Thousands of post offices across Britain may be closed under cost-cutting plans due to be announced next week, according to reports on Saturday. Newspapers said up to a fifth of the national network, or 3,000 branches, could be scrapped to stem losses caused by the loss of government business and a rise in competition from the Internet and email.
A Department of Trade and Industry spokesman said an announcement would be made next week, possibly on Thursday, but would not confirm the figures reported in the Times and Financial Times. "There is widespread recognition that the current size of the network is unsustainable," the spokesman said. "We will not comment on any speculation about numbers involved."
The Royal Mail, the state-owned postal operator, is fighting private competition after losing its 350-year monopoly on postal deliveries on January 1. It lost key business when the government began paying benefits such as state pensions directly to claimants' bank accounts rather than through post offices.
The growth of email, text messages and buying car tax discs and television licences over the Internet have also dented profits, the government says. The Royal Mail said it relied on government subsidies to keep post offices open. "The future size of the Post Office network depends entirely on the government's decision on the level of funding it is prepared to provide," a spokesman said.
The Post Office network lost two million pounds a week last year. This year the loss is expected to double. In October, Trade and Industry Secretary Alistair Darling said he would protect the national network of post offices. "There are always going to be people who depend on the Post Office and don't have bank accounts and we've got to make sure that they are looked after," he said in an interview with the Financial Times.
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