Post Office reforms may reduce network further

SNP MP Mike Weir has warned of a further risk to 350 post offices in Scotland if Post Offices Ltd does not win the contract for the successor to the Post Office Card Account.

The UK Government is currently tendering for a company to run the successor to the Post Office Card Account with the winner to be announced in the summer.

At present 4 million people use the card account who between them make 6.5 million visits to post offices each week accounting for approximately 10% of subpostmasters pay.

The National Federation of Subpostmasters is warning that unless the contract is awarded to the Post Office a further 350 post offices in Scotland will face closure due to loss of income.

Mike Weir, who has campaigned against the post office closure programme said;

"The closure predictions from the Federation of Sub Postmasters are deeply concerning.

"There are real echoes of the decision by the UK Government to withdraw the contract for TV licences from the Post Office.

"As more post offices were earmarked for closure only this week it is vital the Government ensures those that remain are able to deliver essential services and to remain as viable businesses across Scotland.

"The Card Account is used by many of the most vulnerable and elderly in society, often in our most deprived or remote communities.

"Retaining core services like POCA is much more likely to ensure the survival of post offices than trying to break into the mortgage market, especially in the current financial climate.

"The UK Government would be shooting itself in the foot to take away yet another key service from the Post Office network."

ENDS

Notes:

1. Briefing on the National Federation of SubPostmasters (NFSP) and the Post Office Network:

The National Federation of SubPostmasters (NFSP) represents the interests of subpostmasters, private business people who currently run 97% of the UK's post office network.

• In addition to mail, financial services and over 170 products, the post office network provides support for vulnerable residents and serves as the focal point for many communities in urban and rural areas alike. Post offices also act as economic anchors for other local shops and businesses.

• With a current total of 14,000 post offices, the network is bigger than all the major bank and building society networks combined, serving 24 million customers a week across the UK.

• Post offices play a well-documented and vital role in supporting local communities, in particular vulnerable residents; and play an equally important role in anchoring local economies, supporting local retail and providing a wide range of services to SMEs.


2. Briefing on the Post Office card account (POCA):

• The Post Office card account (POCA) is the main means by which customers can continue to claim their state pensions and benefits directly at the Post Office.

• Four million people across the UK use the card account, making 6.5 million visits to post offices each week. Post Office Ltd (POL) pays out £24 billion each year to POCA customers.

• POCA brings in £200 million a year to POL. POCA transactions are directly responsible for 10% of subpostmasters' net sub post office pay (12% in urban deprived areas).

• POCA is due to end in 2010. The tender process for its successor closed at the end of March 2008. The Government will announce the winning tender in the summer.

• NFSP, the regulator Postcomm and many other organisations agree it is essential for the future of the post office network that POL wins the tender. NFSP believe that if the tender is awarded to another bidder, 3,000 further unplanned post office closures will result across the UK, including 350 in Scotland, through subpostmasters forced out of business due to loss of income. Such an outcome would clearly undermine the rationale and funding behind the current Network Change Programme.

• NFSP is also concerned that there should be a seamless migration between the card account and its successor product and that account holders will not have to fill out further forms or overcome other hurdles in order to use the new account.