You are currently browsing the tag archive for the ‘post offices’ tag.

Bookmark and Sharelindsay-mackie2Lindsay Mackie is a consultant at nef. She is leading nef’s post office campaign and works on Clone Town and Ghost Town Britain.

When nef began to put together the Post Bank Coalition 15 months ago it was because we knew that this vital local economic and community network was being neglected and run down to the point where it might crumble to a few thousand post offices.

Successive governments have treated the Post Office as a series of problems which they hoped would go away- rather than as a trusted and flexible organisation which props up- and more- thousands of communities both rural and urban.

Today’s announcement then , that the Post Office is to get a dollop of  £180 million Government (our) money  to provide new financial services and to improve financial inclusion through credit unions and weekly budget plans is thoroughly welcome. The big banks have been made to offer up their current accounts for access in Post Offices and the poor will now be able to pay utility bills by direct debit instead of through the disgracefully over priced meters. The Government is talking about how it can levy retail banks to pay for credit unions to access accounts wherever they are in the country.

This announcement does show that the Government has entirely changed direction by recognising, and saying strongly, that the Post Office network is important, is highly valued by the people, and needs to be sustained .

The Post Bank Coalition – nef, the Communication Workers Union, the Federation of Small Businesses, the National Pensioners Convention, Unite the Union, the Public Interest research Centre – would go much further though, than the Government has today. Our proposal is that a Post Bank- of the sort which flourishes in Italy, France, New Zealand and elsewhere (South Africa is about to start one)- is the answer both to the business future of the Post Office and to our need for diversity in the banking system.

Our economy depends on local economies. At present they are badly served by the retail banks and could be must best served by their local post offices. At present the financial services offered by the Post Office- which it does do very successfully, being, for instance, the number one provider of foreign currency in the UK- are run by the Bank of Ireland so that 50 percent of all profits go back to Ireland. But worse than that, the Bank of Ireland is in a very shaky position and its capacity so far has not even included offering a current account to PO customers, nor children’s savings accounts. We on the Coalition think its probably not capable even of offering the new range of products adequately. It may have been the right partner at the time when the PO went into financial products but it isn’t now.

So we would have liked the Government to grasp that nettle. The other problem about the welcome first steps announced today is that they don’t do anything substantial for the big Post Office problem of the falling revenues of a third of all post offices. Only a publicly owned Post Bank, with all the revenues going back into the Post Office, with all the innovation and increased footfall it would bring, can do that.

But the Post Bank Coalition is pleased with a good first step to keeping and protecting this astounding and far reaching underpinning  of the public realm.

Advertisements

Bookmark and ShareAndy Wimbush is nef‘s Communications Officer and blogmaster.

Ed Miliband in the Guardian on Saturday:

“Institutions are the things that define governments. The 1945 government was defined by its relationship with the NHS. The 1997 government was defined by … institutions like Sure Start. I think the idea of the People’s Bank, the network of post offices around the country connected by a new financial institution, is one of those ideas. It speaks to people’s sense of community – and frankly, banks have let down low-income consumers, and others as well. It is part of a new deal for the low paid around the banking industry. […] It is part of a bigger reform I think we need in the relationship between individuals and financial institutions. We have a set of institutions in our post offices that can form the basis of this banking system, but up to now we have not put into practice this idea that it can be a very serious financial institution and, if you like, a competitor to the conventional private sector. At present there are limits to what the Post Office can offer in terms of current accounts – we will expand those services and link them up with credit unions.”

This is really fantastic news, not just for those of us who have led the campaign for a Post Bank here at nef and beyond, but for people living on the front line of financial exclusion. Both the Liberal Democrats and Labour now support the Post Bank, and there have been some positive murmurings in the sidelines of the Conservative Party.

You can help build momentum for the creation of a Post Bank, particularly if you live in a Conservative constituency, by asking your MP to sign Early Day Motion 344.

Bookmark and Sharelindsay-mackie2Lindsay Mackie is a consultant at nef. She is leading nef’s post office campaign and works on Clone Town and Ghost Town Britain.

