Written evidence from the National Federation
of SubPostmasters
1. EXECUTIVE SUMMARY
1.1 The post office network plays essential social
and economic roles providing access to mails services, government
services, cash and banking, shopping facilities and informal advice
and support.
1.2 Almost everyone uses a post office; but people
living in rural areas, older people, disabled people and those
on low incomes use post offices most frequently.
1.3 Small businesses are particularly dependent on
post offices for their postal services, and post offices are often
essential to the functioning of local economies.
1.4 The Post Office has reached a critical point
in its history. One in three UK post offices closed in the past
decade, and sub post office income is very low and continues to
reduce.
1.5 This autumn the government published the Postal
Services Bill and a government policy paper detailing plans for
the future of the post office network. The government also announced
new funding for the post office network.
1.6 The National Federation of SubPostmasters (NFSP)
is particularly concerned about the government's proposal to separate
Post Office Ltd (POL) from Royal Mail. One third of post office
income and over half of all visits to post offices come from Royal
Mail business. The NFSP is concerned that this unprecedented separation
may adversely impact on the post office network. The NFSP would
like to see a minimum 10 year agreement guaranteeing that POL
continues to act as Royal Mail's exclusive retail outlet.
1.7 The government also proposes POL should become
a mutual company. The NFSP welcomes this proposal, but warns that
prior to mutualisation the post office network must be stabilised
and new services secured for the future.
1.8 The NFSP endorses plans to establish the local
post office as a "front office for government". However,
we are concerned that previous trials of government services at
post offices delivered strong results but were not followed up.
The NFSP believes post offices need to provide a comprehensive
range of services on behalf of central, devolved and local government.
1.9 The NFSP is disappointed that the government
has decided against setting up a state-backed Postbank at the
Post Office. We support proposals to increase access to high street
bank accounts through the post office network, but hold that a
comprehensive range of transactions through all high street bank
accounts should be available at post offices. We also support
the extensive range of Post Office financial products provided
through the Bank of Ireland, but warn this range of services contributes
relatively little to the income of most sub post offices.
1.10 The NFSP believes there will continue to be
significant demand for postal services and post offices. To ensure
the future of our national post office network, mail services
through the Post Office must be secured and the proposed new sources
of revenue from government services and financial services need
to be brought to fruition.
2. INTRODUCTION
2.1 The National Federation of SubPostmasters (NFSP)
is the trade union and membership organisation which represents
the interests of subpostmasters in the UK. Subpostmasters are
independent business people who run sub post offices, which make
up 97% of the national post office network. Subpostmasters act
as agents to Post Office Ltd (POL), which is currently part of
Royal Mail Group.
2.2 This is the NFSP's written evidence to the Scottish
Affairs Committee inquiry on postal services in Scotland. We have
focused on the issues listed in the terms of reference which are
most directly relevant to the post office network.
3. NUMBER OF
POST OFFICES
AND AVAILABILITY
OF POSTAL
SERVICES
3.1 At the end of March 2010 there were 1446 post
offices in Scotland. Of these post offices 68.2% are based in
rural areas, 10.5% in urban deprived areas and 21.3% in urban
non-deprived areas. This represents a higher proportion of rural
post offices than in the UK as a whole where only 55% of post
offices are located in rural areas.1
3.2 Of the total number of post offices in Scotland
140 (10%) are provided by outreach services. This includes 39
mobile services - provided over a post office counter in a van
at fixed times each week by a subpostmaster from a nearby post
office. There are 71 "hosted services" - a subpostmaster
from a nearby post office visits the community at fixed times
and offers service from a host location, such as a community hall
or shop. Nineteen outreaches are "partner services"
- a local business runs a post office from their premises, mirroring
regular business hours, under the supervision of a nearby post
office. Eleven outreaches are home delivery services - a subpostmaster
offers a limited service to registered customers, delivering to
their door.2
3.3 Outreach services are primarily designed for
rural areas where the importance of a Post Office service is clear,
but low transaction levels lead POL to conclude that a full-time
conventional post office is not sustainable. Scotland has a particularly
high proportion of Post Office outreach services due to its large
rural areas. Consumer Focus reports that the public is "broadly
satisfied" with outreach formats, although 33% of outreach
users say they use post offices less since their traditional post
office closed. The main reported drawback of outreach services
is the restricted hours and days of opening. A reduction from
five and a half days a week with the former post office, to three
part days per week at the outreach is typical.3
4. DEMAND FOR
POST OFFICES
AND POSTAL
SERVICES
4.1 Post offices provide individuals and small businesses
with an unrivalled range of mail, government, banking and retail
services, as well as informal advice and support, in a trusted
local environment.
