Future of UK rural post offices in doubt

THE future of nearly 6,800 rural post offices was thrown into doubt last night after it emerged that a European Commission decision on a crucial Pounds 450 million aid package has been delayed until the summer.

Although the Government has already pledged money to maintain the loss-making rural post office network, it needs Commission approval before the cash can be paid. A decision from commissioners was expected this month but has been delayed.

The Post Office spends Pounds 3 million each week to keep rural post offices afloat. The Royal Mail Group has said that up to 80 per cent of the 8,415 branches in rural areas face closure without further subsidies.

News of the threat to the post offices comes as the Government today launches the “Universal Bank” – an ambitious plan to abolish paper-based benefit payments for the 14 million claimants who collect their payments in cash at post offices.

Early indications suggest that the renamed Post Office “card account” will fail to achieve the Government’s aim of saving resources and cutting fraud. The Department of Work and Pensions admitted that just 100,000 of the 1.3 million initial targeted claimants have chosen to apply for the account and some of the biggest banks and building societies have yet to sign up.

(c) Times Newspapers Ltd, 2003