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Sunday, 13 October, 2002, 10:18 GMT 11:18 UK
Rural post offices 'win cash lifeline'
A village post office
The rural post office network is under threat
The government has agreed to inject 450m to support the UK's rural post office network, a report has said.

The cash, paid over three years, is aimed at ending the spate of closures which saw 441 rural post offices shut in 2000.

And it comes as Royal Mail and post office operator Consignia attempts to stem losses which hit 1.1bn last year.

Consignia has warned that the postal network loses 500,000 a day, and that the company will not keep on subsidising it, the Sunday Telegraph said.

Commission lost

Consignia has launched a shake-up aimed at supporting innovative ideas for maintaining rural post office services, suggesting counters are, for instance, opened in pubs, so allowing overheads to be shared.

The reforms helped the number of post offices closed last year drop to 194.

But the pace of closure is set to accelerate again from April, with the relaxation of rules forcing benefit claimants to pick up their cash from post offices.

The move, which will save the government 400m a year, will deny Consignia commission fees.

Consignia suffered a further blow last week when regulator Postcomm proposed a price cap the firm estimates will cost it 460m.

Parliamentary debate

Consignia has also proposed axing many post offices in cities and towns to save costs, with one third of the 9,000 urban branches set to close.

The programme, to be backed by 210m in state aid, will be discussed by MPs on Tuesday.

See also:

13 Aug 02 | England
31 Jan 02 | Scotland
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