Memorandum submitted by Age Concern
Help the Aged and Age Concern welcome this inquiry.
We hope that it will result in the Government recognising the
strategic role the post office network could provide in offering
new services that help to achieve Government policies and that
will provide local communities with services they need, value
and trust. In particular we think that the financial role of post
offices could be extended including an enhancement of the Post
Office Card Account. We also think the post office could provide
a one stop shop in providing national and local government services.
1. Introduction
1.1 Age Concern and Help the Aged are due
to merge in April 2009 to form one single UK charity dedicated
to improving the lives of older people and tackling the disadvantages
they experience. As part of this process we are submitting a joint
response to the Committee's Inquiry into securing the future of
post offices.
1.2 We welcome the opportunity to submit
evidence to the Committee on the future of the post office network.
We are aware from research conducted by both Postcomm and Postwatch
that older people are heavy users of post offices. We also know
from our own research and correspondence that older people place
a very high value on having a post office located nearby. Our
response uses findings from a survey conducted by Help the Aged
on their views on the Post Office Card Account1 and a survey conducted
by Age Concern in 2006 as part of their Stamped Out campaign2 .
1.3 We were delighted by the Government's
announcement that it was to cancel the competitive tendering process
for the successor to the Post Office Card Account (POCA) and award
the contract to Post Office Ltd (POL). Whilst reluctantly accepting
the recent post office closure programme, we were very concerned
that, had POL lost the tender for the POCA from 2010, a further
closure programme would be necessary.
1.4 We were also pleased that this announcement
was accompanied by the Government's recognition that the post
office network offered a trusted source of information and financial
services and that, given the current financial crisis, this was
not the time to jeopardise the future of the network. We consider
that ever since the Government decided to change the way benefits
and pensions were paid was announced in May 1999, severely reducing
the income of post offices, it has taken insufficient action to
revitalise the services post offices can offer, allowing a national
asset to atrophy.
1.5 For example, it was particularly disappointing
that, having recognised the important social and economic role
played by the post office network, the proposals issued for the
national closure programme in May 2007 were not accompanied
by any strategy the network could play in the delivery of services
in rural and urban deprived areas. We sincerely hope that the
fact the Government has asked the Committee to review future services
to be offered through the post office network means that at last
it has recognised the important role it could play in contributing
to its financial and social inclusion policies.
2. What services should the Post Office network
offer?
Government
2.1 The Age Concern survey showed that older
people rated highly the information offered by their local post
offices and the availability (and help with filling them in) of
official forms. It was disappointing that it was decided not to
roll out the pilots of post offices offering a Government one
stop shop as suggested in the Performance and Innovation Report
"Counter Revolution". We hope that any strategy for
delivering services in rural and urban deprived areas would build
on the information already available through the post office network
with regard to delivering local and national government services.
2.2 We are aware that post office income
from providing Government services has significantly reduced in
the past few years. This now only contributes 26.40% of income
compared to 40% in 2006.3 However, we do not think that taxpayers
should be made to have services, such as buying television licences,
provided by post office when there is a cheaper option available.
Neither do we think consumers should be prevented from accessing
government services such as car tax renewal through the internet
rather than post offices.
2.3 However changes in Government services
also provide new opportunities for post offices and the Government
should remain prepared to make greater use of the post office
network to provide these than perhaps it has done in the past.
We welcome the fact that post offices have given the responsibility
for verifying passport applications. We consider this could be
extended to ten year driving licence renewals and, if the proposed
identity card is introduced, responsibility for verification as
well as acting as a central point for collecting biometric data.
Local Authorities
2.4 We were delighted when Essex County
Council (ECC) responded to the recent closure programme by suggesting
that local authorities should become funders of local post offices
in recognition of the important role they play in local communities.
As well as offering retail and post office services, ECC funded
post offices will also be sources of local information offering
internet access. We are aware that there are other local authorities
who are interested in following the lead taken by ECC.
