Another cut in Post Office services

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MINISTERS have been accused of making "empty promises" to support the Post Office network after it emerged another Government service is to disappear from branches.

The government-backed savings account, the National Savings and Investments (NS&I) ISA will be removed from branches from today.

Watchdog Consumer Focus has criticised the decision, and warned that public pledges of support by Cabinet minister for the Post Office network are being undermined by their actions.

Last month, Business Secretary Lord Mandelson said post offices could become an outpost for all Government services, warning "nostalgia" alone will not keep branches open.

It followed the announcement that the network had signed a five-year contract to support the DVLA in issuing millions of motorists with photographic driving licences. It appeared to mark a reversal in a policy of stripping branches of Government services, including TV licences.

However, Consumer Focus yesterday warned the NS&I's removal of their ISA from the post office undermined the Government's moves to drive additional business through the network and was not in consumers' best interests.

"The post office is the most convenient outlet for many consumers to access such services, particularly the old and more vulnerable, many of whom will not be happy conducting business by telephone, post or online," the watchdog said.

Consumer Focus has now written to the post office minister Pat McFadden, the Treasury and NS&I to urge them to review the decision.

Richard Bates, public services expert for Consumer Focus, said: "It is very worrying that on one hand, Government support is being promised to the Post Office network but on the other, government-backed business is being taken away.

"The removal of the NS&I ISA from the post office is simply at odds with Government's ambitions to revive the network."

A major cost-cutting programme saw some 140 Westcountry branches axed last year, but ministers have signalled that further wide-scale cuts are not planned, provided customers continue to support their local branch.

A Commons committee is carrying out an inquiry into the future of the network, and earlier this year visited Devon to take evidence from local people on what services they would like to see offered.

One of the options which has been repeatedly raised includes offering full-scale banking services. The idea of a Post Bank is being promoted by a coalition of unions, business and pensioners' groups.

However, from today the NS&I ISA will no longer be available to new customers through post offices and existing customers will no longer be able to access their account through the network. Customers will only be able to access their accounts via telephone, post or online.

A study by the Department for Environment, Food and Rural Affairs last week revealed access to services like post offices had worsened in the South West since Labour came to power.

A Department for Business spokesman said: "The Government recognises the vital role that post offices play. That is why we support the network with a subsidy of around £150 million a year – as part of a package worth £1.7 billion between 2006 and 2011.

"It is why we are looking to the future and working to find new reasons for people to come through the doors.

"The Post Office's trusted brand, unrivalled network, experienced staff and new technology puts the company in an excellent position to bid for other work".