Urgent review of post office funding needed to support social and community goals

MPs on the business, energy and industrial strategy committee have called on the government to “make the post office a key channel for it to reach customers”.

It accuses the government of “backtracking” on previous commitments to make it a front office for services. “This has reduced post office and sub-postmasters’ revenue and income, while effectively excluding those who cannot take part in a digital-by-default world and who still need face-to-face services.

“Post offices are an essential public service and a focal point in many of our communities. They help address financial and social exclusion as they fill the gaps left by retreating banks, struggling high streets and offer a friendly face to the vulnerable. If the network were to falter the consequences will be wide ranging and more costly than the present subsidies used to support them.”

The committee says the post office network has stabilised at just 11,500 branches but is “fragile”. It says that “many branches do not offer the full range of services, and, more worryingly, many sub-postmasters and retailers are finding it hard to make them viable. If they leave in large numbers, the network will collapse.”

The committee says it is important the post office brand “continues to maximise opportunities with commercial partners, such as the banks and Royal Mail, so fees can be reinvested into the network and sub-postmasters fairly paid”. It also calls for “creative thinking on how the post office can continue its social purpose and maintain the high regard in which it is held by communities it serves”.

The Association of Convenience Stores (ACS) has welcomed the findings of the committee. Chief executive James Lowman said: “We are pleased the inquiry has recognised that rising operating costs faced by retailers make hosting a post office more challenging. Leaving shops to offset reductions in government subsidies is unsustainable and won’t deliver the post office network that people need in their communities.”

“Post offices are integral to local communities – particularly for those living in rural areas where the post office may now be the only place that can provide them with essential financial services.”