Thank you for your e-mail to Alistair Darling about the future of the post office network.
The Government recognises the important social and economic role of post offices, particularly in rural and deprived urban communities. That is why the Government is determined to maintain a national post office network allowing people to have reasonable access across the whole country and has put in place a new policy and financial framework to achieve this.
There is wide acceptance – including from the National Federation of Subpostmasters – that the current size of the network is unsustainable. New technology, changing lifestyles and a wider choice of accessing services mean that people are not visiting post offices as often as they used to. The network’s losses are now running at almost £4 million a week – double what it was two years ago and that will increase further unless action is taken.
The Government’s public consultation on proposals aimed at securing a sustainable future for the network ran from 14 December 2006 to 8 March 2007. The consultation attracted over 2,500 responses and the Government announced on 17 May its decisions in light of the responses received.
The Government has been investing substantial sums in the post office network, totalling £2 billion since 1999. That has, for example, paid for a computer link-up for every post office as well as support for non-commercial branches since 2003. The Government has decided (subject to European State Aid clearance) to extend that support to 2011 with the provision of up to another £1.7 billion additional funding.
This funding will support a new strategic framework for the Post Office. There will be clearly defined minimum access criteria to safeguard rural, deprived urban and remote coverage. This will ensure that the vulnerable communities most in need of post office services will be protected. The network will be supplemented by 500 new and innovative Outreach locations, operated in partnership with other local services such as in pubs, village halls, churches or in mobile post offices, which will mitigate closures, primarily in smaller and more remote communities. Nevertheless, to ensure sustainability, there will need to be up to 2,500 compensated post office closures within the defined access criteria.
Post Office Limited is responsible for implementing the programme at a local level. They plan a rolling programme of 50 to 60 local consultations on detailed area plans, based on groups of Parliamentary constituencies. It will take around 18 months to complete, starting from Summer 2007. The Government does not have a role in proposals or decisions for individual post offices.
As well as the numeric access criteria, it is recognised that, in drawing-up implementation plans, Post Office Ltd will need to take into account local factors affecting ease of access, such as local geography: rivers, mountains etc. Post Office Ltd will also be required to consider the availability of public transport and alternative access to key post office services, local demographics and the impact on local communities. No areas will be subject to more than one round of closures and area proposals will be developed with the participation of sub-postmasters, local authorities and Postwatch before Post Office Ltd carry out local consultations, which will provide everyone with the opportunity to raise any specific concerns over particular proposals.
The Government has supported Post Office Ltd in its efforts to develop its range of financial service products, with Government’s investment having included £500 million for the Horizon project to bring computer systems into every post office throughout the UK.
The Post Office recognises the need to increase its range of services and products and that it needs to adapt to changing shopping habits and give subpostmasters high quality products to sell which appeal to the needs of today’s and tomorrow’s customers. Post Office Ltd is now the largest provider of foreign currency in the UK and the third largest provider of travel insurance. The Post Office is also the UK’s 5th largest fixed-line telephone service provider and has opened 175,000 Instant Saver Accounts in the product’s first year. New products have been introduced and more are in the pipeline. The Post Office will be launching a broadband service later this year in partnership with BT. That will enable it to become a key player in the broadband-based services market, offering Post Office broadband services to the public. That will give people another reason to go into post offices. BT recognises the value of having a shop-front up and down the country.
The value of having a national network is that there can be national agreements to provide travel insurance, broadband services and so on, which individual subpostmasters could never negotiate on their own. That is something that the National Federation of Subpostmasters supports.
The Government introduced the Post Office card account in 2003 and the current contract ends in March 2010. The Government has decided that it will continue with a new account after 2010. The new account will be available nationally and customers will be eligible for the account on the same basis as they are now. EU procurement rules mean that we need to competitively tender for this product. Given the size of the network and the access criteria that we are now introducing, the Post Office is well placed to put in a strong bid.
In addition, cash will be available at the Post Office through some 4,000 free-to-use cashpoint machines now being introduced across the network as well as a range of interest-paying accounts. These will be attractive to the general public as well as those Post Office card account users who choose to build up balances on their Card Account.
The Government’s policy framework, now in place, will enable Post Office Ltd to evolve to meet changing customer expectations and rise to the on-going challenges of doing business in today’s marketplace – whilst ensuring the provision of a truly national network.
If you have any specific concerns about the provision of post office services in your area, they are advised to take the matter up direct with Post Office Ltd for clarification. This can be done via the company’s websitewww.postoffice.co.uk or by phoning 08457 22 33 44 or by writing to POL Customer Care, FREEPOST NAT 18105, Sunderland SR3 3BR.
I hope the above is helpful.
Royal Mail and Postal Services Team