Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the Chairman to cease giving evidence in relation to a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. I also advise witnesses that any submission or opening statements they make will be published on the committee website after this meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. I remind members and witnesses to turn off their mobile phones as they interfere with the sound system.

I welcome the following witnesses from the Public Banking Forum of Ireland, PBFI, to today's meeting to engage with the joint committee on the impact of the uptake of retirement packages at An Post. The main witnesses will speak for not more than five minutes, followed by a question-and-answer session whereby members may ask questions not exceeding three minutes. From PBFI we have Mr. Seamus Maye, co-chairperson and spokesperson, Mr. Tom O'Callaghan, leader of the post office unit and, Mr. Gerry Duddy, secretary and lead researcher. I invite Mr. Maye to make his opening address. I will indicate after four minutes that he has one minute remaining.

Mr. Seamus Maye:

I will try to keep my contribution to five minutes. I think it runs to a little more than that. I thank the Chairman, members and the staff of the committee for giving the PBFI the opportunity to make such an important presentation on the future of the post office network and its intrinsic link to the future of Ireland’s indigenous economy.

I am Seamus Maye, co-chair of the Public Banking Forum of Ireland and also chair of the International Small Business Alliance. On my left is PBFI's secretary and head of research, Mr. Gerry Duddy, and on my right is Mr. Tom O'Callaghan who looks after the post office side of things. He is also chairman of the Independent Postmasters Group.

Together with our extensive membership, we bring many dozens of years of experience in business, banking, credit unions, post offices and the indigenous economy. As a business person with over 40 years’ experience and a commerce degree, I had a basic understanding of banking and little to no understanding of credit creation, nor the crucial difference between funding the productive economy and funding speculative bubbles. PBFI is a solution-based forum. Its members work voluntarily and do not receive any remuneration or expenses. We are wholly independent from vested interests. We might also refer to our extensive letter to the committee, dated 27 June, which comprises appendix 2, and to an update on the current position, which is provided in appendix 1.

We hope, over the course of the exchange, to outline the wider issues our country faces in respect of both banking and driving our indigenous economy and how crucial a role our valued post office network can play in assisting the transformation of the Irish socio-economy. What do we mean by transforming the economy? In 2011 we wrote a letter of congratulations to the then incoming Taoiseach, Deputy Enda Kenny, in which we pointed out that Ireland’s cost base was unsustainably high and that we had an over-reliance on foreign direct investment, FDI, underpinned by a corporate tax structure that was incurring the wrath of the US, the EU, the OECD and our near neighbours in the UK. Since then, those influential players in international trade have taken steps that may ultimately wipe out Ireland’s corporate tax advantages. The Apple case will also prove to be a defining moment in the future of FDI in Ireland.

Post offices are the other side of the coin. The reality is that we have only been paying lip service to our indigenous economy. Like it or not, the responsible and sustainable development of our indigenous economy is crucial to our future. We must create a competitive platform that facilitates the long-term future of our socio-economy. This view is somewhat at odds with the views put forward by retired Secretary General of the Department of Finance, John Moran, who suggested, in a speech made in May 2016, that Ireland can no longer afford rural Ireland. One can see the reference in appendix 3. Clearly, there are choices to be made but we must be careful not to confuse any rural-urban divide with the overriding importance of our indigenous economy. What is patently clear is that the current structure and behaviour of our banking sector is wholly incompatible with driving our indigenous economy. The pillar banks are not lending in any meaningful way to citizens, small and medium enterprises, SMEs, and farmers and where they are, the rates charged are exorbitant - two, three, four and up to five times what our counterparts in Germany and France are paying in interest. Last year, AIB gouged €1.6 billion in profit and Bank of Ireland is gouging profits of approximately €1 billion per year. It appears that neither institution will pay corporation tax for up to 20 years.

I will shorten my contribution in view of the time constraints. Last autumn, PBFI carried out an exercise comparing the cost of a mortgage in Ireland with that in Germany in the context of a house costing €315,000. Over the lifetime of the mortgage - 30 years - an Irish person would pay €121,000 more than his or her German counterpart, which is a penalty of €4,000 per year, as a result of the difference between the interest rate in Germany and Ireland.

Germany’s development bank KfW states in its 2015 report that the German economy boasts almost 4 million SME and microenterprises. These account for 99.95% of all companies and 87% have a turnover of less than €1 million. Germany is the fourth largest economy in the world. Why? One of the reasons is that it is underpinned by a public and community bank network that prioritises people and local economies over profit maximisation. Public and community banks account for some 70% of the German banking sector. German pillar banks including Deutsche Bank and Commerzbank have only 12.5% of the German market in contrast to the Irish pillar banks which hold 95% of the Irish market.

The Irish Government agreed and committed to the introduction of competition to the Irish banking market as a quid pro quoduring the banking bailout but instead we have seen a mass exodus of banks, including Irish Nationwide, Anglo, ACC, ICC, Bank of Scotland (Ireland) and EBS. Article 45(2)[iv] of our Constitution holds that in whatpertains to the control of credit, "the constant and predominant aim shall be the welfare of the people”. Under our Constitution, the Oireachtas is bound to enshrine this directive principle but as it stands, this has not been happening.

In November 2016, Dáil Eireann unanimously passed a motion that allowed for the remodelling of the post office network along the lines of either the German Sparkasse or New Zealand Kiwibank model. Ireland’s post office network, along with our credit unions, can become a core plank of rebuilding Ireland just like the Kiwibank has done in New Zealand. The current narrative on post offices is all wrong. All we hear from media is talk of saving our post offices and subsidising them but we can, at the stroke of a pen, turn the network into a thriving, profitable bank and multi-service provider. The post office network is failing in terms of monetary returns but the reason for this is quite simple, namely, the business model is wrong. Kiwibank makes $100 million in profits each year for the people of New Zealand. It provides creditat competitive rates and has proved the saviour of the people and SMEs of New Zealand. The current An Post proposals are bizarre and ill-thought out. We are presiding over the destruction of one of our finest national assets, with 159 post offices closing, 231 with no future and the remaining 690 depending on An Post winning the social welfare contract again after the current one expires on 31 December 2019. Having regard to European procurement law, there is no certainty that An Post will be successful in winning this contract once again.

As a country, we need to start thinking outside the box. In the words of Professor Steve Keen of Kingston University, "the financial sector should be the servant of the rest of the economy, not the master but at the moment, it’s the master of not just the economy but of the politicians as well [...] to break the nexus, we need a complete political shift." We appeal to this committee today to immediately call a halt to the wanton destruction of our post office network and turn it around to serve the needs of a modern indigenous economy. There is plenty of help and guidance available to the committee and the Minister. Professor Richard Werner of Southampton University is one of the world’s leading banking experts whom we believe could bring invaluable perspective to the committee and we would urge members to engage with him. We are sure members will have lots of questions for us and we will endeavour to be as helpful as possible going forward. I thank members for their time.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Maye for his contribution. I will call on members in the order in which they indicated, starting with Deputy Dooley.

Timmy Dooley (Clare, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Maye, Mr. O'Callaghan and Mr. Duddy for their presentation today which is very thought-provoking. There is certainly room for a debate on the way in which our banking model works in this State. However, our primary concern is the post office network and while I accept that the PBFI is offering a potential solution to the maintenance of the network by the creation of this bank, I must put on the record my concerns about conflating the two issues. I see the post office network as one that delivers a service. The PBFI is advocating the creation of a banking model that will turn our current model on its head. That is a debate for the Oireachtas committee on finance or elsewhere but to do all of that and to save the network in the short time that we have available to us stretches it somewhat. The people I meet and represent in my community and in other communities are anxious to retain a local post office so they can get basic post office services and get their payments. They are not queueing up for another bank. That said, I am sure they would queue up for the kind of attractive offering to which Mr. Maye referred.

A number of questions arise. How quickly could such a bank be put in place? What would it cost? How much would have to be invested by the State? Where would the expertise to set up such a bank quickly come from? Mr. Maye said that it could be done at the stroke of a pen. I have had the privilege of listening to Mr. Duddy on a number of occasions when he argued that An Post had a banking licence previously and that it was only a matter of reinitiating it. I am no banking expert but if one is to lend money, one needs to have money in the first instance in order to be able to get money from the markets. One also needs to be in a position to give confidence to those who will deposit money with one. All of that takes time.

I have listened with interest to Mr. O'Callaghan talking about the Kiwibank model in New Zealand and the Sparkasse model in Germany and that is all good. However, Ireland is a different country with a different culture and we do things differently. If one takes a farmer in west Clare who has just sold his herd of cattle, would PBFI have the capacity to assure him that his money in safe in such a bank? Is it possible to get that kind of model in place quickly in order to save the post office network? Certainly, the ideas are good and the issue definitely needs to be addressed over time but we have a crisis now and Mr. O'Callaghan knows that better than anyone. There are 159 post offices closing in the next two to three months. How does PBFI propose to put a bank in place to resolve that matter?

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I ask the witnesses to take note of the questions being posed as I am going to call on a number of members together. Sinn Féin is next on my list. Does Deputy Kenny have a question?

Martin Kenny (Sligo-Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I thank the three contributors for the work they have done on this issue. I have seen their presentation before and I know the potential of such a bank. Unfortunately, it is an idea that has been around for years but it has not progressed. The crisis in the post office network is not something that has arisen in the last couple of months but has been developing for the last 20 years. As things moved forward and as the economy grew, there was potential for the post office network to expand, to do other business and to meet the requirements of a modern society but it was prevented from doing so. That is what has brought us to where we are today. One of the things that An Post was prevented from doing was putting a proper banking system in place. On the proposal from PBFI, the question that Deputy Dooley asked in regard to the timescale for setting it up is pertinent. How much would it cost to set up? What kind of money would be required to make this happen? I assume that what PBFI is proposing is that if the bank is set up, the post office network would act as the front door. It would be to the post office that people in communities would go to carry out their transactions. If that is the case, is additional technology required in the post office network? Would broadband services, which are sparse enough in many parts of rural Ireland, need to be upgraded, for example?

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Deputy Kenny for being brief. Deputy Smith is next.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

I thank the PBFI representatives for their presentation. We spent a good deal of the last Dáil term looking at and talking about the Sparkasse and Kiwibank models. The issue came up many times at this committee and on the floor of the Dáil, including through questions to the Minister for Finance. We had some very energised debates about whether it could work and the Government committed to looking at it and examining it closely, which it did. The Minister, Deputy Donohoe, published a report on the issue in July which concluded that there was no compelling case for the State to establish a new local public banking system. It found that the cost to the Exchequer for the proposed new model was an estimated minimum of €170 million and that the assumptions in the proposal based on costs, interest rates and loan attrition rates "appear challenging". When I read this, I nearly fell down laughing at the idea that we could not support a public banking sector to the tune of €170 million when we have just thrown €64 billion at AIB and the rest of the banks. I am sure that the reaction of representatives of PBFI was the same. In that context, it is disingenuous for other Deputies to say that this proposal is too late and that Ireland is a different country that does things differently and has a different culture. We do have a very different culture. We have had the biggest bank bailout in history and have refused the Apple tax that is due to us of at least €13 billion.

I fully support Mr. Maye's contention that it is not too late and that we should look at this proposal. I would like to know what he thinks of the Government's report. I would be very critical of the fact that the Minister for Finance released this report in July, during the Dáil recess.

It tells everybody in the country that the final nail is going into the coffin of the post office because what we have seen is just the beginning of the closure of our post offices. This proposal was a way to help us step away from that and to be fair to the Irish people, farmers and small businesses and give them a way to borrow at a decent, realistic and humane rate, as people can do in Germany, New Zealand and elsewhere. Will the witnesses give their response to the report they saw in July?

Eamon Ryan (Dublin Bay South, Green Party)
Link to this: Individually | In context | Oireachtas source

We support the Sparkasse banking model - I have been working with the group for about four years - as presented by Irish Rural Link and others to the Department of Finance. It was very disappointing to get the response from the Department of Finance. I understand that the Minister for Rural and Community Development, Deputy Ring, is saying that all is not lost and that the Government should be given time to consider it. The Government has had four years to do so and we should be proceeding. There is a confluence between this issue and the closure of the post offices because this provides a model for another service. It is a service to small business in particular. It has the advantage that deposits raised in certain areas are retained in those areas so it is about regional development. It brings some of the expertise the Sparkasse organisation has in professional small business lending into the post office or, indeed, into credit unions. There are a variety of ways in which it could be introduced. We strongly support it and we are deeply frustrated with the lack of vision in the Government and among the Government parties in that regard. Do the witnesses support the Sparkasse model that has been presented by Irish Rural Link? I am not familiar with the Kiwi model but I am familiar with the Sparkasse one and I believe it would work. Do the witnesses support the approach that has been taken in that regard?

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will let the witnesses answer that tranche of questions before calling on Deputies Danny Healy-Rae and Harty and Senator Marie-Louise O'Donnell who have indicated their wish to contribute. The witnesses can answer the questions in any order they wish.

Mr. Seamus Maye:

I will take them in reverse order and reply to Deputy Eamon Ryan. The Public Banking Forum of Ireland was formed in 2014 and we immediately brought the Sparkasse people in Germany over here. We have produced an extensive report on creating Ireland's alternative banking force, which includes proposals for the Sparkasse to work with the credit unions and a stand alone proposal for the post offices to take the Kiwibank route. There is nothing to stop the post offices opting for the Sparkasse model as well. There are a number of options available. I was struck by the response of the establishment and the Department of Finance. We brought our report to the Department of Finance and the Department of Rural and Community Development joint consultation group and it was clear there is a mindset that we must not compete with the pillar banks. Those banks are charging us two, three, four, five and more times what our counterparts in other countries are paying, but that is the mindset. The Constitution is very clear. It says that the constant and predominant aim in what pertains to the control of credit should be the welfare of the people.

I should point out to Deputy Dooley that there is a massive, untapped indigenous economy in the agriculture, marine and other sectors, but it is dying on its feet for want of funding. What we are proposing is a no-brainer. New Zealand is a similar country to ours and, in fact, has a smaller population. It said that enough was enough and in 2002 set up the Kiwibank. I do not have the figures for what it cost to set it up but it was relatively cheap. Within 15 years it had 20% of the market. Everybody keeps asking how much it will cost to set up this new bank. It is not a great deal, somewhere between €50 million and €70 million, although we have to do more work on that. However, we must consider this in the context of the €69 billion, as mentioned by Deputy Smith, we paid to bail out banks that were operating on a criminal basis. They are still doing so. Unless and until we lose the mindset that the pillar banks come first and people do not figure at all, the social economy is not going anywhere. There is a glaring opportunity now. There is a crisis in the post offices and there is an opportunity to turn this into a thriving banking and indigenous economy. We must do it.

Mr. Tom O'Callaghan:

First, the question we all need to ask ourselves is: why are we here? We do not wish to see the ruination of small villages and towns throughout the countryside. I also believe that we care about people. To respond to Deputy Dooley, I have heard many people ask what we can do to maintain the network. I take the Deputy's point and I also accept the point that small offices are closing, but I am sick to death of getting a sticking plaster to maintain a network. We must examine this from the top down. It is very simple, like a car. One puts a certain amount of petrol in the car to get to one's destination and back. Currently, the post office needs €78 million, effectively, to maintain itself. We have an opportunity here to consider how to address that.

Deputy Kenny is absolutely correct that the Government has attacked its national asset. Grant Thornton clearly stated in 2014 that if we do not maintain Government contracts to the value of €60 million there will be drastic consequences, effectively shutting it down. That was ignored. We now know there are major problems so how do we resolve them and move forward? My colleague, Gerry Duddy, will discuss what it costs. An Post has done this previously. We should be under no illusion about that. It created a bank in 2010 to 2012 for quite a modest sum with a partner. What we are saying is very simple if we want the network to survive on a social economic basis. We have to think of the people as well. People in every village and town are upset because they are terrified of the post office closing. We must find a solution. Part of that is New Zealand. The reason New Zealand has been highlighted, as against the Sparkessen mentioned by Deputy Eamon Ryan, is that the post offices are interlinked. The branch network is already set up. At the turn of a switch a business proposal can be rolled out through the network to every village in Ireland. It can go to Ventry or to the GPO in Dublin. That is the reason we favour the Kiwi model for the post office network.

Deputy Smith referred to the €170 million. It was an absolute insult to the public to hear that there was more concern that it was going to cost €170 million when billions of euro were paid to the pillar banks. This is being used as an opportunity to stop a challenge to the pillar banks, one that will be of benefit. The difference in what we are proposing is that the profits go back to the small communities rather than to the shareholders. That could be the fundamental reason we are having difficulty.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There are outstanding questions regarding the expertise and technology that will be required. Do you wish to answer them, Mr. Duddy? You can answer any other questions as well.

Mr. Gerry Duddy:

The Savings Bank Foundation for International Cooperation, whose representatives have appeared before the finance committee, has the expertise. It is available in Europe and it has done this type of work all over Europe. It is not a big deal. It is a not-for-profit foundation so it does the work at cost. In addition, Professor Werner is involved in setting up a bank in Southampton so he has expertise in that area as well.

With regard to the cost of setting up Postbank Ireland in 2007, I did a quick search last night because I thought it might be made a big issue today. The total cost was €76 million. Fortis paid €56 million and the rest was paid by An Post in different forms. It paid €10 million in business assets and the rest in cash or credit. It also paid €13.8 million in a finders fee, but this is probably a buy-in to the system. That was the cost.

On the issue of the destruction of rural communities and rural post offices, the French Government is using La Poste and its banking sector to merge with a large insurance company to set up a new banking entity in France. This will be the equivalent of a third pillar of banking in France. It is currently being presented by the government.

Danny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

First, the reason we are here today is that 159 post offices around the country, including 12 in Kerry, are to close. I am glad Mr. Tom O'Callaghan is at this meeting. I have seen him at three community meetings, at least, which were attended by up to 170 people in Kerry who were concerned about their post offices being closed.

We all passionately believe community banking would help to save our post offices. I appreciate the other two witnesses coming in today. We are very disappointed with our Minister for Finance who more or less laughed at the cost of €160 million to set up this community banking. If this €160 million was spent to set up community banking, would it pay for itself and pay to run itself? That is the critical question because money is being pumped into many parts of our economy. I refer to the health service. Is it adequate despite all the money that is being pumped into it? It is not manifesting in a proper health service for our people, the people who we are representing and the people who were on trolleys again last week in Tralee. There is an average of 23 people each day on trolleys in the middle of the summer.

It would be useful if this would help the indigenous sector, as was stated, such as the farming community local to the post offices, small businesses and the self employed and if they could get loans locally and pay them back with low interest. We know what the banks charge and we know the torment they are putting people through at present just to get a €20,000 loan for something small. They are not helping the people at all so the main question is whether this €160 million would pay for itself if it was spent. I want to hear that answered publicly here. It would ensure the survival of many of the post offices, not all of them, but maybe most of them.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am conscious of the Deputy getting an answers to his questions as we are under time constraints. I call Deputy Harty.

Michael Harty (Clare, Independent)
Link to this: Individually | In context | Oireachtas source

I thank the witnesses for coming in today. There is a vacuum in rural Ireland in banking. The pillar banks have left rural Ireland and those which are still there have diminished customer service in, or excluded it from, their banks so it is difficult to speak to somebody when one goes into a bank now. One of the positive aspects of community banking is that customers deal with somebody who knows their community and knows the viability of the businesses that may be coming in to seek a loan. An Post has a trusted brand, has a national network and already has the IT systems in place. Through a public banking system, it should have the capacity to loan to businesses that cannot get a loan from the public banking system or from the pillar banks as they exist at the moment.

On the closure of post offices, is it too late for a community or public banking system to step in and preserve the network as it exists at the moment? The reason I am here today is to try to preserve the network as it exists. There needs to be a devolution of services to post offices from Government. All Government services should be available through the post office network. Community banking is another facet that could support post offices but how quickly can it be put in place and is it feasible for it to be put in place to maintain the network as it is at the moment?

