Postal Services Bill

The Postal Services Bill was published on 28 January. Amongst other things, it introduces a new regulatory regime for postal services and creates a Consumer Council for Postal Services that replaces POUNC.

Our initial views on the Bill are below but we would like to hear the views of all users of services offered by the Post Office - Royal Mail, Counters and Parcelforce. Please contact us at info@pounc.org.uk

POST OFFICE USERS' NATIONAL COUNCIL: BRIEFING ON THE POSTAL SERVICES BILL FOR THE SECOND READING SCHEDULED FOR 15 FEBRUARY 2000

1. Introduction

POST OFFICE USERS' NATIONAL COUNCIL (POUNC) welcomes the Bill because it strengthens the position of consumers in a number of ways:

  1. Strengthens the role of the present consumer body (POUNC) by establishing a more powerful Consumer Council: the Consumer Council for Postal services (CCPS).
  2. Puts a duty on the Regulator (the Postal Services Commission) to protect the consumer interest.
  3. Provides for the possibility of more choice for consumers through greater competition.
  4. Protects the concept of universal service at uniform price.
  5. Provides for sanctions against postal operators for service quality failures.
  6. Provides for the first time an opportunity to establish access criteria and a coherent strategy for Counters network.

2. Areas of concern with the Bill

Whilst generally content, CCPS believes there are a few areas where our ability to act independently to meet our aim protecting and promoting the interests of all users of postal services is being restricted:

  1. Section 40 of the Bill limits the role of CCPS to the universal postal service. Currently the remit of POUNC covers the whole of the postal market. The Post Office will still be a monopoly or dominant supplier in many areas outside Universal Service provision for some time including all postal services bought at a Post Office. Therefore users will have no representative voice for these products or services. It is essential that CCPS is able to represent users in these circumstances and have the capability to devote resources to issues that affect the entire postal market.

  2. Sections 42 (3), and 46 (5), contain caveats on the CPC's ability to publish information where the 'publication might seriously and prejudicially affect the interests of the person'. CCPS must get the consent from the person affected who is unlikely to agree if is contains bad news. We believe some public interest test should be applied. For instance the PSC at section 34(80 (b) can apply a public interest test, yet CCPS cannot.

  3. At section 46, CCPS can investigate matters but we must notify the Secretary of State and the PSC: that smacks of a 'nanny state'. As a representative consumer body we must be seen to be objective and independent.

  4. Section 31 provides a challenge to all parties is to make sure Post Office Counters have a coherent network strategy that ensures all consumers continue to have ready access to postal services. CCPS has a vital role in the development of this strategy and the access criteria to postal services throughout the UK. CCPS will monitor the effects of that strategy through its new regional network and make recommendations where user access to postal services is under threat. CCPS concerns about the Counters network are attached at Annex A

3. Bill sets up a stronger Consumer body: Consumer Council for Postal Services (CCPS)

4. CCPS Aim

CCPS's aim is to protect, promote and develop the interests of all users of UK postal services. CCPS's priorities are:

5. Progress so far

BACKGROUND ON POUNC

6. The Post Office Users' National Council (POUNC) was established under the 1969 Post Office Act as a Non-Departmental Public Body (NDPB) to represent user interests in The Post Office. At the same time, separate statutory Councils were established for Scotland, Wales and Northern Ireland (POUCs) to look after user interests in their respective geographical areas. POUNC represents the national voice and works closely with the other Councils.

7. POUNC currently comprises a part-time Chairman and 16 voluntary Council Members, all appointed by the Secretary of State for Trade and Industry. A small executive of some 11 staff supports the Council. POUNC has no regulatory powers. POUNC relies on persuasion and reasoned argument in its dealings with The Post Office in pursuit of consumer interests and complaints.

8. The Postal Services Bill brings into force the reforms that were outlined in the White Paper on Post Office Reform published last Summer including the establishment of a stronger consumer body to replace POUNC.

9. Copies of POUNC's Annual Report are available from POUNC at Hercules House, 6 Hercules Road, London, SE1 7DN and also from Citizens Advice Bureaux, Local Authorities, Local Libraries and similar organisations.

POST OFFICE USERS' NATIONAL COUNCIL
7 February 2000


ANNEX A

POST OFFICE COUNTERS - NETWORK

1. Some 18,000 sub-post offices in operation.
2. Benefits Agency intend that benefit payments should be made direct to bank accounts by 2003 phased in over a further two year period.
3. This will reduce sub post office revenue by an average 35% but in some instances by as much as 80%.
4. Post Office Counters hope to replace some of the lost revenue by an arrangement with the Banks and by using the Post Office as a source of Government Information.
5. This is unlikely to reduce the deficit materially and up to 8,000 sub Post Offices could close.

OUR CONCERNS

1. Closures will limit access to the range of services, which the Post Office is legally required to make available to the public under the Universal Service Obligation (USO) such as Registered Post, parcels up to 20 kilos etc.
2. As yet, the Post Office has made no suggestions as to how the USO will be fulfilled if such a large number of sub-post offices close.
3. The rate of closures in recent years has averaged 200 per annum. Since the Benefits Agency change was rumoured, the closure rate has accelerated and will exceed 500 in the year ending March 2000.
4. The market value of sub post offices has declined sharply due to the forecast loss of revenue. Sub-postmasters will lose out and they have no right to compensation from the Post Office for such a substantial loss of revenue beyond their control.
5. A sub-postmaster buys the right to operate a sub post office. This money is not refunded in the event of closure for any reason.
6. The Post Office is not under any obligation to compensate sub post offices in the event of a reduction in revenue caused by change or removal of product.
7. The Post Office has known for some years of the Benefit Agency's desire to change the payment method. Hence the ill fated Horizon project. Apart from dealing with the Banks and Government to reduce the revenue gap much more innovative thinking is needed to find new products for post offices to sell to recover the revenue they are about to lose. It is not too late.
8. Much attention is focussed on the impact of closures of rural post offices. Dependency on post office services is just as great in the urban areas where there is social depravation, and has the same consequences.
9. The Benefits Agency has to develop systems to achieve the change. Will they be ready, tried, tested, and able to fulfil the requirement of the new payment method to meet the year 2003 target?

10. Have all the issues been resolved in providing bank accounts to those currently "unbanked":

  1. Help in understanding the operation of a bank account and the withdrawal of cash
  2. Joint accounts - will the money reach the people intended to receive the benefit?
  3. Will there be bank charges?
  4. If there is an overdraft, will the benefit payment merely be applied to reduce the debt?
  5. What happens to payments if the account holder infringes their agreement with the bank?
  6. What if the individual does not qualify for a bank account or chooses not to have one?

POUNC would welcome users' views on this subject.


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