“It seems very odd to base a post office closure programme on work that does not look at the social and economic impacts of closures.  It is as if the post office closure programme was worked out on the back of an envelope.

“Communities now lamenting the loss of their local post office will be angered that the government’s decision to swing the axe was not based on up-to-date research but on old data that did not examine the damage that closures would do.   Because the number of closures had already been fixed, the few people who knew about the consultation period saw it as little more than a way of giving the closure programme a thin veneer of legitimacy.” 

Mr Bacon was speaking as the Commons public accounts committee published its report on Post Office Ltd’s Network Change Programme.  In 2007, the Department for Business, Innovation and Skills and Post Office Ltd agreed a £1.7 billion strategy to make the post office network financially sustainable, including a £150 million annual subsidy. One element of this plan was the Network Change Programme, whereby up to 2,500 post office branches were to be closed.  The Network Change Programme was expected to initially cost £176 million, mainly in compensation to sub-postmasters. Annual savings of £45 million were forecast, but the report finds that the Programme was expected to generate a £17 million loss in the 2006–07 to 2010–11 period of the strategic plan.

The report finds that the Department’s assessment of the social and economic costs of the closure programme were inadequate.  The Department did not undertake any specific economic and social research to support its decisions in 2006, and drew instead on older work, largely completed in 2003. This analysis simply assessed the economic benefits provided by the network as a whole and did not consider the impact of closures.  The Department’s research on the social and economic benefit provided by post offices has to date been largely limited to the rural network.

The report also finds that there was criticism of the local consultation phase of the programme from some of those taking part. In the early stage of the consultation process only 18 per cent of people had been aware that a consultation was going on in their local area.  Complaints included that too little time had been allowed for consultation, that the decisions had already been made and that the public were not being listened to properly.  Postal watchdog Postwatch (now part of Consumer Focus) went on record to say that it considered the six week local consultation period to be too short.