Oireachtas Joint and Select Committees
Wednesday, 15 June 2022
Joint Oireachtas Committee on Transport, Tourism and Sport
Future of An Post Network: Discussion (Resumed)
Kieran O'Donnell (Limerick City, Fine Gael)
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The purpose of the meeting is to continue its consideration of the future of An Post network. We recently had productive meetings in the matter with the Irish Postmasters Union, IPU, the Minister of State at the Departments of Transport and the Environment, Climate and Communications, Deputy Hildegard Naughton. On behalf of the committee I welcome Ms Debbie Byrne, managing director of An Post Retail and Mr. Pat Watt, head of operations, An Post Retail.
Witnesses are reminded of the long-standing parliamentary practice to the effect that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore if their statement is potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction. 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 of the constitutional requirement that they be physically present in the confines of the Leinster House complex in order to participate in public meetings. Reluctantly, I will not permit a member to participate when they are not adhering to this constitutional requirement. Any member who attempts to participate from outside the precincts will be asked to leave the meeting. I ask any member participating via Microsoft Teams that, prior to making their contribution, they confirm they are on the grounds of the Leinster House campus. Members attending in the committee room are asked to exercise personal responsibility to protect themselves and others from the risk of contracting Covid-19.
I invite Ms Byrne to make her opening statement.
Ms Debbie Byrne:
I thank the chair and members for the invitation to attend today. It is opportune with the recent announcement of the €30 million funding programme for postmasters. We have lodged our statement but I will touch on a few salient points and then take questions.
Throughout Covid-19 there were many examples of individuals and organisations that redefined the essence of public and community service. Of particular note has been the contribution of An Post both with the post office network and our delivery infrastructure. Throughout the pandemic, An Post kept its network of 920 post offices open. At any one time two or three small offices were closed but reopened again within three or four days. This was important in providing cash payments to citizens who still opted to have their social welfare payments paid through cash. It was also important in terms of the continued distribution of cash to the economy. We kept all our delivery routes open. This was important in keeping Ireland trading during the lockdown and enabling SMEs to keep their doors open. We welcome the recent announcement on the three-year funding package for postmasters in recognition of the real community value of post offices but also of the great public service.
In regard to An Post's own strategy, we take our lead from the Government's own programme for Government.
We are really well positioned to meet the Government objectives of keeping communities connected, protecting societal well-being, supporting the green economy and delivering accessible financial services for all. The pandemic, however, has accelerated some of the headwinds facing the post office network. It is important to recognise that today. While the €30 million in funding for payments to postmasters is very welcome, it should not detract from the job that remains to transform the post office, as I always explain to people, away from the old world of cash payments, BillPay, etc., and into a new world of financial services and e-commerce. That is not to say the "old world" of cash payments is not important, but we know that it is a part of the business and a part of the income stream for postmasters that is declining. Covid has accelerated some of these underlying trends. The strategy we put in place in 2018 and 2019 is still very much robust and intact, but Covid has accelerated some of that decline. The big one is social welfare. Since 2019 we have seen about 5.5 million transactions come out of the network. We very much welcomed the announcement from the Minister, Deputy Humphreys, before Christmas on returning some jobseeker payments to the post office, but it remains the case that the number of those social welfare transactions in the network is way down on what we had envisaged. We are working all the time. Our big mantra for the team is to look constantly for new products and services that we can put through the network. We are constantly looking to top up the leaky bucket, as I call it. We are doing that based on four key pillars.
The first is community banking. Community banking is absolutely key to the future of the post office network in the context of the retreat of the pillar banks from many of our towns. An Post is now the sole provider of financial services in many parts of the country. There are 540 post offices situated in parts of the country where there is no bank within a 5 km radius. Our new partnership with Bank of Ireland, which began last year, is great, and we continue to work in partnership with AIB. Our An Post Money goes from strength to strength. The retreat of some of the big-name banks from the market in the next 12 to 18 months has created an opportunity for An Post. Our current account is going from strength to strength. That is up 77% year on year. We are working very much in partnership with some of the exiting banks right down to branch level, where we are partnering the branch managers with the local postmasters and creating that warm transfer of customers. With the current account we were at about a 50:50 split between account openings online and in the network. That has now shifted, with about 65% of current account openings being in the network. That shows the role of post offices working with the exiting banks to warm-transfer customers and to let them open accounts in a timely fashion, which is not the case with some other providers in the marketplace. Then there is our NTMA business, which continues to go from strength to strength.
The second pillar is looking for new services. There is our Green Hub and our partnership with SSE Airtricity. That has kicked back in post pandemic and is starting to gain traction again. I am really pleased to say that our technical development has now kicked off on Leap and we will be able to do Leap purchase and top-up in post offices across the country from quarter 1 of next year. The one-stop shop for government services is still, I think, something we collectively need to crack. The Government recently produced the digital Ireland framework and, within that, the Government's goal is to have 90% of services online by 2030. It is really important that, over the next 18 months to two years, we work collectively. In the past we have gone around various Government Departments piecemeal looking for extra government services. We now need to stand back, take an all-government approach and ask how we can truly become the one-stop shop for the Government in support of the various Government policy documents that have been published, including the digital framework, rural development, etc., such that a citizen can go to the post office and avail of any government service, which may involve identity verification, planning applications or payment for government services. We have the IT infrastructure. Our IT infrastructure links in with the Department of Social Protection and Bank of Ireland, AIB and Ulster Bank, which shows that it is state-of-the-art infrastructure. Collectively, we need to find a way around this. We look forward to working with the Government on that because three years will pass quickly, the payment to postmasters will run out and we need new services, including government services, coming in behind that.
I am happy to take any questions.
Kieran O'Donnell (Limerick City, Fine Gael)
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Thank you, Ms Byrne.
As a matter of housekeeping, Senator Dooley sends his apologies. He is unable to attend.
We now go to Members. First up is Deputy O'Rourke.
Darren O'Rourke (Meath East, Sinn Fein)
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I thank Ms Byrne for her presentation. It is good to see the witnesses again. I welcome that there has been some progress since we last met.
I will pick up on the last point Ms Byrne made about how An Post would like to see things unfold now in respect of engagement. There is a process to work its way out in respect of the potential government services and a one-stop shop and what that might look like. Are negotiations ongoing? At every committee meeting I attend there is call for a whole-of-government approach. The difficulty with whole-of-government approaches is that they are difficult. I ask the witnesses to give me a sense of where we are at and the type of progress that is being made or not being made. Do the witnesses feel there is a need for a different approach to the engagement in the first instance? From their perspective, is the potential that is there for identification? Is it less for social welfare or is it still for social welfare? I would like just a sense of the types of services the witnesses see as a potential.
Can the witnesses expand on the point about the Green Hub? I am my party's climate spokesperson. There is a huge budget to go with the retrofitting programme. SSE Airtricity, I think, is one of the five one-stop shops. On a practical basis, what is the working relationship between An Post and SSE Airtricity? How does that look, and what is the opportunity to penetrate into communities in a way in which online does not for the retrofitting programme?
I have a final question about the allocation of the new moneys. What is the formula for that? If there are postmasters around the country looking towards the end of this year, how do they ready themselves to be considered?
