Government response
1. The Government welcomes the Committee's report
on its inquiry to identify new services to help secure the long-term
viability of the post office network in response to an invitation
by the Secretary of State for Business, Enterprise and Regulatory
Reform. It is helpful to have the analysis, conclusions and recommendations
which the Committee has drawn from its inquiry and the evidence
submitted to it.
2. We have set out below our responses to the Committee's
conclusions and recommendations under the headings adopted by
the Report. We have listed these in the order in which they appear
in the Report with our response set out below each of them.
What is the post office for?
The importance of post offices to poor, elderly
or otherwise disadvantaged people is frequently mentioned, but
what comes through very clearly is the sense that the post office
is important because it provides services to the total community,
not just to disadvantaged people. It is an instrument of social
cohesion or, to put it differently, it preserves the fabric of
our society. (Paragraph 14)
3. The Government shares the Committee's
view of the important role of post offices as an instrument of
social cohesion.
Is the network still necessary?
In setting the access criteria, and in asking
us to undertake this inquiry, the Government
has accepted that while the truly national retail and government
network that post offices provide may be an accident of history,
it offers a complex of services which cannot be replicated by
other institutions, even though most individual services are available
elsewhere. One of the most important features of that network
is that post offices are found throughout the country. And although
there is some variation in the services on offer, there is an
irreducible core that people have come to expect will be provided
across the country: access to post, access to cash, and, at the
least, access to government information. Also, the public expects
that, where appropriate, that core will support associated private
sector services. (Paragraph 30)
By chance rather than design, the Government has
ended up supporting local economies and providing information
and services to its citizens through the post office network,
in which a publicly-owned company works with a variety of private
enterprises. It is unlikely that anyone would have invented this
system; nonetheless, it exists and it is effective. It is possible
that the network can be sustained in a way which generates revenue
rather than consumes it. However, any decisions on the company's
operations or the services it offers must recognize that the nationwide
post office network needs to be sustained, and sustaining it will
meet the wider objectives of any government. (Paragraph 32)
4. The Government remains fully
committed to maintaining a national network of post offices with
reasonable access for all to a range of services of general economic
importance. The network forms an important part of the national
social infrastructure. Its social and economic role is underpinned
by Government-set access criteria and annual network subsidy payments
which support the non-commercial segment of the network.
The network and its services
Post Office Ltd's current profitability depends
on the Network Subsidy Payment, which runs until 2011. Further
payments would depend on clearance under European Union State
Aid rules. We believe that such payment, if necessary, would be
justified, but clearly, it would be better if the network could
be self sustaining. (Paragraph 41)
5. Discussions with Post Office
Ltd on its business plan and associated funding package beyond
2011 have begun. The Government recognises that there will be
a continuing need for network subsidy payments beyond 2011 and
that state aid clearance will be required.
Subpostmasters and other providers
We recognise that subpostmasters are self-employed;
nevertheless, when the state provides services directly, it pays
its workers at least the minimum wage. Post Office Ltd, a state-owned
company, should ensure it treats its subpostmasters and Outreach
operators no less fairly. (Paragraph 55)
6. As the Committee recognises,
subpostmasters are self-employed and by the nature of this status
are not covered by National Minimum Wage regulations, though any
staff that they employ are. The large majority of subpostmasters
run an associated retail business alongside their post office
which should contribute to their total income from the combined
business. Post Office Ltd has sought as far as possible to protect
subpostmasters' remuneration in an increasingly competitive market
in which it has to bid competitively on price to win or retain
contracts. Since 2003-04, Post Office Ltd has achieved a reduction
in operating costs of around 40% in real terms while the agents
pay bill has remained broadly static over the same period notwithstanding
the significant reduction in the number of branches. The average
remuneration Post Office Ltd now pays to subpostmasters is £43,000
per annum. However it is also recognised that subpostmasters
are under pressure from rising costs and therefore how important
it is for Post Office Ltd to secure new business, as growth in
subpostmasters' income will come from increased work flowing through
their branches.
