Business and Enterprise Committee


The Business and Enterprise Committee today (25 July) publishes its Report, Post Office Finance (HC 622). Having taken evidence from Post Office Ltd. and Postwatch on June 10, the report expresses the Committee's concerns about "the costs to Post Office Ltd of delivering Royal Mail Group services and the financial support to sub-postmasters for providing outreach services."

The chairman of the Committee Peter Luff said:

"In 2007-08 Post Office Ltd received £358 million for providing mail services to the Royal Mail Group. We heard from the Managing Director of Post Office Ltd that this was not enough cover the cost of those services. It is possible that this is down to inefficiency at Post Office Ltd, but it is also possible that it is because Royal Mail Group is inappropriately using Post Office Ltd, which receives some state support, to cross-subsidise its mail services. We urge the Independent Review of mail services and Postcomm to look closely at the relationship between the two bodies."

The report calls for clear information on "what services Royal Mail Group expects Post Office Ltd to deliver for it; how Royal Mail Group determines the price it pays for these services, and how much it actually currently costs Post Office Ltd to deliver them."

Having heard evidence about the insufficiency of funding for outreach services, particularly for partner outreach (where a local partner, such as a retailer or publican, is appointed by a sub-postmaster or mistress to provide a range of Post Office services) the report calls for an investigation by the National Audit Office of the financial arrangements for outreach.

"We remain concerned that the funding provided for outreach services may be inadequate," the report says. "If this is the case, outreach services will fail, and the network be diminished. However, we are not the appropriate body to look at the detailed financial arrangements for outreach, which will involve many different contracts. A significant amount of public funding is going to sustain the network; we need to be confident the public receives the services this is meant to secure. We recommend that the National Audit Office investigate the financial arrangements for outreach services."

Further Information:

Committee membership is as follows:
Chairman: Peter Luff MP (Con) (Mid Worcestershire)
Mr Adrian Bailey (Lab) (West Bromwich West)
Roger Berry (Lab) (Kingswood)
Mr Brian Binley (Con) (Northampton South)
Mr Michael Clapham (Lab) (Barnsley West and Pen.)
Mr Lindsay Hoyle (Lab) (Chorley)
Miss Julie Kirkbride (Con) (Bromsgrove)
Anne Moffat (Lab) (East Lothian)
Mark Oaten (Lib Dem) (Winchester)
Mr Mike Weir (SNP) (Angus)
Mr Anthony Wright (Lab) (Great Yarmouth)

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