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Future of the Post Office Network: Government Response to the Committee’s First Report of Session 2019
Second Special Report
‘On 25 October 2019, the Business, Energy end industrial Strategy Committee published its First Report of Session 2019, Future of the Post Ofce Network (HC 247). Due tothe 2019 General Election, the
response from the Goverment was delayed. The Government response was received in March 2020 and is appended below. The Committee's recommendations are in beld type, the Government response
In plain type.
Appendix: Government Response
Introduction
Ts merarandum sets out the Government's response othe Business, Energy and Industrial Strategy Commitee’ report. The Government thanks the Commitee fer Rs conning intrest mn the fture of
the Post Office network and for Its conclusions and recommendations relating to the future ofthe Post Ofice
‘The response is being submitted by the Department for Business, Energy and Industrial Strategy, which sets the policy framework and oversees Post Office Ltd's performance in its operational role.
Drawing on information from Post Office Ltd where appropriate, we have set out below our responses to the Cor ‘conclusions and under the headings by the Report. We
have listed these in the order in which they appear In the Report with our response set out below each of them.
The Structure and Stability of the Post Office Network
2, Though the PO network appears relatively stable tjst over 11,500 branches, this igure masks the fact that up to one In leven branches may be closed at any one time and that Yemporariy’ dosed
‘can mean they are cosed for over two y
Post Office Ltd should publish regular figures to show how much of the existing Post Office network Is currently closed, for how long each Post Office Is closed before It Is re-opened and
provide fal details 1ns €o the reasons for closure. (rergrapn 11)
2. We accept that there Is @ balance to be achieved the of the ‘and the depth ofthe It provides at any one branch. However, we are concerned that after cutting back
te network to 12/00 branches, to many of these branenes are outresch or Mable PO branches Which do hot Provide te ul level of senses over and above Series of General Eonorve terest We
‘question how naiionel and comprehensive the PO network truly is.
that Post Office Led to the per of across the whole Post Office network, to Identity whether service provision
[truly national and comprehensive: (aregrsph 1)
The Government notes the Commitee's concerns about the stably ofthe Post Ofice network and is commited to ensuring Pst Ofc Lid maintains a stable newer s explained nou wten evidence
‘We are confident that the Post Office network is stable, with over 99% of the UK popuiation living within three miles ofa Post Offce, and with {2 required minimum range of core Services of General
Economic Interest (SGEI) Including postal and banking services.
Wit regards to publishing regular igure and metrics eating 1 the status of the Post Offce branch network is regularly
Teported in number of way ncuding Post Ome Li's Annual Network Report, which they publ on ter webste, The Annual Report reports on the size and shape of the network ond ensures the the
network can be tracked overtime. Post Ofc Ld leo provides Giizens Advice with quarterly data which sets out any chenges Inthe network,
‘On the question of temporary closures, we should clarity that temporarily closed branches are not counted within the Post Office network numbers. The reasons for a temporary closure of a branch are
normaly outside the control of Post Office Ltd, such as postmasters retiring, but whenever Post Office Lid need to relocate a branch the Government believes they work hard to restore service to the
{prrmunty a son a possible and consult wit local cmmuntie a seta the princes of community engageriet agreed wih Cans Avie In most ane, Post fice Lid can provide services
{through a branch close by oF, on occasions, set up an outreach service should it be required. Having added over 200,000 weekly opening hours, to both rural and urban branches, through the Network
‘Transformation programme, the Post Oi is delivering increased convenience for communities across the country.
3._ttis important that Post Office Ltd is held property accountable by the Government for Its decisions, whether strategic or operational, and there needs to be consistency inthe criteria applied by
Sovernment Ins decison of whether or nt to intervene. While we welcome the Minister’ Intervention on sub-paymasters’ pay, we ae nt eriely sure why tis s satel ss and other sues such
<ecsions onthe franchising of POs and its ret sateuy arene, when they to have implations forthe vibity ofthe PO network. Al tese decisions have the potential to have a rect impact onthe
health of he PO ‘and should be subject tt
We recommend that the Government undertake an urgent review of Its. Post Office Ltd to. and pr 2 clear: of how It will do 80 In the
future: This should examine how all Pst Office Ltd's Gecisfons; operational or strategie are the ‘and lity of the Post Office (Paragraph
23)
The Government agrees Post Ofc Ld should be accountable for Is decsons,BEIS wil soon publsh a Fremework Document to gover the relationship, This sets out responses and clr
‘governance arrangements between Government
‘Within tis framework, Post Office Ltd has substantial day-to-day operational independence from Government. This enables It to recruit and develop the commercial, operational and organisational
‘capabilties required to perform effectively in a range of commercial activites.
