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CWU Response to BEIS Post Office Network Consultation 2016

Introduction

1. The Communication Workers Union (CWU) is the largest union in the communications sector in the UK, representing approximately 192,000 members in the postal, telecoms, financial services and related industries. We are the recognised union for all non-management employee grades in Post Office Ltd (POL) and have members in all sections of the business, including subpostmasters.

2. As the government is aware, the CWU is currently in dispute with the Post Office for the second time in three years over job losses; Crown office closures and franchising; cuts to many of our members’ pension entitlements; job security; and the future of the service. With the Post Office having refused the CWU’s latest offer for a structured period of talks over its plans and with the significant changes that have been made to the Post Office network since 2010 without any public input, we believe that a meaningful opportunity for stakeholders to have a say on the Post Office’s strategy is long overdue. We therefore cautiously welcome this consultation, provided that the government intends to listen.

3. In this respect we would express serious concerns over the fact that the Post Office currently appears to be preparing to announce a further round of Crown office closures and franchising at the start of next year. We do not believe this would be consistent with the current consultation providing stakeholders with a genuine say and call on the government as the owner of the Post Office to ensure no such announcements are made until it has published its formal response.

4. We would also highlight the fact that the CWU delivered around 75,000 postcards, signed by members of the public, to BEIS on 19th December in response to the consultation. These call for the government to: abandon the current Crown office closure and franchising programme; establish a Post Bank through the Post Office network; (re-)commit the making the Post Office a “genuine Front Office for Government”; and give postmasters a fair deal. Here we call on the government to act on this and commit the necessary funding beyond 2018 to deliver these things and maintain the network at its present size.

5. The postcards were collected in the matter of a few weeks, which demonstrates the strength of public feeling over the need for the government and Post Office to change course. The government cannot ignore these responses.

6. We have long argued that the separation of the Post Office from the profitable Royal Mail business was a mistake; that the commitments set out by the Coalition in 2010 for the expansion of government and financial services lacked any plan to deliver them; that the reduction in government subsidy alongside this would mean substantial cost-cutting; and that this would not serve customers’ interests or secure the future of the network (particularly in the face of new technologies impacting on its traditional work). This remains our view and we believe there now needs to be a fundamental re-think.

7. We would therefore repeat our call for the government to halt the current programme of cuts being implemented by the Post Office and, following the consultation, to bring together key stakeholders and industry experts to develop a new strategy for the future based on growing revenues and innovation to provide new services. The Post Office has a highly trusted brand and a more extensive network than all of the banks and building societies in this country put together. This should be the foundation for a positive vision of a service that could have huge economic and social value to the country, particularly as a Post Bank – but this requires the government and Post Office to change course.

Question 1

Do you agree that the existing criteria should continue to be used for defining what a nationwide network of post office branches should look like?

8. While we would oppose any downgrade of the existing access criteria, we believe that it needs to be enhanced in four ways to ensure all Post Office users have access to a high quality Post Office service and see no reduction in the current level of coverage.

9. These are: (1) a strengthening of the existing geographical requirements on the proximity of Post Office services to citizens’ addresses, to secure the existing number of post offices as a minimum; (2) a commitment to maintain the current Crown office network and to cease the closure and franchising programme; (3) an extension of the criteria to encompass basic requirements on service quality, the absence of which represents a serious deficiency at present; and (4) much stronger requirements on service availability. We expand on these under question 2 below.

10. On the fourth point here, the consultation document neglects to note that alongside the geographical access criteria, the Post Office has an obligation to provide a number of services throughout the entirety of its network under the terms of its government funding. These include the processing of social benefit and tax payments, the processing of national identity and licensing schemes, and access to basic cash and banking facilities.[1] While we want a revised access criteria to go beyond these requirements, evidence suggests that the Post Office is failing in its duty to provide these services on a universal basis, and concerns have been raised by a number of stakeholders[2] about the quality and range of services available.

