Cathal Crowe (Clare, Fianna Fail)
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I thank the Minister for taking this Topical Issue debate. Just a few streets away at the GPO on O'Connell Street, there are copies of a beautiful yellow and green glossy brochure available in the atrium. It is a report An Post commissioned a few years ago, namely, A New Vision for Post Office Services in Ireland. Within it, there are different subsections, including one relating to the consolidation of post office services, which is lovely flowery language for shutting down post offices.

In my constituency of Clare, we have discovered in the last few days that Broadford post office, which has existed since 1831 and been a permanent fixture in the village for 190 years, is now going to close. The postmaster, James O'Brien, and his family have done a fabulous job there in recent years but for very real, personal and genuine reasons, he has to retire and step back from the business, which we all respect in the community. An Post is seizing the opportunity of an individual stepping back from his role to shut down the facility. It says people can go 15 km over the road to Tulla or Ardnacrusha or a shorter distance to Kilkishen. That is irrelevant because as we have seen during Covid, more and more people are back in their home environments working from home and villages have become viable once more. It is illogical to do this and shutting down key services is just stripping the bedrock out of a village.

I know the Minister wants to see a vibrant rural Ireland but when post offices, local schools and shops are closed, the very rural Ireland we are trying to protect is hollowed out. An Post is hell-bent on doing this. This is quite a personal thing because it was happy for this post office to remain open for a long time but when an individual retires, suddenly the whole business plan for that community and its 15 km hinterland collapses. That is wrong. That is not how a post office system should work. If it was good enough to run last year or the year before and was profitable then it should be serving the heart of the community and its surrounding areas for many years to come.

James O'Connor (Cork East, Fianna Fail)
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I thank the Minister for being here to discuss the very important issues facing our postal services. I remind him that balanced regional development, of which post office service are an integral part, is a key pillar under the programme for Government. The 2020 Grant Thornton report identified the postal service as one of general economic interest due to its high public value but low commercial viability.

The service is at a critical juncture. In terms of sustainability, I have some serious concerns about the latest moves of An Post. In my view, the management of An Post has moved the postal service from a mail company that happens to be a parcel service to a parcel service that is no longer concerned about mail delivery. This was evident in the closure of the Cork sorting centre.

I have serious concerns around the proposals for the introduction of a potential priority or economy postal system. From information I have gathered in recent days, it is being suggested that the cost of next-day delivery stamps will increase from €1 to €2 and a new lower class stamp will be considered for later delivery. This will create a class stamp system for postal services and could impact on hundreds of delivery jobs for our postmen and postwomen across the country, which will not be overcome by forced early retirement packages. This approach also undermines An Post's universal service obligation to deliver mail to every house in the State, every week day for a uniform price. How will this be addressed and is it compatible with the Communications Regulation (Postal Services ) Act 2011? I am extremely concerned about this matter. The postal service is a vital part of rural life and the fabric of rural society in Ireland. There has been a stripping of this service in recent times which is not welcomed by people in rural communities. We know how important they are. In many cases, people working in An Post are the only people some individuals, particularly old age pensioners, see each day. They have an important role to play in rural life, in my view.

Eamon Ryan (Dublin Bay South, Green Party)
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I thank Deputies Cathal Crowe and O'Connor for raising what is a critical issue for all of the people of our country, but particularly rural Ireland.

An Post's social value has been particularly evident during the recent and current Covid crisis. It has played a valuable role in its commitment to rural communities, the elderly and vulnerable in our society. I am acutely aware of the importance of maintaining a post office network and I note the serious decline in mail volumes and the impact of Covid-19 on footfall through post offices have had a severe impact on the postal network and the revenues being generated by postmasters. Since taking up my role as Minister for the Environment, Climate and Communications, I have met representatives of the Irish Postmasters Union, IPU, to discuss the matters raised in the Grant Thornton report, which was commissioned by the IPU.

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 enterprises as part of our commitment to a sustainable national post office network. While it is long-standing Government policy that postal services will not be directly subsidised by the Government, 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.

In response to the structural challenges facing the postal sector generally and An Post, the company put in place a strategic plan for the medium-term and long-term future of the company. Government efforts are 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. 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 to support the renewal of the post office network at a cost of €15 million and the continued fulfilment of a five-day per week mail delivery service which accounted for a further €15 million.

