Commission Vice-President Joaquin Almunia, responsible for Competition policy said "The aid will enable the UK post office network to continue performing its fundamental social and economic role and important public service tasks, without unduly distorting competition."
Post Office Limited (POL), a limited company incorporated under UK private commercial law in 2001 and a subsidiary company of Royal Mail Group plc, operates a nationwide network of around 11,500 post office counter outlets. These outlets provide over-the-counter access to social benefit payments, basic banking services and other services in the UK, and therefore act as focal points for the communities they serve. The proposed measures would prolong by one year a "Network Subsidy Payment" of £180m to keep open unprofitable offices e.g. in rural areas and a "Working Capital Facility" up to a ceiling of £1,150 million which enables POL to hold enough cash to carry out its public service obligations. The current authorisation of these measures expires on 31 March 2011. The one-year extension is necessary for POL to continue carrying out services of general economic interest entrusted to it by the UK Government.
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