Local councils may takeover struggling post offices

A really interesting development in the story of the struggling UK post office network today. It seems that local councils may finance and control some of the post offices that Royal Mail has earmarked for closure due to sustained losses.

Many of the newspapers are running this development - I was alerted to it by an email from the Press Association.

Local authorities across the UK are considering taking control of threatened post offices.

Essex County Council, which proposed the idea in February, said many other local authorities were also interested in running branches.

Royal Mail bosses, who plan to shut 2,500 struggling branch offices, said it was happy to talk to councils who wanted to provide funding.

Essex County Council is aiming to take over as many as 15 branch offices in Essex for the next three years and has set aside £1.5 million for the scheme. More than 30 Essex branches have been earmarked for closure by the Royal Mail.

Essex County Council has said discussions with the Royal Mail are at an advanced stage.

“I have had a lot of calls from councils around the country about the possibility of copying what we are trying to do,” said Essex County Council leader Lord Hanningfield. “This is exactly what local government should be doing. Identifying local needs and priorities and delivering on them for local communities.

“The principle of allowing local people and their representatives to run and deliver local services has once again been underlined here.

“Let me also stress that this is also not about replacing one public subsidy with another.

“Our intention is very clear - the money that we will be investing on behalf of the people of Essex will be used over the course of the next three years, to help each branch to move, as far as possible, to become financially self-sufficient and cost neutral to the council.”

A Royal Mail spokeswoman said: “We are very willing to work with local authorities and other groups who want to fund and provide premises and staff for additional services in their community and are actively pursuing these ideas at the moment.”

Some great business studies angles in this developing story:

- The social value of local post offices - do they justify the public subsidy that has kept so many open
- Should local councils effectively be taking loss-making businesses over?
- If Royal Mail couldnt help the struggling post offices reach breakeven, what services, skills and support can local councils deliver to achieve this objective?