Britain's post offices get £1.3bn to modernise and survive

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Post Office says all 11,800 branches will benefit from investment, which aims to make network less dependent on subsidies


Britain's shabby post offices are to be given a facelift, with £1.3bn of government investment to modernise branches and extend opening hours, in a "once in a generation" opportunity to upgrade the network, Paula Vennells, its chief executive, has announced.

Around 6,000 post offices, about half the 11,800-strong network, are to be revamped over the next three years, and the government has reiterated its pledge not to close any more branches.

Vennells, chief executive of Post Office Ltd, said: "This is a once-in-a-generation opportunity for the Post Office – a chance to revitalise the network and allow it to meet the needs of 21st-century customers and communities."

However, the postal workers' union warned of a "major gamble" that would "downgrade" some branches.

The Post Office insisted that all of its 11,800 branches would benefit in some way from the investment, which is subject to European Union state aid clearance. The aim is to make the network more self-sustaining and, over time, less dependent on subsidies. Weekly visits to post offices have fallen from 28m in 2000 to 20m now.

Almost half of the network will convert to a "new operating model": larger "main style" branches will offer extended opening hours, as will "local style" branches, where a post office counter sits inside a local shop such as a convenience store.

Subpostmasters who convert to a main style branch will be offered up to £45,000 to help make the changes, while those in a local style office will receive up to £10,000 to invest.

The £1.3bn investment was first announced by the government in 2010, but without any details on how the money would be spent.

Billy Hayes, general secretary of the Communication Workers' Union, accused the Post Office of taking a "major gamble with our postal service and the livelihoods of postmasters". He added: "There are serious flaws with the downgraded local model which deny services to customers – not even the ability to post parcels in many cases – while only making them available at tills in convenience stores and petrol stations. There comes a point at which it's no longer a post office."

Winning more government business is a key part of the Post Office strategy, for example, the rollout of biometric data capture equipment to nearly 800 branches nationwide.

The postal affairs minister, Norman Lamb, said: "Post offices are at the heart of many of our communities, providing much needed services. This government has made a commitment that there will be no closure programme. However, change is needed to secure the long-term future of post offices."

Mike O'Connor, chief executive of the user-group Consumer Focus, agreed, saying: "The post office network needs to be put on a firm footing for the future, so it can continue to serve communities who rely on their local post office. Many post offices are economically unsustainable and the network as a whole needs improvement and investment."