Urban branches facing closure
The postal network is soon to face a new blow with a massive closure programme for urban post offices which could see about 3,000 branches go to the wall.
In the next few days the Department of Trade and Industry is expected to seek European approval for a Pounds 180 million compensation package to help to streamline the 9,000-strong chain of urban sub-post offices. It also wants to provide some money -a little more than Pounds 25 million -to help to revamp the existing ones.
The move comes after ministers said in January that they would help to compensate sub-postmasters who want to give up their businesses. It is the latest development in government plans which were drawn up two years ago to try to “reinvent” local post offices.
The aim is to give the crumbling network a better chance of survival by ensuring that fewer businesses have a greater share of the market. Last year 547 sub-post offices closed as their owners -sub-postmasters who run the franchised offices -struggled to make any money. Some sub-postmasters, who are self-employed, have complained that their takings are so low that they earn less than the minimum wage.
And things are about to get much worse. Next year the Government will begin transferring benefits payments direct to bank accounts. The move will have a devastating effect on many urban sub-post offices which often get 40 per cent of their revenues from benefits work. A “universal bank” service is also planned for the post office network so that those looking for bank accounts could be enticed by no-frills accounts offered by the big banks which are backing the scheme.
The slide in profits and prospects have made sub-post offices virtually unsaleable. If the Government gets European approval for its compensation and “reinvention” assistance, sub-postmasters will be canvassed about whether they want to quit. The average compensation package could be between Pounds 70,000 and Pounds 80,000.
After all sub-postmasters have been canvassed, a mapping exercise will be carried out to determine which branches should be kept open. No one will be forced to quit if they do not want to.
(c) Times Newspapers Ltd, 2002
