THE government has outlined plans for the Post Office to start offering financial products – an idea which could save rural branches.
Proposals include allowing the Post Office to provide current accounts, business accounts, children’s saving accounts and mortgages.
Business secretary Lord Mandelson launched a public consultation on the proposals on Wednesday (2 December).
“Growing financial services at the Post Office will help secure the future of the network and give people access to a full range of banking products at an institution they trust and value.”
Access to accounts would by offered by all 11,500 Post Office branches – more branches than all the High Street banks combined.
The plan would require investment of up to £1.7bn by 2011.
The changes would turn the Post Office into “a leading player in financial services”, said Lord Mandelson.
Information leaflets giving customers the chance to provide feedback will be placed in Post Office branches over the next 12 weeks.
The Commission for Rural Communities said an expanded role for branches had the potential to provide rural access to essential services.
“We are especially pleased that the consultation touches on the role of credit unions, which have an important part to play in tackling financial inclusion in rural areas.”
Simon Hart, chief executive of the Countryside Alliance, said the plans would be welcomed by rural residents worried about their local post office.
But it remained to be seen whether the government believed a beefed-up financial services package would secure a future for the network.
The Communication Workers Union, which represents postal workers, said it too welcomed the consultation.
But the government should not let it be a wasted opportunity.
Billy Hayes, CWU general secretary, said: “The government needs to move quickly on this important and popular move.”
“We're concerned that the consultation provides little vision to truly expand the financial services offered through the post office network.”
All profits generated from the offering financial services should be used to maintain a viable post office network, said Mr Hayes.
The consultation closes on 24 February.