Post Office's new offerings fail to convince regulator

The postal regulator has launched an investigation into the raft of new services being offered by the Post Office, after concern that they may not be meeting the needs of customers.

The postal regulator has launched an investigation into the raft of new services being offered by the Post Office, after concern that they may not be meeting the needs of customers.

In the past few months the Post Office has expanded to offer car and travel insurance and personal loans. It plans to offer a fixed-line telephone service early next year.

But Postcomm is unsure that these services will be attractive to the Post Office's customers in deprived urban areas.

"Postcomm is not totally convinced that the products are right," said a well-placed source.

Around half of the Post Office's 16,000 counters are in urban areas, and 21 per cent of these are classed as being in deprived areas.

It is understood that the regulator will present its findings to the postal services minister, Stephen Timms, before the end of the year.

Postcomm declined to comment, but a minutes of a recent Postcomm seminar have revealed that its chief executive, Martin Stanley, harbours concerns over the Post Office's strategy. "Our investigations have led us to believe that further action is needed to ensure the viability of the urban network to meet the needs of customers," Mr Stanley said.

The Post Office, which is part of the state-owned Royal Mail, defended its decision to expand its range of products. A spokesman said: "We are introducing the services because our customers are asking us to. The Post Office is synonymous with value for money and this is obviously a good thing in deprived areas."

He added: "Underpinning all this is the need to return to profitability. To do this, we need to diversify and change with the times."

The Post Office has been particularly hard hit by the Government's decision to pay state benefits directly into people's bank accounts, he said.