Loss of contract could cause Post Office collapse

The Post Office network in Northern Ireland "will collapse" if the plans to change welfare benefit payments are implemented.

The warning stems from the government's refusal to renew the £1 billion contract for the Post Office Card Account. This account is used by around 4.5 million people throughout the UK and allows people to withdraw pensions and benefits from their local post office.

The Federation of Small Businesses (FSB), National Policy Chairman, John Walker, said: "Small firms, particularly but not exclusively in rural areas, depend on their local post office for many services. Any threat to local post offices is also a threat to these small businesses and, by extension, to the local community.

"The effect that this proposed change may have is of great concern to many of our members, especially since many local bank branches have closed, the post office is their only banking option.

"We therefore call on the Government to examine the effect that this proposed change could have and to work with Post Offices Limited to safeguard the current level of post office numbers. Further closures would be very damaging for small firms and the communities that they serve."

It is understood that the government are to stop renewing the contract in 2010.

The Federation of Sub-Postmasters (FSP) are also extremely worried about the decision and feel that this could mean the end of the post office. In response to the news, the FSP have released a statement saying: "It is difficult to equate the decisions by Government with its stated commitment to supporting a thriving post office network. News on the POCA follows recent announcements by the DVLA on motor tax renewal, which omitted to state that post office counters continue to offer this service. In addition the UK Passport Service is to develop its own network of offices, precluding post office involvement. NFSP believes that this ongoing withdrawal of Government services from post offices."

Federation General Secretary Colin Baker has written to the Prime Minister and to the Secretaries of State for Trade and Industry, Work and Pensions, and Transport, to express their serious concerns at these developments.

(EF/SP)