Post Office fears closure if Government can not agree card account deal

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The owners at Spotland Road Post Office fear they may have to shut down if the Government scraps the Post Office Card Account scheme.

Only a few months ago the Spotland Road office was spared after it was earmarked for closure under the Government's reorganisation of the Post Office.

News was leaked this week that the Government could axe the card account after the Post Office bid to renew the £1billion contract, which expires in 2010. The Post Office admitted any Government decision on the renewal of the contract was 'of critical importance' to the future of Post Office branches.

The card account contributes most of the annual business at Spotland Road. 

Postmistress, Sheila Munsadia said: “After the great news that the campaign to save our Post Office worked, news that the Government could strip our shop of the card account is devastating. Most of our business is generated by this account and if it goes I think we’ll have no option but to shut.

"It’s a kick in the teeth and I hope the public will join us in protecting this vital service.”

The work and pensions secretary, James Purnell MP, promised the long-awaited decision on the future of the Post Office card account would be taken "very soon".

A Post Office spokesman said: "The decision on the Card Account contract to replace the current Post Office Card Accounts in April 2010 is of critical importance going forward. This crucial decision is clearly central to the future of the branch network and Post Office Limited has submitted a very competitive bid."

Rochdale MP Paul Rowen, Lib Dem Work and Pension’s Shadow Minister said: “The Government should have made an announcement on this months ago, but they have delayed and delayed, and we can only assume that they have done this to delay bad news. 

"This Government are effectively stripping Post Offices of key services, then using the excuse that nobody will use them as an excuse for closure.

"I think the Government should think long and hard about this and a decision to award the contract to anyone other than the Post Office will create havoc with our Post Offices and lead to more closures. Many Post Offices, especially in places like Rochdale rely heavily on these accounts. Any Postmaster will tell you that people who use these accounts spend as much as £6 to £8 on extra items.

"The scrapping of this popular card account will affect millions of pensioners and others who rely on pension and benefits payments to make ends meet.”

Rochdale’s Labour Group leader, Councillor Colin Lambert, has urged Paul Rowen to stop making “politically motivated” assumptions about the future of the post office network and to start acting responsibly and encourage more people to use post office services.

“Given that Paul Rowen was predicting not long ago that local authorities across the country would be adopting the now totally discredited ‘Rochdale model’ of saving post offices, I think we should take his views on this subject with a pinch of salt,” argued Councillor Lambert.

“I notice that he has neglected to tell Rochdale Online readers of the letter published in most of today’s national newspapers by the Business Secretary, Lord Mandelson, which states that the banking and wider economic crisis could strengthen the case for the future of the post office network.”

The leaked letter, which was addressed to Gordon Brown, suggests the Government may return the £1billion POCA contract, which expires in 2010 to Post Office Ltd.

In it Lord Mandelson states: "We should examine the prospects for POL (Post Office Ltd) becoming a much more significant player in financial services - offering a wider range of attractive products within easy reach of the whole population, available from an institution they can trust.”

He goes on to speak of the “reassuring” brand of the Post Office, before adding: “POL has two real strengths. The first is the 'trusted' post office' brand. The second is the fact that it offers direct physical contact across its widely accessible network with the 24 million people who visit a post office each week."

Rochdale’s Labour Parliamentary Candidate, Simon Danczuk, has welcomed Lord Mandelson’s remarks and called on Rochdale’s Liberal Democrat council to actively encourage people to use post offices for paying bills instead of sending people letters advising them not to.

“Paul Rowen and Councillor Alan Taylor must accept responsibility for their bogus ‘Rochdale model’ of running post offices, which did not save one post office in Rochdale,” he argued.

Lord Mandelson finally added that many savers had moved their money into post office accounts as fears grew over the safety of funds in banks.

"Taken together I think all of these developments offer POL, with our support, a genuine opportunity to rebuild itself into a widely accessible, trusted provider of a broader range of financial services," he said.