PP 2019/0121
ECONOMIC POLICY REVIEW COMMITTEE
FIRST REPORT FOR THE SESSION 2019-2020
The future of the Isle of Man Post Office ECONOMIC POLICY REVIEW COMMITTEE FIRST REPORT FOR THE SESSION 2019-20 THE FUTURE OF THE ISLE OF MAN POST OFFICE
There shall be three Policy Review Committees which shall be Standing Committees of the Court. They shall scrutinise the established (but not emergent) policies, as deemed necessary by each Committee, of the Departments and Offices indicated in this paragraph together with the associated Statutory Boards and other bodies:
Economic Committee: Treasury; the Department of Economic Development; and the Cabinet Office (including constitutional matters).
Each Policy Review Committee shall in addition be entitled to take evidence from witnesses, whether representing a Department, Office, Statutory Board or other organisation within its remit or not, in cases where the subject matter cuts across different areas of responsibility of different Departments, Offices, Statutory Boards or other organisations. The Policy Review Committees may also hold joint sittings for deliberative purposes or to take evidence. The Chairmen of the Policy Review Committees shall agree on the scope of a Policy Review Committee’s inquiry where the subject cuts across the respective boundaries of the Policy Review Committees’ remits.
Each Policy Review Committee shall have –
(a) a Chairman elected by Tynwald,
(b) two other Members.
Members of Tynwald shall not be eligible for membership of the Committee, if, for the time being, they hold any of the following offices: President of Tynwald, member of the Council of Ministers, member of the Treasury Department referred to in section 1(2)(b) of the Government Departments Act 1987.
The Policy Review Committees shall be authorised in terms of sections 3 and 4 of the Tynwald Proceedings Act 1876 as amended and of Standing Orders to take evidence and to summon the attendance of witnesses and further to require the attendance of Ministers for the purpose of assisting the Committee (or Committees, if sitting jointly).
Resolved on 20th May 2014 –
That the remit of the Economic Policy Review Committee should include the work of the Financial Supervision Commission, Insurance and Pensions Authority and Gambling Supervision Commission, this remit to include the requirement for the Chief Executive to give evidence in public.
The powers, privileges and immunities relating to the work of a committee of Tynwald are those conferred by sections 3 and 4 of the Tynwald Proceedings Act 1876, sections 1 to 4 of the Privileges of Tynwald (Publications) Act 1973 and sections 2 to 4 of the Tynwald Proceedings Act 1984.
Committee Membership
Mr C R Robertshaw MHK (Douglas East)(Chairman)
Mr T S Baker MHK (Ayre & Michael)
Mr J R Moorhouse MHK (Arbory, Castletown & Malew)
Copies of this Report may be obtained from the Tynwald Library, Legislative Buildings, Finch Road, Douglas IM1 3PW (Tel: 01624 685520) or may be consulted at www.tynwald.org.im
All correspondence with regard to this Report should be addressed to the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas, Isle of Man, IM1 3PW. Table of Contents
I. EXECUTIVE SUMMARY...... 1
II. PARLIAMENTARY CONTEXT ...... 2
III. BACKGROUND...... 4
IV. RECENT CHALLENGES AND THE ISLAND’S RESPONSE ...... 5
V. THE PRESENT CRISIS ...... 8
VI. WHAT THE POST OFFICE IS...... 10
VII. WHAT THE POST OFFICE CAN DO ...... 11
VIII. WHY THE POST OFFICE MATTERS...... 12
IX. THE GOVERNMENT, IN CONJUNCTION WITH THE POST OFFICE, MUST DEVELOP A NEW VISION ...... 14
LETTERS AND PARCELS 15
MICARD 16
VEHICLE AND DRIVER LICENSING 16
CASH 17
X. CONCLUSION...... 17
WRITTEN EVIDENCE ...... 19
APPENDIX 1 SUBMISSION DATED 5TH MARCH 2019 FROM THE ISLE OF MAN BRANCH OF THE NATIONAL FEDERATION OF SUB-POSTMASTERS 21
APPENDIX 2 SUBMISSION OF 19TH MARCH 2019 FROM THE ISLE OF MAN BRANCH OF THE NATIONAL FEDERATION OF SUB-POSTMASTERS: SURVEY RESULTS 31
APPENDIX 3 SUBMISSION DATED 4TH MARCH 2019 FROM S GUBBY, SUB-POSTMASTER JURBY 41
APPENDIX 4 SUBMISSION DATED 4TH MARCH 2019 FROM MARY PALMER, SUB-POSTMASTER LAXEY AND PEEL 45
APPENDIX 5 SUBMISSION DATED 27TH FEBRUARY 2019 FROM JEFF CALVERT, SUB-POSTMASTER PORT ST MARY 49
APPENDIX 6 SUBMISSION DATED 4TH MARCH 2019 FROM MARTIN ROYLE, DEPUTY CLERK, GARFF COMMISSIONERS 53
APPENDIX 7 SUBMISSION DATED 5TH MARCH 2019 FROM MARGARET DAVIES, CHAIRMAN, PORT ST MARY COMMISSIONERS 57
APPENDIX 8 SUBMISSION DATED 28TH FEBRUARY 2019 FROM JACKSON BAIN 61 APPENDIX 9 SUBMISSION DATED 28TH FEBRUARY 2019 FROM CHRISTOPHER BALL 65
APPENDIX 10 SUBMISSION DATED 27TH FEBRUARY 2019 FROM DOUGLAS BAYLEY 69
APPENDIX 11 SUBMISSION DATED 5TH MARCH 2019 FROM JOHN BECKETT 73
APPENDIX 12 SUBMISSION DATED 4TH MARCH 2019 FROM BARRY EDWARDS 77
APPENDIX 13 SUBMISSION DATED 4TH MARCH 2019 FROM ARIE EISINGER 81
APPENDIX 14 SUBMISSION DATED 27TH FEBRUARY 2019 FROM SARA GOODWINS 85
APPENDIX 15 SUBMISSION DATED 27TH FEBRUARY 2019 FROM SUE HANSEN 89
APPENDIX 16 SUBMISSION DATED 27TH FEBRUARY 2019 FROM PHIL THOMPSON 93
To: The Hon Stephen C Rodan OBE MLC, President of Tynwald, and the Hon Council and Keys in Tynwald assembled
ECONOMIC POLICY REVIEW COMMITTEE FIRST REPORT FOR THE SESSION 2019-2020 THE FUTURE OF THE ISLE OF MAN POST OFFICE
I. EXECUTIVE SUMMARY
1. Striking the right balance between the commercial and social obligations to be placed on the Post Office is a complex question for policymakers in every jurisdiction. Moreover, as the political, social and technological environment changes, the settlement between the community and its Post Office must be revisited in every generation.
2. In July 2018 Tynwald referred action on the future of the Post Office to the Board of the Post Office itself. This put the Post Office in a position where achieving a positive vision for the future was difficult. It has opted instead for a strategy of managed decline.
3. Between July 2018 and December 2018 the Post Office discussed with various Government Departments and other public bodies the possibility of collaboration in the development of enhanced public services. However, the Post Office did not have any success in persuading other public bodies to partner with it.
4. The Post Office is not in a position to develop enhanced public services on its own. Left to do so it would, over time, slip further into crisis.
1 5. If the Post Office services and a network of sub post offices are left to wither their loss could never be replaced, resulting in a serious setback for enhanced public services in the community.
6. In our Report, which has been brought forward to coincide with the Post Office bringing its report to Tynwald, we consider a number of key issues which must be thoroughly addressed if the future of the service is to be secured.
7. If it is to be sustained, the Post Office’s unique attributes and position as a strategic priority at the heart of Government must be recognised. To achieve this there is an urgent need to re-purpose the Post Office with a new and clear vision. Once set, a operating model can be designed and a series of steps taken to migrate towards it.
8. The Isle of Man Post Office is a national asset which deserves to be treasured by Tynwald and by everyone in the Island. It combines a capable logistics organisation with a highly trusted brand, wide geographic spread and a loyal employed workforce. In the network of sub postmasters it has a team of dedicated private sector partners with close links to local communities. Together these capabilities add significant value to the life of the Island.
9. Where we refer to “the Post Office” in this Report we include not only the Statutory Board constituted under the Post Office Act 1993 but also the independent sub postmasters who carry out services under contract to the Statutory Board. We see both the Statutory Board and the sub post office network as integral parts of the Isle of Man Post Office. II. PARLIAMENTARY CONTEXT
10. The future of the Post Office has long been a matter of concern for Tynwald. Since the 2016 General Election there have been a series of statements by the Chairman of the Post Office Board and two substantive debates. On 19th July 2018 it was resolved -
That Tynwald:
recognises the unique attributes, capabilities and social value of the Isle of Man Post Office;
acknowledges the challenges it faces in its core business sectors;
views with concern its future prospects;
believes that the Isle of Man Post Office has a significant role to play in the future delivery of enhanced public services in the Isle of Man;
2 supports Isle of Man Post Office Board to ensure the long-term future of Isle of Man Post Office for the benefit of the people of the Isle of Man;
requires the Isle of Man Post Office to report back to Tynwald with its plans for Isle of Man Post Office by December 2018; and
recognises the importance of putting aside any determination to pursue corporatization.