11. The introduction of minimum quality standards and the strengthening of service availability requirements, as we are calling for, is both in the interests of Post Office customers and consistent with other universal services, such as the postal delivery service and the telecommunications service. For example, Royal Mail is required to ensure that 93% of priority mail arrives next day, and BT is required to provide a landline connection at speeds that permit functional internet access.

Question 2

What different criteria or what different approach could government consider to define what a nationwide network of post office branches should look like, including steps to ensure provision of post offices in small remote or hard-to-serve communities?

Existing geographical access criteria

12. We believe the minimum requirements on proximity to a post office must be strengthened in order to safeguard the Post Office’s existing network of over 11,600 branches across the UK.[3] The most recent Network Report states that as of March 2015 there were 11,634 branches[4], and we wish to see a commitment to maintaining every one of these branches.

13. The latest publicly available data shows that the Post Office currently exceeds the access criteria set out by the government. For example, 99.7% of the population are reportedly within three miles of their nearest Post Office against a minimum requirement of 99%, and 93% of the population are within one mile of their nearest Post Office against a minimum 90% requirement.[5]

14. The Post Office has an obligation to maintain at least 11,500 Post Office branches, as well as meeting the minimum access criteria.[6] Based on the strength of the current network, this indicates that the Post Office could potentially close over a hundred branches whilst continuing to meet the access criteria. Clearly this would be detrimental to the communities those branches serve, and so we think the criteria should be adjusted to ensure there can be no reduction to the existing number of Post Office branches. This will help to ensure the continued provision of services to remote or hard-to-serve communities.

Commitment to the Crown Office network

15. Over the course of this year the Post Office has announced plans to close and franchise fifty nine Crown offices (and fully close a further three). This follows a programme which saw the closure and franchising of fifty Crowns in 2014-15 and seventy in 2007-08. The network today stands at around 290 branches and we understand that the Post Office is now due to announce a further tranche of approximately twenty Crowns for closure and franchise at the start of next year.

16. The CWU is strongly opposed to this. The only independent research that has been carried out showed that the branches franchised to WHSmiths in 2007-08 were worse than Crowns for queue times, service times, service standards, disabled access and had fewer staff and service positions.[7] We know that franchising means the loss of experienced staff – in 2014-15 only ten out of a potential 400 staff TUPE-ed to the new franchise partner and only six have done so this year – and we know that customers are opposed to the programme. Tens of thousands of people have signed petitions campaigning against the franchise and closure of their local Crown office and the postcards we delivered to BEIS on behalf of the public call for an end to these changes. We also know that Crown closures and franchising disproportionately impacts on urban and deprived areas in the UK.

17. Closing and franchising a Crown means a downgrade of the service, fewer services being provided, the loss of specialist staff and we believe puts the Post Office on the path of managed decline. The Crowns account for around a disproportionately large share of the Post Office’s income and occupying prominent high-street locations should be driving new services and revenues for the business. In particular, we believe they are uniquely placed to offer more banking, financial and government services, given that these are the biggest branches in the network. The closure and franchising programme is not in the interest of customers or the long-term future of the Post Office and we believe the access criteria must be revised to commit to maintaining all existing Crown offices. Given that a further tranche of closure and franchising is set to be announced in January, we would urge the government to step in to halt this as a matter of urgency.

Criteria on the quality and availability of services

18. We believe the scope of the criteria should also be extended beyond the current geographical requirements, to include a set of minimum commitments on the quality and availability of services. It is not sufficient to ensure all citizens have a post office within three miles of their home if it fails to offer the services those customers need.

19. Such minimum standards are not only necessary to meet customer needs, they are also warranted to fulfil government promises and obligations. For example, the government has committed to protecting the value of the post office network[8], and the terms of state aid for POL specify that due to the delivery requirements on POL, efficiency cannot be achieved at the expense of quality. This, however, is precisely what we believe is happening and we explain below why we believe enhancing the network criteria to cover quality and availability of services is now required.[9]

Gaps in quality and availability in the new Post Office models

20. The government sponsored Post Office transformation programme is centred on closing and franchising out Crown offices and moving sub-post offices onto new lower cost (for the Post Office) operating models.

