End of the giro could spell doom for post offices

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SOUTH Yorkshire’s dwindling post offices face a new threat after the Government announced the end of traditional ‘giro’ payments.

The Department of Work and Pensions said the welfare cheques, cashed at post offices, will be replaced next year.

The 250,000 pensioners and other benefit claimants who still cash giro cheques each week will receive their payments through bank accounts or Post Office Card Accounts.

Alternatively, they will be able to withdraw money over the counter at newsagents with a specially issued card using the PayPoint system.

The new system is another blow to the struggling Post Office network. The haemorrhaging of key Government contracts, such as renewing a car tax disc and TV licences, has been blamed for the network’s financial problems.

Some 46 branches in South Yorkshire - 21 in Sheffield, 12 in Barnsley, six in Rotherham and 10 in Doncaster - were culled after the then Labour government ruled closures were necessary to put the network on a sustainable footing.

George Thomson, general secretary of the National Federation of Sub Postmasters, said: “This is a bitterly disappointing decision from the Government.

“Many of these customers will be unwilling or unable to travel to a Paypoint outlet such as an off-licence or garage forecourt to claim their weekly pension or benefit.”

Payments by cheque will be phased out after ministers said there had been a “dramatic” fall in their use over the past few years, with less than two per cent of welfare payments now made by cheque. It costs the taxpayer around £30m to process giros and they are easily open to fraud, the Government claims.

Employment Minister Chris Grayling said: “This new contract represents value for money for the taxpayer. Payment by cheque is now too costly and too open to abuse.”