Post offices - securing their future - Business and Enterprise Committee Contents


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


 
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