Latest news with #mutualisation
Yahoo
2 days ago
- Business
- Yahoo
Employee-owned Post Office model ‘unlikely to be considered until 2030'
Turning the Post Office into an employee-owned organisation could not be considered until 2030, the Government has revealed, as it could also scrap the 11,500-branch requirement as part of a major review into its future. The current level of taxpayer funding for the Government-owned postal service is unsustainable, the Department for Business and Trade (DBT) said in a new Green Paper on the organisation's future. This sets out its views on how the Post Office should be run in the future, including possible changes to its ownership structure. The DBT said turning the organisation into a 'mutual', whereby it is collectively owned by its members, was a possible long-term version of this structure could see membership limited to postmasters and franchisees, or it could also include customers, employees and communities. But the Government said the Post Office 'should be financially and operationally stable before mutualisation can be considered', meaning it would need to be profitable and cash-generative. It is also in the process of working to replace its Horizon IT system following the scandal, in which about 1,000 people are thought to have been wrongly prosecuted and convicted over shortfalls in their branches caused by faulty software. This means the earliest date to consider mutualisation is thought to be around 2030, the DBT said. It could then take a further three years to implement, with it being a 'complex, time consuming and potentially expensive process', the Green Paper read. The Government said another long-term option for the ownership structure is a charter model, similar to the BBC and universities, which sets out an organisation's public purpose and rules for how it operates. Meanwhile, the paper found that the Post Office's requirement to run at least 11,500 branches across the UK had become 'more challenging and costly' due to rising labour costs against declining visitors across the network. This has resulted in it requiring more subsidies from the Government in recent years, it said. The DBT said one option for the future of the Post Office network was to scrap the minimum branch requirement, meaning it could address loss-making branches and focus on bigger, full-service sites. But it would still have to ensure that at least 99% of the population stay within three miles of a full-service branch under this option. The Government stressed that its current level of funding to the Post Office is 'unsustainable' in the long-term and that the organisation should be able to self-fund investment in its network and postmasters. The Post Office made a trading profit of £22 million in the 2023-24 financial year, according to its latest annual report. But it is estimated to swing to a trading loss of £24 million for the latest year and £60 million over the 2025-26 financial year. However, the Government plans to award a new subsidy package worth £118 million to fund a transformation plan and further investment that could improve its services and its financial position. Alongside the Green Paper, the DBT said it had launched a three-month consultation period, giving customers and postmasters the opportunity to have a say in how the service is run. Post Office minister Gareth Thomas said: 'Post Offices continue to be a central part of our high streets and communities across the country. 'However, after 15 years without a proper review, and in the aftermath of the Horizon scandal, it's clear we need a fresh vision for its future. 'This Green Paper marks the start of an honest conversation about what people want and need from their Post Office in the years ahead.' Neil Brocklehurst, Post Office's chief executive, said: 'We now have a once-in-a-decade opportunity to have a national conversation about the future of our post offices and their role in supporting communities across the UK. 'This Government consultation is a vital part of shaping what the future of Post Office could, and should, look like.' Dave Ward, general secretary of the Communication Workers Union (CWU), criticised the Green Paper for 'prioritising further cost-cutting and offering no vision for its future'. 'Successive governments have failed the Post Office, its workers and customers – choosing to use government subsidies for planned redundancies, closures and so-called transformation plans that are nothing more than managed decline,' he said. Mr Ward said the CWU was advocating a 'joint venture ownership model' that would bring the Post Office and Royal Mail back together and give postmasters greater say over the governance and direction of the company.
