Trade & Industry Committee

Session 2006-07

8 June 2007




The Trade and Industry Committee today publishes its Report Restructuring the Post Office Network.

In March 2007 the Committee reported on the Government’s proposals for restructuring the post office network. It has now received the Government’s response, and, although satisfied with some key aspects of the response, the Committee is dissatisfied with others. As a result, it has decided to publish a further report seeking more substantive answers than it has received so far on key areas-the consultation process, helping sub-post offices to develop their businesses and the process for dealing with the consequences of unplanned closures.

The Committee repeats its reluctant acceptance of the need for a review of the network. It welcomes the Government’s decision to widen the range of criteria that will be taken into account when decisions are made on the futures of individual post offices. It is also pleased that the definition of deprived urban areas has been broadened.

It concludes that a six week public consultation period on the local area plans for post offices is insufficient, because there are many and complex factors to take into account and because a significant number of local authorities would find it difficult or impossible to comment in the time available as they meet only once every six weeks or two months. The Committee rejects the Government’s argument that any extension to the six week consultation period would add significantly to the uncertainty faced by sub postmasters, given that there has been considerable uncertainty over the future of the network since May 1999.

The Committee calls for a twelve week consultation period, as set out in Cabinet Office guidelines.

The Committee wants to see a viable network, not one permanently dependent on subsidy; but thinks this difficult to achieve unless Post Office Ltd displays more imagination and entrepreneurial flair in developing new areas of business than it has done in the past. The Committee concludes that: “the Government, as sole shareholder and representative of the taxpayer, has a responsibility to ensure that Royal Mail Group as a whole gives proper attention to increasing the competitiveness of the network rather  than just managing its decline.”

Recognising that it will not always be easy to find a new provider to take over when a sub postmaster retires or resigns, in its original report the Committee asked the Government how the resulting gaps in the network would be filled. The Government’s response was a bald assertion that the national network would be maintained. The Committee presses the Government and Post Office Ltd to announce how they will maintain the network.

The Committee was disappointed that the Government did not take the opportunity to make the successor to the Post Office Card Account more flexible. It was also concerned that it was not clear whether the organisation representing consumer interests, Postwatch, will be merged with other bodies during the network restructuring process, potentially diminishing its effectiveness as a voice for post office customers.

Committee Chairman Peter Luff MP commented:

“The post office network cannot be left as it is, with low morale among sub postmasters and the likelihood of significant numbers of closures which leave gaps in provision. We therefore welcome the Government’s determination to establish a comprehensive national network. However, we want that network to be sustainable, and we are yet to be convinced that either the Government or Post Office Ltd has thought through what to do in the event of future closures, and how to make post offices more profitable and less dependent on continued public subsidy. Without this, there is a real danger that we will be faced with an inadequate network within a few years.”

Peter Luff is available to discuss the report on 07921 039870. For any other media inquiries call Laura Humble, Select Committee Media Officer, on 0207 2192003/ 07917 488489