'3,000 post offices could close'

6:28pm Sunday 11th May 2008

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Another 3,000 post offices could be forced to close if subpostmasters lose the right to handle state pensions and benefit payments, the Government was warned.

The National Federation of SubPostmasters said one in four branches left after the current, controversial closure programme ends later this year, could shut if the Post Office loses the contract to run the new card account.

The current card account, used by around four million people every week to access pensions and benefits, will be replaced next year.

Research by the federation showed that card account transactions accounted for around 12% of subpostmasters' pay. Of the 24 million visits made to UK post offices every week, 6.5 million are made by card account customers, highlighting the importance of the contract to subpostmasters, said the report.

George Thomson, general secretary of the NFSP, said: "The Post Office card account is a crucial lifeline to thousands of subpostmasters already struggling to keep their businesses going.

"If the Government chooses not to award the contract to the Post Office, up to 25% of those post offices remaining open will be forced to close. Furthermore, the on-going network change closure programme will fail if the 11,500 or so post offices which remain are not properly supported in the future.

"The Government must therefore demonstrate that support by awarding the successor to the Post Office card account to the Post Office. Not to do so would be catastrophic. Millions of pensioners and those on benefits chose to access their money at the Post Office. This choice is what keeps so many subpostmasters in business. If the Government wants a sustainable post office network in years to come, it must choose to support our members accordingly.

"Retaining the contract will not be a cure-all for the many challenges faced by the post office network. It will, however, provide the Post Office with breathing space to deliver the new products and services required to ensure that the new post office network is given the best possible chance to survive and thrive in the future."

The contract to run the new card account was put out to tender in line with EU regulations. The deadline for tenders ended in March this year and a decision on who has won the contract is expected by mid-summer.

The warning came ahead of the federation's annual conference, which opens in Torquay on Monday. The Post Office is more than half way through the current closure programme, which will see 2,500 post offices close by the end of the year.

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