Half Britain's Post Offices `will have to close'

The Royal Mail has told ministers that half of Britain’s 14,500 post offices should be shut to stem mounting losses, it was reported today.

But the Government is likely to propose that a fifth of rural and urban branches- between 2,500 and 3,000 – be closed down, according to the Times.
Controversy over plans for reforming the network has been growing in the run-up to an announcement by the Department for Trade and Industry expected next Thursday.

Royal Mail has previously claimed that around 4,000 post offices nationwide would be the optimum “commercial” level, although chief executive Adam Crozier has accepted its social benefits must also be taken into account.

Currently the network comprises around 8,000 rural and 6,500 urban branches, and is said to make an operating loss of GBP2 million every week – subsidised with GBP150 million annually from the Treasury.

Ministers have been criticised for exacerbating financial problems by withdrawing key contracts such as the Card Account.

Any cuts are likely to be phased in over a number of years.

Kate Hoey, Labour MP and chair of the all-party group for sub-post offices, said: “MPs of all political persuasions would be up in arms if cuts of this scale were to happen.”

A DTI spokesman confirmed an announcement would be made this week, but insisted nothing would be confirmed before then.

“We recognise the wider social role of the post office in communities,” he said.
“But also there is widespread recognition that the current size of the network is unsustainable.”

A Royal Mail spokesman said: “The future size of the network depends entirely on the Government’s decision on the level of funding it’s prepared to put out.”