post offices was unveiled by the government today.
A total of£150m will be invested in each of the next three
There will be three elements to the funding:
-£66m a year to maintain subpostmasters' income levels
-£79m in the first year, and£74m in years two and
three, to fund the front line services that allow post offices to
operate, including IT systems, cash delivery and delivery of forms
and direct marketing material;
- a£25m flexible fund:£5m in the first year, rising
to£10m in the second and third years, to develop
innovative, modern methods of delivering services. The National
Federation of Subpostmasters (NFSP) and other key stakeholders will
advise on the use of these funds.
This funding will help Britain's eight and a half thousand rural post
offices to continue to provide access to services in rural areas.
It will also give Post Office Ltd the financial freedom to pilot new
and innovative ways to provide postal services in rural areas.
The funding will be administered by Post Office Ltd (POL) under
contract to the government. In return for the funding Post Office Ltd
will be required to maintain the rural network, and prevent all
avoidable closures. They will provide access for citizens to 'over
the counter' services in rural areas, including:
- access to payment of the state pensions, tax credits and benefits
- access to cash through banking services
- Dispatch points for letters and parcels
- Postage stamp sales
- Renewal of licences (eg television)
- Bill payments to utilities
- Government information and services specified in service contracts
between POL and individual government departments
The funding will ensure that customers have access to services in
rural areas where they would not otherwise be provided on a
Patricia Hewitt said:
'Post offices play a vital role in many rural communities. They are
much more than simply providers of mail services. In many places the
post office is also the village shop, the local community centre, the
business exchange and the bank.
'This multi-million pound package shows our commitment to the rural
post office network. The money announced today will help to ensure
that the village post office remains firmly at the heart of the
Wales is expected to receive more than£16m a year, from a national total of£150m, for each of the next three years.
Wales Office minister Don Touhig said: 'I am delighted to welcome the largest ever Government support package for rural post offices.
'This funding will help Wales's 950 rural post offices to continue to provide access to services in rural areas.
'It will also give Post Office Ltd the financial freedom to pilot new and innovative ways to provide postal services in rural areas.
'The heart of many rural Welsh communities is the post office. They are much more than simply providers of mail services. In many places the post office is also the village shop, the local community centre, the business exchange and the bank.
'This funding will help ensure post offices continue to play a vital role across Wales.'
This flexible fund will support innovative new practice pilots,
offering financial support direct to subpostmasters to modernise the
post office network. Examples might include mobile and satellite post
offices, the co-location of post offices in existing business
premises from pubs to hairdressers, and the modernisation of existing
Total funding for next three years will break down as follows:
2003/04 (£m) 2004/05 (£m) 2005/06 (£m)
Assigned Office Payment (AOP) 66 66 66
Support costs 79 74 74
Flexible fund 5 10 10
Total Social Network Payment
(SNP) cost 150 150 150
1. A rural post office is defined as a post office serving a
community of less than 10,000.
2. Today's announcement was made in answer to a written parliamentary
question, tabled by Andrew Robathan.
3. As announced on 13 June by Patricia Hewitt, the government agreed
that the gilts (past dividends and cash generated by the business)
could be used to support the renewal programme - for both Royal Mail
Group and the Post Office network. The£450m rural support package
will be funded from these reserves.