Post Offices under threat - and why stamps are missing from branches.

As many UK readers know, the Post Office network has changed enormously over the last 20 years.  Once the local Post Office was regarded as the retail arm and visible face of the General Post Office and then Royal Mail.  Somewhere where we could get stamps, and where the postmaster willingly kept back new stamp issues for his happy band of collectors, and took in first day covers to send to the nearest Head Postmaster (First Day Cover Duty) for cancellation with a special postmark and redelivery the next day.

I started drafting an article about the changes to the network some months ago: there always seemed to be something happening which affected the draft and the notes I had made.  Now sub-postmasters are being forced to give up their livelihood in favour of a new model with lower operating costs for the organisation.  

Tonight on BBC2 television is the first of three programmes entitled "Signed, Sealed and Delivered: Inside the Post Office".  Billed as

"An eye-opening look inside the Post Office - an iconic national institution undergoing the biggest shake-up in its nearly 400-year history as it battles to reinvent itself for the modern world."

I suggest you tune in at 9pm, set it up on series-record, or watch on the iPlayer.  I'm sorry that my recent absence prevented me from alerting you earlier.  This will only be available to viewers in the UK or those overseas who have access to UK television.

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Post Office branches, along with the Royal Mail delivery service, were formerly part of the General Post Office. Post Office Counters Ltd was created as a wholly owned subsidiary of Royal Mail in 1986, becoming Post Office Ltd in 2001.

Most of us grew up with the concept of Head Post Offices, where there was a Head Postmaster in charge and the managers and admin and counter staff were all employees of the GPO.  The other type of Post Office was the sub-Post Office, managed by a self-employed Sub-Postmaster (SPM) sometimes employing other people or members of the family.  In the original arrangements the SPM received a fixed core tier payment. On top of the fixed core payment, SPMs were paid per transaction.

In May 2007, the Government embarked on the Network Change, or Post Office Closure Programme, which resulted in Post Office Ltd (POL) closing nearly 2,500 post offices, including 500 branches, which were replaced with Outreach services.   The Closure Programme was necessary to help get the Post Office network on a more stable footing as it was making heavy losses.

Many of the offices which closed were not far from others, and the closure programme was designed to ensure that essential services were still available within an area.  Many part-time offices were closed.   And when the programme was completed we thought that was the end of it.  But it was only the start.

Post Office Ltd was still losing money, with some branches not generating enough profit (not income) to cover the costs of the SPM salary and associated PO Ltd overheads.

The next step was Network Transformation, a programme designed to "address the economics and lack of flexibility of the traditional sub post office operating model".   Back in 2012, the Government stressed that any conversion to the 'Locals' model would be voluntary - in evidence to parliament's Business, Innovation and Skills Committee*, Post Office Ltd said that "any move to the new Post Office Local model is entirely voluntary on the part of the subpostmaster. They will only move to the new operating model if the economics stack up for them and we will only introduce the new model where there is a robust business plan and where we are sure it can be successful and sustainable.   Any subpostmaster who wants to stay on their current contract terms—if that works best for them—can do so."   [* full link now added - plenty of good reading there!]

However, times change.  PO Ltd still needed to save money, but the Government of the day committed £1.34bn for the Post Office network to make sure there was no programme of Post Office closures and to update branches; in November 2013 the Government announced a further £640m investment in the Post Office network, from 2015 to 2018.

At the end of March 2014, there were 350 Crown Post Office branches that are run by Post Office Limited employees (now only 322). The remainder of the network was made up of 11,346 branches that are run on an agency contract basis.   The Crown Offices were where the Philatelic Counters were located: with many of the Crown Office closed and their functions transferred to a branch of a national retail chain (eg Lloyds Chemists, WHSmith) philatelic counters were closed and philatelic awareness, experience and knowledge was lost.

Central to the modernisation funded by the Government was the introduction of two new-style Post Offices.

1.     Main style Post Office branches which offer a modern environment and in many cases extended opening hours. These branches have a dedicated Post Office counter offering customers a full range of products and services, during standard hours. In most cases there will also Post Office service provision at the retail position, providing access to a wide range of services including Post Office Card Account withdrawals and everyday banking services during extended shop hours.

2.     Local style Post Office branches provide a wide range of services from the retail till and are open for all the hours that the shop housing it is open.

According to the Post Office "September 2014 saw the 3,000^th branch transformed and more than 82,000 extra opening hours for customers.  This is not a closure programme and we are committed to maintaining our current network at around 11,500."

Most SPMs are members of the National Federation of SubPostmasters which says it is "committed to protecting and promoting the interests of subpostmasters".  The NFSP is the only organisation recognised by Post Office Ltd to represent subpostmasters on matters surrounding pay and contracts.  However, many SPMs are now saying that the NFSP has acquiesced to the changes now being forced on postmasters without consulting the members.  Their 'Protect our Post Office' campaign has not reversed the Network Transformation.

On the other hand, the Communications Workers Union (the Trade Union representing Post Office, Royal Mail, Parcelforce, BT and other workers in the communications industries) is becoming increasingly vocal and agitated over the changes to the Post Office network.  Back in 2011, they expressed concerns such as:

- passport, DVLA, currency on demand and Post Office financial services being excluded from Locals entirely, means reduced services.  Locals would also lack a dedicated service area and it is difficult to see how financial or government services could be expanded at Locals branches - two key areas being targeted for increased revenues.

(Also excluded from sale under the Locals model are special stamp issues, even where customers exist. And this is not just presentation packs, FDCs, etc, but the basic stamps in sheets.  Where is Royal Mail's retail network now?)

 - It reduces quality of service, with variable levels of staff training and knowledge, leading for instance to customers with parcels being turned away at a number of Locals outlets.

- it is likely to push postmasters out because it removes the 'core tier payment' which they rely on while placing greater costs onto their business by mandating extended opening hours.

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Self-employed Sub-Postmasters can cope with many types of transactions, including the sale of foreign currency, processing of road tax payments, payment of pensions and benefits.  But the government would like to see more financial services and insurance products processed through the network, and single-person branches do not have the flexibility for this, nor the ability to undertake personal financial transactions and investments in a private situation.   Despite PO Ltd having money to contribute to the physical changes to a retail shop to accommodate the new PO Local set-up, some branches have no space to expand: they operate within the physical constraints of the building they are in.

In these circumstances POLtd is seeking alternative retail premises in the immediate area (eg the same village), giving notice to the SPM that his contract will be terminated when a suitable alternative location for the PO is found and agreement reached with a new operator.  In a village near here apart from the PO there are three other shops and a pub.  None of the shops could easily accommodate the PO and its associated delivery office with two rural van rounds, two being very restricted in size (one is a butchers, the other a newsagent carrying a few other lines).  The pub has only recently reopened after a long period of closure, and as we all know, rural pubs are also under threat.   On top of that the current SPM also operates a Post Office Outreach service at 5 other villages - in village halls and churches - where existing branches have closed!  Any new operator ought to be expected to continue this service.

The SPM has been careful since he arrived not to expand his operation to take on lines which would compete with the operation of the other shops (he sells a few sweets, some postal stationery and greetings cards).  It is to be hoped that the other shopkeepers take note of this arrangement and decline to take on the Post Office, otherwise POLtd will dump the present postmaster out of a job.

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