Rural post offices secure £300m lifeline

The government is to provide a further £300m lifeline to help keep rural post offices open.

The government is to provide a further £300m lifeline to help keep rural post offices open.

Patricia Hewitt, the Secretary of State for Trade and Industry, announced yesterday that an extra £150m a year would be made available for the network in 2006 and 2007. The Government is already providing £450m of support under a three-year programme running until the end of next year.

The additional funding will buy the Post Office more time to develop new pilot schemes designed to prevent rural post offices from closing and provide a more secure financial footing. The money will be used to supplement the commercial income sub-postmasters get.

Despite a government requirement that the Post Office should maintain its rural network and prevent "avoidable" closures, almost 300 branches have shut in the past three years. Over the same period, 1,300 urban post offices have closed under a plan to trim the number by 3,000.

Funding for the support programme for rural post offices comes from dividends previously paid to the Government by Royal Mail from past profits.

Postwatch, the consumer body, welcomed the funding extension and said it must be used to determine a long-term strategy for the rural network.