Post offices key to rural survival

18 May 00
The government must guarantee the future of rural post offices or face a further decline in countryside communities, a cross-party committee of MPs has warned.

19 May 2000

The environment, transport and regional affairs committee accused ministers of producing 'mixed messages' on the future of rural post offices after announcing moves to automate benefit payments last year.

'The chancellor has stated that benefits will no longer be paid through the Post Office, while Alan Johnson, Post Office minister, has said they will – we need urgent clarification,' said Conservative committee member Anne McIntosh.

The committee describes the post office as 'a focal point for villages' and warns that without efforts to make up the loss of income from the automation scheme, thousands of sub-offices will be forced to close.

'This would have adverse consequences on rural communities,' McIntosh added. 'People need access to cash locally and we need to ensure that banks will pick up any charges for handling benefit cash for the Post Office.'

But a report from Downing Street's Performance and Innovation Unit, due to be published shortly, is expected to recommend turning post offices into 'universal banks', providing a range of benefit and banking services.

'In deprived areas, post offices play a special role, especially when there are few other shops around,' said Johnson. The government is also considering financial aid for ailing post offices.

In a pre-emptive report, designed to influence the forthcoming rural white paper, the Commons committee also calls for the end of funding disparities between Scotland and England.

But this recommendation could prove too much of a political hot potato for the government, which has so far avoided any major reform of the Barnett Formula, which provides 15%–20% more spending to Scotland.

'This is not a Scotland/England battle,' said Labour committee member Gwyneth Dunwoody. 'The funding formula obviously doesn't work and should be needs-based.'

The committee also recommends a hit squad of senior civil servants to accelerate the 'glacial' rate of reform at the Ministry of Agriculture, Fisheries & Food.

The rural and urban white papers are expected in July.


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