Post Office: Finance

Department for Business, Energy and Industrial Strategy written question – answered on 22nd March 2021.

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Photo of Tahir Ali Tahir Ali Labour, Birmingham, Hall Green

To ask the Secretary of State for Business, Energy and Industrial Strategy, how the £70m capital investment awarded to the Post Office for 2020-2021 was agreed to be spent.

Photo of Tahir Ali Tahir Ali Labour, Birmingham, Hall Green

To ask the Secretary of State for Business, Energy and Industrial Strategy, if any of the £177m capital investment awarded to the Post Office for 2021-22 will be spent on franchising any Crown post office branches.

Photo of Tahir Ali Tahir Ali Labour, Birmingham, Hall Green

To ask the Secretary of State for Business, Energy and Industrial Strategy, what amount of the £70m capital investment awarded to the Post Office for 2020-2021 will be spent on franchising any Crown post office branches.

Photo of Tahir Ali Tahir Ali Labour, Birmingham, Hall Green

To ask the Secretary of State for Business, Energy and Industrial Strategy, if any Crown post office branches will be franchised under (i) the Post Office’s multi-year Group Strategic Plan; and (ii) the Post Office’s most recent 12 month Group Business Plan.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

£210 million in capital investment was allocated to Post Office Ltd between 2018 and 2021. Post Office Ltd received £168 million in 2018/2019 and £42 million in 2019/2020. No capital investment was provided to Post Office Ltd in 2020/2021. This investment funding was designed to modernise the branch network and improve the systems and processes in place so that the Post Office could continue its journey towards commercial sustainability.

In the most recent Spending Review for 2021/2022, the Government announced further Post Office investment funding of £227 million. This reflects the Government’s commitment to the role that post offices play in our communities. This funding consists of £50 million subsidy to safeguard services in the uncommercial parts of the network, and a further £177 million which will allow Post Office Ltd to invest for the future and to ensure the Post Office remains a vital force on our high streets.

This investment includes supporting Post Office Ltd's future strategy for its network, including the remaining Directly Managed Branches. The management of the Post Office network, including decisions on Directly Managed Branches, is an operational matter for the Company. Changes to the branch network are subject to local consultation processes.

It is important to note that over 99% of the Post Office network is already successfully franchised. This is the preferred business model for the Post Office as it delivers significant cost savings without impacting service provision for local communities. Franchising enables longer opening hours, increased convenience, and greater accessibility for communities.

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