Alex White (Dublin South, Labour) | Oireachtas source

The Department of Social Protection is a key player in the payment services sector in Ireland. The manner in which payments are made to customers impacts on the State, notably in respect of costs. As with all of its activities, the Department is compelled to look at any scope for efficiencies in how it makes payments to ensure it provides value for its customers and for the economy at large. As consumer behaviour shows a very high movement towards online and electronic payments, the Department must look for opportunities to provide better and more secure customer service while also continuing to serve those who are more vulnerable in our society. Therefore, as part of the payment strategy to be brought to Government shortly, the Department envisages using more modern approaches in the future where payments, ultimately, will be delivered to customers electronically. This goal is in line with wider Government policies and objectives. It is based on the objective of better public services and more effective electronic payments, as set out in the public service reform plan and the e-Government strategy 2012-2015. It is aligned to the objectives of the Government's Action Plan for Jobs, the national digital strategy and the recently published national payments plan.

The progression to electronic payments is a critical element of the wider national payments plan aimed at removing the very high levels of cash usage in the economy and will contribute to improved national competitiveness. The Department's strategy is contingent on the roll-out of the standard bank account, SBA, which is being driven by the Department of Finance. The combination of the national payments plan, the SBA and the Department's payment strategy can, as three interdependent initiatives, realise tangible benefits in delivering a more efficient payments landscape in Ireland and can grow opportunities and benefits for consumers and business alike over the medium term.

At the moment, some 50% of all transactions are being paid in cash through the post office network. The current contract with An Post expires at the end of 2013. The award of public sector contracts with a significant financial value is subject to various EU directives. Due to the financial value of this particular service, the Department is required by law to publicly invite tenders for any new contract to deliver social welfare payments. This ensures the taxpayer receives value for money and ensures all potential suppliers are given the opportunity to put forward the most efficient, effective and competitive solutions for consideration and evaluation.

Therefore, as part of the payment strategy, the Department is undertaking two procurements which will reform the payment arrangements for the delivery of welfare payments. The first procurement for over-the-counter cash services for social welfare customers commenced in December 2012 and is now well advanced. This will replace the existing service contract with An Post and will ensure continuity in the delivery of cash payments to the Department's almost 1 million cash payment customers. It is anticipated that a contract for these services will be signed over the coming months and will provide services to customers similar to those they currently enjoy.

The Department will be advertising a second procurement later this year for an e-payment solution. This solution will supplement existing levels of payments made directly by electronic funds transfer into customer accounts in financial institutions. It is anticipated that the notification regarding this procurement will be published shortly. The payment programme will contribute to strengthening the Department's approaches to fraud and control through ensuring high risk customers will not be migrated to an electronic payment until appropriate and robust measures are defined and fully implemented to mitigate any increased risk of fraud with an electronic payment.

The transition to new payment approaches will require a significant effort to assist and support our customers. The Department will work energetically to help customers and their representatives in the transition period. The Minister for Communications, Energy and Natural Resources referred to the programme of capital investment and work in recent years which has resulted in the computerisation of all post offices, recognising the inevitable movement towards lower levels of cash in society. The Minister for Social Protection and the Minister for Communications, Energy and Natural Resources, together with the rest of the Government, are very conscious of the important role of the post office throughout the country, notably the extent to which it is now a one-stop-shop where people can pay bills, purchase mobile phone top-ups, use the passport application facility, pay the local property tax and carry out a range of banking and other financial services. The concerns raised here are understandable, particularly in respect of the impact the Department of Social Protection's plans to move to e-payments may have on An Post. However, I reassure the House on behalf of the Minister for Social Protection that the Government has stated and upholds its commitment to maintaining the post office network as set out in the programme for Government.