DWP switches post contract to private firm

The Department of Work and Pensions has switched its postal services contract from the Royal Mail to a private company.

UK Mail, a subsidiary of Business Post Group, will now handle 82 million mailings from two DWP centres in the north of England.

This includes pension and benefits statements and winter fuel payment notifications.

The DWP was reported by the FT to be seeking to save up to £5m from its annual £70m postal services bill.

And Business Post said the move could pave the way for other public sector organisations and government departments to follow suite.

The DWP £12m contract was awarded after a year-long trial which involved UK Mail and TNT Post.

The private company will collect post from DWP distribution centres in Tyne and Wear and Lancashire, sort it and pas it to the Royal Mail for delivery.

Business Post chief executive Guy Buswell said the firm was "delighted" to have won a "very significant" contract.

"It being the first such contract awarded by central government, it was a highly competitive process and follows a year-long trial period during which we operated alongside other independent operator," he said.

"Our expectation is that this decision will pave the way for other public sector organisations to look beyond Royal Mail for their postal service provision."