Ms Debbie Byrne:
I will take the last question first. Our understanding from the Department of the Environment, Climate and Communications is that that still has to go through a formal process in respect of state aid approval. In parallel, however, we will kick off discussions in early July on the dispersal model. We will parallel that in track. That would be in partnership with An Post, the IPU and the Department of the Environment, Climate and Communications. I believe the Department of Finance wants to be involved as well. We welcomed that the Minister and her officials were able to get to this stage so early in the year in the agreement on the funding. We also now recognise there is an urgency in communicating the dispersal model. It is fine that postmasters know there is €30 million, but everybody wants to know what is in it for them. I think I will be able to give a more precise answer once we have the first meeting at the beginning of July. That is already in the diary. It is a matter of not dragging this out until November. People need to know-----
Kieran O'Donnell (Limerick City, Fine Gael)
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On what date in July is that meeting?
Kieran O'Donnell (Limerick City, Fine Gael)
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Who will be at the meeting?
Ms Debbie Byrne:
I think the Department of the Environment, Climate and Communications, the IPU executive and us. There was talk, I think, of somebody from the Department of Finance being there, but I have not seen the names.
I literally only got that into my inbox last night, so we can confirm that.
In terms of Government services, the outstanding memo still needs to be published out of the last round of engagement in terms of the old approach where all of the Secretaries General came together and looked at what their respective Departments could provide. I have not seen that memo. My understanding is that not too much has come out of it. At the IPU conference two weeks ago, the Minister for Social Protection stated that she and her officials were looking at what social welfare services could be provided. Anywhere there is paper, there must be a role for the post office. For example, social welfare recipients must notify the Department of Social Protection when they go on holiday. Why can this not be done at the post office counter? The Minister is working with her officials to look at that.
On the new approach, the digital framework document has been published. There is also a reference in the programme for Government to reform and local government. Having got the funding piece over the line, my next step is to stand back and ask how we approach that. We will need some kind of committee obviously with our own Department at the heart of it but also perhaps work with the Department of Public Expenditure and Reform and the Department of the Taoiseach because for something to be a whole-of-government approach, and the Deputy will know better than I do, those two Departments will probably have to have some skin in the game in terms of directing that because it crosses local government. If you are doing something in post offices, you are replacing services provided elsewhere, etc. My objective this summer is to plan the approach with a view to kicking it off in September.
When we launched the green hub in the October before the onset of Covid, we were ahead of the curve. What consumers were telling us at the time was that it was all very complicated. For example, if they wanted to do up their house, they had to go to the SEAI website and all the rest of it and bring all the information together themselves. What we did was simplify the process and bring everything into the green hub, which is a portal on the An Post website. We brought together and simplified some of the SEAI information. We then plugged in SSE Airtricity as a provider. Consumers can book an appointment where an SSE Airtricity evaluator will visit their home, assess it and see what jobs need to be done. During Covid, we did some assessments remotely with an iPad, which worked quite well, so now we give people the option of availing of both routes. Consumers get an estimate and a shopping list so they can decide to go the whole hog in terms of a deep retrofit or cherry pick off of that. In conjunction with the European Investment Bank, we launched a green loan, which is still has the lowest rate in the marketplace for green financing. We would like to scale that, and we have been talking to other providers about coming on board in order that we have partners in addition to SSE Airtricity.
The SEAI came out with its one-stop-shop arrangement at the beginning of the year. We have had to stand back a bit and see where we can play a role. It is a really good example where we invested a lot of time and energy. We are very close to the consumer and are outside the tent on this, which is very frustrating because I think we could help Government accelerate that. We are part of Government but we are not so I think we can do more in that space. Again, I would ask that when policy things like this happen, people would ask about the position of An Post, because, for the minute, we probably have to re-evaluate our strategy in light of that. We are in discussions with SEAI to see whether there is a role for us. We have invested in the digital infrastructure and could be the front end of that and bring SSE Airtricity in through the Government route. Why does the Government need to replicate and spend money again creating a digital front end for consumers?
Darren O'Rourke (Meath East, Sinn Fein)
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That is the point I was going to make. Things happened in between and it is almost as if the branch network of An Post might be a physical place to go and access that one-stop shop.
Kieran O'Donnell (Limerick City, Fine Gael)
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Did An Post propose to the Department that it could be an interface?
Kieran O'Donnell (Limerick City, Fine Gael)
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Was this with the Department, the SEAI or both?
Kieran O'Donnell (Limerick City, Fine Gael)
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When did it reach an impasse?
Mr. Pat Watt:
It just has not progressed. In our most recent engagement, we were working through the funding model. We had further conversations around becoming that national aggregator, with the post offices effectively acting as the referral engine for this. The matter was tabled again during those conversations. It just has not developed at this point.
Kieran O'Donnell (Limerick City, Fine Gael)
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Could I suggest that An Post write to us with something of a more formal nature. We would like to follow it up as it seems a very practical measure. Obviously, we would have to do our own due diligence. That is just the way we are made. There are huge waiting lists in this space and An Post has the network. Am I correct in thinking it also has the technical infrastructure and would be able to interface with SEAI systems and so forth?
Darren O'Rourke (Meath East, Sinn Fein)
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The SEAI has taken that space in terms of the online portal whereas An Post's great advantage is the physical branch network and the branding. Can An Post link the two to get the best of both? There is opportunity there is heads are put together.
Jerry Buttimer (Fine Gael)
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I must leave. There is a vote in the Seanad.
Kieran O'Donnell (Limerick City, Fine Gael)
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We will continue with the Deputies present and bring Senator Buttimer back in on his return. We would like to do work on this. We see ourselves as playing a very constructive role. An Post is under our remit while the SEAI is not. However, they are under the remit of the same Minister so we would like An Post to give us something we can follow up with the Department of the Environment, Climate and Communications because we want to assist with anything that drives the overall viability of the network.
Kieran O'Donnell (Limerick City, Fine Gael)
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Very much on the basis of a partnership model.
Kieran O'Donnell (Limerick City, Fine Gael)
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It is a practical measure.
Cathal Crowe (Clare, Fianna Fail)
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I welcome Ms Byrne and Mr. Watt. I will start with the positives and then I might move to some constructive criticism. I thank them for everything they did during Covid. An Post was everywhere when much of society was not circulating. It was brilliant. I only found out the other day that PPE was being brought to home carers. An Post had a partnership with Home Care Ireland that involved the company delivering PPE, including gloves and masks, free of charge to people who could not leave their homes to get it. This was a small thing but, cumulatively, it was massive. I thank An Post for that.
I will now move to constructive criticism. We sat here about a week and a half ago and met with the IPU and Tom O'Callaghan from the Independent Postmasters Group. We have been carrying out a body of work on this. The Government has given €10 million to support - not save - the network and give it some sustainability. Is that not incongruent with An Post's rationalising? An Post has a plan to streamline the network. Rationalisation and streamlining mean closures. Are the two aims not incongruent?
Ms Debbie Byrne:
They are not incongruent. The size of the network is always a big debate. My job is to grow the revenue. If the cake is shrinking, the size of the slices must be reduced. The objective must be to grow revenue. That is the starting point of all of this. It is why we are considering our relationship with Bank of Ireland and Leap. We must ask if we can grow our partnership with SSE Airtricity and our green hub. If we do not grow the revenue, we cannot sustain the base at the size it is. That is just-----
Cathal Crowe (Clare, Fianna Fail)
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At what point will the network be pared back to an extent whereby An Post is in a financially healthy state to take off and generate more revenue?
