Post offices struggle to survive

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Thousands of post offices are struggling to survive, with some subpostmasters having to rely on their savings because they are not making any money, a new report has warned.

A study of 750 subpostmasters showed two thirds have seen their income fall or remain the same over the past year, while more than half are taking home less than £1,000 a month.

The National Federation of SubPostmasters said services designed to boost incomes are failing to deliver, and called on the Government to introduce "tangible new work" for post offices.

The warning follows an announcement this week by Business Secretary Lord Mandelson that the Government was not going ahead with its controversial plan to part-privatise the Royal Mail.

The recent spate of post office closures and attempts to boost subpostmasters' incomes had delivered little or no new money, said the report.

Federation general secretary George Thomson said: "This situation is not sustainable. Our survey clearly shows that the post office network is not out of the woods despite the recent closure programme and the livelihoods of subpostmasters remain at risk.

"I believe that the network can once again be a thriving national resource at the heart of local communities, used and valued by millions. This can only be achieved if the Government steps up to the mark and delivers real, tangible new work for the public and for small businesses to carry out across our counters.

"The situation is currently very precarious. Unless new sources of work are urgently found for subpostmasters we will be facing more post office closures, depriving local communities of vital post office services and much-needed local retail."

Four out of five of those polled reported an increase in overheads in the past year and two thirds said staff costs had risen. One in four subpostmasters said they were taking less from their post office pay as salary than they were a year ago while 14% were taking nothing at all, instead drawing income from pensions, savings or their retail business. The average subpostmaster salary is now £12,300 before tax, said the federation.

Many traditional income streams were declining, including payments from processing state pensions and benefits, while new areas such as financial services were producing "minimal" levels of income, said the federation. Apart from payments for using the Post Office Card Account, 41% of subpostmasters earned nothing from Government services, said the federation, adding that this "seriously jeopardised" Government claims that post offices could become the "front office" for all Government departments and agencies.