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In a report published today on postal services in Scotland, the Scottish Affairs Committee says the Government’s assurances regarding its intentions for the universal service obligation and the Post Office network are welcome, but need to be reinforced.

The Committee recommends that, where appropriate, this would be best achieved by amendments to the Postal Services Bill or, at least, by clear statements during the Bill’s passage.

The Committee’s report considers two key issues: the maintenance of a universal service and the continuation of a sustainable Post Office network across Scotland.

The issues of privatisation and the pension deficit are UK wide issues which have been considered widely elsewhere, and the Committee has not examined these in its report.

Ian Davidson MP, Chair of the Committee, said:

“We welcome much of what the minister said to us in evidence regarding protections in the Bill for the universal service obligation, particularly his assurance that a vote in both Houses of Parliament would be required before the six day a week delivery and collection service and universal tariff could be changed.

"What is much less clear is the long term future of the Post Office network. Good intentions are all very well, but the lack of solidity in assurances regarding the postal network is worrying.

"Postal services and the postal network are the life blood of many rural, remote and island communities throughout Scotland and the survival of many small businesses depends on the network. Yet it remains unclear how the Postal Services Bill will protect consumers in deprived urban, rural and remote areas of Scotland.”

Universal postal service

Assurances by the business minister that the Bill would not allow Scotland to be made exempt from the universal service obligation (USO) because it is a ‘geographic’ exception are welcome, says the Committee.

However, further clarification is needed on clause 34 which allows Ofcom to designate more than one universal service provider.

A requirement should be included in the Bill for Ofcom to consult with consumers, small businesses and vulnerable users in remote, rural and island communities in Scotland before it recommends any changes to the existing USO – the Committee warns that any changes could have a disproportionate impact on these communities.

There are considerable advantages to a long, stable and robust relationship between Royal Mail Group and Post Office Ltd and the Committee recommends that a ten year Inter Business Agreement should be reached prior to any sale of Royal Mail.

Post Office network

In relation to the Post Office network, the Bill makes no provision for the number of Post Offices and does not set out criteria for access to the network. The Committee warns that the latter is of particular concern because the current criteria could be met by 7,500 branches rather than the existing 11,500 branches. This could lead to many closures in Scotland.

The Committee recommends that the Government gives assurances to preserving the existing network of branches during the passage of the Bill.

Elements of Outreach Post Offices, which replaced 102 Post Office branches in rural and remote parts of Scotland, are not sufficiently robust or reliable to provide an adequate service, according to the Committee, and it fears the new Post Office Local risks downgrading the service further. Improvements should be delivered as a matter of urgency.

The Committee also criticises government departments’ lack of joined up thinking in relation to guaranteeing the sustainability and viability of the network by channelling services through Post Offices where appropriate, and says if tangible benefits are not delivered soon, the risk of closure of many Scottish Post Offices remains.

Further information

The Government published the Postal Services Bill 2010-11 on 13 October 2010. The Bill received its second reading on 27 October and the proceedings in the Public Bill Committee concluded on 9 December. The remaining stages of the Bill in the Commons will be taken on the floor of the House on Wednesday 12 January 2011.