Wednesday, 21 October 2020
Post Office Network: Motion [Private Members]
That Dáil Éireann:
recognises: — that transactions within the post office network are down by an estimated 25 per cent due to the Covid-19 pandemic, which heightens the serious viability challenges facing
the network; and
— the need to put the post office network on a sustainable operational and financial footing in line with the Cabinet decision in 2017; and calls on the Government to: — designate the post office network as the ‘offline gateway’ of choice for citizens availing of State services due to its unique nationwide network and existing strong relationship with offline citizens;
— commence the provision of offline Government services with the availability of motor tax renewal through the post office network; and
— give recognition to the existing post office network as both a rural economic lifeline service and a locus for future development of financial services outside of the existing banking framework.
This an important issue. I am a rural Deputy and was brought up in Belclare. Canavan's, the local post office, was beside us. Over the years it was the financial centre of the village, where people drew their children's allowance, pensions and so on and they spent the money locally in the adjoining shop. It is still in existence today, and it provides a valuable service to many people in the locality. This is replicated throughout the country in the post office network. During the Covid-19 lockdown, the post office assumed the role of a social contact and provided a reassuring knock on the door for many people. The postman called to the doors of those on their own and provided a lifeline to many who were isolating. Tomorrow, as we begin the second lockdown, the post office will again be the focus of providing all these services, including the provision of free postage to nursing homes and newspaper delivery to ensure that people are not on their own. All of this is to be commended.
However, the post office network is at a very critical juncture. There 891 postmasters and 45 An Post-operated post offices in the country. During the Covid pandemic, their transactions are estimated to be down by around 25%. Grant Thornton, which has done a report on the post office network, has estimated that there is a €17 million shortfall annually in the costs of running the network. The Government needs to act quickly to save the network.
Grant Thornton has also argued that the post office network remains a highly valuable asset, which contributes an estimated social value of between €344 million and €776 million per annum. We are calling on the Government to do a number of things. The first is to designate the post office network as the offline gateway of choice for citizens availing of the State services, due to its unique nationwide network and existing strong relationship with offline citizens. Second, we ask the Government to commence the offline services by providing the motor tax renewal service through the post office network. That would be a statement of intent. We ask that recognition be given to the existing post office network, both as a rural economic lifeline service and a locus for future development of financial services outside the existing financial framework.
I ask the Government to take this motion seriously on the basis that we, in rural Ireland, need this network to ensure that it has a focus. We see villages in which the doors have been closed. The last beacon of light for many of us is the fact that the post office remains open.
I commend everyone involved in the post office. My colleagues will expound more on the virtues of the post office network. Critically, the post office network will be in a very serious position from June 2021, unless the Government acts now. That is why the motion is being moved now, rather than leaving this issue to come to a cliff edge. I would appreciate if the Minister, who is listening in Galway, would take this on board.
I welcome the fact the Regional Group has brought such an important motion to the Dáil. The Minister of State, Deputy Naughton, will know as well as anybody else in this Chamber that we have seen Ireland grow into a city state. With regard to size, Dublin, and in comparison to the rest of the country, is an outlier in relation to any other capital city in Europe. Even in Britain, London does not have the dominance Dublin has here. That lopsided development is continuing apace. Right now we have an overheated capital, and a third of the country spending two or three hours per day commuting into Dublin. People are commuting from Galway, Cork and Cavan to Dublin every day to work. That lopsided development is phenomenally damaging for Dublin because of the fact that housing is not available, one cannot travel around the city and it is difficult to find places for children in schools. It is damaging to people in the commuter belt, because parents are separated from their families for long periods. We see regional and rural Ireland emptying of young people. There are many reasons for this.
The Government provides a number of sources of funding to try to stop this but in reality, it is only social welfare for rural Ireland. This is happening at the same time as services are being gutted in rural Ireland. In 2018 we saw well over 100 post offices close all over the country, including seven in my own county of Meath. Garda stations have also been closed and rural pubs and shops have closed. The fabric of rural communities is in big trouble at the moment. At present, there are 900 post offices around this State and they are the centre of business and human interaction in rural areas. If one takes those post offices away, a lot else falls. If pensions are not collected on particular days in small towns and villages, then that money is not spent in those places. The post office infrastructure is in serious trouble. If 2021 turns out as predicted, each post office will make an average loss of €19,500, which is startling. Posts offices are not currently economically viable. There is a hole in the funding for post offices at present of €17 million.
We have a choice here. One of the problems I have noted in my time in this House is that there are certain issues or topics for which every single Deputy will declare support, for the sake of the common good, with post offices and credit unions being two examples but when it comes to action and putting money where our mouths are, this Chamber has let down those organisations for generations. Rather than have everybody from all sides of the House saying nice things about the post office network, can we actually support this motion and make sure that there is money to pay for the continued existence of the network? The €17 million hole that exists must be filled. The Government is throwing helicopter money to many other areas of society at present and it would be absolutely wrong not to stand up for post offices. If we allow post offices to close in the near future, the trend towards lop-sided development will accelerate.
The debate this morning centres on the old adage that we know the cost of everything and the value of nothing. In recent years the Government has, to a large degree, turned its back on the needs of the post office network and in doing so it has turned its back on the needs of regional and rural Ireland. A significant group of our citizens have used post office services for many years and will not avail of the move to e-commerce that the Government and society more generally is pushing. We need to acknowledge that in the first instance. We also need to determine how we can future-proof the post office network for the modern age. In that context, the Government must view the post office network as a strategic asset. As someone who lives in regional Ireland with a large rural constituency base, I know the value of the post office network and the importance of post offices to citizens. They want to do business in their local post office, which is a local community area where they feel safe and secure, are known and get recognition. They value the services of post offices and have been prepared for years to support them through their taxes but unfortunately the Government is not so prepared.
A public service obligation, PSO, levy will be required to support the services of post offices in the future. We can look at initiatives like issuing social welfare payments through post offices and so forth but ultimately this is about a strategic decision as to whether the Government will support the network into the future. That is both a strategic and cultural decision. Once that decision is made by the Government, it can provide the initiatives that will ensure that money flows into the post office network. I ask the Minister to consider the importance of the network to the social fabric of the country. Previous speakers have referred to payments through the PUP scheme, motor taxation and driving licences being processed through post offices and there lots of other initiatives we can consider. Some months ago I called for a joint initiative between post offices and credit unions to provide funding for the SME sector. There are hundreds of millions of euro sitting in credit union accounts that cannot find a way of leveraging interest and at the same time, people in businesses are looking for money. A natural efficiency could be arrived at but nobody has expressed any interest in examining this proposal further.
I ask the Minister to put a floor under the post office network and to make a strategic commitment to fund it into the future. After that we can look at various initiatives that will provide revenue for the network but first and foremost, a political decision to support, save and expand it must be made.
The post office network is vital infrastructure for many in rural and regional communities. Almost 950 post offices are operational throughout Ireland but unfortunately this number is decreasing. The sector has seen significant cuts in recent years with the closure of hundreds of post offices, most of which were located in small rural communities. County Wexford has 52 post offices but unfortunately this number is getting smaller. They serve all types of communities, from the larger ones in our main towns such as Bunclody, Gorey, Enniscorthy, Wexford and New Ross to small family-run outlets in small villages such as Rosslare, Ramsgrange, Fethard-on-Sea, Wellingtonbridge, Foulksmills and Campile. Post offices provide vital services to hundreds of communities but are under further threat at the moment due to Covid-19 restrictions imposed by the Government. Transactions within the post office network are down by 25%.
This motion calls on Dáil Éireann to recognise the significant challenges facing the post office network. I have described the network as being under threat and with the wrong action, that threat can become a weakness but with the right action, it can be turned into an opportunity or a strength. The right action is for the Government to ensure the sustainability of the network through a PSO. This may involve emergency investment but more importantly, it requires an expansion of the role of the post office to give the network the opportunity to sustain itself.
It is also important to recognise the knock-on benefits of post offices for local communities. The Grant Thornton report argues that the post office network remains a highly valuable national asset that contributes far more to the economy than the cost of the PSO. It estimates that the protection and expansion of the network would result in a social value for Ireland of between €344 million and €776 million. This social value can be seen when people travel to their local post office to do something and then decide to call into another local business while there, whether that be a butcher's shop, bakery, café, clothes or shoe shop or a sports shop. Post offices help to bring economic activity to their areas and they need a PSO to get them back on track and ensure their survival. They also need opportunities to develop by providing as many useful services for people in local communities as possible. They need to be seen as the go-to venue for people to engage with State services.
The motion calls on the Government to designate the post office network as the offline gateway of choice for citizens. Many people find online services totally alien and they need an alternative. Every form that needs to be completed such as driver licence or passport applications should be available as a matter of course in every post office. In all cases, the postmistress or postmaster is there to help people to complete these forms. The motion also calls on the Government to commence the provision of offline Government services with the option of processing motor tax renewals through the post office network. Many rural residents would need to drive for miles to the nearest motor tax office. Let us save the carbon by allowing people to drive the few miles to their local post office instead. This motion recognises the existing post office network as a rural economic lifeline and a locus for the future development of financial services outside of the existing bank framework. The post office network is ideally placed to provide an alternative in this market. I hope Deputies on all sides of the House will support this motion to protect and future-proof our post office network.