4.2 In Scotland, 82% of the public visit a post office
at least once a month, and nearly half (49%) use a post office
every week. Post office use is highest amongst people living in
rural areas - 58% of those living in accessible rural areas and
67% in remote rural areas visit a post office once a week or more.4
4.3 Post offices are also used most by the more vulnerable
members of society. Older people and disabled people are the most
frequent users. In Scotland 63% of people over 65, and 63% of
disabled people, visit a post office once a week or more often.
People on low incomes are also frequent users - 54% in socioeconomic
group DE visit a post office at least once a week, as do 61% of
those with incomes of less than £15,000 a year.5
4.4 Mail services are by far the most widely used
service at post offices. In Scotland, 83% of post office users
had sent letters or parcels from a post office and 77% had purchased
stamps within the past year.6 A recent UK-wide survey
confirms 68% of the public regularly use post offices for posting
their mail.7
4.5 Post offices play a significant role in providing
face-to-face interface with government. This function is particularly
valued by the more vulnerable members of society. For instance
Age Concern (now Age UK) described a sense that the post office
is the "local representative and link to wider civic society".8
Research finds 54% of UK households use a post office for picking
up forms or leaflets, 50% for paying car tax, 27% to apply for
a passport, driving licence, EHIC or fishing licence.9
Document checking services are extremely effective - for instance
the National Audit Office found the Post Office "check and
send" passport service had 1% error rates, error rates are
15 times higher for postal applications.10
4.6 Post offices are key providers of access to cash
and banking. In the UK £86bn of cash passes through the Post
Office every year. For every £1 transacted in the UK, 14p
is handled through the post office network.11 UK post
offices make £24bn of benefits payments every year and in
Scotland 32% of consumers used the post office in the last year
to pay bills.12 A rural survey revealed 43% of older
people use post offices to access cash.13
4.7 Post offices are important providers of local
shopping facilities. Eight in ten post offices are run alongside
a shop. These shops are often the only shop in the area - an estimated
57% of rural subpostmasters provide the only retail outlet in
their village.14 These shops are very much co-located
with the Post Office part of the business; research by the NFSP
finds in Scotland two thirds of attached businesses would be unlikely
to remain open if the Post Office part of the business closed.15
In rural areas 71% of older people buy stationery, newspapers,
food and household goods at the post office.16
4.8 Post offices are also sources of informal advice
and support, in a trusted local environment. It has been estimated
that two thirds of rural subpostmasters "keep an eye on"
more vulnerable residents.17 Post offices have been
described by Help the Aged (now part of Age UK) as "crucial
outreach points" helping older people to go on managing their
own affairs.18
4.9 Research for the regulator Postcomm in 2009 calculated
post offices' "social value" at up to £10bn and
concluded that the network "provides a major social net benefit
to the UK population".19 The social role of post
offices displaces some of the cost to government - as a "key
institution in the local community encouraging social interaction,
[it] can help reduce social care and health care costs, enabling
people to live independently for longer".20
5. IMPACT OF
POST OFFICES
AND POSTAL
SERVICES ON
BUSINESS
5.1 Small businesses are extensive users of postal
services. Postcomm, the regulator, finds in the UK 91% of SMEs
use a post office, and 59% of all small businesses using a post
office use it once a week or more often.21 The Federation
of Small Businesses (FSB) finds 88% of UK small businesses use
a post office to purchase stamps and send letters, 77% use post
offices to send parcels.22 The FSB comments that although
"there is a common perception that generally all things postal
have gone electronic", this is not the case in the small
business sector. Small businesses do not in the main charge customers
for goods and services or receive payment online. Instead, they
send bills and invoices via the post and they receive payment
for goods and services by cheques sent through the postal system.
