Examination of Witnesses (Questions 80-99)
POSTWATCH
29 JANUARY 2008
Q80 Mr Hoyle: That is good. I just
wonder if I can pose this little question to you: I have got Councillors
Malpas and Smith at the moment getting people to sign a petition
on the streets of Chorley to keep the post offices open. Both
councillors are on the borough council and yet you are not allowed
to pay your council tax at the post office, you need a Paypoint.
Do you think there is a whiff of hypocrisy there at the moment
on the streets of Chorley?
Mr Webber: I think we all have
a responsibility to use our post offices, and that includes local
government.
Q81 Mr Hoyle: Putting work into them?
Mr Webber: Yes.
Q82 Mr Hoyle: So typical naked opportunism!
What I am concerned about is we have profitable post offices out
there and they are now down for closure. How many profitable branches
of Post Office Limited are earmarked for closure?
Mr Webber: Does your question
refer to profitable to the sub-postmaster, or profitable to Post
Office Limited?
Q83 Mr Hoyle: Sub-postmasters. How
many of those are profitable that are down for closure?
Mr Webber: The answer to that
is: I do not know. The answer to the numbers that are profitable
to Post Office Limited, I would hope would be zero. There would
have to be some exceptional reason why they would choose to close
a post office that was profitable to them.
Q84 Mr Hoyle: So we do not know the
answer!
Mr Webber: I do not know the answer
to the numbers which are profitable to sub-postmasters.
Q85 Mr Hoyle: Because I think that
is part of it. Does Postwatch think that the Post Office's approach
to community proposals to save braches proposed for closure has
been sufficient? Has it got better? You are trying to tell me
it has got better; but my experience is that I am not convinced.
Mr Webber: I am sorry—do
you mean community proposals in the sense of the community running
the post office?
Q86 Mr Hoyle: Does Postwatch think
regarding the Post Office's approach to community proposals to
save braches, in other words the branches that are down for closure,
that there has been a better overseeing of support for the community
view?
Mr Webber: Yes, is the answer
to that, it is getting better. We are certainly seeing an improved
account by Post Office Limited of the representations that have
been made to it, not just the number but the quality of them—the
key issues that have arisen which have helped us a lot to determine
whether they have taken full account of the representations made.
One of our key responsibilities is to make sure that Post Office
Limited have taken proper account of all the representations made.
In general, yes, and it is getting better as it goes along. In
some ways that is unfortunate because it would be good if it were
of high quality from the start. Something that has been getting
better indicates it was not so good early on. It is now, I think,
pretty good.
Q87 Mr Hoyle: I do worry. I will
just give you an example that does concern me, that somebody really
wants to stay who has got a good post office, doing good business
and is marked for closure; yet somebody else who is doing bad
business could remain open. I think there is a bit of a worry
there. With a village with only one post office and that is going,
what happens now? The bus service is so erratic there is one every
four hours, and you do not really go to the post office, you go
to the town; what do you say to those people in that village that
has a post office marked down for closure without any alternative?
Mr Webber: The closure programme
has two main sets of issues that need to be taken into account.
There are the access criteria, which are the distance things;
that is purely mechanical and you can do it with a ruler, or walk
the streets and work out that the access criteria have been met;
and in every case so far they have been. There are then additional
factors: like transport links; like the terrain; like the population
demographics—is it a population of elderly people etc; like
the effect on the local economy. Those are less quantifiable,
and those are the ones we take account of very seriously indeed.
We will look very closely at whether this is the last shop in
the village; whether there is another free cash point available,
for instance, if that post office closes. We will take up the
cause of post offices where it seems those issues have not been
properly addressed.
Q88 Mr Hoyle: Or would you be coming
forward to say we do need a mobile post office entering into those
areas?
Mr Webber: That is one way forward.
Outreach, mobile or otherwise, can be one solution.
Q89 Mr Hoyle: So there is an alternative?
Mr Webber: Yes,
Q90 Chairman: Before I pass on the
questioning, can I just try and clear my head on my issue, which
is this question of profitability of sub-post offices for the
Post Office. To what extent are those central costs capable of
being reduced when a post office closes? To what extent are they
fixed costs, which mean the cost to the network is spread over
a smaller number of sub-offices, meaning more sub-offices become
unprofitable to the Post Office, and we are locked into a permanent
cycle of decline?
Mr Webber: These are obviously
issues for you to take up with Post Office Limited.
Q91 Chairman: I am inviting you to
answer.
Mr Webber: Our concern is with
the outputs really, the effect on consumers. However, clearly
there must be an element of the latter. There must be an element
of overheads which need to be spread among a smaller network.
Alongside that I know Post Office Limited is making great strides
in becoming more efficient centrally anyway in thinning out its
core management costs. At the very least that should counterbalance
the effect that you mention.
Q92 Chairman: When the Committee
raises these questions next week with the Post Office and with
the Minister, are we right that Postwatch is concerned about the
central costs and whether or not we might be finding ourselves
in this vicious circle?
Mr Webber: Yes, although the bottom
line as far as we are concerned is that there should remain a
network of 11,500 post offices once this is over. As I say, that
is something we might talk about later. How that is achieved,
from our point of view, is secondary.
