Post Office Green Paper: Government Response
(Limited Text - Ministerial Extracts only)
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The Parliamentary Under-Secretary of State for Business and Trade (Blair McDougall)
The Post Office is a vital part of the UK’s social and economic fabric, supporting communities, small businesses and local high streets. Last year, the Government published a Green Paper to open a national conversation about how to secure a modern, trusted and financially resilient Post Office for the future.
Today, we are publishing the Government’s response to that consultation. More than 2,500 people contributed their views, including postmasters, businesses, community organisations and members of the public. Their responses provided invaluable insight and have shaped the Government’s decisions.
The message from the public was clear. People want a strong and convenient network, built around permanent, full-time, full-service branches offering a wide range of postal, banking and Government services. In response, the Government will retain the minimum network size of 11,500 branches and all six geographical access criteria. We will also introduce a new requirement that at least 50% of the network must be full-time, full-service branches—the sites that deliver the highest social value and strongest service to customers. This requirement sets 50% as an absolute minimum, and we expect the Post Office to continue operating substantially above it. We are setting this requirement to ensure that full-time, full-service branches remain the backbone of the network for the foreseeable future, as these are the branches that deliver the greatest social value and the strongest customer service.
Government will continue to provide funding to the Post Office to support with the delivery of these policy requirements, via the network subsidy. Pending the completion of the subsidy referral process, Government plans to provide up to £180 million in network subsidy funding over the next three financial years.
Long-term stability also requires keeping with the times, which is why investing to modernise the network remains a Government priority. Government intend to provide up to £483.4 million over the next two financial years to support transformation across the network, pending the completion of subsidy referral processes. This will modernise branches, fund new equipment in branches to improve the customer experience, expand parcel locker provision, and enable the technology transformation to transition operations away from Fujitsu and ultimately move away from the Horizon system.
To continue protecting the network, Government plan to support the Post Office financially on a number of issues that the Post Office is not in a position to fund on its own. This includes plans to provide the Post Office with up to £37.4 million in funding to fund its remediation unit, which is responsible for delivering redress to postmasters affected by the Horizon IT system and other operational failures, and to fund the company’s response to the Post Office Horizon IT inquiry. Government also intend to provide funding of up to £104 million to the Post Office so that it can pay its IR35 tax liability and associated corporation tax to HMRC. This funding is subject to the completion of the subsidy referral process.
Consultation responses emphasised the importance of the Post Office as a parcel hub, and we welcome the Post Office’s continued innovation in this area. On banking, people were clear that the Post Office’s role in ensuring access to cash and in-person services remains essential. Banking framework 4 will increase remuneration for postmasters, and Government will continue to work with the banking sector to strengthen provision further. On 21 January, Government held joint discussions between the Post Office and the banking sector to explore where continued collaboration, on a commercial and voluntary basis, would allow all parties to better meet the needs of individuals and businesses. Attendees agreed to give an update on discussions in six months.
Consultation responses also highlighted continued reliance on face-to-face access to Government services. We see real potential in exploring how these services could be improved and a cross-government group has been established to take this forward.
Strengthening the relationship between the Post Office and postmasters remains central. While meaningful steps have already been taken, including enhanced engagement structures, the Government expect the Post Office to develop a unified culture strategy—covering employees, postmasters, strategic partners and customers—by summer 2026. An independent evaluation of recent initiatives will report later this year.
Our long-term ambition is a financially sustainable Post Office that remains a trusted presence in communities across the UK. Decisions on long-term governance models will be taken only after the conclusion of the Horizon IT inquiry. In the meantime, the Government will work with the Post Office to ensure financial discipline, progress towards positive trading profit by 2030, and protection of access for the communities that rely on it.
This response sets a clear direction: a stable, modern and resilient Post Office, fit for the future and shaped by the people it serves.
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