11. On 11th December 2018 it was resolved –
That Tynwald receives the Isle of Man Post Office Strategic Business Case 2017–2022 [GD No 2018/0087] and the Report of the Isle of Man Post Office Board Strategic Recommendations Requiring Tynwald Approval Report [GD No 2018/0085] and:
1. notes that the IOMPO’s commercial activities have made significant contribution to offset the increasing losses from our public service obligations under the Post Office Act 1993, and have provided profit for reinvestment and significant contributions to Isle of Man Government Treasury;
2. approves the IOMPO’s aim to continue to be self-funding as defined within the financial duties in the Post Office Act 1993 Section 5(1), by protecting the core business, by being efficient and effective, by growing profitably and by diversifying selectively;
3. approves in principle the intention of the IOMPO to bring forward proposals concerning the required legislative changes concerning the closure to new members of its existing Superannuation Scheme coupled with its intention to seek to offer a replacement contract defined contribution group personal pension scheme to new members;
4. approves the reduction of letters delivery from six days a week to five days a week removing the Saturday; and
5. approves that following the public consultation the IOMPO will undertake further work on the format of the delivery of retail services and will report back to Tynwald with its results and recommendations no later than October 2019.
12. In February 2019 we identified as a common theme a concern with the capacity of the Island’s Government for policymaking at a strategic and cross-Departmental level – as opposed to the operational management of individual Departments, Boards and Offices. As a first area of study, the Committee we decided to look at the future of the Post Office and we invited written submissions from the public.
3 13. We received written submissions from the National Federation of Sub Postmasters, from three individual sub postmasters, from representatives of two local authorities and from nine members of the public. We have published their written evidence as part of this Report.
14. We received extensive written evidence from the Post Office Board in confidence, for which we are most grateful. We also heard oral evidence in private from representatives of the Post Office Board: on two occasions from the Chairman and Chief Executive, and on one occasion from the entire Board.
15. In September 2019 we heard oral evidence in private from representatives of the National Federation of Sub Postmasters including two sub postmasters from the Isle of Man and one from the UK.
16. Given the terms of item 5 of the December 2018 resolution, we anticipate that a report on the format of the delivery of the Post Office’s retail services will be brought forward by the Post Office for debate at the October 2019 sitting of Tynwald. We are laying this present Report in order to inform that debate. III. BACKGROUND
17. The Isle of Man Post Office was established by statute in 1972 and commenced operations on Tynwald Day in 1973. Like post offices in other jurisdictions it is partly a public service organisation and partly a commercial operation.
18. The commercial dimension of the Post Office has always been important to Tynwald. Indeed, when the Isle of Man was offered the chance to take over postal and telecommunications services from the UK in the late 1960s, the main considerations were commercial, and Tynwald only agreed to take on the postal services once it was convinced they would be profitable.1
19. The social dimension is also of great significance. As the former chief executive of New Zealand Post Limited, Elmar Toime, puts it in his report presented to Tynwald in April 2016 by the Minister for Economic Development:
The Post is part of national infrastructure with social obligations. It is defined as a national communications and delivery system for letters and parcels with an expectation both of universal pricing and of universal service. Further, through
1 Kermode, Offshore Island Politics: the Constitutional and Political Development of the Isle of Man in the Twentieth Century (Liverpool University Press, 2001), page 185
4 the post office network it is also a community asset, bringing financial and government services to citizens.2
Striking the right balance between the commercial and social obligations to be placed on the Post Office is a complex question for policymakers in every jurisdiction. Moreover, as the political, social and technological environment changes, the settlement between the community and its Post Office must be revisited in every generation. The value of a Post Office is not measured simply by its own financial performance. Its social value must also be recognised. IV. RECENT CHALLENGES AND THE ISLAND’S RESPONSE
20. Today the greatest challenges to the existing settlement arise from technological change. Our own Post Office Chairman described the situation as follows when, in October 2018, she presented the organisation’s 2017/18 accounts to Tynwald:
The postal industry globally continues to be impacted by the increase in digital communications such as email, text messaging and social media and IOMPO continues to suffer the effects of the decline in its core markets. During the last ten years, Isle of Man letter mail has declined by 47% while footfall through local post offices continues to fall with transactions declining by 7% per year on average over the last three years. These declines are a reflection of changing customer habits with fewer people sending letters and more and more people opting for digital ways in which to transact their business, rather than traditional face to face over the counter methods.3
21. The rise of Internet shopping has increased demand for delivery services, but this has not been enough to offset other challenges, as explained by the Chief Executive in his contribution to the most recent Annual Report and accounts:
Parcel volumes and revenues are a growth area, however such is the competitive nature of this sector that pricing power and profitability are declining. Fast and free delivery is a competitive differentiator for online retailers, and competition for the ‘last mile’ is fierce. We are aware that unlicensed businesses and ‘lifestyle’ couriers are operating distribution activities on the Island which may infringe the provisions of the Post Office Act.
2 http://www.tynwald.org.im/business/opqp/sittings/Tynwald%2020142016/2016-GD-0008.pdf 3 http://www.tynwald.org.im/business/opqp/sittings/20182021/2018-GD-0066.pdf
5 Notwithstanding this, there appears to be some recognition in the UK that the ‘gig economy’ employment practices may be legally unsustainable.4
22. Although these challenges have been foreseen for several years, they have not been well managed in the Isle of Man. Mr Toime wrote in 2016:
In investigating how key government stakeholders seem to be interacting with postal matters, there does appear to be conflict. Part of this appears to be because of lack of clarity as to where direction should come from. Accordingly, decision-makers are making calls based on expectations of stakeholder reaction and this is not ideal for the complex operating environment for a postal business.
There are several public policy areas that need clarification even before recommendations for the corporate structure can be made.5
He went on to discuss the following public policy areas: small Government; competition impact and economic growth; community obligations; Post Office network; delivery; pricing; employment policy; preferred supplier to Government.6 He concluded:
Where there is an argument to change expectations there must be clarity in the process for making the case. It may not be the Post’s job to define these expectations but it must make clear the implications of social policies… Where issues are raised that ask for change in the social obligations then these need to be debated at the level decided by Tynwald, but beyond any single individual.7
23. Despite this advice, the Council of Ministers has not yet taken the lead in defining the expectations to be placed on the Isle of Man Post Office. It has been fully aware of the challenges being faced by the Post Office in recent years but it has merely referred them back to the Post Office. This approach was made explicit in the Tynwald debate of July 2018. The original motion would have required the Council of Ministers to report back to Tynwald with its plans for the Isle of Man Post Office. An amendment was tabled by the Post Office Chairman and supported by the Council of Ministers under which the requirement to report back with plans in December 2018 was placed on the Post Office itself.
4 http://www.tynwald.org.im/business/opqp/sittings/20182021/2018-GD-0066.pdf 5 GD 2016/0008, paragraph 5.3 6 GD 2016/0008, paragraphs 5.3.1 to 5.3.4 7 GD 2016/0008, section 6
6 24. The plans reported by the Post Office in December 2018 can be summed up in two words: managed decline. The December 2018 resolution (quoted at paragraph 19 above) includes just two specific proposals: to reform the pension scheme and to reduce letter deliveries from 6 days per week to 5 days per week.
25. As far as the retail network is concerned, the Post Office’s “Strategic Business Case 2017-2022” identified as an action:
Work with the Department of Infrastructure and other key stakeholders to manage the decline in line with the Department of Infrastructure strategy.8
The Chairman commented in the debate:
Natural consolidation of post offices is happening now and will continue to take place as existing offices close through retirement and existing businesses assessing their own business and the financial viability of continuing to offer post office services in light of reduced revenue.
26. In July 2018 it had been resolved: “That Tynwald believes that the Isle of Man Post Office has a significant role to play in the future delivery of enhanced public services in the Isle of Man”. Picking up on this part of the resolution, the Post Office dutifully contacted other public bodies in the weeks following the debate. In its “Strategic Recommendations” report laid before Tynwald in December 2018, the Post Office offered the following description of what happened next:
Following a presentation to the Chief Officer Group in August 2018, IOMPO agreed to meet with each of the key departments. This was further extended to the statutory boards and offices at the extended Chief Officer Group meeting.
Initial meetings have been held with nominated officers from each department, statutory board, and office during September and October 2018. We are thankful for the support provided to date and look forward to working with the relevant officers to explore the opportunities put forward, noting that pan government opportunities to generate cost, risk and social benefits will require cross government collaboration.9
In other words, none of the other Government Departments showed any enthusiasm for engaging with the Post Office about the delivery of enhanced public services.
