THE people who run local post offices and those who use them breathed a collective sigh of relief yesterday.

After months of speculation, Works and Pensions Secretary James Purnell awarded to the Post Office the contract for a card account used by millions of people to receive benefits and pensions.

The decision was welcomed by subpostmasters and unions, who had warned that 3,000 branches would close if the work – which had been put out to tender – was given to a rival bidder.

Mr Purnell said that to support a viable post office network, the competitive tendering process had been cancelled.

Ironically, it is the current turmoil in the financial world that has reminded the Government what a cherished institution the Post Office is; that in a time of great uncertainty it is a much-trusted brand.

The card accounts for one in four visits to post offices (more in rural areas) and as such is a vital element of businesses that are part of the fabric of our communities.

The wonder is that this whole tendering exercise got this far.

The Government cites “exceptional times” as the reason for its climbdown on the tendering exercise.

Common sense alone should have told ministers that stripping the Post Office of the card account would have done untold damage, not only to thousands of branches – many of them fragile businesses – but to the communities for whom they are lifelines.