Post Office Ltd has done a great deal to improve
its financial situation. It is to be congratulated for facing
up to difficulties, and introducing new services. Centrally provided
services, such as insurance or financial services, are welcome
in so far as they increase the financial viability of the network
as a whole. However, we need to be absolutely clear that the health
of Post Office Ltd matters primarily not because it can provide
a profit to the Government, its shareholder, but because it sustains
the post office network. We believe that it is time for Post Office
Ltd to pay more attention to the viability of its commercial retail
partners, who are essential to providing that network. This does
not simply mean negotiating more with the NFSP, important though
that may be. It means recognising the legitimate interests of
all its retail partners. (Paragraph 61)
7. Post Office Ltd has adapted
its internal structures to reflect the make up of the network.
Whilst there is a close relationship with the National Federation
of Subpostmasters, the company has relationship structures in
place to liaise with the 'multiple retail' companies who operate
significant numbers of Post Offices. The company also has relationships
with trade bodies such as the Association of Convenience Stores.
Post Office Ltd has reiterated to us that it recognises that
in making decisions which help sustain the integrity and sustainability
of the network as a whole, it must be aware of the differing interests
of those who constitute the network. This is reflected in the
different contracts and relationships with different parties -
all designed with the ultimate goal of an integrated network and
good service to customers.
Post Office Ltd must consider the impact of its
decisions on its sub-post offices and other network providers
as it seeks to secure the sustainability of the network. There
is no doubt that the company has a very difficult balancing act
to perform in ensuring that the company as a whole is as profitable
and efficient as possible, while acknowledging the needs of its
partners to make a profit. We are not convinced that balance is
currently correct; there is a danger that a drive for efficiency
could result in a rise in unplanned, voluntary closures because
the needs of subpostmasters and other providers are not adequately
met. (Paragraph 62)
8. Further to the response given
at 6 above, Post Office Ltd fully recognises the need for a balanced
relationship with its partners and seeks to handle the issue sensitively.
Recent examples include the way in which Post Office Ltd has sought
to make efficiencies in its central costs and keep the overall
pay bill to agents as stable as feasible. Post Office Ltd is also
piloting and introducing revised approaches (Essentials, Paystation)
to help integrate the provision of post office service provision
more fully into the wider store functions. For example, the Essentials
model currently being piloted enables the subpostmaster to use
his/her resources of space and staff more efficiently across the
overall business (Post Office and associated retail). However,
whilst doing what it can with regard to agents within the network,
it must be recognised that POL has to respond to competitive market
rates and the demand for value from customers if it is to have
any business at all.
Technology and infrastructure
It is clear that Post Office Ltd has, in the past,
not been as innovative in information technology as it should
have been. The Committee welcomes the Horizon technology upgrade,
but views it as only a critical first step. Post Office Ltd should
continue to seek technological innovations that make it more competitive
at bidding for contracts, and simplify and speed up transactions
in post offices. (Paragraph 65)
9. Post Office Ltd has recently
made significant progress in its use of technology. The Paystation
terminal functionality, now rolled out across the network, is
the equal of the technology used in other commercial bill payment
networks. The Application, Enrolment and Identification technology
that has been developed to meet the needs of the DVLA 10 year
photocard renewal contract is world leading and its placement
in branches has the potential to open up further fields of business.
The Horizon upgrade which will be rolled out across all branches
over the coming year improves the functionality of the equipment
on every Post Office counter and adds a web enablement capability
that will allow further Business opportunities (especially in
areas of information provided by government). The upgraded Horizon
on line also produces better and quicker operator processes (e.g.
fewer screens) reduces the number of paper receipts printed and
embeds operating instructions into 'context sensitive' online
help.
10. Post Office Ltd has utilised technology to improve
the range of services provided to customers. Paystation enables
some services to be offered outside of normal hours and Post and
Go machines provide self service for some mails products. Technology
to support Identity Services will enter its pilot phase in the
autumn. Working with its partners, Post Office Ltd continues
to explore a range of other innovative options. Implementing these
across an extensive network inevitably involves considerable expense
and they therefore have to compete with other initiatives for
limited investment funds.
