3,000 Post Offices at risk of closure

| April 27, 2010 | 0 Comments
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The National Federation of Sub-Postmasters has today warned that 3,000 post offices are at risk of closure.

According to George Thomson, the Federation’s general secretary, a ‘double squeeze’ of falling income from Post Office Limited, along with higher staff and utility bills means many post offices are struggling to keep their heads above water.

Post Office Limited pays all the country’s 9,000 sub-postmasters a fixed income, otherwise known as a ‘core tier payment’. All of them receive a minimum of £10,000 a year but Mr Thomson said this is set to fall this month by an average of £1,200 a year.

Furthermore, the second tranche of sub-postmasters’ income (the commission paid on transactions) is also being slashed.

In 2007, if a business visited a post office to obtain £100 in change, the sub-postmaster would receive £1.20 in fees but currently it is 60p and it is set to be slashed even further to 40p later this year.

In a further blow, Spanish banking giant Santander, owner of Abbey and Alliance & Leicester, is scheduled to change its contract with its business customers from September - a move expected to cost sub-postmasters over £2 million a year.

In a letter to Royal Mail chairman Donald Brydon, Thomson said thousands of sub-postmasters feel ‘totally abandoned’ by Royal Mail Group.

Mr Thomson claims Post Office Limited is set to unveil record profits of £62 million and bonuses of around £10 million for its executives.

The news comes just a month after the Government outlined further plans for the Post Office to become a ‘people’s bank’ after injecting a further £180 million funding into the project, on top of the £1.7 billion already invested. The aim is to make the branches more sustainable.

The Post Office Bank, led by Business Secretary Lord Peter Mandelson, will create a ‘People’s Bank’ and will see 11,500 Post Office outlets as the backbone of a new national bank, which is set to encourage saving and provide credit for those on low incomes.

At the time, Ministers said it hoped the moves to expand the Post Office will prevent further Post Office closures.

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