21. Numerous studies show that this strategy is not delivering for customers. As we note above, franchising Crown offices results in a poorer quality of service. Consumer Focus found in 2012 that the Crown offices franchised to WHSmiths in 2007 and 2008 were worse than Crowns on a number of measures, including queue times, service times, disabled access, advice to customers, number of staff and the number of service positions.[10]

22. In relation to the sub-post office network, in 2015, Citizens Advice[11] highlighted major failings in relation to service standards in Post Office Local (PO Local) branches, saying that staff knowledge and accuracy of products, pricing and services is insufficient.[12] It has also said there are repeated problems with PO Locals preventing cash withdrawals or restricting access to cash.

23. This is supported by the Federation of Small Businesses (FSB), which has found that the range of services available under the PO Local model tends to be more restricted than the traditional sub-Post Office model.[13] The FSB also found that banking services at Post Office branches and franchises often fail to meet the needs of small businesses.[14] Key concerns include a lack of cash provision, the limited availability and unreliability of ATM machines in some communities, slow cash and cheque clearing facilities, and the absence of inter account transfers and currency exchange.

24. The problem of insufficient numbers of ATMs is set to worsen, with recent reports suggesting that the Bank of Ireland[15] may not relocate their cash machines to new premises following a post office’s closure or transfer.[16]

25. Citizens Advice also found that reliability was low in PO Locals, with some branches not being open as advertised, and mystery shoppers being told that advertised services were not available. This is supported by evidence from CWU members who report that while a convenience store may advertise that postal services are available from opening to close, in reality they are too often delivered only during core business hours or when a trained member of staff is on shift. Although the Post Office claims that it has added 200,000 extra opening hours to the network, we therefore believe this figure is overstated and fails to take into account such limitations.

26. Furthermore, several important services are only available at selected Post Office branches. These include a number of key government services such as car tax and identity checking services; financial services including current accounts and various insurance products; and telecoms services such as pay as you go mobile services.[17]

27. We believe that as these issues arising from the Post Office’s transformation programme means an unacceptable downgrading of the network which must now be addressed by the government in the access criteria. While Citizens Advice called on the Post Office to implement a rigorous and wide-ranging improvement programme in 2015, to our knowledge this has been ignored.

28. Another developing issue for Post Office customers arises from the changes being made to benefits paid via Post Office Card Accounts (POCAs). The POCA is designed especially for customers receiving pensions, benefits and tax credit who do not have a bank account. It means that those on low incomes and reliant on welfare benefits can avoid the costs of going overdrawn, bank charges and credit checks.[18] However, the Department for Work and Pensions (DWP) has written to POCA users saying they expect claimants to use a bank, building society or credit union account to receive benefits or tax credits.[19] Whilst the DWP has publicly committed to maintain POCAs until 2021[20], its actions appear designed to undermine the POCA and to begin the dismantling of a key service for vulnerable pensioners and other benefit claimants.

29. We are concerned that the limitations and changes regarding the POCA – together with the issues we have raised above in relation to cash machines, and the availability of government services – deviate from the Post Office’s obligations under the terms of state aid and its funding agreement with the government. These include the duty to provide “access to basic cash/banking facilities...especially for rural customers and those receiving social benefits”; the “processing of national identity and licensing scheme applications”; and the “processing of social benefit and tax credit payments to the public”, as set out by the European Commission.[21] We would therefore propose enhancing the network access criteria to ensure these requirements are incorporated in it.

Defining and measuring service quality

30. We believe that the Post Office should use a number of measures to ensure that it is delivering a high quality service to its customers, and the government should set a minimum acceptable standard for each of these measures. One option here would be to incorporate the measures used by Consumer Focus to assess the quality of Post Office services in 2012, as well as weaknesses identified in the network by Citizens Advice in 2015. It could therefore include minimum standards on:

• Queue times;

• Service times;

• Customer service/advice on appropriate products;

• Disabled access;

• The number of counter positions;

• Access to cash;

• Opening times.

