Post Office gets card account
Thursday, 13 November 2008 2:07 PM
The government has handed the Post Office the Post Office Card Account (POCA) contract today, throwing to one side the tender process.
Work and pensions secretary James Purnell told parliament the Post Office would retain the contract to provide benefits and pensions.
"The government has decide to cancel the procurement process and award the contract to Post Office Limited.
"It is the right decision for customers around the country," he said.
He added: "The Post Office is seen as safe secure and reliable. now cannot be time for the government to do anything to put network at risk."
The minister said the decision was made in light of the recent global instability and the social role post offices play.
Mr Purnell added the decision would ensure the viable future for the Post Office and was "value for money for taxpayers".
The new contract will run to March 2015 with the possibility of extension.
Conservative shadow business secretary Alan Duncan described the move as "disarray dressed up as decision" and said it was a "humiliating climbdown for government".
"The government insisted on tender - and after months of the expensive process they have binned that tender," he added.
Mr Duncan also called for POCA to be extended so customers can use it to pay utility bills.
Liberal Democrat work and pensions spokesperson Jenny Willott said: "This announcement comes as a huge relief to the millions of Post Office Card Account holders, thousands of Sub Post Masters and the countless communities that may have lost their post office if the decision had been different.
"The government has wasted time and money and caused immeasurable heartache by dragging this process out for so long."
She added: "Cancelling the procurement exercise is a peculiar means of arriving at this decision and ministers have some explaining to do."
SNP postal affairs spokesperson Mike Weir said: "Today's long-awaited announcement is a victory for people power against a dithering Labour government that was determined on privatisation.
"It is still not clear why we had to endure months of delay and confusion over the award of this vital contract, and I welcome the fact the uncertainty has now been ended."
Mr Purnell said unsuccessful bidders will be compensated, but refused to say how much the failed tendering process would cost the taxpayer.
Newsletter sign up