Marie Louise O'Donnell (Independent)
Link to this: Individually | In context | Oireachtas source

It is a brilliant creative financial solution and it is a very good creative combination to make use of the great existing State asset of the post offices. People forget that there is something like €22 billion to €23 billion on deposit in the post offices and another €23 billion to €24 billion in savings. I know it is a savings bank but Irish people recognise a safe place in which to put money. I have never been asked if I would like to invest my €5,000 or whatever into something like this where it would remain alive and I would not lose it, and it would go into the community like the co-operatives of years ago in every town in Ireland which kept those towns alive.

On the question of investing €120 million, I completely agree with Deputy Bríd Smith that it is like loose change to vulture funds. It is a disgrace that we are even talking in the millions. Whether it is €60 million, €70 million or €120 million it would certainly be worth it. I agree with Mr. O'Callaghan that the Government is shattering its own asset, like shattering a clock. If a clock is shattered in its middle, everything will suffer on the outer parts. I am not suggesting that we should keep post offices with two, three and four people in them alive and well, but smaller post offices will not be kept alive if the centre is being shattered. We are also then gifting them to conglomerates by putting them into the back of Centras and SuperValus. Soon they will be in the back of Tesco as well and we will go to Tesco for everything. It will end up being the supermarket culture.

I do not understand why the Government is so terrified of the pillar banks considering the way they treated this country. There was a man in the bank the other day in Ranelagh and he went through the doors fuming because he had three or four children and he spent a half an hour trying to park only to be told that cash was not handled in that branch. We are running around trying to find out, like evictees, where we will get the cash and where we will actually bank. Although I will not be standing for election, everybody sitting around this table who will be better think very clearly and validly about the new poor. The new poor in Ireland are the guy and the girl in training and earning €30,000, or those in households earning 60,000, where they are both working. They are paying 52% tax and they have nowhere to go to get a deposit. They are living hand to mouth and there is no possibility of them saving €10,000 or €20,000. We are always talking about choice in relation to the human body but they have no choice. They are closed down in this country. They are the new poor, they are the plumbers, radiographers, young doctors, nurses and teachers and they are living hand to mouth. People better start thinking about that. It is appalling and they have no alternative. This should be done to give people a community based, social alternative. Imagine living in a country where 96% of banking is commercial. It is only 12% in Germany. As Deputy Smith said, we got a report where the whole thing was dismissed in three sentences. It is the biggest election issue.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I call Deputy Eugene Murphy and I ask him to be brief so that we can get the answers.

Eugene Murphy (Roscommon-Galway, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I engaged with Mr. O'Callaghan and Mr. Maye at a public meeting in Athleague so I will not take up a lot of time except to ask a few short questions. Before I ask those questions, I mention that we had a postal service and our first Minister for Posts and Telegraphs was in 1924. In this day and age if we cannot keep a service throughout the country to support all of our people who need it, it is a poor reflection on Irish society.

I want to put two things to Mr. Maye and Mr. Duddy and I do not care who answers. As they know, there are 7,500 people employed in the postal service. We had to come to the rescue a short time ago when we lifted the cap on the price of a stamp to ensure that significant numbers of people would not lose their jobs and that a five or six day postal service could continue. I have no doubt about the witnesses' passion, I know where they are coming from and they have said a lot of good things. I refer to the credit union. Can the witnesses see themselves coming behind the credit union, which has a network throughout the country, in terms of non-commercial banking? That is one area where the credit union has done a lot of work on this. It is something that could be supported rather than looking at a new sector of banking.

The witnesses spoke about other areas of business that An Post could go into but the one thing that amazes me in all of this is that nobody has mentioned the younger generation. What about a pilot scheme where post offices would be put into the campuses of universities and ITs to go after that business. There is huge business there. Could that be brought into future policies because that could be quite lucrative for the postal service? That would then mean that the postal service could be supported in parts of the country where it is not profitable but where there are vulnerable people who will be left behind if what is proposed now goes ahead.

I know we will not be able to keep all of those 159 post offices open but we need to keep some of them open and have the service for vulnerable people.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There have been many questions, some of which overlap. The witnesses can respond in written form if they wish to give a more extensive answer.

Mr. Seamus Maye:

Many of the questions and comments were parallel. The figure of €170 million was taken by the Department took from one submission from the Sparkasse people. Our submission did not look for State money. It did provide the option of using State money. To put things in perspective, the Strategic Banking Corporation of Ireland, with which we dealt fairly extensively in our last letter to the committee, has a budget of €1.25 billion and has not gone anywhere near achieving its aims and objectives nor can it because it is simply a non-lender. In Germany, the Sparkasse bank is over 200 years old, has withstood two world wars and several financial crises and has never had a bailout or received a penny of taxpayers' money. The reason is very simple. It does not engage in speculative lending. It lends to the productive economy. We must not confuse this. What happened in Ireland was that our pillar banks abandoned the fractional reserve system and entered an orgy of credit creation which could only finish in one place, namely, a big bang so we are not talking about setting up a bank that can go bust. Banks that are run properly and diligently do not go bust. Would our Kiwibank-style post office bank repay €170 million or €70 million? Yes, of course it would and in a very short period of time.

It is very important that we do not leave out the credit unions. The Public Banking Forum of Ireland has worked very hard with the credit unions and the post office movement from the outset. Members must understand that the pillar banks in Ireland have 95% of the market whereas in Germany, it is 12.5% so there is room for our Kiwibank to take up 20% of the market just as it has done in New Zealand and there is still room for our credit unions or community bank to take another 25% to 30% of the market. This would still leave our pillar banks with a market share that would be far too high at over 50%. The restrictions that successive Governments and the Central Bank have put on credit unions are anti-competitive. They cannot and do not comply with Irish or European competition law. While we are at it, why not take the shackles off the credit unions as well because we have an indigenous economy to worry about? That is what we are looking for. It is not the nitty-gritty of how much it will cost because we all agree that whatever it might cost is peanuts. For the sake of driving this economy, bringing our young people back and opening up all these new industries where we have researched what we can do, we need to drive the Kiwibank, model the post offices on Kiwibank and bring the credit unions on board.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Does Mr. O'Callaghan wish to come in?

Mr. Tom O'Callaghan:

We are not looking at 159 post offices; we are looking at 390 communities that have not been offered a contract. This is upsetting in itself for the people involved but more to the point, their income will collapse within two and half to three years. The reason is because we are heavily dependent on the social welfare contract. In 2012, the Government was told that if it was reduced from €60 million, there would be problems. It actually reduced it to €54 million and the current figure is €51 million yet Government policy that will come in 2019 from the Minister for Employment Affairs and Social Protection clearly states that it will be tendered for the cashless society so the question is what will replace that income when it does come in. How do we stop it? Every Deputy in Dáil Éireann signed up to this. We all made an agreement and I negotiated it with my colleagues here. What we asked was that a five-year holding plan be put in place. This would enable us to get those Government contracts that we would funnel into the post office. An example of that would be if someone was signing on. Why can this not be done within his or her local post office? If we look at motor tax, we can see that 80% of this is done online but 20% could be done in a local post office. These elements need to be brought up to a head in order that we can find an economic solution.

We talked about passion. Yes, we are passionate about the network and that is why we are all here but we must also be realistic. New products are vital, which banking will also enable us to provide. Every post office in Ireland could be like an Argos catalogue. Why can a person not walk into their small post office and buy a colour television? Why can that money not then be circulated within their village? I think we would have no trouble getting new customers.

We need to look at this in a long-term fashion, look at where mistakes were made and look for solutions. Over ten years ago, Bank of Ireland supposedly came to the rescue of the post office in England. It did a deal. Everyone thought it was wonderful and that there would be loads of products. The spin was that every service was there for rural and urban areas. The reality is that last year alone, a profit of more than £15 billion was made for Bank of Ireland while the postmasters are struggling to survive. Something is very wrong. What do the unions in England want to do? They want to get out of the deal. To get out of that deal right now will cost them over £2 billion. We have an opportunity to do right for the first time ever.

Senator Marie-Louise O'Donnell is correct. There is approximately €22 billion in savings and investments in post offices. Where did that money come from? How did they build that figure? We all recall the financial crisis. In 2008, there was a serious issue about whether we would have our own currency. We all recall the stories about how the Army would be there to secure ATMs. What did people do? They turned to their local postmaster and in short space of time, over €15 billion was put into the post office. That figure is now over €22 billion. Why are we now attacking the very people all over the country who have helped to mind our money and who now face closure?

We also made reference to the subsidy. Again, I acknowledge there is a short-term gap. However, a document from Grant Thornton clearly states that the UK Government has used subvention to help the network. We have heard the figure of €8 million. Again, I have problems with numbers because McKinsey has conducted a detailed analysis of the company. I can assure the committee that we will provide the figures that we need to maintain the network for the next five years and proposals to bring us back but we do not want to cost the Exchequer money. We bailed out the banks in 24 hours yet we are prepared to see the network shut down. We are talking about possibly €170 million. Again, our focus is seriously wrong. The Grant Thornton report stated that the UK Government has used subvention to help the network. In respect of its account for the loss of income associated with the reduction in social welfare, which sounds familiar in Ireland, the report stated that at best, these subsidies provide a safety buffer for the post office while it is trying to establish a more reliable long-term stream. We all agreed in November 2016 and asked for a holding plan to allow the implementation of this bank but also the products. Let us put real Ireland back on the map.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Does Mr. Duddy wish to come in?

Mr. Gerry Duddy:

Deputy Harty asked how quickly the bank could become profitable. In its third year, Kiwibank made $7 million. Its profits continued to increase to the current figure of over $100 million per annum. There is talk in New Zealand of allowing it to keep a good percentage of that profit to further develop the bank in New Zealand.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Are there any final comments from any of the witnesses?

Mr. Seamus Maye:

Understanding credit and credit creation is very important. If we allow our post office to create credit just like the banks do, it can provide mortgages at 2%. Every billion that the post office would create and lend out would generate over €20 million in income for itself. If, for example, our new Kiwibank-style post office bank had €5 billion out in first-time mortgages, it would create an income of €100 million per year. Effectively, this is self-financing with some money required to kick-start at the beginning. People need to understand the concept of credit creation, which is what the pillar banks do, compared with the credit unions and the post office, which do not engage in this practice.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I ask Mr. O'Callaghan to be brief as we must conclude this session.

Mr. Tom O'Callaghan:

A 60-plus page contract has been produced in connection with the 690 post offices which have not been touched on. Postmasters across the country have serious issues with the contract and are seeking legal and financial advice in that regard. Their biggest issue is that it is a fixed seven-year contract and they will have little choice after seven years and no security of income because they are heavily reliant on the social welfare contract, the future renewal of which is not guaranteed.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

On behalf of the committee, I thank the witnesses for appearing before us. It is proposed that the opening statements will be published on the committee website. Is that agreed? Agreed.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I draw the attention of the witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the Chairman to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. I also advise that any submission or opening statement made to the committee will be published on its web page after the meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

I remind members and witnesses to turn off their mobile phones as they interfere with the sound system.

I welcome the following witnesses who will engage with the committee on the impact of the uptake of retirement packages by postmasters: the Minister for Communications, Climate Action and Environment, Deputy Denis Naughten, his officials, and Mr. David McRedmond, chief executive officer of An Post. The main witnesses will speak for no more than five minutes. We will take the Minister and Mr. McRedmond and I will then open the discussion to members. Again, members of the committee will begin the questioning and I will then take the names of other members as they indicate.

I invite the Minister, Deputy Naughten, to make his opening statement.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

I thank the committee for the opportunity to address it on this issue. I thank postmasters the length and breadth of the country for the dedicated service they have given to rural and urban communities over many years. As members are aware, some postmasters have taken the difficult decision in recent weeks to leave the business. I will return to that issue.

Some people have, perhaps mischievously, given the impression that I do not understand or care about issues in rural Ireland. As many members are aware, I represent the most rurally dispersed constituency in the country and have consistently raised the issue of our post office network in Dáil Éireann over many years. I have first-hand experience of the concerns and issues involved. I understand the concerns of older people and that this is a very anxious time for many of them. I have watched the gradual demise of the post office network over many years. More than 500 post offices closed during the economic boom in this country between 2002 and 2007 while people sat on their hands and allowed the post office network to fall into decline. No new investment or services were put into it. I did not want that to continue. The postmasters of this country and the communities they serve deserve a clear future and a plan to be put in place for the development of and investment into the post office network and its services. Such action was not taken by a series of Governments over many decades. Although Government after Government promised to do something, nothing was done. We have now set out a clear path and future for the post office network.

As a Member of Dáil Éireann, I have for many years put forward constructive solutions to bring new business into the post office network. I am now lucky to be able to help to implement such solutions. I point out to members, some of whom have been Members of the Dáil or Seanad for a considerable number of years, that I was one of only five Members of Dáil Éireann or Seanad Éireann to make a submission to the Kerr report, which has now been almost fully implemented by An Post. We want to have a sustainable post office network that is available to all of our citizens, both urban and rural, in the medium and long term.

Much has been made in the press over the past week of the impact of the closures. Although I accept that the closures will have an impact on the communities served by the post offices in question, the background to the issue has not been well represented. It is important to put the An Post announcement of the changes to the post office network into context.

Ninety-seven weeks ago, I was presented with a future for An Post and the post office network that was uncertain and extremely bleak. I was determined the company would not go under. There was a very real possibility that that could happen because of the failure to act by successive Governments. The potential for a complete shutdown of postal services with the loss of thousands of jobs was undeniable. Immediate action was needed because of the need to ensure the survival of An Post. We also needed to safeguard the post office network. That was necessary to protect thousands of jobs across the country; the 9,000 people working in An Post. Those imperative requirements needed decisions. I can tell the committee that decisions have been forthcoming. I did not shirk from my responsibility as Minister. We have worked tirelessly to restructure the company in order to save it. I am sure members will recall the urgent need to introduce legislation to facilitate an increase in the price of a stamp. That was an essential first step to avoid a cash crunch for the company and to give An Post time to construct a plan for a sustainable future. The challenges facing An Post were recognised across all political parties. That legislation was widely supported in its passage through the Oireachtas. I thank members of this committee for their support in providing An Post with a much-needed window to put a strategic plan in place.

I also worked hard on securing a Government investment of €30 million in An Post to safeguard the five-days-a-week mail service and collection and to protect the post office counter services. Two years later, critically important decisions have been made. An Post has been stabilised, because of the action that has been taken, and is now one of the few mail services in the world that is expanding its service, from a five-days-a week letter service to a six-days-a-week parcel service. The fabric of services An Post delivers has been strengthened. The company is changing from a 19th century model to one that has relevance and can have resonance in the 21st century in rural and in urban areas. In fact, the current postmasters' contract dates back to 1907 and we all can accept that things have changed dramatically since then.

Today, the future is not as bleak for An Post but underlying challenges remain. Mail volumes continue to decline. E-substitution and the move to online payments and online banking continue to have an impact on the post office network. Standing still is not an option. If, politically, we tread water or if we shirk decision-making, we will not have a stronger post office network; we will have a weaker one and, potentially, ultimately we will have no post office network at all.

I believe in An Post as a public company delivering a public service. That is why I am determined to embrace change, because change is required to deliver for post offices and a postal service for the future. Change is especially required in rural areas. There is widespread acceptance that the post office network requires modernisation to build, maintain and protect a service that meets the needs of communities across the country today and into the future. Investment of €50 million in the network, equivalent to €45,000 per post office, is based on getting communities to use the enhanced services that their local post office will provide through a modernised network.

As part of its strategic plan, An Post announced a renewed vision for the post office network, which centres on the availability of new services in a modernised, revitalised network. Such services must include a better range of Government services, financial services and e-commerce services for shoppers and small businesses. I was one of only a handful of Deputies to make a submission to the Kerr report because I was determined to see new innovative services coming into the post office network. I argued strongly for the need to channel more Government services to the An Post network. I am pleased to say that earlier today, I got a decision from the Government to look at an offline avenue for all Government online services. We expect to come back to the Government with decisions on that quite soon.

Since taking office I have been driving the offline avenue with my officials, my Cabinet colleagues, the management team in An Post, the Office of Government Procurement and other agencies. Government funding of €80,000 has been allocated to roll out the digital assist programme. By means of the digital assist programme, ten post offices are being equipped to become digital hubs to help citizens navigate online Government services and other online goods and services. The intention is to expand the number from the initial pilot scheme.

There is already a rapid expansion of banking services in the post office network. One can now get US, Canadian and Australian dollars and sterling cash and currency cards without having to order them in advance. Post offices will make credit card services available in addition to the An Post smart current account. Personal loans will be provided as well as loans to small businesses. An Post has committed to investing €50 million to grow and modernise the post office network.

Essential to delivering on a renewed vision for the post office network is the agreement reached with the Irish Postmasters Union, IPU. This agreement followed months of intensive negotiations which were overseen by Turlough O'Donnell SC, at my invitation. I take this opportunity to once again thank him for his work, time and commitment to this process.

In its negotiations with An Post, postmasters and postmistresses sought both the modernisation of the network and a voluntary redundancy package for those who wanted to leave the business. It is important that the decision of those who wish to leave the business is respected. They are not decisions that have been taken lightly or without good reason. There are a number of reasons that postmasters are availing of the offer, including age and low population levels, as well as the fact that some postmasters were not even earning the minimum wage as a result of declining transaction levels and mail volumes. I must repeat - the decision on whether to accept the package was one for individual postmasters. All closures have been on a voluntary basis and Ned O'Hara of the IPU has publicly confirmed that. No one was forced to take the package. It is important to state that any retailer in the locations of the 159 post offices can apply to An Post to be considered to take over some or all of the services of the closing post office.

The reality is that by facilitating those who wish to exit the business, neighbouring offices will be further supported, thereby ensuring a sustainable network for the future. Where a post office closes, 70% of the business transfers to a neighbouring office. This agreement removes a level of uncertainty that has existed as a result of the piecemeal approach associated with closures of post offices for the past 30 years. The IPU has publicly acknowledged that. An Post has given a pledge to retain a post office network right across the country. However, we must be cognisant of the declining transactions in recent years that reflect the reality of the world we live in today. We must equip post offices with a range of services that will attract and retain footfall, but those measures are meaningless unless the public use the service the post office provides. Key to the survival of a renewed network is the willingness of us all of us to use post offices. Last week at a public meeting in Athleague I spoke about Imelda Burke. She is the postmistress of Ahascragh post office. Some 18 months ago she sent out 1,000 letters to her community asking them to please use her services. On foot of her initiative she received three positive replies. Last Friday she sent out another 800 letters, again pleading with her community to use her services.

I am aware of the suggestion from various quarters that some form of public service obligation, PSO, levy or State subsidy should be provided to maintain the post office network in its current form. It is long-standing policy that postal services will not be directly subsidised by the Government. Successive Governments have held such a view. An Post is a commercial semi-State body with a mandate to deliver postal services and a viable post office network. Aside from state aid rules and other competition-related issues, it is likely that a subsidy to retain those offices in which postmasters have opted to take the package - in most instances because the business is no longer viable - could have a negative impact on the remaining offices. They would lose the opportunity to enhance their existing businesses and such a move could jeopardise the long-term sustainability of the entire network.

While much has been achieved in An Post over the past two years, there must be a clear focus on continued delivery for the future. That is critical to ensuring the long-term success of the national postal operator and a sustainable post office network to serve future generations.

After years of drift, there is now a clear direction for An Post. Innovation and change are being embraced and new services to meet new needs of the future are being developed. Politically, our responsibility, and the responsibility I take as Minister, is to lead that change, to strengthen An Post as a public company delivering a public service and to support the decisions required to translate that aspiration into effective action.

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.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Mr. McRedmond. If members agree, we will use the same procedure as we did on the previous round. We will start with the members of the committee and then I will go to other members who indicated. I will start.