31. We would also suggest that delivering these minimum standards should be backed up by new requirements on the Post Office to commit to the rigorous and wide-reaching performance improvement plan for the new model sub post offices recommended by Citizens Advice in 2015, to include:

• Improving staff training and support

• Improving branch monitoring and complaints

• Ensuring Post Offices can offer cash withdrawal consistently

• Streamlining product transactions

• Adopting a more strategic reporting focus by tracking and publishing key performance indicators[22]

Defining and measuring service availability

32. We believe there should be a requirement to offer a minimum range of services in all Post Office branches. This should include, but be more detailed than, the broad list of services under the terms of EU state aid, to encompass specific services that have been identified as lacking in some areas. For example, it should include government services such as vehicle licensing and identity checking; and financial services such as cash machines, travel insurance and currency exchange.

33. We are concerned that the inadequacy of the current minimum guarantee for Post Office services is a particular threat to the value and choice of services in remote and hard to reach areas, where they will inevitably be less economic to deliver. Outreach services[23], which represent 1,136 (nearly 10%) of the total 11,634 Post Office branches[24] may be especially prone to difficulties in providing a range of services that meets the needs of customers.

34. The introduction of a minimum standard for service availability would ensure that customers and businesses in remote communities are not excluded from access to a wide range of high quality Post Office services.

Justification for the funding needed to ensure minimum standards

35. Ensuring minimum standards will inevitably rely on continued public funding, especially for the many small and rural branches that are not able to achieve the organisation’s goal of commercial sustainability. Such an investment is justified given the Post Office’s distinct social purpose, and the wealth of social and economic benefits it brings.

36. The Post Office acts as a hub for community cohesion, delivers a social value of between £4.3bn and £9.7bn a year,[25] and is hugely beneficial to the local economy. A study of post offices in Manchester found that each post office contributes around £310,000 to the local economy each year, of which £120,000 is spending on local goods and services.[26] 

37. Given the Post Office’s reliance on public funding to sustain its network both now and in the future, the CWU calls on the government to suspend the cuts in the network subsidy. We also call on the government to commit to providing the necessary public funding to secure a high quality Post Office network up to and beyond 2018, when the existing funding agreement comes to an end. Concurrently, in the interests of maintaining a valuable and accessible Post Office network for all customers and businesses, we ask the government to abandon the current closure and franchise programme.

Question 3

What, if any, new services do you think could be offered at post office branches in the future – in particular considering those that could support remote communities, vulnerable members of society and others that rely on over-the-counter transactions?

38. As outlined above, we believe the Post Office needs a serious strategy for growing revenues through innovation and new services if it is to have a long term future in the face of declining income from its traditional work. The Post Office has a highly trusted brand and a more extensive network than all of the banks and building societies in this country put together. This should be the foundation for a positive vision of a service that could have huge economic and social value to the country. As the government is aware, we have called for it to bring together key stakeholders and industry experts to develop a strategy based on growth – we repeat that call here.

39. There are two areas in particular in which we believe new services can be provided by the Post Office in the future: banking/financial services and government services. These are not new ideas. In 2010 the Conservative-led coalition government set out a new vision for the future when it aimed to transform the Post Office into a “genuine Front Office for Government” and see it expand its revenues from banking services.[27] The government relied on its plans to develop these two key revenue generators as justification for its reduction of public funding for the Post Office and separating it from Royal Mail. However, neither has been delivered: since 2010 income from government services has fallen by 40% and revenues from financial services have grown by just 2%, not even keeping pace with inflation.

40. The government must therefore recognize that it needs a new approach and a proper strategy in order to deliver growth here. There is considerable support for this. The postcards the CWU returned to the government signed by around 75,000 people called for the establishment of a Post Bank and the government to (re-)commit to making the Post Office a “Genuine Front Office for Government”. We would urge the government to set out a plan to deliver both of these aims.