The Independent
2 days ago
- Business
- The Independent
Employee-owned Post Office model ‘unlikely to be considered until 2030'
Turning the Post Office into an employee-owned organisation could not be considered until 2030, the Government has revealed, as it could also scrap the 11,500-branch requirement as part of a major review into its future. The current level of taxpayer funding for the Government-owned postal service is unsustainable, the Department for Business and Trade (DBT) said in a new Green Paper on the organisation's future. This sets out its views on how the Post Office should be run in the future, including possible changes to its ownership structure. The DBT said turning the organisation into a 'mutual', whereby it is collectively owned by its members, was a possible long-term option. One version of this structure could see membership limited to postmasters and franchisees, or it could also include customers, employees and communities. But the Government said the Post Office 'should be financially and operationally stable before mutualisation can be considered', meaning it would need to be profitable and cash-generative. It is also in the process of working to replace its Horizon IT system following the scandal, in which about 1,000 people are thought to have been wrongly prosecuted and convicted over shortfalls in their branches caused by faulty software. This means the earliest date to consider mutualisation is thought to be around 2030, the DBT said. It could then take a further three years to implement, with it being a 'complex, time consuming and potentially expensive process', the Green Paper read. The Government said another long-term option for the ownership structure is a charter model, similar to the BBC and universities, which sets out an organisation's public purpose and rules for how it operates. Meanwhile, the paper found that the Post Office's requirement to run at least 11,500 branches across the UK had become 'more challenging and costly' due to rising labour costs against declining visitors across the network. This has resulted in it requiring more subsidies from the Government in recent years, it said. The DBT said one option for the future of the Post Office network was to scrap the minimum branch requirement, meaning it could address loss-making branches and focus on bigger, full-service sites. But it would still have to ensure that at least 99% of the population stay within three miles of a full-service branch under this option. The Government stressed that its current level of funding to the Post Office is 'unsustainable' in the long-term and that the organisation should be able to self-fund investment in its network and postmasters. Alongside the Green Paper, the DBT said it had launched a three-month consultation period, giving customers and postmasters the opportunity to have a say in how the service is run. Post Office minister Gareth Thomas said: 'Post Offices continue to be a central part of our high streets and communities across the country. 'However, after 15 years without a proper review, and in the aftermath of the Horizon scandal, it's clear we need a fresh vision for its future. 'This Green Paper marks the start of an honest conversation about what people want and need from their Post Office in the years ahead.' Neil Brocklehurst, Post Office's chief executive, said: 'We now have a once-in-a-decade opportunity to have a national conversation about the future of our post offices and their role in supporting communities across the UK. 'This Government consultation is a vital part of shaping what the future of Post Office could, and should, look like.' Dave Ward, general secretary of the Communication Workers Union (CWU), criticised the Green Paper for 'prioritising further cost-cutting and offering no vision for its future'. 'Successive governments have failed the Post Office, its workers and customers – choosing to use government subsidies for planned redundancies, closures and so-called transformation plans that are nothing more than managed decline,' he said. Mr Ward said the CWU was advocating a 'joint venture ownership model' that would bring the Post Office and Royal Mail back together and give postmasters greater say over the governance and direction of the company.
The Guardian
2 days ago
- Business
- The Guardian
Post Office could hand ownership to staff amid review after Horizon scandal
Ministers are to consider handing over ownership of the Post Office to its operators after the Horizon IT scandal. The Department for Business and Trade (DBT) has published a green paper, starting the first big review of the scandal-plagued organisation in 15 years. The review, which will run until 6 October, follows the publication last week of the first part of the two-year public inquiry into the Horizon IT scandal. Ministers said that part of the review will include looking at the ownership model of the Post Office, which is ultimately controlled by the government, including the possibility of mutualisation. Ministers have previously met representatives of post office operators to discuss the possibility of handing ownership to the network branch managers who run its 11,500 outlets. 'This green paper marks the start of an honest conversation about what people want and need from their Post Office in the years ahead,' said Gareth Thomas, the post office minister. 