'Sabotage' threat to UK rural post offices

Fresh fears were expressed for the future of the Westcountry's post offices yesterday after new figures revealed that just one in six people are signing up for a scheme designed to safeguard the network.

The figures, released by the Department of Work and Pensions, suggest that the final take-up of the new Post Office card account could be so low that many more post offices will be forced out of business.

The scheme was launched in a bid to provide a financial lifeline for post offices, which are set to lose 40 per cent of their income as pension and benefit payments are switched directly to bank accounts. It will allow pensioners and other benefit claimants to continue claiming their money in cash at the local post office, as well as providing valuable income for sub-postmasters.

But the Department of Work and Pensions has been accused of sabotaging the scheme by making it difficult for pensioners and others to sign up.

If the current rate of take-up continues as the changeover is rolled out to the rest of Britain's 15 million pension and benefit recipients, many small post offices face losing about one-third of their income.

Losses on that scale could force many of the Westcountry's 700 remaining post offices out of business during the next few years as sub-postmasters conclude that their businesses are no longer viable.

Colin Baker, general secretary of the National Federation of Sub-Postmasters, yesterday warned that the new figures confirmed the worst fears of sub-postmasters.

He told the WMN: "This is the inevitable consequence of the activities of the Department of Work and Pensions who have done their best to steer people away from the post office. All their actions – the forms, the interviews, everything – are making it much harder to choose post offices, and although people want to support their post office they just give up in the end.

"We feared this would happen, and these figures confirm the worst. If these figures continue as the process is rolled out, it will be very bad news for the post offices and very bad news for the people who use them.

"I am not allowed to advise people on what account is best for them. What I can say is that if too many people switch to the banks then post offices will suffer. The best way of keeping your post office open is to opt for a card account."

The latest figures show that just 200,000 of the 1.2 million people who have switched to the new payment system have opted for a Post Office card account rather than an ordinary bank account. Sub-postmasters have complained that they are not allowed to promote the new account, and that the DWP has made it difficult for people to apply.

While those switching their payments to a bank account have to fill in just one form, those opting for the new card account have to telephone the DWP for an interview on their circumstances, as well as completing a number of other steps.

The DWP insisted that the early figures might not be "representative", as the initial tranche of people changing to direct payment was mainly comprised of child benefit claimants and war pensioners.

Pensions Minister Malcolm Wicks denied that the DWP had skewed the application process to make it harder for people to open one of the new accounts, which cost the department more to administer.

Around half of the Westcountry's 300,000 pensioners collect their pensions at the local post office using the order book system. In the next few months they will receive letters from the DWP telling them they must change their payment method – either to the banks or the new card account. Any significant loss from this number to the banks would be a major blow to the region's small post offices.

The change to direct payments was designed to save the Government around £400 million a year, but any savings now look set to be far lower.

Matthew Taylor, Lib-Dem MP for Truro and St Austell, said the Government had made it "impossibly difficult" for people to open one of the new accounts.

"Sub-postmasters in the Westcountry are tearing their hair out about this," he said. "I have had several in my constituency who have rung up to try and open one of these accounts themselves and been steered towards a bank account instead, so it is no surprise that the take-up figures are so low. Only the most insistent are getting through.

"The Government's policy is extraordinary. On the one hand it says it wants to keep post offices open, but at the same time is actively trying to deter people from using them, which will inevitably lead to more closures."