Memorandum submitted by Stirling Council
(POS 22)
BUSINESS, ENTERPRISE
AND REGULATORY
REFORM COMMITTEE
INQUIRY INTO
EARLY EXPERIENCES
OF THE
POST OFFICE'S
NETWORK CHANGE
PROGRAMME
The Stirling Council area is included in the
Post Office's Network Change Programme Proposal for Greater Glasgow,
Central Scotland & Argyll and Bute. This is the first Area
Plan Proposal to be developed in Scotland. The public consultation
on the Area Plan proposals closed on 3 December and final decisions
are expected in early January. Stirling Council has been an active
consultee in the Network Change process and has significant concerns
about the way in which the Network Change proposals have been
both developed and consulted on for our local area. Given the
importance of the local Post Office Network, we welcome the decision
by the Business, Enterprise and Regulatory Reform Committee to
hold an inquiry into early experiences of the Post Office's Network
Change Programme and are keen to contribute.
Our own experience of the Network Change Programme
has left us with significant concerns in three broad areas:
1. the way in which the consultation process
itself has been carried out;
2. the business model and analysis undertaken
by Post Office Ltd to identify changes to the Network; and
3. the restricted role allowed to Local Government
in the Network Change Programme.
In addition it has recently been confirmed that
Stirling's Crown Post office is to be franchised to WHSmith. We
welcome the fact that the scope of the Committee's inquiry extends
to this separate but related development.
NETWORK CHANGE
PROGRAMME
The National Post Office Network is more than
a commercial concern with local branches often playing vital social
and economic roles at the heart of the communities in which they
operate. Whilst understanding the overall rationale behind the
Network Change Programme, local authorities will be concerned
to ensure that any proposals for closure within their area do
not cause disproportionate disadvantages for citizens and communities.
Our concerns have always been two fold—ensuring continued
access to important post office services by citizens and communities
across the council area and safeguarding the economic viability
of communities, specifically those that are fragile and vulnerable.
Our scrutiny of the Network Change proposals has been seriously
undermined however by a lack of transparency, detail and clear
rationale in relation to the proposals for individual post office
branch closures.
Stirling Council, having made strenuous efforts
to engage its communities, has serious reservations about the
validity of the Network Change Programme consultation process.
Our specific concerns are set out below:
1. CONSULTATION
PROCESS
(a) Length of consultation period
The consultation period has been very short
for an issue that has caused deep levels of concern amongst communities.
A six-week consultation period has not given communities enough
time to consider fully the potential impact of the proposals,
or enter into meaningful dialogue about developing alternative
proposals. This has been particular exacerbated by a lack of detailed
information on how the proposals were identified during the local
consultation and lack of advance notice to communities beforehand
that the proposals were imminent.
We appreciate that the issue of the length of
the consultation period is not new, and that the BERR Committee
itself has raised concerns about this issue. Our experience has
shown that these concerns are valid and that the consultation
period has proved to be too short to be meaningful and effective.
We are particularly concerned about the length
of the consultation period in the three communities within the
Stirling Council area where an outreach service has been proposed.
Post Office Ltd has suggested that in these areas, the consultation
period has included assessment of the types of outreach service
that would be appropriate and the days and hours it should operate.
We do not feel that the affected communities have been able to
engage fully with such questions during this initial consultation
period when their main focus has been on building a case for retention
of the existing local post office branches.
We would suggest that the six week consultation
period will cause particular difficulties in any areas where an
outreach service is proposed.
In addition, consideration of alternative outreach
options has been hampered by a lack of clear information about
the levels of services and hours of operation of the different
options. Such information was only obtained from Post Office Ltd.
at the request of Stirling Council several weeks into the consultation
period. If, following the current consultation period the Post
Office Ltd continues with the proposal to impose an outreach service
on these communities, our view is that it is essential that Post
Office Ltd. undertakes a further consultation period to determine
exactly which outreach option is appropriate and the days and
hours on which it should be available in each affected community.