5.2 In depth studies carried out in 2006 confirm
the essential role post offices and postal services play in supporting
local businesses in the most remote parts of rural Scotland. The
consumer watchdog, Postwatch (now Consumer Focus) confirmed that
many rural businesses conduct a significant amount of trade by
mail order. When asked how they would cope if the local post office
closed some businesses said they would use an alternative courier
service, however, this was often not a satisfactory alternative
as it did not guarantee next day delivery. Other businesses would
have to make lengthy and expensive journeys to alternative post
offices. Some businesses declared it "impossible" to
continue trading should the post office close.23
6. WIDER ECONOMIC
IMPACT
6.1 Post offices play an essential part in supporting
local economies. At a local level small shops clustered together
rely on each other for survival. Outlets such as post offices,
newsagents, butchers and grocery stores may all depend on each
other to attract people to a location rather than any one specific
shop. The loss of a few of these shops may render a local shopping
trip unviable for customers and lead to further closures - a domino
effect. Post offices are particularly key because of their unique
social value and the sheer diversity and range of services provided
which distinguishes them from other retailers. The post office
is also highly valued and trusted compared with other retailers.
NFSP research finds 45% UK of post offices are located in a row
of shops or village with between one and three other shops.24
6.2 In rural and deprived urban communities post
offices are frequently the only local place to take out cash.
Evidence shows in general cash is often spent near to where it
is withdrawn. People who make cash withdrawals spend 50-67% in
nearby shops.25
6.3 A study by the New Economics Foundation (NEF)
emphasises the role of post offices as an anchor for local communities
and their economies.26 Based on detailed analysis of
Manchester post offices, NEF concluded each post office contributes
around £310,000 to the local economy each year, of which
£120,000 is direct spending on local goods and services.
In addition, NEF's analysis reveals that each post office saves
small businesses in their direct vicinity around £270,000
a year.
7. CURRENT CONTEXT
7.1 Despite the huge demand for post office services
and the enormous social and economic value of the network, the
post office network has reached a critical point in its history.
Two major government closure programmes, the withdrawal of many
key government services and other social and economic changes
have resulted in 7,000 UK post office closures - one third of
all post offices - over the past decade.
7.2 The strength of the post office network lies
in its depth and reach - the network remains bigger than all the
bank and building society branches together. It is essential the
post office network stabilises now, as an ever reducing network
would inevitably undermine its future viability.
7.3 Sub post office income remains worryingly low,
continues to reduce and must be tackled as a priority. A survey
undertaken by the NFSP in 2009, found average net Post Office
pay for Scottish subpostmasters was £2,377 a month. From
this sum subpostmasters had to pay for the running of their office
including any mortgage or rent payments, bills and staff wages.
On average subpostmasters in Scotland took personal drawings (salary)
of £828 a month from their Post Office pay, and 19% took
nothing at all.27 New work urgently needs to be brought
into the post office network, increasing income for the remaining
post offices and ensuring they can continue to serve local communities.
Polling by the NFSP in May 2010, indicates that UK subpostmasters
have seen further reductions in their Post Office pay and that
three-quarters of subpostmasters experienced a drop in pay over
the last financial year.
7.4 It is in this context that the government's proposals
for the post office network and the UK's postal services should
be viewed. This autumn has seen the publication of the Postal
Services Bill and a government policy paper both of which will
prove to be critical to the future of the nation's post offices.28,
29
8. IMPLICATIONS OF
THE POSTAL
SERVICES BILL
FOR THE
POST OFFICE
NETWORK
8.1 The Postal Services Bill details a number of
key proposals. These include the privatisation of Royal Mail;
the separation of POL and Royal Mail; the possibility of POL becoming
a mutual company; the overhaul of postal regulation; and the assumption
of Royal Mail's pension deficit by the government.
