My first job after leaving University was working for the Post Office, and three and a half years ago I left the company with its parent (Royal Mail Group) losing something like a million pounds a day. Whilst I am sure the two events aren't linked – the company is now making a healthy profit. Well part of the company is. The part which runs our nations post offices doesn't make money.
When I worked in the Corporate Affairs team of Royal Mail I could tell you how many post offices were in each constituency – and how many were under threat by the Government's decision to move benefit payments from being paid over the counter – to direct payment to bank accounts. The number of threatened offices was huge.I
t is telling that when I was at the post office there were some 19,000 branches – yet today there are around 14,500, with 10,000 of them losing money.The arch capitalists among us would say the answer is clear – close 10,000 – they don't make money. But that's where the dilemma lies. Firstly 14,000 of those 14,500 branches are private business – they aren't owned by the state – they are run by people in village halls, in news agents etc up and down the country.
The Labour Government in its wisdom undertook a programme called Network Reinvention which effectively paid compensation to close urban post offices due to their overprovision. Now the country is faced with the rural network losing money hand over fist – with Government support due to end in the near future. It then moved to have all benefit payments to be paid directly into bank accounts – but allowed pensioners to have a Post Office card account in order for them to be able to collect their pension from a post office counter. Now we hear that the Post Office card account is to go to. So much for the Government backing local services!
So what is the solution? Surely its about allowing post offices to provide products and services that people want. Do I pay my bills at the post office? No. DO I get my TV licence from the post office anymore – NO – I cant. Do I use the post office to post parcels for bits I’ve sold on Ebay and to do my business banking? YES.Therein lies both the problem and the solution.
I was once at a Select Committee appearance where one MP put it to the then Chief Executive of Royal Mail that it was shameful the company was losing money – and then added that the Post Office Network has a huge social role. The Chief Executive jumped on that comment (quite rightly) and put it to the MP that he had just exposed the real issue the post office faced. Politicians wanted the company to be a profit making company – yet at the same time expected them to subsidise loss making parts to fulfill a social role.
Now are those two desires incompatible? Not necessarily. I wholeheartedly support the view that a rural post office branch has a social role. Some of these branches do not have enough customers to make them economically viable – therefore the post office has to be allowed to branch out into providing services that will make them viable. Not only does it have to provide access for people like me who quite like Ebay – it could become the first port of call – the one stop shop of government information and services. How much duplication must there be in the provision of Government information – yet surely the Post Office is the natural home for this to be made available. It should also be allowed to offer a much wider range of financial products and services that will attract a new and younger customer base. This country would be much worse without our network of sub-post offices, and the Government cannot be allowed to sound the last post on such a service.