The Scottish Government

The Scottish Executive Response to Department of Trade and Industry's Consultation on The Post Office Network

March 2007

Introduction

The Post Office, posts and postal services are reserved by the Scotland Act 1998 to Westminster. Responsibility for the future of the post office network therefore lies squarely with the UK Government rather than the Scottish Executive.

At the same time, Scottish Ministers recognise that post offices have an important role to play in the provision of services to vulnerable communities throughout Scotland, but particularly in deprived areas and throughout rural Scotland. Post offices fulfil an essential role both in enabling local businesses to flourish and in sustaining the infrastructure required to benefit from tourism and other visitor income. In many areas they also have a significant social role acting as a focus for local communities, providing help and advice and sometimes providing an "anchor" for other retail outlets in the vicinity.

The Scottish Executive welcomes the ending of a period of uncertainty for the network and an opportunity to put it onto a sustainable basis for the future. It is, however, vital that the process should safeguard the network's widespread coverage, even if the absolute number of post offices is to be reduced. It is against that background that the Scottish Executive makes the following observations.

Access

We agree with the UK Government that Post office Ltd should be required to ensure that the network continues to meet a range of detailed access criteria. We welcome the UK Government's intention to provide safeguards for remote and deprived communities by strengthening the existing Universal Service Obligation, which states that 95% of the population must be within 5km (3 miles) of a Post Office and 95% within 10km (6 miles) in any postcode area. Although not stipulated in the consultation paper, the DTI confirmed that their new access criteria proposals place a greater emphasis on postcode districts. The proposed use of postcode districts (of which there are 443 in Scotland) rather than postcode areas (of which there are only 16) should provide welcome protection to some of Scotland's more remote areas.

We believe that it runs counter to the logic of this approach to set other access criteria which are aggregated on a UK wide basis. There are a range of different geographical circumstances in different parts of the United Kingdom. We believe it to be axiomatic that citizens of the United Kingdom - in whichever part of the UK they reside - should be entitled to expect an equitable level of service provision. Any proposed "national" criteria should therefore be met in respect of Scotland, Wales and Northern Ireland, on the same basis as they are met in England. If, in the light of the present consultation, the UK Government is minded to apply an access criterion which requires 99% of the population to be within 3 miles of a post office, and 90% within 6 miles, Post Office Ltd should be required to meet those criteria separately for each of the 4 home nations, as well as for the regions of England.

The UK Government proposes to exempt 38 postcode districts from the 95%/6 mile requirement because they currently fail to meet this criterion. 37 of these postcode districts are in Scotland. It is unacceptable that these districts should face further post office closures, and Post Office Ltd should be encouraged to use innovative means of service delivery to bring these districts into compliance within a reasonable period. In any event, the Executive would wish to see these districts protected by continuation of the policy of no avoidable closures for as long as they fail to meet the minimum threshold laid down for the rest of the country.

The Executive welcomes the UK Government's recognition that account needs to be taken of rivers, mountains, valleys, motorways, and sea crossings to islands. We would also hope to see other geographical considerations taken into account- for example in deprived communities crossing large open semi-derelict spaces or geographies with a very steep gradient may have implications, particularly for older people and/or the disabled. Against that background, we see no merit in applying access criteria based on distance measured as the crow flies. The Executive therefore takes the view that the framework provided for Post Office Ltd by the UK Government should be based on distances by road. Ferry journey times should be converted to road distances on the basis of an average road speed of 40 mph.

The Executive welcomes the recognition of the particular needs of deprived urban communities in terms of access criteria. However multiple deprivation is not exclusive to urban areas and in Scotland there are also many examples of rural deprivation evidenced in the Scottish Index of Multiple Deprivation 2006. In view of this we invite you to consider extending the principle of more favourable treatment to include deprived rural areas as well as deprived urban areas. We would also wish to note that in Scotland our targeted regeneration policies normally focus on the 15% most deprived data-zones areas rather than the 10% most deprived super-output areas.

