Britain’s next government has been urged to set up a taskforce to explore the future for the state-owned Post Office including mutualisation – once victims of the Horizon IT scandal have been financially compensated.
The Post Office Horizon IT scandal has been described by MPs as one of the biggest miscarriages of justice in recent years and was highlighted by the recent ITV drama Mr Bates vs the Post Office.
The UK government faces the prospect of paying out multimillion-pound sums to compensate hundreds of post office operators who were wrongly prosecuted by the Post Office and lost money because the Horizon IT system wrongly showed financial shortfalls at their branches. A judge-led public inquiry is now trying to find out what went wrong.
However, there are growing questions about the longer-term future of the government-owned Post Office with its 11,500 branches across the UK which reported a £76m loss for the year ended March 2023, down from £130m in the previous year. It has 5,200 post offices in rural areas that provide vital services such as banking to communities where banks have closed their branches.
Nigel Railton, the Post Office chair, recently launched a strategic review looking at the sustainability of the business and its future. “As part of this work we’re seeking the views of serving postmasters and other stakeholders with an interest in Post Office’s role in communities across the country,” the Post Office said.
Earlier this year, Voice of the Postmaster, which represents about 900 operators, the Communication Workers Union (CWU), which represents Post Office employees, and Co-operatives UK met Kevin Hollinrake, the then Post Office minister, to talk about mutualisation which would lead to the ownership transferring from the state to staff.
Rose Marley, the chief executive of Co-operatives UK, the trade body for the UK’s 7,000 independent co-operative businesses, believes the next government should seriously explore the practicalities of mutual options for the Post Office – once victims have received financial compensation.
She said: “We understand that the Post Office network is complex, but if postmasters had enjoyed a genuine stake and a say in how the Post Office operates, it’s pretty clear we wouldn’t be in this mess.
“Evidence also shows that worker and employee-owned businesses are more productive, while community-based co-operatives are more resilient and sustainable as well, so it has to be looked at.”
Richard Trinder, the chair of Voice of the Postmaster, said a proposed taskforce could look at the critical challenges faced by Post Office and expand the scope of mutualisation to include not only post office operators and the communities they serve, but also examine issues such as long-term financial liabilities, IT legacy and a revised business model.
Trinder said: “There has to be a process for redressing victims of the scandal and we have to get the government to contribute and then leave the Post Office clear for a huge restructuring.”
Andy Furey, the assistant secretary of the CWU, said: “We support the concept of mutualisation as we have in the past. However, before any mutualisation can start then we need a new operating model and all key stakeholders need to play a significant part in running the company. The current management cannot remain in place and there needs to be significant investment.”
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The National Federation of SubPostmasters (NFSP), which also represents Post Office operators, believes there should be an oversight committee which would work with the government: “While mutualisation is the ultimate goal of the NFSP, without the financial support of government, the Post Office simply would not survive and would result in thousands of postmasters losing their investment.
“What is more important is the governance of the Post Office, which is significantly responsible for the failures around the Horizon scandal. This is why the NFSP is proposing an oversight committee to work with the government as the shareholder, PO as the operator and postmasters as investors in the network. As the PO has a social purpose, this oversight committee should include consumer champions.”
In 2012, the then coalition government pledged to examine whether the Post Office could become a multi-stakeholder mutual that gave membership to post office operators and their customers, but no further action was taken.
Labour’s election manifesto has pledged to “explore ways to strengthen the Post Office network”, in consultation with post office operators, trade unions and customers, and support the development of new business models, such as banking hubs, that will help reinvigorate the high street.
The Liberal Democrats say they would encourage post offices to become community banking and government hubs. The Conservatives say in their manifesto that the Post Office should remain a “valuable social and economic asset” and delivering that goal “requires a change of culture at the top”. All the main parties have promised to ensure compensation for the victims of the scandal.
Rose Marley, the boss of Co-operatives UK, said: “The compensation is an absolute No 1 priority and rightly so and I think whatever political party gets in power … doing right by those postmasters is something the public want to see.”