Benefits deal has ''betrayed'' Post Office

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The government's plan to take the contract for pension and benefit payments away from the Post Office and give it to the private firm PayPoint would spell disaster for the future of the post office network and was a "betrayal of Britain's most vulnerable", the Communication Workers Union (CWU) has said.

The Department for Work and Pensions announced that the £15m-£20m a year contract will be given to PayPoint which will mean that pension and benefit payments can be collected in shops, off-licences and petrol stations. The contract was originally put out to tender by the Labour government in 2008 and bids were submitted last summer.

The CWU said that the decision was a 'u-turn' by the coalition government which was accused of lying when it previously promised to protect the Post Office by making it the "front office" for government business.

CWU general secretary Billy Hayes said: "This is a cut too far. Taking government business away from the Post Office on top of privatising Royal Mail and taking that business away will cause the biggest closure programme we've ever seen. What they take away in revenue, the government will either have to give back through subsidy or promote mass closures.

"Post offices are a lifeline to many communities across the country. The government has lied to voters about safeguarding the post office network. Instead of increasing work they're taking it away. Instead of promoting trusted government-owned brands which are accessible to everyone, they've chosen a private company which many vulnerable people on benefits will not be able to access. It's a betrayal of Britain's most vulnerable and a despicable act of vandalism on our post office network."

George Thomson, general secretary of the National Federation of SubPostmasters, said: "We must be clear that if we are to maintain a network of 12,000 Post Office outlets, subpostmasters need significant volumes of work in order to survive, including regular repeat transactions such as benefits payments. Ministers have to deliver new government work to post offices, not more broken promises. As the government plans to remove Post Office Ltd from Royal Mail Group and make it a standalone company, this imperative is even greater."