Mr. David McRedmond:

I thank the Chairman and members of the committee. I will raise a few points from my written submission. To be clear about how we in An Post view the post office network, it is a vital public service and our priority is a sustainable social commitment. We want to provide the best range of services to every community throughout the country. This is why we established a separate business to have full control over the network and it is why we are committed to 960 post offices, which is the best rural network of any postal service we know. New Zealand is frequently cited as best practice for rural areas. It has an identical population with a much greater landmass and it has 881 post offices against our 960 after the consolidation. We define our social commitment as being to every community of 500 people, which is why we are opening five new offices. Our social commitment is not just words.

Post offices are individual businesses owned by local postmasters and postmistresses. This is one of the oldest franchise models in the world. For post offices to succeed they need customers and products. A post office is meaningless without both. It can have all the products in the world but if Arnotts opens in an area with no customers it will not work. The consolidation and reconfiguration of the network, which we have just announced, was not a decision made randomly. Rather, it was part of a professional plan developed over the past year with world-class professional advice, local knowledge from the nationwide An Post team, the best data through An Post and consultation. Most importantly, the four-month-long mediation process, to which the Minister referred, between An Post and the IPU was about a comprehensive strategy to ensure we have a post office network long into the future, to meet our social commitment and our need for sustainability. The outcome of this is an extraordinary breakthrough plan and a strategy for the future of the network backed by a collaborative commitment to deliver this vital service to communities. Any attempt to unravel the plan would have the most serious consequences.

I want to highlight what a large and successful business and service the post office network is, contrary to much of the coverage. Every week, 1.7 million citizens use a post office. An Post has collected more than €20 billion in State savings delivered to the State. It has the largest foreign exchange business in the country. The new An Post current-account is winning more new customers than any comparable account. AddressPal, the new online service, has signed up more than 200,000 customers who pick up parcels from their local post office. Even after reported closures, no other network in this country will come close in size to An Post's 960 post offices. We can compare this to 564 Garda stations, 330 libraries and, commercially, 460 Spar shops and 480 Centra shops. In addition, we have 1,600 PostPoint outlets, which provide an expanding range of An Post services without the costs for the retailer of having to have a full post office counter. Soon, we will develop this service into an An Post partner model that will expand the services available and will be able to be applied for by any local shop. We also have the post and pay service, which can be applied for by any shop and which makes e-commerce available everywhere.

The closures are not primarily about An Post's business but they are about the viability of individual post offices as individual businesses and services. The Minister referred to An Post's transformation from a point where it was virtually insolvent 18 months ago. PWC and McKinsey noted we would lose €180 million within five years if we did not take action. We have had to go out and find €200 million profit. Within approximately 15 months from that date, we have more than €100 million. This is about us getting to a position of sustainability and breaking even. We have done this through the steps the Minister noted: mainly through the price increase, a heavy cost-restructuring programme, better international contracts and a rapidly growing parcels business. We continue to take action to strengthen the company. Recently, we announced we will downsize our headquarters so we can put more money into our front line. Because of this rapidly improving performance we can address the issues in the post office from a position of strength, which is how we can invest more than €50 million in the network.

The renewal programme for the post office service is a comprehensive and detailed plan to build a great service. We established a distinct company in 2018, headed by Ms Debbie Byrne as the managing director. This means that for the first time the post office network has end to end responsibility for everything from marketing to product to finance and its own balance sheets, so it can operate in a much more agile and faster way to deliver services. It also includes our post insurance subsidiary, which provides a strong financial and regulatory infrastructure. That business has been put together only in the past five months and it will give us the engine to deliver the services. I have mentioned PostPoint and BillPay, which are also part of the network. The network is being taken more seriously than at any time in its recent history.

The closures are an essential step to consolidate the network so it can provide these services. Where there are three post offices in a community that has only enough people to sustain two then closing one post office makes the other two viable. If we keep all three offices open, all three will be unviable. This is what consolidation is about and it works. What will not work is subsidising the closing post offices because keeping them open will kill the other offices nearby. The offices we are closing account for 3.7% of all customers, therefore 96.3% of customers will be unaffected. They will have better post office services as the network consolidates. The 3.7% will also have better services but they may have to travel up to 7 km further on average.

Our commitment to rural coverage is the best we know of any postal service. Every community of more than 500 people will an office, which is why we announced the five new offices. One figure mentioned is the Department of Employment Affairs and Social Protection's commitment to 95% of people being within 15 km of a post office. Ours is much higher. We believe that 70% of the population have five post offices within 15 km and at least 95% of the population is within 7 km of a post office.

Consolidation is just one part of the strategy to create the best post office service in any developed country, with the most outlets, best opening hours, most useful locations and widest range of services. We are extending in a number of areas. Financial services are being extended as we speak. The new An Post current account has been rolled out to every post office, as have foreign exchange services. We expect to have credit cards and small loans available in 2019. We are exploring opportunities in the mortgage and pensions markets and we have a particular focus on developing financial services tailored for SMEs, particularly smaller or solo SMEs. For the first time, we will launch a specialist SME package. We have approximately four times as many offices as the major banks and we fully intend to provide a full range of financial services in each community. As I noted earlier, we have collected €20.5 billion from 1.2 million customers in post office savings that we have delivered to the State. We have had 5 million transactions amounting to €1.5 billion over the past year in agency banking, and we have foreign exchange transactions of €300 million a year. That is a big service, which we are pushing hard.

The e-commerce strategy aims to provide Irish citizens with access to products equivalent to access in any major city in the world. The product I mentioned earlier that we make available to people is a product that every post office service is trying to buy from us. It is the best technology. It means wherever people are in Ireland they have access to the same goods and products as in the US, UK and any major city in the world. We are making this available and we will ensure it can be picked up from more locations through post offices and local shops.

Finally, An Post is committed to being the one-stop shop for Government services. I am very grateful to the Minister for his support. He has been very strong in pushing us to provide more services. We have been strong in pushing him to ask his colleagues in the Cabinet to provide more services. It is absolutely vital. It drives me nuts to think that driving licences are not available in post offices. I have spent a week defending the fact that people have to travel 7 km farther to post offices when, in many instances, it is necessary for a person to travel 100 km in order to get a driving licence. All those services should be made available through post offices. An Post does a very good job and the postmasters and postmistresses do a very good job. We look forward to having a much better, modernised network for the future.