Rural post offices to receive £450m aid package

The Government is to inject £450m into the Post Office network over the next three years to help to stem the closure of loss-making rural branches.

The aid package could be announced tomorrow when the Commons debates a separate £210m scheme to fund the closure of 3,000 urban post offices. The network of 8,500 rural post offices loses about £3m every week. But from next April it stands to lose even more when the payment of state benefits through post offices starts to be phased out in favour of paying benefits direct into claimants' bank accounts.

Consignia, which changes its name to Royal Mail this week, says this could reduce revenues across the network of 17,500 post offices by up to £400m per year.

The rate of rural closures has slowed in the past two years. In 2000-01, there were 435 rural branch closures, but last year this figure fell to 194 and in the first quarter of 2002-03 there were 30 closures.