Losses made by the island’s network of sub-post offices are not sustainable, MHKs were told.

Post Office chairman Julie Edge (LibVan, Onchan) told the House of Keys that the network made a £1.5m loss last year and a five-year strategy was being drawn up to ensure its long-term viability.

Responding to a question from David Ashford (Douglas North), she said: ’Isle of Man Post Office is committed to providing a sub-post office network.

’However, with transaction volumes declining at an average of 7% per annum, as residents opt for payments being made directly into their bank accounts and digital communications continue to increase, the network made over a £1.5m loss in the last financial year and is therefore required to be subsidised by revenues earned by our commercial activities.

’Such a level of loss, which is forecast to increase in future years, is not sustainable.’

Currently, 24 post offices are operated by local businesses or individuals. But Mrs Edge these are facing a decline in footfall and transactions and some could become unviable.

A new five-year strategy will be presented to the Council of Ministers and Tynwald in due course, MHKs were told.

Mrs Edge said the viability of post offices are reliant on a number of government contracts, with two key ones being the provision of vehicle and driving licences and the provision of benefit and pension payments via its MiCard service.

She said: ’It is my view that post offices continue to play a fundamental social role within our society, particularly in rural communities, but residents must continue to use them and government must take account that the acceleration of its digital strategies will undoubtedly affect their viability.’

Dr Alex Allinson (Ramsey) said there is still a need for physical, face-to-face access, both for post office and for wider government services.

Mrs Edge agreed that post offices have an important social value.