Dáil debates

Wednesday, 25 January 2012

Topical Issue Debate

Post Office Network

4:00 pm

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
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Following on from the last debate, this issue is about service provision that is essential for our citizens in rural areas. We must never underestimate the value of the post office to deliver economic and social services to citizens residing in rural Ireland. Not only do they have access to postal services, but also to essential services such as banking, the television licence payment system and social protection payments.

There are areas I would like the Minister to examine to ensure the future viability of our post offices, such as the payment through our post office network of motor tax and the new household charge. I know the Minister is looking at new household broadcasting charges. Access to those services should be available to rural citizens as well as urban citizens on an equal basis.

As a semi-State company, An Post has a commercial mandate from the Government, but I believe it should also have a social obligation to meet its customers' needs. Many post offices have already closed in rural Ireland, and the impact has been felt severely in those areas. An Post may justify these closures due to the proximity of the closing post office to other available post offices in the jurisdiction. However, the time has come where we need full transparency around these decisions. We need clarity on the criteria used by An Post to close such post offices.

Kill is a rural village in the heartland of mid County Waterford, and the post office there services a full 10 km radius, and includes villages such as Bunmahon, Dunhill, Annestown and Ballylaneen. None of those villages has a post office and the people in the area all use Kill post office.

This post office was burgled in October 2011 and there were problems. I believe An Post took an opportunistic decision to close the post office. I took the matter up with the CEO and the senior officials in An Post, and I was very disappointed with the response. It took two months for an elected representative to get a response from the chief executive of a semi-State company. Not only that, the information on the letter was incorrect. It stated that the nearest post office available to the remaining customers is four miles away, when in fact it is 10 km. It is just not good enough for an area with no rural transport links to be abandoned and left in isolation. This issue needs to be revisited and a social impact assessment carried out prior to any decisions being taken by An Post.

Photo of Ciara ConwayCiara Conway (Waterford, Labour)
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I want to take this opportunity to speak about the basis on which An Post currently justifies the closure of rural post offices, namely, on economic grounds and non-viability. This does not take into account the commercial services that accompany such post offices, such as those outlined by Deputy Coffey like banking services, social welfare distribution and often private shops, which are a vital part of the rural infrastructure of local communities. Post offices are often the focal point for people and give business and life to the local shop, which is a central part of any rural society. I would also like to point out that post offices provide a social support to individual members of the public, mostly those who are elderly and at risk of further isolation.

I understand that An Post is a semi-State company and has a commercial mandate, but the Government also has a stake in Bus Éireann and the ESB. Bus Éireann provides, perhaps not to the extent that we would like, a service that is non-profitable to areas of low population. The ESB provides electrification at a commercial loss to the islands. The Minister should look at how An Post can also provide a service to these rural communities. Deputy Coffey has outlined the difficulty faced by many people in mid County Waterford with the closure of Kill post office. I bring to the Minister's attention some statistics of which I have become aware in recent weeks. The week prior to the robbery and the subsequent closure of the post office almost 700 transactions took place there. This shows a great opportunity to grow its viability. As Deputy Coffey mentioned, we can also look at the introduction of other services such as motor tax and foreign exchange. We could look outside the box. Rural County Waterford is a very scenic and beautiful place and we could have tourist information points for those we want to visit the county. We should consider the example of the ESB which operates at a loss by providing electricity to the islands and rural parts of the country. Will the Minister take on board these points?

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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The Government's core policy goal for the postal sector is to ensure Irish customers, whether business or residential, enjoy competitively priced, high-quality postal services. The Government is committed to a strong and viable An Post and supports its maintenance of the maximum number of economically viable post offices.

The Government also appreciates the importance of the rural post office infrastructure. The programme for Government recognises that the universal postal service is an essential public service, especially in the case of rural communities and those disadvantaged communities affected by the digital divide. The importance of the postal business and the post office network was recognised by Deputies during the comprehensive debate on the Postal Services Act last year.

Deputies are aware that the commercial operation of An Post's post office network is a matter for the board and management of the company and not one in which I have a direct statutory function. An Post's original mandate stems from the Postal and Telecommunications Services Act 1983 under which it was established. The company is required to provide counter services for its own and Government business and other uses which the company sees fit. This counter business has developed significantly over the years and now encompasses a range of financial and bill payment products which are offered alongside the more traditional features such as NTMA products, social welfare payments and stamp and television licence sales.

An Post is facing challenges in its postal and mail business from the revolution in communication technologies. An Post must build on its intrinsic advantages such as the scale of the post office network, brand name and strong connection between postmasters and their local community to re-invent itself as a dynamic and sustainable business in the technological age. I am confident the management and staff are capable of doing this.