The post office in Ireland has seen many changes. It was established in the 16th century when it served just Dublin and a small number of major towns. The postal service developed over the years from the days of the bellman and the post boy, to the mail coach, the mail train, the mail boat and eventually to airmail.
Throughout its evolving history, the post office consistently played a crucial role in the development of Ireland and met every challenge with a determination to overcome it. It has never changed and it is now up to the Government to ensure it never will. The challenges facing post offices today are unlike any they have faced in the past. The world of today demands that the post office carve out a new future for itself to ensure it continues to provide the services people need and demand.
There are more than 900 post offices and they are used by 1.3 million people each week. Studies have indicated that post offices are used more frequently and regularly by people living in rural areas. Figures from 2019 show that 36% of people in Ireland live in what are considered to be rural areas. This is a significantly higher number than the European Union average, yet the number of people who are traditionally considered to use post offices the most are not doing so to the extent they could. The reason for that is that the post office is not offering them the enhanced range of services they need to conduct their business in the modern world. This needs to change or the institution that is the post office will be consigned to the history books.
Due to the use of technology and the emergence of rapid courier services, revenue from letter and parcel delivery is minuscule now compared with the major source of post office revenue it was in the past. However, post offices have effectively handled the distribution of some €4.6 million in social welfare payments, a large proportion of which is in dispersed rural communities. This in turn benefits local businesses because, in general, money being collected locally results in it being spent locally. If post offices can efficiently handle vital social welfare payments, it goes without saying that this should and could lead to them handling a wide range of other services.
Post offices are ready and willing to work to save their future, but the facility to add the provision of additional services required by the public has not been made available to them. The Government and its agencies have not lived up to their promises to empower An Post with new tasks and projects, particularly in the area of financial services. The Government has been too slow to encourage these developments. A prime example of that is the fact that post offices were not offered an option for the collection of the pandemic unemployment payment. This oversight saw billions of euro channelled through banks despite research proving that making payments directly into a person's bank account can lead to up to 20% of it being spent outside the country.
As things stand, average losses of €19,000 are forecast per post office each year from 2021 onwards, impacting on the viability of post offices throughout the country. It costs €70 million to run the post office network. The network generates approximately €53 million in revenue, leaving a shortfall of €17 million. There is a small window of opportunity to help post offices. Once that window closes, it will never be reopened. No Government will wish to see the doors of post offices close forever. No Government will wish to leave that legacy. Post offices are willing to fight and work for their future. The Government needs to give them that chance and opportunity. Urgent and meaningful action is required.
I move amendment No. 2:
To delete all words after “Dáil Éireann” and substitute the following:
“recognises: — the important role that An Post and post offices have played during the Covid-19 pandemic in its commitment to rural communities and to the elderly and vulnerable in our society, and its provision of a swift and sustained response to the crisis in the introduction of a number of initiatives, including check-ins on elderly and vulnerable customers, delivery of newspapers and a recent commitment to free mail to residents in care facilities until January next;
— that transactions within the post office network are down by an estimated 25 per cent due to the Covid-19 pandemic;
— that post offices provide crucial public and financial services to communities all around Ireland, especially to those in rural and isolated areas;
— that the Programme for Government commits to supporting a modernised post office network that ‘will provide a better range of financial services and e-commerce services for citizens and enterprise, as part of our commitment to a sustainable nationwide post office network’;
— that An Post has potential to do more and make a further significant contribution across many areas of public, business and community life in Ireland, with an evolving mandate An Post can emerge as a central hub for a wide variety of valuable community focused services; and
— the strides made by An Post in offering an enhanced suite of financial services through the network; and notes: — that the Government is committed to a sustainable nationwide post office network as a key component of the economic and social infrastructure in both rural and urban areas;
— in pursuit of this objective, Government efforts to support An Post in the roll out of new services and the delivery of its strategic plan to ensure the financial viability of An Post and the continued fulfilment of its mandate to deliver a mails delivery service and a viable post office network, including:— the provision of State support to An Post of €30 million in 2017, €15 million of which was to support the post office network;— the commitment from the Minister for Employment Affairs and Social Protection that all weekly social welfare payments, which had been moved to a fortnightly schedule from the end of last March, will be fully restored to being paid weekly with effect from Monday, 2nd November, 2020, noting the value of these transactions to An Post.”
— the approval of a capital expenditure programme, which as part of the Company’s commitment to the sustainability of its network is designed to develop the newer elements of An Post’s financial services business and mitigate declining core mail volumes and revenues on the retail side of the business;
— the work under way, in consultation with An Post, to explore the scope to put more business through post offices; and
— the Provision of Offline Services Report, which will be published in the coming months and considered as part of a national digital strategy and which proposes a more coherent approach to providing offline services to citizens; and
I thank Deputies for their contributions and the opportunity to address the motion. Although the Government is opposing the motion, I wish to put on the record that I agree with many of the sentiments expressed by the Deputies who put down the motion, as the network has the capacity to do more business for the Government. All Members agree on the end point, but where we differ is on how to get there.
I commend An Post and postmasters on the community initiatives put in place in response to Covid-19 which have been implemented with such goodwill and efficiency throughout the country. Throughout the pandemic, An Post has kept its network of 940 post offices open, playing a hugely important commercial and societal role in communities. Most recently, An Post announced that it will ensure free delivery of all card and letter mail posted to or from residents of nursing and care homes until the end of January. Enabling family, friends and colleagues to keep in touch is of great importance. The support provided to the elderly and most vulnerable through this and other important initiatives is an invaluable service during these times.
An Post, postmasters and the network are facing their own particular challenges. The ongoing decline in core mail volumes through e-substitution has seen An Post working hard to diversify its business in recent years and to seek new business opportunities. Deputies will recall that even before Covid-19 there were huge challenges for the business, with mail volumes declining by 6.3% in 2019, resulting in a €25 million decrease in revenue. An Post estimates that Covid has probably accelerated this process of volume decline by two to three years. A further difficulty in that regard is that once customers have adapted to digital alternatives, they rarely return to sending mail and, as such, the decline is likely to be permanent.
Like many other aspects of our lives, the way in which the public accesses Government services is likely to have been profoundly affected by the pandemic. We need to consider these changes and our response to them very carefully. To take the example of motor tax, under the existing arrangements, motor tax is payable in person or by post through motor tax offices in 26 local authorities. It is also payable online at any time, with the level of online usage increasing from 42% of all motor tax transactions in 2010 to just under 79% at the end of last year. Although overall motor tax transactions have reduced slightly in recent months due to Covid-19, the percentage of online transactions has increased significantly during that time, averaging 92% of all motor tax transactions.
We need to consider our overall approach to offline service provision in light of our experience, and not in terms of individual services but rather as a whole. Rather than considering individual services, a centrally driven, whole-of-government approach to offline service provision, similar to the adoption of digital government, would help to realise the commitment in the programme for Government to a sustainable nationwide post office network. I am considering the report of the offline services group with a view to bringing it to the Government in the weeks ahead.
The Government has recognised in its programme that a modernised post office network will provide a better range of financial services and e-commerce services for citizens and enterprise. We need to be imaginative and to explore other ways to use the post office network. The Minister for Environment, Climate and Communications, Deputy Eamon Ryan, made reference in the House last week to the potential to use post offices as hubs for remote working. Engagement has already begun with An Post and I am keen to work with it to explore this potential. It has also been imaginative, diversifying and expanding the services it offers. It recently launched its green hub facility as a one-stop shop for home retrofitting. New services such as these will drive footfall through post offices.
There is no doubt that Covid has had a negative effect on post office footfall, with an estimated 25% decrease in transactions. Social welfare cash payments, which were reduced to a fortnightly payment in March, will return to a weekly payment of on 2 November. This announcement has been welcomed by postmasters. The recent report commissioned by the Irish Postmasters Union, IPU, on the post office network states that without the introduction of a public service obligation and further Government services through the post office network to increase turnover, the network faces an annual shortfall of €17 million per annum from 2021 onwards. These issues need to be addressed quickly and I can assure Deputies that work is under way in this regard.
A significant amount of time and effort has been spent in the past three years working on restructuring An Post, and I acknowledge the work of my predecessors in that regard. This work was critical to save An Post and protect jobs and the post office network. An Post has invested in training for all post offices in 2019 and 2020 to better equip postmasters to run their business, manage a profit and loss account and promote their businesses locally. Significant investment has been made in redefining the network, including reducing the number of post offices, modernising the postmaster contract and updating the brand.
The consolidation of the post office network has assured the widest possible distribution across the State with an ever-improving network. The focus of the business is on developing a full range of financial services which will mitigate the ongoing reductions on the retail side. The key focus continues to be on future-proofing the company and keeping it relevant to its customers with regard to the types of services it provides. This restructuring has seen the development of new areas of business, particularly in parcel delivery but also in new retail areas and in financial services, which has resulted in a return to annual profitability since implementation of the plan first began.
It is important to remember that, as with any business, it needs to grow and develop new products and meet the changing needs of its customers. An Post already has a significant presence in financial services, providing local banking through approximately 940 branches. In recent years, it has launched a current account, a credit card offering and loans. It also has a growing foreign exchange business. It has expanded in the area of e-commerce and has seen massive growth in its parcel business as well as in new green initiatives, placing sustainability at the heart of its business and adapting its fleet to provide zero carbon emission deliveries in Dublin.
