The Effect of Network Transformation on Subpostmaster Pay

Over the last few years Post Office Ltd (POL) has lost a lot of Government work.  There is a clear trend in the drop off of revenue from the Government and there is no reason to suggest that this will not continue as further budget cuts are made to Government departments.   The only reaction to this from POL is one of apathy.  Nothing they can do about it they say.  Perhaps not but perhaps they would be wise to review the original premise of the NT project which appeared to rely heavily on the likelihood of increased government work as a result of the NT Investment program and maintaining a network size way above its optimal size.

Instead POL’s focus has shifted to trying to increase sales of Financial Services.  But these products are sold mainly through the larger Main Style branches and offer little income to the vast majority of the smaller community branches.  Yet it is these smaller branches that are expected to open longer hours for greater convenience to their Post Office customers.

So any comparison of overall revenue paid to SPMRs must be taken with a pinch of salt – bigger offices are doing better and smaller offices are doing worse.

So let’s look at the figures.

There are about 9500 offices that are referred to in the Post Office accounts as Subpostmasters.

In 2014 they received £448m and in 2015 £435m – a drop of £13m a year.

In 2015 the number of opening hours per week of the network increased by 50,000 so an average over the year of 25,000 per week.   There are on average I would assume 2 counters per post office and 51 weeks in a year taking account of Public Holidays.

Without setting out all the calculations involved that sees Subpostmasters being paid 9.4% less per counter hour open.

But that doesn’t take into account the fact that some of the bigger offices are in fact doing a lot better.  If it was taken into account the vast majority of the smaller offices would be seeing a decline in income per opening hour way in excess of 10%.

To earn this decrease of course you have to employ staff because you can’t be expected to work these increased opening hours can you?  So the effect of the introduction of the Living Wage – a 10% increase – will have a serious impact on the viability of these smaller post office.

Just imagine – your income drops by 10% and the government that owns the business that is paying you less demands you pay your staff 10% more?   Where on earth is that money going to come from.  Completely and utterly unsustainable.

But wait! It doesn’t stop here.   Network Transformation hasn’t finished yet.   Half the network is still to convert to longer opening hours and loss of the fixed element of their pay.  The Network Subsidy is set to fall by over 50% by 2018.

Will it work – how on earth could it?  Post Offices are closing for good all around the country right now as a result – what on earth do these people at POL think would inspire someone to open them back up?   Yet these closed offices remain on the books of POL as temporarily closed so not included in the statistics.  They hide these in order to get their bonuses.

In a couple of years I am not going to turn round and say I told you so – what I am saying today is that I AM TELLING YOU THIS IS SO AND THIS IS WHAT IS GOING TO HAPPEN – IT IS INEVITABLE. ONLY FOOLS WOULD DENY IT AND FOOLS SHOULD NOT BE PUT IN CHARGE OF SPENDING £2 BILLION POUNDS OF TAXPAYER’S MONEY.