New threat to Post Offices

2.03.00pm BST (GMT +0100) Mon 23rd Jun 2008

At a full City Council meeting this week Liberal Democrats will highlight the damage the loss of the Post Office Card Account (POCA) contract could have to post offices in Norwich.

The contract for the POCA is worth £1 billion to Post Office Ltd but, with the government having opened the contract up for competitive tender, there are fears the post office could lose out to a rival bidder. According to the National Federation of Sub-Postmasters the lose of the POCA contract could lead to the closure of 3,000 post offices.

Eaton Ward Councillor Judith Lubbock commented "Post Offices provide a vital social function and this needs to be considered when awarding contracts. The government has consistently removed business from post offices like pensions and TV Licenses and this has greatly damaged the network. If the government ends the POCA contract then it will be another major blow for local Post Offices."

The Post Office Card Account was set-up in 2003 when the Government forced pension and benefits claimants to receive payments via a bank account. Those who did not or could not set up a bank account, were given the option of a Card Account, similar to a very basic bank account. The contract for the accounts was given to the post office (2003-2010). The contract is worth £1 billion to the post office network (2003-2010) and of the 24 million visits made to post offices every week; 6.5 million are made by POCA customers.

The Liberal Democrats believe the contract should stay with the post office as removing it would lead to further closures. Instead of cutting existing services the Lib Dems want to expand services offered at post offices and will put down a motion calling on the City Council to do more next week.

As Judith Lubbock explains "Firstly we need to protect the services that the post office currently offers and secondly we should be giving post offices greater freedom to offer new services and seriously investigate the possibility of offering council services through the post office network. Post Offices could become a 'one stop shop' for a range of government services. We need to be supporting post offices, looking at innovative solutions and investing in the network not cutting services and undermining this vital social network."

The Labour Government is currently carrying out a network change programme that will see 2,500 Post Offices close and will leave a network of 11,500. According to the National Federation of Sub-Postmasters the lose of the POCA contract could lead to the closure of 3,000 post offices on top of this. The Liberal Democrats will ask for a government commitment that the network will not shrink below 11,500. The POCA contract is currently open for competitive tender and Post Office Ltd faces stiff competition to hang on to it.