Will Mr. McRedmond outline whether he has a breakdown of the reasons for the proposed 159 closures? How many post offices will close because the relevant postmaster or postmistress is retiring? How many will close because they are operating at a loss?

Will Mr. McRedmond outline An Post's level of engagement with local businesses that have expressed an interest in taking over the postal service. Is An Post approaching businesses within communities? Is it waiting for communities to approach it? I am sure some of my colleagues have received correspondence about this matter. In that context, I am aware, for example, that a number of businesses in Gurteen, County Sligo, are interested in taking over the post office network there, which deals with 1,100 transactions per week. They are going to contact An Post. What has been the level of engagement? There is a narrative to the effect that some businesses are not being communicated with or are being told that there is no interest there.

Mr. David McRedmond:

In terms of the breakdown relating to the 159 post offices, technically, these postmasters and postmistresses are ending their contracts. What is involved, therefore, is an exit contract payment, not a retirement. There are a number of different reasons involved. An Post did not ask for reasons. Rather, it identified the approximately 350 post offices in respect of which this package was offered. Those post offices were identified on the basis of their being able to serve the needs of communities and where it would be possible for people to exit. On that basis, people have exited for their own reasons. An Post has very detailed information on each of those post offices as to the number of transactions involved and the number of social welfare clients who use their services. The company has a very clear plan for dealing with these.

As to engagement with local businesses, in the first instance, An Post ran a consultation on the plan in late April and throughout May when the deal with the IPU was announced. That consultation was made widely available. There was a relatively low take-up, as is often the case with consultations, and more engagement was required. In the context of the latter, An Post has put in place a protocol and an appeals body. There are two appeals adjudicators who are independent, experienced and recognised experts. Any local business can appeal and say it wishes to have a post office and will be assessed against that criterion. There was one post office in Sligo whereby an appeal was made not by the business but by the community. In that instance, it was very close to the cut-off population number of 500. The adjudicator did not say that An Post was wrong but asked if it would reconsider because the size of the community was so close to the cut-off. An Post did reconsider it and the post office was kept open. An Post is certainly open to listening to the adjudicators. That is the process by which businesses can engage. We have to be careful because there are 159 post offices involved and many communities will be affected. We have to be fair to each of them. An Post does not want to prejudice the outcome of any one of those appeals.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Am I correct in stating that An Post makes the final decision as to whether a business will be allowed to take on the postal service, particularly as this may impact on neighbouring post offices in that area? Am I interpreting Mr. McRedmond's words correctly?

Mr. David McRedmond:

That is correct. There are two elements. The first is to ensure that, as a business, the post office can be sustainable. The starting assumption is that it would not be sustainable to have a full post office in the vast number of those places. That is the reason people take the package. The Minister was right in talking about the very low amounts being earned by those postmasters and then having costs associated with operating a full post office. In simple terms, it would, by and large, be true that they are not sustainable. The protocol tests the sustainability of post offices in those areas and, in most instances, it will agree that they are not sustainable. However, there is the chance that a post office might be sustainable and that is one reason for appealing. If the adjudicator has a strong view and says that a post office should be licensed in a particular area, then An Post will, of course, do so.

Another opportunity that would probably be more attractive to retailers involves having PostPoint extended into the An Post partner model whereby retailers could offer a broader range of services. It would not be the full range of services but it would be most of them. The exception would be the services relating to social welfare. It could be possible for retailers to take those up without having to have dedicated staff and dedicated counters that give rise to the costs that make it unsustainable to have post offices in particular areas.

Businesses can also apply for Post and Pay, which would mean that they could do parcel drop-offs for particular areas. This could be integrated into An Post's mails and parcels network. We fully intend having the best availability of e-commerce throughout the country. It is not the case that there are no services available. It comes down to a net point regarding social welfare payments. In that case, the other potential solution is that the money could be paid into An Post's smart current account. That account comes with a debit card that can be used in local shops. There are some other opportunities to cover that.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

A local business person is well able to make a business decision as to whether it will be viable for him or her to incorporate the postal service into his or her existing business. Such an individual will not take something on that will not be sustainable into the future. Engagement with local businesses is going to be critical; that seems to be the narrative. As Mr. McRedmond said, the consultation process was not taken up by many but, now that the matter is being reported by the media, there will be far more interest. There seems to be far more interest from many local businesses in considering taking on the postal services in their areas.

Mr. David McRedmond:

I accept that.

Timmy Dooley (Clare, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I welcome both presentations. I thank Mr. McRedmond, who set out what this is about, namely, restructuring An Post. It is a commercial, semi-State company and that is its mandate. Mr. McRedmond has to look at viability in terms of profit and loss. He has a responsibility to the shareholders and the board of directors to exercise his fiduciary duty, and he has done that.

The Minister's responsibility is different and the third or fourth paragraph of his opening statement tells its own tale. He said that when he came to office "the future for An Post and the post office network was uncertain and extremely bleak" and that "The potential for a complete shutdown of postal services with the loss of thousands of jobs was undeniable. Immediate action was needed." The reality is that the Minister was spooked by An Post and the officials in his Department. It is one of the oldest tricks in the book: paint the worst possible picture, spook the Minister and frighten him into believing the world is about to fall in. If the Minister falls for it, the officials have a result. They have done that. The Minister clearly did not challenge them or look at alternatives. He went into crisis mode. This was his big moment - he was going to save the post offices. He lost sight of the communities - the small communities that he and I represent. I will not go through all 159 of the post offices but will use my own county as an example. Post offices will close in Lissycasey, Cree, Cooraclare, Doonbeg, Fanore and Kilfenora. They are all viable villages with post offices that do not fit Mr. McRedmond's model for viability.

If we were to introduce a PSO levy, do we give the same amount to the post office that has taken the package where there are 12 transactions a week and should it be considered the same as the post office that has 700 transactions a week? The Minister has a responsibility to develop a model of postal services in those villages that meet the needs of that community. Somebody has to pay. Mr. McRedmond says it will not be An Post; it does not fit his model. I suggest to the Minister that the PSO model with subvention from the State is a way to do it. The PBFI earlier identified other methods for doing it and maybe that can happen over time.

The Minister knows this will have a devastating impact on the lives of elderly and vulnerable people in the 159 villages identified. While Mr. McRedmond might talk about the distance people have to go to tax their cars, 12 km or 14 km for somebody who is elderly or vulnerable and does not have access to a car and certainly does not have access to public transport is an intolerable burden. I challenge him on the transfer of the services. All the new services can be created and there can be sterling, the dollar, yen and bitcoin, if it is wanted, but they will not save the post offices in Lissycasey, Cree, Cooraclare, Doonbeg, Fanore, and Kilfenora. Retention of the basic service is needed in those post offices, which includes social welfare payments.

There is a postal agency service available in some areas where there used to be a post office contract and it makes social welfare payments. If the Minister had not got into panic mode when the sky was about to fall, he could have gone back to Mr. McRedmond and asked what would be the cost of retaining a basic service in these areas, be it in the 159 post offices to be closed, or more if they opted for it, including social welfare, under the post office agency model in a local shop or supermarket. In the areas I mention in Clare - and the same is true for places dotted all over the country - there are people clamouring to take the service. They are not looking for the same money. They do not want the same burden of investment in the way of concrete roofs and caves where they have to store vast sums. There is not much money required because the activity levels have reduced. I urge the Minister to go back and consider that model as a way of saving the service.

There is a slight variation between the notes we received in advance of the meeting and what the Minister said. He said that "some or all" of the business can transfer to another facility.

Timmy Dooley (Clare, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

This is important because it gets to the nub of the matter. I have also picked that up from some media interviews the Minister has given where he talked about "some or all" of the business. If "some or all" of the business includes social welfare payments, there is no difference between him and me. If all the business can transfer to another business in the community, that will be a result because that is what people at the meetings I attended, and those I have met, demand.

Has the Minister considered, or will he consider, retaining the postal agency model in the 159 locations? When he mentioned "some or all" of the business, did that include the social welfare contract transferring to other businesses in the area and will he consider a way to ensure this does not create a problem for An Post's profit and loss if these services are transferred? Will the Minister consider a PSO levy on An Post and provide the subvention to meet the needs of what Mr. McRedmond will inevitably put forward if he is to transfer that business into the local community?

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

I thank the Deputy for his questions. I was shocked by the figures presented to me at the end of October 2016 because I had been presented with a different set of figures shortly before then. As a result, I asked New Economy and Recovery Authority, NewERA, which is part of the National Treasury Management Agency, NTMA, and which was established to advise Ministers on the operation of semi-State companies, to go through the books. I deferred making any decision until I had received a detailed report from NewERA and there was engagement with the authority on various figures. I wanted to make sure I had an accurate reflection of what was going on in the company because the last thing I needed was to be put into a position where this was thrown at me to make a quick decision. We did not do that. We went through all those figures rigorously and had them independently assessed by NewERA.

The Deputy is correct that no single service will maintain the post office network. The NTMA service in respect of State savings and the social welfare contract are the two big financial drivers of the post office network but they alone will not maintain post offices. We and the management team in An Post are considering bringing in new services. Footfall and transaction numbers in the post office have increased through a range of new services and, as a result, there is a sustainable network into the future.

In response to the question about the An Post agency, that is effectively what is happening with PostPoint. An Post is studying how it can develop the franchise to expand into other services that it has not offered up to now. That may also be in respect of social welfare services or payments. There is also the opportunity through the An Post smart account for people to use the card in a local Centra, SuperValu or Spar to make their purchases and get cash back. Technology has moved on and An Post is exploring all those options.

Timmy Dooley (Clare, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I would like absolute clarity on this point. Is the Minister saying that it is possible that the postal agency model can be made available to other businesses in these 159 communities with the capacity to provide access to social welfare funds or payments?

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

I will let Mr. McRedmond answer that. In respect of the Deputy's comment on "some or all" of the business, I have said - and the company has agreed to this - that this will be a voluntary decision by individual postmasters and there will be an opportunity for the community to have An Post review the decision. Mr. McRedmond has given an example of one area where An Post has decided to advertise again for a postmaster. That will be an independent review and every community that wants to can make a submission.

There is also an opportunity for retailers in that community to make an offer to An Post to take on enhanced PostPoint service, as Mr. McRedmond said, or to have the post office in their retail business. This is an individual decision for retailers and they may or may not want to do that for one reason or another. I do not think, any more than postmasters being forced to take a redundancy package, that retailers should be forced to take on something that may not suit their business model. There are several options open to them if they want to take on some or all of that business.

The PSO has been kicked around for many years, long before I came into this Department. The consistent policy of Government has been not to introduce a levy.

If a PSO were introduced, do we give the same level to the post office that has taken the package where there are 12 transactions a week as the post office that has 700 transactions a week? Should that be considered the same? There is a huge level of community support for one compared with the other and that is the challenge we have at the moment. We need to make sure that as many post offices as possible have as many transactions as possible and we need to expand the type and number of services available.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Deputy Naughten. Does Mr. McRedmond want to answer that question briefly?

Mr. David McRedmond:

The agency model is an old model and a legacy service. It is not something we are looking to introduce. PostPoint can provide many of the services but right now it would be unable to provide social welfare. It could do at some point in the future but then there would be issues around security. The big problem with social welfare is cash and how much security there has to be in the business. That has to be looked at.

Timmy Dooley (Clare, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

As transactions have reduced so much, does it not make sense to do it and not put intolerable burdens on the people concerned?

Mr. David McRedmond:

Whatever we can do we will do.

Timmy Dooley (Clare, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is Mr. McRedmond happy to engage with elected representatives in the next number of weeks to look at the extension of the postal agency already referred to?

Mr. David McRedmond:

The postal agency is not something we are going to do because we have no real network to set that up. We are looking at PostPoint and how we can extend that technology.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am going to bring in Deputy Lowry.

Michael Lowry (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister and Mr. McRedmond. I do not question their commitment to resolving the problems of An Post. I represent the constituency of Tipperary and like every other county we have taken more than our share of closures with the closure of eight post offices in Ballingarry, Clogheen, Coolbawn, Gurtnahoe, Littleton, Newcastle, Templetuohy and Upperchurch. The word "voluntary" has been much used and emphasised but effectively the real position is that the postmasters union has been put into a corner and the postmasters and postmistresses saw this as the only opportunity they had to exit the system. There was a veiled threat that if they did not take the package then their contracts would not be renewed. That is the way it is being perceived in rural Ireland.

Mr. McRedmond talked about a protocol, as well as procedures and an appeal process. I do not understand. Could he explain what the protocol and procedure was in respect of the closures - was it simply because a postmaster requested it? The post office in Littleton, County Tipperary, for example, was closed. Mr. McRedmond said the criterion is that we should have a post office for every area of population over 500. Littleton is down for closure and yet according to the census it has a population of 1,200 people. What process came to the conclusion that Littleton should be closed? The same goes for many of the post offices that have been closed in County Tipperary. Who adjudicates on the appeal process and determines whether a post office should be closed if an appeal is lodged?

Mr. McRedmond also used the word "consolidation". What has happened in these efforts to consolidate is what most agencies in Ireland have done in recent times - rationalisation and centralisation. This has meant that rural Ireland has suffered because of those decisions. We need to remember again that post offices are an essential part of the fabric of rural Ireland. They are a focal point and a community hub and have a beneficial binding influence on local communities. When these decisions are made to take services from local communities, as usual, it is the older people, the poorer people and those who depend on the State for a living who, because they do not have a bus service or public service transport, have to pay for a taxi to go to the nearest post office to do their business. That may be 15 km away. In Tipperary, the closures in these villages and parishes have been greeted first with dismay and that has been followed by anger, resentment and public protest. The general consensus in rural areas is people feel they have been abandoned by the Government.

I also want to be reasonable and fair in my comments. The crisis in An Post has not just dropped out of the sky. It has developed for at least 15 years. We have been cautioned and warned about it but several political Administrations have proceeded to show political neglect and not invest in the system. That is why we are where we are at the moment. Over the past 15 years, we have also had exhaustive assessments, analyses, reports and recommendations but nothing was actually done. The one conclusion and common thread in every report written was that the post office network, as it presently functions, was not sustainable in the long term because it was non-violable. It needed to be remodelled. I accept that Mr. McRedmond has shown great initiative and that he is doing his best to expand the range of An Post services. It is welcome, as the Minister mentioned, that this has been discussed at Government level this morning and that online services will have the support of the Government. The Government must, however, empower the post offices to broaden the range of activity to increase revenue. Post offices must also be allowed to diversify into the financial services sector and into community banking in particular. Before Mr. McRedmond came in we heard good, logical and common sense reasons why community banking should be part of An Post in future.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did Deputy Lowry have a specific question or does Mr. McRedmond-----

Mr. David McRedmond:

I cannot answer a question about a specific post office-----

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is fine.

Mr. David McRedmond:

-----because I do not want to prejudice the appeals process. The adjudicators are Mr. Paddy McGuinness and Mr. Tom Hobson who are both highly recognised in this field of doing these sorts of adjudications. The protocol is published and available on the An Post website. I do not know if there is a second post office in Littleton if there are 1,200 people there but I should not go into the particular case. We are keeping 100 post offices open where the population is under 500 because of the distance requirements and making sure they are available. As the criteria are complex, there could be a number of different reasons but it is worth taking a look at the appeals process and seeing if there is a possibility with it. I will point out that it is not fair to say that we have abandoned rural Ireland. After the consolidation there will be 35 post offices in Tipperary and that is considerable coverage compared with that in many other countries.

Deputy Lowry also mentioned two other things. On not implementing reports, I went through the Bobby Kerr report and, even though I disagree with some of the things in it, I discovered that we had implemented 17.5 of the 19 recommendations for An Post in that report - I said it was 18 earlier. We have taken action. I respect that Deputy Lowry has raised these issues before and we have gone back, looked at them and implemented. In respect of community banking, I do not believe there is anything in community banking that An Post is either not doing or not planning to do in the short term. I believe we are going to make the full range of services available. We are not likely to go for a banking licence but with the changes in banking regulation that is no longer a requirement to provide the services. It is indeed much better because services can be provided more quickly. I believe we can leapfrog many of the services of the traditional banks and that we can have an even better range of services. I completely share Deputy Lowry's ambition for financial services.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am going to bring in Deputy Bríd Smith. I know she is under pressure.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

I am under pressure to leave and I thank the witnesses and the Minister for coming here today. I have a question for the Minister. In the past few years I watched closely a game of pass the parcel, pardon the pun, in the relationship between what is going on here and what went on in the Dáil between the Minister, Deputy Naughten, the Minister for Rural and Community Development, Deputy Ring and the Minister for Business, Enterprise and Innovation, Deputy Humphreys. No one wanted to take responsibility for what we were watching unfold in front of us, namely, the collapse of the post office sector. I believe this is the beginning of something much bigger and not the end of it.

Will the Minister take responsibility for the outcome of the closure of the 159 post offices and any future closures? There have almost been scraps between himself and the Ministers for Rural and Community Development and Business, Enterprise and Innovation on the floor of the Dáil with each refusing to take responsibility for the issue and saying it was somebody else's responsibility. It now seems that the Minister and Mr. McRedmond are saying the responsibility for the closure of these 159 post offices is that of the postmasters and postmistresses themselves and that they have made that choice. I do not accept that for a minute. In the style of the Mafia, they were made an offer that they could not refuse because they were not being offered an alternative or viable contract. Will the Minister and Mr. McRedmond comment on how it came about that 159 people who had resisted the closure of their local post office, having looked after their communities informally but in a close and caring way, would suddenly decide that they would close? There must be something behind it.

If in 2019, An Post loses the tender for social welfare, will the remaining post offices have the volume of business required to remain viable? After two and a half years, regardless of the social welfare payments, how will the Minster and An Post decide whether the volume of business and the footfall is good enough? This process will be incremental, with more and more closures because the footfall will not be good enough. I use my local post office in Ballyfermot frequently. The main footfall relates to the collection of children's allowance, pensions and other social welfare payments and the payments of bills as people collect them. If An Post loses that tender, hundreds of post offices will close in the Ballyfermots of Dublin, Limerick, Cork and so on, where the main source of footfall is social welfare payments.

I have a question relating to something which was discussed during the previous session when the Minister and Mr. McRedmond were not present. Is either of them interested in a model such as Sparkasse or Kiwi, a public banking model that could make a return to the community? How do they feel about the report which the Minister for Public Expenditure and Reform issued in July in which he said that the Government would not pay out €170 million to fund a public bank, when it had no problem paying out €69 billion to bail out Anglo Irish Bank, AIB and so on. I cannot stay for their replies but I will watch back and hope that they will reply.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The Minister is welcome. I am glad to have this opportunity where hopefully we can clarify some issues. In my local parish of Aughavas, the post office is closing because the postmistress is retiring, which she is entitled to do. However, it should not be the case that if a person in rural Ireland retires that the service should be retired, which is what it means for many people. Often when someone goes sick or on maternity leave, the service goes sick or on maternity leave. That is our experience everywhere. On my way to Dublin today, I heard the Minister of State at the Department of Education and Skills, Deputy Halligan, speaking about school bus services. The same issue applies here. Services are being withdrawn from people living in rural Ireland. Similarly, the home help service is being withdrawn all over the country by the HSE. Most Ministers whom I deal with personally say they are doing their best but when they get together around the Cabinet table, it seems a corrupt political system is in place. It is destroying the country and the problem is particularly acute in rural areas and areas where people most need services. It is a corrupt political system which the Government inherited from Fianna Fáil, a party that closed hundreds of post offices, and started this rot which has continued all the while.

People talk about whether services are viable or not. Is the health service viable or sustainable? Are people eligible or are they concessionary when it comes to them being allowed to live and be active citizens in their own communities? These are the questions that are being put to us. Is that the kind of Ireland we want? Do we want an Ireland where people must make choices like that, or where, if they live in a particular part of the country and they do not have access to services? That is not the kind of Ireland in which I want to live and nor do the vast majority of decent, ordinary people. They want to live in an Ireland where the Government delivers services to them and stands up for them. This Government is not standing up for people.

