A coalition of MPs and interest groups is arguing that ‘Post Banks’ could provide a range of financial services. Business minister Pat McFadden said he believes the idea has ‘potential’ and has agreed to discuss it.

Wandsworth Council has consistently argued that widening  the range of services provided by post offices is the best way to secure the future of the network. As well as providing local branches with much-needed business, it will help people who do not have bank accounts and provide local communities with vital facilities.

The council has already announced that Freedom Passes will be issued directly by the borough’s post offices from 2010, and that from next month residents will be able to pay their rent, council tax, business rates and other bills in local post offices using new swipe card and bar code technology.

Post Office Ltd. already offers the Post Office Current Account, but the council argues that this is very limited. It can only accept government benefit payments and has none of the facilities, such as cheque books, that people expect from a bank account.

Wandsworth has lost over half of its branches in the past five years after two rounds of closures.

Under the new proposals post offices will offer tailored products to small businesses. Many of the people most seriously affected by the closures in Wandsworth have been small business owners.

John Wright, chairman of the Federation of Small Businesses said "Most sub-post offices are run like small businesses and keeping the network alive by establishing Post Bank would not only retain jobs but could also, we estimate, create 11,000 new jobs."

Deputy leader of the council, Maurice Heaster, is writing to Mr McFadden to give his support to the proposals. He said creating a post bank would help prevent more branch closures and provide a real alternative to traditional banks.

“This will be a bank that people can actually trust. We are in very difficult times financially and this would provide a vital service to small businesses that are struggling to get credit. It would also help people who are often excluded from traditional banking, such as older people and people on low incomes.

“We have long argued that our post offices need something like this to keep them viable, so it is gratifying to be listened to. Many local postmasters have a wealth of ideas about how the network could be improved and made more sustainable, and we will continue to do all we can to help them.”

For more information on the council's campaign against post office closures, visit
www.wandsworth.gov.uk/postoffices