£1.3bn funding boost for Post Office

The Post Office will receive £1.3 billion of extra funding over the next four years, Business Secretary Vince Cable has announced.

Vince told the Commons the funding would be used to reform the network and secure its long term future, reversing years of decline. Outlining the boost during yesterday's second reading of the Postal Services Bill, which sets out plans to privatise Royal Mail, Mr Cable told MPs: "I can announce today £1.34 billion of new funding for the Post Office over the spending review period.

"The funding will be used to reform the current network, to change the underlying economics and so reverse the years of decline and secure its long-term future."

He said earlier this month that private buyers will be allowed to own up to 90% of the Royal Mail, with at least 10% of shares going to employees, while the Post Office may be mutualised.

The staff share scheme would be the biggest of its kind - larger than those of British Telecom, British Gas or British Airways, he said.