Community post offices 'are doomed by a lack of funding'

A cross-party committee had been told many such part-time branches were exploited because they received as little as £1.23 an hour – jeopardising their future at the heart of rural communities.

And one sub-postmaster was reported to have said businesses would have to be 'desperate' to take on an outreach contract.

'No money': Naomi Nardi, the shopkeeper at Bridestowe Post Office, Devon, said outreach branches need funding

Labour hopes to open 500 'post office lite' counters to replace 2,500 proper local branches being closed because the Post Office is losing £3.5million a week.

Last week, business minister Pat McFadden said outreach outlets – paid for from a budget provided by the Royal Mail – would help many communities survive the closure programme.

But the Commons business and enterprise committee said it is concerned about the level of payments for the outreach service, which ranges from a mobile post office which visits villages for a few hours every week, to a counter in a pub, shop or a library.

Problems are particularly acute where a business is contracted by a sub-postmaster in a nearby village or town to offer services such as weighing parcels and paying pensions.

On average, these 'partners' were offered £2,000 to £3,000 a year by the sub-postmaster – or £8 to £12 a day.

The committee report said: 'We remain concerned that the funding provided may be inadequate. If this is the case, outreach services will fail and the network be diminished.'

It urged the National Audit Office, the spending watchdog, to investigate funding arrangements.

Peter Luff, Tory chairman of the committee, said: 'In principle, outreach outlets are a good idea because the most remote and vulnerable communities will keep post office services of some kind.

'But if funding is inadequate then these communities will end up losing their post office completely. This is potentially hammering another nail in the coffin of the post office network.'

Liberal Democrat spokesman Sarah Teather said: 'Even outreach services need to be properly funded. At this rate, many areas will end up with no post office services whatsoever.'

Naomi Nardi, of Bridestowe Post Office and Riverside Stores, in Devon, said businesses which take on an outreach contract are exploited.

She told MPs: 'They are onerous, inequitable and parasitic – doomed to failure where there is virtually no money in them for those actually doing the work.'

A Post Office spokesman said: 'Outreach services are one way to establish a commercially viable business for a sub-postmaster providing services across a number of communities within the funding available from the Government.'

The Post Office said a trial of 100 rural outreach outlets had been encouraging. Urban trials will take place later this year.