‘The, Department for Busines, Energy and Industrial Strategy (BEIS), however, sets she overall policy and objectives forthe Post Ofc has a dedicated Shareholder Policy Sponsor to lead on all
Pos Gee Lid veld busines forthe Deprtnent 24 Board, on nich UX Goverment investments (URI sits as te Sharehaler Representative, is tasked to calver EIS: objectives Bs
wellasenure tne long-term success ofthe company. Tis enables Governme, va UKG,t have Vishy ef and chalenge Post ice L's major operational and seegle decsone fo ensure tne
[ustainabity ofthe network is maintained and that Good corporate governance and nancial stewardship practices are upheld. We have regular Gecussions withthe Post Ofce at senior levels, both
Ministertally and with officials,
Ti Government therefore has robust mechantams for heldng the Pest Ofc to eecout, wth Mister approve equed fr areas inching board appointments, remuneration and Post Ofice Lis
strategic plan.
4. We regret the Minister has decided not to meet with the Communication Workers Union (CWU), who represent a number of sub-postmasters. We see no reason why the Minister and Post Office Ltd
‘cannot Involve the CWU in discussions on behalf of those sub-postmasters they represent.
We recommend that the Minister Invite the Workers Union to par Jn the working group on. pay with effect. (Paragraph 26)
Tas Goverment is deterrind to anre potas reresrtatves can chalenge bth Goverment nd Post Oe id on kn sues, Hann to prove the Pot Oe tna and ving
development of products and services which are more atracive and relevant to Gommuntues. For example, te Government and Post Offi Lid regularly attend Citzens Advicn's Post Ofes Advisory Group,
fuerte forum slo etiended by GWU end ober key stakeholders, wich gles ttndees te opportu to chllenpe en alse conor. ona mie onge of sess
‘The Working Group, a quarterly meeting chaired by the Minister for Postal Affairs and attended by HMG, Post Office Ltd and the National Federation for Sub-Postmasters (NFSP), was set up in 2019 to
provide an additional forum for the Government an Post Office Ltd to be challenged on key issues, such as postmaster remuneration.
Ths NFSP represent over 8,000 postmacters operating ove 9,00 branches, a sgnifcantiy higher representation of postmacters than any other organisation; The NESP also as a track record of challenging
Fost offica Li on porta esc, Induding te comprasencive review of posmastarrehunaravon which nae cared out over Sumer 2019 ond tre estasishent of te eva panel for Post
Impacted by new branch epenins tel are. Taso provided input and feack to Post Ole L2d onthe needs of Pestrasters during the fanclang programme. While the Coverment believes the
INFSP effectively challenges Post Office Ltd where necessary, we aso recognise the need forthe relationship between POL and Postmasters to improve so that both can prosper.
5. Anational Post Office network provides an essential public service. It needs Government subsidy to do this. If the Network Subsidy Payment, which supports the operating costs of the PO network, Is
vitharonn after 2021, we are concerned tat te PO and many subpostasters and retalers who run POs wil not be able fil he gop in funding with oer revenues, Many sb-pastmasters are alrecy
‘Struggling and thinking of leaving thelr POs and the removal of £50 malin in subsidies could tp many over the edge. ‘convince some retallers and retall chains who Rost POs thet Its no fonger
‘fable Ths would have @ damaging effec on the BO network. Tt shouldbe avoldcé ata costs, We welcome te fc: tat the Minster le ling the eve forte sunsidy os porto te next spending Review
With the date for the Spending Review being put back until 2020, we recommend that the urgently ‘that fe will extend the ry 2024
to give long term certainty for sub-postmasters and retallers. Paragraph 31)
Ths, government has commited to safeguarding the Pst Office network and protecting rural services, and with over £2 billion of Government investment snes 2010 the network sa Rs mast stable in
decades with over 11,600 branches.
In the financial year 2016/17 Post Office Ltd made £13 proft, the fist profit in 16 years; this increased to £45m in 2017/18 and £60m in 2018/19. This Is forecasted to continue to increase with the new
Banking Framework coming Into force next financial year.
Government subsidy wil reduce to £50m in 2020/21. This Is an annual saving to the taxpayer of £365m from its peak in 2013/14 and enables the funds to be distributed elsewhere in the fiscal framework.
‘The reduction in Government subsidy since 2010 reflects Post Office Ltt’ strengthened financial postion and progress towards commercial self-sustainabilty.
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‘The current Funding Agreement runs until the end of the 2020/21 financial year, and the Government remains committed to ensuring the long-term sustainability of the network and will continue working
with Post Office Ltd to achleve this. Future subsidy requlrements wil be considered within the Government's cal framework.
