Memorandum submitted by the Mayor of London,
Greater London Authority (POS 26)
INTRODUCTION
1. The Mayor of London welcomes the opportunity
to respond to the Business, Enterprise and Regulatory Reform Select
Committee inquiry into early experiences of the Post Office's
"Network Change Programme". It is particularly welcome
that as well as looking at the restructuring of the sub-post office
network it will also look at the implications of the changes to
the Crown post office network and the transfer of offices to retail
outlets, such as branches of WHSmith.
2. Details of which offices in London are
scheduled to close have yet to be released. However, the Mayor
is so concerned about the likely impact of any closures on Londoners
and local communities that he wishes to enthusiastically support
this inquiry.
3. The future of the Post Office is a matter
of great importance to many Londoners, who see their local post
office as a vital public service. Research by the National Consumer
Council has identified that London has suffered from a particularly
high rate of closures in recent years with a 25% decline in network
coverage since 2004. The comparable national figure for the same
time frame is 7%. The Mayor is concerned that the current proposed
closure programme would have a similarly disproportionate impact
on London.
4. Current proposals are for 99% of the
total population in the top 15% of the most deprived urban areas
in England (just under a fifth of which are in London) are to
be within one mile of their nearest post office outlet, and that
95% of the total urban population across the UK are to be within
one mile of their nearest post office outlet. 18% of London's
population would come under the deprived urban category and the
remaining population under the urban one.
THE IMPORTANCE
OF POST
OFFICES TO
LONDONERS
5. The proposed changes in access criteria
are of great concern to the Mayor and run counter to his vision
of London as an accessible and inclusive city. It will impact
particularly badly on older and disabled people and those with
young children.
6. The Mayor believes that post offices
are part of the key social infrastructure required to create sustainable
and inclusive communities in London. Access to this infrastructure
is important for many Londoners living in deprived urban areas
and local provision is especially important for members of more
vulnerable communities. It is also vitally important to those
Londoners who are not able to access the banking system and cannot
have any benefit payments made to an account, so need to collect
them from post offices.
7. Many of London's poorest people do not
have access to a current account via a bank and are financially
excluded. Research by the New Economics Foundation[16]
suggests 35% of those living in urban deprived areas lack access
to basic bank accounts. The Government's insistence that benefits
payments must be delivered through bank accounts, has further
contributed to the commercial difficulties faced by individual
post offices. The Post Office network is ideally placed to promote
financial inclusion and help in the development of more sustainable
and cohesive communities, a clearly stated Government and Mayoral
priority.
8. In addition, research by the New Economics
Foundation has shown that when post offices close, it can lead
to a cycle of economic decline in deprived urban areas[17].
9. It is clear that we need to take action
to foster and support cohesion and economic development. The Mayor's
London Plan notes that "co-ordinated planning and other interventions
may be required to retain facilities, such as corner shops or
small parades in estates, that provide an essential social service
but are on the margins of economic viability." Provision
for post offices is supported by various London Plan policies
relating to the provision and protection of social infrastructure
and community facilities, as well as policies designed to maintain
retail facilities and the quality of town centres. The specific
relevant policies include:
(a) 3A.15 Protection and enhancement of social
infrastructure and community facilities;
(b) 3D.3 Maintaining and improving retail
facilities; and
(c) 3D.1 Supporting town centres.
10. In the context of the London Plan the
Mayor wishes to stress the essential role of an effective network
of post offices in delivering accessible, essential local services,
providing a social hub and sustaining neighbourhood and other
centres.
11. The London Plan notes that social infrastructure
should be "provided within easy reach by walking and public
transport of the population that use them". In addition,
when planning for access to local parks and bus stops it is usual
to expect most of the population to be within a 400m distance.
This ensures that facilities are placed within easy walking distance
for people who are less mobile, including older people, disabled
people and families with young children. To suggest a distance
of one mile is out of step with emerging benchmarks for provision
and location of required social infrastructure and community facilities.
The Mayor is also concerned that the distance based access criteria
provide too crude a measure to properly take account of the urban
density that exists across much of London.
12. The Mayor suggests that further work
should be undertaken to establish higher standards for the provision
of Post Office services, especially in dense urban areas such
as London. In addition, London's population is predicted to increase
by 800,000 to 2016 and consideration will need to be given to
meeting the needs of this additional population.
13. In the consultation document for the
closure programme, the Government stated that there will be a
maximum of 2,500 sub-post office closures where the sub-postmaster
will be compensated and the support package the Government proposes
includes compensation payments. This raises the question as to
whether that money would be better spent providing a viable future
rather than closure and redundancies. A further run down of the
network could occur through uncompensated closures, where sub
postmasters retire or give up their business. This could seriously
threaten the Governments aim of maintaining a national, though
substantially reduced network.
14. The Mayor welcomes the Government's
funding commitment but is concerned that it will be insufficient
to meet the ongoing needs of the network. Among other measures
he would like to see the Government extend the Social Network
Payment to support post offices in deprived urban areas. This
would require an increase in the Social Network Payment to reflect
the larger number of offices it would be intended to support.
The Mayor believes that the future shape and coverage of the network
must reflect and adapt to local needs.
15. The Mayor would also like to see a longer
consultation period on individual office closures than the six
week period currently planned. It is good practice for consultations
to last 12 weeks. Given the importance of Post Offices to local
communities and to allow community groups to take part to protect
their interests the Mayor would like to see the consultation period
extended to 12 weeks.
OUTSOURCING OF
POST OFFICE
SERVICES
16. The Mayor is also very concerned about
the proposal to franchise many of the Crown Post Offices to a
private operator and the negative impact this may have on both
the quality of customer service and quality of employment in London.
Local community groups, elected representatives and unions have
all argued convincingly that the quality of franchised post offices
has been much lower than that of Crown post offices that they
replaced. Many branches are now run as franchises by private companies
giving workers much worse terms and conditions, including rates
of pay below the London Living Wage.
CONCLUSION
17. The Mayor considers that the current
proposals for levels of provision in urban and deprived urban
areas are not sufficient to meet the social need for these services
within the community. The Mayor is therefore opposed to the proposed
new minimum distance requirements for post offices and urges the
Government to maintain the current criteria. The Mayor would also
like to see further work done to establish benchmark catchment
areas for post offices to bring them into line with other emerging
social infrastructure requirements and to ensure that loss of
existing provision is minimised.
18. The Mayor would like to see much greater
emphasis on a recovery and development business plan that allows
the network to sustain itself and develop. Both the House of Commons
Trade and Industry Committee and the Communication Workers' Union
have noted that new services need to be developed if the Post
Office is to survive at the level of coverage and density that
is required. Greater consideration also needs to be given to how
more flexible services can be developed to ensure that the Post
Office continues to offer an inclusive service which meets the
needs of the deprived and vulnerable communities that rely on
it for access to services as well as the wider population—however
flexibility is unlikely to be sufficient unless new business is
also developed.
19. The Mayor reiterates his willingness
to sit down with all relevant parties, to work towards an economic
and business strategy that will allow the Post Office network
to become the sustainable network that London requires.
18 January 2008
16 See, "Basic bank accounts: the case for
a Universal Service Obligation", New Economics Foundation,
March 2006. Back
17
"The last post", New Economics Foundation, December
2006. Back
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