De La Rue wins the banknote printing contract as the “preferred bidder” by the Bank of England in the tender for the new polymer and paper money that will eventually go into circulation in the United Kingdom.
De la Rue has been printing banknotes since 1860. It makes over 150 national currencies plus the British passports. In 2012, it added plastic banknotes to its business. In March, it lost out to Innovia Security on a 10-year contract to supply the BoE with polymer.
In November 2012, the Bank of England started a formal public procurement for the printing of the Bank’s banknotes. The UK’s central bank received the bids in June 2014, and has completed an evaluation of them.
The Bank of England wrote in a public statement:
“Subject to successful completion of assurance activities in respect of De La Rue’s bid, finalisation of the contract, and the final award decision by the Court of the Bank of England, the Bank expects to sign the contract in October. The Bank does not intend to make any further announcements until a contract has been awarded. Printing under the new contract is due to commence in April 2015.”
The UK is one of the biggest economies so far to start using plastic banknotes. According to the BoE, it will save about ₤1 billion ($1.62 billion) over the next ten years.
De La Rue Chairman, Philip Rogerson, said:
“We are delighted that De La Rue has been selected as the preferred bidder for this very prestigious and important contract with the Bank of England.”
The BoE will require De La Rue to print 12 billion banknotes.
Last year, the Bank of England (BoE) announced that plastic banknotes would replace the current £5 and £10 notes, which are currently made of cotton.
The new polymer ones will be printed on a thin and flexible plastic film that is much more durable and resists washing machine cycles.
They will retain the familiar look of current banknotes “including the portrait of Her Majesty the Queen and a historical character,” the BoE emphasized.
They will be rolled out as follows:
- 2016: the £5 notes come out with a portrait of Sir Winston Churchill.
- 2017: £10 notes come out with a portrait of Jane Austin.
The 10-year contract will start off with a 6-to-12 month initial transition period, followed by 119 months during which De La Rue produces banknotes. There is an option to extend for another 36 months.
De La Rue will start printing the polymer ₤5 notes in H2 2016 and the ₤10 ones in 2017. The ₤50 and ₤20 notes will continue being made of cotton.
Why is plastic better than cotton?
After carrying out a 3-year study, the BoE concluded:
- Plastic banknotes are resistant to dirt and moisture, they remain cleaner for much longer,
- it is much harder to make fake polymer banknotes, which incorporate advanced security features,
- they are more durable, said to last about 2.5 times longer than the current cotton ones.
- they are thin, flexible, and a nicer fit in people’s wallets and purses,
- they are more environmentally friendly.
Video – Why the BoE considered polymer banknotes
In this video, Chris Salmon, the Bank of England’s Chief Cashier, discusses why the Bank decided on polymer banknotes.