Q93 Mr Weir: You mentioned in your
first report on the programme that the specific reference to the
proportionality rule, that no one place should be significantly
worse affected than another, threatens to "exacerbate existing
levels of disadvantage" by ensuring similar levels of closure
everywhere. Is there an alternative to this, in your view?
Mr Webber: There are two alternatives
and one is not happening. That would be to say, that certain areas
are over-provided in relation to others, and so the aim would
be a network that is actually equal for all across the UK. The
other though is to say that there is on average something like
17% or 18% closures. If there are to be 2,500 closures out of
the network that averages 17% or 18%. Each area plan would be
around that level, but there can be plus or minus some per cent
closures in each area. That is the one Post Office Limited have
chosen. They have said they would see closures ranging from 13%
of the network to 23% of the network in a particular area, averaging
around that 18%. So far it has worked that way—the aim would
be that relatively under-provided areas would then not be further
disadvantaged through applying that sort of system; and relatively
over-provided areas would not be further advantaged.
Q94 Mr Weir: How does that work in
a network which, in many areas, is possibly imbalanced already
because of past programmes which have not had an overall look
at the network? I can think of areas in my own constituency where
you have two post offices close together and nothing for miles
round about. Under this programme the chances are that one of
those post offices will close. In effect you are not looking at
the overall balance of a network, you are merely having more closures
of the programme. Is that not just making matters worse? Is it
not necessary to go to your first alternative and look at the
overall balance so that everybody has the same access to a post
office?
Mr Webber: Ideally, yes. It would
be, I suspect, almost impossible to do that. I think the compromise
position Post Office Limited have adopted, which is to have that
range from 13%-23% of post offices closed within any single area,
is probably going to have a similar effect; and can, at any rate,
ensure that an area which suffered badly in the so-called urban
reinvention does not suffer significantly further.
Q95 Mr Weir: How does that mesh in
with the overall 2,500 closures, where the Government seems to
be intent on having that figure with very little variation from
that? If there is a variation between each area plan of that percentage,
then logically are some areas (and the Chairman has already mentioned
his own area coming near the end of it—mine is not much
further forward then his so I share his concern slightly) going
to be worse hit to make up the balance, do you feel? Or is there
any leeway to reduce the numbers of closures to take this into
account?
Mr Webber: It is for the Government
to say whether there is leeway not to hit that 2,500 figure, and
I hope there will be flexibility about that. What is important
I think is that no area should suffer because of its place in
the sequence. The Chairman's constituency, I hope, will not suffer—
Q96 Chairman: And Mr Bailey's.
Mr Webber: Indeed.— because
it is in one of the very last area plans. I think that will not
happen. The Chairman did cite a figure of 14% so far. That is
actually not a figure I recognise. If I am wrong about this I
will write to correct the matter. Our figure is something more
like 17% of offices on average, in the area plans so far where
there have been announcements, which are down for closure, which
is pretty well the target figure, and I think that is right.
Chairman: The Highlands of Scotland have
the lowest level so far with 9%.
Q97 Mr Weir: We could argue about
that! The Highlands of Scotland have, as already been mentioned
by George Thomson, many of the accepted areas, with less closures
proposed because of the accepted areas. Could I put the point
I put to George on this. He mentioned postmasters phoning up and
saying, "Why are we not on the closure programme", because
they want out. Some would say that is hardly surprising given
the history of closure programmes. Given you talked about the
overall level about not exacerbating existing levels of disadvantage,
are you confident that when we get to the end of this programme
we will be left with a sustainable network? Will we not get a
lot of unplanned closures with people who say, "I'm not getting
compensated but I can't go on?" If that happens is the Post
Office in a position to plug the gaps in the network?
Mr Webber: Could I answer that
in two ways.
Chairman: I am going to rule that question
out of order because someone else wants to ask that later on in
more detail.
Q98 Mr Clapham: Mr Webber, could
I ask about the post-consultation process and the review scheme.
It does appear that Postwatch is the only body that can trigger
a review at this stage. Would that be correct?
Mr Webber: Yes.
Q99 Mr Clapham: Looking at the number
of reviews there have been and the stages, there are four stages
within the process, yet by January 2008 we had only had two cases
at stage two, plus of course the two from the Merseyside plan.
Does that suggest that the review procedure just is not robust
enough?
Mr Webber: It is certainly not
something we enter lightly, because we will already have had the
11-week period before it goes public; then there is the six-week
period of public consultation. Post Office Limited have changed
on average more than 10% of their proposals during the pre-consultation
phase. It has changed, on average, another 5% or so during the
public consultation phase; so most of the key concerns should
have been addressed by the end of the public consultation phase.
That said, we certainly do not hesitate to use the process when
we need to. Indeed last week, and this is purely coincidence,
there were seven cases being escalated to stage two; and indeed
some have now gone on to the stage three process, and that is
the first time that has been used. The stage four process, which
involves the Chair of Royal Mail, has yet to be used. That was
the new addition to the process announced by the Government before
Christmas.
| 