An investment loan of €40 million from the European Investment Bank aims to support the implementation of a number of the projects underpinning An Post's strategic plan including post office renewal to allow An Post to offer upgraded retail services in fit-for-purpose outlets with appropriate digital and physical infrastructure. Government made €30 million available in State funding to support the renewal of the post office network and the continued fulfilment of a 5-day-per-week mail delivery service. This reflects the Government commitment to sustaining a nationwide post office network and daily mail service. The Minister, Deputy Eamon Ryan, has also recently approved a capital expenditure programme which, as part of the company's commitment to the sustainability of its network, is designed to develop the newer elements of An Post's financial services business and mitigate declining core mail volumes and revenues on the retail side of the business.
Government acknowledges that An Post has the potential to provide additional Government services. As the Minister of State responsible for An Post, I intend to work closely with the company to see if there is scope to channel more services through the network. It is my intention that all options will be considered fully and that efforts will be redoubled to give effect to our commitment to ensuring a sustainable and viable post office network.
I am sharing time with Deputy Fitzpatrick. I do not know if he is here yet. I thank my colleagues for bringing this motion before the House. I also thank Ms. Cáit Nic Amhlaoibh in our office for all the work she has done in putting this motion together.
The local post office has long been the focal point of communities throughout Ireland. This is particularly true of rural areas but they have also played an important role in the social fabric of communities in many urban settings. The whole local post office network stands on the edge of a cliff. Unless action is taken to ensure its economic viability, more and more post offices outside the larger urban areas will shut for good.
It goes without saying that any difficulties or challenges faced by individual postmasters up to now have been gradually added to by the Covid-19 pandemic, which has reduced the volume of transactions by approximately 25%. Government needs to throw them an economic lifeline by offering them the chance to provide services such as motor tax renewal in their local areas. People should be able to renew driving licences, pay hospital charges and avail of a range of other services in their own localities.
The post offices need an injection of funds, as outlined by the recent report by Grant Thornton which recommended annual public service obligation funding of €17 million to support the post office network. That report outlined how funding models of this type are already in place to support the post office networks in the UK, France, Spain, Belgium, Italy, Finland and Poland. These have the approval of the European Commission, which shows there is no barrier to introducing such a levy here.
I remember I spoke in the Dáil on the issue of the threat to the future of post offices six years ago, back in 2014. I stressed then, as I do now, the very important and unique role they play socially, culturally and economically. In the interim, things have got worse instead of better for them. We had another report by Grant Thornton back then, which said: "Despite continued assertions by government officials as to the importance of the post office network, little support is being offered to them." At that time the big issue was the threatened loss of the contract to deliver welfare payments. That report also showed how the total number of post offices had shrunk from 1,361 in 2006 to 1,152 by 2012.
Grant Thornton's latest report outlines that the total number today is down to 944, of which 45 are company post offices run directly by An Post while 899 are run as franchises by postmasters. Grant Thornton warns that the network "faces significant levels of unrestrained closures by the end of 2021" unless action is taken.
I stress that there is an enormous return for the State in investing in local post offices and ensuring their survival. While it might be difficult to put a monetary figure on it, the social impact on communities would be very significant. The reverse is also true; further closures could have a devastating impact. There is a great grá among people for their local post office and there is great support for doing something to ensure they remain open and viable. Independent research earlier this year found that 91% of people said their post office provided a valuable service to the locality. Some 86% supported the Government providing financial support to keep their post office open and a further 86% wanted more State services to be available at their post office. Government would be pushing an open door if it were to act now. If it does not, it may find itself paying the price down the line.
It is vital, at this critical time, that Dáil Éireann gets behind this motion and supports our call. Post offices need urgent Government assistance in order to survive the current crisis and build for the future so that we will have a profitable and sustainable post office network.
An Post is more than the post office, it is a vital part of every local community in every village and town. Post offices are not only a place where people conduct business, but also a place where social interaction takes place and, more often than not, the lifeblood of a local community. In recent research carried out by Red C, it was found that 91% of those surveyed agreed that the post office provided a valuable service to the local community, 86% supported the Government providing financial support to keep their post office open and 86% wanted more State services to be available at the post office. It is fair to say that we all realise that the local post office is much more than just a post office. I believe everybody in this House will agree with me when I say that Government must do everything in its power to ensure that local post offices remain open.
When a post office closes, other local businesses also suffer. This has been shown to be true over the years. In our motion, we ask Dáil Éireann to recognise that the volume of transactions within the post office network is down by an estimated 25% as a result of the Covid-19 pandemic, which further threatens the viability of the network. We call on the Government to designate the post office as the offline gateway of choice for citizens availing of State services due to its unique nationwide network and existing strong relationship with offline citizens.
The statistics behind An Post are quite impressive. Some 28% of the population, or 1.3 million people, continue to use the services of the post office every week, which distributes €4.6 billion in social welfare payments. Coming from a business background, I know the challenges being faced in what seems to be an impossible situation. The post office needs Government support and a roadmap to the future. An Post's losses mainly result from the ongoing transfer of traditional post office services online and the reduction in its traditional mails business. I call on the Government to provide, first and foremost, funding to safeguard our post office network. A sum of €17 million does not seem to be a lot of money. I plead with the Minister of State to keep the post offices open.
With regard to the roadmap, the situation will be more difficult. For An Post to be viable, it must return to profitability. In order for this to happen, it must be allowed the opportunity to provide more services than it currently provides. We have heard in recent weeks that some major banking institutions are talking about pulling out of Ireland in the near future. l am not alone in saying that all the major banks would prefer not to operate personal bank accounts and not to deal with the costs associated with them. The reality, however, is that personal customers require an operational bank account. This account is needed to make debit card payments, direct debit payments, standing order payments, money transfers and so forth. There is a real opportunity for An Post to provide this service to personal account holders, probably in the form of a basic payment account.
An Post is in a unique position to offer these services. It is clear that the high street banks are not interested in this type of business, which presents an opportunity to An Post. An Post already has the infrastructure in place and with possible co-operation with the credit union movement, it could also have the IT structure in place. It would provide an opportunity to An Post to work closely with schools, especially primary schools. It could encourage students to open their first account with An Post. One will find that once people open an account at an early age and become familiar with this, they will stick with it. I know from speaking with members of older generations that they would be happy to conduct their business with An Post rather than the main banks.
This evening, the country will commence level 5 restrictions for a period of six weeks. Many so-called non-essential businesses such as clothes shops, gift shops and shoe shops will unfortunately have to close their doors to the public. The Government is actively encouraging these businesses to develop online business. While I agree with this approach, since it gives these businesses the opportunity to continue to trade, I also believe that it gives the post office an opportunity to expand its services. Local post offices should be given support to work with local businesses to provide a cost-effective and reliable delivery service to the businesses that require delivery of goods. I know that a number of couriers carry out a similar service but I firmly believe the post office can provide a unique partnership with local businesses to provide a more cost-effective solution. Local businesses need help to compete with large competitors, many of which are based outside the country. In Dundalk, we actively encourage people to shop locally and to keep business in the area.
An Post could benefit with regard to the motor tax. Surely this service could be provided by An Post and provide much-needed revenue. It is important that we all recognise the vital service that An Post provides to the local community in every village and town in the country. It is also vital that we come to its rescue and that the Government provides the necessary funding to fill the current gap of €17 million. It should be noted that the Government already provides substantial funding to the bus and rail services to keep them operating and An Post should be given the same treatment.
I spoke about the figure of €17 million and the local community. The Minister of State comes from the Galway area and, more than most people, realises the disservice done to An Post. There are opportunities and the Government could work closely with An Post. I know it costs a total of €70 million. I plead with the Government not to let this service go down.
I thank the Regional Group for tabling this important motion. Sinn Féin is happy to support it. We have submitted an amendment which we believe further adds to the motion and we hope that people can support it. The work of postmasters and workers throughout our postal service has been vital during this pandemic, ensuring that people can stay in contact, access their weekly payments and pay their bills. I commend An Post's recent initiative of providing free post to our friends and family who are resident in nursing homes. It is a fantastic idea and commendable, and I hope people make good use of it.
Sinn Féin has always been vocal in its support for protecting the post office network. Post offices are crucial services in our towns and villages and are especially important in rural Ireland where they provide essential services and serve as a meeting point in local communities. Despite the invaluable role that our post offices play, the network has regrettably suffered from years of neglect by successive Governments, with hundreds of closures and the loss of vital outlets throughout rural Ireland. These include post offices in my constituency of Meath East which were closed in 2018, including my local post office in Tara, and at Bellewstown and Clonalvy. I remember them as a county councillor at the time and there are other examples. Post office closures have had a severe impact on individual villages and communities. Local shops subsequently closed.
At that time, Sinn Féin tabled a motion on the future of our post office network. Some 159 post offices were earmarked for closure, including seven in Meath. There was little more than rhetoric from the then Government. Nothing was done to secure the future of the network. We asked that the proposals contained in the 2016 Kerr report, which included post offices providing alternative services such as financial services and Government services, be implemented immediately. We also suggested that a new model of community banking be established through the post office network to fill the void left by commercial banks in rural Ireland. Two years later, we are in much the same place, with even more challenges facing our post office network and little interest from Government in dealing with it.