8.2 There are some aspects of the Postal Services
Bill which the NFSP supports, including the government's proposal
to take on the Royal Mail pension deficit, and the plan to transfer
regulation from Postcomm to Ofcom. The NFSP does not take a view
on whether or not Royal Mail should be privatised. However, there
are other aspects of the bill about which we have significant
concerns.
Separation of POL and Royal Mail
8.3 The issue within the Bill of most significance
to the post office network, and of most concern to the NFSP, is
the proposed separation of POL from Royal Mail. Currently, POL
and Royal Mail are both part of Royal Mail Group, which is owned
by the government. The Bill proposes to retain POL within public
ownership, and to separate it from Royal Mail, which will be privatised.
However, to our knowledge, there is no known international precedent
for separating a mail company from its retail arm.
8.4 Under the current Inter-Business Agreement (IBA)
between the two companies, income from transactions carried out
in post offices on behalf of Royal Mail accounts for one third
of POL income (£343m in 2009/10) and one third of subpostmasters'
pay (which the NFSP estimates at £240m in 2009/10). Of this,
around 60% is variable income based on the levels of transactions
undertaken; while 40% is fixed income, based on post offices providing
bricks and mortar access points for the public to use postal services.
8.5 Mails business generates more than half of all
visits to post offices.
8.6 In addition to the central role which footfall
and income from Royal Mail transactions provide throughout the
entire network, there are 900 "mailwork" sub post offices
in the UK, where the subpostmaster provides premises, facilities
and supervision for Royal Mail delivery staff. These are overwhelmingly
located in rural areas - around one in seven rural UK post offices
is also a mailwork post office. Mailwork subpostmasters are paid
according to the number of postmen and women they supervise. This
pay is frequently around 25% of a mailwork sub office's total
Post Office income.
8.7 The NFSP is concerned that the separation of
POL and Royal Mail will mean that current business arrangements
between the two companies may well change. As a separate company,
Royal Mail may seek to renegotiate existing contracts, or may
reconsider whether POL should remain as its exclusive retail outlet.
8.8 Any changes to Royal Mail, and to the relationship
between Royal Mail and POL, that adversely impact on the post
office network will unquestionably risk further widespread post
office closures. Many sub post offices already urgently need new
sources of income to remain viable, and would not survive further
reductions of income as a result of loss of Royal Mail work or
changes to remuneration for this work.
8.9 The NFSP believes that in order to avoid further
post office closures, existing levels of Royal Mail work at post
offices must be maintained with a minimum 10 year IBA between
the two companies following separation.
8.10 A minimum 10 year IBA would guarantee that POL
will continue to act as Royal Mail's exclusive retail outlet;
and that customers could continue to access Royal Mail services
at post offices. It would allow time to stabilise the network
and if necessary seek alternative revenue streams to ensure both
POL and the network are less reliant on Royal Mail income.
8.11 Advice received by the NFSP leads us to believe
that suggestions that a 10 year IBA between POL and Royal Mail
would be in any way in breach of UK or EU procurement or competition
law are erroneous. We believe that this is more a question of
political will on the part of ministers to permit this. The NFSP
is concerned that a fear within government that Royal Mail may
generate less income if tied to a 10-year IBA with POL may lead
to attempts to prevent this.
Other mail services at post offices
8.12 Subpostmasters have an unrivalled specialisation
in mails, and post offices should continue to serve the public
and business as one-stop-shops for all mail needs.
8.13 The NFSP supports new mail services being introduced
at the Post Office, such as Local Collect which allows people
to collect undelivered parcels from nearby post offices.
8.14 Postcomm suggests that new mails operators may
want to use the size and geographic coverage of the post office
network to sell their products and services to domestic customers
and small businesses. The NFSP agrees that if this is how postal
competition develops, post offices must act as dropping off and
collection hubs for mail companies - increasing convenience and
access for the public. To maintain the network's integrity, this
should be agreed on a network-wide basis, rather than by arrangements
with individual post offices.
