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Sunday, December 10, 2006

Labour go to the brink on Post Office network

This report in yesterday's Guardian is set to put the cat amongst the pigeons as the prospect of the closure of thousands of Post Offices all around the Country looms ever larger:

The Department for Trade and Industry said last night the current size of the network, with 14,000 post offices, was "unsustainable". Royal Mail has said about 4,000 post offices would be the optimum "commercial" level although chief executive Adam Crozier has accepted that the social benefits of the post offices, particularly in rural areas, must also be taken into account. There is speculation that between 2,500 and 7,000 post offices could face the axe, with any cuts likely to be phased in over a number of years.

A statement from the DTi is scheduled next week but although it looks likely that some subsidy will remain so as to keep socially necessary services that will not prevent a wholescale decimation of the network. The Government's problem is that decisions they have already taken in relation to the abolition of the Post Office card account and the removal of business from Post Office counters will add to the likelihood of closures. Postmasters in deprived areas in particular are threatened with financial ruin. Now Labour are proposing to seal their fate with an unprecedented closure programme that will impact on thousands of communities.

A recent New Economics Foundation Report has sought to quantify the impact of Post Office closures on the communities they serve. The report finds that the consequential closure of Post Office branches could take hundreds of thousands of pounds out of the local economy. For every £10 earned in income, a post office generates £16.20 for its local economy. They say that most local businesses suffer a 'significant' impact following a closure and traders noticed a loss of custom in areas affected.

The report notes that eight urban post offices have closed for every rural closure and that one in six urban postal closures have been in a deprived area. Groups affected by closures include schools, local universities, credit unions and community groups as well as the elderly and other local people. The NEF say that as a result of a Post Office closure many local people move their grocery shopping outside of their local community.

If the Government allow these closures to go ahead they will be paying the price electorally for some time to come.
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