Post office branches are housed in a wide variety
of locations and buildings — a legacy of the evolution of
the network. This has inevitably meant that not all post office
branches are ideally sited or arranged. There is, however, no
excuse for poor access either in relocated or new branches. The
Committee expects Post Office Ltd's new Code of Practice to ensure
that any future branch developments provide full access, particularly
for those with mobility concerns. Post Office Ltd must actively
improve all branches, not just Crown post offices, as necessary,
to take into account technological change and new services. In
some cases, it will be reasonable to expect Post Office Ltd's
retail partners to bear part of the costs, but this depends on
a proper share in the associated revenue. (Paragraph 67)
11. Post Office Ltd is fully aware
of its disabled access obligations and when re-locating and refurbishing
branches takes accessibility requirements into account. It also
has a specific fund to which subpostmasters can make application
if they are doing work on their premises that will enhance accessibility.
In its report on the Network of Post Offices published in November
2008 Postcomm reported 'over the past five years Post Office Ltd
has also provided £13m in funding to assist subpostmasters
to enhance their facilities, to improve accessibility and the
provision of services for disabled people'. This continues to
be an important area for the company.
Postal services
The largest single source of Post Office Ltd income
is Royal Mail Group. As we have noted, there is little clarity
about how this is calculated, and we welcome the Government's
proposals to introduce more transparency into this. Given the
wider social role of post offices, we believe that it is appropriate
to allow any mail operator who wishes to negotiate with Post Office
Ltd to use the network. Post Office Ltd should do everything it
can to secure contracts with Royal Mail's competitors. However,
such contracts should be properly priced; any such arrangements
should "pay their way" for Post Office Ltd and its partners.
(Paragraph 74)
12. We agree that Post Office Ltd
should explore all options to maximise use of the network. Access
through the post office network to postal services provided by
other operators is covered by Section 9 of the Royal Mail Licence
issued by Postcomm. On 21 April 2009 POL announced that it had
agreed a contract with the private mail company DX Group to enable
DX's customers to collect from Post Office branches items that
could not be delivered. As well as a fixed contract charge, the
Post Office will receive a fee from DX for every item delivered
to one of Post Office Ltd's branches. The service was initially
launched in 92 Greater London branches prior to its national roll-out.
Central government services
Government departments should always consider
what is the most effective way to reach those who prefer to deal
with matters face-to-face. It is legitimate to encourage people
to use cheaper communications channels, but not to deny them choice.
(Paragraph 82)
We accept that not all government services can
be provided across the network, but as a minimum, wherever a service
can be provided by post then the associated material should be
available at post offices. For example, passport application forms
should be universally available. The Government must think of
post offices not just as a collection of private businesses, but
as a public service. (Paragraph 83)
13. We recognise the continuing
importance of face to face interaction for a significant number
of people. A key strength of the Post Office Network is that
it is a convenient and trusted place for face to face transactions.
Developments such as Horizon Online and the Application, Enrolment
and Identification equipment being utilised to support the new
contract to renew photo driving licences further enhance these
capabilities. Government Departments are looking at how these
capabilities can enhance their portfolio of ways in which citizens
can interact with Government. This is as potentially as important
at Devolved Administration and Local Government levels as it is
for Central Government.
14. The Government is seeking to
maximise the use of the Post Office consistent with value for
money for taxpayers. Discussions are underway between Post Office
Ltd and Government service providers to see if the Post Office
can act as a complementary channel for those citizens who do not
have, or do not choose to use, internet access.
The responses from government departments to the
Committee's inquiry were, as a whole, inadequate. Most departments
failed to suggest any way in which they might use the post office
network. It is easy to think of government facilities which might
usefully be available through the network, simply because of its
near universal reach: payment of fines, and proof of such payment;
provision of simplified consultation documents; leaflets about
departmental services and initiatives; application forms for energy
saving schemes; and provision of popular government forms. (Paragraph
84)
15. The Government has stated that
it is keen for the Post Office to develop its Government Services
offering and has an established mechanism for aiding this through
a cross-Whitehall committee, chaired by Lord Mandelson, to identify
potential new services. Many of the potential services suggested
in this recommendation are being pursued by the Post Office or
are currently already provided in some form. However, there is
a clear benefit to the Post Office and to its customers for it
to expand these services where possible, and Government is working
towards this end.