8.15 To date POL has contracted with one alternative
mail company: since summer 2009 the DX Group has offered a collection
service of undelivered DX Group mail items at local post offices.
However, while this new work is welcome, we caution about arrangements
with other mail companies bringing individual post offices additional
income. New business from other mail operators is likely to be
at the expense of losses of Royal Mail business.
Mutualisation
8.16 The Bill contains provision for POL to become
a mutual company. Ministers are consulting on what kind of mutualisation
might work best for POL. Ministers indicate the full realisation
of mutualising POL is likely to take the duration of this parliament.
8.17 The NFSP welcomes these proposals. Increasingly,
the interests of POL and of subpostmasters are no longer aligned.
Subpostmasters have an estimated £2bn of their own money
invested in the network, through their initial purchase and ongoing
maintenance of and investment in their post offices, and should
have a far greater say in how the network is run.
8.18 We understand that mutualisation can take many
forms, and we look forward to actively contributing to the process
of ensuring the right model is developed for the business, the
network, subpostmasters and their customers.
8.19 However, the NFSP strongly believes that any
plans for mutualisation are worthless unless urgent and significant
action is taken to turn POL around. POL continues to run as a
heavily loss-making company. It has only technically been in profit
for the last two years (£72m in 2009/10, £41m in 2008/9)
due to the government's £150m subsidy payment. Performance
figures for the six months up to 26 September 2010 show that the
company's external revenue decreased by £28m compared to
the same period in 2009; and its operating profits for the period
fell from £41m to £20m.30
8.20 The NFSP believes that this can only be remedied
with a minimum IBA with Royal Mail; a funding programme which
delivers long-term sustainability for the network rather than
short-term survival; and contracts to allow post offices to become
the front office for government.
Community-run post offices
8.21 The government indicates support for the "community-run"
post office model, which may be defined as post office businesses
which reinvest their surpluses in the organisation or community.
The government states that the experiences of the increasing number
of community-run post offices "have shown how well the mutual
model can work at a local level, allowing communities to tailor
the services to their particular needs".31
8.22 However, the NFSP is concerned that the community-run
model may have significant drawbacks. Research into existing community
shops that offer Post Office services finds the goodwill and volunteer
hours contributed by the community is an essential component.
A survey of 70 such enterprises found 81% of staffing was provided
by volunteers, 34% had received grants, 23% had taken out loans.
Around a quarter reported a financial loss in the last financial
year. Moreover, subpostmaster remuneration was often regarded
as being too low to support the viability of the post office outlet.32
8.23 The NFSP would be concerned about any plans
for widespread community-run post office provision. We are concerned
that the model would not be cheaper to run overall than a traditional
post office. There are also questions to be asked about whether
such models would be viable in many areas of the country, such
as deprived areas; and questions about stability and long-term
viability. We note that very few voluntary agencies providing
direct services to the community are run entirely on a voluntary
basis. Citizens Advice Bureaux (CABx) and Oxfam shops, for example,
are run by professional paid managers. Moreover organisations
such as CABx commonly have difficulties with recruitment of volunteers,
retention, staff supervision and development and having a sufficiently
large volunteer base to provide regular hours.
9 EXPANSION OF
SERVICE RANGE
9.1 The government's policy paper published in November
sets out specific plans for the future of the post office network.33
The government identifies two areas with "real growth potential"
- i) increasing the number of government services offered at post
offices, with the Post Office acting as a "front office"
for government; and ii) boosting the number of financial services
provided at post offices.
Government services
9.2 The NFSP endorses the government's plan to establish
the local post office as a "genuine front office for government".34
We have long asserted that post offices are the natural home for
all forms of central, devolved and local government transactions,
verification and information, providing a local and trusted environment
for citizens to interact with the state. This also offers potential
cost-savings to government by enabling it to cut back-office functions.
