Chief urges swift action over local post offices

The head of the body regulating postal services warned last night rural sub-post offices face near “freefall” unless a Government decision about the future of the network is taken soon.

PostComm chairman Nigel Stapleton issued the dire prediction as he ended a tour of Scotland in the far north with a visit to a pilot mobile post office at Reiss, near Wick, a traditional sub-post office at John O’Groats and talks with local businessmen and councillors in Thurso.

Earlier he visited an alternative pilot with a full sub-post office operating satellite sub-offices for a few hours a week in neighbouring villages around Leven in Fife and had meetings in Dundee.

As well as continuing Government cash support in recognition of the social role of local post offices in the community, he urged the lifting of the Royal Mail monopoly so the Post Office can benefit from handling growing business from private sector operators like TNT and DX a year after the end of Royal Mail’s monopoly delivering letters and parcels.

Mr Stapleton lashed the indecision of Government ministers who were supposed to have issued a consultative document on the future of the rural network earlier this summer.

He said: “Where their thinking is going is not clear to us at all.” PostComm will be publishing their own report – Post Offices at the Cross Roads – next month, a title “carefully chosen” because if a decision is not taken soon on how to support the rural network when existing subsidy arrangements run out in 2008, “we are almost going to go into freefall mode with sub-postmasters with their own money in the business not having any certainty about what their future is”.

He added: “We are pushing the Government to take this issue to an even higher profile than at the moment.” He said the Post Office is losing GBP100million a year in addition to the GBP150million subsidy for rural offices and strictly to break even would require just 4,000 of the existing 14,500 offices.

This would have “significant negative effects in rural communities”.

Mr Stapleton said his authority regulates the postal delivery business but only has a “powerful” advisory role on the collection side.

He said there were two critical reasons why the network should not be so savagely cut. The Government had to recognise the social importance of local offices, and much more could be done rolling out alternative ways of delivering postal services and generating other revenue.

He said: “One of the things we are pushing, because it is aligned with our competitive letter market, is that we do not accept the rationale that the post office network should be exclusive to handling Royal Mail and Parcelforce business.” Other delivery companies lack facilities for collecting and dropping off packets which post offices could provide and negotiations had already started.

Mr Stapleton welcomed the row over PostComm’s consultation including controversial changes under which deliveries would not have to be made to homes more than seven-and-a-half minutes drive off a public road down poorly-maintained public rights of way.

The Post Office dismissed the proposal as having no effect because it does not enforce the rule in Scotland, but he pointed out that if the rule were changed there was nothing to prevent the Royal Mail enforcing it in future.