Mr. Brian McGann:

I thank the committee members for allowing the Irish Postmasters Union the opportunity to make a presentation to it today. My name is Brian McGann, general secretary of the union. I am accompanied by our union's president, Mr. Ciaran McEntee, our vice president, Mr. Padraig McNamara and our treasurer Mr. Sean Martin, each of whom is a serving postmaster.

The Irish Postmasters Union represents the vast majority of the 1,100 postmasters in Ireland. Postmasters, many of whom come from generations of postmasters, are deeply rooted in the communities they serve. They and An Post are trusted servants of the community providing valuable services such as banking, welfare payments, mail services, foreign exchange, investment products, Postfone and many other products and services.

The post office serves 1.7 million customers every week over five and half days, including Saturday. Every post office is fully automated and is capable of providing any of An Post's services in any part of the country.

The post office is trusted, flexible and accessible. When customers walk through the door of a post office they know that they are dealing with people they can rely on and trust, and that the sensitive information they provide, in order to do their business, will be safe, secure and treated in confidence.

In 2011 the union launched its Open for Business campaign which is based on making the country's sub-post offices more sustainable by making greater use of the retail network of post offices. A key element of this campaign was the development of a suite of business proposals which the union argues could be implemented to the benefit of the post office network and the taxpayer.

In 2012, the union commissioned Grant Thornton to independently assess our proposals. Following its assessment of a number of the union's proposals, Grant Thornton prepared a report and this was published by the union. The Grant Thornton report found that each of the proposals examined would have a positive cost-benefit outcome and it estimated that if these proposals alone were implemented, more than €80 million in savings could be achieved, much of which would accrue to the taxpayer.

However, despite the benefits that would accrue to all parties from adopting the approach put forward by the union, the Grant Thornton report recognised that these proposals alone could not replace the very substantial undermining of the viability of the post office network if the welfare payments business was taken away from An Post.

In 2013, following extensive investigation and consultation, this committee published a report on promoting a sustainable future for the post office network. This report contained many ideas and valuable recommendations on how the post office network could be sustained. In 2014, at our request, Grant Thornton undertook a second study of the issues facing the post office network. Its findings, published last week, make for stark reading.

While much good work has been done, both by this committee and by the IPU, no real action has been taken to secure the future of the network. Indeed, much has happened since last year to give rise to real concerns that the post office network could be in greater danger of collapse than ever before.

This morning we wish to address some of the key problems facing the network and also highlight some of the main findings of the most recent Grant Thornton report. Members will be aware that the postmasters, through a number of Independent Deputies, have put forward a motion which, if adopted, would greatly help to secure the future of postmasters, their families and staff and would also help to underpin the future existence of many communities throughout the country.

Before I deal with some of the issues facing post offices today, I wish to dispel a few myths about postmasters.

First, postmasters are not employees with good salaries and pensions. In fact, postmasters get paid for the transactions they conduct and if they do not have business to transact, they do not get paid. In the House last night the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte stated that he was not going to close any post offices. The fact is that if there is no business to transact in post offices, then post offices will be closed in any event. While the Minister may not actively sign any order closing post offices, Government inaction in this regard will close post offices.

Sometimes people maintain the post office is part of the old way of doing things. The reality is that we have the most up-to-date technology available in every post office and our systems have the capacity and flexibility to take on new business easily and quickly. There are modern technologies in the marketplace but some things can only be done face-to-face. Computers cannot smile at us and one cannot squeeze a loaf of bread online.

Sometimes people tell us that we are too expensive but that comparison is unfair because the post office offers far more than a simple transaction. Post offices are an important strategic asset for Ireland and we must ensure that the network is sustained for the future. The Grant Thornton report highlights how important the post office is for communities, especially in rural and disadvantaged urban areas and for the elderly, disadvantaged and financially excluded.

An Post recently won the contract to deliver welfare payments on behalf of the Department of Social Protection. The contract, which is for two years, can be extended for a further four years beyond that. Many people believe that this has dealt with the welfare payments issue and that everything is rosy in the garden but that is not the case. The Department of Social Protection stated in the current contract document that An Post will be required to assist the Department in achieving its objectives to move to electronic payments based on the Department's electronic payment strategy. This will involve forcing many of the 51% of people currently receiving welfare payments over the counter to move to using a bank account.

The Department plans to issue a second tender and has already issued a request for information. This tender will see the introduction of a system of direct electronic payment of welfare and, if implemented in its current form, the Irish Postmasters Union is gravely concerned that the sustainability of the post office network will be undermined to such an extent that hundreds of post offices throughout the country will close and this will have a seriously negative impact on people, especially in economically disadvantaged urban areas and in rural areas as well.

Despite winning the contract, post offices are losing business since it is being driven out of our offices into the banks on a daily basis by the Department of Social Protection. I have before me an example. It is a letter to a claimant and it states that in order to give a decision on the person's claim the Department needs the following information: the name and address of the bank, account number, sort code and the name of the account holder. What person looking for payment of a benefit from the State would refuse to give that information if it is demanded of him? There is no choice in that letter and no option. Clearly, the Department of Social Protection is driving people out of post offices and into the banks. People are not being given a choice and if this continues by 2017 post offices will not have the welfare payments business and hundreds of offices will be forced to close.

The State savings contract is due for renewal this year and the revenue from the contract is almost of equal value to the welfare payments contract. Any loss of remuneration from this contract will also seriously undermine the sustainability of the network. Rural post offices have been subject to the loss of rural mail delivery offices and the closure of these facilities undermines the financial position of post offices in the longer term since this represents an important source of income for postmasters. The greatest issue facing post offices is the fact that the Government does not have a plan. Despite making a commitment in the programme for Government to maintain the post office network, the Government has no plan to ensure that the commitment is delivered on.

Government policy is forcing An Post to operate on a commercially feasible basis without any recognition of the social role played by post offices throughout the country. This policy is leading to the closure of post offices but more concerning is the establishment by An Post of an alternative network to the existing post office model.