Post office ownership review explores mutualisation after horizon scandal

Ministers are set to examine a major shift in the ownership of the Post Office as part of the first significant review of the organisation in 15 years. This move follows the fallout from the Horizon IT scandal, widely regarded as one of the UK’s largest miscarriages of justice. The Department for Business and Trade (DBT) has released a green paper detailing potential changes, including handing ownership to the network’s operators.

The review coincides with the recent publication of the initial findings from a two-year inquiry into the Horizon scandal. Between 1999 and 2015, around 1,000 post office operators were prosecuted due to defective accounting software that falsely showed financial discrepancies. The scandal has deeply damaged trust in the institution, highlighting the need for reforms.

One of the options under consideration is the mutualisation of the Post Office, potentially transferring ownership to the network branch managers who oversee its 11,665 outlets. While this model has been embraced by many organisations seeking a more cooperative structure, critics, including campaigner Alan Bates, have raised concerns. Bates argues that the Post Office remains reliant on government subsidies, and without significant financial stability, such a transfer may not be feasible. Mutualisation is unlikely to proceed before 2030, with implementation potentially taking up to three additional years.

In its current state, the Post Office is struggling financially. A pre-tax loss of £612m last year and rising debts have outpaced the value of its assets. To address this, the government has pledged £500m over the five-year parliamentary term to stabilise operations. Additionally, £118m has been allocated this financial year to support restructuring efforts, which include cutting hundreds of staff roles and closing up to 115 branches. These measures aim to address the widespread profitability challenges faced by branch operators, nearly half of whom report minimal or no profits from their Post Office operations.

The green paper also explores removing the requirement to maintain a minimum of 11,500 branches, though the government acknowledges the potential impact this would have on communities. While no immediate changes to the branch network are planned, ministers are open to reassessing its size in the future as circumstances evolve.

Calls for reunification with Royal Mail, voiced by the Communication Workers Union, have also gained traction. Union representatives argue that a joint ownership model could provide a sustainable path forward. However, the government has ruled out this option, choosing instead to collaborate with Royal Mail’s new private owners, following its recent acquisition by EP Group.

The Post Office faces a challenging road ahead. The government has emphasised its focus on creating a more accountable, transparent, and financially stable organisation. Though significant ownership changes remain a distant prospect, the review offers a chance to shape an institution that remains vital to communities across the UK.