Plan to close half of all post offices
UP TO HALF OF Britain’s 17,500 post offices could be closed down under plans drawn up by Consignia as a desperate measure to cut losses.
The former Post Office wants to close 1,000 post offices now with a further 7,000 to go over the next five years, according to a strategic plan submitted by Consignia to ministers in London.
The report, produced by senior Consignia executives, claims too many post offices are making losses and have to be closed if the company wants to have a future.
It was written with the advice of the bankers UBS Warburg. The company is currently negotiating with the National Federation of Sub-postmasters over where the axe will fall.
The report was produced on the back of heavy losses suffered over the first six months of this financial year. Post Offices will also be confronted with the loss of income from paying out benefits and pensions to 16 million customers from January next year when government welfare payments are paid directly into claimants’ bank accounts.
But there are suggestions the report may be an attempt to lever more government subsidy for Consignia. The company is technically state-owned but is allowed to act independently by the government.
The political fall-out from such a radical restructuring would be a serious blow to the credibility of the government, which would be reluctant to sanction such a dramatic reduction in the quality of service offered to consumers.
Martin O’Neill, the Labour MP for Ochil in Clackmannanshire, and chairman of the Commons Trade and Industry select committee, said: “The Post Office has become an extremely emotional issue and MPs from all parties are very jealous guardians of these shops which have a big place in the affections of the British public.”
The number of post offices across Britain has already dropped by 1,750 over the last five years. Last year complaints over the quality of postal service rose to two million.
The proposals are also likely to spark a major industrial relations row. Consignia is also likely to suffer strikes by postal workers over plans to cut 30,000 jobs.
