Letter from Hugh Bayley MP
LOCAL AREA
CONSULTATION FOR
THE POST
OFFICE NETWORK
CHANGE PROGRAMME
Thank you for inviting me to submit evidence
to your inquiry about local area consultation for the PO Network
Change Programme.
Post Office Limited published its Area Plan
Proposal for North Yorkshire with Yorkshire East and Keighley
and started public consultation on 27 November 2007. The consultation
period will end on 17 January 2008. I acknowledge that Nick Tumer
and Matt Silcock, from PO External Relations, came to see me at
the House of Commons on 5 December and, at my request, Adrian
Wales and Matthew Silcock, from PO External Relations, attended
a public meeting in York to answer questions from members of the
public on 20 December 2007. Nevertheless, I believe the consultation
arrangements are deeply flawed, and primarily designed to enable
the PO to "jump the hurdles" and to close branches with
little regard to public opinion. I set out my concerns below and
make recommendations about how the department for Business and
Regulatory Reform and the Post Office could improve the consultation
arrangements in future.
1. How many branches need to close?
The Government regrets the need for branch closures,
but argue that some closures are inevitable because four million
fewer people are using the PO each week than two years ago. The
change in the number of users will vary from place to place, depending
on local economic activity, housing expansion, benefit claimant
rates etc In its local area consultation documents the PO should
state what the change in PO usage has been in that area since
the previous round of closure(s) in absolute numbers and percentage
terms, and what number of transactions and percentage of transactions
for the area as a whole take place at the branches proposed for
closure. Where two or more branches are proposed for closure it
would be possible to publish this information without breaching
commercial confidentiality about customer numbers at a specific
branch. In the infrequent cases where only one branch is proposed
for closure it might be reasonable to publish only percentage
figures—to indicate that x % of transactions have been lost
and y % of the local "transaction capacity" is proposed
for closure. Such information would allow the public to assess
whether the proposed closures are proportionate to the loss of
business.
Recommendation 1
Local Area Consultation documents should state
what the change in PO usage has been in that area, and what change
in PO "transaction capacity" is being proposed.
2. Parliamentary Questions
In November anticipating the closures consultation
in York, I tabled a Parliamentary Question seeking information
about the number of transactions over PO counters that had been
in York in each of the last five years. The Minister replied "This
is an operational matter for Post Office Ltd I have therefore
asked Alan Cook, Managing Director of PO Ltd, to reply direct
to the hon Member" (13 November 2007 col 133W)
Mr Cook did not reply for a further three weeks,
and when he wrote he did not answer the question. He said "I
understand that a meeting has been arranged with you next week
on Wednesday 5 December . . . at that meeting our managers will
be able to discuss with you, on a confidential basis the level
of customer usage in the branches affected by our proposal changes
for your area". Mr Cook's letter is attached as Appendix
A (not printed here).
At the 5 December meeting the managers told
me in confidence, the average number of customer transactions
per week at the three branches within my constituency which are
proposed for closure. They did not give any information about
how the number of transactions at the branches or in York as a
whole had changed over recent years, despite the implication in
Mr Cook's letter that I would receive an answer to my question
when I met his managers face to face.
The managers agreed, when we met, that they
would answer my question subsequently. I received an email from
Mr Silcock on 31 December telling me, in confidence the current
average weekly number of transactions at each of the 34 PO branches
in York, but not the number of transactions across PO counters
in York as a whole over the last five years, as requested, which
could, of course, have been supplied without breaching the commercial
confidentiality of the number of transactions at a single branch.
I regard the way both the Department and PO
Ltd responded to my question as wholly inadequate. My question
was relevant and a full answer could have been provided without
infringing commercial confidentiality. At a time when PO branch
closures are being proposed in York, the information which I sought
ought to be in the public domain. Finally it is quite unsatisfactory
for a member to have to wait for a month and a half for a reply
to a question especially when the question relates to a time limited
consultation.
Recommendation 2
The Department for Business, Enterprise and
Regulatory Reform should closely monitor the answers to Parliamentary
Questions given on its behalf by PO Ltd, to ensure that they are
adequate and timely.
3. How well informed are Local Area Consultation
Documents and Proposals?
The PO Ltd Area Plan Proposal for North Yorkshire
with Yorkshire East and Keighley lists 71 PO branches as being
in York. In fact only 34 of these 71 branches are in York, which
suggests a lack of local knowledge.
At the public consultation meeting in York on
20 December, it became clear that the managers responsible for
the closure proposals were unaware, for example, that:
(1) One of the branches proposed for closure
(Micklegate Branch) was designated as the receiving branch for
customers of two other branches (Albermarle Road and Bishopthorpe
Road) which were closed two years ago.
(2) HSBC is closing its bank branch which
is almost next to one of the PO branches proposed for closure
(Clifton).
(3) The Council has approved a large housing
development on Haxby Road, near one of the branches proposed for
closure (Haxby Road Branch).
(4) Winter flooding, which is a recurrent
problem in York, closes some of the pedestrian routes which the
PO assumed customers could use to get to alternative branches.
