Select Committee on Business and Enterprise Sixth Report


Appendix 3: Postwatch Response

Postwatch response to the Business, Enterprise and Regulatory Reform Committee on the post office closure programme

Role of Government and the future of the network

1. In answer to a Parliamentary Question, the Government said a network of around 7,500 offices would suffice to meet the national criteria. We do not think it is satisfactory simply to accept that the network may continue to shrink in an unplanned way between now and 2011; Post Office Ltd should be obliged to use its best endeavours to keep the network at a minimum of 11,500 fixed outlets. (Paragraph 7)

Postwatch response:

We agree with the Committee's concern over the future of the network. The Government needs to outline its future strategy for ensuring the post office network does not fall below 11,500 branches. We look forward to this clarification in its response to the Committee. Additionally, Postwatch will write to the Government on this matter.

The Consultation Process

2. We urge the new National Consumer Council to place continued monitoring of the post office network among its highest priorities. (Paragraph 8)

Postwatch response:

We agree that the statutory body responsible for representing post office customer interests must continue to monitor access to post office services. It is essential that the new NCC is closely involved in determining Government policy, both up to 2011 and after.

Postwatch will continue to work closely with those setting up the new NCC's work on the post office network. Postwatch will undertake an evaluation of how it carried out its role in the closure programme, so that the new NCC does not lose the knowledge gained by Postwatch. In addition Postwatch will, of course, make its post office database and GIS system available to the successor organisation.

3. Post Office Ltd should be far clearer about the basis on which the public is being consulted. All its literature should make it clear that there will be reductions in Post Office provision, and that the question being asked is simply whether the right branches have been identified for closure. (Paragraph 12)

Postwatch response:

We agree that POL's communications materials need to be clear that the public consultation is not about how many post offices should close, but about which ones should close.

In our evidence to the Committee we outlined our own concerns with POL's communication materials. We have again written to POL to offer to assist with a review of its consultation materials, and have requested this takes place as a matter of urgency. We will update the Committee in our next progress report.

Confidentiality

4. If people are to respond sensibly to proposals to close a particular sub-post office, they need to know why that branch has been put forward for closure. There may be some details which need to be kept confidential, but this should be strictly limited, given the substantial public investment in the network and the keen public interest in the outcome. We welcome the fact that Post Office Ltd has been prepared to share more information as the process has evolved; it should give such information at the outset of the consultation process. (Paragraph 14)

Postwatch response:

We agree with the principle outlined by the Committee that POL should be as open as possible. Customers, communities and their representatives should be given all the information that can be shared so as to help stimulate interest and participation in the consultation process.

We specifically welcome the Government's confirmation in the House that POL "is prepared to share an estimate of the total individual branch saving with the relevant Member of Parliament on a confidential basis" (Hansard, 5 February, column 216WH). We hope POL will be proactive in its approach to working with MPs on this matter.

5. Area Plan Proposals and their associated publicity should make it clear that closure, although likely, is not inevitable, and that the status of post offices scheduled to remain open may change. The notification that an office, is to remain open should be far more clearly worded. (Paragraph 16)

Postwatch response:

We agree that it is important that those post offices proposed for closure which remain open should not be blighted. They need to attract customers that may have already started to use an alternative post office. POL's communication materials are important in this respect. We have written to POL to offer to assist with a review of its consultation materials

6. The Chief Executive of Post Office Ltd told us that the proposals in Local Area Plans were refined through the pre-consultation process and that this preparation is some compensation for the limited time allowed for public consultation. If this is so, commercial confidentiality should not prevent Post Office Ltd from holding the discussions necessary to make sensible proposals. (Paragraph 17)

Postwatch response:

We agree that POL should do all it can to ensure the proposals that enter public consultation are sensible and robust.

Local Authority and MP involvement

7. We also note that although Postwatch appears to be doing a good job in influencing proposals in the pre-consultation period, several of the MPs who responded to our request felt that Postwatch could have been more closely involved in discussions with them. Postwatch is the only organisation able to take proposals to review; it would be helpful if it always discussed its position with interested MPs. (Paragraph 20)

Postwatch response:

Postwatch writes to all relevant MPs and local authorities at the beginning and end of public consultation. We have also met or spoken with many MPs about proposals within their constituencies. However, in response to the Committee's request we will now write out again towards the end of the public consultation to remind MPs of our contact details, to detail the review process, and to offer a discussion.

Profitability

8. Local authorities and local MPs should be more closely involved in the pre-consultation process. Postwatch appears to be doing a good job, but it simply does not have the wider responsibilities of local government, or the representative role of MPs. The Chief Executive of Post Office Ltd told us that local authorities were involved in drawing up local area plans before they went out to public consultation; clearly, some local authorities do not feel they have been properly involved. Local Area Plans would be improved if local authorities and Post Office Ltd worked together. (Paragraph 21)

Postwatch response:

We agree it is important that local authorities are included in the development of area plans and have the chance to input relevant data. We will continue to work with POL to ensure they engage with local authorities throughout the programme.

