Examination of Witnesses (Questions 260-267)
POST OFFICE
LTD
5 FEBRUARY 2008
Q260 Mr Weir: The mobile ones you
talked about, would they be funded centrally or would they be
funded by a postmaster running an Outreach service?
Ms Vennells: The mobile is provided
by us and then the core sub-postmaster who runs that is then actually
paid on exactly the same basis, so they are paid on the costs
of running the service, but the van is kitted out by the Post
Office and the service is still provided by us. The only difference
really is that it is mobile.
Q261 Mr Weir: What about local communities
and their involvement in working out the best Outreach arrangements
for their areas? Obviously, as I think you would appreciate, different
areas will have different needs in Outreach services, but, given
there is a six-week consultation programme and as part of that
consultation, for example, there will be an Outreach service,
is that really a sufficient amount of time for a local community
to consider the removal of their services and whether that particular
Outreach model is sufficient for them, and is there not a need
for a separate consultation on what Outreach model particularly
affects each community and how it is best delivered?
Ms Vennells: A useful challenge,
that, I think. At the start of the programme, and you will be
aware that we have amended the Outreach process of consultation
slightly from the beginning, we were worried about the point you
make exactly, that it is quite difficult for groups of customers
in a community to envisage what an Outreach may be until they
have experienced it, so initially we went out to say that we would
consult on the type of Outreach and get their suggestions. Postwatch
felt, and I understand why, that it would be much easier if we
were more specific about the type of Outreach that was provided,
so that is now what we do, we recommend a particular type of Outreach.
I think in most cases, because of the work we do with the communities
and with Postwatch, we will get that right and, as I have said,
we have already got several hundred working, but I think there
is a commitment from us that these are important because, as Alan
was saying, this is about the social provision of the post office
and it is important that they are right, so, if we find further
down the line that it is not the right model, there is nothing
to stop us going back and making a change.
Mr Weir: But on what basis do you recommend
the type of Outreach? I can imagine, for example, if a village
post office is closing that the postmaster may be able to say,
"Well, these are the hours when I am busiest and this is
the type of work I've been doing", but, if there is a postcode-excepted
area which has not had a service for some time, how do you determine
what sort of service is required in these areas and what consultation
do you make within your consultation programme? It is a different
issue from closing post offices. This is an issue about what services
are not there now and may not have been there for some time and
they are now required for an area.
Q262 Chairman: Also, on the question
about hours, do you really think that two hours in a community
is enough, because I do not think it is, and how long are you
committing to providing the Outreach service for? I have heard
some reports that you are only committing for a year maximum to
continue providing Outreach, but I hope that is not true.
Ms Vennells: No, it is not. Those
are two slightly separate points. There is no restriction on the
amount of time an Outreach is provided for. On the two hours,
actually there is a very small number of communities where we
do that and the hours are calculated, and this partly relates
to Mr Weir's question, on the number of customer sessions that
there were in the existing post office. In the vast majority of
cases where we have got a two-hour provision, the community have
chosen to take two lots of one hour, so it actually makes it easier
for them and they know that there are two opportunities during
the week when the post office is available.
Q263 Chairman: So that is Mr Weir's
question really, that you are looking at what the local community
thinks it needs to reach that?
Ms Vennells: Well, I then come
on to Mr Weir's question which is related to this which is how
you decide if you do not have the number of customer sessions.
We would do the same amount of data-gathering that we do in the
current pre-consultation phase in terms of all the local communities,
the demographics, and we would split that down, and then we would
have to take an educated view on what the hours would be. The
chances are in a number of these cases that there would be Outreach
provisions as well, but clearly that would need to be part of
the process. I cannot give you a more detailed response than that,
but I am very happy to write to you on it.
Q264 Roger Berry: The Government
has committed to a network of 12,000 post offices or so to 2011
at least. Your own research found that you would only need 7,500
outlets to meet the Government's accessibility criteria as they
currently stand. Do you think these criteria need to be strengthened
then to preserve the Government's ambition of a universal network?
Mr Cook: Well, whether the Government
wants to strengthen them or not, I guess, is their call, but we
do have a mutual understanding that we are going to run the network
at that size through to 2011 and the funding of £150 million
a year is adequate for us to do that, so that is the goal.
Q265 Roger Berry: So, if you are
running a network at that size, how will you ensure that the gaps
which emerge can be filled?
Mr Cook: Well, that comes back
to the commercial challenge that we face because we have talked
here about planned closures and we have talked about saying to
some sub-postmasters, "We don't require your services".
Where a sub-postmaster in two years' time retires, the challenge
is always whether we can find another sub-postmaster to fill that
slot. Now, the more successful the business is commercially, the
easier it is to find someone to take up that post, so, providing
we can make a success of this business financially, it should
be easy. The will will always be there, but we have found that
over the past six or seven years there has been an attrition of
around, say, 150 a year where it has not been possible to find
a sub-postmaster. At any given point in time, we have probably
got 200 post offices where we have got a temp in covering while
we are trying to find someone to replace a retired or resigned
sub-postmaster. As I say, the more attractive we can make the
post office business to a sub-postmaster, the easier that process
will be, and one of the big things for us is to make sure that
we retain the Post Office card account because that is a big driver
of both usage of post offices and post office income, so it is
much easier to contemplate being able to refresh the population
over the years, providing we win that contract.
Q266 Roger Berry: Lots of things
will influence the amount of business that is flowing through
the network, but the Network Change Programme itself will undoubtedly
lead to some loss of business for the network as a whole and I
wondered what recent analysis have you carried out on the amount
of business that might be lost to the network as a result of the
Network Change Programme?
Mr Cook: Well, it is mostly only
history and analysis because we have no actuals really because
they have only just literally started to close, so I cannot give
you any data in terms of what is the experience so far. History
tells us that about 80 to 85% of income migrates to a nearby branch
and clearly that will vary, depending upon the proximity of the
nearby branch. What it does is it does make those branches, and
I am talking now about the postmaster's balance sheet rather than
mine, if you like, it makes their business more viable because
they are then getting more customers and more income.
Q267 Roger Berry: That figure is
based on the Urban Reinvention Programme, is it not?
Mr Cook: Correct, and experience
of individual closures here and there.
Chairman: I am afraid we are going to
have to draw things to a conclusion. It is frustrating for all
of us as we would have liked to have had longer, but we are up
against the wire in terms of our time, if we are to produce some
kind of report in some form in rapid time, which we hope to do,
so there will be something coming out of this Committee, I hope,
relatively soon. Thank you very much indeed, we are very grateful
to you. If there are things you want to respond to on reflection,
we will always welcome a letter, but that may not be reflected
in our immediate report as it will probably be too quick for that.
Thank you very much indeed.
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