UK post offices in jeopardy despite big cutbacks

THE future of some post offices remains uncertain despite a huge closure programme designed to boost the financial viability of those that remain, an official report has found.

Almost one in three, or 7,000, post offices has been closed in the past 22 years, to the fury of many small communities and elderly people.

However, the drastic cuts in the network may still leave some sub-post offices vulnerable to falling volumes of business, the National Audit Office (NAO) said.

A report by the Government’s main spending watchdog concludes that the future of the remaining post offices cannot be “guaranteed” and urges the Department of Trade and Industry (DTI) to be alert to the problem.

Post Office Limited is on course to shut about 2,500 urban post offices in the latest closure programme. However, the NAO said there was still some uncertainty as to whether the programme, backed by Pounds 210 million of public money, would achieve its long-term aim.

Sir John Bourn, Comptroller and Auditor-General at 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 and the DTI must stay alert to this.”

Edward Leigh MP, chairman of the Commons Public Accounts Committee, said that he was concerned to find that even after the present closure programme, many individual sub-postmasters might still struggle to run a profitable business.

“The future for some post offices is still bleak,” Mr Leigh said.

The NAO report lays the blame for the uncertainty at the door of the DTI, saying that it has made slow progress in piloting alternative methods for providing post office services in rural areas. The department is also criticised for not using its allocated budget more effectively.

Mr Leigh said the Government needed to stop “tinkering around the edges” of the rural problem.

“The Government needs to stop sitting on the fence over the future of rural post offices beyond 2008,” Mr Leigh said. “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 Government is giving up to Pounds 150 million a year until 2007-08 to keep rural post offices open.

Postwatch said that it welcomed the NAO report, which confirmed many of its concerns about the handling of the rural postal network.

Postwatch, the consumer watchdog, added its voice to calls for the Government to make clear what its policy on the rural post office network is.

Peter Carr, chairman of Postwatch, said: “Financial support may be in place for the medium term, but sub-postmasters and customers alike need to know that the Government has a clear, positive vision for rural post offices’ long-term role.”