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Delays in awarding a contract to handle millions of pension and benefit payments through a card account are "destabilising" the Post Office, MPs warned.
A Government decision is eagerly awaited on the future of the Post Office Card Account (POCA), which more than four million customers use to receive benefit payments and pensions
The contract for the account runs out early in 2010 and ministers will soon announce whether it will be retained by the Post Office or given to a rival. A leading Labour MP has warned that up to 6,000 post offices would be forced to close if the organisation does not retain the contract to run a card account.
West Dunbartonshire MP John McFall, chairman of the Treasury Select Committee, said up to 3,000 branches could close even if the Post Office suffered a partial loss of the contract.
The Business and Enterprise Select Committee said in a report that it was concerned about the Government's approach to the contract, which had been advertised on the basis of the most "economically advantageous" tender.
"Although our primary concern is for those who need access to benefits, we are also concerned that the delays are destabilising Post Office Ltd, and for communities in rural and deprived urban areas, which rely on the Post Office for access to basic services," said the report.
"The longer uncertainty continues, the harder it is for the Post Office to develop its long-term plans. Whoever wins the contract, existing POCA customers will need to be transferred to a successor account."
The MPs said they were "naturally concerned" about the effects of the possible loss of the contract on the Post Office, which is already closing 2,500 branches this year, as well as on the taxpayer because of possible increased subsidises to maintain a national network of offices.
"It is widely recognised that a decision to award the contract to an organisation other than Post Office Limited would have grave effects on the Post Office network. Even after the network change programme, more sub-post offices would almost certainly close," added the report.
The Post Office is facing competition from the private company PayPoint, the country's biggest private payment network with 20,000 outlets in shops across the country, and another bidder, believed to be a bank.
A Government decision is eagerly awaited on the future of the Post Office Card Account (POCA), which more than four million customers use to receive benefit payments and pensions
The contract for the account runs out early in 2010 and ministers will soon announce whether it will be retained by the Post Office or given to a rival. A leading Labour MP has warned that up to 6,000 post offices would be forced to close if the organisation does not retain the contract to run a card account.
West Dunbartonshire MP John McFall, chairman of the Treasury Select Committee, said up to 3,000 branches could close even if the Post Office suffered a partial loss of the contract.
The Business and Enterprise Select Committee said in a report that it was concerned about the Government's approach to the contract, which had been advertised on the basis of the most "economically advantageous" tender.
"Although our primary concern is for those who need access to benefits, we are also concerned that the delays are destabilising Post Office Ltd, and for communities in rural and deprived urban areas, which rely on the Post Office for access to basic services," said the report.
"The longer uncertainty continues, the harder it is for the Post Office to develop its long-term plans. Whoever wins the contract, existing POCA customers will need to be transferred to a successor account."
The MPs said they were "naturally concerned" about the effects of the possible loss of the contract on the Post Office, which is already closing 2,500 branches this year, as well as on the taxpayer because of possible increased subsidises to maintain a national network of offices.
"It is widely recognised that a decision to award the contract to an organisation other than Post Office Limited would have grave effects on the Post Office network. Even after the network change programme, more sub-post offices would almost certainly close," added the report.
The Post Office is facing competition from the private company PayPoint, the country's biggest private payment network with 20,000 outlets in shops across the country, and another bidder, believed to be a bank.
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