You cannot expect PO manages to have as detailed
local knowledge as the local authority. This, in part, is why
they need to consult. However, it would make sense for the PO
to share proposed Local Area Consultation documents with the local
authority before they are published, to reduce the potential for
error.
Recommendation 3
PO Ltd should submit draft Local Area Consultation
documents and closure proposals to the local authorities in these
areas before they are published to try to avoid omissions and/or
factual inaccuracies.
4. How widely does the Post Office consult?
The PO is expected to consult widely on its
proposals, but there is little evidence that it does.
One of the branches proposed for closure in
York has, according to PO Ltd, 818 customers a week. This branch
was given 150 copies of a letter to explain the closure proposal
to customers and explaining how customers can make their views
known. When I visited the branch four days after the consultation
began all 150 copies had been handed out to customers and I had
to ask PO Ltd to print additional copies for each of the branches
scheduled for closure in York.
Recommendation 4
That the PO should provide each branch proposed
for closure with sufficient copies of a letter to customers explaining
their proposal and how the public can respond to it.
My constituent Philip Crowe, has written a detailed
statement for consideration by your Committee which I enclose
as Appendix B (not printed here). He believes that PO Ltd
and Postwatch have failed to consult widely over their York proposals
and failed adequately to inform the public of its right to object.
I would ask you to consider Mr Crowe's representations in detail.
Mr Crowe includes a list of local organisations in York which
the Council consults. It is not clear how many of these bodies
have been consulted by The PO, but Mr Crowe is personally aware
of only two. I believe the PO should take advice from local authorities
about whom to consult and append to their consultation documents
a list of the organisations consulted. The responses the receive
should be open to public inspection.
Recommendation 5
The PO should take advice from local authorities
in each area about which organisations to consult about closure
proposals and the responses that they receive should be placed
in the public domain.
5. Do PO closure proposals comply with minimum
access criteria?
The Government has set out minimum access criteria—for
example 95% of the total urban population to be within one mile
of their nearest PO Branch. The North Yorkshire consultation document
does not set out how many people live in each of the urban and
rural areas within the overall area, and what proportion of the
population currently are within he specified minimum distance
of a PO branch, and what proportion would live within the distance
if the closures were to go ahead. If those figures are not calculated
there is no way of knowing whether the Government's minimum access
criteria are met, and if they are calculated they should be published.
Recommendation 6
Each Local Area Plan should state clearly the
proportion of the population in each urban and rural area covered
by the plan, that live within the Government's minimum access
criteria (a) currently and (b) if the proposed closures were to
go ahead.
6. Do PO closure proposals seek to retain
the more popular and well used branches?
According to the figures provided to me by the
PO, on a commercial in confidence basis, the average number of
customer sessions per week at each of the 33 York sub-PO branches
ranges from 2358 to 13. One of the branches proposed for closure
is the fourth most used branch in York with nearly 2,000 customers
a week. Another is the 13th most used branch.
I appreciate that the Select Committee will
not consider the case for any individual branch but I believe
it would lead to more meaningful consultation if the PO revealed
the average number of customer sessions per branch in each area
(urban and rural), and indicated if any branch proposed for closure
carries out more than the average number of transactions. The
PO should have to meet a higher burden of proof that a branch
is not commercially viable if that branch is one of the more popular
and well-used branches.
Recommendation 7
PO consultation documents should reveal the
average number of transactions per branch in each urban and rural
area, and indicate any branch proposed for closure that carries
out more than the average number of transactions. The PO should
have to meet a higher burden of proof to close these branches.
7. Should a de minimis threshold be added
to the Government s minimum access criteria?
I represent an urban constituency but I recognise
the need to retain a PO branch network in rural areas even though
the number of transactions per branch is much lower than in urban
areas. However I note that one of the rural branches in the City
of York has only 13 transactions a week, and another only 26.
It seems to be a grossly inefficient use of public subsidy to
retain and continue to pay the overheads for PO branches serving
only three to five customers a day while closing branches three
or four miles away which serve 400 customers a day. I believe
that a de minimis rule should apply to PO branches with very low
usage, in order to protect significantly better used urban and
rural branches.
Recommendation 8
The Government should set aside the minimum
access criteria in rural areas for PO branches which serve a very
low number of customers (say fewer than five a day), on the basis
that there is little demand from the public for PO services in
these places. The money saved by the PO should be used to keep
open other better used branches in urban and rural areas.
8. Does Postwatch have sufficient powers
to prevent a closure when the PO fails to make a convincing case
for it?
Six PO branches were closed in York three years
ago. The consultation about the closures revealed particularly
convincing reasons for retaining one of the three branches which
was in an important secondary shopping centre in Bishopthorpe
Road. Postwatch called on the PO not to close this branch, but
the PO ignored their representations. Bishopthorpe Road was a
particularly well used branch more than the average number of
customers. I recognise that a public watchdog body cannot compel
a commercial organisation like the PO to retain branches that
are not commercially viable, but I believe it should be able to
block the closure of a commercially viable branch.
Recommendation 9
The Government, PO Ltd and Postwatch should
agree criteria for commercial viability and Postwatch should be
given the power to block the closure of commercially viable PG
branches when they believe there is a particularly strong case
for keeping such a branch open.
11 January 2008
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