8 GD 2018/0087, page 18 9 GD 2018/0085, paragraphs 37 to 38
7 27. Introducing the debate in December 2018, the Chairman of the Post Office said:
The board is committed, however, to any Government initiatives relating to community hub concepts and increased face-to-face opportunities which may help sustain the future of some local post offices and welcomes the opportunity under recommendation 5 to further work on the future vision for the social hub concept of delivering public services in our communities.
In July 2018 Tynwald referred action on the future of the Post Office to the Board of the Post Office itself. This put the Post Office in a position where achieving a positive vision for the future was difficult. It has opted instead for a strategy of managed decline.
Between July 2018 and December 2018 the Post Office discussed with various Government Departments and other public bodies the possibility of collaboration in the development of enhanced public services. However, the Post Office did not have any success in persuading other public bodies to partner with it.
The Post Office is not in a position to develop enhanced public services on its own initiative. Rather, the Post Office needs to work in conjunction with the Government to generate a new vision and operating model. V. THE PRESENT CRISIS
28. The October 2019 Tynwald debate will take place at a critical time for the Post Office. In 2017/18 the Post Office reported a loss of £1.2m, the first time in its history that it had reported a loss. In that year it still provided a dividend to Treasury of £1.5m. After discussions with the Treasury the dividend for 2018/19 was reduced to £500,000.10
29. The crisis is at its most acute in the retail division. Already in December 2018 in its “Strategic Business Case 2017-2022” the Post Office said:
If the DoI ceases their contracts for agency arrangements with IOMPO for vehicle and driving licences as anticipated, this will reduce the IOMPO annual revenue by over £550k per annum based on current revenue levels, and the independent network sub postmasters income by 12% to 51% per annum.11
10 Isle of Man Post Office Report and Financial Statements GD 2018/0066 11 GD 2018/0087, page 17
8 The accompanying “strategic recommendations” document said:
It will become untenable for independent sub postmasters to maintain the network in its current form. The cessation of all or part of the Department of Infrastructure agency arrangement would have a catastrophic impact on the viability.12
In written evidence submitted to us in March 2019, the National Federation of Sub Postmasters (Isle of Man Branch) said:
We believe that the resultant loss in income for sub post offices would lead to the closure of around two-fifths of the Isle of Man post office network.13
30. To put the vehicle and driver licensing contracts in context, the “Strategic recommendations” document said:
The two largest contracts generating income and footfall for post offices are provided by the Isle of Man Government – from the Department of Infrastructure for the processing of vehicle and driving licences and from the Social Security Division of Treasury for the payment of pensions, benefits and allowances. These two contracts make up approximately 62% of total transactions.14
31. It follows that if vehicle and driver licensing were to go, Social Security payments would become even more significant. The Post Office in its December 2018 strategy proposed to expand the use of MiCard, the system currently used for the payment of pensions and benefits on behalf of the Social Security Division of the Treasury. However, we were told during the course of our inquiry that the future of the MiCard system was in doubt based on other Government Departments not having been engaged as to any new opportunities, and on the existing contract for payment of benefits and pensions being under threat.
32. We were told that 39% of the income of sub post offices came from these two Government contracts, that with the Department of Infrastructure and that with the Social Security Division. If both were lost, the network in its current form would disappear. We were advised in the first half of September 2019, that 20% of sub postmasters were already considering their future, but that if the withdrawal of those two contracts were confirmed, that figure would rise to 80%.
12 GD 2018/0085, paragraphs 234 to 235 13 Appendix 1 14 GD 2018/0085, para 210
9 33. There are also significant challenges in the Mails Division. The costs of the letter mail delivery will be reduced by the change from six-day to five-day service which was approved by Tynwald in December 2018; however, it is likely that prices will also have to rise, with the Post Office describing the price of a first class stamp as “not sustainable at the current levels”.15 Meanwhile the parcels delivery service is struggling to compete with the unregulated private sector, with the Post Office commenting in its December 2018 “Strategic Recommendations” report that:
By paying their staff less and only when there is work to do, paying for piece rate only, having minimal or no employment rights, expecting them to contribute their own transport, insurances and pay their own taxes, these budget operators are able to undercut the IOMPO prices, in effect unfairly competing for a limited volume of work against us. To win this work we would have to operate at a loss, which we obviously cannot do.
The privilege under the Post Office Act 1993 therefore is increasingly falling out of line with the costs it is incurring in maintaining the Island postal service.16
The Post Office is in crisis.
The scale of the crisis will not be recognised unless the network of sub post masters and the central Post Office are considered together as an integrated system of postal services. VI. WHAT THE POST OFFICE IS
34. The Isle of Man Post Office is today constituted as a Statutory Board under the Post Office Act 1993. Key provisions of the Act include:
section 2, which places a duty on the Post Office to provide postal services throughout the Island (the “universal service obligation”);
section 5, which places a duty on the Post Office to operate at a profit; and
section 6, which allows the Treasury to take from the Post Office a levy each year; and
15 GD 2018/0087, page 11 16 GD 2018/0085, paragraphs 84 to 85
10 section 10, which gives the Post Office an exclusive privilege with respect to conveyance of letters (letter being defined including a packet containing a letter)
35. As a Board, the Post Office delivers some services itself and others through 22 sub post offices. All of these operate on an agency basis with a commercial and service level agreement in place. The Post Office itself does not own or lease any of the buildings in which sub post offices are operated, nor does it directly employ any staff. Payments are made to each sub post office on a transactional basis but in addition a community payment is made to sub post offices outside Douglas and Ramsey. The total amount paid out in 2017/18 was £383,000.17
36. Having been established in 1972 and having handled communications and financial transactions for Island residents for nearly half a century, the Isle of Man Post Office has developed into a highly trusted brand.
Sub postmasters are independent partners of the Post Office Board. However, the sub post office network needs to be seen as an integral part of the system for delivering postal services throughout the Island. VII. WHAT THE POST OFFICE CAN DO
37. According to the Post Office’s “Strategic Business Case 2017-22” laid before Tynwald in December 2018, the Mails Division of Post Office at that time had 198 Full Time Equivalent postal staff. It delivered and collected mail six days per week, delivering 52,000 letters and parcels every day and delivered to 40,000 homes.18
38. According to the “Strategic recommendations” document laid before the same sitting, the retail network had at the time 23 independent sub post offices.
39. Although the sub post offices are referred to by the Post Office centrally as forming a “retail network”, each local sub post office is much more than a shop. Mary Palmer, a sub postmaster in Laxey and Peel, reminded us in her written submission that:
The Post Office network has a diversified customer base ranging from affluent individuals, established local business and entrepreneurs, to the vulnerable. It provides a wide variety of services including banking, licensing,
17 GD 2018/0085, paragraphs 206 to 209. This report, published in December 2018, refers to 23 sub post offices. The sub post office at Pulrose terminated its contract for services in March 2019, reducing the size of the network to 22. 18 GD 2018/0087, page 10
11 foreign currency and the payment of various bills as well as the sending and receiving of letters and parcels. It supports Government in making pension and benefits payment, in cash, to members of society who cannot be supported by a digital cashless world.
Post Office counter staff know their customers, not only in the sense of meeting formal “know your customer” requirements but also actually getting to know their customers and building relationships with them, seeing them regularly, advising them, talking to them, and checking on them.
There is a social care aspect to the daily interaction between post office counter staff and the public which should not be ignored or undervalued. We live in a society with an ageing population, increasing issues with loneliness and dementia as well as social issues such as drug and alcohol addiction, residents with long term health problems, cancer, depression etc.
A post office also supports local businesses by bringing residents into towns and villages and providing cash which they spend in local businesses.
Sub post offices provide basic banking services in many communities where there is no longer a bank in operation. They facilitate the depositing of cash from locally based cash businesses and redistribute that cash within their own business network and back out to residents, without the need for physical banking.19
Sub post offices provide a wide range of services. Some of these, such as the cash transmission service, do not generate an economic return to the Post Office Board. VIII. WHY THE POST OFFICE MATTERS
40. We believe that the sub post office network has considerable potential to assist the Isle of Man Government with the roll-out of digital services while also maintaining the capacity for face-to-face engagement, which still remains necessary for many people. The much-talked-of development of public service delivery in local communities – “community hubs” – is an important challenge for Isle of Man Government. The idea has the potential to assist community cohesion, protect the vulnerable, and contribute to sustainable development by reducing the need for
19 Appendix 4
12 travel. However, there is little clarity at the moment as to what these community hubs actually consist of.
41. The National Federation of Sub Postmasters (Isle of Man Branch) told us in its written evidence:
It is the vision of the NFSP that Isle of Man Post Office (IoMPO) and its sub post office network can work closely with government to expand their current service offering and develop ‘hubs’ within communities using existing and new Post Office locations which are strategically placed to provide geographical coverage across the island
IoMPO has embraced digitalisation with the development and successful roll out of MiCard for the DHSS and with further investment this card is capable of supporting a number of current government initiatives which can be delivered through an existing network of post offices and trained staff.
Whilst we understand the government drive to be ‘digital by default’ and the subsequent reduction in the use of cash this encourages, post office counters are able to offer a service that both embraces change and continues to offer consumer choice as not everyone wants to or is able to function in a fully digital/cashless society.
