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Closing Profitable sub-post offices

So yet again 2,500 sub-post offices that are mainly profitable will be offered 28 months income to close. 24 months is the usual sale amount.

This will pressurise more people into having benefits paid into bank accounts saving the government about £15 per year for each person on benefits.

Whether it will pick up and prevent any benefit fraud is unclear.

However, as far as offering a service the Government have a clear strategy of chopping off about 3,000 sub-post offices every so often.

The fact is that almost all of the sub-post offices are themselves profitable. There is a problem with the finances of the operator of the Network the erstwhile "post office counters ltd". This problem, however, has almost certainly not been properly analysed. I read a report "counter revolutions" some time ago that produced flawed management accounts.

To identify the cost of running a sub-post office for the post office itself you cannot simply take the fixed central costs and allocate them equally to each office. The marginal cost is clearly not calculated that way. It is an easy piece of maths, but comes out with the wrong conclusions.

I managed to make this point today in the House, but I don't think the minister understood it. The minister was clearly mystified when I said most of the sub post offices he was to be closing were profitable. It is, however, the truth.

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