Last week, I attended a meeting of a couple of hundred people in Killeshandra, a decent sized town, where the post office will be closed because the postmistress is retiring. She is entitled to do so but does that mean that the post office has to close? I have been told that it does, and that that is just tough luck because it is not viable. I am sorry but it is viable. People's lives are viable and they matter. Somebody needs to say that enough is enough and this must stop. We are told that we do not have the money and that we cannot continue down this road. We had the money to support the banks to the tune of billions of euro, and the Government continues to support them as they make massive profits but it will not even tax them. What is wrong at Cabinet that Ministers can do this? Why are they victimising ordinary decent people throughout this country? What is wrong with them?

I have discussed post office closures with the Minister. There are instances in my own area such as Gurteen, which the Chairman mentioned, and many others which are closing because the postmaster or postmistress is retiring. We have been told that there will be a review process which may re-examine them, particularly if there are other businesses that might make the post office viable. The Minister is aware of the post office in my parish where there is also a pub and a shop, and we have spoken about this. He has said if there is another business that makes the post office viable, it has a good chance of being awarded the contract but the contract may not be as good as previously. That is what I had been led to believe but that does not seem to be the case.

There is a question about the way by which the minimum service levels will be examined. An Post says, "In rural Ireland we will endeavour to ensure that all settlements with over 500 people will have a Post Office". Where does it draw the line on 500 people? Is it within 5 km of the post office, which is what I understood, or is it within 1 km? That issue needs to be addressed.

Clearly, the problem is that it is the intention of Mr. McRedmond and An Post to close these post offices and they do not care. The Minister needs to care.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will ask the Minister and Mr. McRedmond to respond in a moment. I have 15 speakers, and as I said at the beginning, each will have five minutes. I ask them to try to keep to questions. I know some have comments but I ask Members not to make speeches. They can get their point across through brief questions.

I call the Minister to respond to Deputies Bríd Smith and Martin Kenny.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

I will first respond to Deputy Martin Kenny. There has been an expansion of postal services in the past two years since my appointment as Minister. An Post vans can now be seen in rural communities on Saturdays, which never happened before other than at Christmas. That is because An Post now provides a parcel service to every townland in rural Ireland six days a week. There has been an expansion of foreign exchange service in post offices to include cash, which does not have to be pre-ordered but can be collected by customers walking in to post offices. Over the next six to eight months, there will be a significant expansion in the financial services that An Post will offer in every post office. That will be new business coming into the post offices. There will be an expansion of services relating to personal and small business loans and a credit card facility which will not only provide services that may have traditionally been available in the community through banks which have withdrawn them or that may never have been available in that community. These new services are going into rural Ireland and will support existing businesses, the development of new businesses in those communities and meet the needs of today, tomorrow and the days after. People are looking back at what the post office provided 20, 30 or 40 years ago, but we are looking at what the post office will provide in five, ten or 15 years and we need to plan for it now. I have taken the difficult decision.

I could have taken the easy decision, as my predecessors did, sat on my hands, ignored the issue, and allowed post office after post office to close and watched hundreds of post offices close, but I will not be disingenuous in this regard. I spent long enough arguing that we should develop new innovative services in the post offices. We are seeing that in the case of financial services currently and we will hopefully see it in the case of government services on foot of the decisions that we have made. One in seven people in Ireland has never used the Internet. With the digital assist programme, they will have an opportunity to benefit from the services on the Internet. For example, using my hat as Minister for energy, consumers can save between €200 and €300 each by using either bonkers.ieor Switcher.ieto move their electricity account from one operator to another. If they have not access to the Internet or cannot use the technology, they cannot avail of that currently. Through the digital assist programme, they will be able to avail of that through their local post office. This is an example of practical services that are going into the post offices today or that will go in next month and the months after that.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Will they be in Killeshandra that fast?

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Regarding Killeshandra-----

Martin Kenny (Sligo-Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

They will not, because they are gone.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Regarding Killeshandra and Littleton post offices, which have been mentioned, there is a review mechanism. The community can make a submission and make the case in that regard. There is also an opportunity for retailers within those communities, if they want to take on some or all of those services, to make contact with An Post. The independent appeals body will also review the decision by An Post on what services will be provided by or offered to the new retailer.

In response to Deputy Bríd Smith's question regarding passing the parcel, I was disappointed that responsibility for the operation of the post office service in this country was split between two Departments. It was not my preference. I was happy to take that back and have responsibility for both the financial operation of An Post and the post offices. We have been working closely, prior and subsequent to that decision. I have always wanted to deal with the post offices and my record in Dáil Éireann will show that I have had an interest in this over a long number of years.

Deputies Lowry and Bríd Smith seem to give the impression that postmasters and postmistresses were given an offer that they could not refuse. If this was such a fabulous offer, it is bizarre that the majority of postmasters and postmistresses to whom it was made refused it. The majority of them has not accepted the redundancy offer.

Deputy Lowry knows better than anyone, as does every member, whether he or she is prepared to admit it, that at the previous general election the postmasters came to each of us and sought two measures: first, that there would be a modernisation plan put in place for the post office, which we are doing, and, second, that a redundancy package would be made available to postmasters who wanted to get out and we are providing that. The third measure which was sought is in the programme for Government, which was to consider the provision of new services by post offices. That is happening and will continue to happen during the term of this Government.

Mr. David McRedmond:

In response to Deputy Martin Kenny, the notion that we do not care is unfair and wrong.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I speak from experience.

Mr. David McRedmond:

The easiest thing for us to do would be to do nothing and let the post office network wither on the vine. I have been in An Post for 18 months. We have worked day and night to deliver a credible plan to do the things that we are so often accused of not doing in this country - to make a detailed plan, develop a strategy and listen to local communities. I am sure the Deputy knows An Post staff in his area. The staff live in every town in this country. We have consulted and we are making the difficult decisions that we have to make to ensure there is a viable network for the long term. It is not that we do not care. I can understand the Deputy might not agree with the decisions. I accept that, particularly on behalf of some communities, but it is not that we do not care.

I have appointed an excellent managing director of the post office network. Ms Debbie Byrne has undertaken extraordinary work in terms of having that negotiation with the postmasters. The Minister is correct that more postmasters did not take up the package than took it up. It was a long and protracted negotiation with them to ensure that we can get the best outcome. They share some of the same interests as us because they are in the communities to get the best outcome for communities. I accept Deputy Martin Kenny's points regarding various communities.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Does Ms Byrne know where Killeshandra or Gurteen and these communities are? On the other issue regarding the 5 km, where are these 500 people supposed to live? Is it within 5 km or 10 km? What is the range?

Mr. David McRedmond:

I cannot tell the Deputy what the range is. It is a census definition. I will have to come back and confirm that for the committee; I apologise.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We can get that. If Mr. McRedmond is willing to give that in written form to the committee, we can provide Deputy Martin Kenny with that.

I am conscious of the time. There are 15 members waiting. If members could keep it to questions, it would be good because they would be helping all the other members who have come to the committee.

Eamon Ryan (Dublin Bay South, Green Party)
Link to this: Individually | In context | Oireachtas source

We need a new development model for rural Ireland and if we were imaginary and visionary, An Post could have a central role in such a model. I have three questions in three areas where we could look to expand the business and create that new development model.

First, Mr. McRedmond stated towards the end of his opening contribution that An Post was looking for additional government services to generate footfall. He cited driver licence applications as one example. Can he give other examples of government services? How long has An Post been looking for those? The Minister might want to contribute as well. What is the likelihood of such services coming online or of them becoming part of the new business model that An Post wants to develop? Will the Minister give as much detail as possible on those government services? I heard Mr. McRedmond state he has the harp over the door and wants all the harp services there. Specifically, I want to know what they are.

The 7 km range is still a hell of a distance, if one has got to walk or cycle. I welcome the six day postal-van service. Would Mr. McRedmond agree there is a possibility if An Post's parcel business is expanding, for the development of a business model where that van route is visible online and an application could be developed for those within the rural community so that it would not only be a postal parcel van but could also be a people van. With the new app-sharing and other devices, one would have a new public transport system that serves the rural community. Because one knows the route, one would know where the van is and when it is coming, and one could opt in to getting a lift from that van. It could well be a lift to the nearest post office which would also help bring business to it. Let us be radical and revolutionary in rethinking how An Post delivers its parcel services so that it is a public transport service as well. Would the Minister commit to that service?

I would very much welcome the potential expansion of An Post into lending but it does not have lending skills and expertise. Mr. McRedmond stated earlier that An Post has everything it needs to go into that business but I do not agree. An Post needs the likes of the Sparkasse banking model and it has to be community-based. We need another banking service, other than the pillar banks. Has the Minister supported the Minister for Rural and Community Development in Cabinet in seeking such a model? Both Mr. McRedmond and Deputy Naughten stated that they want An Post to go into small business lending. Where will An Post generate small business lending expertise if it does not bring in the likes of the Sparkasse model under which it could be developed? That model has worked for 200 years in Germany and it is a proven small business lending model. If An Post does not use that model, where will it get the small lending expertise? Members have stated here that we have to put in capital. I agree but we do not want to just flitter it away with on lending which is not based on smart business lending because rural Ireland needs such lending. The €20 billion on deposit should remain in rural Ireland which is what would happen under the Sparkasse model.

On those three examples of how we could provide a new rural business development, public transport and government services, I would be keen to know what specifically are An Post's intentions.

Mr. David McRedmond:

Regarding government services, I will merely list a few: car tax, M50 toll payments, Leap payments, the public services card and any digital ID. It is astonishing that one cannot buy a Leap card in a post office.

Digital ID is becoming a bigger issue. It is not just for government services. It is also something that can be offered commercially for banks and elsewhere where one needs digital identification. One can sign up for mygovid.ie. We have had a site for a number of years called licences.iewhich was hugely underdeveloped. We should have all local authority licences available on that. That is the range of services that we are looking for.

Eamon Ryan (Dublin Bay South, Green Party)
Link to this: Individually | In context | Oireachtas source

How long has An Post been looking for them?

Mr. David McRedmond:

We have been looking for those services for a number of years. I am not sure we have been looking for them with the degree of co-ordination or vigour required to get all those services. In some cases, they have been put out to tender and there are public procurement rules around some of the services. We have tendered for the services and we have not always won them. Sometimes, we have not won the tenders. We have certainly made great efforts to get some of the services but it has not been as organised as I would like. That is why we have set up An Post Retail, the post office, as a separate business. It used to be that the operators of that business ran the operations and the marketing and product went across the whole of An Post. The post office is the smaller part of An Post, with the bigger part being the mails and parcels business. The post office did not get enough of a look in. That is why we made the decision to put in place an integrated management team and a management board to be able to deliver that.

Members will see a much stronger approach to it. They have heard from the Minister about some of the work Debbie Byrne has been doing in lobbying the Department and the Minister to ask for a protocol to be put in place so we can get these services. That is what we are doing. We have no doubt that we are very vigorous in going for that. I agree with the Deputy about making that a very substantial business, and we are ambitious for it. With regard to extending the parcel service to a people service, we can always look at that. I am used to facing scepticism about these proposals. I would initially be sceptical because delivering parcels is a difficult and complex enough business itself. It looks very simple for a van to go down a road and deliver a parcel but we have a network which brings parcels in from around the world, which has cut-off times and so on. There is complexity and skill to doing it but we would certainly consider it.

Eamon Ryan (Dublin Bay South, Green Party)
Link to this: Individually | In context | Oireachtas source

The Clare Deputies might know about where it worked in the past or have seen it working.

Mr. David McRedmond:

We will certainly look at and pick that up. On the matter of lending, I have nothing against Sparkassen. My only issue with them is that I keep reading about them in the papers and it would be easier if they just came to see me and if I could call them and see them.

Marie Louise O'Donnell (Independent)
Link to this: Individually | In context | Oireachtas source

Why does Mr. McRedmond not?

Mr. David McRedmond:

Sparkassen have been in once to visit some people in An Post. There is nothing magical in their model that we do not do. The Deputy is quite right in saying that we collect that money on behalf of the State and the National Treasury Management Agency, NTMA. That money is in the NTMA. We deliver it to the NTMA and State savings. That is not an issue. I cannot answer that. I am not the Minister for Finance and am not responsible for saying exactly where that money should reside. The Deputy is correct about lending skills. We need to make sure we have the best lending skills, which is why we do not have the loan today but will have the loan relatively soon. We are making sure that we are bringing in the best lending skills.

Eamon Ryan (Dublin Bay South, Green Party)
Link to this: Individually | In context | Oireachtas source

From where?

Mr. David McRedmond:

From a marketplace that exists in Ireland. There is a capability and we will find the people. That is our job. It is always a tough job to recruit the right people but that is what we are doing.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Deputy Ryan is right that we need to exploit technology and see what new innovative services we can provide through An Post. I take the point he makes regarding transport services. Any colleagues here that have stopped and met with any of the postmen or postwomen over the past six months, who look into the van, will see that there is not much space for passengers because thankfully those vans are now full because of the expansion of the parcel delivery service. The fact is that we have a van every day going to every single home in Ireland, and we need to see how we can fully exploit that. That is what the company is examining at the moment.

With regard to Government services, I will read a sentence which goes back to 1997, saying, in government, "[We will] begin an energetic programme of localisation of state services that are now provided centrally. We will aim to make the computerised local post office a one-stop shop for most state services, and bring as much administration as possible down to the regional and county level." An Post, the postmasters and the politicians have been looking at this issue at least since 1997. Anyone who fairly looks at this will see that it is since my appointment as Minister that we have been making progress, hopefully significant progress.

With regard to community banking, An Post will provide a community banking service across the country. That is a very positive development. It is willing to engage with anyone in this area. It is a bit disingenuous that people continue to ignore a very successful community banking model that we have in this country that has been developed and expanded all over the world. That is the credit union model. I cannot understand why we continually ignore a model that is here and has successfully worked. How can we engage with the credit union movement to better develop and enhance that service?

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The last member of the committee before I move on to those in attendance is Deputy Lawless. I ask him to keep to questions.

James Lawless (Kildare North, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I have a number of points to raise but I will try to be succinct. I know we are under pressure for time. I welcome the Minister and Mr. McRedmond and thank them for their time. I am trying to understand, since this broke in the past couple of weeks, the background and where this is going. Community begins at home. I have tried to look around my constituency to get a flavour of the view on the ground. I spoke to people such as Betty Dolan in the Staplestown Road post office in north Kildare, which is closing. Betty has served with distinction for 30 years. I understand that people like that have paid that service to the State and to the post office and are entitled to their retirement. Long may she enjoy it. There are people such as Sean Fogarty in Ballymore Eustace, which is a great example of an innovative, dynamic, new type of post office. Sean Fogarty has invested in a web café, in an Internet doctor and in all kinds of additional services over and beyond the post office, within the same building. That office is going from strength to strength. There are different models and one size does not fit all. I understand that there are different parameters. I am trying to be objective in weighing this up and have listened to the arguments made by the Minister, by Mr. McRedmond and by other commentators and stakeholders. I have listened to the argument about footfall and the argument that some of the post offices do not have critical mass, and that there is maybe a case for rationalisation and consolidation. I am taking that at face value.

I am trying to understand that but, in doing so, I looked at the wider context. I thought about people in some of the areas served by rural post offices and thought that maybe, if they need a State service and there needs to be a State presence in the village or community, then maybe there is a local Garda station that a person can go to instead if that person needs a port of call to the State. Then I realised that 139 Garda stations were closed by the Government in the last term. Five were closed in my constituency of Kildare and west Wicklow. That line is not open to them.

The argument that they can go online would be very sensible and progressive if it worked. It would be a great alternative avenue for accessing post office services but we know that, out of three bidders for the national broadband plan, we have lost two and a half out of three bidders. That scheme is at least five years out of date, with no sign of broadband access coming to rural areas any time soon.

We might take solace that they are receiving some infrastructure and that Leader funding is being invested into communities. That might be a good news story but I checked the figures and the Leader programme is being cut by 40%, €150 million. That is a social infrastructural deficit.

We might think back to the traditional hub of the community being the rural general practitioner, GP. I know Deputy Harty, who is here, is very knowledgeable in this area. We might think that at least the local doctor is still there as a bastion of the community or a hub but then we find out that those have been consolidated into primary care centres. The rural practitioner allowance has been taken away and stripped back.

When all is said and done, people can get into a car and drive 15 km to the new post office that is now serving the area. I checked the report and the most recent audit of regional and local roads tells us that 70% of those roads have a structural deficit and the Minister, Deputy Ross, is not putting any more money into that any time soon.

With all that said, it really is more a question for the Minister than for Mr. McRedmond. It is not a pretty picture for rural Ireland and it does not give solace. Even though the arguments about the post offices can be made on an individual basis in their own right, when one considers the wider context of all the deterioration and denudation of rural Ireland, with rural services being stripped away one by one, one can understand why there was concern in those communities and why people are alarmed about this.

This is a very recent development but I saw on Twitter in the last hour that the Taoiseach has published a wish list for the renewal of the confidence and supply agreement. The Government will be renewed for another two years if that happens. There are nine headings and not one deals with rural development. I do not know if the Minister has a view on that. How does the Government propose to tackle the wider demise and decay of rural Ireland? This is very much a part of that, so I think it is very relevant.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I ask the Minister to try to keep his answers as brief as possible. We might try a new strategy with the rest of the witnesses, if they are agreeable. We will hear from them in groups of three, because they have been here for quite some time.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Deputy Lawless wants to expand this into a far bigger issue. We have introduced the sheep welfare scheme and expanded the disadvantaged area scheme payment. The broadband plan is nearing completion at the moment under the contract we signed with Eir. We are bringing high-speed broadband to one home every minute of every working day. By the middle of next year every singe post office will have access to high-speed broadband. We will roll out digital hubs in the new year. We have rolled out substantial funding for CLÁR and the town and village renewal scheme. We have a rural regeneration fund of €1 billion. We have expanded the wireless and mobile networks across the country, increasing the capacity by 86%. There are lot of things going on in rural Ireland. This Government did not close any Garda stations.

James Lawless (Kildare North, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is a bit cute.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

In previous times-----

James Lawless (Kildare North, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister did not, but the last Fine Gael Government did.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

If we are discussing the 2011 Government, I note that in the Fianna Fáil manifesto of 2011 there was no mention of post offices at all, good, bad or indifferent. I want to move away from that. Deputy Lawless makes a fair point. Sean Fogarty in Ballymore Eustace has been looking at innovative ways to bring footfall into his post office and expand it. His is one of the ten pilot areas where we are expanding this digital assist initiative to look at how we can provide online services to people who are offline or who have never used the Internet for one reason or another. That is just one of those post offices where that has happened. That will be expanded across the country. We have been developing parcel services which allow businesses in the most isolated rural community to have exactly the same e-commerce services Dublin city centre. As I said earlier, to the best of my knowledge - I am open to contradiction - this is the only postal service in the word that is actually expanding its services at the moment. It is expanding its services to the most isolated rural communities and bringing banking services into the local post office network. These services have been withdrawn by other operators. Yes, a critical mass is needed. No one here can justify a situation where a post office that has 12 transactions a week is kept open. That is not sustainable. We all know examples of post offices which the local community bypasses, going instead to the next post office. The community has voted with its feet. We are trying to put a sustainable network in place. This will still be the biggest retail network in the country by far. I am now confident that this niche retail network is sustainable in the medium and long terms. None of us, if we are to be genuine, believed that until now.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Some 14 people are waiting to speak. Would it be agreeable to members if I took three speakers together and asked Mr. McRedmond and the Minister to take note of their answers? That is agreeable. I thank the members.