The social value of the post office network in the UK is estimated to be as high as £10bn – losing our island’s post office network or shrinking it in an uncontrolled manner will have a significant financial and social impact for the Isle of Man.
A sustainable network on the other hand will be attractive to private business in growth areas such as parcel delivery.20
42. We were told that in the UK additional protection has been given to post offices which are the “last shop in the village” to ensure their survival.
43. An additional reason why the Island must hold on to its Post Office lies in the political uncertainty that surrounds us. The Island is in a customs union with the UK, with VAT revenue being shared under the terms of a Final Expenditure Revenue
20 Appendix 1. The source of the £10 bn figure is a report by YouGov and London Economics produced in November 2016 for the UK’s Department of Business, Energy and Industrial Strategy available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/ 566224/beis-16-37-post-office-network-social-value.pdf
13 Sharing Agreement (“FERSA”) made in March 2016. FERSA has a notice period of two years.21 In the event that FERSA and the customs union with the UK were to be terminated, the Island could be faced with a need to impose a replacement tax. In those circumstances a functioning sorting office in public ownership would become an essential element of fiscal infrastructure.
The Isle of Man Post Office is a national asset which deserves to be treasured by Tynwald and by everyone in the Island. It combines a capable logistics organisation with a highly trusted brand, wide geographic spread and a loyal employed workforce. In the network of sub postmasters it has a team of dedicated private sector partners with close links to local communities. Together these capabilities add significant value to the life of the Island.
The network of sub post offices covers virtually all the towns and villages in the Island. In many cases it is integrated with a general village shop, which in several villages is the “last remaining shop in the village”. There is a significant risk that closure of the sub post office and loss of the guaranteed income it brings will lead to the cessation of the shop with adverse social consequences and an increase in travelling.
The Post Office has the capability to make provision for those who would be unable or unwilling to function in a fully digital and cashless society.
If the Post Office simply continues doing what it has been doing, even with a down-sizing programme, it will decline to the extent that it will ultimately become irrelevant – particularly given the relatively fixed cost nature of its organisational structure.
If the network of sub postmasters is allowed to disappear it will never be replaced. The loss of the sub post office network would be a serious setback for the delivery of enhanced public services in the community. IX. THE GOVERNMENT, IN CONJUNCTION WITH THE POST OFFICE, MUST DEVELOP A NEW VISION
44. Although we have not seen the proposals that the Post Office will be presenting to Tynwald in October 2019 pursuant to the Tynwald resolution of December 2018, we are not optimistic about them. In the first place, the resolution (quoted in paragraph 2 above) is too narrowly focused on “the format of the delivery of retail services”.
21 http://www.tynwald.org.im/business/OPHansardIndex1416/5945.pdf
14 Secondly, even within that narrow remit, the Board of the Post Office is not in a position to take the Government-wide view which is needed.
There is a need to develop a sustainable, modern Post Office, to recognise the unique attributes of the system we already have and to build a plan that consciously re-purposes it for the 21st century, based on its trusted brand, geographic coverage, logistics capability, and excellent workforce.
Properly purposed, the Post Office could be an integral part of modernising Government and public services in the Island.
Proposals developed by the Post Office Board in isolation will not be sufficient to secure the Post Office’s future. Unless and until the future of the Post Office is acknowledged as a strategic priority at the heart of Government, that future will remain at risk.
It is for the Government, in conjunction with the Post Office Board and sub postmasters and involving genuine community engagement, to articulate a vision for the future, taking into account the desirability of exploiting the cherished asset that is the Post Office and starting by recognising its core competencies and qualities. Once the vision has been set, an operating model can be designed and a series of steps taken to migrate towards it, including addressing funding.
45. It is not for us, as the Economic Policy Review Committee, to lay down in detail what the future vision should be. On the basis of the evidence we have considered, however, we had identified some matters which should be taken into account.
Letters and parcels
46. As noted above, the Isle of Man Post Office has an exclusive privilege in respect of letter post under section 10 of the Post Office Act 1993. As the Post Office comments in its “Strategic recommendations” report laid in December 2018, postal privilege is granted to a national Postal Administration in return for their undertaking to supply a postal service for all residents that meets the requirements of the Government.22
47. It has been explained to us that the exclusive privilege is supposed to extend to any parcel containing a letter, but that this aspect of the law is difficult to enforce. We believe that it would be disastrous if all small parcels and letters ended up being provided by people on zero hours contracts engaged by gig economy providers.
22 GD 2018/0085, paragraph 184
15 We see no reason in principle why the Post Office’s exclusive privilege should not be extended to small parcels. There should be an urgent review of the scope of the privilege and of how it can be better enforced.
MiCard
48. The MiCard service was implemented by the Post Office in 2016 in partnership with Treasury’s Social Security Division. It fits well with the trusted brand of the Post Office and is helping to sustain footfall across the network.
49. While MiCard has initially been used for the payment in cash of benefits and pensions on behalf of the Social Security Division of the Treasury, it has many more capabilities. These are illustrated by the “MiCard wheel” which is reproduced by the Post Office in its “Strategic Business Case 2017-2022” laid before Tynwald in December 2018.23 It is also reproduced in the written submission sent to us by the National Federation of Sub Postmasters.24
The MiCard system has considerable unexploited potential. The Government should not move away from MiCard without a clear alternative with equivalent or better capabilities and potential.
Vehicle and driver licensing
50. It is clear from the evidence presented to us that the loss of the vehicle and driver licensing contract with the Department of Infrastructure would be catastrophic for the Sub Post Office network.
51. In the UK, the withdrawal of paper vehicle license discs in 2014 was designed to save the DVLA around £10m per year in administration costs. However, figures released in 2017 suggest that the change has cost the UK exchequer around £107m per year in lost revenue.25
Paper vehicle licence discs should not be withdrawn without full consideration having been given to all the potential consequences.
23 GD 2018/0087, page 19 24 Appendix 1 25 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/ 659918/vehicle-excise-duty-evasion-statistics-2017.pdf (include as an Appendix)
16 Cash
52. We are aware from a previous inquiry by this Committee that a number of individuals and businesses in the Island have difficulty accessing banking services. We were told that the Post Office, working with sub postmasters, has put in place a cash transmission service which helps businesses around the Island with the handling of cash.
Despite the rise of online banking there is still a role for cash in the Island’s economy and this is likely to remain for the foreseeable future. The cash handling capabilities of the Post Office should be valued and developed. X. CONCLUSION
At this point in our Report we would normally offer one or more recommendations for Tynwald to debate. However, the present Report has been brought forward to coincide with the Post Office bringing its own Report and recommendations to Tynwald. We have therefore decided not to make recommendations of our own in this Report. Instead we would encourage all Hon Members to read this Report and to pay particular attention to the wording in bold.
C R Robertshaw (Chairman)
T S Baker
J R Moorhouse
September 2019
17 18 WRITTEN EVIDENCE
19 20 Appendix 1 Submission dated 5th March 2019 from the Isle of Man Branch of the National Federation of Sub-Postmasters
21 22
22 The future of the Isle of Man Post Office
National Federation of SubPostmasters (NFSP)
23 EXECUTIVE SUMMARY
It is the vision of the NFSP that Isle of Man Post Office (IoMPO) and its sub post office network can work closely with government to expand their current service offering and develop ‘hubs’ within communities using existing and new Post Office locations which are strategically placed to provide geographical coverage across the island
IoMPO has embraced digitalisation with the development and successful roll out of MiCard for the DHSS and with further investment this card is capable of supporting a number of current government initiatives which can be delivered through an existing network of post offices and trained staff. Whilst we understand the government drive to be ‘digital by default’ and the subsequent reduction in the use of cash this encourages, post office counters are able to offer a service that both embraces change and continues to offer consumer choice as not everyone wants to or is able to function in a fully digital/cashless society
If the post office network is valued by government and is to be sustained, government and IoMPO strategy must be aligned. IoMPO needs government departments such as Dept of Infrastructure and Dept of Health and Social Care to embrace working with the IoMPO with a view to using MICard to provide smart digital solutions and realise overall savings for government
The decision on the display of tax discs is a fundamental one which will have far reaching consequences. The DoI expect a cost saving that – based on outcomes realised in the UK - may NOT be delivered AND could result in an overall loss to our economy. This is a controversial decision made worse by the immediate impact it will have on our post office network and its ability to deliver a sustainable strategy for the future.
The social value of the post office network in the UK is estimated to be as high as £10Bn – losing our island’s post office network or shrinking it in an uncontrolled manner will have a significant financial and social impact for the Isle of Man.
24 A sustainable network on the other hand will be attractive to private business in growth areas such as parcel delivery. As part of their policy alignment government should also consider their position on ‘GIG economy’ parcel businesses with no physical presence on the IOM
The NFSP has a vision for a successful and profitable post office network of private business owners. A network capable of growth which offers consumer choice as well as supporting government, private businesses and the residents of our island.