The Network Transformation Programme
‘6. While Post Office Ltd have met the access targets that the Government have set them, we have reservations about what is actually being delivered. Being close to a PO that Is only open for a few hours @
‘Week and that does not offer the full level of services may not actually beneft customers very much. We also note that progress on disabled access Is ‘patchy, which also calls Into question whether
‘geographic proximity Ison its own a good measure of the accessibility robusiness and comprehensiveness of the PO network.
we that the produce additional which the level of ‘and level of access: ‘across the Post Office network. (Parograph 38)
‘Accessibilty to services for everyone is atthe core of Post Office Li's socal purpose, which is why the Government requires Post Office Ltd to maintain a network of over 11,500 branches across the United
Kingdom dd for tis network to provide aces oo minum range of Core Secs of Genera Earemic Interest (SEH) ncng postal and barking sercs, a et ut in the 2018 Enrustme eter
In the response to ation three, UKGI, the St Rep Post Office Ltd's obligation to maintain this branch network that meets nationwide access criteria
Pot ‘elves a minimum range of services The Government recognises that some Fost Offices are open ona part-time basis, but this reflect the commer realties and levels of customer demand in those
‘Wide coverage across the UK alms to ensure that the Post Office is accessible for al, Including for specific groups such as the eldery, disadvantaged, those on low Incomes and those with disabilities. The
Postal Services Act 2011 (Section 11) requires reporting on Post Office network access for a number of user groups over and above the established Government Access Criteria. These include Individuals with
disables, Individuals over the age of 65, disadvantaged individuals, those on low incomes and small businesses,
‘tzens advice also regulary monitors dsabled access at Post ces and engages with Government and Post Oe Ltd to identity gaps n lsbled access at Post Ofes, They note n thelr 2038 reprt on
‘accessibily the percentage of disabled customers who Use the Post Office more tan once @ week s higher thas the pereerkage of non-dsabled customers, and as such Ils should be 8
priory for Government and Post Oc Lid to make sure the network eaccesebe fra
Post Office Ltd have shown that they are committed to ensuring accessibilty to Post Offices forall demographics by consistently exceedin
‘rari, for 2010/19 over 90% of vidi over 65, and over 95% of aadvantagedindvidal,nchduals wt al
‘the geographical access criteria requirements. For
tes and inMgule with incomes ctOk were within 1 le oa Post Offs branch.
7,4 Network Transformation Pogrorme (NTP) has simultaneous reduced Government subsides for funnng the PO, whl also resulting nthe PO posting profs forthe as tree years. The Post Oce
ita nas met dasic Government access criteria anc the PO network has stabilised at Just over 11,500 branches. However, this has been delivered at cost. First, 10% ofthe 11,500 branches are outreach and
mobile POs which offer a reduced level of service to permanent branches, white csabled access is ‘patchy: Second, the theory of modernising POs to provide retall whitespace to generate Income to il the
‘9ap left behind by declining Government subsidies and fees for Government transactions, does not appear to be delivering for many sub-postmasters, If sub-postmasters begin to leave their POs in large
rhumbers because they feel they cannot make a living there is a danger that the overall PO profits being currently delivered wil either not be sustainable or wil be delivered on the back of a hollowed-out PO
network. tis questionable whether profits delivered while reducing access to a vital public Service can be viewed as a success.
‘8. Its clear tous that too many sub-postmasters are struggling to earn a living. It Is also unacceptable that many sub-postmasters feel unable to take holidays because they cannot afford to employ staff
to cover them. If large numbers of sub-postmasters decide to give up thelr POs this wil camage the PO network and stress customers around the country who may lose access not just to PO services, but to
‘everyday banking services or even, in some communities, any retal faciities. In many cases the theory that increased footfall and retall would replace Government subsidies and dedining fees for providing
‘Government services was overly optimistic. This approach for many sub-postmasters isnot offering them a viable livellhood. We suggest that the Government need to consider the wider social goals, such as
social and economic inclusion, that sub-postmasters are providing n different locations across the country.
‘The Minister and Post Office Ltd are We ‘that they take into. the vital social role that sub-postmasters are fulfilling and the
.g2p they will leave behind If they begin to leave the pr We also that the ‘review they have the right ‘retail
‘and fees for Post Office and (Paragraph 55)
Tne Government apres that postmasters have acral to payin the delivery of Pst Ofc serves to consumers ass the UK, ncuing fancal and sacl inclusion, particulary for more vunerble
remote customers. The Government also agrees that it needs to be attractive to run a Post Office. That is why we support the Improvements that Post Office Ltd has made to the remuneration of
Dostmasters and the steps being takes to improve relationships, such os the Introduction of Area Managers.
{In 2020/21 postmasters will see a 10% increase year on year compared to 2018/19. The increase Is a mixture of fixed and variable remuneration, Including increased rates for cash deposits through the
renegotiated Banking Framework agreement.
‘The Government recognises that changing consumer behaviour presents a significant challenge for small retallers, including many postmasters up and down the country. Post Office Ltd continue to develop
ew products to provide customers and Government with a competitive offering that considers socal purpose, what customers need and what delivers value for money for postmasters.
