Post Bank vital for saving UK Post Office network, claims report

A coalition of business leaders, trade unions and community representatives in the UK havepublished a report outlining how a publicly owned Post Bank is essential to revitalising the

In the first comprehensive critique of the government’s November 2010 ‘Securing the Post OfficeNetwork in the Digital Age’ report, the Post Bank Coalition argues that the services offered byPost Office Ltd need to be expanded if it is survive and meet the needs of small businesses,customers and communities.

The report, ‘Sorted: Revitalising the Post Office through local banking’, was launched lastThursday at a parliamentary roundtable event hosted by Nia Griffith MP, with speakers from theUnite union and the Federation of Small Businesses, and attendees from the Post Office AdvisoryGroup and MPs involved with the Postal Services Act 2011. The act was approved last month to makeprovision for the restructuring of the state-owned Royal Mail group, including ownership of itsPost Office Ltd subsidiary, and the regulation of postal services in the UK. The bill makesprovisions to sell up to 90% of Royal Mail to private investors, give at least 10% of shares toemployees, to separate the retail network Post Office Ltd and its 11,500 branches into a mutuallyowned organisation, and to transfer the heavy pensions deficit, estimated at about £8.4 billion, tothe government.

The report argues that with funding for the Post Office network unclear, the network faces along decline without an initiative such as Post Bank, characterised by further post office closuresand an uncertain future of the country’s post offices, the sub-postmasters that run them, and thecommunities they serve. It also argues that the current joint venture with the Bank of Ireland isno longer fit for purpose and that there needs to be a new model for banking services at the PostOffice; that a publicly owned Post Bank in the UK – mirroring those seen in a number of othercountries – would support the network and bring much needed diversity to the financial sector; andthat without a Post Bank, the network faces a long decline “leading to the loss of a cherishedpublic institution and that a significant opportunity to create a socially useful bank will belost”.

Members of the coalition also outline other areas where they claims government policy inrelation to the state-owned Post Office is failing, including the closure of 240 sub-post officesin the eighteen months between April 2009 and October 2010. The report calculates that the effectof a post office closure on the turnover of small and medium businesses within half a mile would bearound £270,000 loss per annum for the local economy.

Billy Hayes, general secretary of the Communication Workers’ Union (CWU), said: “Post Bankoffers an opportunity to solve two major issues facing the country – saving our post office networkand bringing trusted banking to communities everywhere. This is a gift to the government, anall-round good news story and an initiative which would bring real, measurable positive change toPost Office staff, who are fearing for their jobs, and to businesses and communities struggling tofind suitable local banking. We urge the government to embrace Post Bank and take measures to makeit a reality.”

Clive Davenport, Trade and Industry chairman at the Federation of Small Businesses, said: “Following the crisis in the banking sector and with the demise of the Post Office Network, we havelong been saying that creating a Post Bank is the perfect opportunity to help tackle these. We knowfrom our research that small businesses rely on their local Post Office to not only send andreceive parcels, but to make payments as well. We also know that banks still aren’t lending tosmall firms. The UK banking system really needs more competition to give small firms a betterchance of securing a good deal. Creating a Post Bank will not only help to do this, but it willalso help keep the thousands of sub-postmasters’ businesses alive.”