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Pensions: Postal Services

Volume 463: debated on Monday 1 October 2007

To ask the Secretary of State for Work and Pensions (1) for what reasons his Department used a private sector company to deliver pension cheques to sub-post offices during the recent postal disruption due to industrial action; what cost-benefit analysis was made prior to the temporary arrangement to send pension cheques by courier service to sub-post offices; and what the total cost was of the exercise; (155056)

(2) what steps were taken to ensure that the sub-post offices which received pension cheques during the recent postal disruption were within easy access of the intended recipients; what criteria were used to determine which sub-post offices were used; what provisions were made for house-bound and frail pensioners to collect their cheques from sub-post offices; and what revisions he will make to his contingency plan to dispatch pension cheques during any future postal strike.

[holding answers 10 September 2007]: During the recent postal disruption, the Department used a company with whom it has an existing contract for providing courier services. In the absence of assurance from Royal Mail that deliveries to our customers could be maintained, we used our contingency arrangements to ensure customers (many among the most vulnerable in society) received their payments. A comprehensive cost-benefit analysis was conducted when the cheque contingency plan was developed. This established that the contracted courier could deliver cheques to our customers during local, regional or national postal disruptions, and that Post Office Ltd. could provide additional counter services during such disruptions.

The total cost of the exercise, including VAT, was approximately £2.6 million. This cost included discounts totalling £390,000 negotiated with the suppliers. A quantifiable saving of £250,000 was made by using our contingency arrangements, in not having to incur postal delivery charges. Further unquantifiable savings were made by substantially reducing the number of customer cheque payment queries received in local offices due to the industrial action.

Customer cheques, including those paid to pensioners, were delivered to each cheque customer’s nearest post office, as determined by their postal code. Any customers who were unable to collect their cheques, could nominate a temporary agent to do so on their behalf.

The contingency plan was highly effective in ensuring our customers received their cheque payments throughout the disruption caused by the postal workers’ dispute, and the contingency will be used again if required.