Post Office to announce ‘transformation plan’ amid reports of job cuts

The Post Office is to set out a “transformation plan” in a bid to fix its finances amid reports that hundreds of branches could close down.

The industry shake-up may result in the closure of 115 loss-making branches wholly owned by the Post Office – putting more than 1,000 jobs at risk, and hundreds more at the business’ headquarters, Sky News reported on Tuesday.

Post Office chairman Nigel Railton is expected to make the announcement at the company’s headquarters in London on Wednesday morning, addressing a speech to postmasters across the country, as well as retail partners and Post Office staff.

New operating model

The Post Office network includes 11,500 branches across the UK – 115 of which are Crown Post Offices located in city centres and staffed by Post Office employees.

Sky News reported that the Post Office will seek to close those branches or seek alternative franchising arrangements in a bid to cut financial losses in the long-term.

A Post Office spokesperson said the new plan, which follows a strategic review earlier this year, will “dramatically increase postmasters’ share of revenues, strengthen our branch network and make it work better for local communities, independent postmasters and our partners who own and operate branches”.

The spokesperson added: “The plan intends to create a new operating model for the business that means ensuring the Post Office has the right organisational design.”

The government is also said to have been consulted on the possibility of handing ownership of the network to thousands of subpostmasters across the country.

Scandal

A spokesperson for the Department for Business and Trade said: “Post Offices are an integral part of the communities they serve and the services they provide for local people.

“The Government is in active discussion with Nigel Railton on his plans to put postmasters at the centre of the organisation and strengthen the Post Office network for its long-term future.”

One government source told Sky News the plans should be seen in the context of comments made by Jonathan Reynolds, the business secretary, on Monday at the public inquiry into the Horizon IT scandal.

The scandal involved hundreds of subpostmasters who were wrongly convicted of stealing after the company’s defective Horizon accounting system made it appear as though money was missing from their branches.

Giving evidence at the inquiry, Mr Reynolds said: “I think, despite the scale of this scandal, the Post Office is still an incredibly important institution in national life.

“I look at the business model of the Post Office, and I think even accounting for the changes in the core services that are provided … there’s still a whole range of services that are really important.

“But I don’t think postmasters make sufficient remuneration from what the public want from the Post Office, and I think that’s going to require some very significant changes to the overall business model of the Post Office.”

Retail partners of the Post Office, such as WH Smith, Tesco, Morrisons and the Co-Op, operate 2,000 Post Offices across the country.

The rest of the network – around 9,000 Post Offices – are operated by independent postmasters.