Last month, the Irish Postmasters Union commissioned a report which sets out the significant challenges faced by post offices across the State and highlights the significant value and contribution they make to our economy and society. One of the central recommendations in this report is that a public service obligation be introduced to secure the future of the network and allow post offices to continue to provide their excellent and important services. Some €17 million per annum was suggested for this annual public service obligation. When Sinn Féin tabled its motion on the future of post offices in September 2018, Fianna Fáil tabled an amendment calling for just such a public service obligation to be introduced. With Fianna Fáil now the lead party in government, will it follow through on this commitment, which can secure the post office network, or is this just another broken promise? I note there is no such commitment in the Government's amendment this morning. We have included it in our amendment and, on that basis, we ask Fianna Fáil and its colleagues in government to withdraw its amendment and support the Regional Group's motion and the Sinn Féin amendment.
Another proposal that we have included seeks the expansion of the role of post offices as a one-stop shop for those inquiring about and applying for Sustainable Energy Authority of Ireland grants or other similar green initiatives. These will be crucial in future. There is a welcome and much-needed commitment from Government to expand these services, which we appreciate, but many may not be able to access these grants through online portals. Our post offices should become a place where people can access information about these grants, talk to a person about them, be encouraged and persuaded if needs be, and get help in applying for them. This can help to increase the uptake of these grants and also provide our post offices with a new avenue of business. We are having a conversation at the Joint Committee on Climate Action about public involvement in addressing climate change and our obligations. I believe that post offices can play a key role in outreach and engagement. It is a win-win for our post offices and environment, and I ask the Minister to consider further expansion of this emerging role for post offices.
We need creativity from the Government. We cannot have business as usual. We cannot come back next year with another debate on the same challenges. Post offices are critical State infrastructure throughout our island and need proper investment, ambition and attention from this Government.
I add my voice to what Deputy O'Rourke has said. It is straightforward. We need to make decisions about vital matters and provide support. I think we all accept, even based on what has been said today, that An Post is a necessity. We have postmasters talking about negotiations on subvention and its possible end. They are worried about whether they will continue to be personally viable. As with many of these situations, we could lose too many of these post offices. With regard to An Post management and the Irish Postmasters Union, everybody is now singing from the same hymn sheet. We have the Kerr report, the Grant Thornton report and a need for the Government to put money where its mouth is. It needs to provide a €17 million public service obligation. Combined with that, we need to ensure that we facilitate An Post by ensuring it maintains itself as a viable option.
We know the difficulties we have. We know the Minister is meeting Ulster Bank about the possibility that it will leave the market. We are aware that retail banks are not really interested in front end dealings. They are trying to move away from those. We have a facility in the community, especially in rural areas where it can be more difficult for people to get in, particularly if they are maintaining a 5 km limit at this point in time. We need to ensure that post offices are given the facility to be the banking service for local people. We need to ensure that whatever resources they require to do that are provided. We welcome any Government services that can be provided. People are worried that some social welfare payments that will be paid directly into banks could reduce the viability of certain post offices.
All this must be examined. We must ensure that we give post offices the capacity to be able to deliver State services and that community involvement will be taken into account from the point of procurement. I agree with the comments on what An Post is doing and its potential as a one-stop-shop as a green hub, which could be facilitated and empowered to a greater degree. These are the things we need to do.
I support the motion and the amendment tabled by my colleague, Deputy O'Rourke. I fully agree with the proposal put forward in the Grant Thornton report commissioned by the IPU, which indicates a €17 million PSO contract as the only realistic solution to support the post office network, as well as serious consideration of what further Government services could be put through the post office network to make it more viable. There have been concerted efforts over the past number of years to get people on certain social welfare payments to have their payments paid through the bank. It is time to go back to a form of community banking through the post office network, something that is done in many other European countries. SEAI grants, as has been mentioned, could also be paid and delivery services could be enhanced.
I come from a village in Cavan called Kilnaleck. In January 2019, its post office was closed. It was one of five post offices closed in County Cavan at that time, and one of 159 closed nationwide. Kilnaleck is a small village with more than 80 businesses. It is very vibrant and has a great hinterland but that was not taken into account. The criterion was if it was a settlement of less than 500, its post office would close. It took no cognisance of the hinterland or that the post office provides a service, not just something about making profit. It forced businesses and individuals to go elsewhere for their financial needs. It was another knock following the Ulster Bank closing in 2013 and the closure of the credit union in 2016. It has meant a loss of business to the village, which has also had a serious impact on people. There are many elderly people in the area who do not have transport and they had to find some way for going to a different village to collect their social welfare payment. Many were in tears on the day that the post office closed. Many foreign nationals living in the area depended on the post office and similarly they had no transport to go elsewhere. They were also left at a loss. They used the post office regularly. We speak of investing in rural Ireland and we are talking about revitalising our villages in towns, yet we are draining people away by closing the services they need. Investing in An Post and keeping the post offices open would be the best way to keep rural Ireland open as well. I do not want to see what happened in Kilnaleck being allowed to happen anywhere else. More services and more investment need to be put into the post office.
I thank the Regional Group for tabling the motion. The post office network is the backbone of rural Ireland. It provides a meeting place in the heart of our communities. The familiarity of the post office gives many in rural Ireland great comfort at times of need. They are usually run by local people who are well known and trusted in their communities. It brings rural Ireland to the rest of the world. It is a place where people can collect their money or send money to the four corners of the world to relatives and loved ones, which is vital to our rural communities who have lost many of their youth to emigration. Furthermore, post offices are crucial to everyday life as they are often the only access to ATM services, the payment of household bills and the household budget package. It also supports social interactions. They are meeting places for many in our communities and they often provide the only face-to-face interactions for older people going about their business. Our banks have turned to self-service and our younger people are leaving but our post offices have remained the beating heart of our communities.
I am concerned by the risk for further closures in rural Ireland. In 2016, the Government made a commitment to our post offices and, in 2018, closed 159 stand-alone post offices, including six in County Clare. I recall attending all the meetings and then hearing An Post's announcement that it would pump €50 million into the post office network in city areas and opening new shops at a time rural Ireland was losing them. This flies in the face of regional balance. It is more important than many realise to keep our post offices in our communities.
The post office is the heart of rural Ireland. This has been said many times and it rings true today as it did since 1818. Over the past six months of Covid, rural post offices have through cards, parcels and letters, and by simply having a chat with staff and neighbours, kept many otherwise isolated country people going.
I commend the Deputies on bringing forward this motion and I hope that they, accept our amendment, which intends to strengthen the call on how to best protect and save our post offices.
Each closure of a post office tears away at the natural country way of life and the right to equal services in rural Ireland. In many villages in Wexford, the local post office was the very first build in the parish after the church. Country life is a different way of life. The successive failures of Governments to support An Post in rural communities has harmed local parishes across this island. Besides being an antidote to loneliness, the rural post office is also an antidote to digital isolation. Many people in rural Ireland do not engage with Zoom or Microsoft Teams. For many citizens, particularly the elderly, an online life is not something they partake in. We must ensure these citizens are given a guarantee that the Government will fund rural post offices and expand services. That is why I particularly welcome this motion and the Sinn Féin amendment to invest in expanding the services offered by the network of post offices. The original motion calls for a motor tax renewal service to be conducted in the post office. That is one of the ways to safeguard our rural post offices, but other services included in our amendment such as applying for SEAI grants through the post office should also be examined.
The introduction of a PSO to guarantee the current post office network and prevent any further closures, as the amendment calls for, would be a welcome solution.
Now is the time for the Government to show its sincerity in backing rural Ireland, in backing communities and in backing an post and rural post offices. I urge every Deputy to support the Sinn Féin amendment and look forward to seeing real action being taken to protect our post offices.
I congratulate the Regional Group for tabling the motion. I hope that it will take Sinn Féin's amendment on board.
On the previous occasion I spoke in the House on post offices, 12 were to close in County Cork. That affected 34 towns and villages. For those living in Rockchapel in County Cork, the local post office is now in Brosna, County Kerry. Things have not improved much.
This motion is about strengthening services. Of course we welcome that but we should remember that banking and post offices are very different. No one in the bank will help customers to fill out a little application form or allow them €5 off their ESB bill, for example. It is the only hub left in some of our towns and villages. Our amendment referred to having a one-stop-shop. They are the only meeting places in many areas because they have lost their Garda stations, shops and pubs, and rural transport is very limited. It might be the only chance that people have of getting out to meeting people once a week. It is a vital service.
Recently, my own town lost our post office to a fire. That affected more than 9,000 people and caused great panic and consternation. That demonstrated how vital postal services. It only took a few weeks before the post office was up and running again and I commend An Post on that. There was great community spirit and tie-in between the post offices of Carrigtwohill and Castlemartyr, which offered their services. It is often forgotten that postal services are about community. They are community-led and are about community spirit and respect.
