Post Office Limited

History

Post Office branches, along with the Royal Mail delivery service, were formerly part of the General Post Office. After the passage of the Post Office Act 1969 the Post Office became a statutory corporation, with a network of almost 25,000 post office branches, including 1,765 Crown branches. Post Office Counters Limited was created as a wholly owned subsidiary of the Post Office in 1987. The first managing director of Post Office Counters was John Roberts, who took up the post in 1987.

In 1989, Crown branches began to be franchised to reduce costs, and the Crown network fell from 1,493 to 606 by 1997. A moratorium on further franchising was imposed by the New Labour government, but this was lifted the following year on the condition that 15% of revenue came from the Crown network. A former civil servant, Richard Dykes, took over as managing director of Post Office Counters in September 1993. Dykes was succeeded in May 1996 by Stuart Sweetman, who continued to serve in that role until his retirement in November 2001.

As part of the Postal Services Act 2000, the Post Office statutory corporation was changed to a state-owned public limited company, Consignia plc, in 2001, although the name was unpopular and was changed to Royal Mail Group just a year later. Post Office Counters Limited became Post Office Limited and in 2002, David Mills was appointed as chief executive of the Post Office, a newly created role. In October 2002, a three-year recovery plan was agreed, including the closure 3,000 urban sub-post offices from an overall network of almost 18,000 branches. Mills stepped down at the end of 2005. His successor, Alan Cook, was appointed with the title of managing director in January 2006. Cook had previously been chief executive of National Savings & Investments.

With declining mail usage, the Post Office had chronic losses, leading to a reported £102 million lost in 2006, raising concerns in the media regarding its ability as a company to operate efficiently. Minutes of a board meeting in April 2006 state that the company was insolvent and unable to meet its future debts. Plans to cut the £150m-a-year subsidy for rural post offices led to the announcement that 2,500 local post offices were to be closed during 2007, with the 14,000-branch network considered unsustainable.

In 2007, the government gave a £1.7 billion subsidy to Royal Mail Group so that it could turn a profit by 2011. This was to be used to invest across the whole network of Royal Mail, the Post Office, and Parcelforce. 85 Crown post offices were closed, 70 of which were sold to WHSmith. This followed a trial of 6 Post Office outlets in WHSmith stores. WHSmith was expected to make up to £2.5 million extra in annual profit. 2,500 sub-post offices closed between 2008 and 2009. Redundancy packages were provided from public funding (subpostmasters were paid over 20 months salary, roughly £65,000 each).