Post Office to close 115 branches, risking hundreds of jobs

THE Post Office has announced plans to close 115 branches and put hundreds of jobs at risk as part of a major overhaul aimed at securing its long-term future.

The closures, which could affect about 1,000 employees in wholly-owned branches, come as the state-owned business struggles to return to profitability following an ongoing IT scandal, according to reports.

Post Office interim chairman Nigel Railton revealed the move on Wednesday (13), adding that the company’s network of over 11,600 branches, most of which are run by franchisees, needed restructuring.

The closures, which represent about one per cent of the Post Office’s branches, could result in some locations being transferred to retail partners or sub-postmasters.

The overhaul also includes plans to increase sub-postmasters’ share of revenue, with the aim of raising their average pay by £22,000 over the next five years.

"We can, and will, restore pride in working for a business with a legacy of service, rather than one of scandal," Railton said during a press conference. These proposals will require government approval before they can proceed.

The Post Office, which has been in operation for 388 years, faces significant challenges as it competes with private parcel delivery companies such as Evri and struggles with declining demand for traditional postal services.

Although it has tried to diversify into banking, the Post Office still relies on government subsidies to stay afloat, with pre-tax losses of £81 million reported for the 2022-2023 financial year, though an improvement from the £131m loss the year before.

The institution’s reputation has also been tarnished by the Horizon IT scandal, which saw nearly 1,000 sub-postmasters wrongly prosecuted between 1999 and 2015 due to faulty software.

This issue has taken up much of the management's attention, with the current CEO, Nick Read, set to step down in March after overseeing a period marked by one of the UK’s most significant miscarriages of justice. Read has acknowledged that the Post Office still has work to do to regain the trust of its sub-postmasters.

In response to these challenges, the government has initiated a separate review to explore the future of the Post Office, with postal affairs minister Gareth Thomas considering mutualisation as a potential ownership model.

Railton, who has been leading the review, explained that the Post Office needed "a fresh start" to put sub-postmasters at the heart of its operations.

The plan aims to provide over £250m annually to postmasters by 2030, subject to government funding. Additionally, the Post Office intends to improve its banking services and introduce a new, lower-risk IT system for sub-postmasters.

However, the move to reduce head office jobs and restructure the organisation has drawn criticism, particularly from the Communication Workers Union (CWU), which represents many of the Post Office staff.

CWU general secretary Dave Ward described the closure plans as "immoral" and "tone deaf," given the ongoing inquiry into the Horizon scandal.

"CWU members are victims of the Horizon scandal and for them to now fear for their jobs ahead of Christmas is yet another cruel attack," he was quoted as saying.

According to reports, the government has been in discussions with Railton about how to support the business, including the possibility of turning over ownership to sub-postmasters.