Post Offices play an important part in our life. They are often the hub of social and economic life in communities, particularly in rural and deprived urban areas.
This is why the government has made an investment of more than £2 billion since 1999 and why we announced in December that we will continue to support the network with a further major commitment to provide £1.7 billion until 2011.
In addition the Post Office will be in a strong position to bid for a new account to run when the current Post Office card account (POCA) contract ends in March 2010. The new account will be available nationally and customers will be eligible for the account on the same basis as the POCA is now.
This does not mean the present situation can remain as it is. People increasingly choose to access services in different ways - using direct debits to pay their bills, hole-in-the-wall machines to get cash, emails rather than letters and the telephone and internet for banking or to access information on government services.
Government cannot ignore these changes or the fact that people simply do not use post offices as they once did. Some four million fewer customers are using their post offices each week compared to just two years ago.
Our proposals and investment will therefore help put the Post Office network on a more stable footing for the future. They strike the balance between the cost to the taxpayers in funding the social role of post offices with the needs of the most vulnerable groups of customers.
The national network will remain but there will need to be a reduction in offices, in particular among the least used and those making the biggest losses. It is important that Post Office Ltd. take a strategic approach to best provide the national network. To achieve this we need to have the right post offices in the right places.
However, we will limit Post Office Ltd to 2,500 closures nationally and these will be carefully managed to ensure that communities with the greatest social needs do not lose access to post office services.
We will introduce a new accessibility criteria, which will set down what coverage we expect from the network. For example, in deprived urban areas 99 per cent of the population will remain within one mile of a post office, and 95 per cent of the total rural population will be within three miles of one. We also want to encourage the Post Office's efforts to reach out to rural communities through new and innovative ways of delivering post office services, opening up 500 outlets in village halls, community centres or in local businesses like the village pub.
We cannot turn back the clock but it is important we explore every avenue in trying to maximise use of the unique Post Office network. Our measures, which are currently out to public consultation, will help put the national network on a stable footing for the future, providing reassurance for both subpostmasters and their customers.