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Post Office future to be outlined Post Office future to be outlined
(about 8 hours later)
The government is set to confirm its plans for the future of the Post Office later, including how many branches it expects will have to close.The government is set to confirm its plans for the future of the Post Office later, including how many branches it expects will have to close.
Trade and Industry Secretary Alistair Darling will reveal the level of grant it will give to subsidise the running of rural post offices.Trade and Industry Secretary Alistair Darling will reveal the level of grant it will give to subsidise the running of rural post offices.
It is thought the new funding package will result in the closure of up to 3,000 offices.It is thought the new funding package will result in the closure of up to 3,000 offices.
The Royal Mail currently receives £150m a year in a deal which expires in 2008.The Royal Mail currently receives £150m a year in a deal which expires in 2008.
The Royal Mail has said the size of the network depended on the level of government funding it receives.The Royal Mail has said the size of the network depended on the level of government funding it receives.
Losing businessLosing business
The Department of Trade and Industry has described the current size of the network of 14,000 post offices as "unsustainable".The Department of Trade and Industry has described the current size of the network of 14,000 post offices as "unsustainable".
The network is losing £4m a week, up from £2m last year, following the loss of vital business. Mr Darling said the Post Office was serving four million fewer customers than two years ago and was losing £4m a week, up from £2m last year.
He said there was a need to strike a sensible balance between closing those branches with too few customers and providing a national network of post offices.
"We need to deal with that but we do need to ensure we have a national network because we recognise the importance of the Post Office to people the length and breadth of the country," he said.
Post offices were hit after the decision to pay pension and child benefit directly into bank accounts.Post offices were hit after the decision to pay pension and child benefit directly into bank accounts.
TV licences, driving licences and passports have also gradually switched to being sold online or through other retailers.TV licences, driving licences and passports have also gradually switched to being sold online or through other retailers.
Compensation
The BBC learned at the weekend that between 2,500 and 3,000 post offices - mostly in rural areas - face phased closure after the government announcement.The BBC learned at the weekend that between 2,500 and 3,000 post offices - mostly in rural areas - face phased closure after the government announcement.
It is understood there will be compensation packages of £40,000 to £70,000 for sub postmasters.
General Secretary of the Federation of Subpostmasters, Colin Baker, said his members provided a social service which was dearly loved.
He accepted there was a financial case, insisting talks were needed on how to create a sustainable network for the future.
"The government have had that viewpoint recently that they can do without the Post Office which I think the nation this year has told them in resounding terms, that they can't."
You cannot carry on putting a massive amount of public subsidy into this Prime Minister Tony BlairYou cannot carry on putting a massive amount of public subsidy into this Prime Minister Tony Blair
It is understood there will be compensation packages of £40,000 to £70,000 for subpostmasters. Closures
Prime Minister Tony Blair insisted on 12 December the consumer and not government policy was to blame for potential post office closures.Prime Minister Tony Blair insisted on 12 December the consumer and not government policy was to blame for potential post office closures.
He said: "You cannot carry on putting a massive amount of public subsidy into this.He said: "You cannot carry on putting a massive amount of public subsidy into this.
"Now we will look for ways in which we hopefully can stabilise the situation, and give the majority of post offices a way forward for the future."Now we will look for ways in which we hopefully can stabilise the situation, and give the majority of post offices a way forward for the future.
"But the reason why under the previous government and under this government post offices have continued to close is not because it has been government policy to close them - it has been because people have made an individual choice to transact their business differently.""But the reason why under the previous government and under this government post offices have continued to close is not because it has been government policy to close them - it has been because people have made an individual choice to transact their business differently."
'Vital role'
Campaigners say thousands of elderly people across the country are worried about the closures.Campaigners say thousands of elderly people across the country are worried about the closures.
Age Concern's director general Gordon Lishman said: "It's time the government started listening to the people who use and depend on their post office. Age Concern's director general Gordon Lishman said: "It's time the government started listening to the people who use and depend on their post office."
"Post offices play a vital role in local communities and provide much more than just a postal service."
Dave Ward, deputy general secretary of the Communication Workers Union, said: "The government must not miss the opportunity to provide real support for the Post Office.
"They have already shown poor judgement by appointing managers who are obsessed with profit and do not understand the public service ethos of the company they lead."
A long battle by campaigners has seen four million people sign a petition calling for rural post offices to be saved.A long battle by campaigners has seen four million people sign a petition calling for rural post offices to be saved.