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Willott welcomes government Post Office Card Account u-turn

November 13, 2008 4:55 PM
Originally published by UK Liberal Democrats

The Liberal Democrats have welcomed the Government's decision to continue the Post Office Card Account (POCA). In a House of Commons statement yesterday, the Government confirmed it would end the tendering process and allow Post Office Ltd to keep the contract to distribute benefits to 4.3 million claimants until 2015.

Jenny Willott, the Liberal Democrat Shadow Secretary of State for Work and Pensions, criticised the "huge stress" caused to POCA customers by the tendering process and the "waste of money involved". She questioned the Government's newfound commitment to the Post Office network, given the decision "to cancel the contracting exercise rather than award the contract to the Post Office." She asked: "Does it mean that the terms of the tender would not have allowed the Department [for Work and Pensions] to award the contract to the Post Office?"

Jenny Willott's full response to the government statement was as follows:

"I thank the Secretary of State for advance notice of the statement. I wish to make it clear from the outset that the Liberal Democrats are delighted at today's decision. It is good to see that the Department for Work and Pensions has listened to the vociferous opposition to the possible loss of the Post Office card account that has come from all parts of the House and from outside it. I understand that 2 million people signed a petition requesting that the POCA remained with the Post Office. Today's decision could also be seen as a response to the Liberal Democrat Opposition day debate on Monday.

"Today's statement is a strange way of going about the decision. Cancelling the procurement exercise raises huge questions, some of which have been asked by the hon. Member for Rutland and Melton (Alan Duncan). I should be grateful if the Secretary of State clarified why the Department decided to cancel the contracting exercise rather than award the contract to the Post Office. Does it mean that the terms of the tender would not have allowed the Department to award the contract to the Post Office? To enable us to make our own decision on that, will he release the specifications, the invitation to tender or negotiate, and the descriptive documents, which the Government have refused to release up to this point - indeed, on Monday, he again said that he would not be able to release them. I would be grateful if he made them public now.

"The Secretary of State said that he has decided to award a contract for the continuation of the POCA within the terms of the relevant EC regulations. If he can do that now, why could he not have done it before or why did he choose not to do so? I would be grateful if he clarified that point. The reasons that he gave for the decision relate to the current economic climate. What is it about that climate that means that the Government can now reconsider? This situation leads to the suspicion that as 1,500 jobs are being lost every day in the UK, he knew that the Government could not afford to close a further 3,000 post offices - at least - with all the accompanying job losses. Will he tell us exactly what has changed?

"The Secretary of State also said that he believes that it is not the time to do anything to put the network at risk, particularly as post offices are often the only provider in rural and deprived urban areas - that is what the Liberal Democrats have been saying for the past two years, as have a number of Labour Members. As that was the case when the Government decided to put this out to tender - it remains the case - what has brought him around to our way of thinking and to deciding that now the Post Office does need to be saved? Why did he think last week that it was okay to risk the only providers in those deprived areas, but that now it is not okay to do so?

"As the hon. Member for Vauxhall (Kate Hoey) said, the DWP has behaved appallingly so far on this matter; there has been delay after delay. This has been going on for nearly three years and the decision was 11 months overdue. That has caused huge stress for POCA customers, sub-postmasters and all who are concerned for their community facilities. Why has there been such a delay? It also raises issues about the cost of the process and the waste of money involved. Legal questions have already been posed about changing the competition rules halfway through the process, but this has been a waste of money not only for the bidders that did not receive the contract, but for the post offices and the Government. The Secretary of State has said that he will be providing compensation, but will he finally give us an estimate as to how much money has been wasted? Why is the amount of compensation considered to be commercially confidential? Nevertheless, I welcome today's announcement and the saving of post offices."