Lib Dem Malcolm Bruce MP Comments On DTI Admission That Urban PO Closures Are Flawed

12.00.00am GMT Thu 5th Feb 2004

The Urban Reinvention Scheme for post office closures is flawed, according to a Department for Trade and Industry statement today.

Trade Minister, Stephen Timms MP admitted that, in many cases, the consultation process for closures had not been dealt with appropriately or with sufficient sensitivity.

Commenting on the statement, Malcolm Bruce MP, Liberal Democrat Shadow DTI

Secretary said: "It has taken 14 months for the Government to finally admit the closure programme is a total fiasco, with not a shred of strategic forethought."

"Local authorities who were spending government money on urban development for their areas, suddenly found out that the jewel in the crown of their community was destined for closure, with no prior notice to them."

"Hefty compensation packages of up to £67,000 have been used to lure postmasters out of the sector. And who can blame them, when the alternative is to stay in business and watch your income eroded by the automatic credit transfer."

"The improvements outlined in the statement today should make the process fairer in future consultations, but what about the 680 post offices that have already closed?"

"Having acknowledged that the urban closure is a fiasco, the DTI must now begin a review of those 680 closures, and take appropriate steps where necessary."

"The Liberal Democrats still have significant concerns about the future of the British post office network. Through Automatic Credit Transfer, the Government has effectively dismantled the postmasters' ability to make a decent living."

"It is no wonder then that rural post offices continue to close, despite Government assurances that they will receive help to stay open."

ENDS

Notes to Editors;

• The closure programme began in November 2002 and was originally scheduled to last three years. The Government recently announced the programme would have to be completed by December this year.

• A third of the urban network is to close, meaning approximately 3,000 post offices.

• The funding package for the Urban Reinvention Scheme amounts to £210million. £180 million is for compensation for Sub Postmasters if they close their business, £30 million is set aside for matched funding grants of up to £10,000 for the remaining post offices to upgrade their businesses.

• Subpostmasters are being offered on average £65k in compensation if they close their business. This is often in excess of the commercial value of the business. The Watchdog PostWatch claim the result is that offices that could and should remain open do not do so because of the generous and inflexible compensation package.

• The improvements in the consultation arrangements for the post office urban reinvention network were announced today by Stephen Timms.

Headline changes include:

• Post Office Limited will advise MPs and local authorities as soon as possible of the remaining timetable for commencing consultations on plans for their area.

• Local authorities will be invited to provide relevant information, in advance, on infrastructure and regeneration projects to assist Post Office Limited in the preparation of area plans.

• When preparing an area plan, Post Office Limited will achieve a balance between sub-postmasters volunteering to leave the network, those offices which are not viable and the need for relocations and new openings.

• Post Office Limited will advise MPs and members of the devolved administrations on a strictly confidential basis of proposals, including the overall rationale for the proposed area plan, one week before they are put out to public consultation.

• Public consultation will be on the proposal to close an individual office but Post Office Limited will also take account of, and respond to, views expressed about the proposed service provision in the area in reaching decisions on individual closures.

• Once final decisions have been made and announced, Post Office Limited will write to Postwatch, Members of Parliament and local authorities referring to the main points raised during the consultation and giving the reasons for its decision.

• Public consultation will normally last for 6 weeks but will in future be extended to take account of public holidays that occur during that period.

• If branches previously identified as expecting to receive additional custom following closure of nearby offices, are themselves subsequently proposed for closure, Post Office Ltd will provide a detailed explanation of its reasoning in putting forward the proposal for consultation.

• Criteria have been agreed to define the "exceptional circumstances" which may justify putting into public consultation a closure proposal for an office located within the 10% most deprived urban wards and with no other office within half a mile. The core criteria are: the branch proposed for closure being relatively small; having experienced a significant decline in business between March 2000 and March 2003 with a continuing trend which, if it has not already done so, will render the business non-viable; and having a dense network of surrounding offices with several accessible by reasonable transport links within half a mile to a mile. Other criteria which might also apply include: significant depopulation of the surrounding area or the geography of public service and retail provision has shifted; a clear majority of customers of the branch proposed for closure live within half a mile of alternative branches; and security issues which make it unlikely to be feasible to continue service.

• Finally, Post Office Limited has confirmed that the documentation between itself and a sub-postmaster does not create any binding arrangement for closure until the public consultation has been completed. No contract binding on Post Office Limited is signed before the public consultation process has ended.