This article is more than 1 year old

This article is more than 1 year old

The Post Office boss Paula Vennells received a 7% pay rise last year, while thousands of postmasters took an average 4.5% pay cut.

The former L’Oréal and Argos executive took home £718,300 in the year to March, according to accounts filed at Companies House this week, while 11,500 Post Office workers – the vast majority of whom are self-employed – received a combined £17m pay cut to £371m.

Postmasters say falling pay combined with rising costs, such as business rates, is resulting in the closure of permanent post offices and a switch to temporary facilities run from vans or community centres.

More than 1,500 of the 11,547 post offices in the UK are now temporary, 426 more than in 2014, according to Post Office data at the end of March collected by the House of Commons library.

“Net profits are being squeezed. We are seeing more and more post office businesses falling over,” said Calum Greenhow, the chief executive of the National Federation of SubPostmasters.

He said more than 400 post offices had closed in the last six months, although some of those are likely to reopen after being refurbished or moved.

Some postmasters have written to the Guardian saying their fees are not sufficient to pay even the minimum wage for the number of staff required to open at evenings and weekends, when the public want access to post offices. They say it is not safe to leave one member of staff in charge of large amounts of cash.

Tom Moran, the network development director at the Post Office, said the drop in pay for branches was the result of a gradual switch from fixed fees to variable payments for most, based on the number and kind of transactions they handle.

About 3,000 offices in locations where they have community importance as the “last shop in the village” receive a set payment subsidised by the government, which is due to end by 2021.

Before 2010 the majority of postmasters received a set fee from the government-backed business. But that is being phased out alongside a severe cut in subsidy from £210m in 2012 to £70m in the year to March.

Moran said that despite £17m less going to postmasters last year, the Post Office had stabilised branch numbers at about 11,500 after years of decline, by offering financial help to develop retail businesses alongside counters handling mail and benefits.

He said the introduction of new technology and ways of working had made running a post office more efficient. He said investment meant outlets could now be run with one person.

“We believe we have got a competitive offer. The stability of the network is a good indication that what we are offering is there or there abouts,” Moran said.

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He said Vennell’s basic pay had only risen 1.9% and the rest of her £46,700 jump in remuneration was the result of bonuses earned for hitting targets, including increasing profits and holding branch numbers steady.

The Post Office announced a £35m annual profit excluding exceptional items and subsidy, more than double the year before, while sales were steady at £961m.

Moran said post offices were suffering from a general slowdown on the high street: “Retail is going through a very tough time and we are no different to any other retailer. People are increasingly using online retail rather than going shopping.”