An Post management has succeeded in growing business at post office counters generally. Most Deputies are familiar with some public concern at queues and delays in certain post offices. This is not the sign of a failing business. Equally, Deputies should be aware of the success of new services such as foreign exchange in certain outlets. The counter business is not immune from the threat presented by the development of electronic alternatives to traditional counter business. An Post management cannot wish this away, nor will I ask it to.

At the last An Post AGM, it was made clear to the board that new value-added services must be found to maximise the potential of the post office network. The recession and banking crisis have increased the amount of business being conducted through post offices. An Post must take advantage of this and has been encouraged to give further consideration to identify scope for post offices to generate additional business, particularly on the banking agency side.

As a result of large-scale investment in the computerisation of the network, the company has had success in securing business growth in its contractual arrangements with AIB, Western Union gift vouchers, Garda fines and BillPay. In addition, An Post wins a significant amount of business from Departments for postal services and financial services delivered through the post office network. Approximately 62% of post office network business comes from Government work. However, while the Government will continue to strongly support An Post, a reliance on Government contracts in the future is not a valid or robust strategy for An Post to take to address the challenges it faces.

The Department of Finance is looking at strategies for the further development of e-inclusion initiatives in the financial services area. An Post already has a strong track record in dealing with people who are financially excluded and An Post will have a central role in the development and implementation of initiatives along with the other stakeholders in the area. The Department is working to ensure the advantages offered by An Post are fully recognised in the design of products and services to address financial exclusion.

The importance of An Post to rural communities is well recognised and as a company it must seize all opportunities to remain relevant to its local customer base. I understand the concern of the Deputies about the financial viability of the post office counters service. I will continue to facilitate business expansion by the post office counter business because it is only this growth which can provide a sustainable basis for the survival of an expensive post office counter service in rural Ireland. I will pay particular attention in the months ahead, with my colleagues the Minister for Finance and the Minister for Social Protection, to the development of a universal basic bank account product which I want to be accessible in the post office network nationwide.

The Government recognises the strategic importance the postal sector plays and the central role An Post has played to date.

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
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I thank the Minister for his comprehensive response. He has identified many challenges facing An Post and I agree it needs to reinvent how it delivers services to those in rural Ireland. However, it certainly cannot provide these services if it closes post offices without tangible assessment of what extra delivery could give rural areas. Will the Minister take an active interest in this area on behalf of rural citizens? I do not expect a post office at every crossroads; far from it. However, I gave the example of there being no post office in a 10 km radial in mid-County Waterford.

The Minister used the phrase "financial exclusion" and this is what is happening to many customers of the Department of Social Protection who used the post office in Kill. They are financially excluded because there is no rural transport link or ready access to alternative postal services which are more than 10 km away. This is unacceptable and An Post needs to review this. The Government must be cognisant of the changes in rural Ireland to ensure that we protect services as far as possible.

Photo of Ciara ConwayCiara Conway (Waterford, Labour)
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The CEO of An Post acknowledged that the post office network is vital to businesses and the social fabric of Irish society. The social dimension of An Post's services is under-estimated, misunderstood and misrepresented by An Post. If the CEO truly believed what he stated Kill post office would not have been closed. He showed disregard for the residents of the area by not even having the correct information, stating that the nearest post office was only four miles away when it is more than 10 km away with a round trip of more than 20 km. For people already struggling to collect pensions this is a considerable imposition. There are no rural transport links or Bus Éireann services to facilitate access to An Post services. Decisions on the closure of post offices cannot be made on economic imperatives alone. The social impact of something like this cannot be measured on a balance sheet.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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I accept what Deputies Coffey and Conway have stated on the social role and responsibility of An Post. We spent a good deal of time during the debate on the Bill discussing this very issue. The difficulty is that An Post is also a commercial State company and it must be viable; this is its mandate. It is this balance between the commercial mandate and the social responsibility that is sometimes difficult to get right.

I agree with Deputy Paudie Coffey that there is a need for the company to continue to reinvent itself. We should make no mistake: electronic substitution has caused the gravest of problems for An Post and there has been a dramatic decline in its revenue in recent years. There has been a drop in volume of more than 20%, which has caused very serious difficulties for An Post.

As regards the fact that Kill post office is closed, until Deputy Conway brought the matter to my attention yesterday, I was not aware of it. I do not know the circumstances surrounding the robbery that seems to have precipitated its closure, but I will undertake to raise the matter with the chairman of the company. I do not know whether it is the intention to reopen it. I accept it is not the most strategic approach to the retail infrastructure of An Post that, for whatever happenstance, that if a post office is closed, it will remain closed because it is one less. I will examine the prospects in the case of Kill post office in that context.