‘9. Its imperative that sub-postmasters recelve proper support and training If they are to provide a high level of service to the public. It ls troubling to hear that sub-postmasters are sometimes expected
‘to pay for their own training when they are providing PO services, and that the support they do receive Is often inadequete. It should not be down to sub-postmasters’ representatives to provide such
training; this is clearly a Post Office Ld responsibilty. We welcome the Ministers and Post Office Lid's commitment to look at sub-postmasters’ training needs, especially In areas such as secur.
we that Post Office Ltd they have Identified in ‘and how they intend them. We also
‘pesmmand tht Pot Ofc Ld reports on our bat hom much ic inveing iach unig aed what tls from: ‘ond how fee
Paragraph 59)
‘The Government agrees that staff traning is vitally Important, especially as the demand for more complex transactions increases. Post Office Lid have recently undertaken a review of pastmaster training,
Identifying areas for improvement and highlighting the need to simplify processes and make life easier for postmaster
Aga resltof tis review, the Post Ofte are plaig greater focus on practical valning fr pestmasters nding using terminals, delvering gh quay customer service and day-to-day operation of ost
Post of ‘expanded the number of opportunities for on-site training which has allowed postmasters to experience a wide range of transactions and customer interactions. From January
‘oto post omos Ltd wil streaming mes and wort ais for spec products and pacerees for new sarters and exoing posters: These emacs wit enable posasiers to View and select
learning solutions to meet their on-going training and support needs.
Post Office Ltd is investing in the redesign of it training programme to ensure best practice. This wil include training for the established network as well ax new starters, Post Office Ltd's Area Managers and
Business Suppor: team will be able to develop training In all branches.
dacs uc the way ot Ofte Ld devlos tek vanigg pewammes and he replay eveuae te ling methods, covering he aut ofthe ies, mata and beans of lng
‘The satisfaction scores Post Oc Led have rece Taniin the high 90% satisfection area. Post Ofce Lx Eto contin to Sek nd fespond to feedback onal Rs ating.
Consultations on Post Office Closures and Post Office Franchising
10._Itls clear from the evidence we received and from the experience of many MPs and their constituents who have taken part in PO consultations that there are high levels of frustration with how Crown,
oO dosures are belng rn. the instar conceded tht communist wth local communities at mes had betn poor and POST OFFICE LTD accept that mists have been made. We sugges that the man
‘source of frustration Is related to the belie thatthe closure ofa local PO, or its movement into another building as part ofa franchise, can be stopped. In the vast majority of cases this is nt the case,
‘Consultations appear tobe more around feedback on a decision that has already been made, Such consuaone run the danger of camaging the PO brand and wasting people's time
fo fice uns anchidingprgrare tpt fs plang nena estaba nabver: ond hae aay read nthe mode of eva 7-500 bench hgh the Net enafrmetion pure,
large, muti
retailer or an independent postmaster—who beneft from increased footfall and income from Post Office product.
Post Office Lid is aware ofthe needs of Its customers and the local community when franchising a Crown Post Office. In terms of qualty of service and access arrangements, Citizens Advice concluded In
thelr written evidence to the Select Committee in May 2019 that franchised Crown Post Offices are performing In line with or better than Directly Managed Branches (OMB),
‘All ofthe DMB consultations that have been undertaken to date have been in conjunction with Citizens Advice who have reviewed Post Office Ltd processes and results from each of the consultations taken
place. This arrangement will continue going forward.
The Government has been keen tat Post Office Lid gives more clay to communities a to the speci sues they ae belng consulted on, In summer 2019, Post
offsite franc! ‘and have made changes es 8 result, Including improvements to thelr online Consultation Hub, providing more Visuals of changes
Sore materials Pot Offs Lid are consulting wit Cizensadves on these pln, which we Unk ae welcome:
Office Ld reviewed ther strategy for the
i information or customers, and updated I
ie ahve the cave hat ome peope wl not ogre wh the rloeton of ar rware Pos Oc, tees changes
franchisi
to help customers better understand the objectives and benefits of offsite DMB
411. While there appears to be a mixed picture In terms of service standards In franchised Crown Post Offices, the Issue of dabled access isa cause for concern. Citizens Advice has noted that across the
‘while PO network access is “patchy” and ft appears that cisabled access to POs in some WH Smith stores may not be as good as it should be.
we ‘that Post Office Led access nal! ICrown Post Offices and: that an Equality ts out and for all
future franchises of Crown Post Offices. (Paragraph 70)
‘The Government understands the Importance of adequate accessibility inside cus and CCizens Advice's: around ‘access. When 2 branch, Post
Office Le aware ofthe needs ofthe people trey Sarvs Incding elder and deabled mernses of the Community. Wiss working wth ew partners Post Offes Lid caries out accecrbty sececonents on
‘customer access both into and within any proposed franchised branch, to ensure that the premises meet Post Office Ltd's own accessibility standards and all applicable legislation. This includes ensuring that
‘there is sufficient space for customers, Including wheelchair users, to move around the store and reach the Post Office area without hindrance, and that the entrance areas and shopping aisles are kept free
of obstructions.