They have not been earth shattering, but two recent developments around the Post Office are a cause for modest cheer.

One is the Post Office consultation set up by the Department for Business Innovation and Skills, Prop: Lord Mandelson.

Now this a foolish exercise in long grass exploration in one way- any decent Government would be taking firm steps itself to safeguard the Post Office network, give more Government business to Post Offices , make imaginative use of this national network– and indeed go the whole hog and set up a Post Bank. But this one isn’t and when a gift horse comes along its best to do more than a dental examination. BIS is consulting us on suggested financial services that the Post Office should provide and we should all be sending in our ideas and responses to postofficebanking@bis.gsi.gov.uk or to Post Office Banking Consultation, Shareholder Executive, BISA, 1,Victoria St. London.

BIS wants to know what we like about the PO existing financial services , what we think might also be offered which exists elsewhere in the world, what new financial services we’d like at our local Post Office, and how best could the Post Office support poor people and people who are financially excluded.

Loud and clear we must tell BIS that we want current accounts, much more help for small local businesses, budgeting assistance schemes, attention to the queuing problem and an underlying shift of Government opinion about the Post Office-from thinking that it is a drain on the public purse, to realising that it is a trusted national asset capable of expanding to fit the 21 st century. The consultation must end by the end of February.

And lets raise a cheer for Consumer Focus which this week in a crisp little report, which actually talked to hundreds of people, recommended an immediate current account which the financially excluded would actually use, thus lifting up to a million people from their currently state (brought about mainly because banks aren’t interested in engaging with people on low incomes and the feeling is therefore reciprocated).

The Government would do well to read Consumer Focus’s report – and then implement it.

Bookmark and Sharelindsay-mackie2Lindsay Mackie is a consultant at nef. She is leading nef’s post office campaign and works on Clone Town and Ghost Town Britain.

The Post Office consultation announced today is a most baffling affair. It’s billed by Lord Mandelson and his department as containing “exciting proposals” on which he wants our views. He wants to see the Post Office at the forefront of mortgage provision and he says it is “ideally placed to bring banking services to the heart of people’s communities”.

The consultation will ask us if we want the Post Office to have its own current account, a children’s savings account, business accounts, the ability to manage our money on a weekly budgeting account, and links between the Post Office and credit unions.

The department for business, innovation and skills (BIS) also wants the banks that don’t allow their current accounts to be accessed at the Post Office – hang your heads RBS and HSBC – to do so. (They could just tell them to do it – why consult us?)

The thing is though, these proposals are good. The Post Office should adopt all of them, and has indeed in the past announced that it will, for instance, offer current accounts. The big criticism is they don’t go nearly far enough. A Post Bank – where all the profits go back into the Post Office and are not halved with the Bank of Ireland as at present – would be a really practical and visionary step. It would introduce diversity into the banking system too.

So why have a consultation? These are mainly business proposals that would extend the Post Office’s thriving and well-run financial services. It’s hard to see the populace rising up in indignation at the idea of Post Office children’s savings accounts. (“How outrageous. I am so against this!”). It’s not like that. Why are we having a three-month consultation on financial developments?

If BIS was serious about quickly expanding and strengthening the Post Office it would say to Alan Cook, its head, that he should just get on with providing these sensible and desirable new services. Whether people want them or not will show up in the market. At nef and in the Post Bank Coalition we think that people love and trust the Post Office and will use these new offers and thus make these extended financial services popular.

The consultation is really worrying on two counts. The main one is that these mouse-like developments – in fact any self-respecting mouse would have a bolder vision than this – don’t tackle the neglect and the lack of government support from which the Post Office has suffered for decades. A third of sub-postmasters and sub-postmistresses have seen their revenues decline in the last year. This is just not sustainable. The government has recognised today that the Post Office is a great British institution but it needs to treat it like one.

That means that it doesn’t need this consultation (reporting cunningly just before the election, when the long grass will be even longer) but it does need to follow the excellent advice of the BIS select committee report last July – on, yes, the future of the Post Office. Having massively consulted, it concluded that financial services should be expanded and that, crucially, the government must put its business through post offices and recognise the Post Office’s potential as an unparalleled social, community and economic network.

