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Post Office Restructuring (Coventry)

Volume 479: debated on Thursday 17 July 2008

The Petition of the Communication Workers Union, Coventry Area Branch,

Declares that they do not agree with the franchise of Hertford Street Crown Post Office in Coventry City Centre. They do not want WH Smith, or any other private company, running this public service, we believe that the Crown Post Office at Hertford Street Coventry should continue to be provided by Post Office Ltd. and should remain at its current location.

The Petitioners therefore request that the House of Commons urges the Government and Post Office Ltd. to withdraw its franchise plans for Hertford Street Crown Post Office.

And the Petitioners remain, etc.—[Presented by Mr. Jim Cunningham, Official Report, 18 December 2007; Vol. 823, c. 469 .] [P000095]

Observations from the Secretary of State for Business, Enterprise and Regulatory Reform:

The future viability of directly managed offices, otherwise known as 'Crown Offices', needs to be addressed in the wider interests of the network as a whole, in view of the major changes and challenges it faces. Post Office Limited's (POL) current policy, which has the Government's support, is to maintain a core network of directly managed offices, whilst continuing to drive efficiencies in an effort to reduce costs and return the business to profitability.

This strategy includes, as recommended in the Performance and Innovation Unit Report on the future of the post office network (a copy of which can be found at: www.berr.gov.uk), the conversion of individual, directly managed offices to franchise or agency status, where suitable opportunities arise. The commercial agreement between POL and WH Smith allows for the franchising of around 70 Crown post offices, which will involve WH Smith introducing a Post Office operation into more of its stores, as it has already done in other parts of the country.

Crown post offices are those that are directly staffed and managed by Post Office Ltd and are around 380 from a network of 13,000 branches—the rest (97%) are 'sub-post offices' operated under contract by agents and franchise chains. The network has always relied on private business for the majority of its outlets. Losses in the Crown post offices have been running at around £70m per year and clearly action has to be taken to reduce these losses. Franchising helps maintain services which could be under threat, due to the large scale of the losses in the Crown network. These losses represent money that could be better used for the benefit of customers and it is absolutely right that POL look to find more cost effective ways of providing the main Post Office service to customers.

Operational matters are, of course, the direct responsibility of POL management, though it is not POL's intention to downgrade any of the branches under its franchise agreements. The franchising will simply mean that the business will be run by another company on its behalf, albeit at a new location nearby. Customers will continue to have access to the same level of Post Office services as they do now. Research has shown that post offices that have run in partnership with franchise partners have proved to be very popular with customers, who very often find that service is actually enhanced, due to new premises, longer opening hours and wider retail offerings. Experience also shows that this allows the Post Office and retail sides of the business to complement each other, increasing footfall and improving financial viability.

Hertford Street Crown Post Office branch was converted on 15 May 2008 and relocated to a nearby WH Smith store.