Press Release - BERR’s oversight of the Post
Office Network Change Programme
5 June 2009
In a report published today, the National
Audit Office has found that the Post Office Network Change
Programme has largely met its targets and complied with the
undertakings given by the Department for Business, Enterprise and
Regulatory Reform. However, the implementation of some of the new
Outreach services, planned for 500 locations where conventional
post offices are to be closed, is behind schedule.
By March 2009, 2,383 post offices had been closed in the Programme
so far, 98 per cent of the final total of 2,435 now planned. The
Programme has overseen a planned reduction in the total number of
post office outlets to fewer than 12,000, compared with some 14,000
when the Programme began in 2007. At the same time, the Programme
has put in place protections for consumers which set out maximum
distances that people should have to travel to their nearest Post
Office.
The programme is forecast to be under-budget - at March 2009, the
projected final costs for the programme were £161 million, down
from the original estimate of £176 million. After completion of the
programme, Post Office Ltd plans to deliver savings of £45 million
a year. The ongoing benefits of the programme will exceed the
one-off costs of the programme, notably the cost of compensating
sub postmasters, from 2011-12 onwards.
The 42 local public consultations run by Post Office Ltd on the
closure plans resulted in the withdrawal of 92 closure proposals,
and 48 others were brought forward as substitutes. The NAO found
that the handling of some closures suffered from poor
communication, causing resentment among some local customers.
The reduction in outlets originally comprised 2,500 closures offset
by the installation of 500 new Outreach services such as mobile
post offices. The programme of putting these services in place was
planned to be complete by late 2008. At March 2009, 433 of the 500
planned services were open. Planned refurbishments to nearly 700
existing post offices expected to take more business as a result of
closures have been completed in only 447 post offices.
The post office network is being supported by a subsidy from the
taxpayer of £150 million a year, reflecting the role Post Offices
play in the local community. The Department evaluated the social
and economic value of supporting the reduced network, but does not
plan continued monitoring of the social or economic benefits.
The closures are part of a larger plan aimed at returning Post
Office Ltd to profitability by 2010-11. The plan also includes
action to improve efficiency and Post Office Ltd’s financial
performance, and to sustain and increase revenues. It is being
supported by funding from the Department of up to £1.7 billion over
five years.
The Comptroller and Auditor General
said:
“The network change programme has been
implemented in a way which has met most of its targets and the
closures are nearly complete with 98 per cent already done. But
communication around the programme could have been better, and
there is still work to do to complete the late running Outreach
services, which are designed to provide facilities to communities
where conventional post offices have been closed."
Notes for Editors
1. In May 2007 the
Department for Business, Enterprise and Regulatory Reform approved
plans to close up to 2,500 post offices run by sub-postmasters,
partly offset by at least 500 new Outreach services, leaving a
network of around 12,000 outlets. The closures are known as the
Network Change Programme, which is part of a larger plan aimed at
returning Post Office Ltd to profitability by 2010-11, after
allowing for a £150 million annual Government subsidy. This plan
also includes action to improve efficiency and Post Office Ltd’s
financial performance, and to sustain revenues, in part by
developing significant new revenue streams. The plan is being
supported by funding of up to £1.7 billion over five years from
BERR, including the £150 million annual subsidy payment in
recognition of the social and economic role that post offices
play.
2. Press notices and
reports are available from the date of publication on the NAO
website, which is at www.nao.org.uk. Hard copies can be obtained
from The Stationery Office on 0845 702 3474.
3. The Comptroller and
Auditor General is the head of the National Audit Office which
employs some 900 staff. He and the NAO are totally independent of
Government. He certifies the accounts of all Government departments
and a wide range of other public sector bodies; and he has
statutory authority to report to Parliament on the economy,
efficiency and effectiveness with which departments and other
bodies have used their resources. This report has been made by Tim
Burr, who was Comptroller & Auditor General until 31 May 2009.
He was succeeded by Amyas Morse on 1 June 2009.
Press Notice
35/09
All enquiries to
Mark Anderson, NAO Press Office: Tel: 020 7798 7558
Mobile: 077796 937
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