Margaret Murphy O'Mahony (Cork South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I would like to commend my Fianna Fáil colleagues on this committee for asking for this meeting. It proves my party's commitment to rural life. I thank the Minister for coming here today. I give him due credit; any time I have asked to meet with him to speak about post office closures, broadband, etc., he has always met with me. I commend him on that point, but my comments will go downhill from now on.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Surprise, surprise. I was not expecting that at all.

Margaret Murphy O'Mahony (Cork South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thought I would lure him in with a bit of positivity. I left west Cork early this morning to speak at this committee and at the Joint Committee on Agriculture, Food and the Marine, which is discussing the fodder crisis. There are two crises going on in west Cork at the moment. As the Minister knows, the post office is the nucleus of any community. There are now four communities in west Cork out of which the heart has been taken; Allihies, Ballineen, Desertserges and Drinagh. There is also village in the eastern part of the constituency whose post office building is in another constituency, but people in Cork South-West are obviously affected. There are, therefore, five such communities, and there are 12 in total in Cork.

I had the unique honour of working in the post office many moons ago. To say it was an education in life would be putting it mildly. It has always stood to me, and I have very happy memories from that time. I have seen the importance of the post office to a community first-hand, both to the economy of the community and to its social well-being. I would not for one minute sit here and ask the Minister to keep open post offices that are not viable because of their social aspect. However, because of rural isolation, etc., the post office network is of huge importance. When I was working on the counter in the post office, I did a course on how to deal with a customer. We were told that we might be the only person that an older person would meet in a week, so it was vital to be nice to them. Even this contact could stop. People will stay at home, getting their pensions paid into the bank. They may never leave their houses. I am not trying to be dramatic, but it can come down to that.

This Government made a commitment to rural life and to the post office network, and in my opinion it has failed on both commitments. In fact, there was an active campaign by the Government to get people to have their social welfare payments paid into the bank instead of the post office. I have letters to that effect.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

There was a campaign by previous Governments, yes.

Margaret Murphy O'Mahony (Cork South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The individuals who did that are still in government.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

That was not done by this Government.

Margaret Murphy O'Mahony (Cork South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

There was such a campaign.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy may continue.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

That plan changed under this Government.

Danny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

It has been that way in the past few months.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We will let Deputy Murphy O'Mahony continue her questioning.

Margaret Murphy O'Mahony (Cork South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I know the Minister is also involved in the roll-out of broadband. Today is not the day for that topic. However, I recommend rolling out broadband before there are any big changes to rural life. People who now may not be able to access a post office cannot get anything online either. It is six of one and a half a dozen of the other. Before any big changes are made to rural living, the Minister should ensure that broadband is rolled out.

The Minister mentioned in his opening statement that the Kerr report has nearly been implemented.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

It has been implemented in full.

Margaret Murphy O'Mahony (Cork South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I beg to differ. He mentioned a few times that he made a submission to the Kerr report, and that he was one of six to do so.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Five.

Margaret Murphy O'Mahony (Cork South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Fair play to the Minister. It is grand to make a submission but Deputy Naughten is the Minister now, so the days of submissions are gone. He can act and I am asking him to do so. There is a huge potential for growth within the post office. Every one of them is computerised, even the very small ones and those in the non-viable areas. There is a huge potential there for future business.

The Minister also said that no one was forced to take this package, and I have no reason to disagree with him. I actually agree with him on that point. Many people took it for reasons of health, age, etc. Some of them just wanted to give up. There is no reason the service for those areas cannot be re-tendered to at least keep the post office open. Let the people retire.

With respect, I think it was bordering on mind games to ask people whether they wanted to take a package or not. In many cases, the community is in essence blaming the postmasters but it is not their fault at all. They were offered a package, which in fairness was a good package, but it has left the community in many cases without its heart and nucleus.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy has just gone over five minutes. For everyone's benefit, I advise members to ask more questions.

Margaret Murphy O'Mahony (Cork South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Both the Minister and Mr. McRedmond mentioned enhancing the services. There was a bit of back-slapping going on, but many of the services mentioned, such as the foreign exchange, were there in my time, which is a long time ago.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

It was not.

Margaret Murphy O'Mahony (Cork South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It was. I served myself. In the bigger post offices, and even in the town post offices, in my time. We need an injection.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I call Deputy Collins. I know he has statements but I ask him to keep it to questions because there will be more benefit.

Michael Collins (Cork South West, Independent)
Link to this: Individually | In context | Oireachtas source

At the outset, the Minister thanked postmasters and postmistresses. He is correct; we need to thank them. Nobody has been listening to them, however, for many years now. I have been trying to listen to them, and I have been speaking to them one by one. Many of them in rural Ireland are living on the minimum wage. Does anyone realise that? Does the Minister realise that? Does Mr. McRedmond realise that? They cannot survive and they are choked. They were forced into taking this redundancy because many of them have served their community brilliantly down through the years but they know there have not been any new services drafted into their post offices down through the years. The Government has failed to do that. An Post has failed to help them to survive. More of them are fearful of their future.

I live in a rural community and I know how rural Ireland is dying on its feet. I have seen the closure of Garda stations and banks. In my peninsula two banks were closed. What was the first thing that happened? The local supermarket was closed within 12 months, with the loss of 17 jobs in that community. If the post office is taken away, the heart is being ripped out of the rural community. That is what the Government and An Post are doing now. They do not realise what they are doing. There are four, nearly five, post offices in west Cork that are facing closure.

I ask Mr. McRedmond because I am getting slightly confused. We heard that it was 15 km but we are hearing 7 km today. Mr. McRedmond said earlier that people would not be left without a post office within 7 km. Allihies post office is 10.9 km from Eyeries post office. Obviously, in the rural part of Allihies, it could be 16 km or 17 km. Mr. McRedmond is going from post office to post office, which is a nice way to get An Post off the hook. That is 10.9 km. Drinagh post office is 9.5 km from Drimoleague, but Drinagh is being closed, as is the plan. Allihies is to go also.

Mr. McRedmond also said An Post would look at shutting one post office where there are three in order to save the other two. If that is the case, are we talking about Desertserges and Ballineen? They are both closing and only one will survive, which is Enniskeane. I look at west Cork and it is being chewed up completely differently to the way that Mr. McRedmond describes. These post offices are the lifeline in rural communities. We need their very survival. I ask Mr. McRedmond to look at Allihies, Ballineen and Drinagh and give that community the opportunities. I attended the public meetings and there is severe anger because the people feel they have been deserted by the Government and An Post. People need An Post to fight for them. I ask the Minister to do the same. I know he is a good, fighting Minister for the people of rural Ireland, but this is not the position they want to be in. They are losing their post offices. I know it because I come from that area myself.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I call Senator Marie-Louise O'Donnell.

Marie Louise O'Donnell (Independent)
Link to this: Individually | In context | Oireachtas source

I thank Mr. McRedmond and the Minister. I know the post offices are getting a battering but I think they are excellent. I even like the colour of them and the harp. I like the fact they were not based on greed, unlike every pillar bank. We have all been hurt, if not disemboweled, by the greed of the banks.

Who are the adjudicators? Where were they found? Who are they? What are their qualifications? What were the centralities and the boundaries of their adjudication? Did they visit Kilmeaden? Did they visit Killeshandra, Gurteen and Ballindine? As a reporter I would wander into towns years ago and one would think there was nobody there, but one would be foolish to think that because there were huge communities.

I would also like to ask about the financial services because I am a great believer in the Sparkassen model and the Kiwibank model. I am not convinced that they are not the way to go. I am convinced we need to look at this as a creative solution, but we are not doing it because the Government is terrified of the pillar banks. That is my opinion of it.

The Minister mentioned community banks, that he is interested in the community and that he will bring in community banking. Will he explain under what auspices he will have this community banking? The banking products, all of which I agree with, will be under the auspices of our existing pillar banks that I would not allow in my back door. Will he use these pillar banks and their products? If he will, as a conduit or an echo or a road into the post office, in what way will he change their profit margins? Will he start from scratch and say, "Well boys, come and work here and not in Ranelagh or Baggot Street"? If he is working under the auspices of the post offices, he is working to a different model here and he will answer a 1% or 2% for the new poor in Ireland. Call the young guy earning €30,000 who, along with his wife or partner, does not have a hope of ever getting a bedsit. Will the Minister say exactly what his banking products are and under what auspices? Will they be new social community banking, or will they be the pillar banks with manners put on them?

We should watch our language. We cannot use words like "the closure of 159 post offices" in the same breath as the word "historical". I would like to find out about the 231 that are left with collapsing incomes. Will the Minister say what he will do about that? The post office is a brilliant organisation but one must remember that it takes in a lot of money. Some €25 billion is on deposit. I have my little €5,000 there for a rainy day. What are the post offices giving back to the community? I know they are running a service but what are they actually giving back? It is like the book Move Fast and Break Things, which talks about Amazon and Google, which make billions, but do they build social housing? I do not think so. I would question that.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In reply to those last three contributions, I invite Mr. McRedmond and the Minister to respond in whatever order they wish.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

I will start with Senator O'Donnell. As she knows, the investment and lodgements that are made with An Post are managed by the NTMA, and they are invested in capital projects around the country.

On the 230 post offices that have been unviable until now and remain part of the network, they are critical to the development of the new services we spoke about earlier such as banking and digital assist-type services, and providing an offline avenue for people who have not had that up to now. They will see significant investment, as will the rest of the post office network across the country, which is critically important.

On the banking aspect, I do not want to go into the detail of it because I know it is part of discussions that are ongoing, but my understanding is it is not the pillar banks. While An Post is providing agency services for some of those banks, namely, Danske Bank, Ulster Bank and AIB, what An Post is talking about is a new service. Mr. McRedmond might talk in more detail about that.

As to the questions from Deputies Murphy O'Mahony and Collins, there is no doubt that post offices were the nucleus of the community in the past, but I do not believe that is the case today. We have not seen new, innovative services coming into the post offices. The generational change where we see younger people coming in and using the post offices has not happened. We want to bring them back to being the nucleus of the community, but that can only be done by putting investment into the post office network, modernising it and making it meet the needs of today and tomorrow.

It should not just be older people using the post office but families and younger people, not just at Christmas to buy stamps and in the summer to renew a passport but on a weekly basis. People should be using the post office for banking, e-commerce and online services such as are needed in respect of identity verification, for example. There are real and genuine opportunities for the post office network and the company is determined to roll out those services.

Deputy Murphy O'Mahony gives the impression that broadband is not being rolled out at the moment but it is. Communities across the country are getting it. Is it happening as quickly as I would like? Absolutely not. I am determined to make sure we continue the momentum on the build-out of broadband infrastructure until every home and business in the community has access. I am acting and have acted as Minister. The Deputy will see new and additional services that we have been working on over the last months being rolled out in post offices. I accept that my predecessors have talked the talk but failed to actually bring services into the post office network. That is changing and the fruits of it will be seen as part of the modernisation that is taking place.

In reply to Deputy Michael Collins I would say the service has expanded. We now have An Post vans in every village in rural Ireland on a Saturday, which was unheard of in the past, because we are expanding the parcel service. I accept the point he and Deputy Murphy O'Mahony make in respect of post offices in west Cork. That is why we have a review process that allows for those particular circumstances to be taken into account and for the other retailers in those communities to take on some or all of the services.

I will hand over to Mr. McRedmond.

Mr. David McRedmond:

I will start with the issues raised by Deputies Collins and Murphy O'Mahony. They are correct that some of the distances are greater than 7 km. I was saying the additional distances are 7 km on average. The 15 km as a measure is a target that is used for the social welfare contract by the Department of Employment Affairs and Social Protection. Certainly in the more remote areas, it can be further. I realise this is not going to be a popular answer in respect of the situation in the Deputies' area but, as a whole, County Cork has 125 post offices. The number of people affected by the post office closures are 1.4% of people, so 98.6%-----

Michael Collins (Cork South West, Independent)
Link to this: Individually | In context | Oireachtas source

They are the rural people who have been affected. Mr. McRedmond is forgetting that.

Mr. David McRedmond:

Absolutely, but 98.6% of people are unaffected by that. That is not saying we should not have to look after the 1.4% because we absolutely should, but it shows there is a measure around this and that we have very carefully looked at the network to try to make sure the services are available. I absolutely hear and accept what the Deputies are saying about west Cork and, as the Minister has said, there is an appeals process. I cannot get into discussing the individual offices.

Senator Marie-Louise O'Donnell has always been a great supporter of post offices. In response to her question, the adjudicators are Paddy McGuinness and Tom Hobson. Paddy McGuinness is ex-Western Development Commission and Tom Hobson is an adviser and consultant who has worked in many groups, including Údarás na Gaeltachta. They are upstanding people to be adjudicators. They are experts and have been carefully selected, not to serve An Post but to get to the right answer and implement the protocol.

On the 231 post offices that did not take the package, they are the ones that will benefit most from consolidation from the post offices that are closing. Not all of them will do so because it is spread geographically. They will get additional business and that is the whole purpose, to extend their viability. They are kept on their existing contract because if they switched to the new contract they would have less money as the number of transactions is very low. They are better off on the existing contract. They will get all the new services that go through. We were talking about foreign exchange, for example. That is extended into those offices which did not have it before. There are opportunities for co-location, which is another part of the strategy. If a post office shares its premises with a local Spar, Centra or whatever, that can bring a benefit in terms of footfall. We have quite a detailed plan for how to do that.

In respect of financial services, we do agency banking. We are agnostic about that. If someone has an account with AIB it is useful but the financial services are driven through our own regulatory infrastructure, particularly through Post Insurance. By the way, just last week we launched a whole extended range of life insurance products throughout the network. We are launching travel insurance within the next week. We are extending the services all the time. The financial services we are looking at are services that could come from other operators. We are not particularly considering the Irish banks to provide them. We do believe in the whole notion of ethical-----

Marie Louise O'Donnell (Independent)
Link to this: Individually | In context | Oireachtas source

That is a central point.

Mr. David McRedmond:

We do believe in the notion of ethical finance. We have to make sure the products are very transparent, simple and clear, that there is no obfuscation and that they are on the best terms we can provide. That is certainly true.

Marie Louise O'Donnell (Independent)
Link to this: Individually | In context | Oireachtas source

They are outside the pillar banks.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am going to bring in Deputy Tom Neville, then Senators Mac Lochlainn and Mulherin.

Tom Neville (Limerick County, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the witnesses for attending and thank the Chairman for allowing me to attend, although I am not a member of the committee. My question is about closures in County Limerick. There have been a number of public meetings over the last months. There was a meeting in Athea a few days ago about an impending closure there. This is one example of active participants who are looking to take up the post office in the area but we are being told it will probably close because the population is under 500 and the 15 km rule is coming in as well. How was the figure of 500 decided? Was it the specific census figures or was it the town boundary? If we went slightly outside the town boundary or out to the speed limits, we could start picking up 500. The population is on the brink of that figure.

Athea has been given money by the Government towards a sewerage scheme and development in the last year and a half. The town is going to progress and there will be future development there. That is very welcome and is on the back of the rise in the economy. There is also good broadband access available in the town and further investment has come in for flood relief and so on. There are all these services going in from the Government but An Post is pulling out. Would it not make more commercial sense for An Post to start looking at towns on a broader scale than just population and distance? It should look at all the other amenities, services and investments that are built around a town. In two, four or five years' time, as the town progresses, An Post could make a commercial gain there, and there are active participants looking at taking up the licence. We have been told it is probably not going to be re-advertised. I need clarification from Mr. McRedmond on that as well. They are looking at taking up the licence under co-location, which would create footfall for the shops and keep the positive momentum going.

I take on board what the Minister said. If a place is doing 12 transactions a week, it is not commercially viable. I get that. This is a particular place where we have good investment, a good future and bright prospects. The removal of the post office will hit this town. It will hit all that momentum. I am trying to create a case that it is commercially viable to have that work in tandem with what is going on. I would like to hear Mr. McRedmond's views.

Pádraig Mac Lochlainn (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I thank the Chairman for the opportunity to ask some questions as I am not a member of the committee.

The Minister and the chief executive officer, Mr. McRedmond will be aware that in Donegal, 17 post offices are scheduled for closure from south Donegal right up to the Inishowen Peninsula, my own home place. A number of public meetings are taking place and a number of communities are trying to save their postal services. I trust that Mr. McRedmond will listen to the proposals brought by them and consider the case for keeping open those post offices in Donegal.

There is much hypocrisy in this room. I was doing some research and a response to a parliamentary question in 2005 from the then Minister confirmed that in January 1999, there were 1,911 post offices across the State. By 2011 that number had dropped to 1,156, meaning 755 post offices were closed under a Fianna Fáil Government. To repeat, 1,911 post offices were open across the State in January 1999 and by 2011, under a Fianna Fáil Government, 755 of them closed. There must be some honesty about whether the recent announcement came out of nowhere. There has been a gradual collapse of the post office network across this State. It is the first fact that should be read into the record today. We must have some honesty, particularly from those who are making a political case.

Under the EU postal services directive, to which the State signed up quite a while ago, we have limited the capacity for the State to subsidise our post office network. We have tied the hands of our Government. It is why we have turned what should be a service at the heart of our rural communities in every village into something that must make a profit and have a business case. We need honesty about these two facts. It is the context or background of how we got where we are today. It is not the fault of the Minister, Deputy Naughten, on his own or Mr. McRedmond. They inherited this legacy and they have now been asked to speak to it. I cannot fathom how certain political spokespersons, when we consider their own track record and what they presided over, have the audacity to call out the witnesses today.

Marie Louise O'Donnell (Independent)
Link to this: Individually | In context | Oireachtas source

Hear, hear.

Pádraig Mac Lochlainn (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I will get into the solutions. It has been said that every settlement of more than 500 people will have a postal service. I am from the Inishowen peninsula and the electoral register, which does not even cover the total population, indicates Ballyliffin has 686 residents, Culdaff has 795 residents, Culkeeny in Malin has 544 residents and Dunaff in the Urris area of Clomany has 476 residents. It is clear that whatever criteria are being used by the company is not correct.

In all those areas there are community facilities and vibrant community groups running innovative community projects. Is there some way of linking to this and creating social economy models in some areas? The Minister, Deputy Naughten, is correct to reference the credit union movement and community banking. Is there some way of forming a partnership between the credit union movement, which is vibrant across the island, with the post office network? It has been referenced in the Bobby Kerr report. Others have spoken about the New Zealand or German community banking models. We must have an honest discussion.

Will the witnesses confirm that 755 post offices were closed in the period I mentioned? I am 99% certain I am right but I would like it confirmed on the record. What limitations have been put on the Minister and Mr. McRedmond arising from the EU postal services directive? There are many good people here today making a case to save these post offices and preventing others closing. Is there a case for arguing for repeal or the loosening of the directive as it applies to Irish rural communities? Is there a case for partnerships with the credit union movement across the State? Is there a case for partnerships within a social economy model with community groups based in almost all these areas across the State?

Michelle Mulherin (Fine Gael)
Link to this: Individually | In context | Oireachtas source

At this juncture it is clear from the working groups that something must be done. There is to be restructuring to make the An Post network sustainable, and we have spoken about it for years. An Post has been given a loan of €30 million from the Government to get itself sorted. A protocol is being applied whereby post offices will serve populations of at least 500 people, and nobody will be more than 15 km from a post office, on average. Nevertheless, I am very concerned about the way business is being done. I am not arguing that every post office ought to remain open but my concern is the way the company is doing its business.

Mr. McRedmond is speaking about rationalisation and restructuring but in my county of Mayo, 11 post offices are to close and I have heard no announcement about new services going in anywhere. On the one hand the company is applying a protocol wholesale and we have heard the announcement while the Oireachtas is in recess that a plethora of post offices are to close. I question the timing of the announcement and a special meeting of this committee had to be convened because this is causing such concern in so many rural communities. There is the practical aspect of accountability on the part of An Post as a State company.