Banking and other financial services

41. The Post Office has failed to drive forward its own financial services, which are actually provided by the Bank of Ireland under the Post Office brand. It offers no business account of its own; more than four and a half years into a pilot, it is still only trialling a current account (which had been due to launch in 2014); and five and a half years after the government said it would be launched, it still provides no children’s account.

42. These services were proposed as long ago as 2009, when the Labour government recognised that the Post Office’s banking offering was not complete and that it should provide new products[28] to make money in order to sustain the network.[29] The CWU responded to the government as a member of the Post Bank Coalition at the time, arguing in favour of a stronger offering on current account and business banking services.[30] We continue to believe the Post Office must provide these core products if it is going to move forward in this area and note that the Federation of Small Business (FSB) has recently criticized the current offering in many Post Office branches as being “too limited” and expressed its concerns over services becoming worse as the Post Office continues with its closure and franchise programme.[31]

43. The CWU is calling on the government to establish a national Post Bank through the Post Office network, which we’ve campaigned for over many years. There is a compelling case for a Post Bank, which would bring trusted, comprehensive banking services to local communities and businesses across the UK. We want to see a Post Bank providing the core banking products we have identified above and providing full access to banking services, addressing the limitations of the current service the FSB has highlighted.

44. The experience of other countries, including France, Italy and New Zealand, shows that capitalising a Post Office Bank could generate strong returns for the Post Office and the Exchequer. The French government launched the state owned La Banque Postale through its post office network in 2006. It has a mandate to encourage sustainable development, tackle financial exclusion and promote social and affordable housing. Last year it generated revenues of €5,745m and pre-tax profits of €1,094m, dwarfing POL’s revenues of £304m from financial services. The contrast is an indictment of the government’s failure to recognise the potential for the Post Office, invest in its future and develop a coherent strategy for growth.

45. A Post Bank would be a growth engine for the Post Office and a crucial service for businesses and individuals as banks continue to close branches across the country. The big banks have closed 1,700 branches across the UK in the last five years, negatively impacting small businesses and the elderly in particular. Around 1,500 communities have reportedly been left without a bank on their high street.[32] A key driver of bank branch closures is online banking, which is now used by 56% of adults according to consumer body Which?. However, there are still 20 million adults who do not bank online, and closures have been especially high in areas with slow broadband connections where it is harder to use online banking.[33] In addition, when asked whether the Post Office could work as an alternative bank branch, there was some relatively negative feedback from customers, indicating that Post Office banking needs improvement if it is to be seen as a viable alternative to a high street bank.[34]

46. A Post Bank could help to address financial exclusion which is a serious problem in the UK, with estimates that 1.5 million people do not have access to a bank account. It could offer affordable, responsible deals on personal loans, helping to tackle the problem of payday lenders that charge huge annualised interest rates of over 1000%. Like La Banque Postale, it could also offer financing for much needed social housing projects and we believe lending to and supporting socially useful projects would be a unique selling point for a Post Bank.

47. Establishing a Post Bank would make the Post Office a lender in its own right rather than a credit broker, giving it much greater potential to grow its customer base and generate revenue. This will require capitalisation through public funding, but all the evidence from state owned post banks overseas shows that this would be an extremely worthwhile public investment. For example, New Zealand’s Kiwibank was profitable just three years after launch and last year made profits of NZ$127m. It paid a NZ$22m dividend to the state owned New Zealand Post in 2015 and made up 92% of NZ Post’s profit before tax.[35] Similarly, in 2015 La Banque Postale paid a dividend of €369m to the state owned La Poste, and La Poste paid a total dividend to the French state of €171m.

48. We also believe the government should support the Post Office to create a national credit union or build more and stronger links with existing credit unions to offer affordable, responsible deals on personal loans.

