Opinion: Is the Post Office safe in your hands, Mr Davey?

Editor’s note: the author of this post has requested to remain anonymous, but his identity is known to me.

I write as a lifelong Liberal/Lib Dem and former councillor. I am sadly having to remain anonymous so that my wife is not made subject to reprisals for my views.

Lib Dem Voice recently claimed the future of the Post Office network is secure. I would like to present a counter (sic) viewpoint.

My wife took on a Post Office 10 years ago and her guaranteed monthly salary then was £620. Now, its £800 for a 48-hour working week – less than £3.70 an hour. Any further income is based on transactions alone.

Thanks to a hell of a lot of hard work, she managed to grow her total income from £18,000 to £32,000 at which point she could afford some part time help.

Now, with the loss of various government-related contracts all, bizarrely, designed to cut costs (but which just leaves a bigger hole for Government to subsidise) her income is below £24,000 and due to the dog-in-a-manger attitude of the Post Office contract she is BARRED from even offering successor services.

I am afraid that a very cynical trick is being foisted on us, under the guise of modernisation, a cynical trick that even Labour would not have been attempted.

My understanding is that the guaranteed payment to sub postmasters will be scaled back or even eradicated, meaning that postmasters incomes will be significantly reduced.

Many of the transaction payments are fractional percentages or literally penny amounts. If the basic payment is chopped, there do not seem to be any plans to increase the transaction payments to compensate.

This will potentially make many sub-Post Offices unviable, almost regardless of how well-used they are. Incidentally, the new subpostmaster contract I believe starts in April, but no formal details have yet been released to those affected.

The cynical part is that, under the new arrangements, once a subpostmaster’s income has been reduced below a viable level, their business is downgraded to a “Post Office Local” and moved to the nearest shop or petrol station that will take it, BUT they will be unable to offer the full range of transactions or even carry enough cash to pay more than a few pensions.

So ‘the network’ may remain in number terms, but many of the outlets that remain will be little more than a stamp vending machine – BUT we’ll have kept the promise not to cut offices. This downgrading will further erode the relevance of Post Offices in an electronic age.

The real irony is that all these ‘efficient’ independent, privatised couriers ride on the back of Post Offices by dropping their undelivered parcels at Post Offices.

As a service to their customers, rural POs allow this, so the courier company meets its delivery target by getting a signature and avoids the enormous costs involved in re-deliveries. If Ed Davey should be doing anything, it should be formalising that arrangement with couriers to generate income for postmasters.

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16 Comments

  • Richard Swales 30th Jan '12 - 10:01am

    I’m a believer in free markets, but it’s not a free market to let private companies use the post for free to do the last leg of their journey. The rest of us have to pay the same national rate when posting within the same town.

  • Leading Lady 30th Jan '12 - 11:06am

    What I find rather bizarre is the NFSP support this downgrading of the Post Office network.

  • I think people forget just how important a service our Post Offices provide. The last Government, and it now appears this one, have a shocking record on Post Offices. They are never going to be able to provide the service we as a country through “Post Office Local”. We need a network of Post Offices we can trust and believe in. In my area both the local Tory MP and the Lib Dem Candidate were protesting Labour plans to close out local Sub Post Office. Now they’re in power it remains closed, worse it appears many more like the one in this thread are threatened.

    These can be a lifeline to our communities especially the elderly, their needs cannot be left to the free market.

  • This article would be more convincing if it said which services are well-used and will not be offered by “Post Office Locals”. Otherwise it sounds like special interest pleading to me. Why shouldn’t the post office be in the petrol station?

  • I believe the NFSP support these proposals because their members tend to be the larger outlets less likely to be affected – they were similarly relaxed about Camelot offering services for the same reason.

    PO locals are generally open plan, so cannot carry large cash amounts and I believe will not do financial services, insurance or car tax, driving more people online , further eroding the customer base

  • Andrew Suffield 30th Jan '12 - 2:39pm

    This downgrading will further erode the relevance of Post Offices in an electronic age.