'Post Offices continue to be a central part of our high streets and communities across the country. However, after 15 years without a proper review, and in the aftermath of the Horizon scandal, it's clear we need a fresh vision for the future.' About 1,000 post office operators were prosecuted by the Post Office between 1999 and 2015 because of faulty Horizon accounting software that made it look as though they had been committing fraud. The scandal, widely considered to be the most widespread miscarriage of justice in UK history, was the subject of the critically acclaimed ITV drama Mr Bates vs the Post Office, which aired last year and thrust the problem into the national spotlight. Bates has previously criticised the idea of mutualisation. 'Currently, the government subsidises it and will continue to have to support it. They can't just give it to the subpostmasters and say: 'Here you go, mate',' he said last year. In November, the Post Office announced it was to close up to 115 branches putting 2,000 jobs at risk. Nigel Railton, the Post Office chair, is cutting hundreds of staff jobs in order to add £250m annually to operators' remuneration. On Monday, the government also announced that it is to provide a further £118m subsidy to help the Post Office push through its restructure and transformation plans. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The Communications Workers Union (CWU) criticised the award of the subsidy and said the Post Office and Royal Mail, which were split more than a decade ago, needed to be reunified. 'Successive governments have failed the Post Office, its workers and customers,' said a spokesperson for the CWU. 'And choosing to use government subsidies for planned redundancies, closures and so-called transformation plans that are nothing more than managed decline. The only way to build a successful future is to bring Royal Mail and the Post Office back together through a new joint venture ownership model.' The owner of the Royal Mail was bought by Czech tycoon Daniel Křetínský's EP Group in a £3.6bn deal that took the stock market listed business private earlier this year. The government said its green paper will provide the opportunity to work 'hand in hand' with post office operators and the public to ensure the company is 'put on a path to a strong and sustainable future'. 'We now have a once-in-a-decade opportunity to have a national conversation about the future of our post offices and their role in supporting communities across the UK,' said Neil Brocklehurst, the chief executive of the Post Office. According to the latest official figures, just over £1bn has been paid out in compensation to more than 7,300 claimants across the four redress schemes up to 2 June.
Yahoo
2 days ago
- Business
- Yahoo
Post Office could be owned by its workers, government says
The Post Office could be turned into an employee-owned business, the government has suggested, as it launched a public consultation over the future of the service. The business, which operates counters or shops in more than 11,500 locations around the country, is fully state-owned and subsidised by the tax payer. Plans for mutualisation have been under discussion for more than a decade, but were sidelined as the scandal around the wrongful conviction of subpostmasters unfolded. "It's clear we need a fresh vision," said Post Office Minister, Gareth Thomas, launching a Green Paper on the service's future. The government said it wanted to transform the organisation's culture in the wake of the scandal which saw hundreds of subpostmasters wrongly accused of false accounting and theft at the branches they were running on the basis of data from faulty software. The consultation will run for 12 weeks and be the "start of an honest conversation about what people want and need from their Post Office in the years ahead", the minister said. It will look at how to meet changing consumer needs while also strengthening the relationship between the business and its postmasters. Mr Thomas also announced a further £118m to support the work already underway to deliver changes in the Post Office. The Green Paper puts proposals such as changing the Post Office's ownership model back on the table, providing and opportunity for staff, taxpayers and other stakeholders to share their views, before the government draws up its strategy. Post Office to offload all directly-owned branches
BBC News
2 days ago
- Business
- BBC News
Post Office could be owned by its workers, government says
The Post Office could be turned into an employee-owned business, the government has suggested, as it launched a public consultation over the future of the business, which operates counters or shops in more than 11,500 locations around the country, is fully state-owned and subsidised by the tax payer. Plans for mutualisation have been under discussion for more than a decade, but were sidelined as the scandal around the wrongful conviction of subpostmasters unfolded."It's clear we need a fresh vision," said Post Office Minister, Gareth Thomas, launching a Green Paper on the service's future. The government said it wanted to transform the organisation's culture in the wake of the scandal which saw hundreds of subpostmasters wrongly accused of false accounting and theft at the branches they were running on the basis of data from faulty consultation will run for 12 weeks and be the "start of an honest conversation about what people want and need from their Post Office in the years ahead", the minister will look at how to meet changing consumer needs while also strengthening the relationship between the business and its Thomas also announced a further £118m to support the work already underway to deliver changes in the Post Green Paper puts proposals such as changing the Post Office's ownership model back on the table, providing and opportunity for staff, taxpayers and other stakeholders to share their views, before the government draws up its strategy.
