Post Office loses Government contract for Pension and Benefit payments

“Another broken promise”, say Greens

The Green Party has joined a chorus of trade unions and customer groups to condemn the decision to remove the contract for benefit and pension pay outs from the Post Office and award it instead to the private sector company PayPoint, a subsidiary of Citibank.

Keith M Ross, Green Party Assembly Candidate for South Wales West said, “Following hard on the heels of the privatisation of Royal Mail, this is a bitter blow for our hard pressed local post offices.”

In 2008 the previous Labour government put the contract to pay benefit ‘giros’ out to tender for the first time, and invited bids from the private sector. The Post Office made an unsuccessful bid to retain the contract, and it was announced this week that the contract has been awarded to PayPoint.

This means that in future benefit claimants and pensioners who receive their payments by girocheque will have to go to one of the 22,000 PayPoint outlets around the country, which include off-licences, convenience stores and petrol stations.

Mr Ross continued, “This move represents a loss of around £4million per year for the Post Office, in addition to the reduction in ‘footfall’ resulting from people having to go elsewhere.

“The amount the government will save from this will not make the slightest scratch in the surface of the national debt. Yet this relatively small sum is a vital lifeline to our post offices. We could easily have afforded to subsidise the service to this extent.

“This could be the straw that breaks the back of many local post offices. We’ve seen large numbers of post offices across Wales closed or under threat of closure, including in Swansea. This change can only add to that number.

“At the last election, just about everyone promised to protect the Post Office. The Lib Dems in particular made it a strong point in their campaign for the General Election. Since the election Coalition Ministers have promised to protect the Post Office by making it the “front office” for government business. We can now see that this has to be added to the growing list of broken promises of the Con-Dem coalition parties.

“Rather than guaranteeing the continued business to post offices, the government has chosen instead to allow an American owned bank to profit from some of the most vulnerable people in our society. Ironic when you consider that the very reason people need to cash giros is that they don’t have a bank account.”


One response to this post.

  1. Edited version appeared in today’s Evening Post. Read it here.


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