An Post is continuing to undergo vital transformation as part of the delivery of its strategic plan, which has seen the company being 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 formats. These include, among other things, diversifying and growing the financial service products it provides for individuals and SMEs to include loans, credit cards and more foreign exchange products, local banking in association with the major banks and 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, were launched. Investment by An Post of €50 million in the network is about getting communities to use the enhanced services in their local post offices.

A recently approved capital expenditure programme 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. An Post also invested in training for all post offices in 2019 and 2020 to better equip postmasters to run their business. The strategic plan in place to transform the company has resulted in An Post recording an operating profit of over €41 million for 2019, the third consecutive year of significant financial improvement, bringing the group out of its loss-making position of 2016.

The Government believes An Post has untapped potential to do more and make a further significant contribution across many areas of business, public and community life. With an evolving mandate, An Post can emerge as a central hub for a wide variety of valuable community focused services. As with any business, An Post needs to develop commercial strategies to enable it to grow and maintain its relevance for all its users. All options will be considered fully and efforts will be redoubled to give effect to our commitment to ensure a sustainable and viable post office network.

Cathal Crowe (Clare, Fianna Fail)
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The people of Broadford are taking this matter to heart. Last year, the previous year and the year before that their post office was viable, operational and functional. It was only when James O'Brien retired that the issue of consolidation or closure arose. Once this post office closes, it will not reopen again and 190 years of operations will be wiped out. This will hollow out the village and damage it forever.

In terms of costs and sustainability in the long term, it costs in the region of €70 million per annum to keep all 900 posts offices operational. Cumulatively, they generate €53 million per annum in revenue, leaving a funding shortfall of €17 million. In a report commissioned last year by An Post, Grant Thornton identified that €17 million as money which the Government, in time, will have to step in and provide vis-a-visa public service obligation. I ask the Minister to urgently look at this issue. I am told by postmasters that if things do not change, 600 of our 900 post offices may close by the autumn of this year, which would mean two-thirds of our posts offices would be wiped out. Some of these post offices are as old as the Broadford post office, which, as I said, has been in operation for 190 years. They will be wiped out forever.

James O'Connor (Cork East, Fianna Fail)
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I thank the Minister for his reply. We need to hammer home the message today of the importance of post office services across to the citizens of this State. They are an integral part rural life. I am concerned about the ramifications we may face in the next number of years in regard to this sector, particularly around the increasing costs of stamps and, in addition, the possibility of a two-tier system for mail delivery, which would be extremely concerning if it were to come about. It would have an adverse impact on the delivery service and the livelihood of people working in An Post. Every household in rural Ireland appreciates the people working for An Post who call to them daily and the availability of that service to them. If we are serious about allowing people to continue to work from home, perhaps to help the environment which is an important cause for the Minister, we should seek to protect this service. It is important that we do that as much as we can.

Eamon Ryan (Dublin Bay South, Green Party)
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I join Deputy Cathal Crowe in thanking James O'Brien and his family for their service to the community of Broadford over 190 years. The reality is that many post offices are family businesses that are trusted and respected and provide extensive services to their communities. I wish Mr. O'Brien well on his retirement. I regret that as of now, there does not appear to be anybody willing to take on the post office and keep it operational. I understand that this is a critical issue for the people of Broadford and, similarly, for hundreds of post offices and communities across the country, particularly in rural areas.

We face a real challenge despite the really good work done in this area in terms of mediation. The work done by the Irish Postmasters Union and others in seeking solutions has been very progressive. The Covid crisis has worsened what was already a difficult situation. Footfall has declined by about 20% and there has been an acceleration in the decline in mail volumes, which was traditionally falling by about 7% per annum. That has accelerated to approximately 12%, I am told. There has been a commensurate increase in parcel delivery of approximately 100% but my understanding is that this does not benefit the post office. Some 80% of post office business is social welfare payments, bill pay, mail and State savings services. State savings have held up or risen slightly but the other three services have declined significantly in recent years despite all of the good work and efforts of postmasters, An Post and others.

We have a real challenge in this regard and we have to be honest and upfront about it. New financial services offer one potential revenue stream. An Post has launched its Green Hub initiative, for example, which offers an opportunity for trusted postmasters to offer financial advice and financing for green home projects, such as home energy retrofits, in the same way that they manage State savings.

None of this is easy. I cannot sugar the pill for the people of Broadford and tell them there is an easy and immediate solution. Nevertheless, we do need to find a solution and we can do so by putting all our efforts towards ensuring that as many Government services and financial services as possible are available through the post office network. That is our best chance.