Post Office Closures – Business Sense or Offence?

Post offices around the UK will make a £200 million loss this year, a loss currently subsidised by the British tax payer. Today’s much trailed announcement by Alistair Darling that …

14th December 2006 at 3:21 pm

Post offices around the UK will make a £200 million loss this year, a loss currently subsidised by the British tax payer. Today’s much trailed announcement by Alistair Darling that 2,500 post offices will close therefore sounds like good business sense.

Why then should the Federation of Small Businesses (FSB) have reacted so angrily to the announcement? Clive Davenport, FSB Trade and Industry Chairman said today:

This carnage on high streets across the UK is completely unacceptable and very short-sighted. Whatever money the Government saves from these closures will be lost in tax revenue due to decreased small business productivity. Small firms employ fifty eight per cent of the private sector workforce. We have to ask if it is sensible to put a large proportion of those twelve million jobs at risk to save what is, in Government spending terms, a small amount of money.

I have a great deal of time for the FSB (disclosure: I’m a member!) but quite frankly this sounds like hysterical exaggeration. The reason Post Offices are closing is because fewer and fewer people are using them. While the heavily subsidised sub-post offices do have some social benefit to local people and businesses, there is little evidence to suggest that closure will decimate local jobs and business.

Should Post Offices be a social service? No, not in my opinion. Any FSB member worth their salt would have come to the same, hard business decision as the government has today.

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Alex is the founder and editor of SmallBizPod, the UK's first podcast dedicated to small business, start-ups and entrepreneurship. Alex writes about topical small business issues, entrepreneurs and anything else that catches his eye here on the small business blog.

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  1. Post offices open at the wrong times

    Today, the government has announced that 2500 post offices are to close. It’s hardly surprising (and not just because the scale of the closures was leaked, and because it’s been under discussion for a long time). People now prefer to have t…

  2. Pat Shore says:

    Get your voice heard – the rural post office network –

    Everyone has a view on the future of the rural post office network – but will everyone’s views be heard? Perhaps you have a good idea on the future of the network; perhaps your own experience shows a vital aspect has been over-looked. Now there is a simple way to get your point across quickly and easily. The recent popularity in ‘blogging’ – contributing to a weblog or online message board – has inspired ruralnet|uk to set up a blog for this issue: a simple technique allowing thousands to add their personal comments to the debate. Over half of all UK homes have access to an online computer – as well as libraries, youth clubs, schools, day centres, UK online centres, and even some Post Offices! Anyone with an interest can visit the blog and leave their comment on the consultation questions, and read what others are saying.

    ruralnet|uk Chief Executive, Simon Berry said “Government consultations are all very well, but they are time consuming and complicated. Fine for the professionals but not for the people affected. It will take just a few moments for anyone to have their say in our collective consultation and their views will go straight to the government.”

    Visit, click any of the ‘Comment’ links and have your say. You can comment on as little or as much as you like. It is as simple and quick as that. There is no printing or sending to do.

    At the end of the consultation period, ruralnet|uk undertakes to summarise objectively all the comments received, and feed them into the Government’s consultation procedure. Says Simon: “We were the first to use the internet to run a collective consultation on the ‘first’ rural white paper way back in the spring of 1999 when we received 1154 contributions. It was said to be “one of the most useful submissions received”. So we know that a collective view from rural people, presented by us will carry a lot of weight.

    So, don’t be left out: go to state your views and have an impact on the future of post office services in rural areas.

  3. Pat, just a word to the wise … I’ve let your comment through because deserves to be heard. For future reference, however, it might be nice if you offered a genuine comment, rather than a cut and paste of a news release. Just a bit of blogging etiquette for you.

  4. Sarah Booker says:

    People protest, they write, they hope the consultation will take their views into account, but when it comes down to it the decision has been made.

  5. Sarah, I have a lot of sympathy for sub post-offices and know first hand the impact their closure has on local communities – two have shut in my home town in the last few months.

    But … are post offices a public service? Do we, as tax payers, want to spend £200 million each year bailing these failing businesses out?

    If the answer is yes, then we need to return to the days when the government ran various British businesses and the tax payer subsidised them.

  6. ruth says:

    why blame the post office when you all have pensions banked all go to supermarkets then cry when your local shop and post office closes.
    Local people are to blame for the closure of local Post Offices I know, I had one and saw locals buying from Supermarkets and not from shop. Local events all food etc bought from Supermarkets, I have had to sit and watch all locals abusing the village shop they all cry they want it but they are the ones who abuse it?
    Just think that you may pay 20p more for an item but you will drive and not even think about the cost of petrol?
    And I have to say that the locals are the ones who abuse the local Post Office the newcomers who arrive in the village try to shop and do their best to keep it alive, the true local people have no care, but when their shop has gone they are the ones who shout?
    Buying a newspaper does not keep your village shop alive all you have to spend is about £5-£10 a week, buy a card, buy milk. butter, fruit, bread, search and keep the shop if not it will go.

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