9. Postwatch should scrutinise proposals to close post offices which are commercially viable for Post Office Ltd particularly closely and, if necessary, have powers to block them. (Paragraph 22)

Postwatch response:

We understand and share the Committee's concerns relating to the possible closure of profitable post offices. We welcome Alan Cook's assurance that closures will only take place where the result is a material saving to POL. This, however, is not an assurance that profitable branches to POL will not close. Postwatch agrees with the Committee that such proposals would need to be carefully considered—profitable offices are likely to be heavily used, and closures would therefore affect many customers.

However, Postwatch has not argued for the power of veto over any closure and believes the decision on whether or not a branch closes should rest with POL. Postwatch's strength is its ability to represent customer interests. This must remain our focus. We are, of course, active locally in querying POL's rationale for proposing particular branches for closure. However, a power of veto on decisions would require an independent analysis of POL's business model, accounting practices, and financial projections - activities that Postwatch does not have the statutory remit to undertake.

Alternative support for Post Offices

10. We welcome Post Office Ltd's apparent willingness to contemplate introducing locally supported post offices. (Paragraph 24)

Postwatch response:

We agree it is important that POL is innovative and flexible in ensuring that access to post office services is maintained throughout the UK. In most cases access to these will be best maintained via a commercial enterprise but there will be places where a locally-supported community effort is the way of meeting customer needs.

Management style

11. The Post Office's future is a matter of public debate. As we have said, Post Office Ltd is not solely a commercial enterprise. Its network provides access to essential services, and has a greater reach than any other. The Government is the sole shareholder, and the public has a right to expect Government-controlled enterprises to behave in an exemplary way. After the experience of this inexcusable lapse, we expect Post Office Ltd to do so in future. (Paragraph 28)

Postwatch response:

We agree with the Committee. It is crucial to the successful outcome of the closure programme that all interested parties have productive and respectful working relationships.

The Government Access Criteria

12. The evidence we have received from local authorities suggests the detailed information required to implement the access criteria properly has not always been taken fully into account. We are particularly concerned that in some cases the local area plan has failed to reflect arrangements to transfer Crown Offices to franchised premises in a different location. If Post Office Ltd cannot take into account information about matters that it controls, confidence in the wider information underlying these plans is undermined. Post Office Ltd must do more to demonstrate that local area plans are accurate and based on current information. (Paragraph 31)

Postwatch response:

We agree that it is important that POL does everything it can to make the consultation process robust.

In its evidence to the Committee, Postwatch outlined the concerns it had with this issue in Liverpool where the future of the Crown office is under review. POL has now resolved this situation and it is essential that it takes future franchising plans into account in its area plan consultations.

13. We underline the fact that the geographic access criteria are national, and can be met even if coverage in certain local areas falls well below the national standard. We do not know the extent to which the national criteria are met in each local area plan. We expect Post Office Ltd, as far as possible, to take the geographic access criteria into account at local area plan level, not just meet them nationally. (Paragraph 32)

Postwatch response:

We welcome the Committee's view on this issue.

For every proposal, Postwatch looks at the distance customers would have to travel following a closure, and seeks to ensure that POL takes this into account along with other local factors such as public transport, demographics, terrain and impact on the local economy.

Looking beyond the current programme, we believe the new NCC should continue to monitor the network and report to Government if gaps appear in access to post office services: currently the only local criterion is that 95 percent of customers in each postcode district should be within six miles of a post office.

Accessibility

14. We welcome the fact that Postwatch surveys proposed franchises for accessibility. We trust it also considers accessibility when it considers proposals for sub-post office closure made as part of the Network Change Programme. However, we are far from convinced that Post Office Ltd itself is fully engaged with the need to ensure that services are accessible to all. This needs to be given much higher priority. (Paragraph 34)

Postwatch response:

Postwatch agrees with the Committee that this is an important issue. POL provides information on disabled facilities and service at nearby branches as part of its pre- and public consultation materials. We examine this issue very carefully and will oppose a closure if it leaves customers with significantly worse facilities than at the closing branch.

In addition to its work during the programme, Postwatch carries out local monitoring of facilities and service levels at post offices throughout the network. Monitoring of a particular branch may be in response to complaints from customers or as result of local knowledge and research. Postwatch raises its findings with POL and asks them to take necessary steps to improve the customer experience.

Local economies

15. We believe that there should be a presumption against closing a post office where this is the last shop in the village, or in a deprived urban area. (Paragraph 35)

Postwatch response:

We understand the position taken by the Committee but we would find this a difficult recommendation to support.

Where a post office is located in an urban deprived area or is the last shop in the village, Postwatch believes this is an important factor to consider in conjunction with other local factors. Before proceeding with the closure of these post offices, POL should fully consider other important local factors such as distance to the nearest alternative post office, availability of public transport, terrain, demographics and other impacts on the local economy, for example access to cash.

