Memorandum submitted by UNITE
1. Executive Summary
UNITE welcome the opportunity to submit evidence
to the Business and Enterprise Select Committee Inquiry into the
future of the Post Office network.
1.1 The Post Office network plays a very
important role in ensuring that older people can access a range
of services. Post Offices often play a key role as the hub of
the local community and being able to visit the local Post Office
is central to the ability of many older people to live independently.
The closure of the local branch therefore leaves these people
isolated and reliant on relatives or local authorities to access
basic services.
1.2 We believe that the importance of the
Post Office to local communities justifies the current level of
subsidy and that the Government should commit to continuing the
support beyond 2011.
1.3 Successive Government decisions to pay
pensions and other benefits directly into bank accounts rather
than through the Post Office has reduced trade. This is one of
the main reasons why fewer people are using their local branch.
Rather than closing Post Offices we believe that central and local
government should be looking at ways to provide more services
though the Post Office and therefore encouraging more people to
use them.
1.4 We support the idea of a publically
owned "People's bank". We believe this will increase
older people's access to financial services and confidence in
the security of savings.
2. About UNITE
2.1 UNITE, the National Federation of Royal
Mail and BT Pensioners, is the oldest and largest occupational
pensioners' organisation in the UK, with over 100,000 members
nationwide organised into over 200 branches.
2.2 We campaign on behalf of our members
and older people more generally, on issues such as improving pensions,
health services and social exclusion.
2.3 The Business and Enterprise Select Committee
has invited wide ranging views on the future of the Post Office
network. We have, however, limited our evidence to the functions
of the post office network that are of most relevance to our members.
3. What Services should the Post Office Network
offer?
3.1 UNITE believes that the Government has
a duty to secure the future of the Post Office network. Despite
the reduction in Government services that can be accessed at local
Post Offices, the importance of the role that the Post Office
plays in local communities should not be underestimated. The local
Post Office plays a key role in ensuring that older people and
other vulnerable groups have a point of contact with both the
local community and the state. The Government should therefore
commit to providing a subsidy to the Post Office network for the
long term and should clearly commit to extending the subsidy beyond
2011.
3.2 Increasing the range of services which
can be accessed through the Post Office will the increase the
use of local Post Offices helping to secure their long term future
and also improving access to services to local communities.
3.3 We believe that the Post Office should
be used more by central government departments and local government
to provide services. In 2000 the Cabinet Office published
proposals to turn Post Offices into one stop shops where local
people could access a range of government services and information.[79]
It is regrettable that the Government chose not to implement the
report's recommendations at that time. There is now an opportunity
for Government to move forward with these recommendations.
3.4 Local government could also help to
secure the future of Post Offices and improve access to their
services by using the Post Office network as a delivery channel.
Essex County Council is taking this forward by taking over management
of Post Offices and using them to deliver council services in
addition to the services already offered by the Post Office. We
would welcome the adoption of this model by other local authorities.
3.5 It is crucial that the tie between the
Post Office Limited and the Royal Mail is maintained and secured
for the long term. This will ensure the future of the universal
service obligation.
3.6 Post Offices deliver a range of services
not provided by the Royal Mail. We believe that there could be
scope for Post Offices to offer further services from suppliers
who are in competition with the Royal Mail, provided that this
does not threaten the future of the business arrangement between
the Royal Mail and the Post Office Limited.
4. How much account should be taken of:
(a) costs to the taxpayer in providing
services through the Post Office rather than through cheaper channels?
4.1 Government should compare the costs
of providing services through the Post Office, and through alternative
cheaper channels. However, this should not be assessed without
consideration of the public benefits of delivering access to services
via the Post Office and the costs faced by society as the result
of Post Office closures.
(b) consumer preference for alternative
channels?
4.2 It is clear that government services
need to adapt to changing consumer behaviour and preferences.
However, we believe that government departments should also consider
the impact of changes to delivery channels on older people and
other vulnerable groups. Changes to customer behavior and preferences
should not necessarily lead to a closure of local Post Offices.
Instead, Post Offices should be given the freedom and funding
required to adapt to customer demand by offering new services
in innovative ways.
5. To what extent would a desire for the
presence of a Post Office or Post Office services translate into
actual use of those services?
5.1 Public support for Post Offices is strong
because people understand the importance of the network in for
local communities. There is an understanding that Post Offices
are not purely commercial concerns, but they play an important
social role which should continue to be supported by Government
subsidy.
