent Solutions, it filed no accounts. Ever. One of its directors shared the same (slightly unusual seeming) first name with the director of Potent Solutions and ZCO, as well as having the same (more common) surname. This same director also shares the same date of birth with the owner of Potent Solutions and ZCO, and shared the same bank. The accountancy firm used was based in the ZCO and Potent Solutions address, at Unity House, Bolton. Two of the addresses given for the company prove to be post offices in Bury and in Farnworth.
It was also proudly mentioned to us at the Consultation that Potent Solutions had once won a ‘golden ticket’ award for their performance at Bury Post Office. (We can find no trace of this award, although this appears to be given by the Post Office to postmasters at sub-post offices. Instead we found the story of a postmaster couple winning such an award at a Post Office in Bury St Edmunds. They seem to have enjoyed a special day out to Henley Regatta, as opposed, sadly, to Willy Wonka’s Chocolate Factory The Bury St Edmund’s story is included mainly for explanation of the phrase ‘Golden Ticket’.) What is perhaps more immediately interesting from the point of view of establishing a history of linked company activity however is that on checking with The Land Registry we find that whilst the name of on the Title Deed for Bury Post Office appears to have been a director for AA Postal Services the lease of the Farnworth Post Office still appears to be held by AA Postal Services Ltd. This post office also seems to have beenthe subject of an expensive Post Office Ltd funded refurbishment in 2011 and the lease was recently listed as for sale.
Whilst there is nothing obviously wrong in all of this it does seem slightly puzzling that (1) Having registered AA Postal Services Ltd as a limited company throughout the five years of its existence there was never any attempt to submit accounts: the pattern which has been repeated with Potent Solutions, and (2) If the aim is to build a successful chain of post offices (as the then why sell the Farnworth P.O. lease … if this P.O. was successful? Note at the Acocks Green Ward Meeting on 29 October 2014 one of the two Post Office representatives present to put the case for the ZCO post office Franchise in Acocks Green admitted that they were aware of the previous existence of AA Postal Services and named the other of the two directors but said they had no knowledge of the five year registration period at Companies House.
In summary: after this consultation we remain concerned about the suitability and experience of this applicant for the running of the franchised branch of Acocks Green Post Office, and also continue to be concerned about the proposed location itself.