Ms Debbie Byrne:
We are at that point now post Covid. We put in place a transformation policy in 2018 and 2019 and the fundamentals of that are still right. It is about driving new products and services and driving co-location. Covid obviously interrupted some of that and we are renewing the policy. We are driving co-location and looking at new co-location partners. Mr. Watt has come from a pharmacy background and we are looking to see are there new opportunities in that regard. We are also considering if there is a role in some areas of Government service. Could we co-locate an Intreo office in a post office? We must look at the use of the footprint.
Cathal Crowe (Clare, Fianna Fail)
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The transformation of which Ms Byrne speaks is fully intertwined with the dismantling of the S52 contract. Some people are still on that contract. Approximately one third of postmasters are on the old S52 contract. If I have my figures correct, approximately two thirds have moved onto the new contract. That new contract is largely unsustainable for the small rural post office. There was a time when those post offices received transactional payments and there was positive discrimination so a comparative transaction in a large urban post office would net a certain amount of transaction money but I do not know the figure. That approach was subventing the rural post office but it is gone now. Government funding is good and we all welcome it. However, this transformation which our guests see as a positive and which brings An Post into a positive revenue stream is a double-edged sword to someone like me in a rural constituency. It means more post offices are being closed in Clare and the west of Ireland to get the entire network to a sustainable point.
Ms Debbie Byrne:
There are still 300-plus postmasters and postmistresses on the old S52 contract. They are essentially subvented. An Post is subventing the deep rural post offices in addition to the new funding that will come from the Government. In the past, there was a declining rate for the bigger post offices in the context of social welfare. Ours is a commercial organisation. This is a business like any other. With the number of social welfare transactions declining, postmasters have to run their offices as businesses. Gone are the days when you could wait for someone to come in, show their verification and collect their social welfare and then sell them a stamp.
Cathal Crowe (Clare, Fianna Fail)
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That is absolutely so.
Ms Debbie Byrne:
We are providing the tools to postmasters to change. It is not fair to say that the new contract creates an unsustainable business for postmasters. The new contract is certainly not right for the lower end of the network and the smaller postmasters, which is why they are still on-----
Cathal Crowe (Clare, Fianna Fail)
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By design, the new contract ensures that many post offices will close.
Cathal Crowe (Clare, Fianna Fail)
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It ensures that the collective model is reduced and that some post offices become more viable.
Cathal Crowe (Clare, Fianna Fail)
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It is the survival of the fittest. It is like a squid game of the post office network. One will survive while another across the road will fall. There is a requirement for everyone to live within a 15 km radius of a post office, which might not sound like anything to someone in an urban constituency such as Dublin but in Clare, the situation on the ground is that if someone who is pushing on in years becomes unwell, they contact An Post and hand back the contract. I know of someone whose son was unwell. Those very sensitive issues become the catalyst for an overall post office closure. That is how it is happening on the ground and the situation does not look very transformational to us.
Ms Debbie Byrne:
The structure of our contracts is that the more deep rural post offices are on the S52 contract for exactly the reason the Deputy has mentioned. They were never asked in the first place to move off that contract for exactly that reason. Our whole mantra has been around protecting those smaller post offices. There are fixed and transactional elements to that. Many of the new services, including the current account offering, for example, are in addition. That is an opportunity for those post offices to earn more. We have never approached deep rural post offices and asked them to go onto the new contract. There is a cohort that were never written to about the new contract for exactly that reason.
There is what we call the squeezed middle. People who are in population areas that are not as big as some urban areas are more challenged. That is absolutely the case. We work with those postmasters to try to unlock cross-selling. Mr. Watt is running a great programme called great conversations.
Cathal Crowe (Clare, Fianna Fail)
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There is always a fascination to the effect that robots will take over the work of humans. Some postmasters believe that is already happening with the advent of PostPoint. One of the solutions of An Post comes up with in response to the closure of post offices is to suggest putting a PostPoint at the back of a Centra or Spar shop. That is convenient from the point of view of a consumer who can get stamps when they get everything else. The social interaction goes and everything else. Is An Post considering an expansion of PostPoint? Of course An Post wants PostPoint in more locations but that is not what I am asking. Is An Post planning to put more services through the PostPoint server, system and robot to include things such as social welfare payments and an ATM of sorts so it becomes a multi-transaction facility? There is a concern among the men and women who staff and run our post office network that slowly but surely, the automation of PostPoint and its spread will make many more of them redundant. Perhaps Ms Byrne will expand on that point.
Ms Debbie Byrne:
I will respond and then hand over to Mr. Watt. If a post office closes, continuity of service around core services is important to us. Those services include mail services, the sale of stamps, e-commerce and click-and-collect for parcels. The provision of social welfare and all of the security around that, which includes safes and all of that, is not provided through PostPoint. If a post office closes, we now put in a new-looking PostPoint unit. It is not self-service. I think it is possible to weigh parcels but customers still need to interact with a member of staff. We have in our own company offices some self-service units such as one would see in Marks and Spencer or a local supermarket. That is the way of the world. If a consumer comes in-----
Cathal Crowe (Clare, Fianna Fail)
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Has An Post a strategy to replace physical post offices in rural areas with PostPoint outlets in, for example, Spar shops?
Mr. Pat Watt:
I will focus on that for a moment. It is important to note that two thirds of the core network is co-located. In other words, the branch is in a retail outlet anyway. There is nothing unusual in PostPoint when compared with a post office. It is not robotic; it is the same terminal. There is human interaction involved so that personal engagement remains. We have a post office network and an extensive PostPoint network, as we always have, and one complements the other. The PostPoint offering is very reduced relative to a full-service post office. The intention is to fill in gaps where a post office would not be viable because the transaction levels would not be there but as part of broader retail offering, it makes sense. If in certain locations we get to a point at which a post office is no longer viable, for whatever reason, PostPoint is a decent solution to provide continuity of service to those local citizens. There are one or two options in that regard. Either the business goes to the nearest local post office, which could be 5 km or 10 km away, or we put in a PostPoint, which is a reduced service offering but is still a person-to-person service. It is still an assisted service.
Cathal Crowe (Clare, Fianna Fail)
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I thank Mr. Watt. His response was a bit reassuring. When the Minister of State, Deputy Hildegarde Naughton, was before the committee, she talked about the €10 million fund from the Government to be distributed by An Post. We got locked into a discussion of how much each post office will get and we asked will An Post positively discriminate so that rural post offices get a little more funding and the urban post offices get a little less. The Minister of State did not have that level of detail on the day and said that the matter remains to be worked out.
Dividing €10 million among 900 post offices works out per post office at €11,111, all the 1s. We asked her if the GPO in Dublin would be availing of it. It seems, given the way this will be devised, it will. Will the GPO and the very large post offices take a pro ratashare of this fund, or, as the helms body of the post office network, will An Post ensure the large ones above a certain threshold will not get anything, given the true wish of people is that the struggling rural post office network will be subvented? Will An Post ensure that happens or will it take a slice of the fund for the larger post offices?
Mr. Pat Watt:
I can give the Deputy a sense as to where those discussions are at. This is very much a work in progress. We have not had the July meeting yet so we have not been able to take the lid off this yet. Our going-in position was that the support would be balanced across the network. We currently have a pyramid model. In other words, more of the bottom of the network gets support relative to the top of it. That reflects the fact that, for example, a larger post office has the local community business and footfall it needs to sustain itself and in a declining transaction scenario, it can take action such as reduce staff or hours within its business model. Smaller post offices, particularly one- or two-person operations, would not have the same scope. Our going-in position is it would be more of pyramid approach to the disbursement but we have not started those discussions yet. We will start those in July. We want to make sure there is equity in the distribution of that funding.
