Business Secretary Sajid Javid has overruled civil service warnings that parts of the controversial sell-off of the Royal Mail are a bad deal for taxpayers.

 

It comes after officials cautioned that plans to give Royal Mail staff an extra one per cent of shares free would not represent value for money.

But Mr Javid ordered the policy to go ahead anyway by an unusual process called a 'letter of direction.'

It involves the top civil servant in a department putting his objections in writing. In turn the Secretary of State writes to order the policy be implemented.

Martin Donnelly, the permanent secretary at the Department for Business, Innovation and Skills, said in the document that he had concluded that "while a decision to allocate more shares to Royal Mail staff ... is an entirely legitimate policy it does not provide a tangible return to the taxpayer and so is not value for money as defined in the legislation".

In response Mr Javid wrote that he noted the concerns, but added that he had taken into account the "wider benefits" of the policy.

He also said that there was "merit" in rewarding Royal Mail employees for their hard work and that staff formed an "important part" of the company's shareholder base.

In 2010 Jonathan Baume, the head of the civil service union First Division Association said that asking for a 'letter of direction' was regarded as a "nuclear option" by officials.

Chancellor George Osborne has already faced accusations he is selling Royal Mail shares off too cheaply.

The SNP and Labour have also warned that plans to sell off all of the Government's stake in the Royal Mail could mean the end of the Universal Service Obligation, which guarantees delivery six days a week to any address in the UK for the same price.

The Conservative Government said the promise is written into law.