The need for an improved range of government services

49. Since 2010 we have seen government services being withdrawn from the Post Office, less money received by the Post Office under new contracts with government departments and customers being encouraged to use different means of accessing services.[36] The government appears to have simply given up on its earlier ambition to drive growth for the Post Office here, saying it is ‘difficult’ to co-ordinate different departments.

50. We call on the government to rethink its approach and commit to making the Post Office a genuine front office for government as planned in 2010. At that time, the government recognised that post offices are a natural place for citizens to access face-to-face government services and proposed a number of areas for potential growth. These included identity verification, the processing of assisted applications and cashless payment services. The government also recognised that these services could open into a wide range of applications and could represent steps towards a new generation of government services that will complement and build on the existing strengths of the Post Office in an increasingly digital world.[37]

51. We accept that some progress has been made in generating some revenue from identity related services, although with the Post Office reporting income of £9m from ‘Other Government Services’ in the year to March 2016 this remains modest. Growth from passport check and send, biometric enrolment services and the Cabinet Office’s new Verify online identity service should all be built on – revenues here remain a long way from off-setting the structural decline the Post Office has seen to its traditional services, with overall revenues from government services now down by more than £80m over the past six years.[38]

52. We believe there is enormous potential for the government to make use of the national Post Office network as a delivery platform for government services, and that this would be mutually beneficial for the government, the Post Office, and wider society. The Post Office is ideally placed to support this objective by offering internet access in its branches. This would bring the combined benefits of assisting the delivery of government services, increasing footfall and custom, and providing a valuable service for the millions of households still without an online connection at home.[39]

Question 4

What ways do you think communities might be able to play a more significant role in the operation of the post office network, in particular with the objective to support rural economies and strengthen local communities?

53. The CWU believes that communities have enormous potential to influence the future of the Post Office for the better, but that their views have so far been ignored by government.

54. Where a Crown has been closed and franchised our experience is that this has always been done in the face of significant public opposition. Tens of thousands of people across the country have signed petitions against the change to their local office this year alone. However, we are unaware of a single case where a public consultation, which the Post Office is obliged to run, has reversed its proposal.[40]

55. The CWU would like to see communities being consulted in an inclusive and meaningful way and the 75,000 postcards we have returned to BEIS in response to this consultation demonstrates the appetite for this. This requires consulting all stakeholders including employees, postmasters, and customers on the impact of franchising, and on what services people need from their local post office. It means genuinely valuing the ideas and concerns of respondents and acting on them, instead of reducing the status of public consultations to a pointless formality as we believe they have become – indeed the Post Office’s own Code of Practice for consulting on a Crown franchise states that it will not accept views on the principle of the change being made.

56. We would also make the point here that we do not see how the current programme of franchising and effectively privatising the service in the face of public opposition is consistent with giving communities a role in the operation of the Post Office. Closing Crown offices which are directly owned and managed by the Post Office, a wholly public company, and giving these to commercial retailers does not enhance the voice of communities and in fact reduces the opportunity for them to have an input.

57. We also struggle to see how the franchising programme serves local economies and communities when it has had a seriously negative impact, in particular through the loss of good jobs on the high street and the experienced Post Office staff. This not only affects quality of service, but means a loss of what people see as a community asset when the Crown closes and relationships between staff and customers are lost. The same point applies to the wider transformation of the sub post office network. Franchising removes the Post Office’s ability to expand into new services; means less space in the office, fewer staff and less experienced staff; replaces good jobs with minimum wage employment; reduces the services that are available; and negatively impacts on service standards. This is a long way from being a programme to support local economies and communities.

58. In relation to the sub post office network, we find it unacceptable that the committed, hard working operators of post office branches – independent subpostmasters – are being forced to accept a pay cut or face closure.[41] Subpostmasters are being told to turn their traditional Post Office branches into a PO Local, where they share the same counter as a shop. As a result, they will receive less commission on post office sales, and could lose in the region of £10,000 a year as a result. If they refuse to adapt, the Post Office will simply go ahead with converting the branch to a Local, forcing the sub-postmaster to close their business. Again, this will mean the loss of experienced postmasters and staff and will do nothing to support the provision of high quality Post Office services to local communities.