9.3 The government proposes a number of government
services post offices could offer. These include identity verification,
which could cover document verification and scanning, photos and
signature recognition. This could also develop into services for
helping government manage changes of circumstances with the Post
Office acting as a channel for data collection and dissemination.
9.4 The government also says there is scope to substantially
increase the number of assisted applications that the Post Office
carries out, building on the current "check and send"
services. This has the potential to support the move to "paperless"
back offices, where government departments receive electronic
information from multi-channel inputs.
9.5 The government also highlights the potential
to increase the number of cashless payments that people can make
at post offices, and use of the Post Office's "payout"
service where citizens receive a unique identifier that allows
them to claim a payment from central or local government.
9.6 However, the NFSP is concerned that previous
trials of government services at post offices, such as YourGuide
(in 2002), have delivered strong results but have not been followed
up.35 These schemes need to be developed beyond trial
status and the government must ensure that funding is earmarked
to allow the nationwide roll-out of these services across the
country on a permanent basis.
9.7 In addition, the NFSP believes that as well as
providing value-added work for government departments which only
necessitate occasional or one-off visits to the Post Office, the
government must continue to provide transaction-based volumes
of work at post offices (such as the Post Office card account
and Green Giro benefit cheques) which result in regular and frequent
customer visits.
9.8 The government has also set out plans to look
at greater local authority involvement in "the planning,
delivery and level" of Post Office services. POL and the
NFSP have therefore been asked to work with Sheffield City Council
in a pilot scheme to make post offices the "front office
for government" in the city. Sheffield's citizens will be
able to pay their council tax and rent at any of the city's 78
post offices, rather than at the single cash office. This is predicted
to save the council £240,000 a year.
9.9 The NFSP strongly supports proposals to encourage
local authorities to make far greater use of post offices. We
believe all relevant council payments, information and services
should be accessible through every local post office. This would
allow residents to pay for and access council information and
services in their local area; would free up administration for
local authorities, particularly regarding residents who need or
wish to make very frequent low value payments; and would provide
vital income and custom for post offices. A very wide range of
services could be paid for at post offices including council tax,
council house rents, Social Service bills, leisure centre passes,
school meals and music lessons, parking fines and permits, local
travel tickets, court fines. Council information available at
post offices could range from public consultations, planning applications,
the Electoral Roll to tourist information and details of local
events.
9.10 Over the last few years a number of local authorities
expressed the intention to reopen post offices through local funding
mechanisms. However, the NFSP is firmly of the view that local
authority ownership is not a genuinely viable model for post offices.
Subpostmasters are hard working, self-employed business people
who work long hours in a unique example of a public/private partnership
- if they can not make an individual post office outlet run profitably,
there appears to be little chance that a local authority could
do so. Local authorities can have far greater impact in supporting
post offices by ensuring that all local authority transactions,
services and information are available through post offices in
their local area. Locally-run and funded post offices risk fracturing
the national network, with the provision of post offices subject
to short-term local funding arrangements and the prevailing political
climate, rather an established national framework.
Financial Services
9.11 The NFSP supports plans to increase banking
facilities available at post offices. Bank branches have long
been in retreat, particularly in rural and deprived urban communities.
The Post Office's unrivalled network provides enormous and currently
massively underused potential to put local banking back into the
heart of communities. Subpostmasters and their staff are already
well accustomed to handling high volumes of cash, undertaking
financial transactions, dealing with confidential matters and
helping vulnerable customers.
9.12 We are disappointed that the government has
decided against setting up a state-backed Postbank at the Post
Office, which could have provided a uniquely trusted local banking
service, particularly for financially excluded groups.
9.13 Increased banking provision at the Post Office
will come from an expansion of new products in partnership with
the Bank of Ireland, including a new children's savings account.
Whilst this mechanism of financial services provision is not the
NFSP's preferred model, we have supported the extensive range
of Post Office financial products provided through the Bank of
Ireland, and these have proved popular with many Post Office customers.
We believe the range from savings accounts to credit cards and
insurance products should continue to form part of the Post Office's
services.
