The challenge to Postwatch

Nationwide Post Office Limited is currently in the process of franchising some 70 Crown offices into WHSmith outlets and, over the next 18 months, some 2,500 offices will actually close (although around 500 will be replaced by outreach arrangements).

A taste of the challenge faced by Postwatch as these exercises roll out came from a public meeting this week in Fulham in London when the local (Conservative) Council organised a protest meeting against the intended franchising of the Farm Lane Crown office to the WHSmith outlet in nearby North End Road. The meeting was addressed by Postwatch's Greater London Chairman Roger Darlington who predictably received a tough reception since Postwatch cannot veto such a proposal and can understand the case for franchising. You can read an account of the meeting from a local (Conservative) councillor here.

Some of the many issues which came up in Fulham - which will certainly come up elsewhere - were as follows:

• Customers find it hard to understand how a Crown office can be loss-making when it is seemingly so busy. More explanation is necessary about the falling number of transactions and the low margin on most transactions and, if POL does feel able to give more local financial data, that would be very helpful.
• Customers cannot understand how, if POL cannot make money from a particular office, then a franchisee like WHSmith apparently can. Again more explanation is necessary, this time about the different business model which franchisees operate, including shared property costs, lower staff costs and greater footfall.
• Residents find it hard to envisage how the facilities of a Crown office can be fitted inside an already full retail outlet like a WHSmith shop. It would be really helpful if they could be shown actual layouts and plans with full details of the number of counters and floor space.
• Most controversially people don't understand why the consumer watchdog does not simply oppose any franchising or closure proposal when it is clear that all those at the protest meeting do not want it. It is tough but we have to explain that such hard decisions are likely to make the overall network more sustainable and the alternative is continued, unplanned closures such as we have seen for decades.
• Finally there are constant demands that the post office network should not be required to behave commercially and should be subsidized by government with much party political posturing against the present government. Postwatch is of course politically neutral and can only operate within the context set by the government of the day. But we need to point out that there is in fact a measure of subsidy to the post office network (the social network payment of £150M a year) and the forthcoming closure programme has been reluctantly accepted as necessary by the cross-party Select Committee on Trade & Industry.