Examination of Witnesses (Questions 120-139)
MR ALAN
COOK CBE, MS
PAULA VENNELLS
AND MR
HOWARD WEBBER
10 JUNE 2008
Q120 Mr Binley: I am not being jaundiced.
I am asking you for specifics.
Mr Cook: I am not accusing you
of being jaundiced. I am just saying that you are still going
to have people—
Q121 Mr Binley: The implication was
there.
Mr Cook: No, it was not. You were
saying that we would have communities that feel it is a sham.
I think a community is going to feel disappointed in the process
if they mount a campaign to keep their post office and it is not
successful.
Q122 Chairman: We have heard the
points. You have heard the concern. It would be nice if you could
answer Mr Binley's points. I would have hoped you might have done
your research on members before you came. Let us move on to Essex
and local authorities. Postwatch has expressed concerns about
the involvement of local authorities in this area because it could
undermine the viability of other branches in an area. This Committee
has expressed concern about a competing subsidy from the national
taxpayer and local council tax payer. It is a great idea. Where
are we and what are the implications?
Mr Cook: If one views local authority
funding as a positive thing then we have reached a pretty positive
situation with Essex. One of the more technical challenges was
clearly that the money given to us by central government was subject
to European state aid clearance. So if a local authority starts
to give us money to keep a post office open, I was worried that
in some way that could prejudice the clearance we had already
got of £150 million and indeed that the payment in its own
right would be legitimate. We have been working with DBERR's lawyers,
our own lawyers and Essex's to find a way forward where, if they
want to do this, we can come up with a framework that will work
in practice and that would be operationally viable. I guess the
good news is we have found one. We have reached a situation where
we have gone back to Essex now and said, "Okay, this is how
it works. Here are the numbers for the particular branches that
you are interested in." My understanding is that they are
comfortable with those numbers. They have now got to decide what
level of provision they would like to have. I think one of the
things that we established fair early on is they do not necessarily
want to put back exactly what was there before, for example, it
could be limited hours or an outreach or whatever, because if
they are paying, to be frank, they can decide how much provision
they want to install. We are on the brink now. We have a deal
in the sense of we know how we can do this. I am meeting Lord
Hanningfield next week, who is the Chairman of Essex County Council.
We are at a point now where we have just about established a model
that will work for local authority funding.
Q123 Chairman: The 80% of business
that would have transferred to other offices now will not transfer.
Mr Cook: One of the things that
we are saying is that we would not automatically allow every closing
post office to be local authority funded and one of the criteria
would be whether that would have a particularly adverse effect
on the migrating business. That is one of the factors that we
take into account. It is not that Essex will be buying back every
post office that is closing; it is a particular subset.
Q124 Chairman: So we do not know
how many they will decide to "save"?
Mr Cook: No. We have the formula
and they have all the prices. It is for them to decide now how
many they would like to do.
Q125 Chairman: Are there any other
local authorities engaging with you in a similar way to Essex?
Mr Cook: We are in discussions.
What we have been doing is trying to drive Essex through to a
conclusion so that we have a model that we could then share rather
than having everybody spending a fortune on lawyers' fees. We
have a series of non-disclosure agreements signed with some local
authorities and we are in a position where we can start to progress
those.
Q126 Chairman: So the Essex one is
the model which others will then follow?
Mr Cook: Correct.
Q127 Miss Kirkbride: I know it is
not for you, but can you just say what the county council gets
out of it other than to keep your business open? What is it that
they are seeking to do in addition?
Mr Cook: Nothing.
Q128 Miss Kirkbride: It is purely
to keep your business open? It is not to provide a service that
the council might offer?
Mr Cook: No. There is nothing
else going on in there. It only relates to post offices that are
closing. It is not like we are selling new franchises.
Mr Webber: It is qualified joy
because obviously an extra post office means more services for
customers, provided it does not have a damaging impact on the
post offices which remain as part of the network. The two aims
of the whole closure programme are, firstly, to minimise customer
detriment and, secondly, to have a sustainable network after that.
