Post Office Ltd Response to the
Committee's Third Report of Session 2004-05
Post Office Ltd welcomed the report following the
Committee's inquiry into Directly Managed Post Office branches.
We are pleased that the Committee has recognised that we are committed
to a sustainable directly managed network, and that there is a
need for action by Post Office Ltd to return this network to profitability.
There are a couple of issues however that we would like to make
further comment on.
When Post Office Ltd appeared before the Select Committee
on 30 November 2004 there was some discussion about the circumstances
in which we might need to close directly managed branches, as
well as the possible numbers involved.
We said that over the next 5 years we expected to
close 5 or 6 a year up to a maximum over the 5 years of 30 branches.
We also stated at several points in the discussion
that the main circumstances under which we would need to close
a branch would be related to being forced to do so, for example
by being unable to renew leases, or lease renewals being too expensive.
This is still our view. However there will be a number
of circumstances within the overall total of 30 over 5 years where
it makes sense, in the context of reducing the significant losses
of the Directly Managed branch network, to combine branches onto
one site in order to reduce rental charges and provide a more
modern environment for our customers at the new location. A few
such possibilities are now emerging.
We are therefore notifying the Committee that there
will be a number of cases over the next 5 years that will fall
in to this sort of category. We will, of course, consult with
local representatives on any network change proposals of this
kind.
Your report also stated that Post Office Ltd sets
aside £20m per year for refurbishing branches. We would like
to point out that in our written memorandum we said that we envisaged
committing a minimum investment in the order of f20m over the
next two years on branch improvements, subject to the necessary
approvals.
We were pleased that when giving evidence to the
Committee, the Minister for Postal Services agreed that there
should be better dialogue between government departments and Post
Office Ltd over the cost of government contracts, and that departments
should pay an economic price for the services delivered by the
company on their behalf We would like to advise that we have written
to the Minister on this issue, and in doing so hope to make him
aware of our appetite to take on more government work where this
is mutually beneficial.
