Postal Services in Scotland - Scottish Affairs Committee Contents

Written evidence from the National Federation of SubPostmasters


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.


2.1 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.


3.1 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


4.1 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


5.1 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


6.1 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.


7.1 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


8.1 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.


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.


9.1 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.


10.1 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.


11.1 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.


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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