Service provision

The Executive welcomes the emphasis on exploring innovative approaches to service delivery. We are committed to help streamline public services and improve service delivery to the people of Scotland. Our experience of encouraging shared services suggests that Government may have a role in encouraging and facilitating such discussions between service providers, within the overarching framework of improving services. We want the UK Government to adopt such an approach in relation to plans for Post Office network changes and to require Post Office Ltd to promote and facilitate consideration of local service delivery options in circumstances where arrangements are to change.

We share the UK Government's view that local communities are well placed to help shape the network to reflect and adapt to local needs. In Scotland, Community Planning Partnerships have a key role to play in considering local needs and circumstances and options for service delivery: and should be involved by Post Office Ltd in consideration of future postal service delivery options

As part of the former Urban Reinvention Programme (URP) significant public investment has already been made in sub-post offices across the UK. £30m of funding was available through URP to support modernisation activities related to the PO element of the business. In addition Scotland, Wales, Northern Ireland and England all developed funding to assist sub-postmasters in urban deprived settings. In Scotland during 2003-05 over £1.8m was invested in 48 Post Offices from our Fund to Develop Post Offices in Deprived Areas. Grants of up to £50,000 were provided. We would hope that any future rationalisation activity would take into account recent investments to ensure best value is obtained for public funding.

Funding

As with all UK-wide businesses, Post Office Ltd should expect to maintain a network in which some individual outlets and service points require to be cross-subsidised by others. The Executive welcomes the UK Government's commitment to continue to provide a social network payment to sustain services in areas where outlets would not otherwise be maintained. The Executive has noted HM Government's wish to explore the scope for devolving funding decisions in relation to such payments. Such proposals would require both agreement on funding and legislation to provide the necessary powers.

Consultation

Robust local consultation arrangements need to be put in place to ensure that communities are able to help shape a sustainable network for the future. The Executive believes that Community Planning Partnerships - and local authorities in particular - will have a key role to play in the process. We value the expertise which Postwatch will be able to bring to that process, and expect that the consumer voice will be strengthened in due course by the implementation of the Consumers, Estate Agents and Redress Bill currently before the UK Parliament. At the same time, we would be concerned if the effectiveness of the local consultation process were to be undermined by a loss of Postwatch expertise in post office user representation during the crucial local consultation period proposed by the UK Government. We therefore invite the UK Government to ensure that arrangements for implementation of the new Act take full account of the requirement for effective consultation throughout the period of the proposed Post Office restructuring exercise.

ANALYSIS USED TO SUPPORT THE DEVELOPMENT OF THE SCOTTISH EXECUTIVE RESPONSE TO THE

DEPARTMENT OF TRADE AND INDUSTRY'S CONSULTATON ON THE POST OFFICE NETWORK

[NOT SUBMITTED AS PART OF THE RESPONSE]

Proposed access criteria

The DTIs consultation document on The Post Office Network (December 2006) proposes the following access criteria:

(1a) Nationally, 99% of the population to be within 3 miles of a Post Office outlet and (1b) 90% of the population to be within 1 mile;

(2) In deprived urban areas, 99% of the population to be within 1 mile;

(3) In urban areas, 95% of the population to be within 1 mile;

(4) In rural areas, 95% of the total rural population to be within 3 miles and

(5) In remote areas, 95% of the population in postcode districts within 6 miles.

The DTI consultation recognises that there cannot be a 'one size fits all' approach to access criteria and that in applying the criteria, Post Office Limited will take account of local conditions such as rivers, mountains, valley, motorways and seacrossings.

Definitions

Post Office Ltd classifies settlements with populations above 10,000 as urban and those below 10,000 as rural. Deprived urban communities are those in the 10% most deprived areas.

DTI is in discussion with Post Office LTd about how the deprived urban criteria can be applied in a consistent manner across the UK. It is envisaged that it will be based upon the most recently published Indices of Multiple Deprivation for each nation.