The Committee is profoundly disappointed by the
narrow focus on departmental concerns and the lack of attention
to citizens' needs displayed in many of the answers to our questions
about departments' use of the post office network. Government
is in the business of providing services, and the post office
network represents an unparalleled facility to deliver those services
to local communities. It is bizarre that government policy recognises
the value of the network, but that individual departments do not
see that they have a role in making sure that everybody, not just
the web enabled, has access to their services, and that taking
this seriously by using the post office network more could contribute
to wider policy aims. (Paragraph 85)
16. Government recognises the value
of the Post Office network and is committed to its future. It
also recognises the importance of offering a choice of channels
for its services, and for making provision for those who are unable
to access online services. The Government has created a mechanism
for enabling greater use of the Post Office in the provision of
services, through a cross-Departmental committee to identify new
business opportunities for the Post Office. However, amongst the
considerations that Departments must take into account in determining
which is the best method for delivering services to that Department's
customers are customer choice and value for money to the taxpayer.
We recognise that providing services through the
post office network may be more expensive than providing those
services online. However, we consider the public's expectation
that there should be a choice of ways to access government services
and information is legitimate. The question should not be "is
it cheaper to provide this service entirely on-line or remotely?"
but "given that there needs to be a choice of delivery methods,
what is the most effective way to reach those who prefer to deal
with matters face to face?". (Paragraph 90)
17. The Government agrees in principle
with this recommendation. It is right that people should be offered
a choice of channels for accessing Government services. In many
cases, this will be the Post Office. Government has shown its
commitment to using the Post Office for providing face-to-face
services through its decision to award the Post Office a new contract
for the provision of the Post Office card account, as well as
the recent deal with the DVLA to allow the capture of biometric
data (photographs and signatures) for the ten year renewal of
driving licences at 750 Post Offices around the country.
Many or even most identity services may well be
too sophisticated to provide across the network. However, even
limited use of the post office network will allow these services
to be offered across a wider geographical area than would otherwise
be possible. There is potential to use the post office network
to offer such services at a range of locations across the UK,
which will both benefit those who need new driving licences or
identity documents and provide income for Post Office Ltd. (Paragraph
95)
18. The Government fully agrees
that one of the major new opportunities for the Post Office is
the possibility of using post offices as centres for the capture
of biometric data for passports, driving licences, and potentially
ID cards/identity documents. The Post Office has already agreed
a deal in March with the DVLA to provide a "one-stop"
biometric data capture facility at 750 branches around the country.
In May, the Government announced that it was working with the
Post Office to allow biometric data recording for ID cards/identity
documents and biometric passports in Post Office branches. This
is clearly a large area of opportunity for the Post Office and
we are committed to helping them develop it.
The biggest barrier to the expansion of government
services offered through the network is the attitude and lack
of imagination of most government departments. History has given
government an unparalleled and highly valued portal in the post
office network. Departments must try harder to provide their services
through post offices. At the very least, individuals must be able
to get important government forms in all post offices. It surely
cannot be beyond the Government's technological ability to provide
a means to supply such material electronically so that the most
up-to-date version of the form in question can simply be printed.
Some of the proposals which have been made to us are impractical
at first glance, but contain good ideas. Departments should not
simply dismiss the provision of services through the network;
they should assess whether offering services through post offices
would make life easier for their customers, and if so, whether
it is at all practicable. (Paragraph 108)
In asking us to undertake the task force role,
BERR showed its commitment to a coordinated effort to provide
more services through post offices. The new Department for Business,
Innovation and Skills should continue this work. There should
be a government-wide leader to coordinate and implement as soon
as possible a programme of expanded government services in post
offices. There should be a new presumption that, in addition to
any other delivery methods, all government departments should
seek to deliver their services through the post office network
in the interest of social inclusion. They should also be obliged
to promote these delivery methods on an equal footing with other
methods. The example of the Pensions Agency, constantly seeking
to obscure the availability of its services through post offices,
stands as a warning as to what will happen if this policy is not
enforced properly. (Paragraph 109)
19. The Government is keen for
the Post Office to build on its Government services work. We are
using a cross-Whitehall committee, chaired by Lord Mandelson,
to co-ordinate the identification of new services for post offices.
This committee acts as a cross-Whitehall "champion"
for the Post Office. We recognise the potential for utilisation
of the Post Office to improve access to Government information
and services, particularly as the technological capabilities of
the network develop.
