13/11/2008

£1bn Post Office Contract Welcomed

The Post Office has been awarded a contract that would distribute benefits to millions of claimants, it was announced today.

Work and Pensions Secretary James Purnell said the announcement that the Post Office would continue to provide the Post Office Card Account (POCA), was "good news for our constituents, good news for Post Office Ltd and good news for sub-postmasters".

The contract will run initially from 2010 to March 2015, with the possibility of extension beyond that.

The account, used by around 4.3 million claimants, was brought in to end the need for giros and payment books for pensioners and those claiming benefits.

Mr Purnell said the Post Office is a "cherished institution at the heart of many communities", and was viewed by many as a safe and reliable provider of financial services.

In a statement, Lord Mandelson, hailed the news, saying the decision could secure the future of the Post Office.

He said: "Now the challenge will be for the Post Office to broaden its offer to loyal customers and to bring in new ones to help get it on to a stable financial footing."

However, Alan Duncan, the Conservative business spokesman, called the decision a "humiliating climbdown" for the Government "who have done everything they possibly can to find a way of awarding it (the contract) to somebody else".

Ministers from all parties have campaigned for the contract to remain with the Post Office, as the Federation of SubPosters - who welcomed today's decision - warned 3,000 branches would have closed if the contract had not been renewed.

(JM)

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