There are 12,000 UK post offices, including 500 outreaches, and the post office network is the country’s largest retail branch network. With over 90% of the population living within one mile of a post office, post offices provide easy public access to essential services including mailing, access to cash and retail goods.

Five hundred post offices are run by people directly employed by Post Office Ltd (POL). These offices are called ‘directly managed’ or Crown offices. However, the majority of outlets are sub post offices, run by private business people, subpostmasters.

Subpostmasters are not POL employees, but instead have a contract with POL to provide services using their own premises and staff. Generally, subpostmasters receive a fixed payment from POL; this is topped up by a variable payment based on the number of transactions they carry out. Most subpostmasters run their post office business under the same roof as another retail business. In urban areas this is often a newsagent or stationery business. In rural areas it is typically a village shop. Post offices offer a wide range of services including:

• Postal services
• Banking
• Bill payments
• Benefits and pension encashments
• Driving licence applications, car insurance, tax discs
• Passport applications, Bureau-de-Change and travel insurance
• Telephone service, phonecards, mobile phone vouchers, E-top ups
• Personal loans
• Savings stamps
• Home insurance
• Postal orders and MoneyGram
• Local travel tickets
• National Lottery tickets

But our national post office network is currently under considerable pressure. This is due to long-term lack of investment, trends in retailing, car use and technological innovations. The Government’s decision to pay state pensions and benefits straight into accounts has also had a serious impact. These combined pressures have resulted in large numbers of post office closures. Over the last 20 years, one third of UK post offices have closed.

In recognition of the major challenges facing the UK’s post offices, the Prime Minister asked the Cabinet Office to draw up a strategy for the future. This resulted in the publication of a report in 2000, Counter Revolution – modernising the post office network, which set out a blueprint for the network.

Urban post offices
Both the government and POL accepted there was a need to close substantial numbers of urban post offices in order to create a sustainable business for POL and subpostmasters. This led to the urban network reinvention programme, which resulted in the closure of around 2,500 post offices in urban areas by spring 2005.

The future viability of the network depends on the success of new Post Office products and services, including the recently introduced banking and financial services. The government also provided £30 million to invest in the urban post office network, through improvement grants for individual post offices.

Rural post offices
POL has made it clear to the government that, without financial support, it would have no choice but to close large numbers of rural post offices, keeping only those that are commercially viable or necessary to meet Royal Mail’s postal licence obligations. As a result, the government has agreed to fund the non-commercial element of the company’s rural business until 2008 with a "Social Network Payment" of £150million a year paid to POL. The government has also imposed a ‘no avoidable closures’ of rural post offices requirement on POL.

Some of government’s funding to sustain rural post offices is specifically for helping POL to pilot new ways of providing post office services. This includes trials of ‘hub and spoke’ or ‘outreach’ post office services, where the subpostmasters of the hub post office provides a mobile service at locations such as village halls in outlying areas for several hours a week. POL reported on these trials to government at the end of 2005.

Following pressure from subpostmasters and their customers, the government published its plans for the long-term strategy for the entire national post office network in December 2006. These proposals included an extension of the Social Network Payment to 2011 and a new, enhanced form of Post Office card account from 2010. The government also proposes to close 2,500 post offices in both urban and rural areas. Click here to read the government’s proposals in full.

The National Federation of SubPostmasters works closely with both government and POL to ensure the best possible future for our network of sub post offices. We continue to press for urgent government action to ensure that UK citizens can access a network of bigger, better and brighter post offices - providing communities with postal, banking and financial services, access to national and local government services and anchorage to local shops.

Further details of NFSP’s campaigning and policy work can be found under Research and Policy.