59. We believe subpostmasters should be well placed to respond to the needs of their customers and shape their services to best serve their local community. However, this opportunity is being denied to them through a combination of cost cutting, and a command and control approach from the Post Office which gives postmasters little say over many aspects of how their post office is run.

60. The CWU calls on the government to give postmasters a fair deal so that running a post office continues to be a viable, rewarding career option in return for delivering a valued public service.

61. Communities should be at the heart of delivering Post Office services, but they can only do this effectively if the Post Office has a strong business strategy, an experienced and properly rewarded workforce, and adequate public funding in the areas where they need it most. That is why we are calling on the government to develop a coherent vision for growth, to suspend the network subsidy cuts, and to invest for the long term future of a high quality, thriving national Post Office network.

Question 5

Do you have any other views on the points raised in this consultation that you feel government should consider regarding its approach to the post office network?

62. We believe the government has failed to deliver on plans put forward six years ago to secure the ongoing sustainability of the Post Office, and that more joined up thinking is needed to bring about a new strategy for the Post Office as a matter of urgency. In place of the Post Office growing revenues by becoming “a genuine Front Office for Government” or expanding its financial services, we are seeing a programme of managed decline.

63. The Post Office has converted 3,323 branches to the PO Local model, or 1,323 more than the 2,000 originally intended by the government in 2010. It is franchising 59 Crown Offices this year and closing a further three outright, whilst also cutting around 2,000 jobs and shutting its defined benefit pension scheme. These measures are designed to meet the reduction in regular public funding for the network, but they are not a genuine platform for growth.

64. In this context, we are concerned that the bonus scheme for senior management in the Post Office has created a perverse incentive to cut back on branches and jobs. We know that the scheme is linked to profitability and a reduction in government funding, and believe this has helped to drive a focus on hitting profit figures in the short term by cutting costs, without any strategy for the long term future of the network. In 2015/16 the aggregate bonuses paid to Group Executive members stood at £1.6m and on top of this the Chief Executive and Chief Finance Officer received £497,000.

65. We want the Post Office to have a secure future, but we do not believe this can be achieved by simply cutting costs, particularly given the challenges the Post Office faces with the decline of its traditional revenue streams.[42] We believe these challenges can only be addressed by diversifying and improving services, rather than franchising Crowns and converting traditional post offices into low quality PO Locals.

66. In striving to achieve a new vision for growth, it is crucial that the government and the Post Office harness the views and experience of all stakeholders including employees and their representatives, customers, local businesses and industry experts. This will create a valuable, strategic partnership that brings together a wide range of ideas to design a thriving Post Office for the years ahead.

For further information on the view of the CWU contact:

Dave Ward

General Secretary

Communication Workers Union

150 The Broadway

London

SW19 1RX

Email: dward@

Telephone: (+44) 0208 971 7251

20th December 2016

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[1] Entrustment of Post Office with delivery of certain public services, letter from Jo Swinson to Paula Vennells, 23rd January 2015, accessed at: and Compensation to the Post Office Ltd for costs incurred to provide SGEIs 2015-2018, European Commission, 19th March 2015, accessed at:

[2] Including Citizens Advice; the Federation of Small Businesses; and Members of Parliament (for example during a backbench debate on 17th November 2016).

[3] Post Office Annual Report 2015/16, accessed at:

[4] Post Office Ltd, Network Report 2015, accessed at:

[5] Post Office Ltd, Network Report 2015

[6] European Commission, ibid, 19th March 2015

[7] Are you being served? Consumer Focus, 2012

[8] Securing the network in the Digital Age, BIS, 2010, p.3 and 2016 Post Office Network Consultation, BEIS, p.1

[9] European Commission, ibid, 19th March 2015, p.22, para 118

[10] Are you being served? Consumer Focus, 2012

[11] The statutory representative for consumers of postal services in England and Wales.

