Post Office Ltd wins “vital” £450m DVLA contract

Post Office Ltd has won a GBP 450m contract to continue providing “front office” counter services for the UK’s vehicle licensing agency through post offices across the country. The Drivers and Vehicles Licensing Agency confirmed this morning that it is awarding the seven-year deal to the post office network, to begin once the existing deal runs out at the end of March 2013.

Under the contract, post offices will continue to provide services like road tax payment, car registrations and driver’s licence applications.

Running until March 2020, the deal has an option of a three-year extension.

For the Post Office Ltd, the contract also forms a possible gateway to winning additional government work, as it is a framework contract, meaning Post Office Ltd has effectively been pre-qualified for other government services contracts.

It is understood that Post Office Ltd won the DVLA contract in the face of bids from rivals including PayPoint, the national retail pay point company and half-owner of the Collect+ retail parcel network.

Contract

The deal will see DVLA’s road tax and vehicle services initially offered at 4,700 post offices, as they are currently, with 750 also providing driver licensing transactions.

Depending on demand, more post offices could also offer these services, the DVLA said.

Some new services, currently offered by the DVLA’s own local offices, could also be offered, including provision of duplicate licenses and licensing of heavy goods vehicles.

Announcing the contract win today, the government’s secretary of state for transport, Patrick McLoughlin, said he was “confident” that Post Office Ltd would provide an “excellent service” for motorists.

“This contract also provides value for money for the taxpayer, resulting in savings of between GBP 13m and GBP 15m a year,” he said.

Post Office Ltd said the “important” DVLA contract was a “ringing endorsement of the post office network’s “strong track record in successfully delivering essential government services”.

Paula Vennells, the Post Office Ltd chief executive, said the deal was a testimony to the quality of the company’s employees and subpostmasters.

She said: “This contract win is another stepping stone to Post Office realising its vision of becoming a front office of Government: a key touch point between people and the services they need.”

Vennells paid tribute to the efforts of the National Federation of Subpostmasters during the bid process in lobbying for the DVLA contract, which she said “demonstrated the strength of feeling that many subpostmasters hold for this important area of business”.

“Front office for government”

The National Federation of Subpostmasters said today that the DVLA contract must now lead to the Post Office network winning more government work.

NFSP general secretary George Thomson said: “This vital contract must be the first of many awarded by government and local authorities if our cherished national network of post offices are to have a sustainable future, and if the pledge by ministers to use our post offices as ‘the front office for government’ is to be realised”

Thomson said no other organisation could offer the kind of access to services as the Post Office network, or the “same level of professionalism, expertise and security”.

Yesterday the government responded to MPs’ concerns about the Post Office network winning government services contracts, warning that under EU procurement rules, contracts had to be awarded through a full tender process.

National consumer watchdog Consumer Focus said the contract win was a “win-win” decision for consumers and the Post Office, but also stressed the need for more government services to be offered through post offices.

Consumer Focus chief executive Mike O’Connor said: “Winning the DVLA contract will help to secure the sustainability of the Post Office’s network and maintain the service customers need. There is a lot of talk about the potential benefits of the Post Office being the Front Office for Government, but this is only as good as the actual contracts won.

“Forthcoming Consumer Focus research shows clear consumer appetite to access central Government services through post offices. Post offices are trusted to provide expert, specialist services at locations which are convenient for their customers. Growing Government business is critical to turning the network around and hopefully this will be the first of many,” added O’Connor.