I welcome that Mr. McRedmond is here today but what is he showing us other than that An Post is shutting down post offices? It is all I can see in County Mayo. The witnesses can speak about something else coming down the line but I have not heard any announcements about anything else coming down the line other than in generalities. There has been talk of other proposals for years. As far as I can see, the company is applying a formula that it can argue has some fairness or method but the reality is the only post offices closing are ones where postmasters have accepted a package. The company is not forcing anyone to close. It is driven by the fact that somebody has had enough for various reasons. I do not for a minute blame a postmaster for this and so many of them have delivered excellent services throughout the years. This is a different matter and it is about what the company is doing to expand services.

The Minister indicated the number of unviable post offices that will get more services but what about the other post offices? Not every area is making the same argument but I could use Ballindine post office as an example. Three businesses have expressed an interest in taking on the post office service that closed on 10 August. There has been no correspondence with these people, although one may have received an acknowledgement from An Post of receipt of the expression of interest. None of the rest heard anything subsequently. While I understand there will be a review at the end of September, the post office has already been closed. My understanding is that all the post offices that are closing could have stayed open until January. Why not have a review or consultation with the affected communities and people prepared to put their money where their mouth is and carry on these services before the post offices close? It is a bit like the horse bolting and closing the gate. People are right to be cynical about the way the company is doing its business. There is talk that services will be improved but there is no evidence of that on the ground in rural Ireland. I know there are a few places where post offices have been opened but they are not where I am from. It is not in Mayo or any of the places represented here.

There are serious business people in Ballindine who subscribe to the idea of things paying for themselves so why did not receive a reply? If there had been some consultation in the case of the Ballycroy post office, the company would know there is no other post office within 15 km and it has a population of over 600. It now has to backtrack as a result. What is happening with Ballycroy? If there had been consultation, the company would know it got the protocol wrong.

Finally, we had community and public meetings in respect of Belcarra post office. What is happening with that post office? It is a growing suburb but people are being directed to a post office one would not go to because the road is not safe. Another post office nearby, Ballyglass, is also closing down. There seems to have been no cognisance taken of that. People are having problems engaging and things are being done in the wrong way.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Senator's point is very well made. May I bring in a fourth speaker on each occasion in order to allow us to get to everyone who wants to contribute? I call Deputy Michael Harty.

Michael Harty (Clare, Independent)
Link to this: Individually | In context | Oireachtas source

I thank the Minister and Mr. McRedmond for attending. I also thank the Chairman for giving me the opportunity to speak because, while I am not a member of the committee, I feel very deeply about this issue. I understand that Mr. McRedmond and the Minister have a job to do to make An Post viable. However, as public representatives, our job is to represent our communities, particularly those that are going to lose their post offices. As previous speakers indicated, there is a cascade of effects on a local community that loses a post office. If one goes to a village five or ten years after it lost its post office, one finds that it has become a shell of its former self. The financial viability and sustainability of the community involved is gone. That is our perspective as the people elected to represent such communities.

It is not just 159 communities which will lose their post offices. In fact, 390 and perhaps more of the 670 post offices that will be offered new contracts will find they do not have a viable future. There will be a ripple effect in the communities that will lose their post offices immediately, but also in many communities that have not yet lost them. The State must intervene to support rural Ireland. That is the point Deputy Eamon Ryan and others have been making. There must be some form of support for rural Ireland, which must not be abandoned. There is an abandonment. Do the Minister and Mr. McRedmond they appreciate the depth of abandonment felt by these communities that are going to lose their post offices now or that will lose them in the near future? There is real anger among people. Deputy Dooley referred to public meetings. We have had six in Clare and six out of 14 took the option. The other eight in Clare will, undoubtedly, have to close in the near future because the An Post is not going to invest in post offices in communities of fewer than 500 people. The effect on these communities will be akin to that of Brexit. It will tear the heart out of their economic viability. In fact, it will be far greater than the effect of a hard Brexit nationally.

There is a commitment in the programme for Government to the effect that new Government services be devolved to the post office network and that consideration be given to a public banking system. In the two and a half years since the programme was introduced, none of those Government services has been transferred to post offices and it appears the concept of a public banking system has been abandoned by the Government and will not be introduced. The banking system being introduced through post offices is a pillar bank model. As such, we are going to support our pillar banks rather than introduce community banking, which would return profits to local communities. I want the Minister to explain why the public banking system been abandoned.

I refer to possible solutions. We have held six public meetings in Clare in the past two weeks and a number of solutions have been put forward by communities. The first of these would involve a public service obligation to allow essential post office services to continue. There should be an option of salaried positions, part-time positions and a special contract for those who wish to co-locate operations to another business in the area. Postmasters and postmistresses should be appointed as peace commissioners in order that they might provide meaningful services to our post offices. There is random selection regarding post office closures in view of the fact that 159 people have taken packages while 231 have not. That is just a random selection based on the particular circumstances of the postmasters in those areas. It is not fair to a community that it comes down to a random selection like that.

There is a silo mentality in this Government. Departments operate in silos and fail to take into account the effects their decisions will have the sustainability of communities. The Department of Communications, Climate Action and Environment may make a decision which results in the Department of Rural and Community Development trying to pick up the pieces following the destruction of local communities. The closure of post offices is an example. Why has this not been rural-proofed to protect those rural communities which are going to lose these services?

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Minister and Mr. McRedmond can take those questions in any order, but I ask them to try to be as brief as possible, acknowledging that some will require detailed answers.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

I will try to be as brief as possible. To those members of the public who happen to be watching these proceedings, I note that Senator Mac Lochlainn is right in that there has been a gradual collapse in the post office network. The reason that happened is that no Minister wanted to be put in the position in which I have been placed today. I am trying to set out a viable future for the post office network. Perhaps not publicly, but privately everyone in this room will accept that we cannot keep every single post office open. When members go to their public meetings they have to take a different approach, but I have decided that we need to have a viable future for our post office network. It is not acceptable to continue to allow post offices to close at a rate of one every second week for the next 12 months to two years. Rather, we must set out a clear future for our post office network and put real new services into post offices.

I taken the point Senator Mac Lochlainn makes about looking at solutions. In fairness, I have had a great deal of engagement with the Senator down through the years. He is someone who is very constructive in that regard. From my experience dealing with the management team in An Post, I know that any constructive proposal put to it will be explored and considered in a genuine way. I come back to the point I made earlier and to Deputy Neville and Senator Mulherin who referred to specific cases regarding specific post offices. The chief executive cannot speak to that at this meeting. However, it is the reason that there is a review mechanism built into this. It is so that those specific, individual cases which may not be known to the company can be looked at independently of the company. That is why there is a mechanism for local retailers to contact An Post if they believe they can offer some or all of those services in their own local communities. That can be independently reviewed by this team. The mechanism is there because there are specific and unique circumstances in individual communities which it is not possible to foresee in relation to the statistics. I encourage those communities to make submissions and let the independent team look at the position.

Senator Mac Lochlainn referred specifically to the postal services directive. It is not an impediment to investment. The Government is making an investment of €30 million, of which €15 million is for the postal mail service and €15 million is for the post office network service. The postal services directive deals with the universal service obligation in respect of the five-day a week delivery service. In fact, it is a tool I was able to use to maintain the five-days-a-week postal service. Thankfully, and in answer to some of the questions here, anyone who travels in rural Ireland today on a Saturday will see an An Post van. No one can tell me that is not an expansion in services. It is a new service which was not there heretofore in rural Ireland. It is absolutely the case that we need to put more services into rural Ireland. The company is committed to that and is going to invest in every single one of those post offices which remain in the network. I note to Deputy Harty that they will see new capital investment to modernise facilities, technology and the services they provide in communities.

On community banking, a report was compiled and published. It was identified at the time that the next steps include exploring a local public banking avenue. The very next step involves a tender to secure external consultants to carry out an independent evaluation of local public banking and to run a stakeholder forum. I understand that the Department of Finance is drafting the terms of reference for that tender and has engaged with Irish Rural Link and the SBCI to get their input. That is something that is ongoing in tandem with the work An Post is doing in respect of its banking services.

Mr. David McRedmond:

In response to Deputy Neville regarding what decided the 500, a detailed analysis was carried out. There was no clear plan in terms of defining areas in the context of a strategy for rural Ireland. We did a lot of analysis and concluded that 500 was the number which could best define towns in Ireland. It was the census definition but, as I have already said, I will revert to the committee on that point. What if a town grows? At any time, it is open to any community to apply to have a post office and we are open to that. We are also open to different solutions. We are open to PostPoint, parcel depots and post offices and anybody can apply at any time. We have a protocol in place to determine whether it is viable. That is why we announced recently that we are opening post offices in Ballon, County Carlow, Kilworth, County Cork, Tullyallen, County Louth, Kentstown, County Meath, and Killane, County Sligo. We are opening post offices as well as going through this consolidation.

Senator Mac Lochlainn asked about the EU postal services directive. As the Minister has clarified, it applies to the mail service but not to the post office service as such. I will have to check if 755 post offices closed in that period and confirm it for the Senator.

Pádraig Mac Lochlainn (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I ask that Mr. McRedmond email his response to me on that.

Mr. David McRedmond:

Yes, I will do so.

On the issue of the credit union partnership, there have been some discussions. What I will say on the issue of financial services overall, which also relates to the question on the pillar banks, is that our main financial services are driven by Avantcard and we use a FinTech company to deliver some of our other services. Most importantly, we are just completing our financial strategy which will see us launch a request for proposal, RfP. Under that RfP it will be open to anybody to apply to provide services. As already stated, the nature of EU banking regulation is changing quite dramatically and this means that banking data is open and one does not need to have a licence. An RfP will be issued and it will be on that basis that we will decide on the best services for citizens.

Senator Mulherin referred to the lack of announcements on new services and that is a reasonable criticism. We must ask if we are publicising the new services sufficiently well. We certainly have been announcing them. We have been putting up notices in post offices telling customers that agency banking is available. We have been advertising the roll-out of foreign exchange services this summer. We have undertaken a lot of advertising in respect of foreign exchange cards. We have been doing all of that but it might be the case that we are not doing it enough to make sure that all communities are aware. We will certainly look at that again. When we undertook advertising last week we made sure to include all regional as well as national newspapers but I absolutely accept the Senator's point in that regard.

I was asked why the closures announcement was made when the Dáil was in recess. Everything was driven by doing the deal with the Irish Postmasters Union but I did not expect that to take three to four months. I expected it to take a month, in which case the announcement would have been made far sooner and would have been during the Dáil term. These businesses are not our businesses. These post offices do not belong to An Post. We cannot force any of them to stay open. We tell them that a package is available and that they can take it and exit from their contract. If someone is going to take over a post office, I would imagine that he or she will take over the entire premises and everything else involved. As I said at the start, the main reason people are taking up these packages is that their post offices are unviable in those locations. That is the reason we did it when we did. The Senator has suggested that the way it was done was cynical but there was no intent in terms of doing it when the Dáil was closed. Our intent is to get on with the business. There is a real drive on in An Post, because of the financial difficulties we were in 18 months ago and we are now back into a position of growth and profit and are delivering extended services and improving our parcel services. There is a real drive to get on with the work and that is what we are doing. If anything, haste was driving it and we certainly had no intention of doing it in a way that was not entirely open and visible. We have issued press releases at every stage, including to Deputies. We have done everything we could to try to keep people as informed as possible along the way.

Deputy Harty spoke about the possibility of more post offices closing and referred to the approximately 230 postmasters that did not take up the package. This is a scheme that we agreed with the postmasters and it has taken a year to put it in place. It took months to negotiate and we are not doing another one. Our aim now, as I have said previously, is to make sure that the remaining post offices are viable, with new services, with the plans for co-location and with all of these other pieces. That is very much at the heart of this. In terms of the services, I very much appreciate any support we get in that regard. It is up to members of this committee to support the delivery of Government services through the post office network. There was a debate regarding the television licence, which I understand, but a recommendation came from this committee that the licence fee be collected by the Revenue Commissioners, even though An Post is doing a very good job with television licences. That is an example of a service should be available in post offices.

The Deputy was asked if the selection was random. It was not random. The Deputy is correct that out of those selected as potential takers, there is a degree to which one office took it and another did not. However, the fact that the package was offered to that particular cohort of post offices was carefully designed.

Tom Neville (Limerick County, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I have a brief question for Mr. McRedmond relating to the appeals deadline. I ask that An Post considers extending that deadline because communities are trying to get organised and gather as much information as possible. Obviously, they are going to learn from what comes out of this meeting and will want to include that information in their submissions. In that context, I ask An Post to consider extending the appeals deadline. I also ask that An Post considers extending the deadline for some of the impending closures. In some of the villages or areas earmarked for closure, contingency services are being considered by businesses in order to retain footfall. If a post office closes, the people cannot access money. In that scenario, the local shop may want to install an ATM or organise mobile ATM services. We do not want post offices to close before ATMs are provided.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy's point is well made.

Michelle Mulherin (Fine Gael)
Link to this: Individually | In context | Oireachtas source

I posed a question that was not answered.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What was it?

Michelle Mulherin (Fine Gael)
Link to this: Individually | In context | Oireachtas source

My question was around why certain post offices were being closed, including in particular the post office in Ballindine. A review will take place after the fact when these post offices could have remained open until January to allow for proper public engagement. I also asked why An Post is not engaging with people who have submitted expressions of interest and whether that situation will be remedied.

Mr. David McRedmond:

Certainly, An Post will engage through the adjudication process that we published. An Post will engage with any applications that come in to us. I cannot deal with the specifics of the case referred to by Senator Mulherin but we absolutely will engage. In terms of post offices closing, as I have said, these are not An Post's businesses. These are operated by the postmasters. We will absolutely engage. Even if the post office is closed, we will engage with communities. In terms of extending the deadline for making submissions, we want to be reasonable but we cannot keep it entirely open-ended. That may seem like half an answer but we will attempt to be reasonable. Likewise, in terms of post offices closing, if something needs to be done beforehand, while it is not up to us in the end but up to the postmaster, we will attempt to do what we can.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Okay, I have two more rounds. We will take all the questions together, rather than waiting for each round. Is that agreed? Deputy Danny Healy-Rae is first.

Danny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

I thank the Minister and Mr. McRedmond for meeting us today because there are many anxious people in Kerry and all over the country who are concerned about what is happening. I want to thank the postmasters and postmistresses who have decided to take this package. I know one man whom no one could begrudge retiring because he has spent 56 years behind the counter.

Nobody can blame him for taking the package. I wish him well for the years he has left because he served his community very well. The Minister and Mr. McRedmond can dress it up whatever way they wish but 159 communities will be hit by the closure of these post offices, including young people, old people and people who have no way of travelling outside their parish other than by paying for a taxi. People in this room might not know it, but there are no taxis available during the day in rural areas. That is a fact. In Dublin, from the Red Cow Hotel to the city, there are all kinds of services. People do not realise that these are missing outside that area. What will be done about that?

Some 12 post offices are to close in Kerry. Nine of them are in north Kerry and in the case of two of them the nearest next post office is in County Limerick. I have no complaints about Limerick-----

Eugene Murphy (Roscommon-Galway, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Deputy was at the hurling.

Danny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

-----and in spite of what people say I saw all of the senior hurling match.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

Good man, Deputy.

Danny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

I saw every bit of it. Glin and Abbeyfeale are the nearest to Asdee and Duagh. Nine post offices in one circle in north Kerry are being closed, including Ballylongford, Ballymacelligott, Moyvane, Kilflynn and Asdee. If a few more are gone the only places people will be able to go is Listowel, Tarbert and Tralee. That is all that will be left in north Kerry. Mr. McRedmond could run the biggest company in the world and make a profit from it. I would go so far as to say that if he was selling sand in the Sahara desert he would make a profit there. However, post offices are different. They are a social service for people and the Minister should treat them as such. The Minister outlined all the work he has done, but he has much more to do. He must treat the post offices differently. They are a social service for the people. Mr. McRedmond said one would be closed so that two would survive. However, if Lixnaw in north Kerry is closed and Ballyduff is left open, does he know the rivalry, difference and identity that the people in these parishes wish to retain? They want to retain their identity. That is what it is about, and they are not being allowed to do that. The witnesses can dress it up whatever way they wish but they are tearing the hearts and guts from these communities.

The Minister said that they were the nucleus and that new innovative services should be put in them. That is a role for the Minister and Mr. McRedmond. It is the Government's role. It is not the role of the communities. It is not the role of the old person who has always gone to the local post office for his or her pension or of the mother who collects her child benefit. That is being done away with now. In one community, Gneeveguilla, there are 1,200 people and there will be no post office. In a short time there will be no shop there. One can tell them to go to the post office in Rathmore and that it is 7 km to that post office. However, there are other parts of Gneeveguilla that are much further than 15 km away.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Do you have a question, Deputy?

Danny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

Are these people going to be disenfranchised? Many of them work in Munster Joinery. They have one car and their wives cannot travel down to Rathmore, Barraduff or Headford for the next nearest post office. The Minister and Mr. McRedmond are finishing these people as a community.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Thank you, Deputy.

Danny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

Are they going to help them to retain their identity? These are people in Kerry who are outside the Red Cow Hotel. The post office in Ballinskelligs is closing and the next nearest post office is in Waterville. It is 12 miles from one post office to the other but some people will have to travel almost 20 miles, and they cannot get a taxi. Mr. McRedmond does not realise this. The Minister is hard working but there is a lot more work to be done. This was shoved in front of us-----

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Thank you for your question.

Danny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

I came here this morning especially to represent the people.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Absolutely.

Danny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

There were 170 people in a hall in Moyvane and their hearts were on the ground after getting this news. I must go back to them to explain what it will mean. I appeal to the Minister to put somebody in these places and pay them. There are people in the GPO who have been paid for the past ten years for doing nothing there. There are hundreds of people there and they are not accountable to anybody.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Your point is very well made.

Danny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

The witness mentioned that he might do something with them. It is not fair to leave people in a places such as Gneeveguilla and Ballylongford without a post office at the stoke of a pen while we were on holidays and unable to tackle the Minister about it or to voice the opinions of the people.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Thank you, Deputy. I call Deputy Fitzmaurice.

Danny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

However, we will be back on 18 September because what is happening is not fair or right.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Thank you, Deputy. You have made your point clearly and very well. We have to move on.

Eugene Murphy (Roscommon-Galway, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

On a point of order, I have nothing against Deputy Fitzmaurice but I have been sitting here all day so was I not due to speak before him?

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

No. I took note of people as they indicated their wish to contribute. Next is Deputy Fitzmaurice followed by Deputies Mattie McGrath, Nolan, Eugene Murphy, Canney, Pringle and O'Keeffe. It is in the order that people indicated.

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

I put my name down in time.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I ask you to confine your contribution to questions.

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Yes, and I wish to have them addressed directly by the Minister and Mr. McRedmond. I thank them for their presentation.

An Post tendered for a contract with the then Department of Social Protection. When it tendered it gave the number of outlets it has around the country for the services. That is how it got the contract. An Post is now in breach of the contract up to 2019 because it is closing post offices that it said in the contract would be providing the services to the people. Can Mr. McRedmond elaborate on that? Can the Minister confirm that An Post is in breach of the contract with the closure of 150 post offices?

Second, 231 post offices have not taken up the offer for closing and An Post is offering a new contract to 690 other post offices. Will it offer a new contract to the 231 or will An Post have 690 on one contract and the 231 on another? If that is what it is contemplating, I do not believe it is legal.

The third question is about the criteria for adjudicating on whether to open or close post offices. Mr. McRedmond referred earlier to one in every two that will survive in an area. I will give an example in a hinterland of 15 km to 20 km. An Post sent out word to Creggs, Glinsk, Ballymoe, Williamstown and Athleague in the one area. An Post went around the periphery and offered that to every post office in the hope that they would close. Mr. McRedmond's reference to one in every two is not factual.

Another criterion that was used was inside the 15 km zone. I am surprised at this from somebody who comes from a business background.

