Q&A: the post office network

Q. What is today's protest about?
The National Federation of SubPostmasters (NFSP), representing the people who run Britain's 14,000 post office branches, is concerned that changes to the delivery of services previously administered by the Post Office, combined with a failure to recognise the social role of post offices, have reduced the post office network to "a critical state".

Q. What has happened to make postmasters concerned?
Between 1999 and 2005 the number of sub post offices in this country fell by more than 20%, from 18,393 to 14,376.

And claims that sub post offices fulfil a social role are undermined by government figures that show that the 800 smallest post offices in the country are now used by an average 16 people a week.

What's more, post offices are haemorrhaging cash. The network incurred losses of £110 million in the year 2004-5 (in contrast to the Royal Mail Group, which registered record £537 million profits), and its £150m yearly government subsidy ends in 2008.

Q. Give some examples of the way things have changed.
The move in recent years away from direct payment of pensions and benefits to card payments has badly hit the income of post offices.

This was offset in turn by the introduction of the Post Office Card Account (POCA), now used by some 3.4 million people. It's estimated that the card has helped Post Office Ltd to retain some of the £400 million worth of transactions that could otherwise have been lost. MORI says the card is responsible for 10% of subpostmasters' pay.

However, the government announced earlier this year that it will not renew its contract to fund the POCA in 2010. The National Federation of SubPostmasters claims this has already prompted a migration by customers away from the card account and into bank accounts.

Another recent blow to post offices was the announcement by the BBC that Post Office Ltd had lost the contract to deliver "over the counter" services for TV licensing. PayPoint took over responsibility for all over the counter TV licence services from July of this year.

Q. Realistically, what are the prospects for post offices?
The NFSP has five main demands. They are -

• An enhanced Post Office Card Account offering a significantly wider range of services.
• A government committee to thoroughly assess the social and economic role of post offices.
• The government and local authorities to give post offices preference in the distribution of government services.
• A definitive statement on the post office network's future.
• A compensation framework for subpostmasters who are forced to close.

Recent government decisions have, by implication, rejected demands one and three. The government has a stated commitment to opening up the UK postal services market to competition, which suggests that it does not necessarily support the post office network in its present shape and size.

And the NFSP's final demand, for closure compensation, implies that even postmasters are resigned to the prospect of continued closures in the foreseeable future.

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