25 NFSP Vision of the Future of the Post Office Counter Network
The NFSP sees tremendous value in working with government to provide a sustainable network and offer a wide variety of services across the Isle of Man.
The post office counter network can support the government drive for digitalisation and innovation by offering government digital services through MiCard whilst also continuing to offer customer choice for those who cannot or do not want to use fully digitalised/cashless options.
The social value of post offices
Virtually everyone uses post offices. Citizens Advice (UK-based) research suggests that 97% of consumers and 93% of small businesses use a post office at least once a year.
On the Isle of Man, post offices currently provide banking services, payment of bills, vehicle licensing and registration services, cash payment of pensions and benefits as well as an efficient International mail and parcel delivery service. In doing so we support a wide range of people and stakeholders - including: People of all ages and from all walks of life; Local cash-based businesses who bank cash and are provided with change – one of the biggest employers on the island is supported by the post office network; Entrepreneurs/online business who export goods. There is a wealth of evidence demonstrating the social value of post offices. House of Commons Library Briefing Paper – The Post Office contains a summary of a BEIS/YouGov study ‘The Social Value of the Post Office Network’) which sought to quantify the value people and businesses place on the UK post office network. By modelling a range of measures collected via a large scale quantitative survey, researchers estimated the value of the network (i.e. what people and businesses would be willing to pay to keep it) at somewhere between £4 billion and £10 billion.
In the context of this submission, it is extremely important to note that there is a significant correlation in the demographic groups of people who are most likely to be digitally excluded – i.e. unable and/or unwilling to access services online – and those who are most likely to rely on their local post office. Specifically: The over 65s People in socio-economic groups D & E Residents in rural areas By extension – those who are less able to transact online are most likely to seek to transact at their local post office.
26 Threats to the network
Scrapping the need to display Vehicle Tax Discs
The NFSP is aware that the DoI is currently considering scrapping the need to display physical licence discs. We believe that the resultant loss in income for sub post offices would lead to the closure of around two-fifths of the Isle of Man post office network.
The closure of a post office can have disastrous consequences for local communities. In the short term, residents will be forced to travel long distances to access post office services; in the long term the community overall can suffer. Using the village of Glen Maye as an example, we can see the chain of events triggered by the loss of the village post office. Over time as the local economy suffered, other businesses and amenities have closed. Villages with no amenities lose their sense of community and this can lead to social problems in the area.
A further example of this being the lessons to be learned from the development of the post war Scottish New Towns - where the lack of local amenities had a negative impact on communities.
“The new towns…the masterplans dictated low density development with large amounts of open space, and housing segregated from jobs, shopping and business services. These created a car dependency and are now not considered sustainable.” (source: HoC select committee for transport, local government and the regions report on new towns)
Current post office closure rates in the UK are high and the NFSP has flagged this to Post Office Ltd and government decision-makers repeatedly. The most common reason for closure is the resignation of the subpostmaster – publicly available data collected by the NFSP shows that this is the case in two-thirds of all closures. Times are tough on the high street and a decline in subpostmaster income has led many operators to resign from the network.
The NFSP’s argument against scrapping the need to display physical tax discs can be summarised as follows: the resultant loss of income for sub post offices would lead to unprecedented levels of closure; which would be detrimental to local communities; and affect more vulnerable people – who are less likely to transact online – disproportionally; the equivalent decision in the UK has led to an overall loss to the public purse and an increase in untaxed vehicles on the road The wrong decision on this will have a significant impact on the future sustainability of the IOM post Office network and the ability to deliver a sustainable strategy.
27 OPPORTUNITIES
Learn from mistakes – avoid decisions made by one department without oversight from Government re the bigger picture/wider economy
A historic decision was taken by DHSS to encourage the payment of child benefit directly into bank accounts – no choice was given to residents in the letter that was sent and the public unaware of the impact on the post office provided bank details. 65% of post office business was lost – many of these customers would have chosen to support their local post office had a choice been given. A dramatic decrease in footfall impacted the business and income of local post offices. IoMPO, aware that they could lose the DHSS contract, responded with the development of Mi Card – a smart card for the payment of pension and benefits which reduces the cost for the DHSS and provides customers with choice. The child benefit business lost (which along with the loss of other contracts/business) has placed many offices in the existing network under threat.
Closure of IOM Crown Offices
What were the actual savings from the closure of the crown offices? Can the Post Office quantify these for the committee?
Analysis of Post Office Accounting Loss
The loss in the current set of Post Office accounts is primarily down to pension fluctuations - which is an unrealised position. What are the actual costs and revenues generated by the network to the Post Office Head Office and how is the loss from running the network calculated? Can this be provided to the committee? How much of the quantified loss is due to lost contracts eg child benefit, dog licences etc rather than changing consumer behaviour? Banking – a UK success story
Many banks are choosing to close their branches as operating costs rise and customer numbers fall. In the UK, the NFSP are working with Post Office Ltd, government and other industry stakeholders to help ensure that the post office network is equipped to cater for the demand for banking services in communities abandoned by the high street banks.
Through the promotion of the availability of banking services at post offices and the equipping of sub post offices with the tools needed to deliver an increased volume of banking transactions, the NFSP is hopeful that government and Post Office Ltd can find a sustainable solution that continues public access to vital banking services and improves the financial health of the sub post office network.
28 The NFSP would welcome the opportunity to work closely with government to better equip the IOM post office network in order to meet customer demand for banking services.
THE FUTURE
Existing services offered by the post office network can be expanded to provide ‘smart’ solutions through the development of MiCard to support various government departments:
Engagement of other government departments, through government strategy, is key to success. The NFSP are of the view that such engagement could provide costs savings across government and will support the future of a sustainable and successful post office counter network. Support through work/contracts not cash subsidy.
Key to the success of this vision is to ensure strategically placed offices with a geographical spread across the Isle of Man. The geographical locations should take into account the government plans for new housing as well as existing residential areas.
The NFSP visualise community ‘hubs’ which provide key services to a community – doctors surgery, banking facilities, post office, pharmacy, local shop, access to government services, parking. In some locations these will be separate buildings in others they may be one building.
A post office network that is diversified and embraces digitalisation whilst offering choice is a sustainable and valuable asset to our island economy.
29 Dramatic changes are unavoidable and the NFSP understand that the network in its current form is not sustainable and support a controlled and strategic shrinking of that network if it ensures the sustainability of what remains. We also appreciate these changes may require a renegotiation of contract terms between government, IoMPO and network of sub post offices but less offices and new contracts should mean a higher volume of transactions which would make this achievable.
The NFSP would encourage the post office and government to consider the efficiencies and administration savings that could be made by our proposals.
The NFSP believe the right network will attract private contracts in respect of parcel delivery – a growth area.
30 Appendix 2 Submission of 19th March 2019 from the Isle of Man Branch of the National Federation of Sub-Postmasters: survey results
31 32 [Contact details supplied]
33 34 35 36 37 38 •
•
•
•
•
39 40 Appendix 3 Submission dated 4th March 2019 from S Gubby, Sub-Postmaster Jurby
41 42 The Future of Jurby Post Office – the hub of our community
We have been made aware as a result of attending a meeting chaired by [Name] (General Retail Manager of the Post Office) that it is the intention of the DOI to trial and potentially follow the UK and scrap the need to display physical tax discs on vehicles in the Isle of Man.
We further understand that the government is promoting a digital strategy and in consequence the number of services available at post office counters are either in decline or under threat. Dog & fishing licences, Manx Telecom Pronto cards & SIM cards, postal order sales and redemptions have all disappeared. Increasing numbers of benefit recipients choose to collect their benefits through their bank which very effectively by-passes the sub post office network all together. However we believe the greatest danger to our network will come if vehicle licensing is digitized.
The combination of these 2 policies along with the demise of the Santander UK contract with the Post Office will further contribute to the number of services in decline. In consequence the mainly privately owned network is under threat with offices closing rather than being sold on – exactly the situation at Crosby Terrace and Pulrose . As a result the local businesses which support many sub post office counters are struggling to keep then viable and with sub post masters incomes reducing in line with the reduction of services it is expected that 40% of offices in the existing network will close.
Clearly the impact of the above is of great concern not only to ourselves but also the local community which we support and the potential social impact on isolated villages like Jurby is likely to be significant.
So we would like to pose you some questions:
1. why would the DOI propose we scrap vehicle tax discs when the UK model shows; a) their PO network saw a fall in income of approx £4m in the first year as well as a loss of £400m to the UK public purse b) Over a 2 year period there was a 270% rise in the number of untaxed vehicles
2. why is the government promoting a digital strategy when it is directly at odds with the future viability of post office counters islandwide?
3. with the imminent termination of the Santander contract and the potential demise of post office counters how are local communities and businesses going to manage their requirement for cash?
Our post office in Jurby and it’s supporting business Jurby Stores provides a lifeline to our community. We are the ‘hub’, the focal point for local activities, the meeting place for friends and neighbours – as well as providing retailing and post office services. We give
43 out information and support vulnerable people and the whole community passes through our hub from school children to commissioners. As a community we need a choice outside the digital world and our choice is the continued availability of cash through post office counters.
