Govt gifting Post Office to sub-postmasters, managers would be ‘poison chalice’

The Government is reportedly holding a meeting today (7) between business minister Kevin Hollinrake and representatives of the co-operative movement, union officials and other stakeholders, to revive plans to mutualise the Post Office.

However, sector experts ParcelHero say handing over ownership of the Post Office to its branch managers is far from the generous offer it appears. The  Post Office needs significant modernisation and investment.

“Stakeholders and sub-postmasters should be in no hurry to take on ownership of the UK’s struggling Post Office. It could be like inheriting a seemingly valuable country home that is actually decaying and mortgaged to the hilt,” said Head of Consumer Research, David Jinks M.I.L.T.

“Following the Horizon scandal, the Government clearly now sees the Post Office as a hot potato it wants to pass on to new hands as soon as possible. However, very little has changed since 2012, when it first attempted to offload the Post Office to its managers at the same time that the Royal Mail was privatised.

“Back in 2012, the Government’s own report, ‘Building a Mutual Post Office’, recommended: ‘A formal transfer of ownership should only take place when commercial sustainability and financial stability have been achieved.’ That goal has yet to be achieved.

“For the financial year 2022/23, the Post Office Group posted a total statutory loss of £76 million and ended the year with net liabilities of £799 million. That does not represent commercial sustainability.

“Today’s meeting has been called by the Communication Workers Union, which represents Post Office operators but, following the Horizon scandal, its timing is certainly fortuitous for a Government seeking to divorce itself from the troubled organisation. Hundreds of Britain’s sub-postmasters were prosecuted for theft, fraud and false accounting because of problems in the Post Office’s faulty accounting software.

“The scale of the problems facing the Post Office are still huge. Letters are in significant decline and other revenue streams, such as the Post Office Card account, have closed. Even its contract with the DVLA is now under rolling review. In a 2023 Parliamentary debate on the future of postal services, MP Tahir Ali said: ‘There are big cracks in the Post Office network that gesture towards a bleak future.’ He warned that the Government has been ‘significantly reducing investment in the network’.