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Last post? Post Offices are being subsidised by loyal subpostmasters in an ‘untold scandal’ (Image: Daily Express)
Britain’s army of loyal postmasters are paying to keep counters open for their communities in another Post Office “scandal”.
Many are subsidising loss making businesses from their own pockets or forced to plough money from sideline businesses to cover huge shortfalls.
The brutal reality of running a counter has been laid bare at a time the first comprehensive review in 15 years could see a slew of branches close.
And while the public wants to keep the vital services it provides, most are unaware of the personal toll it is taking on those battling to keep their heads above water.
Postmasters have told this newspaper the financial hit is seeing public-spirited individuals essentially prop up a state-run service.
In many cases it is the only reason communities still have a functioning Post Office.
The community-run facility is a lifeline but its Post Office counter barely breaks even (Image: Daily Express )
In Killin, a picturesque village of 700 people in the central Highlands of Scotland, the Post Office is a community lifeline. But like most a cross the UK it barely breaks even.
The counter is found in MacGregor’s Community Hub which started life as a cooperative in 2014.
Today it is a thriving Open All Hours-style store offering fresh, seasonal produce, alongside traditional offerings. It has branded itself as “Scotland’s littlest department store with the biggest heart”.
It was trumpeted as a beacon of hope in the Government’s Post Office Green Paper, which seeks to transform the service and its reputation, but manager Ellie Banwell, 45, said that doesn’t tell the whole story.
She said: “The Post Office barely washes its face but so far our best month was just over £14,000 a month in turnover and we’re averaging £12,000 for the last six.
“As online shopping exploded it has eaten up independents who have struggled to survive. And as people have retired no one has wanted to take them on.
“Like many places, what was once a vibrant high street has slowly shut down and we witnessed the closure of the greengrocers, the butchers, the hardware shop, newsagent and bakery.
“But we embraced the idea of an ‘everything shop’ and are making it work. We are everything under one roof.”
The grim reality for postmasters – who are not employed by the Post Office – is they are paid a pittance for what they do.
They receive 25.5p for cash withdrawals over the counter, 5p for balance inquiries, and 38p for cash deposits. They also earn £1.25 per £100 of travel money sold. Additionally, there are different rates for mail and parcel services, with main branches often receiving a higher percentage of the price than local branches.
Ms Banwell said: “Hardly anyone understands that the vast majority of private individuals are literally subsidising the Post Office out of their own pockets.
“And the scandal here is the Green Paper seems to suggest we should keep on doing that.
“To me it sounds like using profitable businesses to prop up counters is the way to go. But to milk private individuals to subsidise a state service is plainly wrong.”
First class delivery! Volunteers at MacGregor’s Community Hub (Image: Daily Express)
In the past year MacGregor’s has tripled its income despite its Post Office counter, which opens between 10-2 six days a week, running at a loss.
Unlike sole trading postmasters the community-owned venture is able to access grant money. It was able to secure £50,000 – half of which was from the National Lottery – to kick start the project and gets a rural uplift payment meaning the Post Office, a lifeline in an isolated community, just about covers costs.
Ms Banwell, who took over as manager last year, said: “The shortfall between what it costs to staff the counter and what it makes is staggering. The shop is the good news story
“Community enterprises which are non-profit, like ours, can get grant funding which means we can get investment but private individuals cannot and because of that they are locked in and that is not right.
“Maybe community ownership is a solution but it’s not a fairytale, it’s far more challenging than that.
“But the public is largely unaware of the plight of the postmaster. Most people think we are employed by the Post Office for a start.”
Postmasters, some of whom have seen reputations and finances ruined by previous Post Office regimes, have been forced to subsidise loss-making post and parcel services with retail offerings like mini-supermarkets and sales of greetings cards and stationery. One suggestion in current discussions is to supplement counters with food, takeaway and delivery services.
One told the Express: “Our main concern is the financial viability of running a Post Office. Most postmasters’ retail businesses subsidise their Post Office and this is not right or sustainable.
