Post Office 'heading for extinction' amid plan to cut 600 jobs, say unions

The government has been accused of putting the Post Office in crisis as the service said it would cut 600 jobs in its cash-handling business.

Nine of its 24 cash-handling depots are to close by next April as the Post Office stops transporting and distributing cash for businesses beyond its own branches.

The job losses announced on Tuesday amount to nearly half the staff employed in the service’s Supply Chain division and come on top of an expected loss of up to 500 frontline jobs from the franchising of 39 Crown Post Offices, as well as the loss of more than 50 financial service experts selling products in branches through a further savings programme.

Unions warned that the Post Office was “heading for extinction” after the government slashed funding by £130m in three years to £80m, with further cuts planned in future.

Dave Ward, general secretary of the Communication Workers Union (CWU) which is the main union for postal workers, said the government had put the Post Office in a “financial straitjacket” without developing a proper plan for its future after splitting it from Royal Mail in 2012.

“With this latest round of job losses, the management of the Post Office has to face the fact that it is in crisis and heading for ruin,” he said.

“With a cut in its funding from £210m in 2013 to zero in 2019, these job losses show that under business secretary Sajid Javid’s leadership the Post Office is heading the same way as the steel industry.

“There is a perfect storm in the Post Office and our members will expect us to act to defend them.”

The CWU and Unite, which represents postal managers, called on the Post Office management to resign in protest at government funding cuts to the service.

Brian Scott, of Unite, said: “The Post Office’s business plan, which was agreed with the government, has failed. Those at the top should accept the blame for that, but instead they are adopting a slash-and-burn approach in an effort to cover this up. We will not sit back and watch them destroy a public institution.” The unions called on the government and the Post Office to halt cuts and to sit down with unions, customers, small businesses and communities to put together a strategy to develop new services and safeguard its future.

Mark Ellis, supply chain director of the Post Office, said: “If Post Offices are to thrive in the future, we need to look at all aspects of how we operate, transforming our support areas as well as our branch network …

“With downward pressure on prices due to competition from larger providers and the market for external cash-in-transit services gradually declining, we believe that in the future our resources should be wholly focused on supporting our network.”

The depots which are closing are in Preston, Stoke, Hull, Edinburgh, Inverness, Poole, Eastbourne and Dartford, as well as a coin operation at Merlin House in Birmingham.

A spokesperson for the Department for Business, Innovation and Skills (BIS) said: “We have always been clear that the Post Office will need some level of subsidy to maintain the non-commercial and social elements of its network, so any suggestion that the government would not consider funding post-2018 is complete nonsense.

“BIS said that by 2018 it would have invested almost £2bn in modernising the Post Office network over seven years. Thanks to their efforts to run an efficient business and the investment programmes funded by government, the subsidy needed to sustain the business has dropped from £210m in 2012 to £80m this year.”