We take out social and community obligations very seriously in Jurby and we would ask you to do the same when considering the future of our post offices and their services.
From the management of Jurby Stores and Sub-Post Office.
44 Appendix 4 Submission dated 4th March 2019 from Mary Palmer, Sub-Postmaster Laxey and Peel
45 46 Dr Jonathon King
Clerk to the Committee
Clerk of Tynwald’s Office
Legislative Buildings
Finch Road
Douglas
IM1 3PW 4th March 2019
Dear Dr King
I write in respect of the Committees request for information re its review of the future of the Isle of Man Post Office.
Having worked in the finance sector in the IOM I understand the view that the IOM can achieve a digital cashless society. As a Chartered Accountant I worked in finance and tax for 20 years. I was involved in many large business deals, all conducted without physical cash ever changing hands and on a personal level could conduct most of my day to activity electronically. In 2013 I decided to leave employment and I now run my own business in the form of 2 of the islands Post Offices. With hindsight I didn’t know then what was involved in running a Post Office nor how important a role it has in our society and during the short time I have been involved my view of the IOM, its communities and its residents has changed dramatically.
In the recent Tynwald debate the Post Office was likened to Woolworths – a high street institution – a shame that’s it gone but it’s not really missed. In my view you cannot compare the Post Office network to Woolworths. The Post Office is so much more than a shop and I feel strongly that the demise of the Post Office network would have far reaching consequences on our society.
The Post Office network has a diversified customer base ranging from affluent individuals, established local business and entrepreneurs to the vulnerable. The Post Office network provide a variety of services including banking, licensing, foreign currency and the payment of various bills as well as the sending and receiving of letters and parcels. The network importantly also supports Government in making pension and benefits payment, in cash, to members of society who cannot be supported by a digital cashless world. Many vulnerable customers don’t have bank accounts and others choose to receive cash. If there is no Post Office network how would the Government get a payment to a vulnerable member of society who may live rurally or have no means or are not physically able to get to a Government office or a bank/ATM to receive that payment?
The Post Office counter staff know their customers, not only in respect of KYC requirements but actually get to know their customers, build relationships. We see them regularly, advise them, talk to them, check on them. The social care aspect of the daily interaction between our counter staff and the public should not be ignored or undervalued. We live in a society with an ageing population, increasing issues with loneliness and dementia as well as social issues such as drug and alcohol addiction, residents with long term health problems, cancer, depression etc What would be the impact/social cost of these vulnerable members of society not getting out regularly to visit their Post Office and interact face to face with others?
47 Local businesses would also suffer. The Post Office brings residents into towns and villages and provides cash which they spend in local businesses.
The banking industry have a lot to answer for and their mistakes have had a significant impact on our economy over recent years. It is the Banks that are also now driving a cashless society – discouraging individuals and businesses to bank cash because they can’t make enough money from it, closing branches in towns villages because of running costs. In my opinion many of the executives who run our banks have lost touch with society outside of their financial world and don’t realise that for some cash is a commodity that cannot just be disregarded. Digital solutions do not and never will work for all.
The Post Office provide basic banking services on behalf of 3 banks (soon to be 2) to residents across the island and in many communities where there is no longer a bank in operation. The Post Office facilitate the depositing of cash from locally based cash businesses and more importantly the Post Office are then able to redistribute that cash within their own business network and pay it back out to our residents, without the need to physically bank it. If there is no Post Office network where is that cash going to go? Who is going to handle/distribute the cash? A current and very real issue being faced by our existing Santander UK customers who will no longer be able to bank cash with the Post Office from the 22 April 2019. Many of our towns and villages no longer have a banking presence so without a Post Office where are local business expected to bank their cash? How do they store it or transport it safely if they cannot bank it locally? The Government cannot ignore the obligation it has to all members of our society and must recognise that an online/digitalised/cashless society cannot meet everyone’s needs.
However, it would be naive as a business owner to ignore the changes and not recognise growing markets and opportunities to provide a different generation of customer with the digitalised service they choose and the Post Office are already embracing this with technical solutions with the development of a smart card and the recognition that there is a growing demand for the handling of parcels in and out of the island.
It is my opinion that the Post Office can diversify its services and how it delivers them and offer customers the choice of digital payment or a cash service for those who need it. Working alongside the Government the Post Office Network could provide valuable resource and infrastructure to provide an even wider range of services to our local communities. The Post Office is a hub of many of our communities which I believe can be developed further.
I thank the committee for the opportunity to present my views and hope they consider carefully the wider implications of individual government department decisions. The current request from the DOI to scrap the need for a physical vehicle licence being one such decision. As the recent article in the Examiner alluded to not only will this decision potentially result in an overall loss to the public purse and to many cars being driven on our roads without tax or insurance, it has the power to devastate the existing Post Office network. I hope the committee can impress this on fellow members of the Government and assist in aligning government policy with that of the Post Office to ensure the sustainability and growth of a valuable island resource.
Yours sincerely
Mary Palmer
Postmistress Laxey and Peel
48 Appendix 5 Submission dated 27th February 2019 from Jeff Calvert, Sub-Postmaster Port St Mary
49 50 Archived: 23 September 2019 17:07:36 From: [Jeff Calvert] Sent: 27 February 2019 19:43:27 To: committees Subject: Post Office Review Importance: Normal
Dear Dr King
I am emailing to give a few thoughts regarding the Economic Policy Review regarding the Post Office strategy. Perhaps it is appropriate that I advise that I am currently the Sub Postmaster at Port St Mary Post Office. Perhaps it is easier to bullet point a few thoughts as follows:-
1. Regain some services which we used to provide for the benefit of both locals and visitors eg *Travel tickets of various kinds, bus, train etc. Customers have limited access to purchase such items *Fishing licences - many visitors have enquired since we stopped providing these, and when advised to go to St Johns they ask where is that? I wonder what the cost of lost revenue is for those who choose to poach instead? 2. The more rural areas will find customers socialise more if they have a purpose to go out. The Post Office and the services they offer goes some way to achieve this. 3. Businesses benefit from the footfall in the area (my own included as we also run the local newsagents). This stimulates the local economy for all businesses whether it be for local groceries, hairdressers, local wet fish shop, art gallery or many of the local coffee shops / restaurants etc 4. It is vital we retain vehicle transactions. Not all customers have or choose to use online services. Customers should be offered choices on how to complete transactions. 5. Some customers often require assistance when completing forms as they can be complicated sometimes. We offer our help in such circumstances. The digital era does not assist in this way. 6. We have run our business for 12 years and know our customers. Port St Mary is a small community and If they - the customers are not seen as regularly as normal, then we enquire to see if all is well. We have on occasions asked relatives to check to see if all is okay. 7. Whilst appreciating we are in a more digital age nowadays, it is the freedom of choice and/or availability of services and requirements that is important to customers and businesses. 8. If more and more offices close, then please consider the environmental impact. We already know that the closure of Pulrose Post Office now requires customers to travel further to other offices which maybe several miles from their home. 9. And last but by no means least, any further decline in services and/or customers will lead to job losses. This may result in claims for additional support from government and taxpayers, which seem very much false economy.
51 Thank you for the opportunity to contribute to the review. I am sure there are many more topics I could state. With that in mind please feel free to contact me or to call into Port St Mary Post Office or the newsagents for a chat.
Kind Regards
Jeff Calvert Port St Mary Sub Postmaster & Director of Calvert Newsagents Ltd
52 Appendix 6 Submission dated 4th March 2019 from Martin Royle, Deputy Clerk, Garff Commissioners
53 54
Garff Sheading Garff Commissioners LAXEY Barrantee Garff
LONAN 35 New Road, Laxey, Isle of Man, IM4 7BG. MAUGHOLD Telephone: (01624) 861241 Fax: (01624) 862623 Email:[email protected] www.garff.org Garff Sheading
Mr Chris Robertshaw MHK Chair, Economic Policy Review Committee Clerk of Tynwald’s Office Legislative Buildings Finch Road Douglas IM1 3PW 4th March 2019
Dear Mr Robertshaw
Members of the Commission note that the Economic Policy Review Committee has launched an inquiry that will examine the future of the Isle of Man Post Office.
The Commissioners submitted comment to the recent consultation on postal services on the Isle of Man in which they argued that both the delivery services and the services provided through post office counters had a practical and social worth that could not be measured on the grounds of cost alone.
The past months have not eased these concerns and, in particular, it is the view of the Commission that the future of our privately operated sub post offices is being threatened from several additional directions. These being:
1. that Isle of Man sub post offices will shortly lose the contract with Santander for the processing of customer’s deposits and withdrawals
2. the proposal to terminate the use of physical tax discs on vehicles which is likely to have a particularly negative effect on the revenue of sub post offices. The first of these is perhaps beyond the remit of Government, however, the second is a direct consequence of a Departmental proposal that appears to take little consideration of the wider implications of the action on society or the rest of Government.
