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From a peak of some 25,000 offices in the mid-1960s, the Post Office network began to decline in size as early as 1970. The network continued to contract with some 6,000 ad hoc closures having taken place by 1997 without any policy or support being developed to help the network adapt to wider changes in society.
In 1999 the Prime Minister asked the Performance and Innovation Unit (PIU) – now known as the Strategy Unit – to look at the future of the Post Office network, identify the challenges, and provide the Government with recommendations for how to maintain and improve the sustainability of the network.
The PIU Report (Counter Revolution - Modernising the Post Office Network) was published in June 2000 and set out 24 recommendations for the future, all of which the Government accepted and implemented.
The PIU explored the core themes of how the network functions in rural, urban and urban deprived areas, as well as looking to the future and ways of replacing business that would be lost following the switch to direct payment of benefits from 2003. Implementing the PIU’s recommendations formed the core of Government’s policies for the post office network in recent years.
The report showed quite starkly that the Post Office network had not kept pace with the changing needs of customers. Too often post offices had become dingy and shabby through lack of investment, and were losing business. The business had lost touch with its customers’ needs, which are very different now to what they were a generation ago. Major advances in technology, greater mobility and changes in shopping and financial habits have led to people simply not using post offices in the way that they had done in the past and custom has sharply declined.
Since 1999, the Government has made a very substantial investment in the Post Office network of more than £2 billion to help it adapt to the changing needs of customers and to the marketplace in which it operates. This investment includes the £500 million that was made available for the ‘Horizon’ project to bring modern computer systems into every post office in the country for the first time.
In line with recommendations in the PIU report, Postcomm, informed by Postwatch, reports annually to the Government on developments in the Post Office network. Postcomm's annual post office network reports can be found on their 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 Government were 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.