Cathal Crowe (Clare, Fianna Fail)
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I will wrap it up at that. It is important An Post disburses the fund in line with a pyramid model.
Cathal Crowe (Clare, Fianna Fail)
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If the postmaster of a small post office sees that the GPO and the larger city post offices are getting a cut of it, that will erode confidence. I thank witnesses for what they are doing and for their answers.
Kieran O'Donnell (Limerick City, Fine Gael)
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I will follow up on a question as a few members are in the Seanad. We had representatives of the Irish Postmasters' Union, IPU, in before us and an urgent issue they raised concerning the €10 million package, or €30 million over three years, which is very welcome, was that postmasters have to give six months' notice if they intend not to stay on and are retiring. The end of June was a critical date because, I understand, the current pandemic payment ends at the end of December. I am a little worried the meeting to deal with the construct of the €10 million will not happen until mid-July. There is concern there will still be a degree of uncertainty and many postmasters may be forced into a situation where they will give notice they will retire before the end of June. I need clarity on that. The key fundamental question raised was why it was so urgent that it would be announced. What is the position on that, as people need to have some indication of the level of funding they will get?
Kieran O'Donnell (Limerick City, Fine Gael)
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The meeting is not taking place until mid-July. That is way too late.
Kieran O'Donnell (Limerick City, Fine Gael)
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The general secretary of?
Kieran O'Donnell (Limerick City, Fine Gael)
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Regarding that meeting about which Mr. Watt received an email last night, from whom did that request come?
Kieran O'Donnell (Limerick City, Fine Gael)
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Why did the meeting not take place? Why is it not taking place before the end of June to give reassurance to postmasters? The urgency in terms of the six months' notice period they have to give was raised with us. They want clarity on that before the end of June. The announcement of the €10 million provides a degree of clarity but certainty of the level of funding they will receive will inform their decision as to whether they will continue in their role.
Mr. Pat Watt:
The feedback we have got from the IPU is very clear in that the cliff edge has been avoided. That is very clear. Most recently and prior to the announcement, there were three or four locations where postmasters had signalled their intent to retire but they have since rescinded those decisions and are now staying on because of the new package.
Kieran O'Donnell (Limerick City, Fine Gael)
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Why has that meeting not taken place before now?
Kieran O'Donnell (Limerick City, Fine Gael)
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Is that from An Post's end or the IPU's end?
Kieran O'Donnell (Limerick City, Fine Gael)
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Who did?
Kieran O'Donnell (Limerick City, Fine Gael)
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Was the 8 July date put forward by the IPU?
Kieran O'Donnell (Limerick City, Fine Gael)
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This is a crude measure. Some €10 million is involved. I understand there are 833 self-employed postmasters and the balance of 45 post offices are An Post owned-----
Kieran O'Donnell (Limerick City, Fine Gael)
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Will that €10 million be allocated to the 833 self-employed postmasters exclusively?
Kieran O'Donnell (Limerick City, Fine Gael)
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That is good to hear. Is it too crude of a measure to say that works out roughly at €12,000 per post office?
Kieran O'Donnell (Limerick City, Fine Gael)
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It is like an inverted graph.
Kieran O'Donnell (Limerick City, Fine Gael)
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Ms Byrne expects rural post offices and some urban post offices-----
Kieran O'Donnell (Limerick City, Fine Gael)
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-----that are struggling will get higher than the average of €12,000?
Kieran O'Donnell (Limerick City, Fine Gael)
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Is that the intention?
Kieran O'Donnell (Limerick City, Fine Gael)
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On the timeframe for that, from what date does that kick in?
Kieran O'Donnell (Limerick City, Fine Gael)
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That is to be welcomed. I would hope that meeting can take place sooner rather than later . That would involve An Post, the IPU and-----
Kieran O'Donnell (Limerick City, Fine Gael)
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-----the Department with responsibility for communications.
Kieran O'Donnell (Limerick City, Fine Gael)
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In terms of the final construct, does the Minister have to sign off on that or is that purely a commercial matter?
Kieran O'Donnell (Limerick City, Fine Gael)
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The funding will come through An Post.
Kieran O'Donnell (Limerick City, Fine Gael)
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Are postmasters paid by An Post and is it on a monthly basis?
Kieran O'Donnell (Limerick City, Fine Gael)
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Will this payment feed into their monthly payment?
Mr. Pat Watt:
We have got to work that through. They may prefer that to happen quarterly or twice a year. We would like to see a balance between an element of the payment being fixed to provide that surety and certainty and an element of it based upon commercial performance, which would be variable.
Kieran O'Donnell (Limerick City, Fine Gael)
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That will come done to negotiations with IPU on behalf of its members.
Kieran O'Donnell (Limerick City, Fine Gael)
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I welcome the fact An Post is considering a model that ensures struggling post offices can survive. I took a very crude measure based on 833 postmasters, which works about at about €12,000 per post office but a higher proportion of the fund would be skewed towards the post offices that are struggling. As a Deputy based in Limerick city, I deal with post offices, both urban and rural, and many of them are under severe pressure. There is great support for them on the ground.
Evolving to the services provided by the post offices, An Post is delivering a Government service in terms of disbursing social welfare payments. When the driving licence contract came up, An Post did not tender for it. Does Ms Byrne know the reason for that?
Kieran O'Donnell (Limerick City, Fine Gael)
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At the time, I believe the State was looking for 30 centres or is that information just anecdotal?
Ms Debbie Byrne:
That was before my time but I looked into it to see why that particular tender went wrong. My understanding is that the tender document that went out looked for 40 centres - it was in that order of magnitude - and the tender was made on that basis. Our tender indicated we could meet that tender of 40 such centres but we were prepared to-----
Kieran O'Donnell (Limerick City, Fine Gael)
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That is an area we should look at because the national digital strategy falls under our remit.
Kieran O'Donnell (Limerick City, Fine Gael)
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It is largely driven by the Department of the Taoiseach and the committee is very interested in it. I have confirmed with the clerk to the committee that the national digital strategy falls under our remit. The committee wishes to be proactive and constructive in finding a way to retain the viability of the An Post network.
Kieran O'Donnell (Limerick City, Fine Gael)
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I have always said that it is much easier to dismantle a network than to grow one. We saw that with the rail system and I would hate it if everything was not done to rebuild An Post.
To ask the hard question, does An Post have a policy of streamlining and closing post offices? That is a question members are being asked. Does An Post have a deliberate policy to reduce the number of post offices from the current number of 833?
Kieran O'Donnell (Limerick City, Fine Gael)
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I accept that but, ultimately, An Post funds them. Has An Post come up with a model where it is looking to streamline the number of post offices in the country?
Ms Debbie Byrne:
If one goes back to the 2018 protocol around which there was a consultation, the country was mapped in conjunction with the parameters set out in the social welfare contract, namely, that every community have a post office within a 15 km radius in rural areas and a 3 km radius in urban areas. In some communities, even in rural areas, there would be several, possibly three, post offices that would fit within those parameters. Over time, the digital provision of social welfare services is accelerating. I return to my original point around revenue. The absolute goal has to be to drive revenue through the post office.
