POSTAL group Consignia has reported a pre-tax loss of £1.1bn for the last financial year.

The group, which employs 2,500 staff at its offices in Darlington, Durham and Teesside, has already put in place a three-year renewal plan to stem the losses and return it to profit.

However, the plan will lead to about 17,000 job losses at the group, although Nick Morgan, area manager for Darlington, Durham and Teesside, does not expect much impact in his area.

He said: "Unlike some other areas of the business, we have already restructured our operations, so the impact on jobs in the Tees Valley will not be as severe as elsewhere."

Consignia also plans to change its corporate name to the Royal Mail Group by the end of this year.

Mr Morgan said this was due, in part, to the confusion caused by the Consignia name, which many people did not fully understand.

He said: "There was universal dislike for the Consignia name among our customers, who just didn't understand it.

"As a result, we have decided to move back to a more familiar name, and will become Royal Mail Group plc by the end of this year."

Other changes involve the rescheduling of postal deliveries, which is anticipated to save the group £350m a year.

The group plans to scrap the second post, moving to a single delivery at a consistent time, six days a week.

Mr Morgan said: "At present, the second delivery, which the majority of addresses are scheduled to receive, accounts for 20 per cent of Royal Mail's total costs and 30 per cent of the time taken to deliver letters. But it only delivers four per cent of mail.

"By making changes to the delivery times of the post, starting for instance at 9am, we can deliver far more of the mail first time around.

"Earlier deliveries will be made between 7am and 9am for businesses receiving more than 20 items of post a day."

He added: "We are looking to protect our business customers and have to put them first, especially with the increased competition that is set to be allowed in to the postal sector."

A pilot scheme for the deliveries will start next month and Thirsk, in North Yorkshire, is one of the areas selected.

Consignia lost £318m on its day-to-day operations, equivalent to £1.2m every day.

While overall turnover grew by 3.6 per cent, that was outstripped by a 4.8 per cent rise in costs.

Mr Morgan said: "All core businesses lost money in the financial year to March 2002. Royal Mail's domestic business lost £74m, the UK parcels business lost £94m and the Post Office network made a loss of £163m.

"Consignia realises that it needs to become a more focused organisation, and needs to run a quality service for all its customers. We believe the changes we are putting in place will allow us to do that.