9.14 Post Office financial services may bring in
a considerable proportion of POL's revenue and are essential to
the company's viability, however the NFSP is concerned that their
impact on individual sub post offices should not be overstated.
Research shows that these financial services can contribute relatively
little to many subpostmasters' income. For example in March 2009,
NFSP found that amongst Scottish subpostmasters 96% earned nothing
at all from Post Office Credit cards; 93% of subpostmasters earned
nothing from Post Office Home Insurance; 86% of subpostmasters
earned nothing from Post Office Vehicle Insurance; and 99% of
subpostmasters earned nothing from Post Office Life Assurance.36
9.15 The government also says there will be increased
access to high street bank accounts through the network. The Royal
Bank of Scotland (RBS), including NatWest, is to allow its customers
to access current accounts at post offices. This means that almost
80% of UK current accounts will allow free cash withdrawals at
post offices, with only Santander and HSBC still refusing to allow
access. However, the NFSP remains concerned that the banks do
not offer access to all types of transactions for all types of
accounts, and that the types of transactions available at post
office counters vary from bank to bank. Currently the banks do
not advertise their post office accessibility; and the restrictions
on the number of accessible accounts and the range of transactions
make it a difficult message for POL to promote. The NFSP believes
a comprehensive range of transactions through all high street
bank accounts should be available at post offices.
10 FUNDING
10.1 On 27 October 2010 the government announced
£1.3 billion of funding to secure the long term future of
the Post Office. The government says the funding package will
enable the Post Office "to improve its offer and win new
revenue streams". The funding allocates £180m for 2011/12;
£410m for 2012/13; £415m for 2013/14; £330m for
2014/15. Nearly half of the funding is earmarked as the "network
subsidy".
10.2 Just over a third (37%) of the funding package
is to go on modernising the post office network. This includes
making "significant investments" in about 4,000 main
post offices based in town and city centres. In addition, POL
is to convert around 2,000 sub offices to the new "Post Office
Local" model. Under this model 86% of Post Office services
are offered, for all the hours the shop is open, in an open plan
setting alongside the retail till.
10.3 Whilst the new funding is a welcome step in
the right direction, the NFSP warns that additional guarantees
on the future relationship with Royal Mail and on new government
work are also essential if the post office network is to have
a sustainable future.
10.4 The NFSP was delighted when the Scottish government
deployed £1 million in 2010/11 to establish a Post Office
Diversification scheme to help sustain and develop the small businesses
which are built around post offices. The scheme closed for applications
in September and awards of up to £25,000 were made to 49
post offices based in Scotland. A range of projects from setting
up an internet café to selling local produce were funded.
The NFSP notes that evaluations of other post office grant schemes
show they result in increases in customer numbers and increased
sales turnover.37, 38 The Scottish government scheme
follows that provided by the Welsh Assembly government. The Welsh
Assembly government has been funding diversification grants for
post offices since 2008, and has offered three rounds of funding.
10.5 In Scotland, the NFSP has also welcomed the
financial assistance offered to post offices through rates relief,
the Small Business Bonus Scheme. This is provided on a sliding
scale with businesses with a combined rateable value of up to
£10,000 receiving 100% relief. Individual properties with
a rateable value of up to £18,000 can receive 25% relief.
The NFSP continues to argue for 100% rates relief for all UK post
offices.
11 FUTURE DEMAND
FOR SERVICES
11.1 There has been considerable recent discussion
about the future of postal services in the UK. Figures show an
ongoing decline in the number of letters sent, with a 7.3% fall
in letter volumes in 2008/09.39 The number of parcels
continues to rise due to dramatic increases in online shopping.
However, both the public and small businesses will continue to
need local venues in which to undertake their mails transactions
- both posting and collection. The parcel collection services
that post offices currently offer, such as Local Collect in which
undelivered items can be picked up from the local post office,
are likely to expand in the future.
