Royal Mail says siphoned-off aid claim ‘nonsense’ (UK)

Royal Mail rejected suggestion that millions of pounds of state aid intended to maintain vital rural post office services may be siphoned off to help pay for postal deliveries.
A spokesman for the group said the suggestion in a report from the all-party Commons business and enterprise committee, which sparked outrage among north and north-east MPs, is “complete nonsense”.
He was replying to a special report from the committee which also urged the independent watchdog National Audit Office “investigate the financial arrangements for outreach services”. Tory Chairman Peter Luff said his committee had heard evidence from Post Office Managing Director Alan Cook that the GBP 358million it receives from Royal Mail does not cover the cost of services it provides.
He said: “It is possible that this is down to inefficiency at Post Office Ltd, but it is also possible that it is because Royal Mail Group is inappropriately using Post Office Ltd, which receives some state support, to cross-subsidise its mail services.”
The spokesman said: “It’s complete nonsense to suggest that Royal Mail uses Post Office to subsidise the mails business and as Post Office Ltd made very clear, the issue is that it costs too much to run the post office network at a time when government and other traditional business is falling away.” He said so-called “outreach” services – which the committee feared are underfunded – “are one way to establish a commercially viable and successful business for a SubPostmaster providing services across a number of communities within the funding available from the government.”

Royal Mail rejected suggestion that millions of pounds of state aid intended to maintain vital rural post office services may be siphoned off to help pay for postal deliveries.
A spokesman for the group said the suggestion in a report from the all-party Commons business and enterprise committee, which sparked outrage among north and north-east MPs, is “complete nonsense”.
He was replying to a special report from the committee which also urged the independent watchdog National Audit Office “investigate the financial arrangements for outreach services”. Tory chairman Peter Luff said his committee had heard evidence from Post Office managing director Alan Cook that the GBP 358million it receives from Royal Mail does not cover the cost of services it provides.
He said: “It is possible that this is down to inefficiency at Post Office Ltd, but it is also possible that it is because Royal Mail Group is inappropriately using Post Office Ltd, which receives some state support, to cross-subsidise its mail services.”
The spokesman said: “It’s complete nonsense to suggest that Royal Mail uses Post Office to subsidise the mails business and as Post Office Ltd made very clear, the issue is that it costs too much to run the post office network at a time when government and other traditional business is falling away.” He said so-called “outreach” services – which the committee feared are underfunded – “are one way to establish a commercially viable and successful business for a SubPostmaster providing services across a number of communities within the funding available from the government.”

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