Kieran O'Donnell (Limerick City, Fine Gael)
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Is An Post’s bottom line to look to provide a service within a 15 km radius-----
Kieran O'Donnell (Limerick City, Fine Gael)
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Is that, in essence, An Post’s bottom line?
Ms Debbie Byrne:
We have to start somewhere with a strategy, so yes it is. We will await the new census results before remapping because there may be areas that did not have a post office before and may need to have one now, etc. We have to start from somewhere in terms of providing clarity around provision of service. That is our commitment.
Kieran O'Donnell (Limerick City, Fine Gael)
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Is that is based on the most recent census?
Kieran O'Donnell (Limerick City, Fine Gael)
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Has An Post a deliberate policy to close post offices?
Kieran O'Donnell (Limerick City, Fine Gael)
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Does An Post have a policy whereby it may decide to reduce three post offices in a single area to one? That is a hard question and I know Ms Murphy may not wish me to put it but it is what we are being asked on the ground.
Mr. Pat Watt:
It is not so much a question that we would close them because we do not close them. They are independent businesses so if they close, it is of their own volition. We are doing everything we can to ensure every post office is viable by feeding into the system as many new products and services as possible. If post offices make a local decision to close because they do not believe the business is viable, sometimes those decisions are very nuanced and specific to the individual postmaster. For example, many have different types of arrangements around the property, whether they lease it or own it, the number of staff they have, etc. They are very individualised and personalised decisions. Sometimes it is also a retirement decision. There are many nuances to this and we are certainly not driving a strategy to demand closures.
Kieran O'Donnell (Limerick City, Fine Gael)
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I know An Post is not doing that. If a postmaster or postmistress is retiring, it is An Post's policy, one which I have seen in practice, to advertise the business if it considers that there is scope to retain the post office within the community.
Mr. Pat Watt:
We have a team of regional sales managers on the ground who understand the local nuances. It is not the case that there is somebody in Dublin making the decision here. They very much use their local knowledge and relationships to tap into that network to try to identify contractors who may consider the post office to be an attractive business for them, either as a stand-alone business or as part of a retail operation.
Kieran O'Donnell (Limerick City, Fine Gael)
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I ask that An Post write to the committee on the role of the Sustainable Energy Authority of Ireland, SEAI, and the national digital strategy because we want to focus on those matters. We wish An Post well in its deliberations with the Irish Postmasters' Union and with the Department. We want to see money being directed to ensure that the rural and urban post office network is able to survive. I welcome that this money is not confined to post offices owned by An Post but will go to all 833 of them. This averages out at support of about €12,000 per post office but we expect the figure to be higher for post offices that are struggling.
Kieran O'Donnell (Limerick City, Fine Gael)
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I accept that.
Kieran O'Donnell (Limerick City, Fine Gael)
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It is not just about the size of the post office. I am aware of that.
Mr. Pat Watt:
Yes, that is 100% the case.
To ensure there is no perception that we have not engaged around the funding, I should add that before the funding was confirmed, we met the IPU discuss our views on dispersal. We began that discussion to get a fix on what our ideologies are around this. The IPU has gone off to do some modelling, as have we. That will mean the July meeting will be a more productive one than simply starting from scratch. We hear the urgency that attaches to this issue.
Kieran O'Donnell (Limerick City, Fine Gael)
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This is a very simple issue. For me, the post office network is a hidden jewel. The question then is what we can do with modern technology to build this network so that it can provide a role. Post offices have private services with the banks but we can also look at State services as well as remote working and all of the discussion that entails in sustaining rural villages. Mr. Watt is correct on that and I have seen urban and rural post offices of reasonable scale that are under pressure. When I use the word “struggling” I am talking about the broader context but the rural post office is key, as is the urban one.
Gerry Horkan (Fianna Fail)
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I apologise for my absence earlier. I had to attend a vote in the Seanad. If I ask questions that were already asked, I apologise in advance. I was tracking the meeting until I had to go off to vote. I thank Ms Byrne for her opening statement. I am conscious that this is our third engagement on the retail post office network in the past month or so. We had the IPU appear before the committee and also had the Minister of State in on foot of the announcement of the funding programme, and so on. There is probably some repetition of points we made previously but I want to hear An Post’s perspective on them.
Ms Byrne referred to an investment by An Post of more than €60 million to transform the post office network to build a sustainable business for postmasters. Where did that €60 million actually go and what did it do?
My next question may have already been touched on by the Chairman. What formula was used in each of the three years? The phrase used to describe this was the "dispersal" method or model.
It is to give it to those who need it most, not those who are already thriving without it and so on. Where does Ms Byrne see the cash versus digital scenario going? That genie is out of the bottle and people are now much more willing to tap than they ever were before. They are much more willing and less reluctant to embrace technology. There was this whole cash-only thing, which I would have seen happen in my own post office. People used to go in to collect their pension and then paid their bills with the cash they got from the pension. They would then walk across to the other side of the shop and spend the rest of it over the counter buying their groceries before they went home. The cash kind of moved around within the building but never actually went anywhere. That can now be done differently.
Obviously, broadband is part of this committee's remit as well. The unintended consequences of improved broadband may mean that people will be able to access some of the services online that they cannot get at the moment because they do not have broadband and they will stop going to the post office for them. Where does Ms Byrne see that going?
Has Ms Byrne an idea of the percentage of the population that engages with An Post on either a weekly or monthly basis? I remember that Postbank kind of came and went. There is another service available now, although I am not that familiar with the An Post current account. Ms Byrne might enlighten me on that.
Ms Byrne made a reference to making online shopping easier, including by means of out-of-hours collections. What is involved in that? Obviously, people can still presumably top up their Leap cards at DART stations and on Luas platforms, but it is welcome that An Post also offers this service. I was taken by Ms Byrne's phrase about the leaky bucket whereby stuff is coming in and going back out and we are always plugging holes. The An Post brand is really important. It is really trusted - possibly more than the pillar banks or the commercial financial services sector generally. An Post should build on that and provide more services. The in-person verification stuff is very useful. I do not really understand why we set up a whole load of driving licence offices when we could possibly have done them through the post offices - not all 920 offices but perhaps 200 or 300 could have done it.
Gerry Horkan (Fianna Fail)
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I just wonder why we are duplicating services, particularly those that involve in-person transactions. The movement of things online is going to keep happening whether we like it or not. We cannot tell consumers that they have to go down to the post office to top up their Leap cards when they can do an automatic top-up online or whatever.
Gerry Horkan (Fianna Fail)
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However, it is a useful facility for an Post to have to bring in footfall and so on. In terms of the 920 post offices, do we have any idea how many are stand-alone offices as opposed to offices within retail premises, such as, for instance, those located at the back of shops? That is probably plenty of questions to keep Ms Byrne going for now.
Gerry Horkan (Fianna Fail)
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It is more about hearing from you than hearing from me to be honest.
Kieran O'Donnell (Limerick City, Fine Gael)
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Is there a split between which offices An Post owns and which are self-employed?
Gerry Horkan (Fianna Fail)
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I know the split. I think there are approximately 50 company-owned post offices-----
Gerry Horkan (Fianna Fail)
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There are 45 and approximately 880 are franchised
Kieran O'Donnell (Limerick City, Fine Gael)
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It is 873.
