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The Performance and Innovation Unit (PIU) report, published in 2000, identified that over-provision was damaging to the future sustainability of the Post Office network in urban areas. With over 1,000 urban sub-post offices having at least 10 other post offices within a mile there was no longer enough business to sustain such a concentrated network.
The PIU recommended that Government should provide financial support for Post Office Ltd if the company decided to rationalise the urban network. Subsequently, following a House of Commons debate on the 15th of October 2002, the Government made available up to £180 million to Post Office Ltd for its ‘Urban Reinvention Programme’ to fund compensation payments to subpostmasters whose offices were closed under the Programme for the loss of value of their business. A further £30 million was made available on a matched funding basis to make improvements to offices that remained. Funding was provided under Section 8 of the Industrial Development Act 1982.
The Urban Reinvention Programme, which was administered by Post Office Ltd, was UK-wide but related only to the urban network of sub-post offices located in communities of more than 10,000 inhabitants. In accordance with the Code of Practice on Post Office Closure and Relocations – agreed between Post Office Ltd and Postwatch – local communities were consulted on restructuring plans before final decisions were made.
Initially, Post Office Ltd prioritised closure proposals by focusing on those offices under the greatest pressure in order to reduce unplanned closures. From September 2003 – Post Office Ltd implemented the Programme on an area-by-area basis, using Parliamentary constituencies or groups of constituencies. Public consultation on closure proposals under the Programme ran for six weeks (increased from one month in the early stages) and was extended to accommodate public holidays.
However, consultation on local changes does not amount to a referendum, the ultimate decision whether to close or retain an individual post office remains with the management of Post Office Ltd.
Under Post Office Ltd's Urban Reinvention Programme, 2,486 urban sub post offices closed and some 3,700 offices have received investment grants.
Postcomm commissioned NERA Economic Consulting with assistance from Accent to carry out a review of the Urban Reinvention Programme. The evaluation of the short and medium term economic and social effects was published in October 2005. A further report, evaluating the effects of the Programme ‘One Year On’ was published in October 2006. The reports are available from Postcomm’s website.
Alongside a need to rationalise parts of the urban Post Office network with too many outlets serving the same district for them all to remain viable, the PIU also recommended that a fund be established to improve post offices and associated retail facilities in the most deprived urban areas.
In response, the Government provided £15 million for the Deprived Urban Post Office Fund, administered by the Neighbourhood Renewal Unit, which resulted in grants of up to £50,000 for improvements to 340 offices in the most deprived 10% of wards in England. The devolved administrations were allocated proportionate sums to introduce their own equivalent schemes.
An independent evaluation of the Deprived Urban Post Office Fund, carried out by the Centre for Enterprise and Economic Development Research at Middlesex University, was published on 20 December 2005. The evaluation report is available from the Neighbourhood Renewal Unit’s website.
On 14 December 2006 Department launched a 12-week consultation on a range of proposals for the Post Office network. The consultation closed on 8 March 2007 and we are grateful to all those who took the time to contribute to the process. The Department published its response to the Post Office network consultation on the 17th May 2007.