(b) Availability of information
Throughout the consultation period, we have
been disappointed by the absence of detailed information and lack
of transparency from Post Office Ltd about their reasons for closure
or change of individual branches, including how the weighting
given to social/local economic considerations in relation to commercial
considerations, and therefore the lack of detailed justification
for individual closure proposals. Other than referring to the
overall aims of the Network Change Programme, Post Office Ltd
has not answered questions on this at public meetings, nor was
sufficient detailed information made available privately to the
Council to clearly explain the rationale for individual proposals.
It is, therefore, impossible to test for ourselves whether these
are the most appropriate options or whether Post Office Ltd has
made mistakes in applying its own criteria.
A large number of inaccuracies and errors contained
in the Branch Access Reports, and the lack of any Branch Access
report for those branches where an outreach service has been proposed,
has not filled us with confidence in Post Office Ltd's ability
to apply the criteria accurately.
Using a specific example from our own area,
we note from Area Plan Proposal for Greater Glasgow, Central Scotland
& Argyll and Bute that "of the 54 rural branches that
we are aware support the only essential retailer in a rural community
we have maintained 49 of these branches. Similarly of the 83 rural
branches that provide the only access to cash locally our plan
maintains 77 of these." It is a concern that of the limited
number affected, 3 are located in the Stirling rural area within
a few miles of each other. Without access to the detail and a
clear rationale for how these proposals were arrived at, we are
deeply concerned that such a large proportion of the adverse effects
of the Area Plan proposals are concentrated within a 5 mile radius.
No information was provided to show that this was mere coincidence
and we strongly suspect that rationale beyond the criteria set
out in the Network Change Programme have been used to select the
branches for closure or change in our area.
As noted above, the three communities where
an outreach service is proposed are medium sized villages successfully
supporting a range of local services. These are not small, remote
communities where development of outreach services could have
been more easily understood. We remain unconvinced and highly
surprised at the suggestion that, out of all branches in the Stirling
area, these three branches have such low transaction rates as
to appropriately place them on the list for closure in the rural
area. Without access to the detail and clear rationale for how
these proposals were arrived at, we are unconvinced by the verity
of the proposals.
Turning to a second specific example from the
Stirling area, we cannot understand how Post Office Ltd has come
up with the proposal to close the local branch in Cultenhove,
Stirling. Cultenhove is an area of extremely high deprivation
and against every criteria that Post Office Ltd is meant to take
into consideration—access to alternative post office services,
local demographics and the impact on local economies—a forceful
case has been made for why such a proposal would cause a disproportionate
disadvantage for the community of Cultenhove. Again, without access
to the detail and clear rationale for how these proposals were
arrived at, we remain deeply concerned and cannot understand the
rationale for the proposal.
The DTI document "The Post Office Network:
Government Response to Public Consultation" says (page
16):
"In applying the access criteria, Post Office
Ltd will be required to take into account obstacles such as rivers,
mountains and valleys, motorways and sea crossings to islands
to avoid undue hardship. Post Office Ltd will also consider the
availability of public transport and alternative access to key
post office services, local demographics and the impact on local
economies when drawing up area plans. Post Office Ltd will
demonstrate how these factors have been considered in arriving
at their plans in each local consultation document."
(Emphasis added.)
Post Office Ltd has not shown to us in any transparent
or meaningful way how these factors have been considered in relation
to individual proposals for closure. On the basis of all of the
above factors, Stirling Council remains unconvinced about the
specific proposals for network change within its area and deeply
concerned about the validity of the consultation process carried
out. These concerns have implications for the whole of the Network
Change programme.
While our concerns relate specifically to the
local council area we believe these specific examples contradict
the terms of the Government's framework for the restructuring
programme and therefore have far-reaching implications that are
worthy of consideration by your inquiry.
2. BUSINESS MODEL
AND ANALYSIS
As noted above, we have general concerns about
the way in which the criteria appear to have been used to identify
branches for closure or change. Some local decisions appear to
be particularly perverse, specifically the Cultenhove branch as
outlined above and the proposed rural outreach services identified
for three of our larger villages.
