The Government has decided against establishing a state-backed Post Office Bank, citing the plan as too time-consuming and expensive. Ministers announced the decision today, stating that now is 'not the right time' to create such an institution, especially given the strain on public finances.
Instead, the Government outlined a £1.34 billion funding package over four years to modernise and maintain the Post Office network. Postal affairs minister Ed Davey described the investment as ushering in an 'exciting new era', with plans to refurbish branches, extend opening hours, and reduce queues. He emphasised that the Post Office 'will not be for sale' and that there will be no programme of closures.
Unions and campaign groups expressed disappointment. The Communication Workers Union (CWU) called the decision 'desperately disappointing', while general secretary Billy Hayes warned that privatising parts of the Royal Mail would 'kill off' post offices by removing vital business, such as welfare payments and mail services.
As part of the announcement, Mr Davey revealed a new agreement between Post Office Ltd and Royal Bank of Scotland (RBS), allowing RBS and NatWest customers to access current and business accounts through post offices. This will bring the total to nearly 80% of current accounts accessible via the network.
The Government also confirmed plans to convert the Post Office into a mutual structure, similar to the Co-operative Group, giving employees, sub postmasters, and communities greater say in its operation. Additionally, the Post Office will expand its role as a 'front office' for government services, piloting schemes such as verifying documents for pension services and supporting National Insurance applications.
