Pat Rabbitte (Dublin South West, Labour) | Oireachtas source

I thank Deputy Kitt for raising this important issue. I assure him that the Government is committed to a strong and viable An Post and supports the maintenance of the maximum number of economically viable post offices providing high quality services on a nationwide basis.

The commercial operation of An Post's post office network is a matter for the board and management of the company. In much of rural Ireland, commercial business is moving away from smaller towns towards larger urban centres. This is marginalising the rural economy, drawing employment away from the countryside and reducing economic services, including banking and retail services, outside regional centres. In urban areas, increased broadband penetration, reduced mail volumes and the availability of alternative payment services is reducing post office business. The post office network needs to place itself to rise to these challenges over the medium term.

In the face of these changes, earlier this year I committed to taking the issue of the provision of additional public sector business to the Cabinet committee on social policy. The committee had its initial consideration of the paper I put to it at its meeting on 28 April and agreed to my proposal for a whole-of-Government review of the scope for locating additional public services in post offices. The review is being undertaken with the aim of a final report, based on the responses made by Departments being made to the Cabinet committee in September. While it is not possible at this stage to pre-empt the outcome of the report, all potential avenues for new public sector business opportunities will be fully explored by my Department. Where new business is identified, the caveat of compliance with public procurement requirements will need to be respected.

It is acknowledged that the migration from cash to electronic payments by the Department of Social Protection is one that will have a significant impact on the post office network. However, having invested in the computerisation of all post offices, the network is well positioned to handle the change and become the front office provider of choice for government and financial services and is ideally configured for over-the-counter transactions. Any such developments would need to be subject to competition and public procurement requirements, as appropriate.

Progress towards diversification within the financial services sector is under way, with the enhanced arrangement with AIB and the agreement with Aviva for the transfer of their branch offices personal insurance business to One Direct.

On the issue raised by the Deputy regarding a review of direct debit services at post offices, a number of aspects need to be taken into account. First, it is a matter for An Post and the contracting party for a service to decide what payment channels are made available to customers. These can range from cash transactions to electronic transactions. Second, the availability of choice is something which customers seek as it gives them greater options for conducting their monetary transactional business. Expansion rather than limitation of choice is a common feature of customer service today.

I understand the concern of the Deputy about the future of the post office network. An Post faces many challenges not only financial in nature, but also from the development of communications technologies. Any decisions it may take must be considered in the context of maintaining a sustainable post office network. As shareholder, I have a strong concern regarding the ongoing commercial position of the company and regularly liaise with it in this regard. I acknowledge the pivotal role post offices play in local communities in both financial and social terms.

An Post has many strengths and the largest retail presence in the country. Ireland has one of the most extensive post office networks per head of population in the 28 member states of the European Union. I have impressed on the company the need to further exploit its unique position in this regard and have been supportive of its attempts to diversify its income streams and win a wider range of commercial contracts offering higher margins.

I envisage a strong future for the post office network by using its existing strengths to remain a significant player in the provision of government, financial and other services. Securing the future viability of the post office network in the longer term will entail the network continuing to modernise to provide the services that its customers require. It has been long-standing policy that An Post remains in a position to compete in a liberalised market and continue to provide wide-ranging services to urban and rural communities.

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