20. Government supports consumer
choice in the most appropriate channel for accessing services.
But the need to adhere to EU procurement rules means that there
cannot be a presumption that these services will automatically
be provided through the Post Office network. In some cases, there
may also be value for money implications of automatically awarding
a contract to the Post Office. Clearly, one of the benefits of
the network change programme will be that the Post Office is more
competitive and therefore better placed to compete for contracts.
21. With respect to the specific
example of the Pension Service and the payments of pensions and
benefits through the Post Office - Government is clear that it
provides customers with all the information they need in order
to choose the account which best meets their needs and circumstances.
Around 4 million people have their benefit, pension, or tax credit
paid into a POCA and more than 10,000 people a month on average
are opening a new POCA. Many more will access their bank account
at a Post Office. Over the last year, the Government has sent
half a million leaflets to customers whose benefits are paid by
cheque listing all the accounts (including POCA) which can be
used at Post Office branches.
Local government services
Local authorities use post office services even
less, and less consistently, than central government. Many are
quick to say they support post offices, but then are slow to offer
their services through them — the support that really matters.
They should try harder to provide their services through post
offices — those who have piloted such services have been
enthusiastic about the results. The Local Government Association
should lead efforts to expand the availability of local government
services through the post office network. (Paragraph 118)
It is not appropriate for the Government to dictate
to local authorities the extent to which they provide services
through the post office network. However, we believe more could
be done to raise awareness of the potential of the network. Post
Office Ltd should take the lead in developing services that can
be easily accessed by local authorities. It should then work with
the Local Government Association to ensure that every local authority
is provided with information about the services post offices can
offer. (Paragraph 120)
22. Post Office Ltd already has
a portfolio of services that Local Government can utilise (for
example Council tax and rent payments, issuing of passes etc).
It has also recently successfully trialled new service offers
- such as 'post office payout' (a simple mechanism to make targeted
cash payments), 'validate' (where Post Offices check/verify documentation
and provide a convenient place where citizens can update information)
and a 'consultation service' (which helps Councils to conduct
local consultations in a way that gains higher levels of community
involvement). The challenge is to persuade local councils to
utilise these services to a greater degree than has historically
been the case.
23. Since the publication of the
Select Committee Report, the Local Government Association has
held a workshop involving a number of Councils and Post Office
Ltd which discussed plans for of holding a Conference to which
all councils will be invited in order to ensure that local councils
are aware of the value to them and their residents of the services
that could be done through the post office.
Relying on local authorities' funding to maintain
the network would result in poorer local authorities providing
fewer or poorer services. This would undoubtedly undermine the
uniformity of service, which we have heard is a desirable —
some might say necessary — characteristic of a sustainable
post office network. (Paragraph 122)
24. The Government agrees with
the Committee. The purpose of establishing access criteria was
to ensure reasonable access to Post Offices throughout the country.
The most effective way to ensure this and the provision of essential
services across the network is through centrally-managed funding,
rather than by leaving each local authority responsible for the
provision of the network and the services in their local area.
Local authority funding can, of course, play a helpful supplementary
role as long as the integrity of the local network in an area
is not undermined, but we agree with the Committee that the most
sustainable form of support will be for local authorities to put
business through the post office network.
Post offices are community assets, and we welcome
the approaches to support them that we have seen. Essex, Devon
and Wales are showing commendable initiative. Undoubtedly there
will be many other examples throughout the United Kingdom. In
providing services through the post office network, Essex is giving
an example of a local authority using post offices as a resource.
We were particularly impressed by the effort that the Welsh Assembly
Government and Devon County Council have made to improve the underlying
businesses associated with sub-post offices. Helping businesses
in this way not only supports the network, but safeguards other
facilities for the local community. (Paragraph 125)
25. The Government agrees that
post offices represent an important asset to many communities
and welcomes the range of community, local authority and devolved
administration initiatives which are safeguarding provision of
services. The Government helped to facilitate discussions between
local authorities and Post Office Ltd to develop these models
of post office provision.
26. Whilst ensuring a national
network of post offices with reasonable access for all, the Government
is keen to explore ways of making the network as responsive as
possible to local needs. We support the framework for dialogue
with local authorities and community groups that has been established
and published on the Local Government Association website.
