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European Commission approves £180m of government support to the UK Post Office Ltd
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The European Commission has today authorised £180m of public funding for the UK Post Office to be used for its network of Post Offices for one year from 1 April 2011. The Commission also approved continuing existing local facilities which fund the provision of cash services at Post Office counters. The aid is compatible with EU rules on state aid taking into account the important public service tasks entrusted to Post Office Ltd and therefore does not give any unfair competitive advantage. This decision comes on the day that the Commission unveils its thinking on future reform of the rules on state aid to "services of general economic interest", that is, private operators providing public services.

    (C) Copyright Royal Mail Group 2010

    (C) Copyright Royal Mail Group 2010

    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.

     
    For more information, please contact the London press office on 020 7973 1971.
    Please note: all amounts expressed in sterling are for information purposes only

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    Last update: 24/03/2011  |Top