In a bid to secure its financial future, the iconic British institution, the Post Office, is set to announce sweeping changes to its operations. According to insider sources, the cost-cutting measures will include the closure of dozens of branches, significant job cuts at the head office, and a revamp of the terms offered to franchisees who operate the majority of the UK’s post office network.
A “New Deal” for the Post Office
Nigel Railton, the chair of the Post Office, is expected to unveil what he calls a “New Deal” for postmasters and the future of the organization. The plan, which has been in the works since June as part of a strategic review, aims to:
- Dramatically increase postmasters’ share of revenues
- Strengthen the branch network
- Make the Post Office work better for local communities, independent postmasters, and partners who own and operate branches
Branch Closures and Job Cuts
As part of the restructuring, the Post Office is seeking to shut down or franchise out most of its 115 wholly-owned branches, known as crown post offices. This move could impact up to 1,000 jobs. Additionally, the company plans to cut another 1,000 positions from its head office, aiming to streamline operations and reduce costs.
The number of crown post offices has been steadily declining over the years. In 2012, there were almost 400 such branches, but the Post Office has been gradually reducing this figure.
Enhanced Terms for Franchisees
While cutting costs in some areas, the Post Office also intends to offer improved remuneration terms to the franchisees who independently run about 9,000 post office branches across the UK. This move is seen as an attempt to maintain a strong network of branches despite the planned closures of directly-managed locations.
Criticism and Support
The restructuring plans come amidst criticism from former postal minister Kevin Hollinrake, who recently accused outgoing Post Office chief executive Nick Read of failing to take necessary cost-cutting action in the organization’s central operations. Hollinrake called the failure to make cuts a “failure of leadership” and pointed out the high number of employees earning six-figure salaries.
Despite the challenges and the fallout from the Horizon IT scandal, business secretary Jonathan Reynolds expressed his support for the long-term future of the Post Office. He suggested that a new model of governance, which would include post office branch operators, could help ensure the institution’s sustainability.
I think despite the scale of this scandal, the Post Office is still an incredibly important institution in national life. As an institution, as a brand, there is still tremendous affection and desire for the Post Office to have a strong future.
Jonathan Reynolds, Business Secretary
A Controversial Necessity?
While the planned closures and job cuts are likely to be met with resistance from unions and affected communities, many experts believe that significant changes are necessary to secure the Post Office’s future. The organization has been struggling financially for years, requiring substantial annual subsidies from taxpayers to maintain operations.
As the Post Office prepares to announce the details of its restructuring plan, all eyes will be on how the “New Deal” balances the need for cost-cutting with the importance of maintaining a strong, accessible network of branches across the UK. The coming months will be critical in determining whether the Post Office can successfully navigate this challenging period and emerge as a sustainable, viable institution for the long term.
