The Post Office Network

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Closures

• Maximum of 2500
• Potentially 50-50 between rural and urban areas
• 28 months compensation for subpostmasters
• 500 new outreach services

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Which post offices?

• no indication which P.Os will be closed
• closures to take place over 18 months period
  commencing this summer
• provisional plan in place?
• consultation period for specific closures -
• 6 weeks

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Criteria

• nationally, 99 of population within 3 miles of a
  P.O. and 90 within 1 mile
• in deprived urban areas, 99 within 1 mile
• in urban areas, 95 within 1 mile
• in rural areas, 95 within 3 miles
• in remote rural areas, 95 of the population in
  postcode districts within 6 miles

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Lack of clarity in application of criteria (1)

• definition of rural and urban
• how social criteria will operate
• how loss-making P.Os will be sustained in the
  longer term

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Lack of clarity in application of criteria (2)

• whether viable P.Os closed if criteria already
  met?
• effect of postmaster wanting to leave on choice
  of which P.O. to close

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Reasons for closures (1)

• Financial pressures
• 90 of rural P.Os fail to make a profit
• around 1 in 5 of rural branches has fewer than 70
  customer visits a week
• despite 150 million p.a. government funding,
  1,000 rural P.Os have closed in the last five
  years.

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Reasons for closures (2)

• Fewer transactions
• Estimated government transactions will have
  fallen to 10 of total transactions by 2010 (40
  in 2002). Revenue from tthem fell by 168 million
  in 2005/06
• previously payment of benefits accounted for up
  to 90 of business in deprived urban areas - now
  most paid into bank accounts

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National Federation of Sub-postmasters

• still a demand for cash services, both payment of
  bills and receiving pensions and benefits
• government has withdrawn services and not
  encouraged use of post office accounts

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Are there advantages?

• Although it is emotive to talk of closures,
  changes in habits need to be acknowledged
• and where the number of transactions is very
  small the financial cost of support to small P.Os
  may be unrealistic.
• The plans are intended to bring some certainty
  into the structures and avoid ad hoc closures

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How the Government will help

• Further substantial funding available until 2011.
  Recognises need for continuing subsidy of the
  social network after 2011.
• Post office card account (contract ends March
  2010) will be replaced with a new account after
  that date.

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How the Government will help (2) Focus on
services

• It will provide support to enable the P.O. to
  expand into new areas of business e.g. financial
  services products such as insurance parcel pick
  up for internet orders
• support P.O to deliver outreach services such as
  mobile P.Os P.Os in community centres and pubs

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Main Concerns (1)

• need more recognition of social role of Pos
• place for social inter-action community hub
• often combined with shop which may not be viable
  without PO and decrease in footfall may affect
  other businesses
• may be difficult to access banking services
• (only 4 villages bank or building society.
  Currently, 60 have P.Os.

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Main concerns (2)

• may be no or infrequent transport to alternative
  provider
• travelling to a service means increased costs
  incurred and damage to the environment
• parking provision often better at village P.O.

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Main concerns (3)

• Outreach services operated by sub-postmasters
  from elsewhere are subject to closure e.g.
  Mobile P.O and do not provide the same economic
  boost
• Is this the thin end of the wedge and will it be
  followed by more closures?
• Lack of clarity in application of criteria
• May be closures because of proximity of P.Os
  even if viable

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What could be done to help ?

• Enable people to open basic bank accounts in P.O
  branches
• Enable all current account holders to withdraw
  cash over the counter at P.Os
• Increase range of services P.O. can deliver
  including government services
• Increase other services provided in the premises
  e.g. solid fuel, dry cleaning agency

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The Rural Community Council will help!

• Gives advice
• Has operated a grant scheme through EMDA and is
  applying for an extension of the scheme to assist
  P.Os to become more competitive and keep them
  open where possible or to support provision of
  alternative service where necessary

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Consultation on closures

• The programme of closures is due to start in the
  summer and last 18 months.
• There will be a 6 week consultation period about
  specific closures this gives very little time
  to respond constructively, suggest ways of
  supporting the PO business or find alternative
  ways of providing the service

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Carrying out the consultation

• The Rural Community Council suggests that the
  consultation be carried out by an independent
  body such as itself and local councils on behalf
  of the P.O.

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Views of Local Postmasters (1)

• Most businesses with shop and Post Office will
  close if the P.O. service is removed
• P.O. has not support small subpostoffices
  remuneration poor which means they have
  insufficient resources for improvements
• P.O business development managers largely ignore
  small P.Os.
• Several small P.O. could close in rural area if
  within 3 miles of a centre (e.g. Measham)

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Views of local postmasters (2)

• Federation of Postmasters no teeth
• Paid per transaction and where cash is still
  drawn that happens less frequently than
  previously. Charge too much for bill payments
• Cashpoint only usable for certain banks
• Money wasted by P.O. Lots of unneeded promotional
  materials supplied
• Sub P.Os less queues, more parking.

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What happens next?

• List of local post offices circulated
• No clear knowledge of which vulnerable but some
  may be identified
• Encourage production of business plans to
  pre-empt closure?
• Consultation questions circulated
• Members indicate issues wish to raise in response