11.2 The NFSP believes that the case for replacing
more traditional face-to-face and paper-based services and communications
with electronic alternatives, is often overstated. Face-to-face,
locally accessible channels remain particularly crucial for the
most vulnerable members of society. Government figures show that
35% of all households have no internet connection, and it is predicted
that the proportion of digitally excluded adults in the UK will
be 31% in 2015, with the highest proportions among older people
and low income groups.40, 41 Moreover even many of
those with internet connections will still need help navigating
through systems and interpreting official information.
11.3 Local face-to-face provision of government services
will continue to be needed. In part this is to complement online
services for those who have no online access or need assistance
in finding or interpreting official information. But also some
services can only be carried out face-to-face, such as identity
verification and application checking.
11.4 In addition, local access to cash and banking
will continue to be needed for the foreseeable future. With the
retreat of high street bank branches from many rural and deprived
areas, post offices present the ideal low cost solution.
11.5 In geographical terms the post office network
is Scotland and the UK's most accessible face-to-face channel
for mails, banking and government services. The NFSP sees no reason
why the demand for post office services should not experience
a considerable increase, providing post offices: i) retain their
role as the local outlet for mail services; ii) offer comprehensive
access to major central and local government services and transactions;
iii) provide a comprehensive local banking service, including
full access to all high street bank accounts.
REFERENCES
1 Postcomm, October 2010, Tenth Annual Report
on the Network of Post Offices in the UK
2 October 2010, figures provided by Post Office Ltd
3 Consumer Focus, April 2010, Outreach or Out
of Reach?
4 Consumer Focus Scotland, July 2010, Consumer
Survey of Postal Service Users in Scotland
5 See 4
6 See 4
7 Postcomm, March 2009, Customer Survey 2009
8 Age Concern, September 2006, Stamped Out?
- Let's make rural post offices work for older people
9 Postcomm, August 2009, The Social Value of the
Post Office Network
10 National Audit Office, October 2003, Difficult
Forms - how government agencies interact with citizens
11 Royal Mail Holdings, Report and Accounts Year
Ended 29-3-09
12 See 4
13 See 8
14 Essex County Council evidence to Business and
Enterprise Committee, Post Offices - securing their future
inquiry, June 2009
15 National Federation of SubPostmasters, July 2009,
Subpostmaster Income Survey 2009
16 See 8
17 Postcomm, 2001, Serving the Community
18 Help the Aged, February 2007, Financial Exclusion
Among Older People
19 See 9
20 Cornwall County Council evidence to Business and
Enterprise Committee, Post Offices - securing their future
inquiry, June 2009
21 See 7
22 Federation of Small Businesses, September 2009,
FSB Postal Report - securing the future of the post office
network
23 Postwatch Scotland, September 2006, The Importance
of Rural Post Offices
24 See 15
25 New Economics Foundation, December 2003, Ghost
Town Britain II
26 New Economics Foundation, December 2006, The
Last Post - the social and economic impact of changes to postal
services in Manchester
27 National Federation of SubPostmasters, July 2009,
Subpostmaster Income Survey 2009 - supplementary analysis,
Scotland data
28 Department for Business Innovation & Skills,
October 2010, Delivering for the Future: A Universal Mail Service
and Community Post Offices in the Digital Age
29 Department for Business Innovation & Skills,
November 2010, Securing The Post Office Network In the Digital
Age
30 Royal Mail Group, November 2010, Operating
Profits Fall But Results Show Modernisation is Working (press
release)
31 See 29
32 Research undertaken by Consumer Focus in 2010
33 See 29
34 See 28
35 MORI, February 2002, Consumer Usage Survey
- The Your Guide Research Programme
36 See 27
37 Office of the Deputy Prime Minister, December
2006, Evaluation of the Urban Deprived Post Office Fund
38 Welsh Assembly Government, May 2006, Evaluation
of the Post Office Development Fund
39 Richard Hooper, September 2010, Saving the
Royal Mail's Universal Service in the Digital Age
40 Department for Communities and Local Government,
October 2008, Understanding Digital Exclusion
41 Demos, November 2007, Web I'm 64
19 November 2010
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