MPs demand Government safeguards the future of local Post Offices

MPs line up to demand Government steps in and safeguards the future of local Post Offices following launch of Mail campaign

  • Call for ministers to give a lifeline to the beleaguered network of post offices
  • Up to 2,500 post offices will close or be downsized in the next 12 months
  • Around 1,000 have already shut and more than 3,000 kept running by subsidies 
  • Is your Post Office under threat? Email [email protected] 

A string of senior politicians and business leaders last night voiced strong support for the Daily Mail’s campaign to protect Britain’s local post offices.

MPs from a range of parties came together to back our call for ministers to give a lifeline to the beleaguered network.

The Mail launched the campaign this week amid an unprecedented crisis.

Up to 2,500 post offices will close or be downsized in the next 12 months because of financial hardship, according to figures from the National Federation of Sub-Postmasters.

Around 1,000 have already shut and more than 3,000 branches in remote areas are only kept running by Government subsidies, which are due to end in April 2021. The impending crisis will make worse the suffering on high streets that has seen 3,500 bank branches close since the financial crisis of 2007-2008.

Up to 2,500 post offices will close or be downsized in the next 12 months because of financial hardship, according to figures from the National Federation of Sub-Postmasters. Pictured, sub-postmistress Victoria MacDonald at The Cellar House in Norwich

MPs yesterday urged the Government, which owns Post Office Ltd, to intervene to guarantee a sustainable future for local branches, especially those in rural areas.

Their demands came as:

  • It emerged that postmasters get just a fraction of the fees paid to Post Office Ltd for providing banking services such as cash deposits and withdrawals;
  • MPs were told the Post Office is ‘looking over the precipice’ and recent attempts to prevent closures had been an ‘unmitigated disaster’;
  • The chief executive of the Post Office apologised for ‘getting it wrong’ as he was told his company’s ‘reputation is in tatters’;
  • More sub-postmasters came forward to tell of their agonising decision to shut their doors after serving their communities for decades.

The Mail’s Save Our Local Post Offices campaign calls on ministers to extend subsidies and ensure a full range of services are offered over-the-counter at branches.

We are also demanding that banks pay their way for the services post offices provide on their behalf and that sub-postmasters – the independent businessmen and women who run local branches – are fairly paid.

Former Tory leader Iain Duncan Smith said last night: ‘The Daily Mail is absolutely right to raise this critical issue. Too many post offices across the country have closed, leading the service to deteriorate. The Government should review the whole programme to ensure it provides the services communities need.’

Labour MP Rachel Reeves, chairman of the Business, Energy and Industrial Strategy committee, said: ‘Post offices are a valued part of communities, providing an anchor in many villages and towns across the UK.

‘The Mail’s campaign gets to the heart of securing a sustainable future for our local post offices.

‘Post offices need a lifeline and we should look at them providing more banking services for a fair return – and the case for Government funding to maintain the network going beyond 2021.’

Liberal Democrat leader Sir Vince Cable said: ‘With banks closing their small town and rural branches too, the post office can be a critical necessity to communities in accessing financial services.’

Shadow business secretary Rebecca Long-Bailey added: ‘Post offices are a vital lifeline for many people across the country, especially in rural areas, yet the Government hasn’t lifted a finger to prevent them from closing. The Government must act with urgency to ensure that the long-term future of local post offices is secured.’

The Business Retail Consortium said: ‘Post offices play an important role for both businesses and consumers. The access to cash post offices provide can support retailers and local businesses on the high street – all contributing to vibrant town centres.’

A few months ago, Dan Cocks put up a sign for customers hoping to send letters at his general store and post office. He could only send four items per customer per day

Yesterday Post Office boss Alisdair Cameron was publicly shamed by MPs at a meeting of the BEIS committee. Labour MP Peter Kyle, whose local post office in Hove, East Sussex, was closed last year, said: ‘Your brand and reputation in the community I represent is absolutely in tatters.

‘It’s a complete mess and that is something that has been replicated in community after community.’

Andy Furey, of the Communication Workers Union, told the committee: ‘The Post Office of today is sleepwalking into a nightmare because of network transformation. I think it’s the most unstable and vulnerable that it’s ever been. We’re looking over the precipice. The network transformation has been an unmitigated disaster.’

Mr Cameron apologised for ‘getting it wrong’ and told MPs: ‘Our first job is to keep the services on the high street.’

Responding to the criticism last night, Postal Affairs minister Kelly Tolhurst said: ‘We recognise the vital role that post offices play in communities, which is why we require the Post Office maintains at least 11,500 branches nationwide and why we have invested £2billion in modernising the network since 2010. As a result, the network is in its most financially stable position in decades.’


By Tom Witherow for The Daily Mail

How are post offices run?

All post offices are owned by Post Office Limited, a government-backed company. Around 98 per cent of branches are franchises – independent businesses that pay a small fee for the right to use the Post Office’s name and infrastructure.

The remaining branches, known as Crown post offices, are larger and managed directly by the parent company. They are typically found in large towns and cities. Post Office Limited has been profitable since late 2017. It also receives subsidies from the Government to support the 3,200 post offices that are not commercially viable.

Why is the post office network in such trouble?

The businessmen and women who run post offices say they have been hit by cuts to their fees and falling demand for services driven by the rise of the internet.

More than 1,000 branches have already closed. Some are being replaced, others have reopened in a different shop, but many never return. Campaigners are worried that the Post Office will continue to struggle to find people to take over franchises if the closure rate rises.

This would mean that post offices close and never reopen, and customers are forced to travel further to access services.

Doesn’t the Government subsidise rural branches?