Tis Government has bean Informed by Pst Ofce Lt that he desan specication f fost Offs branches all comply wih nustry standart, ncn the post oe counter, ning evel, HN pads and
hearing loops, as well as ensuring adequate space fer people walting to be served. All of Post Office Li's branches are subject to auditing at any point and accessblity Is a key part of these a
12, The PO should dispose ofits un-needed buildings in a socially and environmentally responsible manner.
‘The optimum solution would be to sell no-longer used buildings to raise money that can be ploughed back into the Post Office Network. However, where this is not possible, we
‘recommend that Post Office Ltd should work with local communities to repurpose buildings x0 that they do not remain empty for long periods of time. We also recommend that Post
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Office Ltd surveys Its real estate and establishes how many of Its buildings are empty and for how long and what costs are being for such pr and thelr
Impact on the local environment. Such information should be published. Poraqaph 73)
Te Government understands the impacts vacnt property can hve onthe loa conmunky and environment, We ar aware tht Pot Oe Ltd have measures in place to engure aca Port Of
jes are re-oceupled as or example, all vacant properties ‘cross 2 number of ‘to maximise exposure to the Investment market and all proposals are
managed and cansidered on their merts, Where appropriate, Post MoS Lhd also meet wit local councls in a numberof areas to see haw they can work together to use empty units and find stable,
Investors for sales or letings..
With regard to the impact of vacant properties onthe business, Post Ofc Ld olds a database of al vacant properties as part ofthe management ofthe Post Oe estate. The database Includes the lease
type, date of vacation and vacant running costs In order to understand the impact on averall business performance. This is monitored by Post Office d's property team and is reported as part of the
‘aril reporting In thelr annual report.
‘The Government also announced In its Manifesto that i will be making it easier for community groups to make bids for assets of community value, such as Post Offices, when the buldings are at risk or
become vacant. fund of £150 million wll be avaliable for this purpose, glving groups the opportunity to make bids for designated bulldings in thelr area, which wil have a postive Impact on the local
environment of towns and vilages across the country.
23, dears and deapporte nat Crown POs nave been Manche to 3 company hc has not dane up ote Prompt Payment Code and whi ses 90-7
fad for smal businesses and compan wnich are Should seta ae aos worry tak such pracices rise questons about te nancial health of anchses that
fe runing many PO branches across the UK}
We recommend that the Minister explains whet action she will take If WH Smith use 90-day, to sign the Code. we
recommend that hiture Post OMice Fenchices are net awarded to partners that are not signed upto the Prompt Payment Code and who ue excessive payment ferme, (orograph 75)
\Wasmti atest report shows thatthe pay 4% ofthe voices within the day target set by the Prompt Payment Code, As forthe payment of te remaining 16% of il, these reflect commercial
‘agreements entered with suppliers that work for both parties. With regards to WH Smith not belng a signatory to the Prompt Payment Cade, the Code is a voluntary one and there may be @ number of
Tossa wy comparleschocee nat to become & signatory I i fot the ol ofthe Government tacoma xfpanies bo sgh up vo what & voluntary nave, butte Governertarientadoes the
‘Committee's concerns around franchise partners who are not signed up to the voluntary Prompt Payment Code. Post Office Ltd, @ signatory ofthe Prompt Payment Code, is responsible forthe terms it agrees
‘with franchise partners, inclucing whether suppliers are signed to the Prompt Payment Code.
The Late Payment of Commercial Debs (Interest) Act 1998, sets out that payment terms betwee inesses should not exceed 60 days, unless they are fair to both parties. Suppliers can also claim
statutory eb recovery cst, on mwlees ot pad tin he apres perad or (Fo peal agreed) win 30 days leo exebshes mesa 90-cby payment er or ansacvons wh
public authortis:
‘The Payment Practices Reporting Duty apples to large companies and requires them to report every 6 months on thelr payment practices. These reports can be Viewed publidly on the gov.uk website.
14. Tels deeply disappointing that have been to.a company that is regarded as one of the worst two high street retallers and which admits that they are not investing in all
oftheir high street stores and in some cases are not paying rent on some of those stores.
We recommend that the Post Office and the ‘ensure that when for Post Offices are. that they take ofa how a
[partner is regarded by ‘and the of firms hosting Pest Offices. The risk is that. ign street flare takes
Post Offices with It (Paragraph 77)
‘While the decision of commercial partners is a responsibilty for Post Office Ltd, we can confirm that they have robust processes In place when choosing whom to partner with. This applies to all potential
‘ranchising partners, whether they are an Independent business owner or a large retaller.
‘Throughout the process of bringing a new franchise partner on board, Post Office Lid undertake a significant and extensive due dligence and vetting programme with every potential partner. This process
Includes completing personal and financial checks on the Individual applicant or applicants and applicant company, assessment of the financial viability of the franchisees’ proposition Including the business
plan and commitment to provide customer service with trained staft
‘As Post Office Ltd has become more commercially sustainable as a business, they have started to work with new partners to allow them to open branches in communities for longer hours and to better serve
‘thelr customers’ needs.
