The National Federation of Subpostmasters (NFSP) chief executive Calum Greenhow has provided evidence to MPs to safeguard the future of the Post Office (PO) network.
Greenhow stood in front of the Business, Energy and Industrial Strategy (BEIS) select committee on 21 May and warned the PO network had “been taken beyond a tipping point.”
According to the NFSP; more than 2,500 post office branches are at risk of closure due to subpostmasters seeing their income fall and expenses increase. It said the collapse of the network would have “catastrophic implications for local communities.”
During the meeting with BEIS, the NFSP submitted the following on its claims:
Around 1,000 branches are currently listed as closed – two out of every three closures are caused by the resignation of the subpostmaster.
There are no plans to replace the annual revenue received by postmasters from providing government services, which has fallen from £576 to £99m in 2018.
Subpostmasters are increasingly responsible for meeting demand for banking services for low rates of pay.
Greenhow added the network would be unable to survive without its £370m government subsidy. The funding, which is due to end in 2021, is provided on the condition the PO maintains a network of 11,500 sites.
In an exclusive interview with RN, Greenhow said: “It [the subsidy] ensures Post Office branches continue to operate. How will the Post Office balance its books without the subsidy? Our concern is it will take the money away from its mains branches.”
To help rescue the PO network, Greenhow has called for:
The government subsidy be available beyond 2021 and provide more support for rural retailers.
Increased remuneration rates to prevent a “mass exodus” of subpostmasters.
More government services to help drive increased footfall to PO branches.
An increased range of banking services at POs, supported by a national strategy to help raise awareness.
The development of financial products designed for disadvantaged and vulnerable people.
Subpostmasters and organisations, such as the ACS, also provided evidence to BEIS on the PO network. When asked about concerns around the resilience of the network, the ACS said:
"The PO and policy makers must recognise that the long-term resilience of the network is reliant on overall commercial viability for retailers.
"Increasing employment costs such as the National Living Wage, business rates and a highly competitive grocery market means that all store products and services must justify their position."
Imran Khan, who has been a subpostmaster for eight years, added: "All I have seen is a decline of the PO and in all these years. We have lost all our investment, and the good will of the business, and nobody in the proper state of mind is willing to buy our business if it has a PO inside it."
The PO also submitted evidence to the committee. It said in its submission: “Running a PO continues to be an attractive proposition for many retailers. However, while the model is now more sustainable, postmaster incomes have not kept pace with increasing costs.
“Furthermore, we know that while the PO franchise is valued because of the footfall it brings, operating a PO is complex because of separate technology, the need to meet certain regulatory requirements and the knowledge required to support a multiproduct operation.
“We must make it more attractive for postmasters and our strategy is to make it easier for them to make more money with less effort.”
It added it was trialling increased incentives for postmasters selling telecoms and insurance products, alongside a strategic review of remuneration. “In addition, we are working with Postmasters to simplify their role, reducing their costs and enabling them to increase their profitability,” said the PO.
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