2.5 We think this model could be expanded
to include the two piloted initiatives Community Canvass and Public
Messenger and possibly extended to a whole range of local authority
services. However, we have some concerns about the funding of
this model. We understand that where local authorities take over
responsibility for running local post offices, they are not eligible
for the Government's rural subsidy. Whilst we hope these models
could prove financially viable, if they do not we would be concerned
if the responsibility for the post office subsidy is shifted from
national to local taxation.
2.6 We think it is important that the duty
for monitoring this new model should be formally given to an independent
source. We think this should be either the regulator, currently
Postcomm, or Consumer Focus.
Other
2.6 We would like to see the Government
enhance the financial services provided through the post office
network, which has proved successful in other European countries.
POL has successfully introduced a number of financial services
which now provide 29.3% of income. We think this success supports
the view that public trust in post offices is high. We think the
current financial situation provides an ideal opportunity to build
on the public trust in post offices which should be encouraged
to expand on the financial services they currently offer.
2.7 In the Age Concern survey, banking services
came only second to a retail shop as the additional services older
people most valued from their post offices. The research showed
how important it is for older people to be able to access their
money at post offices, which possibly explains the popularity
of the POCA among older people.
2.8 The functionality of the POCA should
be enhanced. The Help the Aged survey identified a number of additional
features older people would like the POCA to have.
— Rather than just receiving state benefits
and offering cash withdrawals, important though these facilities
are, it should allow cash and cheque payments from other sources
to be paid into the account.
— It should provide statements which account
holders could use as a means of proving their identity.
— It should also allow standing orders
and direct debits to be set up so that account holders can pay
utility bills by the cheapest method. To ensure the payment of
direct debits and standing orders do not lead the account to overdraw,
the POCA should provide a buffer zone of say £30 before
any charges are applied and alert account holders if the buffer
is used up.
2.9 The Department for Work and Pensions
(DWP), by repeatedly encouraging current POCA users to take up
other bank accounts have made it comparatively difficult to open
and retain a POCA. The application process for a POCA should be
made simpler and the DWP should promote the POCA more actively
to its clients, particularly new ones. The DWP should consider
reversing its policy of encouraging clients to migrate to a bank
account and stop sending existing clients letters that encourage
them to move payments to a bank account.
2.10 We have campaigned for several years
for the Government to put pressure on HSBC, the Royal Bank of
Scotland and HBOS to make their current accounts available at
post offices. HBOS has recently announced joined other banks in
announcing that they will be doing this. In the past this has
been refused on the basis that the Government did not feel it
appropriate to interfere in the decisions of commercial enterprises.
However, now that taxpayers have a considerable stake in Royal
Bank of Scotland, we think it is now appropriate for the Government
to ensure that there is consistency across the banks to allow
their current accounts to be available at post offices.
2.11 All branches which should be "bigger,
brighter and better" as promised but not delivered by the
Urban Reinvention Programme, should offer a one stop shop for
a variety of community services. For example, in addition to the
existing range of postal and financial products and services post
offices could offer:
— Bus passes, travel tokens and other forms
of travel concessions.
— Basic equipment such as a photocopier,
computer with internet access, community notice board, and a community
and CAB advice leaflet rack.
— There should be regular and widely advertised
"citizen advice days" when a special desk is staffed
by selected representatives from the Police, PCT, Pensions Service,
credit unions, Inland Revenue, care service advocacy services,
road traffic and highway agencies and local elected members. These
organisations would be charged for use of the infrastructure.
In particular there should be specialist advice on benefits, to
enhance take-up, especially amongst older people who are eligible
for pension credit and other entitlements but not presently claiming.
— New services for older people and other
groups such as "leisure cards", for example for the
new swimming provision being funded by central government and
administered by some local councils.
— A telephone "befriending" services
to vulnerable/isolated older people living in the catchment area.