Anything which damages the second of those aims is something we
are going to oppose. I am sure it is being done with great care
in that Post Office Ltd would not enter into an agreement which
would damage the sustainability of the network as a whole.
Q129 Roger Berry: Could you give
us a ballpark figure for the number of local authorities that
have made a serious approach to POL in relation to this? In particular,
where decisions have already been made, were local authorities
making serious approaches or not?
Ms Vennells: We had interest from
just under about 100 and 50 have requested NDAs, ( Non Disclosure
Agreements), which we sent out and so far about 20 have returned
them. Then it seems to have gone a little bit quiet. Wherever
we have been asked to meet with local authorities we have done
that straightaway. They talk to each other through the Local Authorities
Association. I suspect they are probably waiting to see where
Essex get to because Essex is going through quite a learning curve
at the moment in terms of working out what particular type of
model, as Alan explained, they think will work in the areas where
they want to put the services.
Mr Cook: We have also been talking
with the Local Government Association and we have presented to
one of their meetings and whatever. Most of the local authorities
are watching to see how this pans out.
Q130 Mr Clapham: Mr Cook, a little
earlier you said, in relation to the way in which the rationale
is applied, that you thought it was a little bit better than an
art form and you tried to work on information. Have you a prepared
schedule of the information that you require from each particular
local authority and does that go down the line to that local authority?
Now that we see the Essex model is almost ready to be rolled out
to local authorities, are local authorities going to be informed
of that so that they may, particularly in the rural areas, come
into play? My third question is to Mr Webber and is on the appeals
process. We have got four stages in that appeals process, the
final stage being the stage when it reaches the minister. Are
we now saying, given that we have improved the process, that the
MP is going to be involved in that appeals process at an earlier
stage? Is it something that you have discussed and, if not, why
not?
Mr Webber: This goes back to the
point about whether this is an art or a science. It has already
been revealed that the Government's access criteria could be met
with just 7,500 post offices, which is 6,500 less than there were
at the start of the programme. What is being done is selecting
2,500 out of those 6,500—all of those 6,500 would meet the
access criteria. You are then down to the less mandatory factors,
issues like transport, the mix of population, the economic effect
and so on. That is what Post Office Ltd is working on, a very
complex mix of factors, and that is what we are working on as
well, to choose from our point of view and, from Post Office Ltd's
point of view, the least damaging 2,500 to close out of those
6,500. It is always going to seem damaging to the community that
is affected. On the whole we believe that Post Office Ltd has
done a pretty good job and where they have not, we have managed
to improve matters quite a bit during the pre-consultation phase.
Where that has not happened quite a few have been improved during
the public consultation phase. It is only at the end of all that
that we will escalate a case, if we are still really unhappy and
we feel that there is some significant problem, either that we
have not got the information which we have been asking for and
we think is necessary for an effective decision or we are not
clear that Post Office Ltd has taken full account of all the information
they have received, or we think they have got it plain wrong—We
have had around 150 cases which we have escalated at the end of
the public consultation where we have said we were unhappy. The
majority of those cases we are satisfied on because it is only
37 cases which have gone on to the next stage, which is a national
level, and only 23 which have gone on to stage three, which generally
involves Paula Vennells and Millie Banerjee, my Chair, discussing
matters. At the moment there is only one which has gone on to
the fourth stage, which is the Chair of Royal Mail Group deciding
and not the minister. MPs' input is crucial from the last two
weeks of the private consultation and throughout the public consultation.
The stuff that MPs have got to say is absolutely crucial in helping
us to decide whether we should escalate a case. Although Lindsay
Hoyle's case was a very unfortunate one, one of the results of
it is that we will be receiving full details of all the communications
made by MPs, any letters that they have written, meetings notes
and so on, and that will help us decide even better whether we
should be escalating a case. Input from MPs is absolutely crucial
but it is not the only factor, obviously. There are a lot of factors
which help us decide whether we are going to escalate. There are
2,500 closures to be found out of 6,500 possible ones and that
inevitably means it is an art and not a science.
