The Royal Mint, based in Llantrisant, South Wales, has been roundly slammed by
the National Audit Office, for trading losses and thefts in the 2001 to 2002
financial year, and its failure to undertake regular audits.
One expects the Royal Mint, which has been producing bank notes and coins for
the past thousand years, to be one of the most secure companies in the UK, but
that did not stop the theft of over 25,000 GBP in 20 pound notes.
A few thousand pounds may not be a lot, but it's an incredible embarrassment
to the Mint, the Ministry of Defence Police who guard the site, and its new
Chief Executive, Gerald Sheehan, who can expect a serious grilling before
the Public Accounts Committee.
An investigation by the Ministry Defence Police has failed to
solve the mystery of where the money has gone, and who has taken it, but
their investigations revealed further breaches of security including a safe
in the Gold Store which was not only badly located, but also left unlocked.
When it was locked, the keys to the safe were not even held securely.
Employees are prone to walking of with company biros, notebooks, erasers and
rulers, and some have been known to take the company toilet rolls and light
bulbs, but most companies do their best to stop the theft of real valuables,
and have some mechanisms in place to combat, and detect, workplace crime. None
that I know of deliberately leave money lying around, begging to be taken.
The theft of bank notes only came to light during an audit in December
2001, and the crime is believed to have taken place some eight months earlier.
It also appears that only one stock check had been undertaken on the insecure
Gold Store safe in the year.
The theft of money is not the only scandal to have hit the Mint in recent times.
The Serious Fraud Office and Ministry of Defence Police are continuing
investigations into allegations of improper payments being made by the Mint,
and are investigating a Breach of Contract claim from a commercial rival; the
Birmingham Mint, who are seeking 5.4 million GBP damages from the Mint.
The Royal Mint made a loss of 6.5 million GBP in the 2001-2002 period, but that
excludes a 12 million GBP 'restructuring programme', which has resulted in 220
redundancies, and has reduced staffing levels to 1,000.
The Annual Report on the Royal Mint shows that sales had dropped by 17.2% on
the previous year and totalled 79.7 million GBP. Over 30% of sales were coins
and blanks sold overseas and a major factor in the decline in business has
been cited as a drop in demand, as much of Europe adopted the Euro as its
sole currency.
The Collector Coin market has become greatly subdued, but this was offset by
sales of commemorative coins and orders from the Ministry of Defence and the
Department of Culture, Media and Sport for the supply of substantial numbers
of Golden Jubilee medals.
Perhaps a change of Monarch may help the Mint boost its ailing business, but
it is unclear how well a Queen Camilla commemorative coin would flourish. The
only other hope it may have is in the production of War Medals. If we see the
Mint suggesting a change of Monarch, or arguing the case for an escalation
in the battle against terrorism, we will know that the ideas have made it to
the boardroom.
If the losses continue to rise, we'll know it's business as usual; and many
will cite it as another case of "privatisation", gone wrong.
The head of the National Audit Office, Sir John Bourn, has said that much of
the Mint's performance problems can be put down to, "The external pressures of
a highly competitive global market", and acknowledged that, "The Mint now
faces a challenging and painful period of restructuring as it seeks to return
to overall profitability".
The Royal Mint not only produces bank notes, coins and blanks, but is also a
Government Trading Fund, and as such is required to operate as a commercial
concern and must at least break even.
If the Mint doesn't buck its ideas up, this being the second year in which it
has reported operating losses, it is likely that the Treasury, to whom it is
responsible, will impose budget cuts upon it.
The question most people will be asking though is, how can a company which
prints its own money end up in debt ?
