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The Government published the Postal Services Bill 2010-11 on 13 October 2010. The Bill received its second reading on 27 October and the proceedings in Public Bill Committee concluded on 9 December. The remaining stages of the Bill in the Commons will be taken on the floor of the House on Wednesday 12 January 2011. We launched our inquiry into Postal Services in Scotland on 28 October 2010. The purpose of our inquiry was not to comment on the broad parameters of the Bill, but to consider the potential impact and consequences of the provisions in the Bill for postal services in Scotland.
Postal services and the postal network are the life blood of many rural, remote and island communities throughout Scotland. There are 1,446 Post Offices in Scotland (12% of the UK wide network), making the Post Office Limited Scotland's largest retail chain. 70% of Post Office branches are located in rural areas, and 171 branches are in the 20% most deprived wards in Scotland. Many rural branches are not financially viable, and receive a subsidy from other parts of the network. Despite a proposed increase in funding for the network during the Comprehensive Spending Review 2010 period, the Post Office network in Scotland is in a precarious position. Many Post Offices in Scotland remain vulnerable to closure and customers face the threat of a demise in the provision of postal services. It is not clear at present how the Bill will protect consumers in deprived urban, rural and remote areas of Scotland.
This Report makes a series of recommendations based on two key issues: (i) the maintenance of a universal service and, (ii) the continuation of a sustainable Post Office network across Scotland. We welcome the Ministers assurances in relation to the protections in the Bill for the Universal Service Obligation (USO). The Minister assured us that the Bill would not allow Scotland to be made exempt, as a geographic exemption, from the USO. We also recommend that further clarification is needed in relation to clause 34, which, the Minister assures us, would only allow for more than one universal service provider in the most extreme of circumstances. We support a long and robust Inter Business Agreement between the Post Office Limited and the Royal Mail in the provision of a universal service. In undertaking its review of the level of universal service, we recommend that the Bill should include a requirement for Ofcom to consult with consumers, small business and vulnerable users in remote, rural and island communities in Scotland. We also recommend that Royal Mail are enabled to negotiate sustainable terms for last mile delivery of private mail and parcels.
In terms of ensuring a sustainable Post Office network, we are concerned that the Bill neither makes provision for the number of Post Offices nor sets out the access criteria. This is of particular concern given that the Government could meet the access criteria with a network of 7,500 rather than the existing 11,500 branches — thereby presenting a potential threat to some branches in Scotland. We express concern that elements of Outreach services are not sufficiently robust or reliable to provide an adequate service, and fear the new Post Office Local risks downgrading the service further. We welcome the Government's commitment to the provision of both government and financial services though the Post Office as a key measure to safeguard the network and create a reliable revenue stream for the Post Office. We are concerned that there appears to be a lack of joined up thinking across Government departments in this respect and recommend a number of practical steps that the Government must take as a matter of urgency to ensure the effective delivery of this policy.
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