Memorandum submitted by Terence O'Halloran
My colleagues and I have read the Third Select
Committee Report on Post Office Closures with interest. We consider
that you are being misinformed.
I really cannot put it any other way, just look
at the figures. BERR claim £4 million per week losses for
post office outlets. That is simply not true. Annualised, the
posted loss in the accounts for the Post Office was £99 million
to the year ended May 2006. A not dissimilar figure to the losses
posted in the Post Office accounts prior to the 2004 closure programme.
A social grant was paid to the Post Office (2005-06)
(not a subsidy—subsidies are nor allowed under EU law) to
maintain rural post offices (ie those in exceptional circumstances
for social needs). Those social needs are largely the payment
of state benefits to those who could otherwise fail to gain access
to any other source of real currency (£20 notes) which can
be spent on their behalf buying goods and services.
The grant prior to the 2004 closure programme
was £132 million according to the accounts and documents
sent to me by the Chairman of the Public Accounts Committee, Edward
Leigh MP.
The only loss that can be taken into account
therefore is £99 million; which is £1.9 million per
week.
However, £70 million of the £99 million
loss was attributable to Crown Post Offices which will remain
open; some under a franchise agreement with WHSmith. Wages in
Crown Post Offices will rise as will management bonuses and incentives.
There are say 530 Crown Post Office units, leaving
say, 13,400 sub-post offices many of which are situated within
local shops.
The shops serve communities, whether rural,
urban or suburban, many of which we have visited and most of which
are vibrant, profitable outlets for the Post Office, therefore
why are they being closed?
Alan Cook quoted in your Third Report, was reported
as stating that he would not knowingly close profitable units.
He is misguided or misinformed, or misleading you.
Langworth, Rippingale, Passfield, Muswell Hill
(Alexandra Park Road), and many other post offices that are being
closed together with those that have been closed like St Peter
at Gowts in Lincoln, Trinity Street in Gainsborough to name but
two, are/were viable post office outlets. The queues at the alternative
(non profitable) outlets have increased to 20-30 minutes, and
queue times are increasing. It makes "main" post offices
impractical, if not impossible to use.
From the figures above it can be shown that
the losses attributable to sub-post offices amounts to less than
£500,000 per week spread over 13,400 outlets with, say, 60
million of the 180 million transactions taking place each week.
The loss is less than 1p per transaction, therefore the BERR letter
which we have received as three separate replies to direct questions
concerning Langworth and other post office closures is a deliberate
attempt to misguide the public. Three times; despite our attempts
to inform the authors of those letters that the contents are a
total misrepresentation of the facts, the same misrepresentation
of the facts.
Why would anyone close 2,500 outlets rather
than develop them? Because developing outlets actually takes energy
and skill which it seems current management at the Post Office
do not possess.
It is easier to close units and create the illusion
of success, and perhaps be rewarded with a bonus for creating
that illusion, than to work at a real and sustainable solution.
There is a real and sustainable solution.
If the Post Office close 2,500 units with an
average overhead cost of £5,000 per outlet their saving is
£12.5 million (as a budgetary saving). If, however, they
close 2,500 units at £12,000 average, they create the £30
million illusionary saving that, coupled with their £70 million
of Crown Post Office losses, equals £100 million to match
the £99 million loss posted in the accounts. Pay Mr Crozier
or is it Mr Cook £1 million bonus and "you break even".
Members of the Select Committee: the above figures
are, by their nature, simplifications and generalisations but
they do add up, which is more than the figures from BERR or the
Post Office mandarins currently do. Quite simply, the loss is
less than one fraction of a penny per transaction, exacerbated
of course by the fact that any postmaster, sub or otherwise, is
allowed 20 seconds to pay a benefit claim cheque. Pre 2004 was
paid 11.6p for doing so and now attracts 7.3p making the whole
transaction, financially, a disaster, created by government. NOTHING
to do with post or stamps but taking time—the reason Crown
Post Office lose so much.
As business people we cannot afford to stand
in queues and indeed, the postmasters at local post offices have
to wait a week to fulfil an order for stamps. The Post Office
will deliver my stamps to my business within 24 hours, and they
do.
It may well account for the four million individuals
that the Post Office claim are not using their service any more.
Stamps bought direct are placed on letters and packages which
then have to be taken to the post office to be dealt with, because
first class cannot be guaranteed to arrive within 24-hours and
we pay £4.60 extra for the privilege of that 24 hour service.
Whilst the stamps are not purchased at the post
office we use, the receipt impress and receipt that are issued
for the document being passed into the postal system is dealt
with by somebody sat behind a counter. Langworth sub-postmaster—who
receives no credit or acknowledgement for that service.
Those who have their benefits paid into the
bank still have to draw that money from somewhere and that somewhere,
by and large, is a post office near to hand. Queuing time for
both of the above transactions will now increase and in Lincoln
that is estimated to be from 25 minutes at the Sincil Bank post
office to 35 or 40 minutes. Time which we quite simply cannot
afford to give. It is not difficult to see then why four million
transactions per week fall by the wayside (if one can trust the
Post Offices figures). They are consolidated to save time. Ask
"Argos" on Lincoln High Street.
We would appreciate an urgent meeting with Committee
members to discuss the foregoing statistics with a view to the
total abandonment of the current closure programme, the possible
reinstatement of post offices that have been closed and the establishment,
by a responsible body—not consultants, that can bring the
true facts to bear on what has become a social issue of immense
proportion.
10 April 2008
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