In particular, we believe the business case
being put forward by Post Office Ltd for the proposed rural closures
and outreach proposals to be seriously flawed. We consider this
to be the case for the specific communities targeted in the local
Area Plan for Stirling, but are also concerned that, if the same
business model is in use elsewhere, that it may well be flawed
for many if not all rural communities.
Whilst all communities would naturally prefer
to keep branches open, the Network Change Programme does acknowledge
that this will not be possible in all cases. For the communities
within the Stirling Council area where outreach has been proposed,
we are concerned to ensure that (a) the most appropriate branches
have been selected for outreach and (b) the most appropriate outreach
service is proposed. We have already outlined above why we believe
the villages identified for outreach in the Stirling area are
not appropriate. Our following comments focus on the outreach
option itself proposed by Post Office Ltd.
In the Stirling area, Post Office Ltd has expressed
a strong preference for a mobile outreach option using the new
van and satellite technology. Our analysis of the circumstances
is that mobile is not the appropriate option for outreach in communities
such as those identified in Stirling (Buchlyvie, Gargunnock and
Thornhill). As we stated in our response to Post Office Ltd.,
these are medium sized villages, all of which are sufficiently
large to support a range of local services in their own right
and two of which currently have full time post office branches.
We can understand how a mobile service can work effectively with
smaller settlements such as in Caithness and the Lake District,
but we have significant reservations about its applicability to
larger villages such as those proposed in the Stirling area. The
choice of the mobile option appears to us to be based more on
convenience to Post Office Ltd than necessarily a robust analysis
of the needs of the three communities affected. Indeed, if an
outreach service is to be imposed on our three communities, the
hosted option appears to be the "least worst" solution.
Where the post office is currently located in the only shop in
a community, in our case Gargunnock and Thornhill, hosting the
post office in the shop would go some way to minimising the loss
of shop business as well as providing a more pleasant queuing
environment. In Buchlyvie, the community also rejected the mobile
option and expressed a strong preference for a fixed location,
going so far as to identify the preferred location, the local
village hall.
We are concerned that the business model being
used in relation to the outreach proposals effectively rules out
these proposals. The rental proposals made to potential hosting
services are very low at £3 per hour and we can fully understand
why those operating either hall premises or shop premises have
not been attracted by such a proposal. As a Council we are unable
to offer premises for rent at such a low subsidised level even
to local community groups and would expect to charge much higher
than that for commercial operations such as Post Office Ltd.
The combination of very low rental proposals
for the hosted option and the apparent favouring of the mobile
option have led us to the conclusion that the outreach business
model being used is flawed. It does not appear to take into account
the full costs of operating a mobile service—depreciation,
upkeep and maintenance, fuel and staff costs in comparison with
the costs of operating a hosted service. If it did take all these
issues into account then even a much more realistic rental proposal
for the hosted service would still be cheaper than the mobile
service, and therefore contribute more towards Post Office Ltd's
overall savings requirement. We are unclear whether the purchase
and running costs have been excluded from calculations for the
business model because they are being funded through another element
of Government subsidy. Even if this is the case, the costs will
still be born by the public purse and should be taken into account.
Our concerns about a potentially flawed business
model clearly raise much wider issues than the local concerns
for the Stirling Council area referred to above. We have urged
Post Office Ltd to produce a transparent business model in relation
to the various outreach options and would welcome further investigation
of this aspect by your inquiry.
3. ROLE OF
LOCAL AUTHORITIES
As leaders of the local Community Planning process
in Scotland, local authorities have an important role in relation
to the Network Change Proposals and their impact on local communities.
We continue to be disappointed that local authorities have not
been more fully involved with Post Office Ltd in the development
of the proposals for closure in their local areas. As the bodies
with the most in-depth local knowledge, including on population
and business growth, and understanding of the issues facing communities,
local authorities are well placed to help Post Office Ltd with
this difficult task.
Prior to publication of specific proposals for
the Stirling area, Stirling Council submitted to Post Office Ltd
a range of Council wide information on Stirling's current regeneration
and development plans, proposed new settlements, and public transport
information. When the specific proposals became known, we provided
further, more detailed, information on the communities directly
affected. It would, however, have been more constructive if we
had been able to provide this more detailed information prior
to publication of the proposals and indeed been involved in the
discussion of proposals with Postwatch and Post Office Ltd.