Members are especially concerned when they consider the geographical size of Garff Sheading and note that the only post office remaining in the area is the Laxey Sub Post Office. The consequences of the loss of this facility would impact very heavily on our community. Interestingly, it would be an action that contradicts the intention
35 New Road, Laxey, Isle of Man, IM4 7BG. Telephone: (01624) 861241 Email: [email protected] www.garff.im
55
of the Department for Enterprise which is currently creating policy and actions that are designed to revitalise and regenerate communities such as Laxey.
It is the view of Members that sub post offices are an essential community hub in many of the Island’s towns and villages such as Laxey. The concerns in regard to the loss of Laxey Sub Post Office are increased by the actuality that the nearest alternative post offices are in Onchan and Ramsey: both a significant round trip by bus of at least 40 – 60 minutes. As is the nature of these matters it is the less affluent and more vulnerable who are most likely to be incommoded and impacted financially.
If further steps are taken towards digitalisation by individual Departments the sustainability of counter services will be further affected and the decline of the sub post office network is likely to continue. There may also be a ‘knock-on’ effect’ on other Departments such as Health and Social care as opportunities for our ageing population to participate and contribute to their communities is diminished.
Notwithstanding this, the Commissioners take some encouragement from the decision by the Economic Review Committee to take time to examine the future of the Isle of Man Post Office.
It is the view of Members that the Committee should consider a wider, coherent approach from Government. This would assist in ensuring that the actions of individual Departments are taken within a strategy that considers the full impact of any changes and perhaps brings the possibility of a business model that acts to increase the viability of post office counter services.
The Commission thanks the Economic Policy Review Committee for the opportunity to make a submission to their inquiry.
Yours sincerely [Signature: Martin Royle]
Martin Royle Deputy Clerk Clerks’ Office
Garff Commissioners Barrantee Garff
35 New Road, Laxey, Isle of Man, IM4 7BG. Telephone: (01624) 861241 Email: [email protected] www.garff.im
56 Appendix 7 Submission dated 5th March 2019 from Margaret Davies, Chairman, Port St Mary Commissioners
57 58 Port St. Mary Commissioners Town Hall, Port St. Mary, Isle of Man. IM9 5DA Tel: (01624) 832101
Clerk: [Contact details redacted] www.portstmary.gov.im Email: [email protected]
5th March 2019
RE Tynwald Economic Policy Review committee regarding the future of the Post Office
Dear Sirs
On behalf of the residents of Port St Mary and surrounding parishes, we would like to make the following observations and comments to the Tynwald Economic Policy Review committee regarding the future of the Post Office.
Port St Mary Commissioners are regular users of the Post Office Counter service, not only for the obvious things such as purchase of stamps, but also for paying vehicle tax and TV licenses. Port St Mary Commissioners also value the role of the local Post Office as providing a community hub. We have 3 notice boards around the town, but also display Commissioners information in the Post Office window where we believe the large footfall increases the numbers of people who see the information.
Port St Mary has an ageing demographic and we are aware that many of our residents use the local Post Office service where they value the friendly personal service. For a generation that is not and will never be an internet connected generation, the personal service at the counter is irreplaceable. Within Port St Mary we have both Reayrt y Chrink and Cooil Veg, providing 77 and 12 sheltered housing units respectively. For these more vulnerable residents the ability to collect pensions from and pay bills to a real person is highly valued. Internet based services are not appropriate for this generation. For some of these residents, having to collect their pension and the chance to talk to passers-by and shop staff is a highlight in their week. Loneliness in the elderly is a major public health concern and contributes to ill health and mental decline. Any service which increases social connections should be maintained.
The working population of Port St Mary also values the post office counter service particularly for collecting parcels that could not be delivered on the post round. This is convenient and increases foot fall into the retail area within Port St Mary. As you will be aware, for many years the retail area in Port St Mary was in decline with many empty and derelict buildings. However, in recent times this has turned around and there are currently only a couple of empty units. The Post Office provides a key destination business within the retail area. It is likely that other retailers benefit from the increased footfall generated by users of the
59 Post Office counter services. Loss of the counter service would have a knock on impact on other businesses.
Many of the businesses in Port St Mary are small scale sole-trader businesses, and they have access to send parcels and use banking services in their local area because of the Post Office counter.
It is sometimes easy to allow accountants to put a value on a service, but it is often harder to account for the social capital that is gained by having local services, and in this regard we feel that local Post Office counter services should be maintained. Whilst we are aware that cost saving measures often mean an internet based transaction is preferred, the consequence of shifting services away from the Post Office counter would appear to be that the service has now been undermined. Direct payment of benefits, centralisation of bus ticket sales, online car tax payments etc all add up to death by a thousand cuts. For each department driving these changes, the cost benefit analysis of each development would have made financial sense and apparently saved money. However, all of them have ignored the social capital connected with having a Post Office hub within a town. For the residents of Rushen, Arbory and Colby, both Port St Mary and Port Erin post offices are valued resources and the social capital gained in connecting the community on a casual basis should not be underestimated by Government.
Yours faithfully
[Signature: Michelle Haywood]
Michelle Haywood Chair, Port St Mary Commissioners
60 Appendix 8 Submission dated 28th February 2019 from Jackson Bain
61 62 [Address redacated]
[Signature: Jackson Bain]
[Address redacted]
63 64 Appendix 9 Submission dated 28th February 2019 from Christopher Ball
65 66 Archived: 23 September 2019 17:18:06 From: [Christopher Ball] Sent: 28 February 2019 11:48:17 To: committees Subject: Post Office Importance: Normal
fao: Jonathan King I believe strongly that the Government should do what it can to assist Post Offices to continue in business,as they are very important assets in a number of ways to small communities,such as exist here in IoM. This may involve halting the rush to make everything “on line”[oh dear our systems are down again/we’ve been hacked into and all your personal info. has been stolen],and also standing up to the Unions as has not happened in the past,and making sensible economies[eg Ramsey PO] which will not affect core services.
CW Ball
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67 68 Appendix 10 Submission dated 27th February 2019 from Douglas Bayley
69 70 Archived: 23 September 2019 17:19:37 From: [Douglas Bayley] Sent: 27 February 2019 13:57:23 To: committees Subject: IoM Post Office 27-02-19 Response requested: Yes Importance: Normal
Message for Jonathan King
Jonathan you asked for opinions on the Post Office; its a shambles - it worked ok until around 2006/7 when you started to remove the concept of customer service as a staple. Eroding to a nadir where it remains from around 2014 .
Its easy to blame short term poor management so i will. At your CEO main board operational level for over 10 years and the last couple of Chair-people- at least .
All too often the response is not what you can do but what you cannot. And in every case it seems there is very little you can do in terms of providing customer service
To make a pigs ear of such a simple operation takes a special kind of management. And that is what you have.
And then of course the farce surrounding the Ramsey Post Office - i dont even know where it is now - last i heard it was in the newsagents - is it still there ?
Solutions ? Easy, it is a necessary service for any civilised society . Change your management , innovate in terms of products, ensure you have sensible bricks and mortar stores - providing subsidies from the public purse if necessary and above all realise you are a customer service provider - you need ensure your customers are the focus of your operations - not lightweight clueless managers concerned only for their pensions .
-- Douglas Bayley [Contact details redacted]
71 72 Appendix 11 Submission dated 5th March 2019 from John Beckett
73 74 Archived: 23 September 2019 17:20:49 From: [John Beckett] Sent: 05Beckett] March 2019 08:34:49 To: committees Subject: Post Office - the future Response requested: Yes Importance: Normal ______
Some thoughts.
The historical business model based on delivering letters being the main form of direct communication is dead. The world has moved on and “letters” have gone.
The recent post strike really brought home how unnecessary household daily post deliveries have become .... the ”after strike” delivery had several items through the letterbox only one of which was a proper mail being an invoice. Parcel deliveries are a separate issue.
Two household postal deliveries a week would be more than adequate. For Businesses, deliveries I suspect would be required daily or by other methods.
Post office boxes work very well worldwide ..... why not here? I would be happy to have a “key and post office box” in Ballasalla Post Office and collect my mail. The walk would be good!
Money saved by greatly reducing all the unnecessary household mail deliveries should be used to introduce a Post Office Box network using viable post offices or local shops. It is recognized a “post office box” system requires infrastructure installation to provide 24 hour box access, but it works in the rest of the world so why not here?
Good luck with it all .... not easy to introduce change in a non financially viable business based on a long gone era being overtaken by rapidly changing technology.
Hope that helps your thinking,
John Beckett, [Contact details redacted]
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75 76 Appendix 12 Submission dated 4th March 2019 from Barry Edwards
77 78 Archived: 23 September 2019 17:21:57 From: [B Edwards] Sent: 04 March 2019 16:48:00 To: committees Subject: Isle of Man Post Office Importance: Normal
Good afternoon,
Isle of Man Post Office – comments for the Tynwald Committee.
