Annex B
Text of letter sent to Opinion Farmers
in relation to the decision to close Notting Hill Branch
Post Office®
Notting Hill branch 224 Westbourne Grove, London W11 2RG
Consultation on our proposal to close the above
branch has now ended and I am now writing to let you know the
final decision regarding the future of this branch.
Before reporting on the consultation process
itself, I thought it might be helpful to give some background
to the original proposal relating to the Notting Hill branch.
The Post Office branch network is the largest
retail branch network in the UK. It is also the largest Post Office
network in Europe. Around 94% of the UK population currently live
within a mile of a Post Office branch, and in urban areas at least
95% of the population live within a mile of a branch. Approximately
97% of Post Office branches are owned by the people who run them
as agency branches, and most of these are run alongside private
businesses. The remaining branches are those that are directly
managed by Post Office Ltd, such as the Notting Hill branch. At
the end of 2003-04, there were 560 directly managed "Crown"
Post Offices.
In the 1990s, there were a number of factors
that put considerable stress on the Post Office network. In particular,
the income that Post Office Ltd receives from Government clients
has reduced in recent years, compounded by the decision to pay
benefits direct into bank accounts. Whilst this was happening,
the need for investment in individual branches increased through
computerisation and customers requiring higher standards of service.
This has led to a reduction in margins, where many branches and
the network as a whole, now make a financial loss.
For the urban agency network, the Post Office
Urban Network Reinvention Programme was designed in conjunction
with Government to address this decline, through closures in areas
of over-capacity and investment in remaining offices, to help
create a modern and sustainable network. This will also create
opportunity for improved profitability for urban sub-postmasters,
and generate greater investment in the fabric of the network through
a programme of match-funded grants.
Although changes to Post Office Ltd's directly
managed branches, such as Notting Hill, are not included in the
Network Reinvention Programme, the problems faced by branches
in the directly managed network are fundamentally the same as
faced by the agency branches. The directly managed network operates
at a significant loss—our latest figures indicate that these
are in the order of £70 million.
Over the past decade, Post Office Ltd has undertaken
a wide range of initiatives to improve performance. These have
included more flexible staffing structures and steps to reduce
unnecessary costs in branches, along with technological improvements
to make transactions faster and more efficient. The business has
also launched its banking services and begun to introduce a range
of new financial service products to boost sales and strengthen
our customer offer.
This work has been supported by substantial
investment in sales and marketing and staff training. Despite
the hard work and commitment of Post Office Ltd staff to tackle
the problems, there has continued to be a substantial reduction
overall in the number of customers using Post Offices during the
last few years. Post Office Ltd is committed to a significant
core of directly managed branches in the network, but they must
be financially sustainable. There are clearly some difficult decisions
to make if Post Office Ltd is to be viable and, at the same time,
to protect and strengthen its national network of urban Post Office
branches. Regrettably, it is these factors that have led to the
proposal to close the Notting Hill branch. These changes are difficult
for everybody involved, particularly our customers. However, our
aim is to create a sustainable future urban network, including
a significant core of directly managed branches, so that we can
provide service and accessibility to our customers in the future.
During the consultation period, feedback was
received from the local Member of Parliament, Karen Buck, other
locally elected representatives, customers and Postwatch. A number
of petitions were submitted and there was also a representation
from the North Kensington and Notting Hill Post Office Closure
Action Group, in the form of a three-part report. My colleagues
Drew McBride, Head of Area for commercial branches in the area
and Simon Storer, External Relations Manager, attended meetings
with local Councillors and members of the public. Post Office
representatives including Dave Miller, Chief Operating Officer
and Richard Barker, General Manager for our commercial network
also met with Karen Buck MP at a meeting with the London Labour
MP's group. We also met customers in the Notting Hill branch on
three separate occasions and at a local venue, The Tabernacle
Trust. In addition the consultation period was extended by two
weeks, bringing the total public consultation time to 10 weeks.
Over the last month I have very carefully considered
the issues raised and have reviewed them against the original
proposal. I have now fully considered all the points raised in
response to our proposal and have decided that the permanent closure
of Notting Hill branch should proceed.
All of the feedback was extremely useful in
helping me reach my final decision and I would like to highlight
the more frequently expressed views for you below. I hope the
following summary of points raised and how they have been considered
in the decision making process is useful to your understanding
of that decision.