Between 2010 and 2016 the Government provided £170million per year on average to keep open rural branches that do not make a profit. But, as the Post Office has become profitable, the amount of taxpayer money spent on the business has been drastically cut. Last year it was reduced to £60million a year and just £50million will be provided by 2020 to 2021. No subsidies have been agreed beyond 2021, putting the future of those 3,200 struggling branches in doubt.

Why can’t small post offices make a profit?

Most post office branches are operated out of shops which also sell groceries, stationery and newspapers. Some are off-licences, and in tourist areas they often sell souvenirs, postcards and foreign currency.

Sub-postmasters receive a commission from Post Office Ltd for the sale of stamps, processing letters and parcels, and checking passport applications. They make 3p per stamp and 17p each time a customer withdraws cash. For a cash deposit they receive up to 50p.

They say their annual earnings are between £12,000 and £25,000. From this they have to pay staff, bills and other expenses. Some make a small profit, others break even and many more operate at a loss.

Do they get paid to provide banking services?

Post Office Limited has a deal in place with banks to allow customers to deposit cash and cheques and withdraw money, as well as check their balance in post office branches.

Sub-postmasters are paid a set commission, but Post Office Ltd takes a cut. They say they are servicing bank customers on the cheap. 

We work very hard – but the pay doesn’t match up 

By Andrew Levy 

There are times when Victoria MacDonald wonders why she bothers keeping her post office open.

The work is so hard and the pay so low she says the job amounts to ‘a bit of a thankless task’.

‘It’s very labour intensive. For the pay you get the work is very disproportionate,’ she said.

She and husband Grahame set up a post office in their pub The Cellar House four years ago after the last postmaster retired.

They run it in addition to another pub and a hotel, while juggling family life with two children aged 19 and 11.

Mrs MacDonald, 48, said the couple’s post office in Eaton, near Norwich, is just breaking even as less money is being paid for the services provided.

The closure of Barclays bank in the village also means the couple have taken on more responsibilities without the required training. ‘We’ve got people coming in to do what they would usually go to Barclays for,’ she said.

‘We’ve got an increasingly elderly community and people want to pick up their retirement money and pay in a cheque. That’s before you start doing the passports, driving licences and so on.

‘There have been days when I think “Why do I bother?” The only motivation in doing it is for the goodwill of the community.’

I had to limit letters, or shut 

A few months ago, Dan Cocks put up a sign for customers hoping to send letters at his general store and post office.

It read: ‘We have no alternative but to implement a limit of four items per customer per day.’

He said: ‘It was either that, or close the post office facility. It means we don’t lose so much money, because dealing with sackfuls of mail was very labour intensive. Processing mail is very time consuming, and it is us doing the donkey work for the Post Office. Our branch is open 98 hours a week and we receive just £100 per week from Post Office, which means we get about £1 per hour.

‘We just want a fair day’s pay for a fair day’s work.’ Father-of-four Mr Cocks, 44, who runs the Premier store in Whitstone, near Bude, Cornwall, added: ‘It is a scandal. The bottom line is that if it is not profitable, we will have to stop.’ 

Our future is looking bleak

Mr Bowman said his income has declined over the past decade despite serving as a vital hub for his Somerset village

John and Christine Bowman cite the love of their customers as one of the key factors keeping their post office going.

But Mr Bowman said his income has declined over the past decade despite serving as a vital hub for his Somerset village. ‘Our future is very bleak,’ said the 70-year-old, who took over the business in 1983 as a ‘lifestyle change’.

The branch lies in Charlton Adam, part of a series of villages dating back to the Domesday Book. He said: ‘If you talk to any postmaster they will say it is the customers that they really enjoy.

‘But you have to think of yourself and your wellbeing. We will keep bumbling but if we want to sell, it will not sell as a shop. The income is not there.’

He said the Post Office’s handling of contracts for local branches was a ‘farce’. 

We get only a fraction of fees customers pay

By Sam Greenhill Chief Reporter for The Daily Mail

Postmasters are demanding to know why they get such a tiny cut of the money customers are charged – and where the rest goes.

Some branches offer services such as checking an identity document. But while customers are charged £10.50, the postmaster keeps only £1. Last night Post Office Ltd chiefs refused to say how much profit it takes from these services.

A row also broke out over the small fees postmasters get for offering banking services. While banks can charge customers £7 for a £1,000 deposit, the post office branch typically gets less than 50p.

Ash Parmer, of Sutton-in-Ashfield post office, Nottinghamshire, said: ‘With the identity check service, we are the ones doing all the work. Post Office Ltd doesn’t do anything at all’

Some branches offer services such as document checking, passport ‘check and send’ and issuing international driving permits.

But mystery surrounds what happens to all the money customers are charged.

In the case of ID document checks, where a customer pays £10.50 for staff to verify that a copy of a passport or birth certificate is authentic, postmasters suspect the Post Office head office is making more money than they do. Ash Parmer, of Sutton-in-Ashfield post office, Nottinghamshire, said: ‘With the identity check service, we are the ones doing all the work. Post Office Ltd doesn’t do anything at all.

‘We get a pittance for the transaction we are doing. It’s the same with the passport check service and the international driving permit – for the majority of transactions, we are doing the work but getting peanuts.’

At Dorchester post office in Dorset, the postmaster, who did not wish to be named, said: ‘Why are we – the ones at the front-end, who have all the costs and are doing all the work – getting the smallest share?’

Calum Greenhow, of the National Federation of Sub-Postmasters, told MPs yesterday that of £20million made by Post Office Ltd from banking services in 2017 to 2018, ‘only £3million actually made its way through to the postmasters – in other words Post Office kept 85 per cent and we got 15 per cent.’ Last night Post Office Ltd said: ‘We are committed to ensuring our postmasters receive a fair remuneration for the vital services they provide.’ 

Source: Read Full Article