The Post Office (PO) could close more than 100 branches as part of its strategic review, held on 13 November.

Up to 115 Crown branches, directly managed by PO, could be shut by the corporation, with hundreds of head office jobs at risk, in an effort to put the business on firmer financial footing.

The company is said to be looking at options for its wholly-owned branches, which currently employ approximately 1,000 workers and are ‘loss-making’. This could include a third-party taking the branch on.

PO has 11,500 branches across the UK, most of which are franchises, with 115 of those Crown branches.

Brian Smith, a postmaster of Freefield Post Office, Lerwick, Shetland, told Better Retailing the “cost-cutting measures” are “common sense”, and even “good news” if closures redivert PO traffic.

He continued: “From a postmasters’ point of view, these closures wouldn’t affect us. The Crown branches are the last of the directly-managed Post Offices, and these branches have been retained over the last number of years in high-cost areas – in city centres that are expensive to operate on. It costs the company millions every year to keep them open.”

Smith added that transferring the branches over to a third-party, such as WHSmith, could be “far more sustainable”.

“Unless someone wants to step in and fund those Crown branches for millions of pounds, it’s unsustainable. Passing them onto a franchise operation like WHSmith would allow the continuing of the operations. Running the branches through Post Office is nonsensical, so the change is common sense.”

Smith added that these closures are not new, and “nearly 1,000 Crown Post Offices have been shut in the last 10 years”.

“It can possibly increase traffic to sub-Post Offices in the area , which benefits postmasters that remain. It’s absolutely good news.”

Post Office pledges £250m new revenue to postmasters by 2030

Andrew Martin, CEO and founder of SMEB, which delivers payment services to SMEs, said: “Today’s cuts show why we can’t rely on post offices to replace high street banking.

“Post offices are ultimately concerned with the mail – and will be vulnerable to changing political and economic conditions. What’s needed are robust partnerships between existing businesses and new providers, which can ensure reliable access to banking services even in Britain’s smallest towns.”

In addition to cuts, PO bosses have pledged £250,000 in added revenue to postmasters by 2030. Other changes include a full overhaul of technology and data, an improvement to in-branch banking services, new products and marketing to drive footfall and a strengthening of the PO’s online offering which postmasters are also set to benefit from. 

Smith added: “The increase in remuneration can only be positive. I’d like to see schedule of when these changes are happening so we can look forward to that.”

PO interim chairman Nigel Railton confirmed that the new strategy will begin to be phased in immediately, but exact dates have not been confirmed.

Rizwan Salahuddin, of Wood Green Post Office in Finsbury Park, London, told Better Retailing while the remuneration is “good news”, he will need to know what the numbers “look like” first.

“There will be more information to come from area managers, we can’t be sure of anything yet. Remuneration is good news for the postmasters, but it’s not good news for employees of Post Office Crown Branches. It is what is, and it’s happened before. Also, when some branches closed near me in the past, we got extra footfall, so that could be helpful.”

Communication Workers Union response

Sean Hudson, CWU branch representative, said there is a concern that the remuneration is dependent on the Crown branches closing, “which is like bidding postmaster against postmaster”.

“At the moment all we have is words, and I’m noting that the plan sees the extra remuneration to subpostmasters some years down the line. We’ve had these kind of announcements before, as Nigel Railton himself referred to in his speech, and he’s right – we have. What we need is proof, which is in the remuneration. We don’t know if any strings will be attached to the remuneration.”

He added that the Excellence incentive, which confirmed a 5% increase to subpostmasters’ remuneration, was subject to deduction incrementally, based on the balancing of subpostmasters.

“When you’re operating a system like Horizon and balancing it’s very easy to knock points off that 5%. So we’ve already experienced an increase in remuneration from PO but with many strings attached.

“Also a concern is that  picture they appear to be presenting is that the increase in subpostmasters’ remuneration is dependent on a closure programme to our directly employed colleagues. They’ve closed Crowns in the past and these savings haven’t necessarily made their way to subpostmasters’ pockets. I think it’s unfortunate that directly-employed colleagues are going to be another victim of the Horizon scandal.”

Read more Post Office news