The final line of the Minister of State's opening contribution stated: "It is my intention that all options will be considered fully and that efforts will be redoubled to give effect to our commitment to ensuring a sustainable and viable post office network." Sinn Féin's amendment is precisely what the Minister of State committed to, yet the Government has tabled a counter motion. I call on the Government to support the Regional Independent Group's motion and Sinn Féin's amendment and withdraw its counter motion because it puts the horse before the cart. It makes a full commitment to ensure a sustainable and viable post office network yet it will not support the motion.
In the little time I have left, I want to raise the issue of the hubs. It is vitally important that these services are protected. A large number of people in those 34 towns and villages were affected by the closure of 12 post offices several years ago. Losing services can be devastating for a community. Will the Government withdraw its amendment and support this motion?
I very much welcome this motion on post offices and also the Sinn Féin amendment. Several weeks ago I raised the subject with the Minister, Deputy Eamon Ryan, regarding the future of post offices, what was happening in some cases and changes that need to be made.
I commend the postmasters and the postmistresses who provide such a vital service. It is not only an economic service they provide in these areas but also a social service. The closure of post offices and how they have been treated over the years has been absolutely destructive to rural Ireland. One postmaster from Mayo, with whom I was talking this morning, said that they just do not get it in Dublin about post offices. I appeal to the Minister not to look at the cost-benefit analysis carried out by civil servants who do not understand rural Ireland and the importance of post offices.
When I spoke to the Minister on the previous occasion, I raised the utility incentives being used to encourage customers to go online. This has been done overtly and covertly in terms of trying to bypass the post offices. That is wrong and detrimental to rural Ireland, as well as to the future of post offices. It is time to stop talking about post offices. We have done so for many years. It is now time to put these actions in place. There are real solid opportunities which need to be implemented urgently, such as motor tax and driving licence renewals, as well as SEAI applications and Passport Express, the latter which was taken away from post offices. These are vital services.
There are many problems with reading and writing in rural Ireland. Someone providing the post office service will often know a person's vulnerabilities, such as if he or she cannot read or write well. They are there to provide assistance to such individuals. We must not leave those vulnerable people at the mercy of the banks. We know what the banks have done to this country and what they have cost the most vulnerable people. We do not want to continue on that pathway.
Deputy Sherlock has agreed to swap and allow me to speak first.
I thank the Regional Independent Group for tabling this motion discussing the significance of post offices, especially in rural areas. It calls on us to recognise their role and support the sustainability of this public service. Rural post offices are vital connections and nodal points in villages, like Goleen, Kealkill and Kilbrittain, which sustain the local shop and other services. Post offices also provide a sense of community. It is a place for meeting people, sharing news and checking up on each other. The network has a unique reach into every community.
Unfortunately, none of these qualities will feature on a balance sheet. International research shows that post offices are used significantly more by rural populations than by urban ones. Often it is the only place for banking and accessing State services. Moreover, they are an incredible asset to local businesses enabling enterprise and employment. Rural businesses rely on them for financial services and, increasingly, to send out online orders which have become more important under the new Covid restrictions. My family business is dependent on our local post office in Skibbereen which provides excellent service. Orders sent out on any evening arrive to destinations anywhere in Ireland the following day. We cannot underestimate the importance of that network.
The 2018 document, A New Vision for Post Office Services in Ireland, claims to reimagine a new future for post office services in Ireland. However, on rural post offices, it only guarantees the preservation of post offices in settlements of over 500 people which could lead to closures of over two thirds of the post offices in west Cork. It also states that, in rural areas, 95% of the population should be within 15 km of at least one post office, which is of little consolation to people on the Beara, Sheep's Head and Mizen peninsulas.
An Post does not have a choice because of the financial constraints under which it operates. It is up to us as legislators to set out the policies that recognise the role of post offices and the Government to fund them. This age-old argument has been played out in the House many times and in other jurisdictions. In a 1994 discussion on the closure of rural post offices, it was noted that communities feel disenfranchised and powerless by such closures, and that the affect the elderly, people with disabilities and those on low incomes most adversely. Over 25 years later, these points remain as valid.
The motion recognises that post offices provide an important place for offline members of our communities, for those who do not or cannot access services online, elderly people, Travellers-Mincéir, people with disabilities and those in direct provision. While many of us are comfortable operating our administration and finances online, there are people who choose not to or who cannot due to financial reasons, no access to the Internet or other barriers. It is incumbent on us to ensure the State provides alternatives. The post office is ideally placed for this. Post offices are offline gateways. As the motion puts it, it is not just about transactions but about helping to fill out forms, checking up on people and getting people calling into town.
A report on Monday from Safeguarding Ireland and Banking and Payments Federation Ireland highlighted the vulnerability of people who needed help from others to manage their money during the pandemic. Regrettably, Covid restrictions have increased opportunities for financial abuse or the erosion of financial independence. As bank branches close and transfer their functions online, people are left without post offices and credit unions to carry out face-to-face banking and financial transactions. It is important we help preserve these human-centred services for those who need them. The Sinn Féin amendment recognises this role within the proposal for a new model of community banking through post offices.
Article 19 of the Convention on the Rights of Persons with Disabilities guarantees the right to live independently and be included in the community. This means services and facilities should be available for people with disabilities in their area, regardless of their ability to go online or have access to a car. Post offices need to be considered in this context. They are embedded in communities, staffed by people who know the area as well as the needs of their patrons. This is the type of service we should be lauding and trying to replicate, not letting wither for some limited economic reasoning.
This motion is a prompt to reflect on the role post offices have in all communities. It is an opportunity to value their social and economic role in rural areas, as well as the chance to prevent the closure of more post offices. I urge all Members to support it.
It is very seamless between ourselves and the Social Democrats. We work nicely together.
I welcome and support at the motion. The Grant Thornton report is actually a good report and well worth reading. I am glad it was commissioned. I am particularly impressed with the strengths, weaknesses, opportunities and threats, SWOT, analysis element of it. The report refers to the strengths of the post office with its premium brand recognition and positive public perception, being at the heart of the community, supporting local economic growth and social vibrancy in those communities, a proven track record of service delivery, a loyal customer base, being community and social centred, having the capacity to handle additional business, as well as being Ireland's largest retail network with an unrivalled geographical reach and local knowledge of the network. The weaknesses are the structural decline in letter post volumes, growing digitalisation and e-substitution, dependence on social welfare contracts, increased competition and the failure to grow profitable service lines, and uncommercial post office branches.
It is a report which looks inward and is honest about what the post office's failings and weaknesses are. The opportunities are a key element of the SWOT analysis. They include assuming responsibility for additional Government services - "the State on your doorstep"- capability and infrastructure, the ability to extend business, available capacity to grow service offerings for public and private sector organisations, opening up the financial services market, e-commerce and parcel growth, capture new customers and increase market share through to provision of complimentary services and products.
I could go through the threats but they have been well itemised.
The executive summary of the report states "[t]he Post Office Network consisting of 899 post offices, as operated by independent contractors serving local communities across Ireland, faces significant levels of unrestrained closures by the end of 2021 without urgent Government intervention". That is the key sentence. Year in, year out we all stand up in the Dáil and speak about the importance of postal service provision in this country. We hear platitudes spoken on the issue. At the end of the day, as the report highlights, the cost of operating the post office network is €70 million. The revenue generated by the retail element associated with postmasters is €53 million. Therefore, the funding shortfall which must be made good to prevent unrestrained closures of post offices is €17 million.
What can the Government do to bridge that gap? As I have already noted, the report is very good at identifying the network's strengths. How can we build the business base and expand the business model to give post offices a fighting chance, whether they are located in a rural setting or a city like Cork, Galway or Limerick? Post offices everywhere face the same types of challenges.
It is important that as consumers we make the conscious decision to use post offices. The volume of customers is an issue. The demise of letter-writing has obviously had a knock-on effect. One could argue that the growth of the parcel service will be relatively short-lived because companies like Amazon are building their own parallel networks. I wonder about the medium-term or long-term sustainability of that contract with An Post. I have my doubts about whether it will turn out to be a profit centre for An Post after all.
We need to move beyond platitudes. This is a very good report. The Government must examine and interrogate it further with an ethic of ensuring that post offices are planted firmly and sustainably in communities. There is a template in this report. If it is given a fighting chance, the imbalance in those figures can be addressed.
One of the proposals involves a public service obligation. This should be seriously considered by the Government. As the report highlights, it is already in place. This is an excellent report because it is written for politicians like ourselves, who probably do not have time to go through reports of this nature line by line. The executive summary provides a very good synopsis of what is needed. Countries with approval from the European Commission to operate a post office network through a PSO include France, Italy, Germany, Poland, Finland, Spain and the recently departed but still significant United Kingdom. We do not have one but I think it should be considered. Interestingly, the report also highlights that other industries that previously operated under a PSO in Ireland include agriculture, aviation, rail, finance, bus transport, radio, housing and energy. That is particularly significant. As politicians we are all given to the odd platitude. If we can move beyond rhetoric, embrace the report and think differently about what a PSO can look like, we will have an opportunity to build a sustainable future for the post office network. We will support the motion on that basis.
