Consignia to close 3,000 post offices

CONSIGNIA is to unveil plans to close up to 3,000 urban post offices in a move to cut costs and ensure its survival amid rising competition.

The renamed Royal Mail group will today send Post Office managers details of the closure and modernisation plan backed by around £200m in government funds.

The cuts, equivalent to one third of the urban network, would come through voluntary closures by urban sub-post offices. Branches that choose to close would get compensation while extra funding would be available to modernise and raise profits at urban and rural post offices.

A Consignia spokesman confirmed the company was working on plans to create a 'viable, sustainable network' but declined further comment.

State-owned Consignia is losing £1.5m a day and wants to cut costs by £1.2bn a year as it struggles to meet competition from rivals like Hays, Business Post Group and Dutch Group TNT Post.

The Post Office restructuring plan follows the announcement of 15,000 redundancies in Consignia's Parcelforce and distribution divisions last month. The loss-making firm has signalled that up to 30,000 jobs could go from its 200,000-strong work force in what could be the largest programme of job losses in recent UK history.

Consignia operates a franchise network of more than 17,500 sub-post offices run by independent managers. The network is losing about £100m a year on sales of £1.2bn and has seen steady closures as branches complain of insufficient support.

Consignia has been in negotiations with the National Federation of Subpostmasters on the plan to slim down the post office network yet ensure the large majority of people in urban areas still live within half a mile of a branch.

There is no specific target for urban branch closures but somewhere between 2,000 and 3,000 branches was not 'unrealistic', sources said.

The government has set out to protect rural branch numbers on grounds these post offices provide vital community services