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Post Office Development Fund

November 21, 2007 12:00 AM
By Peter Black in Plenary

Peter Black: I propose that Peter Black: the National Assembly for Wales: calls on the Welsh Assembly Government to re-open the post office development fund on a region by region basis, as soon as each regional area plan has been agreed. (NDM3720)

The post office network in Wales-or what we have left of it-is not an ordinary business; I think that everyone in the Chamber would accept that. The community and social aspects of post offices need to be taken seriously if this network is to survive, and the Government needs to acknowledge this. There is no point in considering the post office network on a purely commercial basis. If we did this, many post offices, especially those in rural areas, would have been closed down a long time ago. A total of 90 per cent of rural post offices fail to make a profit, and it has been calculated that there is an oversupply in rural areas of between 65 and 85 per cent, purely on a commercial basis. However, you cannot consider this issue in that way. Post offices are a vital lifeline in many rural villages and towns. In some cases, they provide the only shop or point of contact for many people. In many places, they provide the only way in which you can access services from either local government or central Government that are still provided through post office branches.

Post offices are of great social importance to local communities in rural, urban and valley areas in Wales. As I said, they function as a focal point and provide viable services for many people, especially the elderly, the more vulnerable members of society, and those who have difficulty getting around, whether due to health reasons or a lack of transport. Post offices are of great importance, especially in areas of social deprivation.

We know all about the grave financial pressures that they are facing and the fact that the long-term future of the network is unclear. The UK Government is intent on closing another 2,500 post offices, having already closed nearly 2,500 as part of the urban reinvention programme. The Post Office has lost a number of transaction services, including the television licence contract and benefit payments. The UK Government's plans for Identity and Passport Service will mean a further loss of business and revenue. It appears that the Post Office is slowly but surely being deprived of the functions and business that makes it a viable concern. Under the present Westminster Government-and I make that distinction, because it is largely its actions-the Post Office is facing death by 1,000 cuts.

The policies of the Labour Government are putting post offices at risk. Many of these businesses, which are in our deprived areas, need support both from the UK Government and from the Assembly if they are to survive. We have to understand that, even those post offices that are viable businesses often survive on a day-by-day basis or week-by week basis with small profits. They can make the revenue to survive-even those receiving subsidies-but they do not have the capital to diversify to make the business more viable and sustainable. This debate is about whether or not we can re-open the post office development fund so that we can use that money to help those post offices survive.

We all understand the difficulties that the fund has been through. It was set up by the partnership Government in 2002 and operated until 2004. The fund helped 106 post offices to remain open and £4.1 million was put into the network in Wales. The fund was established to help the post offices to stay open and become more accessible. I believe that it succeeded in doing that. Subpostmasters in eligible areas were invited to apply for grants of up to £50,000 each to renovate their post offices and to widen the range of services and products offered to their customers. That was a vital boost and one that was appreciated. We can still see the benefits of that today all around Wales in post offices that the fund helped.

We know that 'One Wales' contains a commitment to reintroduce the fund. However, so far, the Government has been vague about when this will happen. In recent weeks, both Brian Gibbons and Leighton Andrews have evaded giving us a date for when the fund will be re-established. The First Minister has said that it will be done as soon as it makes some sort of sense.

Leighton Andrews: I said last week in questions that I did not envisage the fund being opened in this financial year; I expect it to be opened in the next financial year.

Peter Black: I would still say that that is quite vague, Leighton. The 'next financial year' could be as much as 17 or 18 months away, depending on the date that you set. Many post offices, particularly the network in South Wales Central, which is facing cuts at the moment, could do with that help; I am sure that post offices elsewhere in Wales could do with that money a lot earlier.

It makes some sort of sense to reintroduce the fund in each area after that area's plans have been finalised. There is no reason why Cardiff and the Glamorgan valleys should have to wait until this time next year, or even later, after the plans for all other parts of Wales have been finalised. All we are doing is denying crucial funding to post offices in some of Wales's most deprived and isolated communities. This is not just an issue about Cardiff or Glamorgan; the same applies to post offices across Gwent and central Wales as well as those announced from May onwards.

The post office development fund was established in order to help post offices and to make them more viable. It has been instrumental in maintaining and improving access. Almost all grant recipients believe that it has succeeded in doing that. If we are to continue to help those post offices and to begin to counter the impact of the Government's cuts we need to look again at reopening this fund at an earlier date.

I also understand that there are issues relating to the fact that post offices that received money in the last tranche are now being threatened with closure-three post offices in this area that received money from the Assembly Government are under threat of closure despite assurances by the Post Office. I hope that the Government is working to try to reclaim the money from Post Office Ltd rather than from the individual post offices. I understand that that is a problem, and while this closure plan is being rolled out we may find ourselves in a situation where we would have to consider providing post offices with funding without knowing their long-term future.

Given what was said last time, I am beginning to wonder whether we will ever be able to rely on concrete assurances from Post Office Ltd. That is why we are proposing an area-by-area introduction. We are suggesting that, if you are going to reintroduce the fund, you need to do so on the basis of much stronger repayment conditions than last time. However, irrespective of that, the problems that we are having now can be overcome and should not be used as an excuse not to bring this fund back earlier than anticipated.

I hope, Deputy Minister, that when you reflect on this debate-because I am sure that you will use your majority to push your agenda through today-you will consider what has been said and reflect on the impact on our communities of the Labour Government's programme to close a large chunk of our post office network. I hope that you will consider that the action that the Assembly Government is taking at the moment remains wholly inadequate, that it can and should be improved upon, and that you will find the money to do that as soon as possible, rather than our having to wait the sort of time that you have indicated.