BBC Fires Post Office from UK Licence Duties

14 December 2001

The beleaguered British Post Office, now rebranded Consignia, was dealt a body blow Thursday by the publicly-owned British Broadcasting Corporation which declined to renew its ten-year £500 million ($725.3m) TV and radio licensing services contract.

The duties, until now handled by Consignia subsidiary Subscription Services, involve the collection of fees for radio and TV licenses from which the non-commercial BBC derives its revenues. The contract has been a Post Office sinecure since the 1920s when the licences were first imposed on Britons.

Sharing the disappointment of state-owned Consignia is none other than WPP Group which, together with SSL and French IT specialist Groupe Bull, formed a consortium to retain the business. The trio did not even make the shortlist – having failed “to meet key elements of the contract related to delivering the best value for licence-holders”, according to the BBC. It is understood, however, that post offices will still retail licences to the public.

Breaking out the champagne is Capita, an aggressive publicly quoted support services group that operates more than 150 large-scale contracts many of which are within the public sector. About 15,000 of SSL’s Bristol-based employees will transfer to Capita.

The contract forfeiture exacerbates lossmaking Consignia’s current woes, not least of which is threatened national strike action following its stated intention to lay-off 30,000 staff.

News source: The Times (London)