NEWS ANALYSIS: Big PR fiasco leads to a very big mop-up job - The reputation of Barclays has suffered a barrage of negative press over ATM charges and fat cat salaries and PR has taken the brunt of the blame

In the past two months, Barclays, the high street bank, has to

paraphrase its current advertising campaign, found itself with big

problems.

The beleaguered PR function has had to handle media interest over

announcements to charge non-customers pounds 1 per withdrawal for using

its cash machines; closed 171 rural branches (all on the same day);

revealed that senior directors were getting enormous bonuses; and then

launched that TV advertising campaign, with expensive, flashy stars

talking brash, bold and, above all, ’big’. It has been said that

Barclays ’is not very good at PR’. That might appear to understate the

case - but since the speaker was the bank’s chief executive, it actually

sounds about as damning as you can get.

Or has the media been more than a little unfair to Barclays? Take cash

machines: customers have been charged on the quiet by rival banks for

using each other’s cash machines for years. Not only did Barclays say it

would charge less and make the system transparent - but from January

2001 its proposals are to be adopted by banks and building societies

anyway.

And take branch closures: these are nothing new but Barclays’ biggest

error was probably in being so late to make wholesale cuts to its

network.

Other high street banks were at it from the beginning of the 1990s. As

to bonuses: financial reporting dates are fixed, which means the

announcement of individuals’ remuneration has no scope for flexibility.

Fat cat salaries make great copy at any time. And what about those ads?

’They should have pulled them,’ says one source. They are a vital part

of our branding, says Barclays.

Paul Barber, corporate communications director for Barclays Retail

Financial Services (RFS), is more candid than you might expect. Although

this may have something to do with the fact that he is leaving to join

the Football Association, his views are interesting. ’I don’t regret

many of the things that we did,’ he says. However, he does regret

’short-term’ damage to the bank’s reputation. And on cash machines he

acknowledges one critical mistake. ’We didn’t get enough of a head of

steam up against how unfair the current system was,’ he says. ’We didn’t

warm up the market - customers, opinion formers, journalists.’

It must be said that Barclays was also, in PR terms, stuffed out of

sight on cash machines by Nationwide. The building society ran a highly

effective campaign during which it threatened legal action against

Barclays. Since Nationwide is one of the few financial institutions that

actually does not charge anyone anything for taking money out of its own

holes in the wall, it held a sort of moral high ground. ’As a PR

professional, I’m full of admiration,’ admits Barber. ’They made us out

to be the bad guys.’ Nationwide media relations manager Alan Oliver

disingenuously says that the company was just protecting the interests

of consumers.

But the Barclays experience also raises a wider question: is it simply

the case that some business decisions -which may make impeccable fiscal

sense - are just too unpalatable for PR to deal with? Given the sequence

of events that Barclays says it was presented with, Barber says: ’I defy

any PR guru to come up with a strategy, programme, key messages or even

words to soften the blow.’ And Barclays clearly feels that journalists

simply stopped listening after a certain point anyway.

Both Barber and Leigh Bruce, who is current group director of corporate

communications, still insist that the decisions made were the right

ones, and that senior management did not ignore the advice of the

communications teams when announcing the changes. ’It would be totally

inaccurate if it were seen as communications versus business,’ Bruce

says firmly. John Varley, CEO of Barclays RFS, was at the centre of the

storm. ’Communications supports business,’ he says, so the public

message is clear. Bruce said the team would look at why messages were

not put across and learn from it: ’We will determine exactly what went

wrong.’

And things are certainly happening at Barclays. The bank’s

communications structure is to be radically restructured, with the four

divisional communications director posts to disappear and PR

centralised. The company says this has nothing to do with recent

travails and is part of CEO Matt Barrett’s vision for Barclays. And yes,

this is the same chief executive who said Barclays was not very good at

PR.

Leigh Bruce will not be drawn on the question of whether Barclays would

have handled things better with this new internal structure. ’It’s very

easy to speculate on that sort of thing,’ he says. ’I’m not going to.

It’s irrelevant. We’ve gone through that period.’

But outsiders will be unable to resist speculating. Bruce, at present,

reports direct to Barrett. In the new-look communications set-up Bruce

will still be in charge - but he will report to group strategy director

Gary Dibb. Dibb does not even have a seat on the main board. Varley

argues that Dibb sits on the group executive committee, which takes the

day-to-day decisions. But when it comes to communication, some may feel

this is not the mark of a company which thinks big.