The UK government has launched a national consultation on the future of the Post Office. They’re exploring models such as mutual ownership or a charter school model. This new strategy begins a 12-week consultation period. Its intent is to look at how we can improve ourselves, particularly as we face continued challenging financial realities. So, too, have the Post Office’s fortunes in making a profit. Its business model really relies on state subsidies, to the tune of tens of millions of pounds annually.
The federal government has made a huge financial commitment. They are channeling an extra £118m towards boosting existing missions to make dramatic changes in to the way the Post Office operates. The government admits that the Post Office network is facing huge challenges but continues to insist that the network is “broadly right.” There are no short-term plans to close them.
In the last five years, the Post Office has been under heavy attack, mainly due to the erosion of their core business through mail products. Not only are customers seeking online alternatives, they’re seeking out other delivery operators, compounding losses and hurting profitability even more. The Union’s Research found that at least four in ten of the Post Office’s branches are loss-making. They lose money on every ride or they just manage to break even.
The Post Office has a concrete solution to its “grim legacy.” This includes the wrongful conviction of many sub-postmasters due to defective accounting software, Horizon, which became known as the Post Office Scandal. This buggy software resulted in hundreds of wrongful accusations of theft and wrongful termination, with permanent impacts on those mischaracterized.
Addressing this legacy, the federal government has made moves to change the Post Office’s culture. Gareth Thomas, a prominent advocate for reform, stated, “We all know, sadly, the grim legacy… so this is about fixing the fundamental problems.” This feeling highlights the need for change and serves as a wake-up call as stakeholders look toward new, more effective ownership models.
As part of its exploration for long-term solutions, the government is evaluating two potential models for the Post Office’s future: a joint venture or a charter model. The proposed joint venture would see a partnership formed between the UK government and an equal, joint venture operated by a board of postmasters. Or, a charter model like that of the BBC and several universities, is in the running too.
The Post Office led the way on this shared ownership model back in 2012. This is what happened when it was demerged from Royal Mail. Since then, discussions have revolved around how best to ensure its sustainability while addressing past grievances and improving service delivery.
The Post Office’s own research demonstrates it delivers tremendous social value to our economy. Household savings are around £5.2 billion per year, while small and medium-sized enterprises save an estimated £1.3 billion. This contribution seeks to further underscore the value of continuing to host a strong, effective postal service, to communities all over the UK.