UK post offices facing bleak future MP warns

The future for some post offices remained “bleak” despite a closure programme aimed at boosting their viability, a leading MP warned, following an official report into the business.

The National Audit Office said the Government needed to be alert to falling volumes of business that could threaten sub post offices.

Despite the closure of 2,500 branches there was uncertainty whether the programme, backed by £210 million of government money, would achieve its aim of producing a viable network, according to the study.

Edward Leigh, chairman of the Commons Public Accounts Committee, said: “The future for some post offices is still bleak. I am concerned to learn that even after the programme of 2,500 closures in urban areas, and work to provide different kinds of financial services, many individual sub postmasters may still struggle to make enough profit to stay open.”

Mr Leigh, Tory MP for Gainsborough, said the Government should stop “sitting on the fence” over the future of rural post offices beyond 2008.

“It should either commit to subsidising post offices, where necessary, for the benefits they bring to communities, or take a totally business-minded view and throw its weight behind new services which hold genuine commercial potential.”

The NAO report said that a significant number of rural post offices were not viable and the rural network was “heavily loss making” for the Post Office.

The Government was giving up to £150 million a year until 2007/8 to keep rural offices open.

Sir John Bourn, head of the NAO, said: “The Government faces some difficult decisions if it is to maintain a viable network of post offices.

“Although the rationalisation programme has put the remaining urban post offices on a firmer footing, their future is not guaranteed.”

A spokesman for the Department of Trade and Industry said: “The Government fully supports the Post Office strategy for creating a viable and sustainable network of post offices for the future.

“The Government’s commitment to the future of the Post Office is clear – it has invested more than £2 billion public money in the business since 1999.”

Peter Carr, chairman of consumer group Postwatch, said: “Decisions to close urban post offices have been dominated by sub-postmasters volunteering to leave with compensation.

“This will create gaps in the remaining network, which will reduce access for some customers and test its viability in the future.”