Mandelson’s department needs to be more radical, more profoundly committed to strengthening the Post Office, more committed to helping small businesses have the financial advice and help they need, than is allowed for by these virtuous proposals. Consulting us on a Post Bank, on using Northern Rock, on making the Post Office the public alternative to our present dreadful banking system – now that would be worth consulting on.

Bookmark and Sharelindsay-mackie2Lindsay Mackie is a consultant at nef. She is leading nef’s post office campaign and works on Clone Town and Ghost Town Britain.

The Prime Minister’s commitment to bringing Post Office banking into the heart of communities, and to giving the Post Office a much greater role in the economy, is a brilliant and simple declaration that this government will protect the public realm, that community matters, that localism matters and that it wants to offer diversity within our astonishingly monolithic retail banking system.

It was also the commitment that got one of the biggest cheers of the Prime Minister’s speech.

If we can now, fast, build up the people’s bank at the Post Office, now that it has effectively been given the wholehearted stamp of approval by the government, it will safeguard the Post Office network – no more dreadful and unnecessary closures – and will offer a real banking alternative to people who think banks should be about more than slicing consumers and then gambling with their money.

So Gordon Brown has done the right thing with his one-line announcement. It’s great.  nef has been campaigning all year, with the Post Bank Coalition, for a Post Bank).

The idea is that the Post Office can also have a Post Bank, such as those that have been set up so successfully in other countries (France, Italy, New Zealand). It is a simple and practical way into a future where community, key information points and financial diversity will be needed more than ever.

A Post Bank will revive and protect the Post Office network, support local economies and small and medium-sized businesses, combat social exclusion and financial inequalities and introduce banking diversity.

Really there is hardly anyone who doesn’t warm to the idea of a great increase in Post Office banking services. (Apart from the British Banking Association, which thinks banks are doing a fine job without the need for another model. Where to start on this peculiar view?) The key now is to make it work.

Sources close to the prime minister are apparently saying we could see increased and improved Post Office services by the end of the year – we need to keep Whitehall to that.

But we also need, in comradely fashion, to ensure that what we get is a true, independent, proper Post Bank and that it keeps its radical roots. The UK has an amazing history of non-shareholder driven banking models – mutuals, trustee savings banks, co-operatives – and Post Banks must be set up using these.

There are all sorts of nifty technical innovations a Post Bank could use to bring in younger clients such as versions of mobile phone banking. And the Post Bank provides the reach to give practical financial advice and help to the poor and the debt-laden. There are very interesting systems available now that can offer planned financial systems to individuals at either no or low cost. Antony Elliott’s Fair Banking scheme is one.

And we don’t need to start from scratch in making the Post Bank a full banking alternative. As an initial step, building a Post Bank around an existing 100% publicly owned bank, Northern Rock, is a logical and brave step. Don’t sell it off to Tesco or whoever – will they provide a true People’s Bank? – keep it working for the public who own it .

In the worst of the crisis last year people flocked to put their money into the Post Office. It’s trusted, even loved. Today’s news is just what we need to keep it like that.

Bookmark and ShareEilís Lawlor is the acting head of the Valuing What Matters team at nef.

SROI

Yesterday saw the launch of the new Social Return on Investment guide, co-authored by nef staff and backed by the Cabinet Office. This is good news for organisations and institutions that wish to account for their performance across the triple bottom line. It is also timely in the current economic environment when the pressure is on to cut costs and make immediate savings. Taking an SROI approach involves thinking about value in a different way – beyond costs and financial savings and over the longer-term. This is in sharp contrast with the recent budget proposals to claw back funds through efficiency savings; these are essentially cuts which will ultimately jeopardise frontline services. Where these services are delivering value, cutting back will lead to poorer outcomes and greater long-term costs.