Overall we feel that there was scope for more
positive and constructive dialogue between Stirling Council and
Post Office Ltd prior to the publication of proposals. We have
urged Post Office Ltd to take this into account in relation to
the role of local authorities as custodians of local area information
in the development of future Area Plan proposals. We firmly believe
that local authorities have much to offer to the difficult process
of rationalising the national post office network, in particular
a close and detailed understanding of the circumstances and challenges
facing our communities.
We were also disappointed that only the MP and
MSPs received information on the proposals prior to the start
of the public consultation, and that the Council only received
the information once the proposals had been announced and the
consultation period had started. We have grave concerns about
such an approach. We suggest that early sight of the proposals
by local authorities is vital, not only because of the detailed
information systems and analytical capability to examine the proposals
held by local authorities but also to assist with planning effective
local consultation and community engagement. Local authorities
commonly deal responsibly with sensitive and commercially confidential
information on a range of issues. We find the suggestion from
Post Office Ltd that any information provided in advance to local
councils would be leaked to be offensive and ungrounded in fact.
We would welcome a finding from your inquiry
that local councils should be more closely involved in the development
and analysis of local change proposals, perhaps in a similar way
to PostWatch's overview of proposals prior to publication.
FRANCHISING OF
CROWN POST
OFFICES
As noted above it has recently been confirmed
that Stirling's Crown post office is to be franchised to WHSmith.
We welcome the fact that the scope of the Committee's enquiry
extends to this separate but related development.
The relocation of a key service such as a main
post office has potentially wide ranging local implications. The
consultation on the proposed move sought feedback from customers
on a limited number of aspects of the proposals—opening
hours, access arrangements and facilities. We acknowledge that,
as part of the agreed Code of Practice, the decision to transfer
a Post Office branch to a franchise partner is a commercial decision
to be taken solely by Post Office Ltd In view of this, there appears
to be limited opportunity to comment on the wider issues and implications
raised by these proposals.
In particular, the location of a central post
office is important for businesses in the vicinity as the post
office draws people to this area. In the case of Stirling the
move erodes the diversity of the centre of Stirling and we are
concerned that the long-term impact on the immediate surrounding
area will be a decrease in viability and an increase in business
closures and vacant premises.
No recognition of these wider issues appears
to have been undertaken by Post Office Ltd. in formulating its
proposals.
We are also concerned that we have had no information
on what will happen with post office provision in Stirling should
WHSmith get into financial difficulties, change hands or decide
to close their Stirling branch. We have not been advised as to
what contingencies are in place for such eventualities.
In relation to how changes to the Crown post
office network interact with sub-post office closures it is of
significant concern that the proposals put forward under the Network
Change Programme appear not to have taken into account the fact
that a decision on the franchising of Stirling Post Office had
already been made by the time the Network Change Proposals were
published. Consequently Branch Access Reports about access to
alternative branches were still based on the existing location
of the central post office, and it must be presumed that any calculations
about access to alternative branches were based on information
that will soon be out of date. It is clearly very important that
the Network Change Programme takes into account any changes to
the Network as a result of the Franchising programme.
ROLE OF
POSTWATCH
As part of the terms of your inquiry, we would
also like to make some comment on Postwatch's contribution to
the consultation process. We were disappointed that Postwatch
did not take a more visible and proactive role in the local consultations.
While Postwatch was represented at all but one of the local community
meetings, they were generally not active participants in the debate.
Neither did they seek out discussion either with the Council or
with local communities about the proposals separate from the public
meetings. Many of those attending the local consultation meetings
were left with the feeling that Postwatch had added nothing positive
to the discussion. It may be that Postwatch was active in the
pre-consultation period and has been so again in analysing the
responses to the consultation. Unfortunately this has not been
obvious to us and leaves us with the impression of a largely passive
watchdog body.
8 January 2008
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