By Daniel Hunter

The Post Office has won a seven year contract extension that will allow UK motorists to buy vehicle tax discs at the post office.

The £450m contract, with the DVLA, will also allow Post Office Ltd to run applications for driving licences and changes to licence photocards.

It has been awarded the contract for seven years, with an option to extend for a further three years.

"We are absolutely delighted to have won this important framework contract to provide services on behalf of the DVLA," Paula Vennells, Chief Executive of the Post Office, said.

"This is a ringing endorsement of the Post Office's strong track record in successfully delivering essential government services and in our ability to compete on both price and quality of service as we support government to improve access to services while achieving cost reductions.

"This contract win is another stepping stone to Post Office realising its vision of becoming a front office of Government: a key touch point between people and the services they need. It is welcome news for everybody at the Post Office and is testimony to the quality of our employees and subpostmasters whose longstanding commitment to efficiently delivering essential services to local communities contributed greatly to this successful outcome. The campaign by the National Federation of Subpostmasters (NFSP) that ran during the bid process demonstrated the strength of feeling that many subpostmasters hold for this important area of business."

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