Mr Cook: As we have the model
ready, we have a small supply of local authorities that have already
expressed an interest in this and signed an NDA and so we can
progress to a conversation with them. The rest we are handling
through the Local Government Association and the Welsh and Scottish
equivalents where we will say that this is the proposition. We
met with Simon Milton a couple of weeks back, who is the Chair
of the Local Government Association, and we are putting together
a joint communication which we will then put out once we have
got the model in place. We will not make money out of this. What
we would be doing is effectively charging them the saving that
we would have otherwise made, so it will be cost-neutral from
our perspective. I think it is likely to prove to be a disappointment
to many local authorities to see how expensive it is to keep these
post offices open because the fundamental problem that most of
these post offices will have is that there is nothing wrong with
the post office, they just do not have enough customers in that
particular area. They may aspire to believe that somehow or other
they have got that capability quite easily. As we have already
discussed with Roger Berry's point, there are a lot of post offices
above these 2,500 which are not even profitable for us never mind
the 2,500. We will effectively produce a price. I do think what
we have learned in the Essex conversation is that it is not as
simple as saying you do not put back exactly what was there before.
You have to go and dig a little bit deeper and find out what they
are trying to achieve in that community. It goes back to Julie
Kirkbride's point, which is what is the motivation here and what
are you trying to do. Essex is very enthusiastic about it, materially
more so than any other local authority we are talking to. We need
to work out how popular this will be in reality.
Q131 Mr Clapham: I want to ask Paula
about the issue of requesting the standardised information. It
seems to me that if you are going to move away from it being an
art form then there has got to be much more of a standardised
approach. Do we ask local authorities, for example, the same type
of information, particularly on things like bus routes? I would
have thought that unless a local authority is pointed in the right
direction then some of the information that is required should
be about bus routes that could be missed.
Ms Vennells: Yes, we do and I
would be very happy to send that on to the Committee. We write
to the local authorities and ask for very specific information.
Q132 Mr Binley: We heard of the possibilities
raised by the Essex question very late in the process, before
closures but after consultation. Why did you not give Northamptonshire
the same opportunity that other people have now had as a result
of Essex raising the issue?
Mr Cook: Essex's post offices
have closed.
Q133 Mr Binley: That is not my question.
I think the time has gone. I just wondered why. I have not had
an answer to that question.
Mr Cook: We needed to work on
a solution with a local authority and Essex was the most enthusiastic.
Mr Binley: I understand that. I asked
for time and you would not give me that. That is the point I am
making. Why do you not give local authorities time? You will do
so now. Why did you not do so at the start of the process?
Chairman: I think the point is that it
is a competitive market and Essex got in first with the idea.
Mr Binley: We are talking about almost
a nationalised service. Let us not play two games, Chairman.
Chairman: It was an idea that came from
Essex about every local authority whose post office has been closed
can, if it chooses to, revisit that closure process.
Q134 Mr Binley: Yes, it can but Northamptonshire
cannot because the time has gone.
Ms Vennells: It can.
Q135 Chairman: My understanding of
what we have heard from Mr Cook today is that where post offices
have closed and a local authority says it thinks the balance is
now wrong, it can have a discussion with you about the possibility
of some modest new pattern of outlets.
Mr Cook: Correct.
Q136 Chairman: Even Lancashire can
do it as well.
Mr Cook: That is what has happened
in Essex in reality.
Q137 Roger Berry: EU state aid clearance
has been given for the network on the grounds of general economic
interest. There are people who are saying that the post office
closure programme is entirely the result of EU Directives and
Commission decisions. Would you care to comment on the truthfulness
or otherwise of that fact?
Mr Cook: The post office closures
are purely down to the losses being incurred.
Q138 Roger Berry: On this statement,
for example, that the recent round of post office closures are
directly linked to EU Directives and Commission decisions, I do
not understand that link. Do you understand that link?
Mr Cook: No. There is no link.
Q139 Chairman: It is one of the big
issues that is coming up repeatedly in our constituencies and
the allegation being made is that this is all part of an EU plot.
This is nothing to do with the European Commission, is it?
Mr Cook: No. The only angle for
the European Commission is approving the state aid.
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