Financial services
It is clear that there is huge demand for wider
availability of banking services through post offices, and this
Committee strongly endorses the widely held view that banking
is essential to the network. (Paragraph 143)
The Committee strongly supports greater provision
of banking services through the network. However, it is not obvious
how a new post office bank would be funded and secured, whether
it would entail ending existing arrangements with the Bank of
Ireland, and if so, what would be the financial consequences of
terminating these arrangements. At this stage, the priority should
be to extend financial services as quickly as possible. The existing
agreement with the Bank of Ireland may be the best way to do that.
Alternatively, it may be appropriate to seek a new arrangement
with a UK bank. If neither of these courses works, a post office
bank may be appropriate. (Paragraph 147)
27. The Government agrees with
the Committee that financial services will play an increasingly
important role in the future of the Post Office. The Post Office
already provides a wide range of financial services - including
savings products, insurance, credit cards, and foreign exchange.
It has recently launched a mortgage product and from next year
will offer a current account. But the Government shares the Committee's
view that the Post Office should work towards a greater provision
of banking services through the network, and that this should
be the priority.
The Government should review urgently the effectiveness
of Post Office Ltd's strategy for expanding banking services,
but it is the outcome that matters (more access to banking through
post offices) and not the means. Post Office Ltd must prove that
its current model, involving the gradual expansion of financial
services, is, as it contends, the best way to improve banking
services. It must do so by providing more banking services through
the network and substantially broadening access arrangements with
high street banks. The Government should use its influence to
ensure that the banks in which the public is a shareholder provide
services through post offices. We appreciate that the Government
wishes to leave the banks to run themselves, but there is currently
a unique opportunity for the public to gain a specific and valuable
benefit from its shareholding. (Paragraph 148)
The Committee whole-heartedly supports the rapid
expansion of fee-free cash machines throughout the post office
network, and urges the Government to consider providing more innovative
tools to enable financially excluded individuals to take advantage
of direct debit bill payment discounts. The Government should
also use the post office network to promote savings programmes
for children and to deliver the Savings Account Gateway programme.
(Paragraph 153)
28. The Government welcomes these
proposals from the Committee. In all of these instances, the Government
is taking action - demonstrating its commitment to providing financial
services through the Post Office. Post Office Ltd has confirmed
that it is also doing what it can to help ensure that it can be
part of the solution in these areas (for example it is currently
talking to Credit Unions about how to make these services available
through post offices).
29. It is generally accepted that
there is a gap in the market for those who want to budget for
utility bills on a weekly basis. The Government is monitoring
with interest a number of proposals for a weekly budgeting scheme
and hopes that a realistic and affordable proposal emerges
which provides access to discounted tariffs on a similar basis
to direct debit payments.
Community services
Our witnesses suggested a wide range of community
services which could be offered through post offices. The extent
to which each is practicable depends on local circumstances. There
may be scope for a rural post office to double as a tourist information
office. There may be circumstances where it would be possible
for a post office to be combined with business premises. There
may be circumstances in which a prescription collection service
could be offered on a commercial basis. We do not believe such
things can be mandated; they depend on the drive of the individual
who runs a particular post office, and indeed, on the community
surrounding the post office. However, they demonstrate the potential
strength and flexibility of a system where services are provided
through a partnership between the central company (Post Office
Ltd) and other partners. There is a role for Post Office Ltd in
making these arrangements easier; for example, by helping with
technology, arranging template agreements and articulating best
practice. (Paragraph 171)
30. Post Offices already play a
key role in many communities. We agree that an important part
of the social value of the post office network lies in the community
services offered by post offices. Through the associated business
located with the Post Office, subpostmasters often offer additional
localised services. The existence and sustaining of the Post Office
network makes this possible and Post Office Ltd takes an appropriately
sensitive approach to these issues. However Post Office Ltd and
subpostmasters cannot be expected to undertake work for free.
Appropriate commercial arrangements which do not undermine the
sustainability of the network as a whole are best responses. This
allows service provision to be professional and sustainable.
