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The Guardian - UK

Business

Mark Sweney

Post Office plan to close 115 branches and cut jobs condemned as ‘immoral’

the Post Office Post Office Horizon Nigel Railton Dave Ward Jonathan Reynolds CWU

a general view of a Post Office in Derby — The Post Office has announced plans to shut down some centrally owned branches while maintaining the rest of its network. Photograph: Rui Vieira/PA

The Post Office plans to close more than 100 branches and says about 2,000 jobs are at risk in a move that has been condemned by unions as “tone deaf and immoral” after the Horizon IT scandal.

The Post Office confirmed on Wednesday it was seeking to offload 115 branches, known as crown post offices, it centrally owns, but said it expected to maintain the total network at 11,500 branches across the UK.

The plans come against the backdrop of the public inquiry into Horizon , described as one of the worst miscarriages of justice in UK history.

The closures put at risk approximately 1,000 jobs, although the Post Office expects that all the branches will be refranchised to new owners over the next five years.

Approximately 2,000 branches are operated by partners including Tesco, WH Smith and Morrisons, and about 9,000 are run by independent operators that have a contract with the Post Office.

The Post Office is also “streamlining” its central operations, with speculation that this will lead to about 1,000 further job cuts.

The plans also include increasing post office branch owner remuneration by £250m annually by 2030, with up to £120m in additional remuneration by the end of the first year of the five-year plan, a 30% increase in the operators’ share of revenue.

Nigel Railton, the chair of the Post Office, said: “The Post Office has a 360-year history of public service and today we want to secure that service for the future by learning from past mistakes and moving forward for the benefit of all postmasters. We can, and will, restore pride in working for a business with a legacy of service, rather than one of scandal.”

The Post Office said its remaining directly managed branches were lossmaking and that it was in talks with unions about “future options” for the businesses.

The organisation has been moving to a fully franchised branch model over a number of years; in 2012 the Post Office had almost 400 wholly owned branches.

However, the Communications Workers Union (CWU) condemned the closure plans. Its general secretary, Dave Ward, said: “For the company to announce the closure of hundreds of post offices hot on the heels of the Horizon scandal is as tone deaf as it is immoral.

“CWU members are victims of the Horizon scandal and for them to now fear for their jobs ahead of Christmas is yet another cruel attack.”

Ward called the planned cuts a “shambolic decision” and said Labour should act to ensure it did “not become the government that targeted elderly people with the removal of the winter fuel allowance and then saw crucial services they rely on removed”.

The Post Office said the planned increase in the operators’ share of revenue remained subject to securing funding from the government, which is the sole shareholder of the company, but that it would double the average remuneration at each branch by 2030.

The government said it was in “active discussions” with the Post Office about the proposed cuts.

“Post offices are an integral part of the communities they serve and the services they provide for local people,” a spokesperson for the Department for Business and Trade said. “The government is in active discussion with Nigel Railton on his plans to put postmasters at the centre of the organisation and strengthen the post office network for its long-term future.”

Part of the “new deal” also includes establishing a postmaster panel consisting of serving branch owner-operators to “help the business to improve the support and training it provides to postmasters”.In a speech to staff and subpostmasters Railton said that nearly half of all branches are either loss-making or only make a small profit from the Post Office business.

This week the business secretary, Jonathan Reynolds, expressed his support for the long-term future of the Post Office under a new model of governance that would include branch operators.

While Reynolds was open to options such as mutualisation, he said the structure of the business model had to change to be sustainable.

“I think despite the scale of this scandal, the Post Office is still an incredibly important institution in national life,” he said. “As an institution, as a brand, there is still tremendous affection and desire for the Post Office to have a strong future.”

However, he pointed out that the Post Office required a large annual taxpayer subsidy and the underwriting of various liabilities such as compensation schemes and the ballooning cost of a replacement for Horizon.