Post Office retains card contract
The Government has ended months of speculation over the future of a card account used by millions of people to receive benefits and pensions by awarding the contract to the Post Office.
Work and Pensions Secretary James Purnell told MPs the organisation would retain the business, with a new contract running for five years from 2010, with the possibility of an extension beyond that.
The decision was welcomed by subpostmasters and unions, which had warned that 3,000 branches would close if the work was given to a rival bidder.
The contract for the Post Office Card Account was put out to tender, with PayPoint and another firm expressing an interest.
Mr Purnell said that in order to support a viable post office network, the competitive tendering process had been cancelled.
Around 4.3 million people hold a Post Office Card Account to obtain pensions and benefit payments, including jobseeker's allowance and child benefit.
Around £80 million is paid out every day to account holders, with many of them spending some of the money in post offices or shops run by subpostmasters.
The card accounts for one in four visits to post offices, rising to one in two in rural areas and is regarded as a lifeline by workers in the industry.
Alan Cook, managing director of the Post Office, said: "We very much welcome this decision, which enables us to achieve our goal of maintaining a branch network of around 11,500 outlets for the foreseeable future.
"It's great news for Post Office Ltd, for our subpostmasters and for our customers. We will, of course, also be working with other Government departments to drive a wide range of services through the network, while at the same time building on our existing range of financial and other products."