We cannot look at post offices in a rural setting without looking at the whole area of rural development. It is a tangential point, but it is worth highlighting the report of the Irish Local Development Network on budget 2021. The report outlined three core concerns, namely, that no funding has been provided for new Leader projects in 2021; no funding has been identified for the delivery and administration of the Leader programme in 2021; and no interim national rural development programme has been announced for the period from 2021 to 2023, as committed to in the programme for Government. One might say this has nothing to do with post offices. However, post offices have everything to do with the rural economy, how money can be spent to sustain it and the multiplier effect of money flowing into it. We need to be more expansive in our thinking about the rural economy and rural society. The post office network must be the fulcrum through which rural society survives and thrives.
We will fully support this motion but I note that it is not the first motion of its kind that we have supported. This issue came up again and again in the term of the previous Dáil but nothing seems to have changed. I thank the Deputies who moved the motion and congratulate the postmasters. They have campaigned relentlessly on this issue. They have given a lot of thought and effort to trying to convince the political establishment that keeping post offices open by subsidising them is the right thing to do.
To refer to what the postmasters' submission to us actually sought, one recommendation is for An Post to provide the sole bank account for social welfare payments. It seems eminently sensible that State money should go back into a State-subsidised entity. There is a lot to be discussed in regard to An Post and banking. We must have an entirely separate discussion of the German or Swiss community banking model that we have discussed in the past. Again, that is eminently sensible. The postmasters have called for investment to facilitate banking through An Post and for all Government Departments to channel their business through the post office. They have also called for an overall strategy for the sustainability of the post office network. I thank the postmasters for their struggle and for keeping the pressure on all of us to take this issue very seriously.
I am sure it has not gone unnoticed that Covid-19 has had as much of an impact on this business as on any other. An Post's business fell by 30% during the period of the pandemic, but it should be noted that it was one of the entities that stayed open through the last lockdown. Without that sort of social connection, we would be a much poorer society.
We support the motion and we also support whatever degree of subsidy is needed to maintain and expand the network. This is partly because of its importance to rural life and community and also because it stayed open through the Covid-19 pandemic. However, I would also like to make a few points about its importance to urban life. It is not just in villages and towns throughout the country that An Post plays an important role. Postmasters have also put their shoulder to the wheel and campaigned to keep services open in villages and communities like Rialto, Ballyfermot and Chapelizod, to name just a few in my constituency. They have a genuine social connection to the community. Seeing this as a State service rather than something to be played around with for the sake of profit is crucial to maintaining the social fabric. It is true that the era of electronic media has impacted on the volume of postal deliveries. However, these developments are not what is killing our post office network.
I think we can agree on the important role played by the postal network in rural communities and in urban working-class communities. It plays a vital social role and represents a link to the wider community that should be safeguarded and extended. Fianna Fáil is now in power. When that party sat on this side of the House it vociferously and passionately supported many motions to keep the post office network open, create a community banking system, etc.
Instead, we are seeing the painful decline of the post office network. This is not just down to demographics or the inevitable sign of modernity; rural post offices are closing as a result of a political decision.
The inability and unwillingness of the Government to give the kind of direct subsidies and support that are required cannot be explained by ignorance of, disinterest in or a disconnect from with what is going on. The reason for the post office closures is neoliberalism and the slavish devotion of many of the parties in this House to the rules and strictures of that economic model. This is the tendering of Government contracts so that non-union, low-paid and precarious employment by firms can undercut what post office networks can achieve.
This is happening across all services and sectors. We have seen it with health, education and transport. Unless something has a tangible or monetary value and can create profit, the neoliberal model deems it useless. If the system does not have the ability to turn a profit, the idea is that it must be commodified and privatised. That is the philosophy at the heart of the decline in our post office network. This means there is a fight with whoever is in power to keep the social fabric that matters to rural and urban communities if the Government believes in that economic model.
The other matter relates to not being able to expand the post office network as a rural or urban community banking structure. This is no accident and it was not even a decision of this House, in many ways, as it is a reflection of the power and dominance of the pillar banks. They have effectively killed a proposal to set up an alternative community banking system because they see it as a potential rival to their massive profits.
We support both the motion and the postmasters in their campaign. We believe the economic model at the heart of driving this once again puts the interests of profit before the interests of people and communities.
I thank the Regional Group and Deputy Denis Naughten in particular for moving this very important motion. I have been a Member of this House for 13 years and every year we speak about the plight of post offices. Many reports have been compiled over decades but this report amounts to the last chance saloon. We seem to be able to find money for everything now because of Covid-19. We should remember that Covid-19 has put a renewed focus on the post office, which is the focal point of our communities, both urban and rural.
I salute the postmasters and postmistresses throughout the country, in both urban and rural areas, for the work they do. One is temporarily closed in Mullinahone in my constituency and I hope it will be reopened very shortly. I do not know if Covid-19 caused it or if it is something else. It happened only yesterday. I wish that family and all other families well and I hope they keep safe.
We must use the opportunity provided by this report. So much damage is being done to rural Ireland with the carbon tax and everything else but this is an opportunity. As I stated, money seems to be available for everything now. What have we got against the post offices that we cannot support them? They are vital because of the jobs and support they provide but even above that they are an integral part of the community.
If somebody is missing in a community, the first person to notice might well be a postmistress or postmaster. Often, people have been saved in this way. Even when people have not been recovered alive, the alarm would have been raised by somebody in the post office. The people in post offices know the customers and the customers know them. I urge people to use post offices or face losing them. We are not using them enough now.
I pay tribute to the postmistress in Newcastle, and I must declare an interest as she is my sister. Catherine McCarra gave up her package last year and kept her interest in the post office. I urge people to use the service and there are many ways in which we could use it more.
The Government has been sending out letters and there is a rush to a cashless society, which will also damage the post office. We are not thinking and the left hand is not watching what the right is doing. Everybody is being encouraged to go online but I encourage people to shop locally this year and support their post offices. Ní neart go cur le chéile. The money must be found to be put into the post offices now.
We have heard so many positives today about the resilience and work of staff and owners of post offices. I will point out the tacit knowledge that An Post has in its offices; it is the tacit knowledge we cannot see. In our local communities, postmen and postwomen know where people live and they know who is in a house. This is a valuable resource as in rural areas, the postman or postwoman may be the only individual a person might meet in a day or week.
What these people offer amounts to a meet-and-greet service. They are always looking out for the needs of the people, particularly the elderly. They know everybody by name rather than number. All we seem to be doing now is rewarding the banks, who screwed us over while we bailed them out. The Government is now trying to destroy the people who stayed open for business, like those in the post offices, and what is left in rural Ireland's communities. This is happening all around the country.
When knowledge is required, what is the best source? It is the post office. Not everybody is an expert on the Internet but all the Government has done is discouraged people from going to communities and meeting and greeting others. It is trying to take away everything from the people who go to post offices. The Government wants people to use services where they are known by a number rather than a name. People in the post office know a person's name and number. I ask the Minister to think outside the box. The banks screwed us over but the post offices should not be screwed over.
I thank the Regional Group, including Deputy Denis Naughten and others, for moving this motion. When the Deputy was a Minister, he was very strong in his approach in trying to save the post office network. We met him once per week and we used to go through many issues.
The post office network has been a lifeline for many people in rural Ireland. In my time in the Dáil, I have heard talk of support for the post office network from big political parties when in opposition but when in government that support seems to end. Instead of creating a vision for post offices, we have seen successive Governments leave rural post offices starved of resources.
I live on a peninsula with three post offices at Goleen, Schull and Ballydehob, and like post offices in Kealkill or even as far east as Kilbrittain, they are a lifeline to their communities. More often I see the people in post offices looking to think outside the box because they are getting little or no state aid. They know they are in serious trouble and struggling to survive. They may be looking at setting up part of the post office as a café and they are trying their best to generate some sort of income for survival. The State continues to refuse support for these post offices.
There is state funding for the post office network in the UK, France, Spain, Belgium, Italy, Finland and Poland with the approval of the European Commission. Unfortunately, this country has failed to recognise the great work that the post office network has done in this country, right down to the person delivering post on the street day and night. With social welfare payments, people are being advised to move to the electronic system but people used to visit the post office and do their transactions there. They are being pushed away. At one time it was suggested the vehicle car tax could go through the post office network but it was ultimately not done.
I acknowledge the work of Deputy Denis Naughten on the motion. It is important to respect the work done by other people. I remember the work done by the Deputy and thank him for his work as Minister. I acknowledge his genuine interest in supporting the post office network, including everything he did at critical times. He made important decisions that were difficult in the interest of nothing but keeping open as many post offices as possible.
I declare that I am a postmaster of a very small rural post office and am glad of that. I am very proud of the network. I will nonetheless highlight mistakes that have been made and post offices have taken a hit. For example, half of their business disappeared because payments were changed to being every two weeks instead of every week. We should remember that salaries are not paid to postmasters but that we get a commission on every transaction. Every time a transaction is made, whether it is selling a stamp, lodging money to a post office account or a person collecting a payment, the post office earns its crust.