Gerry Horkan (Fianna Fail)
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I refer to the 873 franchised post offices. Some in my area are stand-alone operations. A person might walk into a post office and that is all it is; then others are located at the back of premises. In some cases, the husband runs the post office and the wife runs the shop, or vice versa. I wonder about the stand-alone post offices. The one on Merrion Row is flying because it is a very busy place but others are perhaps not the same. How many of the 873 are stand-alone operations?
Gerry Horkan (Fianna Fail)
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Perhaps we should address the questions I asked and then the witnesses can come back in if they wish.
Ms Debbie Byrne:
I will take some of them and ask Mr. Watt to take the others. On the €60 million investment, in 2018, as part of the transformation agreement and transitioning to the more commercial contract, there was an upfront payment to postmasters based on - I cannot remember all the exact parameters now - tenure and size of the business. They got a one-off lump sum-----
Gerry Horkan (Fianna Fail)
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Was that to stay or to retire?
Gerry Horkan (Fianna Fail)
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What does buying them out mean?
Ms Debbie Byrne:
The S22 contract, which was the old form contract, dated from 1902. Postmasters had a fixed element for three years. Every three years, we went back and looked at their actual transactions and the fixed amount for the next three years was calculated based on the level of transactions. As I mentioned earlier, what we are seeing, and the Senator referenced some of the points, is the changing nature of the business. At a top line, while we are trying to fill the bucket up all the time, transaction volumes and revenue are declining. Covid-19 has accelerated some of that trend. In the two years over Covid-19, 5.4 million transactions on welfare alone came out.
Gerry Horkan (Fianna Fail)
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Yes, I saw that.
Ms Debbie Byrne:
With that comes footfall, BillPay, a lottery ticket and all the other things people might purchase as an impulse buy on the back of that. The nature of the new contract is to move to a more commercial basis, which we kind of had anyway; it is just that we were looking at the transactions three years on. This is just a more dynamic form of payment for postmasters based on transaction levels.
Gerry Horkan (Fianna Fail)
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How much of that €60 million was used to buy people out of their contracts? Was that all of the €60 million?
Ms Debbie Byrne:
-----which was to also allow postmasters the opportunity to invest in their business and create a bit of time.
The other factor then was top-up payments. We guaranteed their old payment level for two and a half years, again, working with them to build their business, invest in training or whatever.
Gerry Horkan (Fianna Fail)
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Based on the fact that Covid-19 happened, was that quite an expensive exercise in the end?
Gerry Horkan (Fianna Fail)
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The drop was bigger because of Covid-19 than it otherwise would have been. An Post, therefore, ended up having a bigger compensation figure than it would have been expected to pay.
Ms Debbie Byrne:
We then had to put in the €8.5 million pandemic relief fund. Then there was a capital investment fund of €10 million. Not all of that was drawn down by postmasters. However, we were funding and investing to help postmasters if they had to move to a co-located office or needed to invest in the look and feel of the office or buy new kit such as digital screens etc. There was a kind of mix based on three buckets.
I will let Mr. Watt answer the question on the dispersal model.
Mr. Pat Watt:
We have had initial discussions with the Department and the IPU. The Department shares our view around making sure money is dispersed in a way that really supports those who are most in need. We recognise that the larger, more viable post offices have more options in terms of being able to take action where they are under, say, for example, business pressure on volumes. They also benefit more from the footfall drivers we are putting in place like, for example, agency banking whereas a smaller post office or, indeed, a small urban post office may not benefit as much. Therefore, they do need more support.
Gerry Horkan (Fianna Fail)
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Of the 873 post offices, how many does Mr. Watt think will benefit? Is it 200 or 600 of the 873 post offices that are in need of these dispersal payments and likely to get significant supports?
Mr. Pat Watt:
I would say the bottom half of the network is most in need based on the pure economics. As we move up through the network, however, there are locations that are under pressure in the rest of the network. That is something we will work through with the Department and the IPU. As I mentioned earlier, however, our going in position is to make sure we disperse it in a fair and equitable way to support those who are most in need.
Kieran O'Donnell (Limerick City, Fine Gael)
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Senator Horkan's specific question was how many of the 873 post offices would Mr. Watt deem to be struggling?
Kieran O'Donnell (Limerick City, Fine Gael)
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Did Mr. Watt said 50%?
Gerry Horkan (Fianna Fail)
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It is approximately 450.
Gerry Horkan (Fianna Fail)
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Who are they? How many of them are left?
Gerry Horkan (Fianna Fail)
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Of the 873 post offices, one third are on the old contract. They did not take the buy-out.
Gerry Horkan (Fianna Fail)
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Are they all okay then? They do not need the same level of support.
Gerry Horkan (Fianna Fail)
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Say, for the sake of argument, there are 900 post offices. If we take out the 300 that are on the S52 contract and 600 are left, how many of that 600 that have taken the buy-out and gone to the new contract does Mr. Watt think will need the support? Is it half of them?
Gerry Horkan (Fianna Fail)
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The figure is 300.
Gerry Horkan (Fianna Fail)
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I am just trying to get a handle on it.
Gerry Horkan (Fianna Fail)
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Nobody can fully anticipate the future, but do our guests expect that in five or ten years, there will still be 920 post offices? Could that reduce to 600 post offices, for example?
Ms Debbie Byrne:
If we can keep up the revenue and provide more services through the post offices, that will create a viable network. If the cake is shrinking, either everybody gets a smaller slice or you have to cut fewer slices. Everybody's aim has to be to keep up transactions and revenue and if they decline, either there will be the same number earning less, with greater subventions from the Government, or that will have to be pared back somewhat and for the ones who are left, you create-----
Gerry Horkan (Fianna Fail)
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The ideal is to expand the cake.
Gerry Horkan (Fianna Fail)
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I get the impression the age profile of the users of post offices is generally older rather than younger-----
Gerry Horkan (Fianna Fail)
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Within that age profile-----
Ms Debbie Byrne:
My point is the age profile is changing, which is interesting. Annually, about 65% of people were using a post office, and I cannot recall the monthly figures off the top of my head. Within the age profile, there was a shift, with younger people using the post office more frequently in the past three years, and I think the reasons for that are threefold. First, online shopping, with people either collecting or returning a parcel, is driving in new footfall, which is why we have invested heavily in commercial training with postmasters. If that footfall is driven in, postmasters and postmistresses then have to find a way to sell. We have to move from being a purely service business - we are a service organisation - into having a commercial focus for postmasters while providing that good service.
Moreover, during the pandemic, there has been a significant boom in the younger population coming in, buying gift packaging and sending gifts. We are still investing heavily in a campaign to encourage people to stay connected and send love. We now hear people saying it was so nice to have received a thank-you card or whatever, and we would hope people will continue with that.
Gerry Horkan (Fianna Fail)
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Social welfare is still the biggest component of the post office. Ms Byrne might comment on An Post bank accounts and where broadband might leave the organisation. This may not concern her section, but in less than two years' time, there will be local elections, and at some point there will be a general election. I know a lot of people who would love if An Post could work out geofencing per local electoral area, LEA, whereby if someone were running for election in Stillorgan, Dún Laoghaire or Blackrock, he or she could pay An Post to drop a leaflet to every house in that area, including the ones that say "no junk mail". I do not believe that facility exists whereby it is mapped by local electoral area. If it were done, an awful lot of candidates and parties would be willing to sign up to a reputable leaflet company that would deliver per area, including to the houses that state "no junk mail". In my opinion, a political leaflet, regardless of the party, is not junk mail but rather is a way of communicating with people and getting a message across. It is almost impossible to get leaflets distributed in any other way and there is a massive market, with 949 local authority seats and probably quadruple that in terms of candidates. An awful lot of people, if it were a competitively priced product, would be willing to pay An Post to know the leaflet would be dropped into every house in the area. This might not be under Ms Byrne's control but she may wish to comment on it nonetheless.
