Post offices are again under threat

A report from local MP, Patricia Gibson.

Post offices have been at the heart of communities across Scotland for generations, providing vital financial and communications services and adapting to suit the times.

In the digital age, the Post Office faces considerable challenges and an increasingly uncertain future. While many other nationalised industries and services were sold off by successive UK Governments, the Post Office remains in public ownership. However, the vast majority of branches are operated by franchise partners or sub-postmasters, independent businesspeople often running a post office counter within a retail outlet, such as a newsagent or grocery store.

Despite swathes of branch closures under the last Labour Government, including local branches in Fairlie and Glengarnock, Kilwinning, Saltcoats and Stevenston, post offices have taken up the slack created by the recent exodus of banks from our towns.

As the banks pack up and leave, often taking their cash machines with them, we have repeatedly been told that, alongside the move to online banking, we can always access services at our friendly local post office. However, concerns have grown about the viability of post offices. Postmasters across the country are concerned about the payments they receive for delivering services in their communities.

Post offices once received a core payment but since the Network Transformation Programme very few now receive a fixed element of pay. The total amount paid by Post Office Ltd across the whole network in 2017/18 was 17% lower than in 2013/14, and that’s before adjusting for inflation. Most post offices are now paid commission only for the transactions they carry out.

There is an undeniable need for access to face-to-face banking, yet the fees banks pay to Post Office Ltd to provide this service are far too low. For every £1,000 of cash taken over the counter, Post Office Ltd is paid only 24 pence. In effect, the majority of banking transactions carried out in post offices loses the postmaster money. The remuneration is so poor that many postmasters earn below the minimum wage.

Post Office numbers are at an all-time-low and more than one in five of Scotland’s rural post offices closed in the last 15 years. This threatens the economic well-being and social fabric of communities. In many small towns the local post office is often the last place where a face-to-face service is provided. Whether buying stamps, posting a parcel, paying bills or accessing benefits, the post office is a vital lifeline to many people, particularly the elderly and vulnerable. It is hugely worrying that sub-postmasters are far more likely to state their intention to close in the coming year than other small businesses. Those with such plans overwhelmingly work in deprived areas.

Post Office Ltd is currently renegotiating its deeply unfair contracts with the banking industry. I have raised this at Westminster, calling for the UK Government to ensure our postmasters get a fair and equitable deal. Communities across North Ayrshire, already hit hard by recent bank branch closures, cannot afford to lose the vital services our post offices provide.