Post Office Closures Could Cost £400million - Davey

12.56.16pm GMT Mon 13th Nov 2006

Liberal Democrat Shadow Trade and Industry Secretary, Edward Davey MP

Research undertaken by the Liberal Democrats shows that the cost of potential cuts to the Post Office network could be at least £400m.

Commenting, Liberal Democrat Shadow Trade and Industry Secretary, Edward Davey MP said:

"The Government has presided over a decimation of the Post Office network. Now it seems their solution to 'stabilise' the Post Office will involve an expensive programme of thousands more branch closures, bringing hardship and financial exclusion to millions.

"This is a massive amount of money, being spent on something that is not needed and frankly is an act of vandalism on a massive scale, wreaking havoc on rural and suburban communities.

"The actual cost is likely to be even higher because our research does not take account of inflation."

ENDS

Notes to Editors

1. During the opposition day debate initiated by the Liberal Democrats on 16 October 2006, Jim Fitzpatrick, Parliamentary Under-Secretary, Department of Trade and Industry said "having too many branches with too few customers is clearly the root of the problem across much of the network". http://www.theyworkforyou.com/debates/?id=2006-10-16c.603.0&s=section%3Adebates+speaker%3A10199#g616.1

2. The Urban Reinvention Programme undertaken by the Post Office between 2002 and 2005 required government aid of £152 million for the closure of 2,486 branches- a cost of £61,000 per branch closure.

3. Postcomm in their report "Post Offices at the crossroads" published on 12 October 2006 highlighted that 6,500 rural Post Offices are loss making. http://www.psc.gov.uk/news-and-events/news-releases/2006/government-must-decide-quickly-the-future-of-a-post-office-network-that-is-at-the-crossroads.html

4. The cost of closing 6,500 branches, based on £61,000 per branch, would be £396million. This does not take into account inflation.