A guide to Social Return on Investment

SROI promotes the idea of ‘social value’, a concept that is gaining increasing currency across the political spectrum. In some ways its legitimacy is indisputable; few people would argue that things that are bought and sold and have an ‘economic value’ are the things that matter most, yet in our daily lives we generally unwittingly accept that to be the case. What people have resisted is the notion that this type of value is measurable and quantifiable. While concerns about this are understandable they are misguided and ultimately unhelpful. Somehow we have convinced ourselves that what we pay for goods and services equates with some intrinsic value. Instead, what the market does – in fact what is effectively for – is to bring together people whose valuations happen to coincide. This ‘coincidence’ is called ‘price discovery’ but it is not uncovering any ‘true’ or ‘fundamental’ value, rather it is matching people who agree on what something is worth. Calculating social value is the same as this in virtually every way. The difference is that goods are not traded in the market and so there is no process of ‘price discovery’. This does not mean, however, that these social goods do not have a value to people.

Why does this matter? It matters because it is about more than the logic of an abstract philosophical debate. By ignoring value that is created and destroyed outside the market we have given far greater significance to things that are bought and sold than they perhaps merit. This has grave, practical implications that have helped to lead us down the shaky and unsustainable path we are now on.

The debate that has raged about the efficiency of the Post Office network encapsulates this well – people feel that there was a value to it beyond what can be measured financially, and yet decisions about its future are made largely on a financial basis. Measuring and quantifying social value will never be an exact science; the subjectivity of value makes that impossible. This did not prevent us creating markets and developing accounting practices to enable us to carry on the business of everyday life. Neither should it prevent us seeking to reduce inequalities and improve the health of the planet by bringing onto the balance sheet the real and costs and benefits of the decisions and trades that we make. SROI is the most developed and robust methodology available for doing this. It is now being mainstreamed in the third sector, which has led the way on innovative measurement but its potential is much greater than that. We need to get to a stage where our actions and behaviours are judged and rewarded by the extent to which we create or destroy value in its broadest sense, if we are to find an equitable and sustainable way through the many problems we currently face.

Bookmark and Sharelindsay-mackie2Lindsay Mackie is a consultant at nef. She is leading nef’s post office campaign and works on Clone Town and Ghost Town Britain.

The Chancellor rightly talked about his careful preparations for the future and about the need for increased regulation of our failed cowboy banks.

He should also have offered a tangible reform in both areas in the form of a Post Office Bank which would simultaneously help small local businesses- the underpinning of our economic future- and increase people’s trust in the banking system. It’s not too late. As a practical and popular measure, he can still announce the setting up of a Post Bank in the wake of the Budget.

Read more about our campaign to establish a Post Bank and sign the petition to make it a reality.

Bookmark and Sharelindsay-mackie2Lindsay Mackie is a consultant at nef. She is leading nef’s post office campaign and works on Clone Town and Ghost Town Britain.

The business secretary's plans for privatising the Post Office are in tatters – after his select committee put the boot in

The business secretary's plans for privatising the Post Office are in tatters – after his select committee put the boot in

The words choke and cornflakes suggest themselves when thinking of how Lord Mandelson responded to a report released (pdf) by the business, enterprise and regulatory reform select committee yesterday.

The committee, chaired by the highly respected Tory MP Peter Luff, is doing a forensic job on the various options for the Post Office network. It seems from the public sessions (where key witnesses are invited to give their views on how the Post Office is and should be run) that it’s a motivated, informed and tough body, intent on finding the right solutions for a great national institution – and applying its keen intelligence to the postal services bill (prop: Lord Mandelson) and its proposal that the Royal Mail be broken up through a 30% sell-off.

The latest report on the bill is an astonishing attack on the business secretary’s plan. Though couched in the silky language of parliamentary discourse – “it is surprising”, “worrying”, “the government is coyly refusing …” – the report, to use a technical term, tears the government plan to bits. It also rips apart the key recommendations of the Hooper report, which Lord Mandelson accepted in its entirety on the day of publication and then used as a basis for his sell-off bill.

The report is a rattling good read. Its main conclusions are unambiguous. It agrees with Hooper and the government that the Royal Mail pension deficit should be taken over by the government. And it agrees that Royal Mail should be differently regulated and governed – taking away the malign political interference (or negligence) that has dogged it over the years. Nobody could disagree.