Gerry Horkan (Fianna Fail)
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The mapping is the issue.
Ms Debbie Byrne:
I will certainly take that back to the other side of the house, given the publicity-post aspect of our business is an important revenue stream for the overall group.
I might comment on financial services because they are really important. We have done deals with AIB and Bank of Ireland and we will transition out our Ulster Bank deal as it exits the market. In parallel, we have invested heavily in An Post Money over the past three years and we have about 120,000 current accounts. Our current account openings year on year are up 77% and 65% of those account openings are in the network. We also offer credit cards and loans and are looking to go into mortgages.
Gerry Horkan (Fianna Fail)
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I thank both Ms Byrne and Mr. Watt for their contributions and wish them the very best with the future of the network.
Jerry Buttimer (Fine Gael)
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I apologise to our guests for missing some of the meeting. I will not use all my time, given much of what I had intended to ask has been covered. My first question relates to the Government plan for the subvention intervention with An Post. How will An Post implement this and how can it be targeted, allowing for the fact footfall is declining? How do our guests envisage increasing footfall and targeting the Government subvention?
Mr. Pat Watt:
Our view is that it needs to be dispersed in an equitable way that will impact, in particular, those who most need it. It needs to be biased, therefore, and the model needs to be built towards those who most need it. They comprise those not just at the bottom end of the network but also in the middle. A mixture of rural and urban post offices are under pressure. We have had one engagement with the Irish Postmasters Union, IPU, about this and we have also engaged with the Department regarding the philosophy and the ideology of how this would be distributed. We will have a session in the second week of July at which we will bring to the table our respective positions on the design of that dispersal, so it has not yet been agreed.
Nevertheless, as I said earlier, we are seeking to balance between certainty, as in a fixed element that will provide certainty and comfort for those who most need it, and a commercial element that will ensure we do not lose our commercial focus. One of the risks with funding is that we will lose our commercial focus, and we need to maintain that, so the variable element will be important. I expect that as we move towards the more profitable end of the network, it will be more variable than fixed, whereas at the bottom of end of the network, it will be more fixed.
They are the broad brushstrokes but we have not yet designed it nor agreed a design with the Department or the IPU.
Ms Debbie Byrne:
I might take the question about how we are driving footfall. We really see the issue of growing revenue in the post office as built on four pillars, one of which relates to financial services, whether An Post Money, State savings or working more closely with AIB and Bank of Ireland, which is key-----
Jerry Buttimer (Fine Gael)
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On that point about banking and money, two banks are leaving the country. In our guests' presentation, they spoke about the decline in foreign exchange due to the decline in travel. It is now near impossible to get cash foreign exchange in this country. What is An Post's roadmap in that regard?
Ms Debbie Byrne:
Foreign exchange forms a big part of that financial services business for us. Obviously, that side of our business fell off a cliff earlier during Covid and we are rebuilding it, so we have heavy TV and digital advertising featuring Angela Scanlon. We are very much promoting cash and card, recognising that perhaps not everybody wants to use cash. We are rebuilding that business and that is important. Cash foreign exchange is a product all the banks have got out of. Outside of paying an arm and a leg at the airport to get it, we are the only place to get it. Furthermore, we have invested in a leaflet drop to 1.6 million households. We are very much communicating about it to rebuild the business.
Jerry Buttimer (Fine Gael)
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Where is An Post in regard to its roadmap for business money and banking?
Ms Debbie Byrne:
Our current account is growing. It is up 77% year on year. We are in credit cards and loans and again we are way surpassing our own financial targets on that this year, so we are seeing that when people open up a current account they are then opening up a credit card. Our lending business is up 80%, I think, year on year. That is really growing for us. We have an ambition to get into mortgages.
Jerry Buttimer (Fine Gael)
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The Chairman alluded earlier to the issue of the viability of post offices. Where many of us come from is that the benefit of the post office network is evident. There is a clear need, especially in parts of urban Ireland and not just rural Ireland, to have an available, accessible, modern post office network based on the needs of people. I wish to play devil's advocate while also giving anecdotal evidence. Where we have post offices not being reopened or retendered for, is there an approach that we are going to level out with a number of post offices and that will be it? It will be like water finding its own level.
Mr. Pat Watt:
If we look at the year to date we have had three closures, so our closure rate is very low. In all cases where we have a vacancy we advertise it several times. We have a team on the ground who will actively engage within the community to identify people who may want to operate the business for us. Sometimes that takes one pass and sometimes several. In some cases we have had situations whereby we have a temporary closure because we have not been able to find somebody to take the business and then the business reopens. During that hiatus we redirect customers to the nearest local post office.
Jerry Buttimer (Fine Gael)
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Then in some cases there is a permanent closure and-----
Jerry Buttimer (Fine Gael)
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Yes, but surely if that is the case the model An Post is employing may not be deemed successful. I have a post office where I cannot understand why - I am aware the postmaster retired and nobody would take up the contract, but is it the case An Post is not offering enough to the people involved with respect to their need to make money and be able to manage the business so they can have an outcome that is positive for them, as opposed to a net deficit?
Mr. Pat Watt:
Like any stand-alone business it has got to be viable. In some locations we simply do not have the population or indeed the level of social welfare requirements in that location that would sustain a post office. Despite our best efforts, in some locations we find we cannot provide continuity of service in that specific post office but we do in the nearest local post office. Our objective is always to try to fill the gap and maintain continuity of service.
Ms Debbie Byrne:
Where postmasters retire and they own their premises, it is often not about just finding a person as you have got to find premises, you have got to find a local convenience shop or grocery retailer that has the space, etc. There are a lot of factors at play and premises is often the tricky one.
Jerry Buttimer (Fine Gael)
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Yes and I accept the post office network, not just in Ireland but across many parts of the world, faces huge challenges. In North America there is a huge issue around the post office system.
I thank the An Post officials for being here. It is important we continue our engagement. We are very fortunate our post office network that is still in existence is doing a tremendous job. I thank the people who worked in An Post during the pandemic, and also before and after, for their ongoing commitment to serving in our communities. The whole issue is around retail, commercial viability and ensuring we have a sustainable post office network. I look forward to further engagement.
Kieran O'Donnell (Limerick City, Fine Gael)
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I wish to go back to a couple of points. The total number is 875. There are 45, we will say, owned by the post office directly. That brings it up to 915. Am I correct on that?
Kieran O'Donnell (Limerick City, Fine Gael)
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The total of those owned by An Post itself is 45.
Kieran O'Donnell (Limerick City, Fine Gael)
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How many then, are owned by postmasters?
Kieran O'Donnell (Limerick City, Fine Gael)
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It is 872. If I do a quick calculation that say 30% of those are on the old contract, that is about 290.
Kieran O'Donnell (Limerick City, Fine Gael)
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Then there are roughly 580 or 590 on new contracts.
Kieran O'Donnell (Limerick City, Fine Gael)
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Of the 289, the breakdown between stand-alone and co-located is what, roughly? Is it 60:40?
