MPs fear card account loss will spell disaster for post offices
Concerns over terms of tendering document
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FEARS that the Post Office may lose a contract to operate a card account system used to pay pensions and benefits were raised last night.
The alarm was sounded after Postal Services Minister Pat McFadden told MPs the tender to operate the card — which replaces the current Post Office card account — stipulates that the supplier must be able to access 10,000 branches.
Mr McFadden was repeatedly warned during a Commons Westminster Hall debate on the future of Royal Mail that what is left of the Post Office network after 2,500 branches are axed will depend on it winning the contract.
Branches to be axed in the current round of closures include 40 in Argyll and Bute, Greater Glasgow, Falkirk and Stirling, 38 in the Highlands, and 16 in the Northern and Western Isles, with more to come in the north-east and on Tayside.
The value of the contract to individual branches is partly due to handling charges paid to sub-postmasters and partly because recipients will frequently spend some of their money in the shops in which many sub-post offices are situated.
MPs immediately accused the UK Government of stabbing the Post Office in the back as it reels from an independent report last week warning that the Royal Mail’s daily letter deliveries to virtually everywhere in the United Kingdom at the same price are at risk.
Argyll and Bute Lib Dem MP Alan Reid said later: “This means that a competitor, such as a consortium of banks using their own branches, will be able to tender and in that case the Post Office is finished. It will be reduced to the 4,000 branches which chief executive Adam Crozier said were the minimum required to operate a nationwide service and that would be a disaster”.
More than double the present number of closures would be needed. The Post Office has around 14,000 branches and the current round of closures is designed to reduce this by 2,500,
Mr McFadden was resp-onding to a call from Mr Reid to ensure the tender document issued by the Department for Work requires competitors to be able to access a large rural network.
