Government should consider Post Office mutualisation, ex-minister says

The government should consider plans to turn the Post Office into a John Lewis-style mutual, a former business minister has said, amid reports Whitehall is looking at the viability.

Conservative shadow business secretary Kevin Hollinrake has said he would support a proposal to transform the Post Office’s business structure into a mutual in which customers or stockholders own a majority of shares.

It comes amid the ongoing long-running inquiry into the Horizon IT system, which saw faulty accounting information spark the wrongful prosecutions of more than 900 postmasters.

Sky News reported that the Department for Business and Trade (DBT) has asked BCG, the management consultancy, to review options for mutualising the institution.

It would see the Post Office, which has more than 11,600 branches across the UK, run in a similar model to the John Lewis Partnership, which runs the department store, and Waitrose.

A report is expected to be presented to the business secretary, Jonathan Reynolds, in the coming months, according to Sky News, but reportedly no decision has been taken.

Speaking to the BBC’s Sunday with Laura Kuenssberg, Hollinrake, who was the minister responsible for the Post Office during the Conservative government, said mutualisation was a plan that had been considered when he was in office.

“Mutualisation was always on the table when first the Post Office became an independent organisation, so we should look at that,” he said.

“There is a feeling, quite understandably, amongst postmasters that the Post Office is run far too much in terms of command and control and the centre, they need more say in how the organisation is run.

“We brought in an excellent new chair, Nigel Railton, who has much retail experience. He’s keen to look at that too.”

And Hollinrake added: “There are some challenges, of course, not least paying the compensation that we’ve accelerated significantly and things like the software replacement, so there would be some challenges ahead in doing that right now, but there are ways of doing that.

“But I think it’s something we should definitely consider.”

The DBT has been contacted for comment.