Don't panic: You can still get your tax disc from your Post Office

Fears motorists would not be able to tax their cars or apply for driving licences locally and conveniently have been allayed.

Drivers can still use their local Post Office for paying road tax and getting their driving licences, thanks to the firm winning a major DVLA contract.

The deal is thought to be worth in the region of £450m and will last for seven years, starting from April 1, 2013, with the option of an extension for up to a further three years. In addition to DVLA services, the contract also gives scope for the winning bidder to provide services to the public for other Government departments.

Secretary of state for transport, Patrick McLoughlin said: "I congratulate the Post Office and am confident they will deliver an excellent service to motorists throughout the country.

"This contract also provides value for money for the taxpayer, resulting in savings of between £13 million and £15 million a year and demonstrates how serious we are about making savings within Government."

The scope of the contract is for all existing DVLA related Post Office services, such as applying for tax discs and driving licences and some new services currently offered through DVLA local offices, such as the provision of duplicate licences and licensing of Heavy Goods Vehicles.

These additional services will now be available at the Post Office's network, giving better accessibility to DVLA's services to motorists.

Out of the 4,700 Post Office outlets across the UK, initially only 750 will be able to cater for driver licensing transactions. Drivers may be able to apply for their licences at more outlets if there's enough demand.