There is one thing I have no interest whatsoever in and it is very seldom people would be heard saying this. I respect the work that was done on the report that was brought out recently but it is putting the hand out to the Government looking for money. As the owner of a post office, I am looking for nothing from anybody for anything. What I want is work. I want more people to come into my post office and my neighbours' and friends' post offices. We want footfall and business. Let us take the pandemic unemployment payment, PUP, for instance. If that had been channelled through our post offices, it would have been a lifeline to us during this critical time because people would have been doing their transactions and business through our network rather than through the main pillar banks. We should not forget community banking, which is the model in New Zealand. That was a success there and I do not see why it could not have been used here. I again thank Deputy Naughten and his group for-----
Post offices are an essential social service. They provide a service that needs to be maintained. I was a Deputy between 2011 and 2016 when, because of the completely reckless behaviour of previous Governments, there was a complete retrenchment of public services. Savings had to be found everywhere, in the most horrible places imaginable. That put huge pressure on the post office network. A number of post offices were marked to close. I worked with local communities in Broadford and Cratloe and their work prevented the closure of those post offices. Unfortunately, during the lifetime of the previous Dáil, other post offices closed.
The deficit we are running at the moment is going to lead to similar pressures on post offices and public services. We are running a deficit of approximately 6% of GDP, which looks fantastic on paper. It is the second lowest deficit in the eurozone, lower even than that of Germany. However, we all know that GDP is not a realistic measure of the economy because our corporate tax take means we are effectively eating other countries' lunch and we cannot do that, or get away with doing that, forever. If one looks at the deficit we are running as a percentage of GNI, Seamus Coffey pointed out in a frightening statistic this morning. It is 11.5%, which is the highest deficit in the EU. There is a price to be paid for that, which will be social services, including post offices.
The delivery company, DPD ,has just announced it is hiring 700 people. That is good news but why did the post office hand over the parcel delivery service to the extent it did? All those deliveries are happening because of money not being spent in towns and villages across Ireland. That money is going to Amazon. That is great for Jeff Bezos but it is not so good for our economy.
I thank the Regional Group for bringing forward this important and timely motion. I strongly exhort the Government to put structures in place that will ensure the long-term viability of the post office network. I have been involved in community development and politics for more than 30 years. At no time in that 30 years has the closure of post offices and campaigns to save them been off the agenda. Sometimes these campaigns succeeded, sometimes they did not, and other times the threat of closure arose again a few years later despite the earlier reprieve. That is why we need to ensure post offices can remain viable and that opportunities for further and enhanced provision of services are put in place. Viability is the key issue and the sticking plaster solution of keeping the odd post office branch open for a few years is simply not working and will not work in the long term. I do not need to emphasise the value of the post office network from an economic and social perspective, but I acknowledge that when we use the word "lifeline" to describe a post office, in many cases it is not an exaggeration.
Furthermore, with the current move to working from home and people moving to towns, villages and rural areas across the country, the onus is on the Government to ensure the availability of local services. The IPU, has produced an excellent report undertaken by Grant Thornton. It is crystal clear that in 2021 there will be a €17 million shortfall in revenue. To break it down, each post office across the State will have losses of approximately €19,000 per annum. This shows the extreme urgency of the situation and, as I said earlier, the timeliness of this motion. The IPU is requesting that An Post be the sole provider of the bank accounts required to facilitate the Department of Employment Affairs and Social Protection strategy to move to e-payments. It also asks that all Departments channel business through the post office, including motor tax, driver's licences, etc.
We are sometimes told that the EU public procurement directive will not allow any interference in the tendering process but governments can and must use the flexibility contained within that directive to help ensure both the social and economic value systems are embedded in the tender process.
I welcome the opportunity to speak and commend the Regional Group on bringing this motion forward. In the previous Dáil, Deputies Danny and Michael Healy-Rae and the Rural Independent Group brought forward a motion on this matter and nothing was done. I am critical of the IPU. I will be straight about that. I warned two years ago that the ordinary postmaster and postmistress never got an opportunity to see the legal advice on the new contracts being signed. They were rammed down their throats at the time and they were told to either sign them or forget about it. That was the beginning of where we are today.
If one is in business, one has to be looking at new opportunities. As was pointed out earlier, 700 people are being taken on by DPD. If An Post were cute at it, it would be ahead of the posse because that opportunity was there for the company as well. An Post would rather go around in big vans telling us it has gone carbon-neutral with electric vans than decide how to have a good banking model or bring in new initiatives to keep it viable in different areas. We have to get the public on board. We have to bring things into the post office network that will entice people to go in that door. We have to make sure it is like a new service and is promoted but An Post seems to keep playing the same tune the whole time thinking it is going to get a different result. That will not work.
We need post offices. They are not just about the post, letters, pensions or so on. No one living in a large city understands what a post office means in a rural community where someone might not see another person for a full week. People who might not have heard a word all week will go in and learn who died or who had a child or whatever went on in the area. It is about being able to speak to someone for the first time in maybe a full week for their mental health and well-being. If it is only for that, given the number of suicides we have seen around the country, we need to sit down and put a plan in place. We cannot have this patch job of doing it year to year. Let us do it for the future.
I welcome the opportunity to contribute to this debate. I am sharing time. I come from a rural community in Kiskeam, County Cork, where we are privileged to have John Murphy as the postmaster. He refused the package that was offered a number of years ago to keep the post office within our community. That is a testament to him and his commitment to his community, to which he has given his life in many forms. We have to salute people like him and I salute him for what he has done.
Everything being said about how important and vital it is to maintain the post offices is true. We must examine where we place post offices as we consider where we are in the latter end of 2020. There is an opening there to ensure that post offices are kept at the centre of our communities by having digital hubs. There is much talk among various Government Departments about ensuring that there are digital hubs. We have seen how society has transformed in respect of working from home and that has been way beyond the political curve. Many of us in this House have been talking ad nauseamabout decentralisation and getting Departments to rural communities, but the establishment was laughing at the idea.
Society has moved beyond that now and people are working from home in rural communities while giving as good a service as they ever have. In that context, it is important that we look at the model of the post offices. Before any more post offices close, it must be recognised that they are vital focal points in communities. They must be engaged further, established as digital hubs and they must get more footfall. Many speakers have asked how we can get more business into post offices. To do that, it is necessary to offer the services society needs today. I refer to making the post office more attractive and ensuring that it continues to be the centre it always has been. I state that because there is as much need to have a centre in rural and urban communities today as there ever has been. It behoves us to look at that aspect.
Many fine words, going back several years, have been uttered regarding a whole-of-government approach to post offices. We are now, however, at a juncture where society has been transformed due to the impact of this desperate pandemic besetting us in recent months. We must look at the positive aspects that exist for our rural communities and in that regard and to keep the focal point that is the post office, we must ensure that we enhance whatever State services can be put into post offices. We must also ensure that our post offices are viable for the future and a system of digital hubs based on the post office network is the way to do that. I appeal to the Government and those making decisions to embrace this idea and make it a reality throughout our rural communities.
I welcome this debate and I am glad to hear the contributions of my colleagues on this topic. As the Minister of State with responsibility for eGovernment, I am keen to see as many public services put online as possible, not least because people expect it. People are now used to conducting their commercial and social lives online, and there is no reason that the Government should not deliver services to people online as well.
There was a huge increase in the uptake of online digital Government services during this pandemic. That was by necessity, of course, and involved people who traditionally would not have used our services online. There was a huge increase in sign-up and new services were also offered, including, for example, the PUP, which most people took up online. People also got the results of their leaving certificate examination online and applied to the CAO for college places online. The services availed of, therefore, went beyond the traditional online renewal of passports, which can be done completely without going into an office, or driver licences.
However, there are people who cannot use digital services for various reasons. That may be because of age, disability or difficulty in coping with the language, and those people will need help. The State is not a commercial operation; we are here to provide public services. People with those kinds of difficulties need what are sometimes referred to as assisted digital services. They need to go into an office, and that could be a post office, an Intreo office or other locations such as Citizens Information offices, where somebody can sit down at a computer screen and help those people access the services to which they are entitled. Such provision will ensure that people are not sidelined, and that concept and goal will be included in the updated national digital strategy this year.
The Internet has been a threat and a difficulty for the post office network because the increase in email has been taking away what was that network's basic business of delivering letters. Luckily, however, the post office network did not just sit there and the opportunities that were also presented by the Internet were adopted. The post office network is thriving as an institution and post offices have sustained their presence because they have managed to get delivery business via the Internet as well. When we have dealings in the post office with postmasters and postmen and postwomen, the staff are highly professional, innovative and a wide range of financial and public services are available. The post office is an institution which is a shining example of a State agency and the post office network is to be admired. One reason we should do that is because much post is being delivered by zero-emissions vehicles, thus saving people from air pollution in urban areas and reducing the impact on climate change.
The importance of the post office network has been clearly demonstrated throughout the pandemic. A range of initiatives provided through post offices has helped to support local communities, the elderly and the vulnerable. Initiatives such as check-ins on elderly and vulnerable customers, the delivery of newspapers and the recent commitment to free mail to residents in care facilities have been welcomed across the country. We all share an appreciation of these initiatives and a belief that there is potential for An Post and the post office network to make a further contribution across many areas of public business and community life in Ireland. The programme for Government recognises this and also notes the Government's commitment to putting the post office network on a sustainable footing. The serious decline in the volume of mail and the effect of Covid-19 on footfall through post offices have severely impacted the postal network and postmasters. I am aware of the concern expressed by the IPU and that has been raised directly with the Minister of State, Deputy Hildegarde Naughton.
