The government has announced that it will provide extra funding to The Post Office in order to protect branches from closure, as well as to modernise the service it provides. The deal will start next year, and will consist of £370 million of funding and will last for three years. The move comes as the government owned company is set to make a profit for the first time in 16 years.
It’s estimated that £160 million will be used to protect branches from closure, and the remaining funds will be invested in the network in order to make improvements to services. Over £2 billion has been invested in the last six years, resulting in over 4000 more branches being open to the public on Sundays.
Business secretary Greg Clark said. “The Post Office is at the heart of communities across the UK, with millions of customers and small businesses relying on their local branch every day to access a wide range of important services. With the network at its most stable in decades, this £370m of Government funding will ensure it can continue to modernise and bring further benefits to customers across the UK.”
Paula Vennells, chief executive of the Post Office, said that recent profits are a “major milestone in the Post Office’s journey to [becoming] a sustainable and successful business. We’re fulfilling the promises we have made, and this is recognised by the government’s further investment in the Post Office, which will enable us to continue transforming the business to meet our customers’ changing needs – a transformation that has already seen us make significant progress.”
“For over 370 years, the Post Office has stayed relevant to communities the length and breadth of the UK by changing and adapting. With the Post Office now trading at a profit, we are better placed than ever to embrace the future.”
However, the decision has been criticised by some trade unions, who claim that the recent profits are due to recent cuts. A spokesperson from Unite said that the Post Office didn’t have a “coherent strategy” and that the profits it’s seen this year and the increase in profit could be put down to a “slash and burn” approach to services and jobs.
A spokesperson from the Communication Workers Union said: “While the Post Office and government are dressing this up as good news, in reality the Post Office is facing a significant cut in government funding for the next three years. The announcement marks a continuation of this strategy and is bad news for communities that rely on post offices across the country. Far from modernising the network this is managing its decline.”