Post free-for-all 'Threat to heart of rural economy'

Rural businesses and communities in the Midlands could be crippled by the decision to open up postal services to competition, it was claimed yesterday.

The Country Land and Business Association claimed the two key aspects of the postal service – the national network of 17,500 post offices and the universal service obligation – were threatened by the proposals.

Plans drawn up by Consignia, formerly the Royal Mail, forecast the radical pruning of the network, with 8,000 post offices closing over the next five years.

The CLA said the duty placed on the firm by Ministers to avoid the closure of rural post offices, except where they cannot be made financially viable or combined with a local shop, offers scant protection to what it believes is a vital part of the rural business infrastructure.

The organisation’s concerns were echoed by the Birmingham-based Institute of Chartered Accountants in England and Wales, which fears the plans may also harm thousands of businesses that operate from home. Francis Beatty, regional director of the CLA, said: ‘Post offices are the very heart of most rural communities and their closure would be a devastating blow for communities already suffering from poor service provision and the rural recession.

‘Many rural post offices would like to turn into village shops, but imposition of business rates would usually wipe out any profit the shop may make.

‘This is an area where swift Government action could bring immediate benefit to the countryside.’

The decision by industry regulator Postcomm to open certain parts of the postal service to competition is also giving the CLA cause for concern.

‘Competition may improve the service for large business customers in urban areas, but it will do nothing to help those in the countryside,’ said Mrs Beatty/ ‘Efficient post collection and delivery is absolutely essential to the survival of businesses in rural areas. They are already disadvantaged by the scandalously slow roll-out of broadband telecoms and IT services to areas away from the major population centres.’

The CLA said an increasing number of businesses had been relocating to rural areas in the past few years, which had brought vital jobs and reduced travel costs to the countryside.

The creation of offices and other commercial premises had also proved one of the most successfulways for farmers and landowners to diversify according to the organisation.

Fay Goodman, small business spokeswoman for the ICAEW, was critical of officialdom, saying: ‘We have a serious contradiction in Government policy.

‘Firstly, we are advised that we need to address transportation and reduce traffic on our roads.

‘But when businesses operate from home – which reduces road and parking congestion – they could be penalised through non-delivery of early morning post containing vital cheques and contractors, if the proposals by Consignia are accepted.’ pounds 800m shortfall.