Then it gets down to business, shredding all the arguments made for the 30% sell-off.

“We do not consider either the independent review or the government has properly made the case that these two reforms, about which there is a broad consensus, can only be made as part of a package that includes the third reform – the involvement of a private sector equity partner in Royal Mail.”

The report points out that the government has not put out the figure it hopes to get from the sell-off – or explained why a much-needed cash injection has to come from a sell-off.

“We are left with the conclusion that either the government has not fully thought through its position about future share sales, or that it has done so and is refusing to reveal its hand. Either case is worrying.

“It is entirely unacceptable for parliament to be asked to approve such fundamental changes to Royal Mail Group when there is no indication of how much money Royal Mail Group needs for investment; while the government appears to have no business plan and has not indicated the use to which any private sector capital would be put.”

After such a slating, it’s hard to see what will be left of the rationale for Lord Mandelson’s plan to break up Royal Mail, given that there is no certainty that there will be a cash injection from a private-sector partnership. There are several questions about the proposed partnership that must be addressed:

The figure cited by Lord Mandelson at the second reading was 30%, but why?

How much openness will there be about the partner’s rights and any arrangements between the parties about sale of the partner’s stake? As the bill is currently drafted, parliament will not have any right to see any agreement before the government enters into it (or afterwards). Is the government prepared to make such details public before a partnership is agreed?

What is the detailed rationale for dividing the Post Office from Royal Mail Group?

What will be the effect on competition if, as is very likely, the chosen partner is already active in the UK mail market?

What will happen if Royal Mail needs further capital injections? The natural assumption is that investors would fund this in proportion to their stake in the company. But such an injection from the Treasury would expose the company to all the state-aid rules that we are told this scheme is intended to avoid.

It’s hard to see how Lord Mandelson can now persevere with his wretched, destructive bill. Nobody – including now this august select committee – wants anything to do with it. Can’t someone throw the noble lord a lifeline out of this sinking ship?

Bookmark and ShareVeronika Thiel is a researcher and project manager on nef’s Access to Finance team.

The ClubCard creates a huge database about customer spending habits. Tesco's new current account will add to the supermarket's knowledge about the way we shop.

The ClubCard creates a huge database about customer spending habits. Tesco's new current account will only add to the supermarket's knowledge about the way we shop.

Yesterday, Tesco has announced plans to provide current accounts in thirty of its stores. If this pilot scheme is successful, then the supermarket giant will roll-out banking services nationwide.

In principle, this isn’t a bad move. Britain’s banking sector isn’t really a competitive one anymore. According to an Office of Fair Trading report written before the Lloyds TSB-HBOS merger, 79 per cent of current accounts held by four high street banks. Any injection of competition into the market is, therefore, a welcome thing. And with 2,115 stores across the country, Tesco outstrips the network reach of any single bank.

But those 2,115 are also turning our high streets into Clone Towns, robbing the UK of its retail diversity. And although Tesco has successfully monopolised the nation’s grocery shopping, it shows no signs of slowing down. Tesco is quickly becoming a cradle-to-grave company. You can buy your baby food, school uniform, kitchen appliances, computers, books, internet access and telephone (both mobile and landline), fill up your car and get it insured, get a health check and prescription and, yes, even plan your funeral at Tesco. In many communities, the only pharmacy is in Tesco. It’s becoming the one-stop-shop for your entire life.

In this light, Tesco’s banking plans hardly look like a diversification of the market or the creation of some healthy competition.

Tesco also has one of the biggest databases storing customer information. If you use your Tesco ClubCard regularly, then you can be sure that the supermarket has a wonderfully clear map of your spending habits: what you buy, where you buy it, when, and how often.

Now that they’re throw banking services into the mix, they’ll have another database at their fingertips. My bank can quite easily tell what I do from my transactions: whenever I pay with a card, they know what I bought. That’s why I quite often use cash. I don’t have loyalty cards: they save you very little money, but they do make you a perfectly observable consumer.