5.2 Responding to changing customer behaviour
by closing Post Offices and therefore denying thousands of people
access to crucial services is the wrong approach. The Post Office
is a key delivery channel for a huge variety of services and Post
Offices have the potential to act as local delivery points for
many more. We believe that steps should be taken to increase the
attractiveness of Post Offices to consumers by offering new services
and existing services in innovative ways.
6. What are the impacts of the availability
of post office facilities for businesses, and local residents;
and in particular how significant is the network in aiding social
and financial inclusion
6.1 Post Offices play a vital role in local
communities, especially for older people. In many rural communities
and deprived urban areas the Post Office offers a one stop shop
as Post Offices are located in local stores. The closure of the
Post Office often leads to the total closure of the attached shop.
This is a double blow as older people can't easily access financial
and other services offered by the Post Office and the closure
of the local grocery store means that many older people will find
it difficult to do their shopping and therefore lose their independence
as they begin to rely on relatives or social services for support.
6.2 Many small shops also rely on the footfall
caused by having a Post Office attached. Research undertaken by
the Countryside Agency in 2000 showed that a shop attached
to a Post Office which had closed lost up to a quarter of turnover.
Other nearby shops lost 15 per cent of turnover as the result
of branch closures. Research undertaken by the FSB has shown that
82 per cent of small businesses thought that the closure
of the local Post Office would have a negative impact on their
business. Post Office branches are therefore important to the
future of other local businesses. As well as the impact on the
local economy the closure of local shops means that it becomes
more difficult for older people to access services and therefore
to retain their independence.
6.3 Post Offices provide a community hub
which contributes to the quality of life of many older people.
A poll undertaken by Age Concern England showed that 90 per
cent of older people in rural areas see their Post Office as a
vital lifeline, 76 per cent across all areas said that they
were concerned about losing access to vital services if their
Post Office closed and that more than half of over 60s in rural
areas fear isolation as the result of closures.
6.4 The closure of bank branches in many
areas has made it more difficult for people to access financial
services, especially in rural areas. Only four per cent of villages
have a bank, but 60 per cent have a Post Office. Many rural
or deprived areas also lack access to free ATM's which mean that
those on limited budgets who need to withdraw small sums of money
end up paying substantial amounts of money on ATM charges.
6.5 Post Offices improve financial inclusion.
UNITE welcomes the Government's decision to renew the contract
with the Post Office to deliver the Post Office Card Account.
We believe that if the contract had not been renewed it would
have been a major blow to financial inclusion and to the future
of the Post Office network. It is important that the new contract
makes it much easier for pensioners and other benefit claimants
to receive payments via the POCA as an alternative to payments
directly into a bank account.
6.6 We believe that further steps should
be taken to increase the number of bank accounts which can be
accessed through the Post Office network. We believe that it should
be possible to access all basic bank accounts through the Post
Office network.
7. The "People's Bank"
7.1 We welcome the suggestion that the Post
Office should begin to offer a full banking service as a "People's
Bank". Banks have become increasingly remote from their customers
and branch closures mean that it is becoming increasingly difficult
to access banking services. Even after recent closures the Post
Office is still one of the largest retail chains in Europe. The
strength of the network's penetration means it is in a prime position
to ensure that all communities have access to basic financial
services.
7.2 There is a need to improve access to
credit for both individuals and businesses whilst ensuring that
vulnerable people aren't led into unsustainable debt, to ensure
that people have both incentives to save and the confidence that
those savings will be safe. A publicly owned bank would be the
most effective way to meet these requirements and delivering Banking
services through the Post Office network would ensure that the
new bank is accessible to all and that it is in a position to
meet the needs of local communities for financial services in
a responsive way.
7.3 The Post Office is already playing a
role in ensuring access to banking and other financial services
by allowing access to accounts from a number of high street banks
and offering financial services from the Bank of Ireland. We are
concerned that the Post Office's role as an agent from the Bank
of Ireland means that people who rely on the Post Office to access
financial services lack choice. We believe that the establishment
of a "People's Bank" would help the Post Office to widen
access to financial services, and the fact that the Bank would
be a publicly owned entity should ensure that customers will be
confident that their money will be secure.
8. Conclusions
8.1 The Post Office network plays a crucial
role in ensuring that older people can access a range of services
and live independently.
8.2 We support initiatives to maintain the
Post Office network so that our members can continue to access
local and national services. Rather than closing Post Offices
we believe that central and local government should be looking
at ways to provide more services though the Post Office and therefore
encouraging more people to use them.
8.3 UNITE would welcome the opportunity
to present further information to the Business and Enterprise
Select Committee in writing, or in person.
January 2009
79 Cabinet Office Performance and Innovation Unit,
A Counter Revolution: Modernising the Post Office, June
2000. Back
| 
