Sub-post offices under pressure

Sub-postmistress Jan Ball talks to Working Lunch's Rob Pittam

Every week, 25 million of us visit a post office. It might be for stamps, to tax our car or collect benefits.

But while we might see the people behind the counter as the human face of the postal service, to the UK's 17,000 sub-postmasters and mistresses it's a hard-headed business proposition.

They've invested their own money - sometimes as much as £100,000 - into a business that they hope will provide them with a decent living.

For many, that's become difficult in recent years, and cost-cutting plans by Consignia, which is losing £1.5m a day, make their future even more uncertain.

Jan Ball and her husband Tom run an urban post office in St Michael's Hill, Bristol.

"We were looking for a career change having been in the NHS for many years, so we looked round and decided to buy a post office," says Jan, who's also a local rep for the Federation of Sub-Postmasters.

Bristol sub-postmistress Jan Ball

"It's like buying any other business and we liked the fact that this one was busy and had a reasonably good income."

But unlike most other businesses, the Balls had to be vetted by the Post Office to make sure they were financially sound.

Hard work

They've managed to make their sub-post office pay, but it's been hard work.

"We welcomed computerisation as a way forward but it means we earn less money because it's easier for the Post Office to do some things on the computer so they pay us less."

Sub-postmasters get a basic monthly payment, the size depending on the type of office they run.

They also get money for every transaction they make - from selling stamps to providing banking services.

Hit

"The harder you work and the more you sell to your customers, the better you get paid," says Jan.

But the government's plan to have more benefits paid directly into bank accounts will hit post offices.

And they've already found their costs rising as they've had to meet new legislation, such as the minimum wage.

Last year 540 sub-post offices closed because they were no longer financially viable.

Squeezed

Jan says one of the main reasons is that the Post Office has not increased the payments it gives sub-postmasters, so they are being squeezed on all sides.

And now with Consignia in dire straits, things look even bleaker.

The company is talking about closing 3,000 of its 9,000 urban post offices to save money; it's not politically desirable to shut rural offices, where community services are already threatened.

Problems are compounded because if a sub-postmaster wants to sell the business, they must find a buyer who is acceptable to the Post Office, particularly difficult when they are struggling to make a living.

There's got to be a working partnership

Jan Ball

There is compensation available, but in many cases it is not enough for sub-postmasters to pay off their commitments and recoup their original investment.

They're also angry at what they see as the random nature of the closure proposals, and are pressing for a more structured plan, so large areas are not left without an office at all.

"There's got to be a working partnership," says Jan.

"We're business people but we're also investors in this organisation."

She estimates that sub-post offices around the UK have put a total of £1.5bn into the organisation, but are getting little in return.

Meanwhile the 1,000 branches run by the Post Office itself are losing millions but will remain largely untouched.

Lots of people love doing this job

Jan Ball

"Lots of people love doing this job," she says. "They love the life, they like meeting people and they like being a valued part of the community."

And judging by the comments of customers I spoke to, balancing cost-cutting with community needs is a challenge that could leave Consignia's image dented even further.