The UK’s Post Office is at its most stable for more than 25 years, according to theorganisation’s annual Network Report, published this week, although a key UK parliamentary
committee this week also published a report raising concerns about government proposals for changesto the ownership and administration of the Post Office network.Under plans to privatise Royal Mail Group, Post Office Ltd was made an independent company fromApril 2012, but still owned by the state. The UK government aims to turn it into a mutual company –owned by its employees and other key stakeholders.
The Post Office Network Report 2012 shows that at the end of March 2012 there were 11,818branches open and trading, compared to 11,820 for the previous year, the smallest net change in thenumber of branches open and trading in 25 years. The Network Report has been presented to the UK’sParliament under the terms of the Postal Services Act, which led to the separation of the PostOffice from Royal Mail Group.
The Post Office said modernising its branch network was essential to plans to increase revenueby securing new business. Revenue increased during 2011/12, reversing the trend of recent years,and plans are in place to continue to grow revenue over the coming years to make the network moresustainable and less reliant on subsidy.
“The Post Office’s role as a trusted intermediary between the public and national and localgovernment is a major driver for this growth and the Post Office has recently competed for and woneight out of eight new contracts,” the organisation claimed.
The Post Office said it was also continuing to develop in other areas. As the UK’s number onepostal retailer, a long-term agreement with Royal Mail has created potential to grow this business,it added. The Post Office is now also firmly established in the personal financial services market,with over 2.5 million customers and £15.8 billion deposited in its savings accounts, while it isalso the UK’s number one travel-money provider and the fifth largest telecoms provider.
Post Office CEO Paula Vennells said: “With a stable network, investment, modernisation and adrive to improve convenience and service for our customers, the Post Office is now a growthbusiness building on its core asset of a nationwide network of branches, run by local, trustedpeople, together with its online and direct channels.
“The Post Office has been a key part of the fabric of the UK for generations and is maintainingthat tradition by ensuring it remains relevant and accessible for the changing and digital world inwhich we live.”
This week, Parliament’s Business, Innovation and Skills (BIS) Committee also published a reporton the organisation, outlining its concerns with regards to the government’s proposals for changeto the ownership and administration of the Post Office network.
Commenting on the publication of the report, ‘Post Office Network Transformation: a progressreport’, the chairman of the BIS Committee, Adrian Bailey MP, said: “It has long been clear thatthe Post Office network needs to undergo significant change in order to place it on a long-termsustainable footing and to increase its geographical coverage. Any such reform must be more thanjust a consolidation of the existing network.
“The BIS Committee supports the direction of travel set out by the government. However, a numberof serious concerns remain, not least with regards to the inflexibility of the proposals, the lackof a programme for delivering government services for the Post Office and deficiencies in thetraining programme for post office staff. Without urgent and serious consideration, these concernscould undermine the government’s ambitions to create a Post Office network fit for the 21stcentury.”
The committee had concerns about the remodelling of small post offices into ‘Locals’, where thegovernment is trying to ensure their long-term viability. However, the reduction in services risksmaking some branches unsustainable or unsuitable for local users, the committee observed.
“The pilot scheme for ‘Local’ post offices must undergo a rigorous assessment to ensure there issufficient flexibility in the model,” said Bailey. “Post offices should be responsive to the needsand demands of diverse communities.”
Members were also concerned that the new ‘Locals’ model could result in a small number of majorretailers running the majority of Post Office outlets. “The Government must be alive to the riskthat its new model could erode the ethos of many post offices,” added Bailey. “The ‘Locals’ modelneeds to be viable and attractive to a wide range of operators.”
The committee concluded that Post Office Ltd’s research was too narrowly focused on ‘Local’pilots where there had previously been no post office whilst the Consumer Focus research failed totake into account the social demographic of post office users.
“The information available to the Government is inadequate. More must be done to ensure thepilot scheme is subject to proper review, concentrating on the suitability of ‘Locals’ to a widerange of communities,” Bailey claimed. “The government also needs to actively consult all groupswho are directly affected to ensure informed decisions are made.”
The committee said the new role of post offices as front offices for Government services will bevital to their ongoing financial viability. However, it said the government must set out theservices that are to be delivered through this method, while Post Office Ltd needed to demonstratea clear marketing strategy to ensure post offices are promoted as the preferred outlet for suchservices.
“The record of government in delivering services through the post Office is patchy at best,”observed Bailey. “Warm words and aspirations will not suffice. Much greater clarity is needed bothfrom the Government and from Post Office Ltd.”
On the plan to ‘mutualise’ the organisation, the committee commented: “There is little detail onthe programme for change with regards to mutualisation and particularly on how any suchmutualisation would be affected should the majority of ‘Locals’ be owned by a small number of majorcompanies. The Committee recommends that the government outline how such a situation would affectthe ability of the Post Office to become a mutual organisation in its response to this report.
Bailey added: “If the government is committed to mutualisation, a detailed road-map for changeneeds to be put in place. Without that, the government’s proposals will not be put intoaction.”
Up to 20 million people visit a Post Office each week to access a wide range of government,financial, banking, mails and telephony services, as well as 50% of the UK’s small businesses usingit as part of their infrastructure.
