Post Office could be 'co-op' owned by staff

OWNERSHIP of the Post Office could be transferred from the government to a mutual, owned by employees, sub-postmasters, customers and consumer groups, a government report has recommended.

The Post Office would be run by a board of directors, answerable to a forum that is representative of the members, as suggested by Co-operatives UK, the trade association for co-operative enterprises.

The report recommended that the Post Office should be owned by its members, with the government's relationship centred on contractual or regulatory arrangements.

But the postal workers' union warned the reforms will make it harder to keep branches open.

Billy Hayes, general secretary of the Communication Workers Union, said mutualisation was a "distraction" which would not solve the industry's problems.

It is understood that around 7,500 of the 11,500 branches make a loss and once Royal Mail is separated in 2015 it will be free to choose its access points.

Critics believe this will mean it can either force the Post Office network to become more efficient by closing branches or turn to major supermarket chains as alternatives.

Mr Hayes said: "Breaking the Post Office away from Royal Mail and privatising the mail service will do huge damage to the Post Office network's revenue. Mutualisation won't solve that problem, only government investment and commitment to providing government services through post offices will help to keep post offices open. There is no evidence that distancing the Post Office from government by mutualising it will help. If anything, it will make it harder for the Post Office to win government business to keep branches open.

"The Post Office network is currently loss-making and we can't see the staff being interested in taking on national debt through a mutualisation programme. Government investment will give the network its best chance of survival."

The government insisted reforms will save the network from mass closures, pointing out that under Labour thousands of branches were shut. Postal Affairs Minister Edward Davey said: "This report paints an exciting picture of what a mutualised Post Office Ltd could look like.

"A radical shake-up to combine elements of John Lewis and Co-operative Group's ownership arrangements would give those who know the Post Office best -- subpostmasters, franchise partners, staff and the communities they serve - a real say in how the Post Office is run.

"Mutualisation will only work if the key parties want to make it happen and believe it to be the best way forward - it is not something which can be imposed from above by the government. We will carefully consider this report before public consultation later this year."The report was welcomed by consumer representatives.

But Andy Burrows, of Consumer Focus, said: "The critical issue for consumers must be that change not only provides a secure future for the network but leads to better levels of customer service and access to more of the financial and public services they want to see at local branches."