415. Its deeply concerning that former Crown PO workers who have been TUPE'd to WH Smith to run PO services have been denied the right to be represented by thelr previous unfon, the CWU, for,
collective bargaining purposes. We are equaly concerned that such workers, along with other WH Sith staff who workin retall stores, can only be represented by the Retall Sook Association, an
Independent body which Is not affilated to the TUG. It ls extremely disappointing that Post Office Ltd did not discuss ths Issue with WH Smith when agreeing the franchising of Crown POs,
We recommend that the Minister looks at this issue and an Of ety arg goreed that didnot addres the collective bargaining rights of workers,
Who were being TUPE'd from a publle sector body to a private sector partner. This should an. ‘of the role of BEIS In
raised any. ‘over the collective rights of these (Paragraph 79)
‘The Government has been made aware that WHSmith offer members of staf who were transferred from Directly Managed Branches (OMBSs) to franchised Post Offices located in WHSmith transferred thelr
collective bargaining rights under TUPE, and that this process ls managed by Post Office Lid.
‘with regards to BEIS’ role, as explained In a letter trom Kelly Tolhurs, the former Minister for Small 5, to the BEIS Select Co Chair Rachel Reeves, the TUPE
Regultone 2006 (reg 6) eter to stuatone where the transfered gruping of employees retains en Wery separate em te fet of te orgseaton to which they nave been tansared: in auch cacy an
Independent trade union recognised by thelr previous employer must stl be recognised by their new employers. This obligation does not automatically epply where the transferred grouping does not retain a
‘separate identity, for example I it has been merged into the new employer. However, this does not prevent the new and previous employers discussing collective representation Issues before the merger. It
‘also does not prevent the new employer recognising a trade union for collective bargaining purposes. Where the new employer refuses to recognise a trade union voluntarily, an independent union is free to
‘opt the Central bration Committe eek stattry union recagien forte transfered were. Statutory recognition wil be granted eoleng as inion can demontrate major support fr
Uhlon recog! re Wor
TD Raguatons donot make ay statement about wheter a rade non should be aflated to the TUC. As TUPE rights are s-anfored trough the employment buna stam, we donot maain a
‘central record of TUPE
16._Ttis deeply regrettable that Crown PO staff are being replaced by lower pald staf starting on the National Living Wage, which could be as low as £6.15 for those aged between 16 and 18 years of age.
‘At tne very least. we believe that al staff shoul be pald the rel Lving Wage, an especially these running PO services, Theres danger thet By baying of Crown PO staff and paying lower wages for new
‘Staff fo replace them, that customers will not be able to rely on the same levels of sled and experienced staff they would have Ina former Crown
We recommend that Post Office Ltd and the Government ensure that staff working in franchised Crown Post Offices are paid at the very least the real Living Wage and that new staff in
franchised Crown Post Offices have the same levels of skills and training. (Paragreph 82)
‘The Government recognises the importance of the National Living Wage (NLW), which is why from 1 April 2020 the NLW for over 25s will Increase by 6.2% to £8.72. This means thet the annual earnings of a
fulltime worker on the NLW will have increased by nearly £3,700 since the year the policy was announced.
Post Office Lta's commercial partners and postmasters that run Post Offices are responsible forthe pay and other employment conditions for thelr staff inthe stores that provide Post Office services, whether
that be @ large former Directly Managed Brench franchised to a high street multiple store operator ora small community post office run by an Independent postmaster. However, Its contractual
requirement of operators to ensure branches are run in accordance with all applicable laws and regulations, including wage requirements.
IWHismith have confirmed in @ recent leter to the committee that they pay al staff aver the a
‘environment.
(of 25 atleast the National Living wage and offer competitive pay rates in what is a very challenging retail
Wit regards to winng and support for postmaster, Pest Ofc Ltd work hard to continually improve waning 2nd ensure al tek staf, wheter at dey managed branches or rancid branches,
recelve high qualfty taining and they have toid us that thelr arrangements with retallers ensure that stringent high standards In relation to training must be met. As mentioned previously, Post Office Ltd
have recently undertaken a comprehensive review of postmaster training and committed to further Investment In training and support for postmaster
47, Bearing nmin he woatity of igh ret trcng congtons andthe fet hat ome retalers ara about revenues rom proving PO. there is @ real potential for a retall
rune hundreds of Ps exing i parinerhp wh Pst Oc i I tis happened R would be devastating for many communis acrzs the Uk, espe or vulneabe groupe who depend on
Bier local Po. We found Post offec Lid snd the Milcars explanation of how such a sesrare woud be managed uncanvincog In tors oe major real gore buy se we have seen recently,
happen at short notice and with ite warning,
that Post Office Ltd its ey plans for with the fallure oF (of a major retall This would give that the Post office
1s not to such an ity. (Peragranh 85)
nots the Committee's concerns about the potential impacto alin retll partner on the post oie network, However, we are convinced thatthe post ofce network has demonstrated
‘abit, induaing in the franchised estate, and we ere concent that Pos Otis Led have conkngency plans place co ensure the network remains Sab
From our discussions with Post Office Ltd about thelr contingency plans, we understand that Post Office Ld has regular reviews with its partners to check performance levels, business issues and financ!
stablity and sustainability. In addition, where instability or risk is Identified, Post Office Ltd have a process which includes a branch by branch assessment of the partner estate with prioritisation of
‘contingency planning for vulnerable customers and best solution mapping recommendations.