Subsequently, the IPU published a report, commissioned from Grant Thornton, on the post office network. According to that report, the network is at a critical juncture and faces an annual shortfall of €17 million from 2021 onwards if a PSO levy is not introduced. It has been long-standing policy of successive Governments that postal services will not be directly subsidised by Government. The announcement by the Minister for Employment Affairs and Social Protection, Deputy Humphreys, that social welfare payments, which had moved to a fortnightly schedule from the end of March, will be restored to a weekly schedule from 2 November, is very welcome. The IPU had raised concerns regarding the impact of that change on local businesses and has also now welcomed this announcement.
Government efforts have also been focused on supporting An Post in the roll-out of new services and the delivery of its strategic plan. The ongoing transformation in the company aims to ensure the financial viability of An Post and the continued fulfilment of its mandate to deliver a mail delivery service and a viable post office network. The Government has already made €50 million available in State funding to support the renewal of the post office network and a further €15 million has been made available to go towards the continued fulfilment of a five-day per week mail service.
The Minister also recently approved capital expenditure designed to develop the newer elements of An Post's financial services business and mitigate declining core mail volumes and revenues on the retail side of the business. A report by an interdepartmental group on the provision of offline Government services will be published in the coming months and considered as part of the national digital strategy. It proposes a more coherent approach to offline service provision, with the adoption of a whole-of-government approach, which should be driven centrally. The sustainability of the post office network is of enormous importance and significant work has been undertaken already on the renewal of the network as part of the transformation programme.
Consolidation of the network has seen 152 post offices closed as part of the transformation programme, with business transferred to 128 nearby offices. Some 89% of these offices saw an uplift in business and 51% saw double-digit growth, with an average growth across the 128 post offices of 9.6%. The impact of co-location has been positive, with business in co-located offices up 11% compared to stand-alone offices, which includes An Post's own large 46 stand-alone company offices. As a key pillar of the transformation strategy in 2018 this has worked, with 62% of the network now co-located. This has increased from 48% in 2018 and the target for the network is 70%.
The capital investment put in place as part of the transformation agreement with postmasters helps on the relocations. An Post has been proactive in taking a range of steps in recent years to diversify into new revenue streams for postmasters through the provision of new services and the sale of additional retail products. These initiatives include the expansion of financial services products with the launch of the An Post Money brand and the introduction of an An Post current account, credit cards and loans, as well as growing foreign exchange business and introducing card-based foreign exchange services. I also refer to the expansion of e-commerce services, with a particular focus on the SME market, with such services being available across the counter in post offices to facilitate the growth in parcel business. This has also facilitated growth in existing retail lines, such as gift cards, lottery tickets, bill payment and money transfer, through the expansion of these retail lines and focused promotion in all offices. I also refer to the introduction of new, green-based initiatives, such as the green hub for home refurbishment and retrofitting.
In addition to investment in post offices, through its capital investment fund, An Post has invested in training in all post offices, in 2019 and 2020, to better equip postmasters to run their businesses. It has been noted in the House before that post offices must be equipped with a range of services which will attract and retain footfall, but these measures are pointless unless the public use the services provided by post offices. Key to the survival of any renewed post office network is the provision of a range of services which are attractive to customers and of value to An Post. The manner and method by which the public conducts its business has altered as a result of the pandemic. Determining what Government services will best fit the bill in this current context is no easy challenge.
I welcome the Minister of State. I am proud to be present this morning, as a member of the Regional Group, to promote this important motion to protect the Irish post office network. As a number of speakers have said, it is timely due to the Grant Thornton report being released a couple of weeks ago. The report had devastating findings. There was an annual shortfall of €17 million, which equates to approximately €20,000 per post office. The report's central recommendation is that a PSO levy is introduced or that a PSO charge from the State is used to plug this gap. I take the Minister of State's point regarding the long-standing practice, but perhaps on this issue an exception should be entertained. The main reason is that such a subsidy is available throughout the European Union at present. If it is good enough for other European countries, with the blessing of the European Commission, it is something we should consider here as well.
The Grant Thornton report is quite unpleasant reading. It says there is huge strain on the post office network at present. Footfall is way down, transactions are down over 25% and, as a result, the incomes of postmasters have fallen dramatically. With over 900 branches nationwide, the post office network is crucial for urban, regional, rural and coastal communities. Some 1.3 million people, and I include myself among them, use post offices every week. Most importantly, the network provides a vital service for those who are financially or socially marginalised or excluded. Other contributors mentioned that in the debate. The postmasters want to stay in business, but the financial viability and sustainability of the sector are being challenged like never before. Consequently, many local post offices are likely to close in the near term, unless the conditions in which they operate change dramatically.
I welcome the change from the Department of Employment Affairs and Social Protection whereby it will begin to pay social welfare payments on a weekly basis from 2 November. I was happy to hear the Minister of State confirm that this morning. However, more can be done to modernise the service and enhance the viability of the network. For example, as has been mentioned, the post office network should be designated as an offline gateway of choice for citizens availing of State services. This would be a significant improvement, perhaps even a lifeline, for the sector. Unlike many financial institutions, the post office is still a very trusted brand. It maintains excellent relationships with all its customers, particularly those in the elderly or isolated demographic. There is no reason that it cannot be designated as a one-stop-shop or hub for additional State services.
The provision of motor tax renewals through the post office appears to be a logical first step. Not only would this local service further reduce the list of standard excuses for not displaying a valid car tax certificate, it would also have the additional benefit of taking significant pressure off busy local authority offices, which should be focused more on providing strategic planning and direction for their counties instead of being distracted by routine administration. Enhancing the amount of financial services available at post offices would also help considerably. This is crucial. With the reduction in the number of bank branches throughout the country, countless towns and villages have no direct access to financial services. The Minister of State will appreciate that this has massive ramifications for communities across regional and rural Ireland, for both individuals and small and medium enterprises.
In summary, the post office is a key component, and in many cases the only component, of the economic and social infrastructure of local communities throughout this country. The network's recent commitment to provide free mail to residents of care homes is another example of this. The network needs and wants to survive. We should push more business through the post offices. I look forward to the Government's report on the provision of offline services which is due to be published shortly. If the Government is serious about the national spatial strategy and its commitment to balanced regional development, it must act swiftly and decisively to protect this vital network before it is too late.
I note the Government's amendment. Its content and the speeches by the Ministers of State clearly acknowledge that nothing new has happened to support the post office network since I left office. I was one of the very few Deputies to make a submission to the Kerr report. I remind Members that I was presented with a situation in 2016 in which the collapse of An Post was about to happen within 18 weeks. The decisions I took have led to a position where that company is profitable. Every Member on the Opposition benches talks about the importance of the post office network but, other than me, every party and Member who went into government forgot about that network. That said, the Government has, on foot of the motion, outlined its commitment to put more business through the network, including the provision of offline government services. We will give it the opportunity to fulfil that objective, despite the fact that there was no Cabinet representative present throughout the debate. However, I put the Government on notice that if there is no movement within the next six months, we will revisit this issue.
Local post offices must become the one-stop-shop for all government services, not only to minimise the risk relating to Covid-19 but also to ensure that the 950-office network does not collapse. Since the emergence of Covid-19 last March, access to many government services has been restricted for those who do not want to, or cannot, use the digital options. The post offices have remained open throughout the pandemic. There must be direct intervention by the Government to develop new State services for the post office network, in line with the previous commitment given to use the network as the offline option for all government services, and to pay a fee of €17 million for this service, as outlined in the Grant Thornton report. While we hear that we must learn to live with Covid-19, there has been a failure to deliver alternative ways to engage with government services other than by trying to force people to go online. This does not work for everyone. Some 55% of people aged between 65 and 74 years have never used the Internet, locking them out of those services. Furthermore, 9% of the population in Ireland does not yet have Internet access, while 11% have never accessed the Internet. One in six of the adult population cannot read and understand the instructions on the back of a box of paracetamol due to literacy issues.
By the end of last year, 79% of people paid their motor tax online, which means that 21%, one in five people, still use the offline option. That is just for motor tax, so consider how many people need other offline facilities. One cannot renew one's motor tax online unless one has an email address. This condition will be expanded across all online payments when the EU payments services directive 2 is implemented at the end of this year, 72 days hence. Surely older people and those who are currently offline have enough to contend with due to Covid-19 and Brexit without being excluded from government services because they do not have an email address or cannot use technology. While online transactions are going to get more complicated, the Banking and Payments Federation Ireland and Safeguarding Ireland are calling on older people to take back and keep control of their money, particularly vulnerable people. Two thirds of people who needed help from others to manage their money during the Covid-19 lockdown have not taken back control of their finances. This will get worse as the Covid restrictions outlined by the Government are implemented and Government office opening hours are restricted.
Vulnerable people and those who do not wish to, or cannot, use technology or email would be able to maintain their independence if these services were available through the local post office. This would save the taxpayer a considerable amount of money as the staff involved in these mundane, administrative paper processes could be redeployed into urgently needed contact tracing.
It would also eliminate the costly paper-based notices and transactions that I previously outlined in a case study I published on property tax. We need decisive action to support rural communities, vulnerable people and the vital post office network.
That amendment has been agreed. To be clear, we are not agreeing to that amendment. I thought you were taking our amendment. That is the cause of the confusion. We are not agreeing to that amendment.