Kieran O'Donnell (Limerick City, Fine Gael)
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So that is 74%-----
Kieran O'Donnell (Limerick City, Fine Gael)
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-----of the 586 are now co-located.
Kieran O'Donnell (Limerick City, Fine Gael)
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That is 300.
Kieran O'Donnell (Limerick City, Fine Gael)
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Are what?
Kieran O'Donnell (Limerick City, Fine Gael)
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They are co-located, so we are talking about 200 co-located. That is not quite correct. Mr. Watt says it is roughly three quarters, so it is about 300 by about 270.
Kieran O'Donnell (Limerick City, Fine Gael)
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Then 250 are co-located and Mr. Watt is saying only 50 are stand-alone.
Kieran O'Donnell (Limerick City, Fine Gael)
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There is a feature we are coming up with. I compliment the staff of the post offices in Limerick, including Aengus Lafferty and others. We have dealt with the staff and everybody wants the network to be sustainable. The An Post officials are talking about expanding the service. What is coming up all the time is the renting of good premises is a difficulty. If the officials are looking for that range of services then they are looking for them to rent better premises in many cases. It is something that will have to be factored into the discussions. We are finding the rent of a new premises can be very high and that makes the model unsustainable under the new contracts. Will the officials elaborate on that? Is it a feature they are finding?
Kieran O'Donnell (Limerick City, Fine Gael)
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They are typically coming off the section 52 contract, which is the old contract.
Kieran O'Donnell (Limerick City, Fine Gael)
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Yes.
Mr. Pat Watt:
The challenge within the network, if we go back to the earlier conversation around digital migration which is only going to increase, is that with many of the services we are driving in, for example around agency banking, which is cash lodgements and withdrawals, there will be an impact on cash over the next four five years as it reduces. Therefore, we need more services to plug the gap but equally we need postmasters to be comfortable having the "and" conversation with you. It is not just about the transaction.
We must make sure they are comfortable bringing up those conversations up with their local community and in offering those products and services. There is a mixed bag in the level of confidence and the willingness to engage in that. We will try to work with them and help with that in the coming months to make sure we can build that confidence because that is the only way to grow the business. Equally, on agency banking, if you go to urban locations that might be benefiting from agency banking, they need to proactively reach out into that community and engage with the local manager of Ulster Bank, Bank of Ireland or wherever to make sure they capture that business coming in because once that business comes in, there is a cross-sale opportunity for the other products.
Kieran O'Donnell (Limerick City, Fine Gael)
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Of the 290 who are on the old contracts, how many of those does An Post expect to retire in the coming years? How long would people who are on those contracts have been with An Post?
Kieran O'Donnell (Limerick City, Fine Gael)
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They are old contracts.
Kieran O'Donnell (Limerick City, Fine Gael)
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What does An Post anticipate that the retirement rate for postmasters in the coming years will be? That is what I am really getting at. One third of the independent postmasters are on those old contracts so by definition, they are probably the older cohort.
Kieran O'Donnell (Limerick City, Fine Gael)
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The committee is hugely supportive of postmasters and the work An Post does. We want to see its range of services expand. In the medium term, the national digital strategy is clearly a space we need to go into. We would also like to follow up on the SEAI because there are huge waiting lists and there are schemes out there and maybe An Post can provide an add-on and assist in that. The key focus in the short term has to be that the discussions with the IPU and the Department provide certainty on the level of funding.
Kieran O'Donnell (Limerick City, Fine Gael)
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That needs to be done so that there is certainty for postmasters the length and breadth of the country and so they will know they are making income and can make a livelihood, which is hugely important for people. Does An Post know how many of its 872 postmasters are solo operators and are not employing anyone? Does An Post have that level of detail?
Kieran O'Donnell (Limerick City, Fine Gael)
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We support and applaud the work they do. I want to finish on a productive note. The discussions on the €10 million must take place quickly and clarity must be brought. We want to assist in expanding the range of services. The following matter is the most important of all and I cannot overstate that it is hard to put an economic value on the network. It is hard to quantify but once it is gone, it will be very difficult to replace. An Post is not only a commercial service; there are other factors and the €10 million coming from the Government, and €30 million over three years, is a key element of it.
Kieran O'Donnell (Limerick City, Fine Gael)
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Does An Post have the magic formula?
Kieran O'Donnell (Limerick City, Fine Gael)
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What can An Post do?
Kieran O'Donnell (Limerick City, Fine Gael)
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It is simple for us-----
Kieran O'Donnell (Limerick City, Fine Gael)
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For us on the ground the biggest difficulty with passports are: the photograph; the consent form where the applicants are children; and things being signed properly.
Kieran O'Donnell (Limerick City, Fine Gael)
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Has An Post put any proposals to Government on this?
Kieran O'Donnell (Limerick City, Fine Gael)
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Has An Post put a business case to the Department of Foreign Affairs?
Kieran O'Donnell (Limerick City, Fine Gael)
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Tell me what An Post could do.
Kieran O'Donnell (Limerick City, Fine Gael)
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Correct.
Ms Debbie Byrne:
You still have to print a form off and go to the Garda station. Postmasters are already doing ID verification and anti-money laundering checks for current accounts and social welfare so they could cut out the step with the Garda, check all the forms and make sure they are all properly signed so that when they go into the system they are correct the first time. My understanding is that a lot of the issues with the online applications arise from the stuff repeatedly being sent back.
Kieran O'Donnell (Limerick City, Fine Gael)
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The paper applications that go in would purely be posted at the local post office.
Kieran O'Donnell (Limerick City, Fine Gael)
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Does the postmaster do anything at the moment to assist people with that?
Kieran O'Donnell (Limerick City, Fine Gael)
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Do they do that as a matter of course?
Kieran O'Donnell (Limerick City, Fine Gael)
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Is that something An Post has set out as procedure?
Kieran O'Donnell (Limerick City, Fine Gael)
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I will make the following suggestion. Rather than it being a general discussion I ask An Post to be quite specific on what it can do. Anything that assists people with passports is helpful. An Post is in the community and it is online. This is something we would take up and follow up with the Department of Foreign Affairs as An Post falls directly under our line as a semi-State body. An Post must put flesh on the bones of this.
Kieran O'Donnell (Limerick City, Fine Gael)
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If An Post does that straight away, it is something we would proactively take up. We will take up anything that proactively assists people. People are under such pressure with passports and Ms Byrne is correct that even when they apply online, they still have to get the consent form.
Kieran O'Donnell (Limerick City, Fine Gael)
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In many cases the post office could provide a validation check on photographs. We have to retain the integrity of the passport application process. These are the types of services that we have to look outside the box with. I ask An Post to give us a proposal and let us follow it up with the Department of Foreign Affairs on its behalf. We will look to be constructive and proactive on this.
Kieran O'Donnell (Limerick City, Fine Gael)
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That would make a huge difference. We will follow up on this again. There needs to be speed and efficiency in coming up with the details on the package for postmasters; that is vital.
Kieran O'Donnell (Limerick City, Fine Gael)
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We thank all the postmasters and staff of An Post for the phenomenal work they do for the public. During the pandemic every household got to know their post delivery person, man or woman, invariably with a parcel for a daughter or son that was purchased online. I am familiar with it and they were working seven days per week.
I thank Ms Byrne and Mr. Watt for assisting the committee in today's important meeting.