From the research undertaken by Help the Aged as part of their
contribution to the compensated closure programme, the number
of older people in the vicinity is known, and such a scheme could
be run in conjunction with social services who would provide further
data and professional support. Many sub-postmasters claim to "keep
an eye" on the health and wellbeing of their regular older
customers, in future they could do so on a much more systematic
basis and be funded to do so.
2.13 We are aware that Postcomm has considered
for some time that the monopoly agreement between Royal Mail and
POL should be broken to allow the post office network to enter
contracts with other mail providers. We are yet to be convinced
that this is in the interest of post offices. At the moment the
income from Royal Mail provides just over a third of the income
for post offices. We are not aware of any estimate that has been
made as to whether allowing POL to contract with other mail providers
would provide an equal or greater income. Unless a robust estimate
on the income breaking the monopoly would engender, we do not
think it advisable at this time to jeopardise this source of income
for post offices.
3. How much account should be taken of costs
to the taxpayer in providing services through post offices rather
than cheaper channels and consumer preference to use other channels
3.1 As stated in para 2.2 above, we do not
think that taxpayers should be made to have services, such as
buying television licences, provided by post offices when there
is a cheaper option available. Neither do we think consumers should
be made to access government services such as car tax renewals
from post offices if the prefer to use other options such as the
internet.
4. To what extent would a desire for the
presence for a post office or post office services translate into
actual use of those services?
4.1 Despite the fact habits are changing
we consider that access to services at post offices will continue
to be of interest to many older people in the foreseeable future.
It is still a fact that whilst people are living longer, they
still become less mobile as they get older. We know that currently,
there are a greater number of older people who live in rural areas
than in urban areas. This is partly due to the fact that many
older people are choosing to move from urban to rural areas on
retirement. Whilst at the moment, many of these are likely to
be active and mobile, particularly as they are likely to be car
owners, we see that in future years these same people will become
more dependent on local service provision because of reduced mobility.
4.2 The Age Concern survey showed that even
older people with cars were reluctant to use them. They saw car
travel as not particularly convenient and incurring additional
costs they felt they could not afford. They felt that finding
and paying for suitable parking near alternative sources would
be difficult. Many were also aware they may not be able to use
a car in the future if, as they anticipated, they became more
infirm as they got older. It was also clear from the responses
that many car owners currently walked to their local post office
in preference to driving, gaining useful exercise in the process.
5. What are the impacts on the availability
of post office facilities for business and local residents, and
in particular how significant is the network in aiding social
and financial inclusion. What is a reasonable level of subsidy?
5.1 Whilst the Government has recognised
the important economic and social role played by post offices,
these have never been costed. Any consideration on what subsidy
level is reasonable should take account of the impact the closure
of a post office would have on the local economy and community.
Research conducted by the Federation of Small Businesses found
that 82% of those small businesses surveyed thought that closure
would have a significant impact on their business possibly resulting
in potential closure. Research conducted by the Countryside Agency
found that a closure of the post office resulted in a loss of
15% of income for other nearby shops.4
5.2 The role post offices play in the lives
of vulnerable households—older and disabled people and people
on low incomes—cannot be over emphasised. The Age Concern
survey found that as well as being a key part of the community
because they offer access to what are seen as basic essentials,
post offices provide a social focus for the community, motivate
older people to be active and offer support for those more vulnerable
residents since they act as an alarm system when someone's absence
is noted. This social asset has been recognised by the leader
of Essex County Council, Lord Hanningfield, who has said: "We
spend £500 million a year on the elderly. Spending a
very small fraction of that—about £500,000 a year
on the retention of post offices in our county seems a very worthwhile
social thing to do."
REFERENCES
1 Losing the Post Office Card Account. Help
the Aged. 2006.
2 Let's make rural post offices work for
older people. Age Concern. Dec 2006.
3 Postcomm Eighth Annual Report on the Network
of Post Offices 2007/08. Postcomm, November 2008
4 The Economic Significance of Post Offices
in Rural Areas Countryside Agency 2000.
January 2009
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