Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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104. To ask the Minister for Communications, Climate Action and Environment if supports will be put in place for the post office network in view of the significant financial challenges facing the network; and if he will make a statement on the matter. [34562/20]

Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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I raise the issue of the challenges facing the post office network. An independent report by Grant Thornton recently concluded that the network is at a critical juncture and the financial viability of the network is being challenged like never before. The report projects that the annual cost of running the post office network in 2021 will be €70 million and that it will generate a retail revenue of €53 million, leaving a €17 million shortfall. Can the Minister outline if he will give consideration to the recommendations contained in this report?

Eamon Ryan (Dublin Bay South, Green Party)
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The importance of the post office network has been clearly demonstrated during the pandemic. We have seen a range of initiatives carried out through our post offices which have helped to support local communities, the elderly and vulnerable. However, the serious decline in the volume of mail and the impact of Covid-19 on footfall through post offices has had a severe impact on the postal network. I am aware of the concerns of the Irish Postmasters Union, IPU. I am also aware of the findings of the Grant Thornton report, which was commissioned by the IPU.

It is a long-standing policy of the Government that postal services will not be directly subsidised by the Government. However, we remain fully committed to a sustainable post office network as a key component of the economic and social infrastructure in both rural and urban areas. The programme for Government recognises that a modernised post office network 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.

An Post put in place a strategic plan, covering the period from 2017 to 2021, in response to the structural challenges faced by the postal sector. In order to implement the plan, the cost of which was estimated to be in the region of €150 million, the Minister for Finance provided a loan of €30 million to the company in December 2017. The cost of supporting the renewal of the post office network was €15 million and the continued fulfilment of a five-day mail delivery service cost another €15 million. As part of the delivery of the plan, the company was split into two distinct business units - An Post Mails and Parcels, and An Post Retail.

An Post is transforming its retail network by delivering new products and new formats. Among other things, it is diversifying and growing the financial services products it provides to individuals and SMEs to include loans, credit cards and more foreign exchange products, it is offering local banking in association with the major banks, and it is providing a full range of State savings products. Two new dedicated sub-brands, An Post Money and a new business-to-business brand, An Post Commerce, have been launched. An Post's investment of €50 million in the network is about getting communities to use the enhanced services in their local post office.

The Government believes An Post has untapped potential to do more and to 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. We will work closely with An Post to see if there is scope to channel additional services through the network. All options will be considered fully and efforts will be redoubled to give effect to our commitment to ensuring a sustainable and viable post office network.

Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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Gabhaim buíochas leis an Aire. I appreciate that the Minister's Department is considering the Grant Thornton report, but we need to do more in the current climate, given the crisis we are experiencing now. This is an important issue, as acknowledged by the Minister. The post office is a vital service in many towns and communities throughout the country, particularly in rural areas. As the Minister has mentioned, 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, especially our elderly and vulnerable.

The post office is at a critical juncture. During the Covid-19 pandemic, its transactions are estimated to have decreased by approximately 25%. I acknowledge that it is a long-standing Government policy that postal services will not be directly subsidised by the Government. However, we find ourselves in unprecedented times. In 2017, the Minister for Finance provided a loan of €30 million to the company to support the renewal of the post office network and its continued fulfilment of a five-day mail service. Can the Minister consider a further loan to make up for the existing deficit?

Eamon Ryan (Dublin Bay South, Green Party)
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The Government has continued to look at this matter. Today, we announced a series of further Covid-related payments, in this case to the aviation industry because it is in real trouble. I would not rule out whatever further measures that the Government might have to consider.

The Deputy is right when he says that the 25% reduction in footfall is a real issue. An additional cost of €6 million has been incurred in post offices to pay for PPE and other protection measures. There has been a further acceleration of the decline in mail revenues and volumes. Traditionally, in recent years, it was declining by approximately 7% per annum. The decrease has been closer to 10% or 15% this year. As in many other sectors, business is down. The factor that compensates for this is that revenues from the parcel business are up 100%. That is probably true for many businesses involved in the online system.

The success that An Post has had in recent years in turning its fortunes around, getting back to break-even or to profit and having a very positive outlook compared to what people might have expected in these difficult circumstances has resulted from its approach of aiming for markets for new products for which there is a real demand and being innovative in looking at new opportunities. In addition, there are Government services that we can distribute through the post office network. I commit to doing anything I can to get as many of those services as possible delivered through the post office system.

Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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I acknowledge what the Minister has said. I ask that both he and the Government continue to monitor the situation. It is imperative that we do all we can to support our post office services. I ask the Minister to comment briefly on the public service obligation model which is used in other countries throughout Europe, including France, Belgium and the Netherlands. Such a model was advocated in the Grant Thornton report. I acknowledge the role that An Post and its staff have played throughout the pandemic in being a port of call for people who need to touch base with someone. I wish the firm and all its employees the very best coming up to Christmas.

Eamon Ryan (Dublin Bay South, Green Party)
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I join the Deputy in thanking the workers in the post offices for the really good work they have done throughout the year in this Covid-19 crisis. The Deputy mentioned European examples which we will look at. I should also mention, further to our previous discussion, that An Post availed of a European Investment Bank loan of approximately €40 million as part of its strategic investment plan. We have been tapping into European funding as part of the overall plan. Government funding is not the only funding that has been provided. We will look at other models in other countries while reviewing the Grant Thornton report.