Trade and Industry Press Notice PN 42

Publication of Report

The Post Office Urban Network Reinvention Programme

The Trade and Industry Committee today published its inquiry into the implementation of the Post Office Urban Network Reinvention Programme by Post Office Ltd. The programme involves the restructuring of the post office network in urban areas, mainly through the planned closure of unviable branches with the object of improving the commercial viability of the network as a whole.

The Committee set out to review the way in which Post Office Ltd approached the task restructuring of its urban network; how it identified suitable branches for closure; how the company consulted sub-postmasters, customers and other interested parties; and the role of Postwatch, the consumer watchdog, in the reinvention process.

The Committee acknowledged that the urban post office network had been in decline for years: action was needed to halt the unmanaged disruption to the network caused by unplanned post office closures arising from sub-postmasters' decisions to close their branches. It agreed that the Urban Network Reinvention Programme was an essential element of Post Office Ltd's strategy to develop a commercially viable retail network.

The Committee considered that, given the special regard in which post offices are held by the general public and the importance to many people of the social and economic role of the network, it was not surprising that the rationalisation of the urban network through planned branch closures would cause concern among its customers, especially among those who rely most on the services they provide. However, many people had been left confused and dissatisfied with the outcome of the company's processes of review and consultation. In some cases, Post Office  employees charged with implementing the programme appeared not to have followed the procedures set down by the company for assessing the impact of individual closure proposals.         

The Committee concluded that many of the general public's concerns could have been addressed by better planning and more open and inclusive consultation by Post Office Ltd. It felt that, given its role as the consumer watchdog, Postwatch must bear some responsibility for customers' dissatisfaction, in that it should have exerted more influence over the development of the reinvention procedures and ensured that adequate consultative procedures were in place before the exercise began.

Many post office users faced longer and, for some, more expensive, journeys to their nearest branch. However, early research indicated that most people were continuing to use the post office network, although some had reduced the frequency of their visits.  

Martin O'Neill MP, Chairman of the Committee said:

"It was clear that a restructuring of the urban post office network was necessary to increase its commercial viability at a time when revenues were falling, due in large measure to the Government's decision to phase out the payment of benefits and pensions by means of the traditional order books. Such transactions have been the mainstay of most post office businesses in the past, and they are one reason why post office branches have been held in such high regard by their customers. 

"Post Office Ltd believe that the reinvention programme is the largest retail network restructuring exercise ever undertaken in Europe. That being so, and in view of the important social and economic roles that post offices play within communities, it was essential that adequate preparations were made beforehand to ensure that the programme was implemented in such a way as to address the understandable concerns of post office customers. Unfortunately, implementation has not been smooth in all areas.

"Many of the problems could have been avoided by better planning and consultation by Post Office Ltd. A longer, more open and inclusive consultation process would have given customers and other stakeholders more opportunity to air their concerns and the company a better opportunity to address them. Post Office Ltd acknowledged the problem and did take steps to address the major concerns expressed early on in the implementation process. But it would have been far better to get procedures right from the outset.

"It was also important that the procedures were correctly and consistently applied. From our own experience this has not always been the case.  

"Given its role as the consumer watchdog, Postwatch must bear some responsibility for customers' dissatisfaction, in that it might have been expected to have had a more influential role in the development of the reinvention procedures and to have ensured that adequate consultative procedures were in place before the exercise began.

"However, our main concern is whether the process will draw a line under the recent unmanaged decline of the urban post office network. Post Office Ltd believes-and we have received no firm evidence to the contrary-that the "reinvented" network will be more viable commercially.

"This does not take into account the 'social service' aspect of post offices-an aspect which the Government also regards as very important. If decline does continue, contrary to Post Office Ltd's predictions, then the Government will need to give very serious consideration to underpinning the urban network in a similar way to its programme of support for rural post offices." 

22 July 2004

ENDS