3 Financial support for outreach
5. In response to petitions, the Government has noted
that it will be providing the £150 million Social Network
Payment to support the post office network to 2011 and that "the
Government strategy includes provision for 2500 compensated closures
and 500 new Outreach services."[5]
We have raised the subject of Outreach in previous reports.[6]
We were concerned about the level of payment for Outreach services,
particularly for partner outreach, in which a local partner, such
as a retailer or publican, is appointed by a sub-postmaster or
mistress to provide a range of Post Office services.[7]
We received evidence that this funding was insufficient from witnesses
from Rippingale in Lincolnshire, Tilton in Leicestershire and
Devon. At the meeting with Post Office Ltd we asked for further
explanation of outreach service funding. We were not reassured
by the answers we received.
6. Naomi Nardi, had told us that:
"PARTNER OUTREACH is the least sustainable
of the Outreach Models relying on the work of a third party, who
shares payment from POL [Post Office Ltd] with a core sub-postmaster,
to deliver services.
Perversely, POL does not involve itself in Partner's
payment terms. That is subject to individual negotiation with
the core sub-postmaster, which means payments will vary across
Outreaches for the same work and are open to abuse.
Whilst some core sub-postmasters will no doubt
offer fair deals, others may not. The finance package is not transparent
nor has POL considered there to be any need to ensure that Partners
get reasonable recompense for the work, responsibility and security
of the money and mails that they are handling."[8]
7. When we questioned Post Office Ltd about this,
the Managing Director of Post Office Ltd told us:
"This is a general point across the whole
network. There are post offices in Tescos, in WH Smiths, in Co-ops
or whatever. We pay those organisations for the transactions
they perform for us and they hire staff to do the work. We do
not stand back; we actually go in and train those staff. If it
is a sub-postmaster, we interview the sub-postmaster to make sure
that they are capable of running the business and we exercise
a high degree of quality control, mystery shopping and all that
sort of stuff to make sure that it works properly. It is their
own business and they have to decide the labour rates in their
area or whatever."[9]
8. In response to this Ms Nardi told us:
"Regarding Mr Cook's response using the
illustration of employees of Tesco & W H Smith: those are
not Outreaches and the structures of the different businesses
do not relate to one another at all.
The core sub-postmasters do not directly employ
Partners. If they did, we would very much welcome the minimum
wage.
In fact, Partners are being offered around £2,000
to £3,000 per annum, depending upon transaction numbers and
the deal struck with the Core. That is approximately £8 to
£12 per day gross for up to 9-10 hours a day, and often across
seven days a week.
In our own situation, given the stricture by
POL to offer Partner Outreach for the entire time that our retail
side functions, we would earn £1.23 an hour, gross. This
is too busy a shop & PO to run single-handed and so in effect,
one of us would have to work for the Post Office for almost nothing.
If we need holiday or sickness cover, for which we must pay minimum
legal rates, we make a loss. In an unguarded moment the core sub-postmaster
put forward for us here, told us that he thought a business would
'have to be desperate' to take it on!"[10]
9. We remain concerned that the funding provided
for Outreach services may be inadequate. If this is the case,
Outreach services will fail and the network be diminished. We
note that the adequacy of Outreach funding has been raised by
witnesses from several different parts of the country. However,
we are not the appropriate body to look at the detailed financial
arrangements for outreach, which will involve many different
contracts. A significant amount of public funding is provided
to sustain the network; we need to be confident the public receives
the services this is meant to secure. We recommend that the National
Audit Office investigate the financial arrangements for Outreach
services.
5 See, for example, Observations from the Secretary
of State for Business, Enterprise and Regulatory reform to the
Petition of supporters of the "Keep Mayfield Post Office
Open" campaign. Back
6
Business and Enterprise Committee, Sixth Report of Session 2007-08;
Post Office Closure Programme; HC 292, Business and Enterprise
Committee, Sixth Report of Session 2007-08, After the Network
Change Programme:the future of the post office network, HC 577 Back
7
Business and Enterprise Committee, Sixth Report of Session 2007-08,
After the Network Change Programme:the future of the post office
network, HC 577 Ev 4 and Ev 12 Back
8
Ev 28 (Naomi Nardi) Back
9
Q 164 Back
10
Ev 28 (Naomi Nardi) Back
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