16. Post Office Ltd must take great care to ensure that any reduction in compensation to a sub-post office that closes, but where the remaining business intends to offer new and competing services, is not excessive. The purpose of reducing compensation is to limit competition with, and encourage business to migrate to, remaining post offices nearby. The argument for this reduction is weaker in areas where there is no ready access to such offices. Because of the importance of such facilities to the local communities, Post Office Ltd should always be realistic in its assessment of the degree to which alternative services would really displace business for the post office network. When reaching its decisions it should give the benefit of the doubt to the business and so to the people it serves. (Paragraph 38)

Postwatch response

We agree with the Committee that a solution must be found that balances taxpayers' interests with the needs of local communities.

17. The timetable for the Network Change Programme is extremely compressed. We would be concerned if postmasters had to decide whether to accept the cut in compensation before they had the time to establish whether they could attract bill payment or other services, or explore the terms of such contracts. Postmasters should be given adequate time to explore these factors before deciding what compensation to accept. (Paragraph 39)

Postwatch response:

We agree that the timetable for the Network Change Programme is challenging and that there is a risk therefore that decisions could be rushed. Where possible we hope POL can allow the leaving subpostmaster the time to take soundings locally of likely demand for bill payment and other services.

Outreach

18. We agree that open-ended questions about the type of Outreach which may be appropriate are not helpful but welcome the fact that in recent consultations Post Office Ltd suggests what Outreach arrangements could be provided. We also welcome the assurance that Outreach services will continue until at least 2011. In addition we welcome the statement from Post Office Ltd that they are prepared to consider Outreach services in areas which had previously lost their postal services but are within the new national criteria. (Paragraph 42)

Postwatch response:

We agree that consultation on proposed outreach options needs to be based on a worked-up solution. Customers are unlikely to engage with an unfocused consultation.

Postwatch welcomes the funding made available for outreach services until 2011. We also welcome POL's commitment to individually review how outreach are operating once established and hope this will be an opportunity for POL to further tailor services to needs to the local community. We would welcome clarity from POL on what commitment it has made to retain outreach services until 2011.

19. We believe a single outreach session of two hours a week is generally unacceptable; there should normally be at least two sessions per week. (Paragraph 43)

Postwatch response:

We agree with the Committee that a single outreach session of two hours per week is generally unacceptable. Postwatch has called for outreach services to be available for at least two consecutive hours, three days per week. We believe BERR must look again at setting minimum hours and also a minimum product range. We will seek a meeting with BERR on this topic and feedback our progress in our next report to the Committee.

20. We welcome the proposals to introduce Post Office provision to remote areas. If this cannot be done by voluntary Outreach arrangements, we expect the Post Office to provide the necessary services itself. (Paragraph 44)

Postwatch response:

We agree with the Committee that POL is responsible for ensuring that the access criteria are met in all parts of the UK. It is reassuring that POL so far has been able to find sub-postmasters willing to operate outreach services. Where sub-postmasters cannot be found to operate outreaches in remote areas, POL should bear responsibility for ensuring needed services are established and maintained.

Proportionality

21. We welcome the fact that Post Office Ltd appears to be taking a flexible and pragmatic approach to the requirement that the closures should not fall disproportionately in particular areas, and that its programme takes some account of the varying levels of current provision. (Paragraph 45)

Postwatch response:

We agree it is important that POL takes account of current provision when drawing up area plans. We will continue to look at each area plan to seek to ensure that no areas are disproportionately affected—not only in terms of closures, but also in terms of post—programme customer access to post office services.

22. The Network Change Programme has a difficult balancing act to perform between responding to local needs and concerns and ensuring that the necessary reduction in the network is achieved. We welcome the Minister's assurance that areas which are considered late in the process will not be disadvantaged. We intend to keep this, and other aspects of the programme, under review. (Paragraph 46)

Postwatch response:

We also welcome the Minister's assurance. We will continue to provide the Committee with regular reports to help it monitor this recommendation as well as the programme as a whole.

Conclusion

23. Post Office Ltd has been given the task of reducing the network by a fixed number of branches in a fixed period. The Network Change Programme began in July 2007 and the final consultation is scheduled to end in October 2008. That is a very challenging timetable. As we always feared, this has meant that consultation has been curtailed, and the whole process has been rushed. The failure to realise at the outset that the consultation timetable should take account of the "purdah" for local elections, and the failure to allow properly for the effects of holidays on consultation periods, are symptoms of this. The process has been improving as more experience is gained, but problems remain. There is not enough clarity about the basis of the consultation; we are concerned that accessibility is not always taken into account; commercial confidentiality has prevented sensible discussion. We hope that all those involved will use this Report as a prompt to make further improvements. (Paragraph 47)

Postwatch response:

We welcome this report and the Committee's acknowledgement of the efforts Postwatch are making on behalf of customers. We will work with POL and BERR to ensure the recommendations are fully considered.

We strongly believe that the Committee's continued interest is key to maintaining reasonable customer access to post office services up to and beyond 2011.





 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2008
Prepared 2 June 2008