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Franchising of Stockton Crown Post Office

Volume 566: debated on Monday 15 July 2013

The Petition of the people of Stockton-on-Tees and surrounding areas,

Declares that the Petitioners totally oppose the franchising of Stockton Crown Post Office and believe the proposal will severely damage the provision of services.

The Petitioners therefore request that the House of Commons urge the Government to call upon the Post Office to withdraw their plans and retain Stockton Crown Post Office.

And the Petitioners remain, etc.—[Presented by Alex Cunningham, Official Report, 11 July 2013; Vol. 566, c. 651 .]


Observations from the Secretary of State for Business, Innovation and Skills:

The Government note the views of the petitioners about the future of Stockton-on-Tees Post Office branch, which is currently directly operated by Post Office Ltd, and is known as a Crown branch.

The Government note that the implementation of the Crown Transformation Programme is an operational matter which is the responsibility of senior management at Post Office Ltd. The Government, as shareholder, do not play any role in decisions relating to individual post office branches. In considering the future provision of Post Office services in Stockton-on-Tees, it is important to note the wider context of Post Office Ltd’s proposals to franchise 70 Crown post offices and to merge or relocate a small number of other Crown branches.

The Government note that the 2010 Spending Review contained a clear commitment to modernising the post office network and safeguarding its future, and allocated a £1.34 billion funding package to provide for significant investment across the post office network. A condition of this funding package requires Post Office Ltd to continue to maintain a network of at least 11,500 branches, to comply fully with the access criteria, and with no programme of branch closures.

The Government note that the 373 branches of the Crown network have incurred heavy and historic losses, totalling £46 million in 2011-12, and a further heavy loss in 2012-13. Eliminating these Crown losses is a key element of Post Office Ltd’s strategy to provide for the long-term sustainable future of the network, and the Government support the business in delivering that strategy.

The Government note that the current losses incurred by the Crown network contribute to around a third of the losses sustained by the network as a whole and this is not sustainable. No business, including the Post Office, can continue with a situation where some of its high street branches cost substantially more to run than they generate in revenues. In the case of the Stockton-on-Tees Crown branch, it costs £1.43 to generate every £1 of income.

The Government note that within its broader strategy for eliminating these unsustainable losses and achieving break even for the Crown network by 2015, Post Office Ltd has identified a group of branches where it sees no prospect of eliminating the losses at a local level under the current operating and cost structure. The precise reasons will vary from location to location but commonly include factors such as high property costs and sub-optimal location to attract the necessary increase in custom and business to make them profitable.

The Government note that Post Office Ltd has however made clear that, under each franchise proposal, the full range of post office services would continue to be available in close proximity to the existing Crown branch; and, in the event that a suitable new retail partner cannot be found, Post Office Ltd has given a commitment that a post office service will be retained within the area. Furthermore, before any changes are made to the existing service provision in Stockton-on-Tees, there will be a six-week local public consultation under the terms of a Code of Practice agreed between the Post Office Ltd and Consumer Focus. The public consultation focuses on specific and detailed proposals for relocating the service provision, including such matters as ease of access, and responses are carefully considered by Post Office Ltd before a final decision is reached.