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Government department awards contract to UK Mail

LONDON – UK Mail has secured a contract worth at least £500,000 with the Cabinet Office to handle mail for the Government Gateway, the first piece of government business to be lost by Royal Mail.

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The Government Gateway mails out registration confirmation to people and companies who register to use government online services such as filing tax returns, claiming child benefit, placing a vacancy on JobCentre Plus and applying for an export licence.

The volume of registrations sent out is growing and the contract was worth £500,000 in 2004.

A Cabinet Office source said that UK Mail had been chosen as the best value provider in a tender handled by the Office of Government Commerce, the procurement body. There were 12 expressions of interest in the contract, among them Royal Mail, which did not follow up its interest.

"We have the right to go back to Royal Mail whenever we choose," the source said.

The Cabinet Office is still using Royal Mail for its remaining mail needs.

UK Mail will use Royal Mail's delivery network at the agreed access price of 13p a letter.

UK Mail is a division of Business Post and its business clients include Royal Bank of Scotland and Powergen.

It was unavailable for comment at the time of writing.

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