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Report considers future of rural Post Offices

[Friday 10 March 2006]

Mobile library services are a common and easily accessible service across the Yorkshire Dales and a new report says that the same principle could help to halt the decline in rural Post Offices.

It is just one idea presented in a new report published by the Royal Mail Group on how best to secure the future of its network of rural branches.

Report considers future of rural Post offices
Report considers future of rural Post offices
Photo: Chatsworth Settlement Trustees

There are 8,000 Post Offices in the UK that are classed as being in rural areas, mostly in small villages. Despite having a customer base is typically considered to be low; around a quarter of the entire population, 15 million people, have a rural branch as their nearest Post Office.

It costs Royal Mail around £3m every week to keep its rural network going and over the past three years it has been widely recognised that many rural branches are simply not sustainable without Government intervention.

Many rural branches are operated from other retail premises, such as village shops, and the report recognises that it is often hard for sub postmasters to remain economically viable from the Post Office side of their business, the report states:

"The economics for individual sub postmasters are also challenging. Income from the Post Office is affected by the amount of Post Office work they do, and the income from their retail activities is under pressure because of general trends towards larger retail outlets in urban areas."

In order to address this situation, in 2003 the Government introduced a 'Social Network Payment' of £150m per year - effectively subsidising rural post offices. This payment was originally due to be in place until 2006, but has now been extended until 2008.

In announcing the extension in September 2004, the Secretary of State for Trade and Industry said: "Rural post offices continue to face real challenges and a large part of the rural network continues to be unsustainable commercially.

"For many post offices the number of customers they serve is simply too small to make the business attractive or sustainable.

"With the prospect of customer numbers continuing to fall as people access services in different ways it is clear that there are challenges ahead and that new ways to deliver services more efficiently and effectively are needed."

The report considered a number of pilot studies carried out in fifty villages across the country that could, if taken nation-wide, provide part of the answer as to how to maintain a Post Office presence in rural communities:

  • Partnerships with local rural service providers such as mobile libraries and the police
  • "Hub and spoke" arrangements where a sub postmaster running a branch in a larger village provides Post Office services in smaller communities in premises such as a village shop, petrol station, pub, church or a village hall
  • Mobile services involving a van with online links to the network.
  • Home Service - whereby customers in a very small community with low demand order products directly from the nearby Core Post Office branch by telephone or on the internet and those products are then delivered to the customers' home or to a community meeting point.

Welcoming the report, Adam Crozier, Chief Executive of Royal Mail Group, pointed out that this is only the first step on a long road to securing a future for rural branches; Mr Crozier said: "In itself, the report doesn't provide the definitive answer to the issue of how to create a viable future rural network.

"That will involve wider considerations from all interested parties. But the report does indicate some of the building blocks upon which a sustainable future might be built and, therefore, it represents a real and positive step forward."

Branches across the Dales have for some years being looking at other ways of generating income. The Post Office in Horton in Ribblesdale runs alongside a traditional village shop that caters for villagers and visitors alike; the Bolton Abbey branch operates within a gift shop that caters to the thriving tourism industry; Faced with closure in 2002 the Kettlewell Post Office joined a partnership with the Youth Hostel Association to offer services from the village Hostel.

Bolton Abbey Post Office: Catering to locals and the thriving Yorkshire Dales tourism industry
Bolton Abbey Post Office: Catering to locals and the
thriving Yorkshire Dales tourism industry
Photo: Chatsworth Settlement Trustees

The Countryside Alliance has campaigned for some time on the issue, claiming that Post Offices are an integral part of the social, as well as economic, fabric within rural communities. Chief Executive Simon Hart commented: "We are delighted to see that the Post Office itself is thinking ahead, and trying to establish a sustainable future for its rural network using innovative methods.

"The report is the first step in the long overdue debate on the future of the rural post office network."

Even if we see structural changes to the way that Post Offices operate within rural areas, there are fears being voiced saying that there simply may not be enough business available to them in order for branches to remain economically viable.

The report points out that the majority of work done by Post offices, both rural and urban, used to come from Government departments.

This decline in official business, coupled with the demise in 2010 of the Post Office Account Card, means that over the next few years the network will see business carried out on behalf of the Government accounting for less than 10% of its overall turnover.

Ministers have yet to reach a decision on whether to extend the support payments beyond 2008, a delay which is angering the Countryside Alliance.

Simon Hart continued: "We are concerned by the short-sightedness of the Government in failing to reach a decision on the future of the £250m Post Office subsidy beyond 2008, without which the network has no future.

"Post Offices provide a vital service both in rural and urban areas, and they must look outward - at the needs of their local communities - to develop a roadmap for the future."

What do you think?

Are Post Offices a vital part of rural life, and if so what can be done to save them?

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