‘An grample of when Post Ofice Ld have put these measures into practice wasn March 2018, when Conivaity confrmed thir tet to appoint admiisrators folowing 2 fale attempt te race a france
package to secure the business overal ice Lta worked hard with the administrators and the new retal partner to enable the Post Office part of tne business to continue throughout the ‘ar
Process and managed to secure post office services at all sites going forward.
Post Office delivery of Government Services and widening the Commercii
Office.
18. Over the last 25 years there has been a drastic decine in Government services offered through the PO network, reducing footfall and retall opportunities, while cutting Income fr providing such
Sepcs. I has alo meant thatthe vlperabe and hese who de not have olne access to Goverment serves ae often dered face tface open via, We appreciate that BEIS and the Post Offs
Ltd are lsising with each other and other departments over making Greater use of the network. However, this plecemeal approach appears to signify @ retreat from making the PO a Yront office’ for
‘Government services and ighores the potential for online cnannels to compliment face-to-face services.
and Community Reach of the Post
We that the 2
Office for "and hard-to-reach
Post Office Ltd has an important role to play in ensuring people can access Government services in the ways that best sult their needs. They are also wellplaced to bid for and win important contracts with
‘the unmatched geographic reach of the network and its Key role in the heart of communities. This is why Post Office Lid is stl the leading provider of counter-besed Government services in the UK, and in,
‘and the role that face-to-face provision can play through the Post
review of how It te the
‘ino do not have onlioe scsae:(oresraph 32)
POL00363161
POL00363161
2013 won a cross-G Which allows all Go Depar and their Executive Agencies to contract withthe Post Office easily and at an affordable rate.
Its of course the case that people increasingly prefer to access Government services online, and while this has an impact on Post Offices, Post Office Ltd sil recognises the need for counter-based
‘Government services and stil offers 2 wide range of Government services to people that want them.
BEIS continues to work closely with the Post Office and Government Departments to scope out opportunities for further competition amongst suppliers. The Department is seeking to deliver Government
‘services on a commercial basis where the best value for money can be secured. This is compliant with State Aid requirements and procurement rules.
4, There ig danger thatthe PO's exclusive contractual relationship wth Royo al could Begin to restricts ably to maximise revenue from other commercial partners. The current inablty ofthe PO to
‘parcels from other carvers Is also unsatisfactory for customers if they need to travel to another village or town to collect I.
we commend that a the Government and Post Ofc Lid loa a the ost Oe’ contractuaIrelatlonshlp with Royal Mal, which ends In January 202%, revs whether ts
‘would better mest the needs of Its Is r, that any parcel delivery
{atthe Pt ce work with dlr high ety sence ad prc re nied up ote Livng Wage Foundation, recognise trade unions and have a good record of paying thelr
‘on time and not using ‘and Post Office Ltd ensure that any new contract between the Post Office and Royal Mail
is Post Office Ltd and the 4 snouid ensure thot sey for: (Paragraph 96)
Post Office Ld is inthe proceso renegotiating thelr contract with Royal wal As the Committe will appreciate, the contract with Roy! Mal sa major plo the Past Ofce's business model. Over the
{oming months, ris essendal thatthe Goverment slows the Post OMe te full commercal freedom to conduct these sensave negetinvone as approprate fr tir business plan and ong erm tates.
Utimatay, aeciing» good agreement In these renegotnons wil support the Past Ofiarsjurmey fo commer sutainaity ands abity to continue vesting nthe etwor ne neerest of
postmasters, local communities and businesses.
20._ The new agreement signed between the PO and the Bank of Ireland opens up the possibilty of expanded banking services and new partnerships that can help dellver them. The PO should make the
‘most of these opportunities to cement banking services and products within the PO network. This is even more important now that Barclays Bark has punched a hole in the new banicng framework
‘Sgreement thatthe PO has signed with the other major banks. We look forward to the PO bringing forward these new services and products In the coming months.
We also. ‘and and of jobs In our local ‘should be
for pr these new and the ry ‘and support to deliver them to customers. Post Office Ltd should set challenging targets on
‘eating thase objectives. I these new ‘deliver these objectives, we that the Post Office actively the ‘of a Post Office Bank and the
partnerships cannot
‘necessary legislative changes to establish one. (Paragraph 105)
22. “The decision by Barcays Bank to stop ts customers withdrowing cash trom POs rom January 2020 gl retrograde step whic wl hurt Rs verable customers in both urban and rural ares,
‘threaten the comprehensiveness of the PO network and reduce revenue for the PO and lis sub-postmasters, The measures Ga ;nnounced, such as freezing Its bank closures, after years of
‘tharewing fis presence rom oa communes Ha boost large profs, wil no ornpereae ors partal mtnrewal rom he new banking ogretnet wih te PO.