“Post Offices provide essential services to our communities, yet postmasters are paying for it.
“I don’t believe the Post Office can ever be a commercially viable company and will always need a substantial subsidy or income from other sources in order to provide postmasters with a fair income.”
The community-run facility is a lifeline but its Post Office counter barely breaks even (Image: Daily Express)
A contentious option in the Green Paper, which seeks ways to radically reform the Post Office, is to withdraw the minimum branch requirement – introduced by the Tory-led coalition in 2010 after Labour slashed the network in the previous decade.
But it has sparked fear Britain would be left with what amounts to a bare minimum service agreement, a move that would prove disastrous for communities across the UK .
It prompted the Daily Express to launch its Save Our Post Offices crusade.
Ms Banwell said: “Thank goodness for the Express in taking up this issue.
“It is important we are recognised and valued, especially in rural communities, because access to vital services like banking facilities is difficult.
“The Post Office makes a big play on being the biggest retail network in Britain but where is the innovation?
“What you will find in the length and breadth of the country is that postmasters kept at it for the good of their communities – despite it being a thankless task.
“There’s a wealth of hugely dedicated human capital that could be helped to build something wonderful, but instead it’s being abused, exploited, ground-down, and squandered. It’s high time the whole story is told.”
Post Office chief executive Neil Brocklehurst told the Express: “I don’t believe the Post Office centre should make money. The postmasters – people at the frontline should.
“Historically that has been the other way round. And actually they have been used as a cost centre and that’s the wrong way round.
“We need to make enough money to have enough for capital investments – new IT and infrastructure – and the rest should be going out to the frontline.
“We need to make it pay to be a postmaster.”
Post Office Minister Gareth Thomas said: “Post Offices continue to be a central part of our high streets and communities across the country.
“However, after 15 years without a proper review, and in the aftermath of the Horizon scandal, it’s clear we need a fresh vision for its future.
“This Green Paper marks the start of an honest conversation about what people want and need from their Post Office in the years ahead.”
First class campaign! Ms Banwell backs the Express Save Our Post Offices crusade (Image: Daily Express)
Post Office boss Neil Brocklehurst speaks to the Daily Express
Subpostmasters are paying to keep state-run Post Office counters open…it’s another scandal
By now, we’ve all watched Mr Bates vs The Post Office. We know how innocent subpostmasters were hung out to dry by executives who failed to act over faulty Horizon software. Those victims are finally getting compensation. But there’s another Post Office scandal and its victims haven’t been noticed yet.
I run a village shop and Post Office. I use Horizon almost daily and I can tell you, it is a hopeless piece of software. Unexplained shortfalls still happen, and until very recently subpostmasters reported routinely covering those discrepancies from their own pockets. Troubleshooting is almost impossible. You have to print out transaction lists metres long filled with mysterious codes and plough through them by hand. Beneath that mountain of paper lies a rotten truth: subpostmasters are paying to keep counters open for their communities.
This is the other scandal. Over time, while executives pocketed huge salaries, what we get paid per transaction was slashed so low it often fails to cover the cost of running the counter. Many Subpostmasters took on Post Offices that would otherwise have closed in order to keep them going for their communities. Because it is so hard to get clear data from Horizon, the burden a Post Office places on a business was easy to hide. New owners had no way of finding out what they were taking on until it was too late. Then Mr Bates vs The Post Office aired, and suddenly almost no one wants to buy a Post Office anymore.
Subpostmasters are part of the communities we serve. People who acted out of duty and love of helping others have lost so much. Horizon undermines your confidence and makes you believe you must be the problem when you can’t make an impossible business work. People lost money, they lost confidence and they lost their dreams for the future. There’s no compensation for people caught up in this scandal, and there’s no ITV drama coming to tell their stories.
Ellie Banwell is manger of MacGregor’s Community Hub in Killin, Scotland
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