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The Post Office could close more than 100 branches, placing hundreds of jobs at risk, as the state-owned UK business seeks to put itself on a sounder financial footing following an IT scandal.
The company said on Wednesday that it would seek to offload 115 branches to retail partners or sub-postmasters, placing about 1,000 jobs at risk. The branches may be closed if new operators are not found.
The plans for the Post Office’s wholly owned branches affect about 1 per cent of a network of more than 11,600 sites, which are largely run by sub-postmasters.
Hundreds of positions at the company’s headquarters are also under threat.
The proposals form part of a strategic review led by the Post Office’s interim chair Nigel Railton, who also set out ambitions to increase sub-postmasters’ share of revenue, pushing average branch pay up by about £22,000 after five years.
“We can, and will, restore pride in working for a business with a legacy of service, rather than one of scandal,” Railton said at a press conference in London. The plans require the approval of the government.
The 388-year-old institution has struggled to retain relevance in a competitive market for parcel delivery where many consumers and businesses use services that cut the Post Office out of the process for sending and receiving packages.
Although it has attempted to reinvent itself by providing banking services, the Post Office still receives ten of millions of pounds in state subsidies each year.
The business reported pre-tax losses of £81mn in 2022-23, down from £131mn the previous year.
The long-running Post Office IT scandal, in which nearly 1,000 sub-postmasters were wrongly prosecuted using flawed data between 1999 and 2015, has preoccupied executives.
Nick Read will step down as Post Office chief executive in March following a five-year stint that was overshadowed by one of the UK’s most serious miscarriages of justice.
Appearing before a public inquiry into the scandal last month, Read said the business had “more to do” to win the trust of sub-postmasters.
The Post Office is wholly owned by the taxpayer, but is run at arm’s length by the government through UK Government Investments, a body responsible for managing a portfolio of wholly or partially state-owned companies such as NatWest and Channel 4.
Gareth Thomas, postal affairs minister, has commissioned a separate review into the future of the Post Office as the government considers the viability of mutualisation as a form of ownership, among other options.
“We are considering a range of options to reduce our central costs. This includes considering the future of our remaining directly managed branches (DMBs), which are lossmaking,” said the Post Office.
It added: “We have long held a publicly stated ambition to move to a fully franchised network and we are in dialogue with the unions about future options for the DMBs.”
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.”
This story has been amended to clarify that the affected branches may not close if they are successfully offloaded to other operators.
