Edward Davey, the minister for postal affairs, has today ruled out creating a Post Office Bank because it would be time consuming and extremely expensive.
He says at a time when the public finances are under huge strain it believes funding is better spent modernising and maintaining the network.
The Post Office will not be for sale and there will be no programme of closures.
Davey says: “To underline our commitment we have announced £1.34bn of funding over the next four years. The money will put the Post Office on a stable financial footing. It will help modernise the network and make it even more appealing to customers.
“New government and financial services will also attract new customers through the door.”
The government is keen for the Post Office to expand further into financial services. This will include offering new products through its relationship with the Bank of Ireland and looking into ways that the Post Office and Credit Unions can work more closely together.
The Post Office has signed a deal with the Royal Bank of Scotland which gives RBS and NatWest customers access to their current and business accounts through the Post Office.
Davey adds: “Our long-term goal is to convert the Post Office into a mutual structure, for example like the Co-operative Group, giving employees, sub postmasters and communities a much greater say in how the company is run. Our programme means the network is on the cusp of an exciting new era.”