Post Offices: a support mechanism for 300,000 vulnerable people

The post office network relies on a subsidy from Government. It is just over six months until the current subsidy arrangement ends and that is deeply worrying for subpostmasters and the communities that rely on them for postal services, banking, bill payment and much more besides.

The National Federation of SubPostmasters (NFSP) urges the Government to commit to an extended subsidy payment in its upcoming Spending Review and recognise the incredible work that subpostmasters and their staff do day-in and day-out to support their local communities.

A recent NFSP survey of 500 subpostmasters demonstrates the vital role post offices play in supporting local communities and vulnerable people in particular:

• On average, subpostmasters and their staff ‘keep an eye on’ 25 potentially vulnerable people – meaning that post offices may act as an informal and unpaid support mechanism for around 300,000 vulnerable people across the UK.
• 88% guide vulnerable customers through banking or bill payment transactions every day or most days of the week.
• 64% signpost customers to Government, local council or other public services every day or most days of the week.
• 40% help prevent customers falling victim to scams or fraudulent activity every day or most days of the week.
• 93% of subpostmasters described their post office as a safe place for local people if they need help or feel threatened.

For the survey results in full, click HERE

The dedication of subpostmasters was brought to the fore during the coronavirus pandemic. As many as 90% of post offices remained open during the coronavirus lockdown, providing essential services to their communities.

In the NFSP’s survey, as many as 97% of the subpostmasters who remained open during lockdown stated that they had continued trading to help support their local community; while 90% took it upon themselves to do things that they wouldn’t normally do to help out - such as collecting letters and parcels from homes locally, offering home delivery of groceries and other essentials, and paying extra attention to older and vulnerable customers to ensure their wellbeing, including calling by their houses to make sure they had everything they needed.

The Government subsidy is paid to Post Office Ltd and is designed to cover the operating costs of the post office network. The amount of subsidy decreased from £210m in 2012/13 to £50m in 2020/21.

Post Office Ltd chiefly uses the subsidy to provide a fixed element of remuneration to around 5,000 post offices, the vast majority of which are in rural areas. This includes the ‘community’ network of c.2,500 post offices that are colloquially referred to as ‘the last shop in the village’, as well as 1,600 ‘outreach’ services that serve some of the remotest areas of the UK on a part-time basis using a mobile van or a community space such as a village hall.

Should the subsidy end, Post Office Ltd’s ability to support these post offices with a fixed element of remuneration would clearly suffer.

Former Postal Affairs Minister Kelly Tolhurst told a Select Committee in 2019 that the Government would look to continue to support the post office network. Of course, that statement was made pre-coronavirus and the landscape has changed dramatically since then. The NFSP believes that the coronavirus pandemic has underlined the vital role that post offices play across the UK and continuing the subsidy payment should be a priority for Government.

NFSP CEO Calum Greenhow states:

“The actions of subpostmasters during lockdown spoke volumes – not just staying open but going above and beyond to support their communities. Post offices are vital assets to communities and local economies across the UK. Government should take steps to ensure these assets are protected.”

“While it is not possible to say how many rural post offices rely on their fixed element of remuneration to remain open, it is not scaremongering to state that there would be many closures if this were removed.”

Government is accepting representations to its Comprehensive Spending Review until 24 September. The NFSP will be making representations for the continuation of the post office network subsidy and we encourage other organisations with an interest in consumer affairs, financial inclusion and rural communities to do the same.