We have one post office in Athleague and the Minister is very familiar with it, where approximately 200 cheques go out from one factory every day, where there are people of other nationalities using the money transfer service and where there are more businesses down the road that sell cards and put a large volume through. I listened to what the Minister said about post offices being viable and not viable. Obviously the Department has not looked with the criteria that it has laid down because what it has done is to look at what is between the two speed limits. There could be a new community of young people, who would not be getting a pension, who would all be working inside those speed limits in some areas of the country. Does the Minister admit that the system that has been used is flawed and needs to be re-examined?

These are the facts of what is happening. There are 150 small villages that are now at risk. The Minister said they went through a consultation process and he is right. They went through a process that they drew up with the Irish Postmasters Union, IPU. What is the most important part of An Post? It is the people who pay the money and give the service by sending letters and drawing the pension because that is what generates the money. What part of the process were they brought in to? My understanding is that it was none of it.

Is Mr. McRedmond prepared at this stage to put a hold on closures until July of next year? If he understands rural Ireland and I hope that he does, is Mr. McRedmond aware that the money that comes in with the pension, the children's allowance or social welfare to that small village's local shop, chemist or butcher shop may be what is keeping that village going today? I am not saying that every service needs to be in every corner of Ireland, I will never say that, but when people have money they spend it locally. I ask Mr. McRedmond to engage with Oireachtas Members and communities to keep that facility alone in those small villages because if that goes we are looking at shutting the door on those small villages.

I refer to An Post's appeals process. An Post has set up the appeals process, I have talked to Mr. Gillespie, one of the workers and I have talked to Mr. Lafferty. Before we go through the appeals process I have been told "No". That is a fairly good system. I have also talked to the independent adjudicator and all that has been detailed to me is the terms of reference set down by An Post such as 15 km, 500 people, bla bla bla and now we know that it is flawed from the examples I have given already. Is Mr. McRedmond prepared to do those few things?

On public banking, the Minister has spoken about it and I welcome what he has said, but public banking is not much good if the door is closed in the post office. I know, and I have proof of it, that the Public Banking Forum of Ireland has not been contacted. The Minister talked about Irish Rural Link but it has not been contacted. He referred to the different stakeholders but they have not been contacted. Deputy Mattie McGrath will have heard it as well.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

There will be a stakeholder forum is what I said.

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

I am sorry if I misunderstood the Minister.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I have to move on, Deputy.

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

I thank the witnesses for their time. I want those questions to be given straight answers.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is the way to proceed here, keep it to questions and I will ensure they are answered. I am not talking about Deputy Fitzmaurice but if we could stick to questions it would be great.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

I hope the Chair is not talking about me either, I will be patient.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

No the Deputy has not spoken yet.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

I want to pay tribute to the postmasters and postmistresses who are retiring and indeed those who are continuing for the work they do and I thank the fir agus mná an phoist who deliver the services. It was mentioned earlier about new services expanding in the vans. I can tell the witnesses that many of them are bringing the bread and the paper and are bringing the only bit of life and survival to many people and that is the nature of them, they are doing it voluntarily and they are great people.

On the appeals system, who can appeal a decision? Is it the community or the post office family? If it is reviewed and a contract is awarded to another individual, be it a family member or somebody else, in the same premises or in another shop, what effect does this have on the retiring postmasters and their expected severance package? That is something that is not being mentioned at all.

Many postmasters are very unhappy that they were not afforded any sort of legal advice by either the Irish Postmasters Union or indeed An Post on new contracts being offered. There is a lot of subterfuge going on here as well as intimidation and rushing. Why were the postmasters asked to vote on a new deal referring to their packages and the new contracts without having the finished paperwork? An Post had enough time to do it so why is it engaging in these deceitful practices? Something smells very bad here in this situation.

Further, I cannot understand how the IPU, and I salute it in its job of representing postmasters and postmistresses but it has no remit to do dirty deals with An Post with the acquiescence of the Minister to banish post offices from villages. It is not its remit whatsoever. Its representatives are elected by nobody or represent nobody in those communities. They represent the postmasters and postmistresses. That was a shoddy piece of work and they should not have been cajoled along to do that and given inducements of money as well to banish community services from the very customers who were supporting them. They complained about the customers they did not have and, fair enough, many of us were not great but the people who were supporting them are the ones who will suffer most. It is very unfair. Management are more concerned with cushy offices and big jobs for themselves. Why do we not sell the GPO? We cannot get rid of the idle staff who are in there so sell the damn place and they will have to get them out. They got them out in 1916 and it was a much more important issue. It is scandalous what it going on there. The Minister has told me before that there are staff in there who are unemployed and not gainfully employed. I want him to answer that here today. It is not fair to punish postmen and postwomen out in the country in all kinds of weather who are not gainfully employed in the post office due to trade unions or otherwise. It must be outed. Why are the rural people always expected to carry the can for the waste?

Mr. McRedmond also said that he was not supporting big banks but he is also refusing to support the community banking system put forward here by three wonderful people who are up and down this country night and day researching this and they have given him the models. We have a motion here that should not have to be here today. The Rural Independents put it down in negotiations with the Minister's office and in consultation with the Department of the Taoiseach. Every Deputy accepted it. It was to give a five-year window and give over the tools of the trade, not a hand out - we are not begging for anything in rural Ireland, we want to make our way and we are proud people. Let the post office survive and not be tied behind the bank or in hock to the big banks which this Government is and the last Government was and many more as well. I will hand this motion to the Minister again in case he has forgotten about it or has not read it. That is what was passed by Dáil Éireann. We are asked every night at public meetings to have the will of the people expressed through every Member in the Dáil and have that motion put in place and not have lip service, talk and love letters from the Taoiseach to Micheál Martin about confidence and supply.

We want to have a modicum of service in An Post and we want to allow those good people to provide those services, work for the people and give people some chance of survival. Everything is not in Dublin. Rural Ireland does matter and the Government will know it when it faces the ballot box.

Carol Nolan (Offaly, Independent)
Link to this: Individually | In context | Oireachtas source

I begin by thanking both of the witnesses for their contributions. I am disappointed with the whole outcome. I do not buy into the excuse that many of the post offices that are being closed were unviable. That is the witnesses' perception, I do not agree with their sentiments. What we should be doing here today is giving those post offices support. As rural Deputies we are expected to come in here and accept this. We are not accepting it and it is very clear from the sentiment expressed here by the committee that we will not take this, nor will the people who we represent. I am getting calls from communities in Laois, Offaly and north Tipperary. People are very angry and frustrated and it is another blow to rural Ireland but we will not accept it any more. We will not put up and shut up, it is as simple as that. I wish the postmasters and postmistresses who are taking the voluntary contribution and retiring well. It is their entitlement and we all respect that but what is the process for putting in replacement contracts? In this great democratic institution, why is the motion that the Rural Independents put forward two years ago which many of us spoke on and we all supported not recognised?

This should never be happening today. We should be here to talk about further supports for our communities.

Mr. McRedmond mentioned further expansion of the post office network, including opening new post offices. Does this mean a re-examination and reassessment of post offices in towns with a growing population that were closed because the postmaster or postmistress retired and there was nobody to take up the position? I met Mr. Laverty of An Post in Killeigh, County Offaly, about two years ago to discuss a retirement in an area of growing population. There were concerns about the process of advertising the post. At the time a businessman was willing to use the co-location option in his supermarket. I ask Mr. McRedmond to revisit that and give those areas a chance because it is unfair.

At both the Joint Committee on Agriculture, Food and the Marine and in this committee, a number of members have mentioned the Sparkasse model of banking. Is it possible to have representatives from Sparkasse appear before the committee, in addition to An Post representatives, to discuss this model? That is what should happen. We are a so-called democratic institution and it is only fair that everybody gets to contribute.

It has been brought to An Post's attention that the range of services Mr. McRedmond mentioned have not been advertised properly. Some areas feel aggrieved because they did not receive supports but also because members of the public are not aware of the services available. What are An Post's plans to advertise these services further?

Eugene Murphy (Roscommon-Galway, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Looking at the staff members behind the glass panels in this room, I think they will be dreaming about post offices for a long time to come. They have had a lot of it today.

The Minister, Deputy Naughten, is a constituency colleague of mine. I acknowledge he has clarified a number of issues for me and has been in contact with me. I cannot disagree with virtually everything that has been said by fellow Oireachtas Members. I accept that a lot of this has built up for years and that during our time there were issues with post offices. Deputy Martin Kenny knows my part of County Roscommon very well. I point out to him and to Senator Mac Lochlainn that 15 or 18 years ago, within a radius of 7 miles we had eight post offices. Two of them were a mile and a half apart and three more were 2 miles apart. In reality they could not all survive. We are now at a different juncture and because of that we are concerned.

In acknowledgement of An Post in the past, when rural areas had no transport apart from walking or cycling, An Post gave a tremendous service virtually in every parish. The first Minister for Post and Telegraphs was appointed in 1924 and we were able to put in place a service which, I accept, came from the old British system. In 2018 we must be able to give a service that tries to look after all the people.

The Minister, Deputy Naughten, has clarified a number of issues affecting Roscommon-Galway. I know people in the affected areas who are prepared to take on the service. They have approached me in a confidential manner. I will not say any more about it. We need clarity on the issue of needing a population of 500. I think An Post goes out to the point where the driving speed limit changes, but the catchment area takes in many more people. I seek clarification on that.

I have a problem with Mr. McRedmond's figures. He said that only 1.98% of people in County Cork were affected and 3.9% overall. In the counties of Donegal, Roscommon, Leitrim, Longford, Mayo, Sligo, Galway, Clare, Kerry, Offaly, Cavan and Monaghan, almost 54% of the people are affected. Many of those closures are in one regional part. Mr. McRedmond's figure of 3.8% of people being affected is not a true reflection of my part of the country, in the west and north west. We need to take that into account. While the overall figure is correct, if one breaks it down to how it is affecting my part of the country, the figure is 55% to 60%.

I acknowledge the Minister has a very difficult portfolio. As the Minister knows, the national roll-out of broadband affects 50% or more of the people of County Roscommon - he is doing his best on it. In talking about Internet facilities, many areas will not be able to buy into that in counties like Roscommon and parts of Galway.

The credit unions were mentioned. When representatives from the Public Banking Forum of Ireland appeared earlier, I made the point the Minister made. I would be very wary. We should develop the credit unions more as they do a lot of work in providing a service and surely, a banking model should be based on that.

I will reiterate something I mentioned previously. An Post is looking for new ideas and we all have a responsibility in this regard. Has An Post ever considered the possibility of trying to encourage students to use the post office service? About two years I did a survey of 80 students in a local school attended by my daughter. Of 80 students, only one used the post office service and actually walked into a post office, which indicates there is a problem there. The Minister, Deputy Naughten, can be very good on issues like this. Why not look at a pilot scheme of setting up post offices on our university and IT campuses? Let us be radical here and sell it to the students. There is a lot of business there and a lot of banking can be done there. We should study that to see if it could be effective.

Marie Louise O'Donnell (Independent)
Link to this: Individually | In context | Oireachtas source

I agree.

Eugene Murphy (Roscommon-Galway, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I have a final point and if Mr. McRedmond does not have an answer, he can come back to me. About two years ago there was much talk of the microloan system. There were talks between the credit unions, An Post and the then Department of Social Protection. I do not believe that was set up. That is another area that could be developed.

The Kerr report stated:

Having visited the UK I was struck by the fact that they have grappled with similar issues and embarked on a journey, with significant Government support, that has resulted in greater segmentation of the Network and investment in post offices. This is an exercise that needs to take place in Ireland.

Seán Canney (Galway East, Independent)
Link to this: Individually | In context | Oireachtas source

I am not a member of the committee and am grateful for the opportunity to say a few words. I come from east County Galway. Nobody is happy about the closure of post offices, albeit through a redundancy scheme. In County Galway 18 post offices are closing; I do not know the exact number in my constituency. Funnily enough, the people who have contacted me since the announcement of the closures - this is probably something for both Mr. McRedmond and the Minister, Deputy Naughten - are business people in the village who are asking whether they can get involved in running this post office by bringing it into their shops. They need to know who to contact to do that.

I understand that An Post and the Department are open to placing the post office in a shop in a village or whatever. While that might be considered, who has the final say on whether it would be done? Is it An Post, the Department or someone else who might look it and decide this would work? In the case of four post offices in my constituency that have closed, I have received phone calls from people, mainly shopkeepers, who have stated the post offices were adjacent to their premises and they were willing I am to take on the post office and place it in their shops. If we can do that, we will be increasing the post office network in these areas. My concern is about scenarios in which such post offices are closed because like every other facility, when something closes it is damn hard to get it reopened. Is there a timeframe from when someone puts in an application such that it would be considered fairly swiftly and a "Yea" or "Nay" would be given on it?

While I welcome that all these additional services are being considered for the post offices, one point is blatantly obvious to me.

If I did a survey in my village, I expect I would find that many people do not know what is available in the local post office. The marketing of the post office network in local areas is weak. If the post office is going to be great again, we need to educate the young people about whom Deputy Eugene Murphy spoke. We need to encourage them to come in with their savings books to put in a couple of euro to save for their holidays. This will make them aware that the post office is there to be used. We need to get them used to going into the post office. Every aspect of the retail industry in Ireland is changing because of the Internet and online shopping, etc. The retail business has to change. The post office network needs to change as well. It is okay for Mr. McRedmond to say that An Post will do this, that and the other. I hear about the changes that are made, but I know most of the public does not know what services are available in post offices. As we go forward, we need to be able to get that information out if our efforts are to be worthwhile.

Thomas Pringle (Donegal, Independent)
Link to this: Individually | In context | Oireachtas source

I thank the Chairman for letting me in. I apologise for missing the earlier part of the meeting. I was at the meeting of the Joint Committee on Agriculture, Food and the Marine. Some of my questions may have been answered and I apologise if that is the case.

I agree with the sentiments that have been expressed about Fianna Fáil, Fine Gael and Labour Party members. It is a sign of the role they have played that post office closures have taken place throughout the country on a continuous basis over the past 20 years. It is important to mention that because attempts are being made to suggest everybody is to blame.

The Minister has given a good defence of his role with regard to post offices as an Independent member of the Government. That might be a signal of what needs to happen in the future if we are to continue to defend post offices.

I ask Mr. McRedmond and the Minister to explain the relationship between the Department and An Post. The distinctions between the roles of both bodies need to be clarified.

The Minister has said that his Department is rolling out some services through the post offices. I ask him to explain how that came about. Did they go out to tender? If so, how did An Post win that tender? This is important as well.

I refer to the closures that have been announced. The number of closures in County Donegal - 17 - is the second highest in the country. Why were the service improvements not rolled out to see how they would work before the closures were announced? It would be better to approach the matter in that way rather than announcing the closures first. Some of these post offices could be viable when the new services are available and are happening. That is important. The approach that is being taken has led to unnecessary conflict. This could all be done in a different way.

Mr. McRedmond mentioned earlier that is not possible to keep a post office open that is conducting just 12 transactions per week. I would be interested to know how many of the post offices that are proposed for closure have just 12 transactions per week.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Deputy Kevin O'Keeffe is last but not least.

Kevin O'Keeffe (Cork East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Go raibh maith agat. I welcome the Minister and Mr. McRedmond. I missed the start of the meeting. I hope I will not repeat some of the issues that were raised earlier. We all acknowledge that post offices have closed before this year, before last year and under previous regimes. I was picking my brain to recall the post offices in my own area that closed 20 years ago. Most of them were stand-alone post offices. There was a stand-alone post office in my parish of Ballindangan. I remember a big campaign 30 years ago when a stand-alone post office in Bartlemy was being closed.

There is a trend of bigger significance at the moment. It is having a bigger impact on communities. I have seen in my constituency that the closure of the local post office leads in many cases to the loss of the local shop as well. That is where this will have a major impact. I acknowledge that many post offices cannot stand alone. When post offices close, it can lead to the loss of other services, like shops and newsagents, in local communities. That is where a bigger backlash from the public will be felt.

Reference has been made to County Donegal and questions have been asked about who is causing the closure of all of these post offices. The appeals process has been mentioned. I ask Mr. McRedmond to provide for a 12-month period in which people can vote with their feet in local communities. This would allow people to use their local post offices and thereby take up the slack in local areas, if there is a slack. When I spoke to a postmistress, I got it in the ear from both sides. She acknowledged that there are people who should be able to use her post office but are choosing to go to a post office in a bigger town instead. They are passing her front door because they can avail of other services like banks in the bigger town.

I acknowledge the dilemma the Minister is facing. He cannot satisfy everybody, but he can look at other possibilities like mobile units. I remember when the banks used to bring mobile branches to little villages. Could that be considered? The issue that would probably arise in such circumstances would be the availability of broadband services in such communities. This issue was discussed earlier in the meeting. Given what is happening, the roll-out of broadband to rural areas needs to be fast-tracked. Broadband can be used for other services.

I suggest that consideration should be given to freezing these closures to allow the post offices that have been identified for closure to be reassessed. I am aware that an appeals process has been announced. It has been mentioned that all of this is based on footfall. There could be a footfall of 10,000 people outside a post office, but they could all be going across to the next community to use another post office. The calculation of usage is a big thing. People need to vote with their feet.

I welcome the reversal of a decision that was taken regarding Kilworth in north Cork. It lost its post office under the previous Government. I do not think it has seen much of an increase in population since then. Maybe it was through confidence and supply that we got the post office back up and running. I ask Mr. McRedmond to send me details of this welcome news for Kilworth. The people of the village fought tooth and nail to try to keep the post office open some years ago.

I thank the Chairman for giving me this time. I know it has been a long day for most of us. However, the appeals process should be reviewed. Usage is how we can show whether a post office is able to work.

I would like to ask a final question. There is a perception that a post office must be open from morning until evening. Does each post office need to observe the full opening hours? Can a deal be done to allow a post office to open for just a couple of hours each day, or a couple of days each week? If services have to be reduced, they should be retained for a few days of the week at least.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Many questions have been addressed to the Minister and Mr. McRedmond. Some members have asked specific questions. Maybe the Minister and Mr. McRedmond will deal with those first. They can talk about the generalities thereafter.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

I will begin by dealing with Deputy Pringle's question about my responsibilities as Minister. I am responsible for the postal sector, including the governance of An Post. An Post is a commercial semi-State company with a mandate to act commercially. It has statutory responsibility for the State's postal service and the post office network. I am responsible for the governance aspect.

Deputy Pringle is correct when he says that my predecessors sat on their hands. This portfolio has been held by Ministers from Fine Gael, Fianna Fáil, the Labour Party and the Green Party over the years. I have accepted the mantle and decided to try to do something with the post office network. That is the reason I am here. Unlike my predecessors, I have not taken the option of sitting on my hands. Instead, I am trying to put a viable future in place for the post office network. I am the focus of attention here today because we are trying to put a viable future in place. I believe that after we have gone through this process, people will look back and see that the right decision was made. It will become clear that it was right to put a proper plan in place to develop the post offices, rather than letting post offices drip away one week after another for the next decade until the network is completely gone.

My understanding is that one post office had 12 transactions a week. I understand the average in the post offices that were offered the redundancy package was 120 a week. Mr. McRedmond can clarify that. One cannot justify providing any level of support for a post office that has 12 transactions a week. We cannot try to do that.

