POST OFFICE: GOVERNMENT ANNOUNCEMENT OF ONE YEAR £227MINVESTMENT – 2021/22

POST OFFICE: GOVERNMENT ANNOUNCEMENT OF ONE YEAR £227M
INVESTMENT – 2021/22

Branches are advised that Paul Scully MP, Minister for Postal Affairs, has announced
that as part of the spending review, Post Office will be receiving the following monies
from Government for one year – April 2021 to March 2022:

• £227m total funding, comprising of
o £177m “capital investment”
o £50m network subsidy to support the rural Sub Post Office network

This investment, which is obviously welcome, amounts to an increase of £107m
(89.2%) over the total funding for last year. The table below outlines Government
investment including the network subsidy over the past 10 years.YearNetwork SubsidyGovernment GrantTotal2021/22£50m£177m£227m2020/21£50m£70m£120m2019/20£50m£70m£120m2018/19£60m£70m£130m2017/18£70m£70m£140m2016/17£80m£140m£220m2015/16£130m£150m£280m2014/15£160m£170m£330m2013/14£200m£215m£415m2012/13£210m£200m£410m

It should be noted Nick Read, Post Office CEO, stated the following in regards to the
announcement (the full press release from the Post Office is attached for your
information):

“This important funding settlement will enable us to invest in our products and
services and maintain our presence on High Streets and in rural communities
right across the UK helping fuel economic recovery.”

In addition, the Post Office press release noted:

“It will be used by Post Office to invest and improve products and services
available to customers such as ‘Drop & Go’* and the introduction of automated
cash deposits at branches. Investment will also go towards developing its
support services available to Postmasters.”

On the face of it this seems to be a substantial amount of money for “investment”;
however, the Post Office has had to find in excess of £100m in legal costs associated
with the Horizon scandal so far. Even if the Government investment isn’t used directly
to cover future legal claims (for the 47 cases currently at the Court of Appeal), in our
view, given the substantial monies the Post Office is going to have to find from
somewhere to fund these ongoing legal costs, the Government money isn’t enough for
proper strategic investment to ensure the Post Office continues to be a viable
community service for the future. In addition, it is imperative that there is fair and
decent investment in Postmaster remuneration to ensure they have a viable business
going forward and to guarantee no more network closures. Far too many Postmasters
are currently delivering a vital service for poverty pay rates and this has to stop now.

Also, Nick Read and his Senior Directors hold the unreasonable and unsubstantiated
view that the Crown Office network is simply too expensive to run and continue to look
to privatise Crowns to struggling retailers such as WH Smith. The Post Office needs to
totally rethink its strategy. This public money should be used to invest in the Post Office
network holistically including Crowns and indeed in our hard working, highly skilled Key
Workers, rather than to fund Settlement Agreements for our members who do not wish
to TUPE to unsuitable franchise partners.

With the continued closure of thousands of banks up and down the country, it is high
time to invest in Crown Offices that remain an important part of many High Streets and
support local infrastructure especially in terms of banking and community services so
that the public does not lose this cherished institution and our members, including those
in the Admin and Supply Chain network, are guaranteed job security.

Finally, this vital Government investment should in turn provide the necessary platform
for both the Post Office and Royal Mail to conclude in a positive way their negotiations
to update and enhance the current ten-year inter-business agreement. It is imperative
for the well-being of the nation’s Post Offices that there is a strong, long-term link up
with Royal Mail.

Yours sincerely,

Andy Furey
Assistant Secretary

LTB 570/20- Post Office – Government Announcement of One Year £227m Investment – 2021-22

Attachment to LTB 570/20

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