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The Post Office plans to turn its remaining directly-managed branches into franchises, creating uncertainty for about 1,000 employees.
The last 108 branches operated by the Post Office will be franchised by the autumn, following a review launched in November.
Nigel Railton, chairman of the Post Office, said moving to a fully-franchised network would protect access to the service for communities across the UK and realise savings of £40 million to help lift postmasters’ pay by up to 10 per cent.
• Postmaster pay ‘to double’ but 1,000 Post Office jobs are at risk
He added: “The 108 Post Offices will either stay in the same location where possible or be located close to the existing location, meaning customers will continue to have access to a full suite of products and services.”
However, the plans have been heavily criticised by the Communication Workers Union (CWU), which accused the Post Office of learning “absolutely nothing from the Horizon scandal” and claimed that the move would put 1,000 workers at risk.
Dave Ward, general secretary of the CWU, said: “The Post Office’s claim that these community services will be maintained by their failed franchising model is laughable to anyone who has seen their local Post Office services reduced to the back of a shop.”
Dave Ward, general secretary of the Communication Workers Union, says that 1,000 jobs are at risk
AFP
The Post Office has been reducing the number of so-called crown post offices for a number of years. It has a requirement to have a minimum of 11,500 Post Office branches across the UK, with the majority therefore already operated under contract. It had a network of 11,805 branches as of the end of March 2024.
Retail partners, including WH Smith, Tesco, Ryman, the Co-Op and the Spar Group, operate about 2,000 and the rest are operated by independent postmasters. WH Smith recently agreed to sell its high street shops to Modella Capital. Modella has said that it will keep the Post Office outlets that operate in many branches, but will rebrand the high street chain as TG Jones.
Ward added: “The sell-off of WH Smith last week shows just how fragile and ill thought out this model is. This is the full privatisation of the Post Office via the back door. The role of the government must also be examined. This is a continuation of the hands-off role played by the Tories — we call on Labour to immediately intervene and examine alternative options.”
He called for a joint venture between Royal Mail, the London-listed, former state-owned parcel delivery company, and the Post Office, “two businesses that should never have been separated”.
Royal Mail is in the closing stages of a £3.6 billion sale to EP Group, the European conglomerate controlled by Daniel Kretinsky, the Czech billionaire.
• Alan Bates: Post Office is in a poor financial state — don’t burden staff with ownership
The Post Office on Tuesday promised that it would only work with franchise partners with a “clear track record of successfully running Post Office services or similar customer-focused retail”.
The franchise-only model forms part of a cost-cutting overhaul of the Post Office as it seeks to emerge from the devastating Horizon IT scandal where hundreds of sub-postmasters were wrongfully convicted. The Post Office said its plan, which is subject to government funding, would help it to increase postmaster pay by a combined extra £250 million a year by 2030.
In response to the planned sale of WH Smith’s high street stores, the Post Office has said that it was in contact with the retailer and Modella and believed the latter “could look to increase the number of stores that contain Post Offices in the future”.
Jonathan Reynolds, the business secretary, has said that despite the Horizon scandal the Post Office remained an “incredibly important institution in national life” but the “structure of the business model has to change to be sustainable”.
Separately on Tuesday, Gareth Thomas, the Post Office minister, is to announce in parliament the launch of a new, independent, appeals process for eligible postmasters in the Horizon Shortfall Scheme (HSS), the main compensation plan, following criticism.
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