Members of Britain’s House of Commons have expressed “serious concerns” over current plans to modernise the Post Office Ltd network.
The House of Commons Business, Innovation and Skills Committee said today that the ongoing effort to transform 6,000 of the UK’s 11,800 post offices into 4,000 “Main” and 2,000 “Local” branches was too inflexible to the needs of communities, and that the model was based on “narrowly focussed” research.
The Committee did support the overall direction of the government’s plans to restructure the Post Office Ltd network to wean it off state subsidy. However, it said there were problems in the details of the plan, which will see around GBP 200m invested in redesigning the 6,000 branches.
In particular, the streamlined “Local” post office model came under fire, with MPs suggesting their restricted range of services and varying service quality levels across longer opening hours, along with staff vetting and training deficiencies, could “erode the ethos of many post offices”.
The MPs criticized research behind the Post Office’s new Locals model, stating that the new kind of post office had been trialled in areas where there had not previously been post offices – helping with public support – while independent research from Consumer Focus had not taken account of social demographics, the Committee suggested.
The Committee also warned that remuneration for Local post offices “may not be viable for postmasters” making it more likely that a small number of major retailers could end up running the majority of post offices. The MPs noted that supermarket chain Tesco had expressed interest in running 600 Local branches.
This would bring risks if Post Office Ltd was then mutualised, the MPs suggested.
“The BIS Committee supports the direction of travel set out by the Government. However, a number of serious concerns remain,” said Adrian Bailey, the Committee chairman.
“The pilot scheme for ‘Local’ post offices must undergo a rigorous assessment to ensure there is sufficient flexibility in the model. Post offices should be responsive to the needs and demands of diverse communities.”
Bailey, a Labour MP for West Bromwich, added: “The Government must be alive to the risk that its new model could erode the ethos of many post offices. The ‘Locals’ model needs to be viable and attractive to a wide range of operators.”
One particular area of concern for the BIS Committee in the government’s plans for Post Office Ltd was its “patchy” record in awarding contracts to the network to run government services.
The report noted that as the network looks to become fully self-sufficient prior to mutualisation, the income from running government services will have an “important role in the financial viability of post offices”.
The government’s own figures show that Post Office revenue from government services fell sharply from £576 million in 2004-5, to £167 million in 2009-10, with major contracts like the “green giro” programme, which provides benefits and pension payments to around 350,000 people, transferred to the private sector.
“The record of Government in delivering services through the Post Office is patchy at best. Warm words and aspirations will not suffice,” said Bailey. “Much greater clarity is needed both from the Government and from Post Office Ltd.”
Getting the correct balance
Commenting on the MPs’ findings, the national consumer watchdog Consumer Focus agreed that while the new Post Office Local model offered some benefits for consumers, more consideration was needed on the range of services made available.
Mike O’Connor, the Consumer Focus chief executive, said: “Getting the correct balance between what consumers need and what might be attractive to potential operators of the new model is not straight forward. The need for change is pressing, but getting the programme right at the beginning is critical to its long term success.
“More needs to be done on the range of products available, staff training and the advice given to consumers, privacy and availability of cash if we are to maximise the chances of success for the programme,” said O’Connor.
Britain’s largest postal union, the Communication Workers Union, said the MPs’ report highlighted “serious doubts” over the testing of the Locals model.
The CWU, which has criticised the streamlining of services since proposals were first mooted, called for a moratorium on any rollout of Local branches across the country.
Billy Hayes, the CWU general secretary, said: “We share the Committee’s fear that the Locals model will only work for large companies like Tesco through their convenience store network which could suck in limited services and change the ethos of the publicly-owned Post Office forever.
“If this programme marches ahead, post offices close and then services fail it will either be costly to re-open a post office or will leave communities without these services. There are too many risks and unanswered questions and too little consultation and collaboration with postmasters and communities for this programme to go ahead unaltered.”
Source: Post&Parcel/BIS Committee/Consumer Focus/CWU