Post Office mutualisation proposals unveiled

Postal service overhaul could result in Post Office run along same lines as John Lewis or Co-operative

Ministers will on Monday unveil plans to move the Post Office into mutual ownership as part of the government's major overhaul of the Royal Mail.

The Post Office could be on a "clear path" to mutualisation by the end of this parliament, ministers said, in advance of the launch of a consultation on the proposals. Subpostmasters, customers and communities could be given a say in how the Post Office arm of the network is run, including the appointment of directors.

The move follows the announcement of a plan to privatise the Royal Mail side of the postal business, which the government argues is necessary to protect its future and ensure growth.

The consultation – Building a Mutual Post Office – follows a report earlier this year led by Co-operatives UK, the trade body that works to promote them, which suggested that a mutual body, such as a company or a co-operative, could be set up, with members including staff and customers.

The government would then transfer ownership of the Post Office to that body, which would have a say in board appointments as well as sharing in profits.

Postal affairs minister Edward Davey said: "The consultation … sets out the different options for how we might enable subpostmasters, employees, post office customers and local communities to have a real stake in the future of the Post Office.

"Combined with our major investment programme and the Post Office's ambition to become the 'front office for government', a mutualised Post Office could help link a new commercial focus with an even stronger community purpose."

The government said it believed that Post Office Ltd could be ideally suited to a mutual model, with those that know it best working together, giving them a greater say in how the business is run, as well as a stake in its success.

Changing Post Office Ltd – the national company which sets the strategy for the post office network and operates some larger branches – to a mutual would not affect the thousands of privately owned branches across the UK, said Davey.

The Co-operatives UK report suggested a number of models, such as John Lewis or the Co-operative, but Davey said the Post Office mutual could be a hybrid of different ideas.

The coalition was investing £1.34bn into the Post Office to improve efficiency and levels of service, but mutualisation would help secure its future, he said.

The consultation will continue until mid-December, but it could take years before the process is completed.

The government's plans to privatise the Royal Mail were waiting for regulatory changes and European clearance on state aid, but Davey said there had been a "dramatic change of atmosphere" now the postal services legislation had been approved by parliament.


Damien Pearse

The GuardianTramp

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