Seanad debates

Tuesday, 25 June 2013

Adjournment Matters

Post Office Network

6:55 pm

Photo of Martin ConwayMartin Conway (Fine Gael)
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This issue has troubled me greatly and it troubles significant tranches of rural Ireland, which has felt significantly under threat in the past two decades because of the removal of many services. We have seen the decline of rural pubs because of a myriad of changes, including the smoking ban and drink-driving legislation, all of which have been very appropriate. There has also been the downturn in the economy and we have seen the removal of local Garda stations in many small rural villages. It has been painful and difficult to defend the issue, it was probably necessary to close many of these stations.

The post office network is a completely different issue. A post office is vibrant and provides a comfort zone for the type of vulnerable people we spoke of earlier, including older people. It provides a link for them to communicate and a facility for information gathering.

It provides a community service and community activity. A post office in west Clare held a cake sale on Friday of last week to raise funds for a local charity. It held other activities a number of weeks previously. The post office is a very important element of community life in rural Ireland. The State should be putting more services into the post office. If the facility for paying the household charge had been available through the post office, the compliance rate would have been much higher. Many other services, such as dog licences and other licences and the payment of road fines and parking charges, should be available through the post office. The facility to pay utility bills is available at the moment but, again, these are semi-State companies availing of a useful service.

What troubles me greatly is the threat posed by the outsourcing or tendering out of the social welfare contract. I understand that social welfare and pension payments constitute up to 50% of the weekly business of some post offices in west Clare. It is not necessary to outsource this because it is being done perfectly well by post offices. I contend that one will not get a better service in terms of paying pensions and social welfare payments than one will get at the post office.

The citizens in receipt of social welfare and pension payments feel more comfortable collecting them from the post office than they would from any other type of private institution that may succeed in tendering for this contract. Many generations do not trust the banks but I am talking to older people who certainly do not trust them and would not want their pensions to be paid through them.

The postmasters, postmistresses and staff in the many rural post offices keep an eye on old people and, if they do not turn up for their pension, a red flag will be raised. This is a vital community service. We can look at the bottom line far too often. We must get value for money and have an obligation to do so but we always have a social responsibility as a Government. The Acting Chairman should bear with me because it affects his constituency as well. The Government has a social responsibility in respect of this issue that must be acknowledged and on which a price cannot be put. The threat that has been presented by the speculation surrounding this contract is appalling. The Minister is wrong in trying to save money in this way. If the system needs to be improved and efficiencies achieved, negotiations with An Post management should be entered into. Putting out to tender a contract as significant as this one that probably affects the largest number of vulnerable people is simply wrong. The Government has reversed decisions in the past that were wrong. It did so today in terms of the cuts to the number of special needs assistants and resource teaching hours. There would be nothing wrong with reversing this decision as well.

7:05 pm

Photo of Michael MullinsMichael Mullins (Fine Gael)
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I thank Senator Conway. I gave him a bit of leeway.

Photo of Alex WhiteAlex White (Dublin South, Labour)
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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.

Photo of Martin ConwayMartin Conway (Fine Gael)
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I appreciate the fact that the Minister of State is delivering this reply on behalf of his senior Government colleague. I would describe it as a very glossy reply. It certainly ticks a lot of boxes in terms of IT and modern communications and ways of doing business. It also states very clearly that we are probably the most compliant Europeans in Europe. Sometimes it would be good not to be such good, compliant Europeans. We do not necessarily have to uphold the law in this area. I am concerned about the thousands of jobs within the post office network that hinge on this contract, the social exclusion that will result from An Post losing this contract and the fact the loss of this contract will be another nail in the coffin of rural Ireland. I stress that it is not all about the bottom line. This decision has serious social consequences. I ask the Minister of State to advise his senior Government colleague that people will not take this lying down and that rural Ireland will fight this head on because it cannot be allowed to happen.

Photo of Alex WhiteAlex White (Dublin South, Labour)
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Senator Conway raises an important issue. I agree with him when he says that not everything is about the bottom line. The post office has a crucial role to play, not just in rural Ireland, although it is most important in rural Ireland, but also in urban centres and provincial towns.

There is no suggestion or intention on the part of the Government to do anything other than uphold the commitments in the programme for Government which commits to the maintenance of the post office network. Post offices have shown themselves to be adaptable to changing circumstances. I have no doubt the service which An Post provides throughout the network of post offices will continue into the future.

The Seanad adjourned at 7.40 p.m. until 10.30 a.m. on Wednesday, 26 June 2013.