UK government defends new-style Post Office Locals

The UK government has defended its introduction of new-style “Local” post offices as part of the modernisation of the Post Office Ltd network. The Department of Business, Innovation and Skills said today that it does not share MPs’ concerns about large retail groups like Tescos running hundreds of post offices in store, and “eroding the ethos” of the post office network.

And, in response to criticisms from Parliament issued in July, the government said the new Locals model had been sufficiently tested, and concerns about the range of services being offered in the streamlined post office branches was being “overstated”.

“As a result of the comprehensive pilot phase, and the positive customer reaction, the Government has confidence that the ‘Local’ model will be a success in suitable branches,” said the government today.

The Communication Workers Union hit back at the government this afternoon, accusing ministers of being “in denial” regarding problems highlighted by MPs on the Business, Innovation and Skills select committee.

“We feel the government has unjustifiably ignored the key recommendations in the Select Committee’s report and is in denial about the serious flaws in the Network Transformation plan,” said Billy Hayes, the CWU general secretary.

Post Office Locals

The new style of “Local” post offices providing a streamlined range of services in smaller communities has been piloted since 2008 – with Locals initially called “Essentials”.

Last month the pilot officially become a permanent programme.

So far, 97 Local branches are operating in urban area, with 141 branches (59%) in rural locations. The UK government wants to see 2,000 Locals operating by 2015, with 4,000 “traditional” post offices to be modernised as “Main” post offices, keeping the full range of post office services.

Last July MPs on the Business, Innovation and Skills Committee expressed concerns about the limited range of services that Locals will offer.

Today the government said during the pilot phase, additional services have been added to the Locals model, including the ability to send parcels up to 30kg in weight, vehicle licensing services for those post offices that previously offered such services, and automated cheque deposit services.

The government said of the Locals’ service range: “Typically these services account for over 95% of total post office transaction volumes and therefore care must be taken not to overstate the reduction in the range offered.”

The Department added that many criticisms about “lost services” had overlooked the fact that services like passport checks and vehicle licensing were not available in the “traditional” post offices being replaced by Locals.

Another complaint from MPs was at the government itself failing to award contracts to run government services through post offices. The Department said it was bound by European Union procurement rules on how it awarded its contracts.

Post Office had to win government work on its merits, the government said.

“Both central and local Government and their agencies must secure services in line with EU procurement regulations, which prevent Governments from favouring particular companies – which includes Post Office Ltd,” it said.

Testing

Responding to suggestions by MPs that the Locals model had received limited testing, with results skewed by testing in areas that previously did not have a post office, the government insisted there was a “representative” mix of locations and social demographics during trials.

“Crucially, and contrary to the Committee’s assertion, Post Office Ltd’s research covered both on-site and off-site conversions to the ‘Local’ model and the latest data continues to show that customer satisfaction for both on-site and off-site conversions to the ‘Local’ model is consistently well above 90%,” said the government, adding that Post Office Ltd planned to carry out ongoing customer satisfaction research with Main and Local post offices.

The Communication Workers Union said today that if the government had really received as much satisfaction with the Locals model, it would have seen a lot more subpostmasters applying to convert to post office Locals.

The CWU general secretary Billy Hayes claimed the government would not be able to maintain a policy of no post office closures with the “lack of take up” for the new models.

“If the project was as successful as is being purported then the Post Office would surely have been inundated with requests to convert, however this has not happened and the Post Office is desperately trying to seek volunteers, regardless of how this may affect communities,” he said.

“More time must be spent working with postmasters to develop solutions to the problems the network faces.”

Ownership and mutualisation

MPs had also expressed concerns about reported ambitions by retail giant Tesco to run up to 600 UK post offices, warning of the influence of a small number of retail operators, particularly if Post Office Ltd is mutualised and owned by key stakeholders.

But today the government dismissed such concerns, saying large retailers already operate around a quarter of all post offices in the UK, and were “contributing to a well-established and beneficial mixed ethos within the network as a whole”.

The Department said Post Office Ltd was required to maintain a network of at least 11,500 post office branches, and that the four largest supermarket chains combined could not offer more than 5,000 outlets.

“Post Office Ltd’s network will continue to consist of a wide range of independent, symbol group operators and multiple retailers who are best placed to provide access to Post Office services in a particular community,” said the government.

The UK government aims to mutualise Post Office Ltd, so the organisation is owned by its employees and key customer groups. A stakeholder forum convened for the first time last month to begin drawing up proposals for mutualisation.

Back in July, MPs had demanded a full roadmap from ministers for how mutualisation will proceed.

Today, however, the government pointedly refused to provide the Committee with details on the plan, stating that it was “vitally important” that the government does not prescribe how a mutual Post Office should look, but instead should allow the business and its stakeholders to develop a “shared vision”.

The Communication Workers Union today called on the House of Commons Business, Innovation and Skills Committee to continue monitoring the ongoing changes to the Post Office network.