UK MPs to launch inquiry into future of crown post offices

Post Office executives are to be grilled byMPs overthe future of the 550high street crown offices, some ofwhich are facing closure,relocation or being taken over.

Crown post offices are directly owned by the Post Office, unlike smaller sub-post offices, and lose almost Pounds 70m a year thanks to soaring rents, inefficient use of space and labour-intensive working practices.

Options being considered to make the offices more commercially viable are closure, relocation to nearby but lower-cost premises, and franchising out to convenience store groups such as Londis.

It would be possible to run a scaled-back post office counter from these stores, the Post Office has said.

Ian Fisher, of consumer watchdog Postwatch, said crown office closures could be more controversial than the recent cuts in urban sub-post office numbers.

“Crown offices are the flagship stores within the network, they are prominently-located and heavily-used, so any change would attract a lot of interest.”

In May, David Mills, Post Office chief executive, was questioned by the Commons trade and industry committee over plans to close 2,500 sub-post offices in urban areas. The committee announced yesterday that it would launch a fresh inquiry into the state-owned company’s intentions for its crown offices, following press reports of possible closures.

The committee said it had already raised the question of why the Post Office was carrying out separate reviews of its sub- and crown offices, rather than one definitive closure programme. It queried “the wisdom of such a separate review, given that in many instances sub-post offices have been closed on the assumption that their customers could instead use the local crown office”.

As well as the future shape of the network, the committee said it would examine the reasons for heavy losses by crown offices’, the conduct of public consultations and the role of the network in delivering government services.

No date has yet been set for the hearing. A Post Office official said “the review (of crown offices) continues”, and no firm decisions had yet been made.

It is thought that no more than 50 crown offices will close, and that the company favours relocation as a way of reducing costs and keeping outright closures to a minimum.

The official said: “The challenge which the Post Office is tackling is to find ways to continue providing main post office services to all our customers, but on a more sustainable, and commercial basis.”

About 80 per cent of crown offices are rented, and the group said that rental costs had been rising steadily because of the prime locations the offices often occupied. The branch in Trafalgar Square, central London, generated the biggest revenues of any post office in the country but also made the biggest losses.

Another problem for crown offices is the poor use of space. Many used to include sorting offices, but this activity has since been moved to larger depots, leaving floors unused.