79.RBS’s impact assessments advise customers that they can access some banking services at Post Office branches. RBS’s personal banking customers can check their balance, make withdrawals using their debit card and PIN and pay in cash and cheques with a pre-printed paying-in slip at any Post Office. Business customers can also use Post Ofﬁces to make deposits of up to £2,000 with a pre-printed paying-in slip, debit card withdrawals of up to £500 and can register for their change-giving service. Standard charges apply to business customers, which are the same as those they would pay if they were using an RBS branch. Martin Kearsley, Banking Director for the Post Office told us that the Post Office was not setting out to replace banks but did “look to replace those daily transactions”, and said that “what we do with our partner banks is replace the daily cash in and cash out type services.”
80.A 2014 Citizens Advice study found that 53 per cent of small and microbusinesses used the Post Office for business purposes, with over half (51 per cent) accessing banking services. Earlier research by Consumer Futures found this dependence was even higher in rural communities, with over two thirds (68 per cent) of rural businesses using their local Post Office on a weekly basis. However research by Which? has highlighted the lack of awareness of banking services offered by the Post Office saying that “just 11% of customers used the Post Office more because their local branch had shut. This was largely due to a lack of awareness of the services offered and low levels of trust in Post Office staff training and knowledge. Additionally, Which?’s research shows that while 72% of the people across the UK rated their experience of the Post Office as good or excellent, 41% said that they didn’t realise that it offered banking services.” Martin Kearsley accepted that there was a lack of awareness of the Post Office’s banking services “ which we would like to try to do something about with the Committee’s help, the banks’ help and with our own marketing teams”.
81.An FSB report on branch closures raised questions about whether Post Office services fully met the needs of businesses. In particular, the report noted that:
a)the cash deposit limit may be preventing some firms from depositing their full weekly earnings;
b)the processing of cheque deposits was perceived as taking longer than in branches. This is because the money is not paid into an account until the Post Office have delivered the cheque to the bank, and
c)the inability of some Post Office branches to provide cash, currency exchange or inter-account transfers was a problem in areas reliant on tourism.
82.The Post Office said that the £2,000 deposit limit referred to walk-in transactions and catered to 92% in all deposits. For businesses that wanted to make deposits greater than £2,000 Mr Kearsley said that the Post Office worked with those customers and their bank to arrange for cash to be collected directly from the business at a pre-arranged time.
83.While the Post Office is not a replacement for a high street bank, we welcome the fact that the Post Office provides some of the day-to-day services that customers would otherwise do in their local bank branch. We recommend that the Government, Post Office and Royal Bank of Scotland work together to improve awareness of the bank services offered by the Post Office.
84.We have also heard concerns about whether the Post Office has the capacity to cope with the increased footfall which could result from the most recent round of RBS bank branches closing, with some groups raising concerns about relying on the Post Office for banking services because of worries about its opening hours or the prospects of future closures. In their evidence, Kilbirnie and Glengarnock Community Council noted that “the Aberfeldy post office branch was closed for a considerable period earlier this year and has ongoing issues with opening hours due to staffing shortages.”
85.As the graph below shows, there was a decline in post offices during the mid to late 2000s but since then the number has been declining more slowly. The number of post offices in Scotland has hovered around 1,400 since 2014. This is consistent with the national trend where post office numbers have been relatively stable since around 2009. As of April 2017, there were 1,403 post offices in Scotland.
Number of Post Offices in Scotland
Sources: POSTCOMM Annual Reports & Post Office Ltd Network Reports, personal communication
The vast majority of post offices (around 98%) are operated by franchise partners or sub-postmasters, who are independent business people, with only 20 being Crown post offices which are directly managed by Post Office Limited.
86.Martin Kearsley was confident that the Post Office had the capacity to deal with additional banking customers that might seek to use Post Office services following branch closures, telling us “We absolutely do. We have been transacting on behalf of banks since 1998. Those services have gradually increased through that time. Three or four years ago we were doing about 70 million transactions a year and in 2017 that has risen to 120 million, so we have seen growth”.
87.Responding to concerns about opening hours and branch closures Tom Moran, Network Development Director, from the Post Office told us that under their network transformation programmes the Post Office had “added 27,000 opening hours right across the country.” We were told that while branch numbers fluctuated due to individual postmasters retiring or selling their businesses where a branch closed in a place which needed a Post Office there was a Post Office team responsible for speaking to local businesses to see whether an alternative can be found. Mr Moran said that “the majority of the time we are very successful at doing that.” RBS told us that where a Post Office branch closes they will review their mobile branch service route to extend cover in that area.
88.Given the increasing importance of the Post Office as a provider of basic banking services, it is essential the banks and Post Office communicate with each other about their closure decisions, and work together to ensure all communities have a location where it is possible to access face-to-face banking services. We recommend that the Lending Standard Board review the effectiveness of communication between banks who decide to close branches and the Post Office in a future thematic review of branch closures.
123 RBS, Accessed 25 January 2018 (Same text in all branch closure documents)
125 Citizens Advice, ‘ September 2014
126 Consumer Futures, State of the Rural Network (unpublished), 2014 cited in FSB, p13, October 2016
128 FSB, October 2016
130 FSB, October 2016
131 House of Commons Library. , January 2018 and Q44
Published: 27 May 2018