MPs sceptical of Post Office Locals model
16th May 2012
CWU gave evidence as part of the Post Bank Coalition, which had
lobbied for the evidence session. It is the first public scrutiny
of the transformation programme. CWU is critical of several
elements of Network Transformation, including the Locals model
which reduces access to services, and of compensation which is
presented as investment but which could lead to post offices
closing.
CWU general secretary Billy Hayes
said: "Yesterday's session scrutinised some of the most
controversial elements of the Locals model and exposed many
unanswered questions. Our Postmaster members have demonstrated that
services and experience will be sacrificed and our fears are the
post office network could ultimately be reduced through the Network
Transformation programme."
CWU is concerned that many post offices may close or services be
lost from communities completely. The union believes the viability
of running a Post Office will be reduced because of the removal of
the core tier payment of £10,000 for postmasters and moving to
a fully variable pay model without any significant new revenue
streams to increase sales.
Mark Baker, from the CWU Postmasters
branch, gave evidence to the Select Committee and explained:
"The economics of the new models don't stack up for
postmasters. Taking away the minimum £10,000 core tier payment
means as a business we need to find this money every year just to
break even while there is no strategy to increase revenue at post
offices. It appears to be a cost cutting exercise with onus being
on the retailer to increase sales."
Mark also explained that the argument for longer opening hours
was a red herring as postmasters can already increase opening hours
and move to open-plan spaces without changing their contract.
The watchdog Consumer Focus has identified serious problems
with the provision of cash services in Locals as well as concerns
about privacy and the range of services offered. CWU assistant
secretary Andy Furey also gave evidence to the
Committee and explained fears for rural areas and the lack of
consultation among both the public and postmasters. "Whichever
way you look at it no one seems to win from the new models - it
means fewer services, less experienced staff, and lower wages which
could potentially lead to more closures. That can't be good for
customers, staff, communities or the Post Office itself as putting
them into pubs and petrol stations is a programme of downgrading
and reduction which could damage the brand. We'd much rather
see a positive agenda of government investment and upgrades with
the promise of new contracts and business models which protect
revenues and services" he said.
Clive Davenport from the Federation of Small
Businesses argued that removing one of the growth areas of business
-parcels (over 20kg) - from the Locals model for post offices would
contribute to undermining their viability. Andy added that
increasing the opening hours would put greater costs onto
postmasters which wouldn't necessarily be met by an increase in
sales.
Of the £1.34 billion government funding for the
post office network, 48% is for ongoing network subsidy payments,
37% for modernisation of the network and the remainder for
technology. When pushed by MPs, Post Office boss Paula
Vennells admitted that the 37% set aside for modernisation
includes compensation for postmasters to close their post offices
and leave the business. She also told the Committee of her ambition
for 30,000 Post Office outlets and the introduction of pre-paid
stationery. This has caused concern among postmasters who fear that
these initiatives would dilute demand for traditional post offices
and mean postmasters having more to compete with.
George Thompson from the National Federation of
Subpostmasters gave evidence alongside the Post Office and admitted
that there were problems with the Locals model but said that
"something had to give." He was pushed on questions of
engagement and consultation and denied that the NFSP had withheld
information from its members.
Billy Hayes explained that CWU is calling on the Select Committee to publish its report before the full rollout of these significant changes, which is due in the summer. "We want a successful post office network and are concerned that some elements of the Network Transformation programme could seriously damage the viability of many offices and lead to the downgrading of services and closures. That's why it's so important to get this right and not march ahead with potentially damaging changes" he said.
Find out more by visiting Postmasters in
CWU.
Do you work for the Post Office? The CWU has a newly established Postmasters branch dedicated to representing your best interests and standing up to POL and the government. Join us now for just £8.13 p.m by contacting postmasters@cwu.org or 0208 971 7325.
