Some 97 per cent of post offices are privately owned and operated so the Government can never introduce an absolute moratorium on post office closures. However the Government's funding package for the post office network, announced in May 2007, includes provision for a subsidy of up to £150 million a year to 2011 to support the social network of non-commercial offices. The Government's funding package and Post Office Ltd's business case are both based on the network, after the present Network Change programme, being sustained at around 11,500 outlets to 2011. The Government continue to view such a network as necessary to provide an appropriate level of national coverage and have no plans for a further closure programme.
The Government are providing, and have secured state aid clearance for, £150 million a year to support the post office network of around 11,500 outlets which will remain after the Network Change programme. There is no financial provision to provide additional funding for a network which is larger than this.
asked Her Majesty's Government:
What value they attach to local post offices serving communities other than through the provision of traditional post office services; and to what extent this value is taken into account when the Post Office reviews the post office network in each area. [HL5798]
The Government fully recognise that the important social and economic role of post offices in the communities they serve can, according to individual circumstances, extend beyond the provision of post office services to the range of associated retail facilities which may be offered alongside post office services. Accordingly in developing its Network Change programme proposals for local consultation, Post Office Ltd has considered a range of socio-economic factors including the impact of a proposal on the local economy.
Royal Mail is facing significant challenges as mail volumes continue to fall due to people and businesses switching to digital media to meet their communication needs. In addition, mail volumes have historically tracked GDP so, as businesses cut their costs, the advertising market is vulnerable to a downturn leading to further volume reductions in mail.
The Independent Review of the Postal Sector led by Richard Hooper will be reporting to Ministers later this year and will provide advice on how best to maintain the universal postal service. The review's initial response to evidence in May stated that the status quo was untenable. Ministers look forward to receiving the review's report but will not speculate on what the independent panel's recommendations might be.