Understandably one of the main questions asked
was why such changes need to be made, particularly when the branch
appears to be busy. Regrettably this does not always mean that
a branch is commercially viable. Directly managed branches are
considerably costlier to run than comparable branches in the commercial
network. The reasons for this difference and losses sustained
by directly managed branches, such as Notting Hill, are high property
and staff costs.
Having said that, the decision is not based
simply on the financial performance of the branch. Before putting
forward the proposal for closure of Notting Hill, we not only
carried out a vigorous internal assessment of the needs of our
business, but also looked very carefully at the needs of the local
community and the alternative service provision available to it.
We also considered a range of options including whether the branch
might be relocated, or its business transferred to a franchise
partner. However, our primary aim is for a healthy, viable network
of Post Office branches that are economically sustainable and,
therefore, safeguard their long-term future. I realise that many
customers will feel that they are losing a vital part of the community
but the inescapable fact is that, having considered carefully
the level of our service provision in the area, we have concluded
that there are too many branches, chasing too few customers. If
Post Office Ltd is to continue on the road to recovery and achieve
its aim of a sustainable, accessible network of Post Office branches,
we must change the way we provide our services even if this means
making difficult decisions to close individual branches.
Our customers were also concerned that the alternative
Post Office branches are difficult to get to. I appreciate that
using a different branch will be a major change for some and know
that this particularly affects our elderly and less mobile customers,
which is sincerely regretted. Of the three alternative branches
we have suggested, the key and secondary receiving branches, Kensington
Church Street and Kensington High Street, have good public transport
links, with bus stops within 125 yards of these branches and concessionary
fare schemes available for elderly and disabled people. The branch
we expect to receive the lowest migration of customers from the
Notting Hill branch is 2 Ladbroke Grove branch, which is located
half a mile away and will involve a steep uphill walk if approaching
from the existing branch. There is no direct bus link but as with
all of these branches, car-parking facilities are available nearby.
For customers not wishing to use the alternatives
we have suggested, there are a further six branches within a mile
of the Notting Hill branch; 116 Ladbroke Grove; Portobello Road;
Queensway; Harrow Road; Maida Hill and Leinster Terrace. Two of
these, Maida Hill and Queensway offer the full range of main Post
Office services.
I would like to reassure you that before Notting
Hill branch was put forward for closure, we took into account
the number of customers likely to visit the alternative branches
against current workloads. Post Office Kensington Church Street
branch, located half a mile away, offers the full range of main
Post Office services and products. Opening up and staffing three
currently unused serving positions will increase the number of
serving positions, bringing the total positions in service to
eight. This branch is currently being completely refurbished,
which will provide a more attractive environment for customers
to carry out their business with us.
A combi-till handling retail transactions and
basic Post Office transactions is shortly to be installed at the
Ladbroke Grove branch, which is also expected to received some
migration of customers who currently use Clarendon Cross branch.
Car tax renewal facilities will also be extended to this branch.
The branch will open earlier on Monday and Tuesday mornings, as
well as opening until 5 pm on Saturday afternoons, the latter
of which will be particularly beneficial to those customers who
bank with us. Whilst there will be no physical changes at Kensington
High Street branch, we will of course continue to monitor service
levels to ensure the level of counter coverage meets customer
flow.
When making my decision I have also discussed
with my colleague, Drew McBride, Head of Area for agency Post
Office branches in the area, the separate proposals that were
put forward for a number of sub Post Office branch closures in
this area, to ensure an integrated plan has taken into account
the total changes planned.
I am satisfied that given the number of alternative
branches that are near to our Notting Hill branch and the improvements
we are making, we will continue to offer the right services to
meet the needs of the local community, as it currently stands.
As a result, this branch will close on 10 November 2004.
Whilst I recognise the closure of this branch
will be a disappointment to the customers who use it, I firmly
believe this is the right thing to do and am confident that surrounding
branches will provide our customers with the high standard of
service they have come to expect.
If you would like further information on the
services which will be offered at the alternative branches please
contact the Post Office customer helpline on 08457 22 33 44 or
for details of other Post Office branches, visit our website at
www.postoffice.co.uk
Head of Area
Post Office Ltd
4 October 2004
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