The Petition of those concerned about the proposed closure of Rhyl Crown Post Office,
Declares that Rhyl Crown Post Office should remain within the Crown Network and not become a franchise. The Petitioners believe that the proposal for a franchise will severely damage the provision of services in Rhyl.
The Petitioners therefore request that the House of Commons urges the Minister of State for Business and Enterprise to protect much-loved public services.
And the Petitioners remain, etc.—[Presented by Chris Ruane, Official Report, 21 May 2013; Vol. 563, c. 1200.]
[P001180]
Observations from the Secretary of State for Business, Innovation and Skills, received on 29 May 2013.
The Government note the views of customers who access Post Office services at Rhyl Post Office branch, which is currently directly operated by Post Office Ltd, and is known as a Crown branch.
The Government note that the implementation of the Crown Transformation Programme is an operational matter which is the responsibility of senior management at Post Office Ltd. The Government, as shareholder, do not play any role in decisions relating to individual post office branches. In considering the future provision of Post Office services in Rhyl, it is important to note the wider context of Post Office Ltd’s proposals to franchise 70 Crown post offices and to merge or relocate a small number of other Crown branches.
The Government note that the 2010 Spending Review contained a clear commitment to modernising the post office network and safeguarding its future, and allocated a £1.34 billion funding package to provide for significant investment across the post office network. A condition of this funding package requires Post Office Ltd to continue to maintain a network of at least 11,500 branches, to comply fully with the access criteria, and with no programme of branch closures.
The Government note that the 373 branches of the Crown network have incurred heavy and historic losses, totalling £46 million in 2011-12. Eliminating these Crown losses is a key element of Post Office Ltd’s strategy to provide for the long-term sustainable future of the network, and the Government support the business in delivering that strategy.
The Government note that the current losses incurred by the Crown network contribute to a third of the losses sustained by the network as a whole and this is not sustainable. No business, including the Post Office, can continue with a situation where some of its high street branches cost substantially more to run than they generate in revenues. In the case of the Rhyl Crown branch, it costs £1.61 to generate every £1 of income.
The Government note that within its broader strategy for eliminating these unsustainable losses and achieving break even for the Crown network by 2015, Post Office Ltd has identified a group of branches where it sees no prospect of eliminating the losses at a local level under the current operating and cost structure. The precise reasons will vary from location to location but commonly include factors such as high property costs and sub-optimal location to attract the necessary increase in custom and business to make them profitable.
The Government note that Post Office Ltd has however made clear that, under each franchise proposal, the full range of post office services would continue to be available in close proximity to the existing Crown branch; and, in the event that a suitable new retail partner cannot be found. Post Office Ltd has given a commitment that a post office service will be retained within the area. Furthermore, before any changes are made to the existing service provision in Rhyl, there will be a six-week local public consultation under the terms of a Code of Practice agreed between the Post Office Ltd and Consumer Focus. The public consultation focuses on specific and detailed proposals for relocating the service provision, including such matters as ease of access, and responses are carefully considered by Post Office Ltd before a final decision is reached.