Post Office wins DVLA contract for car tax disc supply

The existing contract with the DVLA was due to expire in March

UK motorists will be able to buy vehicle tax discs at the post office for another seven years after the network won a £450m contract.

The contract, with the DVLA, will also allow Post Office Ltd to run applications for driving licences and changes to licence photocards.

It has been awarded the contract for seven years, with an option to extend for a further three years.

Unions have said the services are vital for keeping post offices open.

'Ringing endorsement'

The existing contract between Post Office Ltd and DVLA was set to expire in March, prompting a long campaign for renewal.

Payments network PayPoint also bid for the contract.

"I congratulate the Post Office and am confident they will deliver an excellent service to motorists throughout the country," said Transport Secretary Patrick McLoughlin.

"This contract also provides value for money for the taxpayer, resulting in savings of between £13m and £15m a year and demonstrates how serious we are about making savings within government."

Post Office chief executive Paula Vennells said: "This is a ringing endorsement of the Post Office's strong track record in successfully delivering essential government services and in our ability to compete on both price and quality of service."

The National Federation of Sub-Postmasters said that the decision was vital for the future of the post office network.

"This contract means the public and businesses will continue to have convenient, local access to essential services while sub-postmasters will retain income to allow them to continue to provide a Post Office service to their communities," said the federation's general secretary, George Thomson.

Insurance certificates

In a separate development, the government has started consultation on a plan to move all motor insurance certificates online.

Under current law, insurance companies must issue a paper and electronic certificate when agreeing a policy with a vehicle owner.

The government believes that the paper versions are easily forged, an increasing number of motorists are moving to the internet to deal with documents, and changes could bring down the cost of premiums.

About 34 million insurance documents are issued every year, the Association of British Insurers has estimated.

The consultation will last for eight weeks. Any change in the rules will require a repeal of the current law.