Council bids to run post offices

Essex County Council has become the first local authority in the country to discuss taking over the running of post offices earmarked for closure.

The council is negotiating a buy-out price from the Post Office and said some 15 branches could be saved within two months.

The closures in Essex were among 2,500 nationwide announced in 2006 in a bid to stem network losses of GBP 4m a week.

Postal affairs minister Pat McFadden has given approval to the scheme.

HAVE YOUR SAY In principle it seems the right thing to do but since councils are hardly renowned for financial competence, I expect it will quickly be used as an excuse for raising council tax Steve, Cambridge

The council set out to allay fears that council tax payers could end up subsidising what has been a loss-making business.

It said it believed it could make a profit by combining postal services with council services.

Councillor Stephen Castle said some 15 other local authorities had expressed an interest in its project and the Post Office said it was willing to work with others on similar takeovers.

“We have had interest from right across the country – people are clearly very worried about the future of their post offices,” said Mr Castle.

Other councils will be watching what happens with Essex to see if this is the way forward
Edward Welsh,
Local Government Association

Council leader Lord Hanningfield called the move a “unique and groundbreaking” deal but said there is still work to be done to assess the financial merits of the plan and how best to serve the community.

“Because of this, it is too early to mention specific branches at this stage.”

The aim was for any investment to be used over three years to help each branch to move towards becoming financially self-sufficient and “cost neutral” to the council, he said.

Rising losses

Mr Castle told BBC News the council hoped to be able to reopen 15 or 16 of the 31 post offices which had recently closed in the county.

It should be a service that is geared to customer needs rather than to traditional ways of doing things and traditional opening hours
Andy Burrows
Postwatch

The scheme has the backing of the Local Government Association, which represents local authorities in England and Wales.

It denied it would be a waste of taxpayers’ money but stressed the subsidy the Post Office gets from the government should go to councils to help them run “these essential services”.

But a taxpayers’ group warned that local councils are already struggling to provide basic services without branching out into running post offices.

“We think it is extremely risky,” said a TaxPayers’ Alliance spokesman. “If councils can’t collect the bins on time what reason is there to think that they’d be able to run the post office?”

Andy Burrows, of industry watchdog Postwatch, said a changing commercial environment had made it hard for post offices to fulfil their function. He stressed that customers need to be better served by postal services.

The government announced at the end of 2006 that 2,500 of the country’s 14,000 post offices were likely to close by the end of this year because of rising losses largely caused by fewer people using the network.

Critics say the closures will have a devastating effect on communities, particularly rural ones.