MPs say Post Office lacks imagination

Undated file photo of Royal Mail lorries.

LONDON (Reuters) - The country's network of post offices faces an uncertain future unless postal chiefs show more imagination and do more than "manage its decline", a committee of MPs said on Saturday.

Thousands of loss-making post offices are set to close over the next two years under government plans to put the network on a sounder footing.

But the Commons Trade and Industry Committee said it was hard to see how post offices win new business and reduce their reliance on government subsidies under their current management.

"The committee wants to see a viable network, not one permanently dependent on subsidy, but thinks this difficult to achieve unless Post Office Ltd displays more imagination and entrepreneurial flair in developing new areas of business than it has done in the past," it said.

"The government, as sole shareholder and representative of the taxpayer, has a responsibility to ensure that Royal Mail Group as a whole gives proper attention to increasing the competitiveness of the network rather than just managing its decline," it added.

The Royal Mail rejected the MPs' assertion that postal executives lacked business flair.

"The Post Office has brought innovation to the UK's travel, financial services and telecoms markets over the last few years," the Royal Mail said in a statement.

"It pioneered zero percent commission in foreign exchange, it was the first to offer 'kids go free' on travel insurance policies, and its HomePhone service offers the lowest priced telephone line rental on the high street," it added.

The Committee also called for the government to double to 12 weeks the time proposed for public consultation on local post office closures.

Local consultations are due to begin over the summer on an expected 2,500 closures to tackle losses of 4 million pounds a week across the network of over 14,000 post office branches.

To cushion the closures, the government will continue to give the network a subsidy of 150 million pounds a year until 2011.