MPs' Post Office decision draws bitter attack

The Government came under bitter attack today after deciding to move a lucrative contract for processing benefit cheques from the Post Office which campaigners warned would lead to fresh branch closures.

Unions, postmasters and consumer groups lined up to criticise ministers, who were accused of "betrayal" for taking valuable business away from the Post Office.



Citibank will provide a new service from 2012, using Paypoint outlets, in a contract worth around £20 million a year, affecting more than 250,000 people.



Payments by cheque will be phased out after ministers said there had been a "dramatic" fall in their use over the past few years, with less than 2% of welfare payments now made by cheque.



It costs the taxpayer around £30 million to process cheque payments and they were easily open to fraud, said the Government.



Employment Minister Chris Grayling said: "This new contract represents value for money for the taxpayer. The facts are payment by cheque is now too costly and too open to abuse and we want our payment system to be as cost-effective as possible.



"We will make sure that everyone who receives their payments by cheque has all the help they need for the changeover and we can assist in choosing another method of payment that better suits their needs."



Communication Workers Union general secretary Billy Hayes said: "Taking government business away from the Post Office on top of privatising Royal Mail will cause the biggest closure programme we've ever seen.



"The Government can't be trusted with our public services, our post offices or the care of the most vulnerable. This cabinet of millionaires has no idea what it's like running a small business where the loss of one or two revenue streams can make the difference between profit and loss."



The National Federation of SubPostmasters (NFSP) said the decision had raised fears among subpostmasters on the future of other benefits payment services such as the Post Office Card Account (POCA), used by almost four million customers every week.



General secretary George Thomson said: "This is a bitterly disappointing decision from the Government. Benefits cheque customers rely on their local post office to provide this important service, with subpostmasters and trained Post Office staff providing assistance to hundreds of thousands of vulnerable customers each week.



"If we are to maintain a network of 12,000 Post Office outlets, subpostmasters need significant volumes of work in order to survive, including regular repeat transactions such as benefits payments. Ministers have to deliver new government work to post offices, not more broken promises."



Lindsay Mackie, campaigner at the New Economics Foundation, said: "Taking the contract for benefit payments away from the Post Office is an act of social vandalism that will devastate communities across the UK."



Andy Burrows, of Consumer Focus, said: "This will be a major blow for the post office network. Government has committed to making the Post Office the 'front office' for public services. The decision to axe this £20 million contract seems out of step with that ambition."



A Post Office spokesman said: "Whilst Post Office is disappointed not to have been awarded the contract, we are pleased that the Department for Work & Pensions has outlined new plans for working closely with us in the future, including three pilot schemes, universal credit reforms and strengthening links with credit unions."



Shadow business secretary John Denham said: "For all the Conservative-led Government's warm words, their actions are undermining the long-term future of the Post Office network.



"From their decision not to establish a Post Office bank, to this disappointing news, the Tory-led Government is failing to provide post offices with the business they need to continue to serve local communities.



"The Tory-led Government must now guarantee future work for post offices through a 10-year IBA (inter-business agreement) and give a cast iron commitment to other Government contracts or shelve their plans indefinitely."

Life and Style
Social media users in Mexico who commented on cartel violence have been killed in the past
techTweets not showing up or loading this morning, users say
Sport
premier leagueLive: All the latest news and scores from today's matches
News
newsMcKamey Manor says 'there is no escape until the tour is completed'
News
politics
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
Fans of Dulwich Hamlet FC at their ground Champion Hill
footballFans are rejecting the £2,000 season tickets, officious stewarding, and airline-stadium sponsorship
News
Shami Chakrabarti
people
Arts and Entertainment
Benedict Cumberbatch has refused to deny his involvement in the upcoming new Star Wars film
filmBenedict Cumberbatch reignites Star Wars 7 rumours
Sport
football
News
news
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Data Analyst/Planning and Performance – Surrey – Up to £35k

£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker