Recommendation 3

The Department has issued a far-reaching letter of support, which commits it to supporting the Post Office to pay its liabilities as they fall due, but there is no clear plan for how long this will continue, or how to eventually make Post Office Limited financially independent. The Post Office is reliant on the Department for its financial survival. The Department issued a ‘Letter of Support’ to the Post Office in December 2024 which, in addition to the Department’s pre-existing commitment to fund the Post Office’s redress schemes, and an extension of established loan facilities, provides assurance that the Department will continue to provide financial support to help the Post Office to meets its liabilities as they fall due more widely. This includes support for: the running of Horizon remediation matters, Horizon support and technology replacement, taxation related liabilities, and for other potential liabilities. Without this financial support, the Post Office would not be able to meet its liabilities as they fall due. In 2023–24 the Department provided £260 million in grants and subsidies to the Post Office. By 31 March 2024, the Post Office also had total borrowings of £786 million with the Department. The Department has assured the Committee that it is working closely with the Post Office to identify ways to make the Post Office more financially independent. The Department did not consider the Letter of Support to require separate disclosure to Parliament under Managing Public Money requirements. However, the Department has agreed to notify the Committee of the next Letter of Support when it is issued. 5 recommendation a. Alongside its Treasury Minute response to this report, the Department should write to the Committee setting out its assessment of the nature and value of all financial support it might need to provide to Post Office Limited and its plans for working with the Post Office to make it financially independent of government. b. The Department shoul