[12] Fixing the Foundations: Branch and Service Standards in Post Office Locals, Citizens Advice, September 2015, accessed at:

[13] Locked out, the impact of bank branch closures on small businesses, Federation of Small Businesses, October 2016, accessed at: (final).pdf?sfvrsn=0

[14] Locked out, FSB, ibid, October 2016

[15] The Bank of Ireland is the Post Office’s financial services partner, for which the Post Office acts as a credit broker

[16] Citizens Advice, Post Office News (November, 2016).

[17] Post Office Ltd, Network Report 2015, accessed at:

[18] Post Office Card Account, Post Office Ltd website, accessed on 1st December 2016 at:

[19] DWP response to freedom of information request, ref: 2616, 4th August 2016, accessed at:

[20] Post Office service for pensioners and benefit claimants to be safeguarded with new government contract, 16 December 2014, DWP, accessed at:

[21]Compensation to the Post Office Ltd for costs incurred to provide SGEIs 2015-2018, European Commission, 19th March 2015, accessed at:

[22] Fixing the Foundations: Branch and Service Standards in Post Office Locals, Citizens Advice, September 2015, accessed at:

[23] These are typically small, part-time Post Offices, many of which are mobile branches or located in pubs and in people’s front rooms.

[24] Post Office Ltd, Network Report 2015, accessed at:

[25] Based on customers’ willingness to pay for services. Source: The Social Value of the Post Office Network, BEIS November 2016.

[26] Post Offices in Manchester: Current Impacts and Future Prospects, NEF 2006

[27]Securing the Network in the Digital Age (BIS, November 2010).

[28] Including its own current account, its own business account and a children’s savings account

[29] Post Office Banking, a consultation on developing the banking and financial services available at the Post Office, Department for Business, Education and Skills, December 2009

[30] Post Bank at the People’s Post Office, Post Bank Coalition submission to the BIS consultation on Post Office Banking, 2010, accessed on 16th December 2016 at:

[31] Locked Out, Federation of Small Business (October 2016)

[32] Bank branch closures trigger high street alarm bells, the Guardian, 21st August 2016, accessed at:

[33] Goodbye bank...hello Post Office? Which? January 2017

[34] Goodbye bank...hello Post Office? Which? January 2017

[35] New Zealand Post Limited, Financial Statements 2015, p.17

[36] E.g. the paper road car tax disc was withdrawn, the DVLA and Post Office Card Account contracts have squeezed the Post Office and the government has promoted online channels.

[37] Securing the Network in the Digital Age (BIS, November 2010)

[38] Post Office Annual Report 2015/16

[39] In 2015, 5.3 million adults in the UK had never used the internet (ONS, Internet Users in the UK 2016), and 14% of UK households (nearly 4 million households) had no internet access (ONS, Internet Households and Individuals: 2015)

[40]In light of this, we do not believe the Post Office’s consultations represent meaningful engagement. The Post Office has also refused to attend public meetings arranged by the CWU and local MPs to discuss the proposals this year. In 2014-15 the Post Office carried out 52 consultations on franchising proposals. Fifty went ahead. We believe one fell through because the proposed partner had a criminal conviction and that the other is still ongoing and yet to be [pic][41]?@ABOw } É Ê Ë î

äËÀµ¨›Ž›?qdZdM@5h…}]hUUîOJQJhÁZ×hÁZ×OJQJ^Jhp[42]ŒhÁZ×OJQJ^JhßZ*[pic]OJQJ^JhÁ]5?CJOJQJaJhQj5?CJOJQJaJhö185?CJOJQJaJcompleted. The Post Office’s Code of Practice even explicitly says that the consultation is not on the principle of whether a franchise takes place.

[44] Post Office network in crisis as five-year cash injection from the Government runs out soon, This is Money, 24th May 2015, accessed at:

[45] For example, turnover from traditional financial services declined by £11m, whilst mails and retail revenue declined by £6m in 2015/16.

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20th December 2016

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