Access criterion (5) is the least transparent in that it is not clear whether this applies to all rural areas. Further information from the DTI advises that there is no definition of remote rural, because none of the access criteria apply solely to remote rural areas. The requirement that 95% of the population in postcode districts should be within 6 miles of a Post Office applies to all postcode districts. In practice, DTI state that it will be of most relevance to remote areas which might have otherwise not been adequately protected by the national criteria.

The DTI has further advised that 38 of the 2,795 postcode districts do not currently meet criterion (5) and these areas are therefore exempt. Of the 38 postcode districts, 37 are in Scotland and 1 in England. Their combined population is just 41,000 with an average population of about 1,000 compared to a national average for postcode districts of 21,500. The exempt areas all fall into remote rural areas (as defined by the Scottish Executive urban rural classification). As at January 2006, these 37 exempt areas included 85 post offices. A map of exempt areas is presented at the end of the paper.

Outline

This paper analyses whether the proposed access criteria are currently being met for the UK as a whole and for Scotland. The next section of the paper summarises the methods and the following section presents the findings for the UK and for Scotland. The findings section also includes analysis based on converting distances from straight lines to road distances. The final section briefly discusses the results.

Methods

Data on distances to post offices for the current UK network was obtained from Department for Environment, Food and Rural Affairs. The data relates to January 2006. The dataset contained 223,060 output areas for the UK. For each output area, distance to nearest post offices was based on straight lines or 'as the crow flies'.

For each output area, the dataset contained population information sourced from the Census 2001.

Rural areas were defined as those with a population of less than 10,000.

For deprived urban areas, the Scottish Index of Multiple Deprivation 2006 was used to identify the output areas in the 10% most deprived urban areas in Scotland.

For reasons set out above, criterion (5) was excluded from further analysis.

The main part of the analysis is based on straight line distances and are therefore 'as the crow flies'. Since the consultation states that Post Office Ltd be required to take into account local geography and ease of access when considering post office closures, the impact of the criteria if the distance to a post office had been measured by road was also assessed. The analysis was therefore re-run, applying a factor to convert straight line distance into distances by road. The conversion factor was based on travel speeds on urban and rural roads.[1]

Findings

Applying the proposed criteria to the current post office network

Table 1 shows the results when the access criteria are applied at UK and Scotland level. It shows that the current network is already meeting the proposed access criteria at UK and Scotland level. Although the access criteria are met for Scotland, the percentages of population are lower in Scotland than for the UK.

Table 1: Access Criteria Applied to Current Post Office Network

* Not possible to estimate deprivation statistics for the UK on same basis as Scotland as UK data based on quintiles not deciles

Table 2 shows similar results, once the 37 postcode districts in Scotland are excluded. It has not been possible to conduct the same analysis of the UK because post code district boundary information for the UK is not readily available. Again, it can be seen that access criteria are currently being met for Scotland and excluding the exempt areas from the dataset does not have much of an impact on the average figures for Scotland.

Table 2: Access Criteria Applied to Current Post Office Network (Excluding except areas)

Converting straight line distances to distances by road

Table 3 shows that taking into account the actual distances by road to a post office that people would have to travel, rather than straight line distances, reduces the % of population with access to a post office. On this basis 4 of the 5 access criteria are not met.

Table 3: Access Criteria Applied to Distances to Post Office By Road to Current Post Office Network (excluding exempt areas)

Discussion

This paper shows that the access criteria are already being met both in the UK and also Scotland, although the percentage of the population with access is lower in Scotland than the UK as a whole. This suggests that access varies by country and therefore access criteria should be applied at a country level rather than for the UK as a whole. This should avoid access issues in Scotland being masked.

The analysis also highlights the importance of measuring access in terms of distances by road rather than straight line distances. It should be noted, however, that this analysis was based on a simple conversion factor. Nevertheless, it provides useful insight into the differences made if distances by road are used.

Analytical Services Division, Science and Analysis Group

Scottish Executive

Environment and RUral Affairs Department 19 February 2007

[1] The average speed across rural and urban roads is 40mph. This lead to a conversion factor of 1.5, that is, every straightline mile is multiplied by 1.5.