Ministers are exploring plans to hand ownership of the Post Office to thousands of subpostmasters across Britain in a landmark shake-up for the 364-year-old institution.
Sky News has learned that the Department for Business and Trade (DBT) has asked BCG, a management consultancy, to study Post Office exchange options.
The work is said to be still at an early stage, but is expected to lead to a report being delivered to Jonathan Reynolds, the business secretary, in the coming months, according to a government source familiar with the matter.
The Whitehall insider added that BCG’s work is expected to include assessing the feasibility of converting the Post Office into a mutual employee-owned company, a model used by the John Lewis Partnership.
People close to the process cautioned this weekend that no decisions had been made yet, and said the Post Office exchange could be a long and complicated process.
The Post Office is Britain’s largest retail network, with nearly 11,500 branches, but it is only able to survive financially because of the annual support it receives from the government.
In April, Kevin Hollinracke, the then Conservative minister responsible for postal affairs, met union officials and representatives of the co-operative movement to discuss the possibility of an exchange.
The minister who currently oversees the Post Office, Gareth Thomas, has led the Co-operative Party for nearly 20 years.
Both Mr Thomas and Mr Reynolds are due to give evidence to the public inquiry into the case Horizon IT crisis Next month, they may be asked about the project BCG is undertaking during their appearance.
The Post Office is wholly owned by the state, and publicly owned by UK Government Investments (UKGI).
In recent months, calls have increased for a review of the company’s ownership model amid mounting public anger over the wrongful conviction of hundreds of post office managers after they were accused of stealing money from their branches.
This scandal was crystallized by the ITV drama Mr Bates v The Post Office, which exposed the scandal to a wider audience and has been labeled as Britain’s largest miscarriage of justice.
Many of those affected suffered ill health, marital breakdowns, or died before being exonerated.
Sir Alan said this week that the government should consider prosecuting the company’s former directors
Sir Alan, who was knighted on the King’s birthday in June, has yet to agree a compensation settlement with the government.
The Post Office’s troubles have worsened this year, with internal management disagreements and disputes between the company’s board and its owner erupting publicly.
Last January, Henry Staunton, the chairman, was sacked by Kemi Badenoch, the then business secretary, over what she claimed were serious governance failures.
Mr Staunton then revealed an investigation into bullying allegations against Nick Read, the Post Office’s chief executive, which the organization said in April had cleared him.
Mr Reid was accused of persistent attempts to secure pay rises, even as subpostmasters were facing long delays in being eligible for compensation after being wrongfully convicted.
As part of its efforts to repair the Post Office’s damaged finances and reputation, the government has appointed Nigel Railton, the former chairman of National Lottery operator Camelot, as its chairman.
One of Railton’s first major tasks is to find a new chief executive, after Reid confirmed last month that he would be leaving after five-and-a-half years in the role.
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Any attempt to swap the company would also need to take into account the ongoing financial cost of the Horizon IT scandal’s compensation bill, as well as the fact that a replacement system has not yet been successfully implemented.
After meeting Mr Hollinryck in April, CWU national officer Andy Furey said: “There has to be a completely new operating model for the Post Office going forward to remain relevant to the community.
“(People) on the front lines serving communities on a daily basis deserve to have a much greater say in running the Post Office.”
This weekend, a spokesman for the Ministry of Business and Trade declined to comment.