Retailers accuse DVLA of Post Office photo monopoly

The retailers, including PhotoMe, Jessops and Timpson, have written letters to MPs claiming that Government agencies are redirecting almost a quarter of the revenues made from their networks of photo booths to the Post Office.

The retailers allege that the Driving and Vehicle Licensing Agency (DVLA), which is overseen by the Department for Transport, has handed an effective monopoly of the driving licence photo market to the Post Office.

The photo booth operators are concerned that the UK Border Agency, which is part of the Home Office, is in the process of giving a similar contract to process Biometric Residence Permits directly to the Post Office, too.

The Photo Marketing Association (PMA) has agreed to lead a co-ordinated campaign to fight what they believe is an attempt by Government agencies to re-direct the sectors’ projected £100m of revenues to the Post Office over the next three years.

In addition, the retailers’ maintain that DVLA is paying the Post Office an extra £4.50 cash “kick-back” on every photo licence processed – a cost that is being passed on to consumers through a more expensive handling fee.

Renewing a driving licence using a traditional form and a photo from a booth currently costs £20. But drivers can now go to the Post Office where the forms can be processed, although photos from any other provider will not be accepted. To process the form, including a photo, the Post Office charges £24.50 of which it takes a cut of the processsing fees plus keeps the additional £4.50.

A spokesman for the DLVA confirmed the figures but added: “Drivers can still use other methods to apply for licences, as well as the Post Office. Next month there will be an online portal available to use, too.”

Nigel McNaught, of the PMA, told The Daily Telegraph: “The DLVA has given the Post Office the mandate to handle its license application form. The introduction of other official identity requirements looks set to follow. This is an important market for the retailers and its wrong that the Government is handing it all to the Post Office at the expense of retailers.”

He added: “The Post Office receives £330m of Government subsidies to provide essential services that are not present elsewhere. But this service is being provided elsewhere. If this business is taken away, then it’s our members’ businesses that’s in jeopardy. Our members have asked for MPs to investigate immediately.”

One industry source said: “The Coalition is calling for a private-sector led recovery but then sees no problem in authorising the plundering of retailers’ profits.”

PhotoMe has already started legal proceedings against the Department for Transport contending that the £71.25m contract for new driving licences had been awarded to the Post Office without even a competitive process. In a court filing from November, PhotoMe alleged that the contract was awarded without advertising, without carrying out any competitive tenders and without seeking tenders from other operators.

The DVLA has had a long-running relationship with the Post Office for renewing car tax discs as well as driving licence checking services