We cai 0 rethink and reverse this We shal follow up on this and. about thelr ‘and hold them regarding
thelr social responslbttes. (Paragraph 119) °
‘The Government recognises thet Post Office Lid is providing a vital service to local communities by providing essential banking services to businesses and throughout thelr network, particulary in
the conte of bank bench doses, on the Goverment sin il support ofthe Banking remewor agreement, We an recaghise the mpotant re postesers ayn Gevering these sees 8 gh
standard and welcome the Increase in rates postmasters are now receiving for cash deposits as part ofthe renegotiated Banking Framework agreement
‘The Government is pleased that on 24 October 2019 Barclays publicly reversed thelr Initial decision to opt out of cash withdrawals under the renegetiated Banking Framework agreement, after significant
‘encouragement for the bank to reconsider. This decision will ensure that customers across the UK, particularly those who are vulnerable and in rural locations, have continued aecess to essertial banking
services.
{In addition tothe everyday benking services offered through the Banking Framework agreement, Post Office Ltd Is committed to looking for new ways to provide better services to businesses and
communes, ncudng rough thar agreement withthe Bank of Ieand, The products and services proved trough tis agreement ar dened to ener acest fra sich =the savings
range which offers a low toensure ¥, and lending products aimed at marginalised groups, such as mortgages specifically for fist time buyers who may be
Struggling to save fora depost.
22._ A broad conversation between Government, the Post Office Ltd and civl society Is required to evaluate the role of POs as part of the glue that helps keeps communities together, and how that role can
best be supported and paid for If fees and revenues alone are not enough to resource them.
We that the Go the wider: ‘role of Post Offices, to, Of the rural ‘last shop in the village’ and explores.
‘the Post Office can help deliver its wider social ‘such as on social ‘and mental health they be In rural or urban settings. (Paragraph 119)
We further recommend thatthe Government explores how the Post Office network and individual Post Ofices can best serve as community hubs, working with other community
‘and costs, the benefits of riven by such an Post offices: ‘share pr ‘with local libraries and work with
the I the Full ‘of pubic: ways to poo! ‘and deliver pubic
(Paragraph 120)
‘The Government acknowledges that serving communities is atthe very heart of the Post Office's socal purpose and is committed to maintaining Post Office presence in local areas.
‘We fully support the wider community role thet Post Offices deliver to rural areas. That is why, since 2010, Post Office Ltd has awarded around 3,000 rural post offices ‘community status’ as the last shops in
their vilage and supported them by Government subsidy to ensure they can continue serving their communities. Furthermore, Post Office Ltd has recently lainched the Community Branch Development
‘Scheme which offers Investment for Community Branch postmasters to support the growth of thelr Post Ofice business and help to underpin the long-term viabllty of thelr business. The Government
remains committed to ensuring a long-term, sustainable future for the Post Office network and are working with Post Office Ltd and postmasters to achieve this beyond 2020.
‘Additionally, since April 2023 the Government has provided over £1m to support Pub is The Hub to deliver almost 200 pub diversification projects, including opening or relocating a Post Office within a pub,
Many pubs, such as the Royal Oak in Bere Regis, Dorset and the Angler's Rest in Bamford, Derbyshire, can today boast of thelr village post offices operating successfully from within thelr community pub.
The Post ofce has been athe forefront of sucessful community hub models in leans across the county, co-octing with ater publ services, such a ibrar, to ct the total cst of running services
Independenty, whist increasing accessbilty for vulnerable groups and driving footfall. BEIS is working with other go departments to where further cok ‘with public services such
{35 Llbraries (DCMS) and employment support (DWP) can be established, to deliver on wider government objectives.
Furthermore, in its 2018 strategy for tackling loneliness, the Government highlighted the Importance of local infrastructure that empowers social connections and networks. As an everyday service and
‘organisation that people engage with in communities across the UK, we recognise the important role the Post Office plays in providing face to face services to prevent loneliness.
‘The Government Is also supporting communities who want to secure the Post Office n thelr area as part of a community shop, as a community hub or other asset. The Government and the Post Office have
recently committed to making the setting up and running of community owned shops, with a Post Office branch, as straightforward as possible and this has led to @ growing network of community run shops
‘and pubs offering Post Ofice services across the UK. Furthermore, BEIS Is working with the Ministry for Housing, Communities and Local Government (MHCLG), whose place-based inftative ives
‘communities the opportunity to protect and bid Yor assets of commmurity Value through 8 registration scheme, slong with exploring options to deliver a £150m communkty ewnership fund, bath of which will
Include Post offices.
< Committee information
Published: 2 June 2020