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Sheppard_jonathan
Jonathan Sheppard, who worked for the Royal Mail Group’s Corporate
Affairs Department during the Urban Reinvention programme, looks at the debate over post office closures.

The debate about Post Office closures is not a new one. For my sins,
any parliamentary question that was asked about the whole of the Royal
Mail came to me for an answer, so I am well versed in their, "That is a
commercial matter for the Post Office" response that Government often
gives now when it wants to pass the buck onto Post office management.

When I started working for Royal Mail, there were close to 20,000 post
office branches. We must not forget that bar 500 or so directly
operated offices (the figure is smaller now) all of the branches are
private businesses run by sub-postmasters usually along with a local
shop. When the sub office closed it was usually because the
sub-postmaster wanted to retire and that he or she owned the building
and wanted to turn it back to residential accommodation.

Often the Post Office got blamed for closing the office when it actual
fact it was the sub-postmaster who no longer wanted to continue.

A few years ago we had the Urban Reinvention programme which aimed at closing unprofitable urban offices. What wasn’t made too apparent to people at the time was that in that closure programme, sub-postmasters had opted to take a compensation package and were happy to close. Consultations were held, and I remember telling MPs that the consultation was not about whether an office closed, but what the future services would be in a locality. At the time my suggestion was to stop calling the local consultation a consultation, as people didn’t really have a chance to overturn a closure decision.

No for me there was always an issue of lack of joined up Government here. Government actively encouraged business to be pulled away from post offices. After investing a huge amount on the Horizon system which automated all post offices, suddenly the Government business on which many offices relied upon was being pulled away. Government actively encouraged people to have their money paid directly into bank accounts – so whoomph, suddenly many offices were uneconomical. TV licensing, car tax disc renewal and so on were suddenly available over the internet – whoompf another bit of Government business gone.

Try as it might, with concepts such as Your Guide – an online terminal to offer Government advice, the Post Office continued to lose business and footfall. And now we are seeing another round of post office closures, with up to 2,500 closures being suggested.

The Post Office rightly point out that they still have more branches than the major banks and building societies combined. If you look at any of the largest retailers and I have worked for one of them, the Post Office has more branches than any of them, by far.  After the current round of closures there will be approximately 11,500 branches, but should we be worried.

I think so. The Government and Post Office have set access criteria about how far people should expect to travel to a Post Office. The minimum number of post offices required by the Government (because lets not forget that the Government is the shareholder here) to meet the access criteria is only 7,500. In simple terms, it can turn round and say 7,500 post offices will still meet the needs of the people. Government will say it’s committed to keeping a network of some 11,500 branches until 2011, but let us be under no illusions, come 2011 we will see yet another round of closures.

That of course brings us to the question of what to do about the Post Office Network. I remember when working for Royal Mail, the then Chief Executive was being questioned about the purpose of the Post Office Network in front of the Trade and Industry Select Committee. Shouldn’t it be acting as a commercial entity, or did it provide a social service? The Chief Exec jumped on the point, and said that is precisely the question no Government has ever answered. If we are to be a social service, there is a cost, and if we are to be a commercial entity we would close 10,000 branches tomorrow. That question still hasn’t been answered. Is the Post Office a social service or a purely commercial entity?

Taxpayers money is being used to close private businesses, yet Post Office management can’t guarantee that no profitable offices may have closed in the process, as the books of closing post office are not open to scrutiny.

Many have questions whether the likes of Essex County Council can run post office branches at a profit, but when you learn that the directly operated branches owned by the Post Office, do not make a profit, they can’t do any worse than current Post Office management can they!

I remember when Heseltine and the Conservative Government wanted to privatise The Post Office Group to give it the commercial freedom to compete with the likes of Fed Ex, Deutsche Post and so on, the uproar, and the reason it was dropped, was to do with the campaign which put the fear of god into people about post office closures. Funny that isn’t it. No privatisation, yet the Post Office network has almost halved in size under the Labour Government.

So what should be done?

  • A decision should be taken about whether the Post Office network (as distinct from Royal Mail) has a social element to it, or whether it is purely to be run on a commercial basis.
  • Post Office management needs to be more innovative in the products and services it offers. If the branches it directly operates do not make a profit, perhaps that suggests they aren’t the right people for the job.
  • If there is a consultation about post office closures in which the public is involved, there has to be a possibility for the public to reverse that decision. If the decision has already been taken, the Post Office needs to be clear about that from the outset.
  • The public needs to use local Post Office. How many people bemoan the loss of their local office but don’t use it. I business bank with Alliance and Leicester, which uses Post Offices for a counter service. I collect my car tax disk from the local branch. The phrase Use it or Lose it has never been more appropriate.
  • The Conservative party needs to come up with some clear proposals about how it intends to support the development of new products and services for the Post Office, which will help ensure the survival of both rural and urban post offices.

If no action is taken, we could soon be hearing the Last Post served on what is still an unrivalled network which reaches every community in the UK….. for now.

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