Deputy Kevin O'Keeffe said the closure of one his local post offices will mean the loss of the local shop as well. That is something of which I have been conscious. He is correct that sometimes it is not just the post office that will close, but shops will close as well. However, as he clearly pointed out, something which some members fail to acknowledge, the local community has bypassed some of those post offices and gone to the bigger towns rather than use the local shop. I heard a postmaster in the past week make the point that some people passed the local post office, went to some of the German retailers in the bigger towns, and collected their pensions in those towns but now they are complaining that the local post office is closing. This is not a surprise to anyone. Since the day I was appointed, I have dealt with questions on the future of the post office network and issues arose long before that. Communities knew their post office was under threat yet they continued to pass by the front door and are now concerned about the post office closures. I gave an example in an earlier contribution of Imelda Burke, the postmistress in Ahascragh, who wrote to every family in her catchment area and outlined to them the services that were available. We need is new innovative services, which is what we will provide. That is what the management team in An Post is doing.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will allow Deputy Mattie McGrath to make a brief point.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

I hate to cut across the Minister but he did not get the post office portfolio when he was appointed. It was under the remit of the then Minister of State, Deputy Ring. It was like the Last Supper on Holy Thursday. He just could not wait to get rid of it some months later. The Minister might want to correct the record on his point that he has been dealing with questions about post offices since the day of his appointment but he did not have that remit.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is that the point of clarification the Deputy wanted to make?

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

Yes. I want the Minister to clarify the position.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Since my appointment I have received questions on the future of the post office network. Everyone here is aware of the issues.

Deputy Eugene Murphy made the point that one in 80 young people in the school in Strokestown had used the post office service. That is the problem and that is what we need to change. We need to get young people to use various innovative services.

Marie Louise O'Donnell (Independent)
Link to this: Individually | In context | Oireachtas source

Such as community banks.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Absolutely, community banking is part of the solution. I smiled at what Deputy O'Keeffe said about post offices because I remember in his father’s time, there was a post office in Leinster House.

In relation to the RfP, it is open to Sparkasse or any other international banking organisation to bid and tender for a contract when it is available.

In response to Deputy Canney, I agree that the company needs to do much more to market the services it provides. There is a mechanism in place for a review. The Deputy asked what happens if a retailer looks to provide a service and An Post decides it is not suitable. The appeals committee will examine the decision and it will have the final say.

Through the range of services it has - the debit card for the smart current account, the PostPoint service and the development of it, and the post office service in so far as is possible - An Post is trying to ensure that the vast majority of people, no matter where they live, can avail of post office services where they do their daily or weekly shopping. It will take time to achieve that but that is the core objective of An Post, through the types of provisions Mr. McRedmond and his team have outlined to date. The development and expansion of the PostPoint service could be the innovation to address many of the concerns members have genuinely raised and people are raising in communities throughout the country.

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Could the Minister answer the question I asked? He knows about contracts from his own Department. When the Department of Employment Affairs and Social Protection tendered for the contract, An Post put forward the list of what was being supplied for the duration of the contract. Is the contract not null and void if it is being taken away and An Post does not do what it said it would do?

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

I cannot give an opinion regarding a public procurement contract. It is not part of my remit.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

Could the Minister answer the question Deputy Nolan asked about the motion that was passed by Dáil Éireann more than two years ago? We negotiated the motion with his Department before it was agreed by all Deputies and accepted by the Government.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

In fairness, Deputy Nolan did raise that specific issue. The financial situation in An Post changed dramatically at the time and that is why I came forward with emergency legislation in the Dáil to increase the price of a stamp. I outlined to both Houses at that stage the precarious situation the company was in.

Marie Louise O'Donnell (Independent)
Link to this: Individually | In context | Oireachtas source

Deputy Eugene Murphy made an excellent suggestion about young people. I will go back again to my point about the pillar banks. A total of 70,000 young people have started in colleges of all kinds and their parents have to spend a fortune on their education. What happens to students is that when they qualify, the banks then put up the interest rate, which is crazy. They carry that albatross on their back right into their thirties, whether it is €10,000 or €5,000, which is the equivalent of €100,000 to a person who is only earning €10,000 a year to begin with. There is an incredible opportunity for An Post in that regard in whatever way it decides to work that out in order that post offices are the place we go for loans and that we can stay away from the pillar banks. An Post is an extraordinary organisation. Given the reputation of the pillar banks in the denial of people's freedom, I would not let people in the door unless the banks play ball the way people want them to.

Thomas Pringle (Donegal, Independent)
Link to this: Individually | In context | Oireachtas source

I had a question about the additional services the Minister outlined earlier that are being rolled out by An Post. Where they tendered for or what was the process?

Martin Kenny (Sligo-Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I am concerned that the process whereby communities can seek a review of the closure of their post office is flawed in that they can only review the decision once the post office has been closed and people have moved their business. That is what we were told when we asked about a review.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

The date of closure is decided by the postmaster or postmistress, not the company. The review can take place anytime between now and 31 January. The postmaster in Athleague set a date of 31 October and has come back to the company now and extended it to 31 January. Members must take into account that each individual postmaster has to make a personal decision. There may be specific reasons for choosing a particular date but there is a mechanism to review that and it will be considered by the company.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The other point on that-----

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I want to move on as I am conscious that Mr. McRedmond has not had a chance to respond yet.

Mr. David McRedmond:

I have seven pages of questions.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am sure some of the answers are there.

Mr. David McRedmond:

I am happy not to answer them.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. McRedmond can fire ahead. Senator Marie-Louise O’Donnell can come in afterwards.

Mr. David McRedmond:

Deputy Danny Healy-Rae asked what we will do about people who need to travel to access a post office. We have looked carefully at the situation. I keep saying that this is not random; it has been planned. We have worked it out and we have done it as well as possible to make sure post offices are as close to people as possible. The result of one of the key bits of research we did before we started the process was that people wanted post offices to be where they do their shopping. That is a key part of the location strategy. It says it is a social service and it should be treated as such. We would have 500 post offices if we did not treat it as a social service. That is our obligation. That was our commitment, as I outlined in my opening contribution. We absolutely believe in that commitment.

In response to Deputy Fitzmaurice's point, we are not in breach of the contract with the Department of Employment Affairs and Social Protection. The contract requires us to meet the Department's criteria, which refer to having a post office for every community of more than 500 people within 15 km of 95% of the population and within 3 km in urban areas.

We absolutely meet that commitment. Not only do we meet it, we do a fantastic job with social welfare. It is flawless. I have been with An Post for 18 months and I have not received a single complaint. We do a fantastic job with social welfare and I would like that to be recognised by the committee.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

Keep doing it.

Mr. David McRedmond:

A question was asked as to whether it is legal not to offer new contracts to the 231 offices-----

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Will they be offered new contracts?

Mr. David McRedmond:

The reason those 231 offices were not offered the new contract is because that contract is based on a variable model and they would do very badly on it. If they want to tell us they want to take it, that is fine but they could see a fall of 20%-----

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Is there a bonus under the new contract?

Mr. David McRedmond:

There is a sign-on fee for the new contract, but my understanding is the actual amount they would earn would fall.

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Let us be clear. Is Mr. McRedmond saying that if those post offices want the new contract, it can be given to them?

Mr. David McRedmond:

I would have to check that for certain.

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Well-----

Mr. David McRedmond:

The Deputy is asking me a question and I am answering it. I would have to check it for certain but I want to be clear that is the reason they were not offered it. We are continuing to talk to postmasters but we must remember this is the deal we concluded with them. That deal went to a ballot and more than 80% of postmasters voted in favour of it. It was a comprehensive package.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

I asked whether the postmasters had received full information on the contract at the time of the vote. I am informed they did not.

Mr. David McRedmond:

Yes, they had. I am absolutely clear they had all the details. I am clear that this will stand up to any scrutiny of how it was done.

Issues were raised regarding the criteria laid down and the fact that the consultation did not involve customers. The consultation was put out. We consult all the time. Details relating to the consultation were published. We will deal with customers through the appeals mechanism because they will make appeals. We have done this in the open. I have heard about how many post offices have closed over the years, that they closed by stealth and that they were not seen being closed. This whole scheme has been published, transparent and public. It has been out there and we have announced it. With regard to me hiding, I have been in here for three and a half hours. We are not hiding. I am absolutely prepared to answer all of the questions as quite rightly I should be.

I answered Deputy Mattie McGrath's question on the postmasters not being offered legal advice. Postmasters have a union. Post offices are individual businesses. We gave the postmasters as much advice as we possibly could and in the end they can take their own advice. They voted freely and they are adults.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

Did they receive legal advice?

Mr. David McRedmond:

I cannot answer because I do not know all of the postmasters. I am absolutely clear that the postmasters' union took extensive legal advice on the contract. I have to assume that given the degree to which there is collective bargaining this is what happened.

To answer the question posed by Deputy Nolan, who does not agree that the post offices are unviable, certain postmasters and postmistresses took the financial offer - it was a good offer but not a great one - while others did not. More did not take the offer than took it, which shows that it was a balanced decision. As to whether we will reassess areas where post offices have closed because no one would take up the position, we absolutely would do so in circumstances where it would be very busy.

On the Sparkassen model, applications can be made through the RfP process and I am happy to meet anybody. I have not met Sparkassen representatives because we are working day and night to develop financial services and to deliver services. I have met many financial services providers and we have done deals.

Deputy Eugene Murphy said that An Post provides a great service in transporting people. I will have to come back to this. Deputy Eamon Ryan also asked about that matter earlier.

Eugene Murphy (Roscommon-Galway, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I was speaking about providing a service in rural areas where people do not have transport.

Mr. David McRedmond:

I beg the Deputy's pardon. I misunderstood. With regard to a population of 500 and 3.7% not being a true reflection of the number of people who will be affected, I am speaking about a national number. When I spoke about Cork, I meant County Cork and I was certainly not attempting to misrepresent. There is no county where the number is more than 10%. There are more along the western seaboard.

The idea regarding students is great. Students who go to the United States on J1 visas use our financial services card because it is brilliant. It saves them transaction fees and is safe. We do provide these services. I do not want to give away too many of our commercial secrets but we are looking at some really special services to attract a younger generation in particular. Our marketing is based on various groups of people who should be keen to work with An Post. We have a major brand project under way. That brand project is precisely to deal with the issue that the services have not been marketed as well as they should have been. This is why we put together a separate company and why I brought in probably one of the best marketeers in Ireland, Debbie Byrne, to head it up.

In the context of the micro-payment system with credit unions, a lot of work was done on this and things did happen. We can get back to the committee with the details.

Deputy Canney made the point that business people in villages want to get involved in the post office. We have spoken about appeals and co-location. He asked whether applications will be considered swiftly. Earlier, Deputy Neville from Limerick said he wanted them delayed. We do not want to delay them too much and we have said they will be considered within 28 days. We have addressed the points made on marketing.

Deputy Pringle made the point that post offices have been closed quietly for years. As I have said, we are being transparent and open. This does not mean we should not be criticised but at least we can say we are being very clear about it. We published as much detail as we possibly could on the post offices. He asked about the relationship between the Department and An Post. I report to the Minister. I also report almost monthly to a cross-departmental group hosted by the Department of Communications, Climate Action and Environment and involving other Departments. It is quite an active engagement. I am keen on that engagement, as is my team.

Thomas Pringle (Donegal, Independent)
Link to this: Individually | In context | Oireachtas source

What about the closure of individual post offices?

Mr. David McRedmond:

That is a decision for An Post. The company has to make this decision. We have to be clear about the lines with regard to the Department and we have been very clear about the protocol. We have to be very objective in what we do. We have stated the criteria we are using and there has been some push-back on them. We have also explained some of the things we are doing. I take full responsibility in An Post for making the decision on these closures.

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Is Mr. McRedmond telling us that the criteria mean that even if a post office was doing the greatest trade in the world, it would still be closed?

Mr. David McRedmond:

There are at least 100 post offices, excluding islands where there are ten or 12 post offices, in communities of fewer than 500 people.

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Is there a place where a post office is doing well - with a lot of transactions being done by businesses or people outside the community - but where, because there are fewer than 500 living there, An Post is sticking with the criteria and closing it?

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Once a postmaster decided to take the package-----

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Postmasters decided to take the package because they received a letter stating their post offices no longer formed part of An Post's future plans and the Minister is aware of this.

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

That is not true and I have already said this at a public meeting. I have provided written confirmation that no contract was withdrawn.

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Whether a postmaster-----

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

This was a voluntary decision by the postmasters. More than half of the postmasters who received the letter decided not to retire. If a post office was commercially viable why did the postmaster decides to take the lump sum?

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Where a postmaster wants to retire, does the area have the right to have a post office?

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

There is an appeals mechanism, which I outlined to the Deputy on the Wednesday before last and which is clear.

A second mechanism is now being put in place that if a retailer looks to avail of services, and if An Post decides - for one reason or another - not to provide them, that will also be reviewed. It is independent of the company.

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

The only problem is Mr. McRedmond outlined that the criterion is a population of more than 500 people, rather than the business that was going through the post office. I am surprised at that as a business model.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

I have two brief clarifications.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is this a point of clarification on something that was not answered earlier?

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

One question I did not ask and one I did.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I ask the Deputy to be very brief.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

One is about the social welfare contract.

Kevin O'Keeffe (Cork East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Mr. McRedmond must finish replying to our questions first.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thought it was a point of clarification. I will let Mr. McRedmond answer.

Mr. David McRedmond:

Deputy O'Keeffe asked for a 12-month period for the appeal. When I pointed to An Post, within one month, postmasters were marching on the GPO - not because of me, I presume. They were marching because they said that An Post and I were dragging its heels in making decisions. The first Kerr report had been done about two years prior to that, so it was nearly three years old. They were screaming to get on with it because they were suffering. I cannot give the Deputy the answer regarding the average number of transactions, although that can be provided. The average amount they were earning was €27,000. That was not a salary. Out of the €27,000, they have to pay for a premises, light and heat. They have to pay for additional staff if they are on holidays. They have to pay for all that. It is simply not viable.

I hear what Deputy Fitzmaurice said and I accept the challenges. I wish that post offices were viable in communities of fewer than 500 but we need people and products. Products are not enough and there simply are not enough people. We know the number of transactions that go through all of the post offices, so we do see it, and the Deputy is correct that we will not be stupid regarding a post office that is viable.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Which of Deputy's Pringle's questions did he think was not answered?

Thomas Pringle (Donegal, Independent)
Link to this: Individually | In context | Oireachtas source

Why are the post offices closing before the services are rolled out? How many of the post offices that will close have fewer than 12 transactions per week? How can the Department roll out the additional services without tender?

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

I have answered the first two questions. There is one post office with 12 transactions and the average is 120.

The Department has not issued any contracts. It does not provide services. The only service the Department provides is the TV licence. We said earlier that the Government has decided to look at an offline avenue for Government services and that decision was taken by the Cabinet today.

Thomas Pringle (Donegal, Independent)
Link to this: Individually | In context | Oireachtas source

Was the decision taken to provide it through An Post?

Denis Naughten (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

No, the decision was taken to look at an offline avenue. That is to go for procurement and it is a matter of who succeeds in that.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am aware of the time we have kept the witnesses.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

Is the social welfare contract only offered on a 12-monthly basis to each postmaster?

Could Mr. McRedmond repeat the percentage of postmasters who voted to accept the package? Did Mr. McRedmond say 80%? I did not understand him.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes, it was 80%.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

I asked a question that the Minister will not answer. Who gave the IPU the authority to take away post office services from rural Ireland? The IPU is entitled to represent its members but it has no mandate from anybody to close post offices in agreement with Mr. McRedmond, or the Minister, or anybody else. It is not mandated by anybody and I want an answer to that, please.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I understand that for a settlement of 500 people, An Post has taken the definition of a "settlement" from the 2016 census, which is 50 houses within 100 m of each other. That is a tight cluster of houses, which exists in few rural parishes. When most people heard the reference to 500 people, they thought it meant the parish. That has caused a lot of anger and confusion, because people thought if they had more than 500 people in their parish, they would be entitled to a post office. Clarity is needed on that.

At the outset, it was my understanding that co-location would be part of the review process. If somebody had another business or another premises and was prepared to host the post office,, which would make the post office viable, there could be a reprieve and the community could keep its post office. I understand that is not part of the review and I would like that clarified.

Michael Harty (Clare, Independent)
Link to this: Individually | In context | Oireachtas source

I ask Mr. McRedmond if it is possible that the review date could be extended to 31 December, as opposed to 29 September, to give a community an opportunity to put together a viable business project. The time limit is so short for many communities that do not have the capacity to do that.

Kevin O'Keeffe (Cork East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

If there is a grocery shop and a post office in the one building, must there be two people on site or can one person operate both?

Mr. David McRedmond:

I would have to look at extending the deadline. As the committee will be aware, there are other pressures because people want decisions made quickly but certainly I will take that question away. I cannot answer here but I will certainly do that and it is not An Post's intention to rush people. At the same time, people are saying postmasters and postmistresses are closing offices, so we have to balance that. I will revert to Deputy Harty on that.

I accept Deputy Kenny's point about An Post being clear about the definition of 500 people and I have committed to come back to the committee regarding precisely what that is. It is an issue around planning, boundaries and distances. An Post has to use some objective criteria, but I will respond to the Deputy on that.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

What about co-location?

Mr. David McRedmond:

Co-location can be part of the appeal anyway if somebody wants to appeal. It is part of our strategy because it can be a way to make a post office more viable if it is co-located. That can be part of the appeal. Somebody can ask for it to be co-located. The post office does not have to be separate. In most instances, though not all, An Post would prefer if it was co-located.

Michael Harty (Clare, Independent)
Link to this: Individually | In context | Oireachtas source

Can a person who is applying for a licence for a new contract get information about the volume of business under the previous contract?

Mr. David McRedmond:

I believe so, yes.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Will Mr. McRedmond answer the questions from Deputies McGrath and O'Keeffe?

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

My question was about the social welfare contract. Is it only awarded on an annual basis?

Mr. McRedmond said 80% of IPU members voted to accept the deal. Who gave the authority to the IPU? It is entitled to represent its members, by all means, but it is not entitled to take away services from a village of the very customers who are supporting its members.

Mr. David McRedmond:

The social welfare contract is renewed each year but it is issued every three years. It is formally signed each year but it is issued every three years.

An Post has not given the IPU any authority. It comes back to the notion of what is a post office business. Outside of the 47 company-owned offices, they are individual businesses. They are not An Post's businesses; they are the individual postmaster's businesses.

Mattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

I accept that. Mr. McRedmond did not answer the question about the percentage. I accept that they are businesses and are entitled to negotiate and their remuneration is not wonderful. They have signed up to a deal that has now removed the post office services from their community. They are being blamed for it but An Post acquiesced and dangled the package in front of them and gave them a deadline of July or August by which they had to apply for it. Can Mr. McRedmond clarify that? What percentage voted to accept it?

Mr. David McRedmond:

I believe that 80% voted in favour of the overall deal with the IPU. They were given a period to apply. The offer was made to approximately 370 post offices and 160 applied.

Michael Fitzmaurice (Roscommon-Galway, Independent)
Link to this: Individually | In context | Oireachtas source

Mr. McRedmond has said he will come back on a few questions, for which we are grateful. When will we get the answers?

Mr. David McRedmond:

An Post will get back within-----

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

He can send it to the committee and mark it for the attention of the relevant Deputy or Senator.

Mr. David McRedmond:

We will do that.

Kevin O'Keeffe (Cork East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The question I asked then-----

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is more of an operational issue.

Kevin O'Keeffe (Cork East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It has an impact if my post office is closing.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Does the Deputy's question involve whether one person can run a shop and a post office?

Mr. David McRedmond:

I must work out exactly what it is but on social welfare days, the person typically needs to get somebody in-----

Kevin O'Keeffe (Cork East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is a busy time. I know that.

Mr. David McRedmond:

There are very serious security issues involving post offices carrying cash and to which we make cash deliveries. We have very serious requirements. Unfortunately, post offices are subject to robberies on a regular basis so it is not as simple as us saying anybody can offer it. It is a very serious business. Our security incidents have come down massively recently because of the work of the security team in An Post but it is still a fact of life.

Hildegarde Naughton (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Mr. McRedmond and the Minister and his officials for coming before us this afternoon and for the long engagement they have had with us. It is proposed that the committee publish the opening statements and submissions on its website. Is that agreed? Agreed. It is proposed that the joint committee adjourn until 5 p.m. on Tuesday, 18 September 2018. Is that agreed? Agreed.