Conclusion
Postcomm has been asked to carry out a review
of the social benefits of the network. The value the public sets
on post offices convinces us that there should be no further closure
programmes, but it is inevitable that there will be some change
in the network as Post Office Ltd's arrangements with individual
retail partner's change. The more those changes can be guided
by knowledge about where post office facilities are most valuable,
the better; the possibility of increasing the size of the network
should not be excluded. (Paragraph 174)
31. The Government recognises the
high social value of the network (which has been confirmed by
recent research commissioned by Postcomm). Recent closures were
necessary to put the network on a more sustainable footing but
the Government has made clear that it will not support a further
closure programme. The Government shares the Committee's view
that some further change in the network is inevitable as a result
of individual subpostmaster's resignations, terminations of leases
etc. There will however be a continuing requirement for Post
Office Ltd to comply with the access criteria.
There is a huge demand for the universal provision
of services throughout the network. However, there are substantial
barriers to providing all services everywhere: variation in post
office premises; the need for specialist training for some services;
and the complex array of service providers in the post office
network. Customers may have to accept that uniform service provision
may not be possible if services expand. At the same time, the
more services that are offered through the network, the more attractive
and useful the network becomes. Post Office Ltd should by default
provide a service in a branch unless there is a compelling reason
against it. (Paragraph 178)
32. The Government accepts Post
Office Ltd's argument that it needs to retain flexibility about
what services it can provide at what branches as customer demand
and cost of provision need to be aligned to have a reasonably
efficient operation offering good value for customers and taxpayers.
The key is to ensure that the network as a whole ensures good
geographic accessibility to all services, and that the 'services
of general and economic interest' in particular have the widest
possible availability.
It is possible that if the right actions are taken,
the post office network will come to be both an important social
resource, and a profitable organisation. However, it is also possible
that the Network Subsidy Payment, or some successor arrangement,
will be needed for the foreseeable future. (Paragraph 179)
33. The Government recognises the
ongoing need for network subsidy payments beyond 2011.
The Government should support the post office
network, but it has a right to expect that the network will be
as efficient as possible. Under current regulatory arrangements,
while Postcomm reports and advises on the post office network,
it has no direct responsibility for it. Broadly speaking, this
will continue if regulatory responsibility passes to Ofcom. Whatever
happens to the Postal Services Bill, the Government is, and will
remain, Post Office Ltd's only shareholder. It cannot duck responsibility
for the efficiency of the network. In a situation where there
is no competition and there are sound reasons for making government
services available through post offices, the Government may have
to be more involved than a shareholder might traditionally be.
(Paragraph 182)
34. The Government shares the Committee's
view that, in return for support from public funds, Post Office
Ltd should take all the steps necessary to make the network as
efficient as possible, whilst having regard to its social role.
The Government accepts the Committee's view that, as shareholder,
it will need to monitor closely the competitive environment in
which Post Office Ltd is operating and the terms on which contracts
for government services are being tendered. That is why management
of the Government's shareholding in Post Office Ltd was passed
to the Shareholder Executive in 2004.
Post Office Ltd must ensure that all post offices
offer good customer service. This may require more financial support.
It may require setting service standards, and monitoring to make
sure they are achieved. Otherwise, post offices will attract only
those who have no alternative but to use them and the network's
role in promoting social inclusion will be diminished. (Paragraph
185)
35. Post Office Ltd is fully aware
of the need to provide good levels of customer service for it
to succeed in commercial and social marketplaces. Although it
currently achieves over 90% satisfaction levels in customer surveys,
it is seeking to invest further in customer service and environment.
The current Crown Office refurbishment programme will see virtually
all Crown Post Offices receive redecoration or refurbishment by
March 2010.
The expansion of the range of services offered
through the Post Office is likely to lead to a need for more training
of subpostmasters, and possibly a need for Post Office Ltd to
provide some training directly to staff in sub-post offices or
franchises. (Paragraph 186)
36. Post Office Ltd closely assesses
and monitors the training and support it provides to subpostmasters
and will continue to do so. These measures range from the induction
programme for new subpostmasters to the training needs associated
with the introduction of new products and services and any associated
compliance requirements. Recent support initiatives include the
Support Charter introduced last year in conjunction with the National
Federation of Subpostmasters and, more recently, a dedicated magazine
covering topical issues.
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