Now, I’m not suggesting that Tesco will breach customer confidentiality or abuse the data that they collect. Due to banking rules, they will be unlikely to be able to match a bank account with the data collected on a Tesco ClubCard.

Nevertheless, the information that Tesco will hold about a person with a ClubCard and a current account would reach frightening proportions. This concentration of information is worrying. If you think that the Government holds way too much data about your person, then think again. Tesco is likely to know more about you than your local council or your GP. And if you are lured by their offer of a current account, they will soon know even more.

Whilst Tesco’s move into banking is, on the face of things, a welcome addition of diversity to the retail banking market, it also is the opposite: concentration. Concentration of the provision of goods and services in one company, and concentration of data collection.

Let’s make sure that Tesco isn’t the only new bank on the block. Support our campaign to offer banking services at the Post Office. Write to your MP and tell them to support Early Day Motion 1082. Chose to bank at a place that you trust and that will also support your local community: the Post Bank.

UPDATE: You can now sign a petition supporting the Post Bank.

Bookmark and ShareAndy Wimbush is nef‘s Communications Assistant and blogmaster. He also draws cartoons for nef‘s newspaper.

Pat McFadden: a neoliberal nostalgic

Pat McFadden, a neoliberal nostalgic | Photograph: Sharon Wallace

It’s been over a week now since we launched our proposal for a People’s Bank based at the Post Office. In a packed committee room in the Houses of Parliament we heard politicians of all stripes voice their support for this new kind of bank, one that would put communities, small businessses and the financial excluded first.

The only speaker to mince his words and to temper his enthusiasm with caveats was, of course, the Minister for Postal Affairs, Pat McFadden. There is a danger, McFadden warned us, of becoming so ‘nostalgic’ about the Post Office that it blinds us to its current problems and the need to modernise. And then he said: ‘We can’t simply go back to the way things were’.

We can’t simply go back to the way things were.

But isn’t it McFadden and the rest of this Government – rather than the Post Bank Coalition – who are the real nostalgics here? After all, they’re the ones who are desperate for us to go back to the way things were before Lehman Brothers declared its insolvency, before the failure of HBOS and RBS. They continue to pump seemingly endless amounts of public money into banks which, as nef argued in our banking report I.O.U.K., are no longer able to perform the most basic functions of a bank.

The Post Office, by contrast, remains a vital and much-needed element of the UK economy. nef‘s research shows that each post office saves neighbouring small businesses around £270,000 each year. And small businesses employ the majority of the private sector workforce, around about 58%. Nor is the Post Bank simply a means of saving the Post Office network: we also believe it would offer something markedly different to what the current high street banks are doing, even taking into account the fact that these banks are now effectively in public ownership. As Liberal Democrat Treasury Spokesperson Vince Cable said of the Post Bank proposal:

This is an attempt to clean up banking. The co-option of the system has spread right through into the branches. There was aggressive cross-selling, commission-based branch managers were drawing people into transactions they should never have done. This is a cleaner principle based on sound banking ideas, but driven by public interest rather than narrow short-term profits.

What’s more, the proposal could easily be put into action. A recent poll by PoliticsHome.com revealed that 74% of the electorate think that a Post Bank would be a good idea, even at this early stage. And brand experts have agreed that the Post Office is uniquely situated – both geographically and within the public consciousness  – to be able to provide trusted, reliable financial services amid so much economic turmoil.

The only thing stopping McFadden, Brown, Mandelson and their ilk is their neoliberal nostalgia. They are desperate to get back to business-as-usual without apology because it is too uncomfortable to admit that the Thatcherite economics with which they dramatically transformed their party has failed. While they wish that we could all just go back to the way things were, others are forging ahead with a new economy.

ABOUT

This blog is operated by nef (the new economics foundation).

Follow us on:
Vimeo
Twitter
Flickr

ARCHIVES

CATEGORIES

Put People First
Airplot - join the plot
nef employees blog in their personal capacity. The opinions expressed here do not necessarily reflect those of the new economics foundation.