Week 19 - Post offices and buses

The good news from Government this week is more money to support Bus Services, the bad news is the closure of the Crown Post Offices, including the Post Office in Teignmouth.

Post offices are either run directly by the Post Office Ltd – these are the Crown offices – or as a franchise by sub-postmasters who used to use the flawed Horizon system. 

Franchising is a useful model in the commercial world.  Typically used by global brands, the franchisee gets a strict manual on how to run the business, where to buy their supplies, and what to sell.  They are often required to put in capital funds to get the premises, buy into the business and take a share of the profit.  This allows a rapid expansion of well-known brands, with the brand owner paying for advertising and brand management.  This can dramatically reduce the investment to massively scale up a business and provide opportunities for local businesspeople but reduces long term profitability.

How cutting out existing Crown Post Offices and moving to this model benefits the Post Office is unclear to me.  In Teignmouth I understand that the Post Office owns their building.   So, what could be gained?  Running the service with fewer staff, or with less well-paid staff perhaps is one answer. Allowing the Franchisee to take risks or cut ‘unprofitable’ services may be another.  Or maybe sharing the space with an existing convenience store to share the costs of the premises by downsizing both businesses.

Whatever the motive, it can only mean a cut to services for the people of Teignmouth.  The town has seen the last of the banks close on the promise that financial services could be done through the Post Office.  But if the Crown Post Office cannot make a good enough profit why should a Franchisee be any more profitable.  Both Dawlish and Newton Abbot lost their Crown post offices some years ago.  Recently both franchises have been closed for a while due to having problems finding staff.

Separating the Royal Mail delivery service from the Post Office counters was supposed to help preserve the business against the reduction in handwritten letters.  This move to full franchising looks to me like a failure to adapt to a changed business environment and will do nothing to preserve Post Office services in the long run.

And on the good news, after hiking bus fares to £3, £1Bn to help bus services does sound positive. Looking into the detail it is a little patchy, however.  Torbay will receive £1.5M, and Devon £5M.  This is all welcome but isn’t enough to make any perceived difference in Teignbridge.

The bulk of the funds are going to the more urbanised areas, Devon put in a Bus improvement plan a couple of years ago and the fractional amount it received then didn't result in any new services, more frequent buses or even bus lanes outside of Exeter or Barnstaple. 

With an increasing cost of living and with fuel prices on the rise again, frequent and reliable bus transport remains some way off, even in the more populated areas of our district, but this is at least a start…