Survival of post offices in the balance

[TrueBlueTerrier]

http://www.guardian.co.uk/uk/2008/nov/0 ... ail-labour

A government crisis over the future of local post offices has deepened after ministers were told that they may face a court challenge if the contract for handling state pensions and benefits, currently out to tender, is not awarded on a commercial basis.

Royal Mail, which wants to keep the contract, known as the card account, is facing competition from the private company PayPoint and a major bank which are believed to have made more competitive offers. However, MPs of all parties are insisting that it goes to Royal Mail because they fear that even more post offices may be forced to shut down. Senior Whitehall officials have told ministers to expect a judicial review in the High Court if the decision is taken on political grounds.

Some 2,500 post offices have already closed as a result of the government's determination to stem losses running at £4m a week. Ministers accept that thousands more would go to the wall if Royal Mail loses the card account, because millions of people currently visit post offices primarily to draw their pensions or other benefits - and then spend money on whatever goods are on offer, making the businesses viable for subpostmasters.

A government source said that James Purnell, Work and Pensions Secretary, who will take the final decision, now faced a choice between 'a legal challenge or being lynched by MPs'.

PayPoint is the country's biggest private payment network with 20,000 outlets in shops across the country, mainly in urban areas, and is said to have submitted a sound commercial case. It already runs online television licence sales.

It is now widely accepted within government that the decision to put the contract out to formal tender was a mistake - restricting ministers' room to manoeuvre. The long-delayed decision is now expected in the second half of this month.

This week the National Federation of Subpostmasters will step up its campaign for Royal Mail, the Post Office's parent company, to be awarded the contract by sending posters out to all 12,000 branches asking people to contact their local MP about the issue. MPs have already been bombarded with three million postcards on the issue from post office supporters.

George Thomson, the federation's general secretary, said: 'If the card account does not stay with the Post Office, there is no doubt that at least 3,000 more post offices will close within 14 or 15 months. Subpostmasters are already struggling with the recession but this will be the straw that breaks the camel's back. It will be one of the most short-sighted decisions the government has ever taken.'

[TrueBlueTerrier]

The Sub PO that I deliver to will close they have side if POCA goes it accounts for at least 20% of their business. A lot more will be in the same boat it seems.