Tuesday, 25 February 2014
Post Office Network
I thank the Cathaoirleach for selecting this item. I appreciate that the Minister is here to respond. The Minister is probably hearing a lot about the concerns communities throughout the country have about the future of the post office network. The issue has been raised on many previous occasions. The concern from the post officer workers, the network and the Irish Postmasters' Union, IPU, is that a plan be prepared as was committed to in the programme for Government, as to the future of the post office network. I come from an urban area and I completely understand the value of my local post office, as well as in rural areas. They play a very valuable role. That is their strength and they are playing to that. The network employs 3,000 people and in 2012 there were 1,152 post offices located throughout Ireland. Grant Thornton recently produced a report on the future viability of the network and it claimed that 450 to 500 post office could close between 2013 and 2017. I do not understand that because in the years 2006 to 2010 197 post offices closed, but since then only 17 have closed. That question should be addressed.
My local postmistress told me they wanted to pitch for driving licences and motor tax. The local post offices could provide many services. They are concerned about the move to electronic payments. Electronic payments are the future and in today's world one cannot stop that because this is about making it easy for consumers and service users. Nonetheless there are areas within which the post office network can develop expertise and provide additional services.
Post bank services are an example. People could be encouraged to use them. If they are concerned about the service they are getting from their local bank, they could move to a post bank.
This is not simply about the Government preparing a plan. That is important, but people must realise, as consumers and customers, that if they wish to retain their local post office, they must support it. That strong message should be conveyed. Perhaps, however, the Minister might respond to their concerns. Will a plan be put in place or is the Government committed to addressing this issue? As he is aware, post offices play a very valuable role in terms of community supports. The postmistress to whom I spoke told me she was the third generation of her family in the post office; therefore, she knows her customers well. It is a valuable and unique support and we should protect it in so far as we can, given all of the constraints.
I thank the Senator for giving me the opportunity, on the same evening as the sustainability of the post office network is being debated in the Dáil, to address in this House the concerns raised by the Irish Postmasters Union, IPU, about the viability of the post office network. The post office has a unique standing. Its social role is highly valued, perhaps most highly in rural Ireland, where 64% of the network serves 38% of the population. I was disappointed to read recent headlines asserting that 557 post offices were to close. The impression is given that somewhere, somehow, the Government has announced a plan to shut down post offices. There is no such plan. In fact, as the Senator said, although 197 post offices were closed between 2006 and 2010, only 17 closures have occurred since 2010.
An Post has not escaped the challenging environment brought about by the economic collapse in 2008. More challenging still are the diminishing mail volumes due to technological advances. Of course, as a network of commercial enterprises, the post office network is also subject to EU competition law.
From where did the headlines about post office closures emerge? The origins are a consultancy report that presumes the loss of the social welfare contract, worth €50 million to An Post, and calculates that such a loss would, in the worst case scenario, lead to the closure of 557 post offices. However, the point is that An Post did not lose the social welfare contract. In fact, it won it in a tender process as recently as last year. The Irish Postmasters Union is prudently asking about what the situation might be in 2019.
There is every reason to be optimistic about the new opportunities that lie ahead for the post office network in the digital age. The retail network has actually grown in the past five years, even as the mail business has been contracting sharply. The over-the-counter business today offers very different services from what was offered in the past, including foreign exchange, passport, bank agency and tax payment services. These services are provided in a competitive environment for customers who can choose to do business in other ways. The professionalism of the postmasters, the unions and the board and management of An Post has served the network well through the years. An Post is a trusted brand and has the largest retail presence in the country, with over 1,100 outlets nationwide reaching almost 1.7 million customers.
While operational matters and the development of commercial strategies are for An Post, as a shareholder, I have a strong interest in and concern about the sustainability of the company. This is backed by the commitment in the programme for Government to ensure the sustainability of the post office network. I am, therefore, pleased to announce that the Government has agreed to a whole-of-government consideration, encompassing central and local government and the wider public service, of the nature and extent of services that can be provided for the public using the post office network as a "front office of government". This will afford an opportunity to have an holistic review of the range of services which could be provided by the post office network and could perhaps yield synergies among the various agencies.
There is no doubt that further challenges will present in the years ahead. I am convinced, however, that An Post possesses the capacity and drive to adapt to the changing needs of customers, as well as the necessary commitment and resolution to continue to develop the post office network. In doing so, it will have my active support and that of the Government.
I welcome what the Minister said, particularly about the proactive approach the Government is taking in addressing the issue across a range of Departments, encompassing central and local government. I am sure that as a result, it will be possible to provide services through the post office as a front office of government. That would be a very welcome development which I am sure would be welcomed by the Irish Postmasters Union and workers in post offices throughout the country. I appreciate the Minister's response.
Working together, the Government and the IPU, notwithstanding the inexorable progress of the digital age and digital enterprise, can ensure there is a future for the post office network. This is a unique retail outlet. No other organisation has 1,150 outlets throughout the country and there is the capacity to win new business and create new products. My view on the fear expressed about the future of the social welfare contract is that the IPU should make common cause with the Irish League of Credit Unions and seek to develop the basic bank account that could be used for this transfer if and when it goes electronic. There are a number of such things that could be done that could prove very useful. The Government's social policy sub-committee will pull together the different strands and consider how to proceed from here.