    Perhaps if you could explain why this is a problem then we might make some progress. If Post Offices are irrelevant then we should close them – it is normal for old businesses to be obsoleted by new ones. If they provide services that are useful enough to generate revenue to pay their staff, then there should be no problem. If they provide important services but are not making enough money to pay their staff then they need to increase efficiency or prices.

    As a service to their customers, rural POs allow this, so the courier company meets its delivery target by getting a signature and avoids the enormous costs involved in re-deliveries.

    If the PO is finding that giving their services away for free is failing to pay the costs of providing that service then they need to start charging.

    This is not complicated stuff. Nobody has any sort of right to offer obsolete services below cost and stay in business.

    Perhaps if you could identify a specific problem then we might make some progress.

    PO locals are generally open plan, so cannot carry large cash amounts and I believe will not do financial services, insurance or car tax, driving more people online , further eroding the customer base

    Again – this is a problem how exactly? Doing it online is cheaper and faster; that’s why people do it.

    This whole issue is sounding a lot like bemoaning the demise of lift girls.

  • The main problem is that all political parties claim to love and protect POs , whilst doing all they can to undermine them. Every MP will fight to save his local office, but the lack of honesty about this means that there is no strategic direction.

    There are still 2 or 3 generations who are not IT savvy and who prefer to budget in cash terms. The lack of adequate public transport means that these people collect their pension and shop at their local shop, often the same place.

    Until this group have shuffled off POs remain necessary

    The present situation is akin to replacing miners shovels with teaspoons, and then closing mines because miners aren’t trying hard enough.

  • Andrew Suffield 30th Jan '12 - 4:07pm

    There are still 2 or 3 generations who are not IT savvy and who prefer to budget in cash terms. The lack of adequate public transport means that these people collect their pension and shop at their local shop, often the same place.

    Until this group have shuffled off POs remain necessary

    Your claim is that there is demand. If these people are willing to pay a fair rate for the service they receive, then POs will clearly be a viable business proposition and will remain open.

    You still aren’t identifying a problem.

  • David Evans 30th Jan '12 - 6:57pm

    @Andrew Suffield.

    I think the real point is that there is “need” due to poverty not “demand” supported by a large income.

  • “financial services, insurance or car tax, driving more people online , further eroding the customer base”

    I never understood why providing a load of services that people have been buying online/by phone for years was going to help Post Offices (as opposed to The Post Office). It must be about 15 years since I bought car insurance over any sort of counter

  • Andrew Suffield 31st Jan '12 - 2:10am

    I think the real point is that there is “need” due to poverty not “demand” supported by a large income.

    You’re simultaneously arguing that they don’t have the money for luxuries but the government should subsidise their choice to use a more expensive service?

    Sorry, that doesn’t pass the giggle test.

  • Dave Warren 31st Jan '12 - 9:15am

    As someone who worked for the Post Office between 1985 and 2010 i saw successive governments destroy it as a public service.

    The crown office network was decimated starting with the Thatcher governments closure programme and continuing right up to the end of the Brown administration.

    The unfair competition regime was rigged against Royal Mail then used to justify privatisation.

    I fear for the future, i think we will see more Post Office closures, fewer deliveries and collections.

    The delivery service will be 5 days a week not 6. Sunday collections have already gone and Saturdays
    may well follow with most boxes only getting one clearance a day.

  • Andrew Suffield 31st Jan '12 - 12:29pm

    My local post office – in a shop – is stacked full with parcels every afternoon – as local people selling on the internet use their local post office to move goods.

    That certainly sounds like a post office that should have no difficulty in staying open. If POs like this one are facing problems then we need to hear about what those problems are. If they are staying open, while POs that stand empty all day are closing, then there would seem to be no problem.

    What I have not seen anywhere in this comment thread is any examples of POs that should be commercially viable but are failing because of some action or inaction of the government.

    As someone who worked for the Post Office between 1985 and 2010 i saw successive governments destroy it as a public service.

    Email destroyed it. The government merely (correctly) declined to throw away money on a technology that was gradually becoming obsolete. The UK today needs a much smaller, more efficient, and above all different postal service, compared to 1985. Letters are no longer the routine mode of communication, and most of what we need shipping is parcels.

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