First and foremost, the Isle of Man Post Office provides a vital service to each and every business and residential property on the Isle of Man and must not be allowed to fail.
The current senior management lack the ability to adjust the business to cope with modern competition from the likes of Social Media and e-mail but, those adjustments are possible.
Like so many businesses today, including many that have failed, the IOM Post Office is run by accountants, who only care about their own back pockets, care little about the people they employ nor the effect on those employees of their management failures.
The effect of E-mail and Social Media are no surprise, it’s been coming for many years now but, sadly the managers of this organization have sat back raking it vast, indeed excessive, salaries while doing nothing about what was clearly going to happen.
Now they expect the workers to take the brunt of the reductions in working conditions while they stay put, still taking their pay and benefits.
Under absolutely NO circumstances should there be any more Post Office closures, nor should there be any reduction in the number of days on which post is delivered, indeed, why not go the opposite way and deliver every day including Sunday?
Businesses and indeed residents rely on the post arriving in a timely manner, if the number of delivery days is reduced, then post that is awaited will be sitting in the sorting office, undelivered. This would cause unnecessary delays in conveyancing, other legal proceedings and indeed personal events such as birthdays.
Why are the management not looking at how to increase the use of the postal system? Maybe have an Island internal post rate reduced to say 25p to encourage people to post cards etc? Maybe around Christmas, perhaps up until say 15 December, allow cards to be posted off Island for the same 25p, again to encourage use and indeed to get rid of volumes of post well ahead of Christmas. Similar incentives could be used for other times of the year, Easter, Mothers Day etc?
Why do the Post Office not deliver the weekly Courier from IOM Newspapers?
I am sure there are many other ways that revenue could be increased without incurring additional costs, sadly the current management lacks the will and the ability to make these things happen.
I would be more than willing to discuss this with a member of the committee if requested.
Barry Edwards.
79 80 Appendix 13 Submission dated 4th March 2019 from Arie Eisinger
81 82 Archived: 23 September 2019 17:23:19 From: [Arie Eisinger] Sent: 04 March 2019 17:49:48 To: committees Subject: Post Office Response requested: Yes Importance: Normal
Dear Sir/Madam
In response to the review of the current postal services, I would like to make the following comments.
The Post Office provides a service like the hospitals, electricity, highways etc. It should not be seen as a commercial undertaking.
Yes it should be run efficiently and in my experience one should look at the management structure to see if it is too top heavy. It is illogical to reduce the service it offers to its customers. The postmen and ladies tend to observe whether there are problems with the people they deliver mail to and inform the necessary authorities.
To leave persons unvisited over a weekend is only going to increase the possibilities of severe problems or even unnecessary mortalities arising and also increase costs to the health services and other caring bodies.
If it requires an increase in taxation to run a caring postal service then that should be put to the politicians and properly considered.
Yours faithfully
Arie Eisinger
Sent from my iPad Arie
83 84 Appendix 14 Submission dated 27th February 2019 from Sara Goodwins
85 86 Archived: 23 September 2019 17:24:35 From: [Sarah Goodwins] Sent: 27 February 2019 14:26:17 To: committees Subject: Post Office Response requested: Yes Importance: Normal
Dear Mr King
I understand, from the Isle of Man Examiner dated 26 February 2019, that the Tynwald economic policy review committee is inviting comments about the future of the Manx Post Office.
I am a partner in the small independent publishing house, Loaghtan Books. We specialise in quality publications about the Isle of Man, use the postal service on a daily basis and find it efficient and helpful, but very expensive.
Loaghtan Books has a small export business which has the potential to increase revenue brought into the Isle of Man, as well as to publicise the island overseas. Our publications are frequently requested through our on-line shop, particularly from customers in North America. Unfortunately most of these requests are unfulfilled as the buyer cancels their order when they realise how much they have to pay in postage costs. To give just one example, our De-tailed Account of Manx Cats retails at £4.95. To post it within the island and to the UK costs £1.40, or 28% of the retail price of the book. There are more Manx cat fanciers in North America than anywhere else in the world, but to get our book to North America costs £8.06 in postage. This is 63% more than the cost of the book.
Well, it's a good book, but I wouldn't buy it for £4.95 + £8.06 = £13.01. Neither do our potential customers.
Loaghtan Books is not alone. I know of at least seven other small businesses with exactly the same problem: because of the cost of shipping they are unable to get their goods to people off island who want them, and who would pay for them. In other words the Isle of Man is unable to make the overseas revenue that it could, merely because high postage costs prevent a successful export business.
If Tynwald truly wants the Isle of Man to reach a global market then the Manx Post Office needs to make overseas carriage/shipment affordable to island's businesses.
I hope you find this information useful.
Best wishes
Sara Goodwins
Fourth Manx Bard Loaghtan Books [Contact details redacted]
Our books make excellent gifts and we will giftwrap (free of charge) and ship anywhere (p+p free within the British Isles; for global shipping charges check our website).
87 88 Appendix 15 Submission dated 27th February 2019 from Sue Hansen
89 90 Archived: 23 September 2019 17:26:04 From: [Sue Sent: 27Hansen] February 2019 16:23:13 To: committees Subject: For Dr Jonathan King Response requested: Yes Importance: Normal
Re the future of the Post Office, Post Offices and sub Post Offices.
It would be a disastrous event if local services were to decline. If we learn just one thing from our neighbouring island it is that a village without a post office very quickly becomes an unpleasant place to live.
In many places the church is unrepresented, local shops decline due to supermarkets' monopolies, public houses shut, post offices are "rationalised".
The villages have no heart.
Don't let that happen here. Give the post offices, postmasters, sub postmasters, postmen, and postladies, a fair deal and they will repay the community.
We can't afford not to.
A Sent from my Wileyfox phone
91 92 Appendix 16 Submission dated 27th February 2019 from Phil Thompson
93 94 Archived: 23 September 2019 17:27:45 From: [Phil Thompson] Sent: 27 February 2019 16:26:34 To: committees Subject: For the attention of Dr Jonathan King Ref Manx Post Office. Importance: Normal
Manx Post Office faces many issues, not the least being its present employment confrontation with a number of CWU membership staff, subjected to pressures more relevant to its Union than its current Isle of Man membership, but above all else and the core reason indeed for its CWU dispute, being the enormous shift in the Postal Industry as a whole and the results of having to follow actions brought about by the UK Postal industry players reacting to the shift far speedier than their Manx counterparts have so far been able to achieve.
Main Post Office & Sub Post Offices. The shift in General Post and sub-Post Office facilities have negated the future of retail counter service in most if not all counter services outlets. As a major player in both communications via postal services, both collective and delivery, the core reason-for-being of mail and parcel whilst not eliminated has been drastically reduced by both competitive activities resulting from an explosion globally in on-line transactions, and of course the use of the internet and smart phone telecommunications as a means of both global and local customer communications. Massive shrinkage in mail, coupled with a huge and greatly more competitive marketplace for package collection and delivery, has resulted in the size and scope of Manx post office’s public and business customer’s needs being met by organsiations far better suited to the economies required of competitive market rates. The net result of all this is simply lost business, both directly with customers and indirectly with sub-contracted work from larger UK operations. It’s traditional staffing costs are totally out of balance with the situation and provide totally just but regrettably belated reasoning for salary cost reduction for the principle of effective survival. Community hub principles are the responsibility of local communities and their local authorities. Not the Post Office, and thus, with a reducing scale of counter services available, as via all private commercial and particularly retailing operations are having to respond to. There is no future need for what is or what was the Post Office more elderly persons on the island will remember and mistakenly demand to. The world has moved on and if the basics of a Post Office service is to survive on the island in the face of growing private commercial competition then Post-Office counter networking services across the island have no purpose suited to their commercial requirements.
Government counter services. As technology and changing methodology of direct Government services rapidly become more online and automated then the administration of those services offers Government to benefit itself departmentally, by offering a life-line to the Isle of Man Post Office and substantial cost savings to itself, per each Government department’s repetitious administrative sections, an opportunity to pass all administration for public paperwork and online correspondence centralised through one large Post Office Administrative department which in turn could be coupled with what remains of traditional mail and available package & Parcels service via a greatly reduced and re-contracted & competitive manual labour force, if that labour force be so willing. If not, then Post Office Administration could effectively be one central point for
95 Government services administration. [MPOA] along with current and perhaps new niche services including stamp sales, foreign currency and possibly local Banking and savings services through one centralized outlet. In Summary. To cling onto current practices and services would be massively costly, riddled with labour discontentment and become an unsustainable burden on the tax payer through subvention. If Government remains determined to dominate the Post Office Board and its policies through political Board involvement, then a radical move to that of an MPOA could justify such a position. Nothing else would in commercial practice or more importantly, need.
Sincerely,
Phil Thompson
96 97 Parliamentary Copyright available from:
The Tynwald Library Legislative Buildings DOUGLAS Isle of Man, IM1 3PW British Isles September 2019
Tel: 01624685520 email: [email protected] Price: £19.00
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