UK Post Office® branches to become more commercial and offer more financial products and services in sweeping changes, Allan Leighton reveals today

Post Office branches will sell a comprehensive range of financial services as part of a sweeping commercialisation of the UK’s network of branches, Allan Leighton, chairman of Royal Mail revealed today (Tuesday) at the National Federation of Subpostmasters conference in Scarborough. The first, an unsecured personal loan, will go on sale from October with a national roll out targeted for January/February 2004.

Mr Leighton said: “Post Office reinvention is now truly underway, and David Mills, the Chief Executive, and I want it to be based on the entrepreneurial skills of our subpostmasters backed by new products, new incentives and new advertising. We are determined to put our Post Office branches on a better financial footing, by giving customers the products they want and letting subpostmasters get on with the job of running their branches to suit their customers. Post Office branches will offer additional financial services in the way that supermarkets currently do, but they will be more accessible, offered with a more personal touch and backed with a real community brand.”

“The other part of the formula is certainty – so we’ll speed up the rate at which we’re changing the network. By the end of the summer David Mills will start to unveil area by area plans of the future urban branch network, so that subpostmasters and customers can get a realistic picture of Post Office services in every town and city.”

He revealed that, in addition to personal loans, over the next eighteen months customers will be able to take out a Post Office credit card, savings account and get motor and life insurance. These financial products will add to the already highly successful sales of foreign currency, travellers’ cheques and travel insurance.

Three hundred more Post Office branches will sell euros and US dollars on demand from July, and an additional 1,000 branches will be selling MoneyGrams from later this month. There will also be a trial giving pay-as-you-go internet access with easyInternetcafe in the next two months. A TV, radio and newspaper advertising campaign starting on Boxing Day will promote these new products.

Other changes to make Post Office branches more attractive to customers will include extended or more flexible opening hours, with subpostmasters deciding when their branches should be open to attract most customers. As part of giving subpostmasters a greater say over the running of their branch, Post Office Ltd will give subpostmasters a greater incentive to make a profit. This will be done by increasing the element of pay based on product sales. Mr Leighton said: “It’s time we treated subpostmasters like the entrepreneurs they are and allowed them to benefit from the work they put in running their branches, just as they would if they were running any other business. So in the future each time they make an extra sale, they will increase their profit.”

Turning to urban branches Mr Leighton said that the urban closure and investment programme will be brought forward by a year to end in December 2004, and changes will be carried out on an area-by-area basis rather than on the current branch-by-branch basis. The plan is still to close around 3,000 of the 9,000 urban branches – 257 branches were closed between January and the end of May – but to do it faster to reduce the uncertainty facing subpostmasters so that they can concentrate on building sustainable businesses. By planning the changes on an area by area basis local people, MPs, councillors and Postwatch – the consumer watchdog – will get a better idea of the final number and location of branches at the end of the programme. The Post Office is currently in discussions with Postwatch on the best way to do this. He reaffirmed David Mills'''' promise to customers that 95 per cent of those living in urban areas will still have a Post Office branch within a mile of their home after December 2004, and that local people’s views will continue to be taken into account before closing any branches.

Mr Leighton said: “We recognise the huge upheaval the closures mean to our customers, and are heartened by how much they care about their local branches. However, these closures are unavoidable because too many branches are struggling to survive due to a lack of business, which isn’t good for our customers or subpostmasters. We have a great brand and some great new products, which can underpin a growth in business, so long as we tailor them to the needs, demands and numbers of customers. Streamlining the network and introducing new products should give the 6,000 urban branches that will continue to operate a brighter future.

“I know that by working together we can make Post Office branches dynamic retail outlets that attract customers and generate a decent income for subpostmasters. The next two years are going to be challenging, but I firmly believe that the Post Office network has a bright future.”

Ends

Notes to editors:

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There are around 17,000 Post Office branches in the UK, of which 8,894 are urban and 8,345 are rural.

The urban closure and investment programme – network reinvention – got Parliamentary go-ahead on 15 October 2002. This approved a £210 million package – £180 million in compensation for 3,000 urban branch closures, and £30 million for investment in the other urban branches. Under the programme the first closures took place in January 2003, and 257 have closed up to the end of May.

On 27 May 2003 the European Commission approved a three-year package worth £150 million a year to keep rural Post Office branches running.