Consignia `should abandon Post Office closure plans'

Consignia should abandon plans to close thousands of urban post offices and allow them more time to develop new income streams, the Liberal Democrats urged today.

Many post office branches are already struggling for profitability and are threatened with losing a further 40% of their income when the Government starts to pay benefits directly into bank accounts in two years’ time.

The Liberal Democrats believe that up to 3,000 of the 8,500 urban branches could close in a programme which will cost the Government #180 million in compensation payments.

The plans have prompted widespread union and public opposition.

The Liberal Democrats argued today that the money would be better spent on keeping the offices open until they are able to develop new sources of income, such as the Government’s own plan for a Universal Bank providing banking services to the estimated six to eight million people who do not have a conventional bank account.

The party’s trade and industry spokesman Vince Cable told a Westminster press briefing: “The mass closure programme should be postponed, phased out in order to ensure that this Government money is used to give post offices a breathing space to find new sources of income.

“A post office is often the heart of a community and rather than using this money to buy out postmasters and mistresses, it would be more creative to take social considerations into account, and keep the network going.”

Mr Cable suggested that post offices should be protected by a universal service obligation, under which Consignia would be obliged to take into account the social value of a post office in a cost-benefit analysis of any closure proposal.