Written answers

Thursday, 5 May 2005

Department of Communications, Energy and Natural Resources

Postal Services

5:00 pm

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Question 22: To ask the Minister for Communications, Marine and Natural Resources if he will consider replicating the model followed by the UK postal authorities including the recognition of a social obligation; and if he will make a statement on the matter. [14496/05]

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 150: To ask the Minister for Communications, Marine and Natural Resources if he will consider replicating the model followed by the UK postal authorities including the recognition of a social obligation; and if he will make a statement on the matter. [14728/05]

Photo of Noel DempseyNoel Dempsey (Meath, Fianna Fail)
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I propose to take Questions Nos. 22 and 150 together.

The Government and An Post share the objective of maintaining a nationwide post office network through a strategy of maximising the volume of viable business handled by the network. There is clear Government recognition of the social benefits of maintaining the nationwide post office network and An Post development strategies for the network continue to take full account of these social benefits.

It is my understanding that additional funding for the post office network in the UK has come from two sources. The UK Government has directly funded a programme to restructure the urban network by providing grant aid for postmasters who wish to exit the post office business and investment funds for remaining operators who wish to upgrade individual post offices. In addition, historical Royal Mail surpluses, which were not transferred to Government but were invested in Government gilts have been used to subsidise the rural network. The gilt resource is finite and, therefore, this source of funding is transitional in nature and has not prevented closure of post offices.

The Irish Government has already provided funding by way of a €12.7 million equity investment in 2003 to support the modernisation of the post office network and it is not envisaged that further public funding will be provided to An Post. The best way to sustain the post office network is to gear the network to provide a range of products and services that meet consumer needs. Accordingly, the fundamental requirement for An Post is not for State aid but rather for the company to address strategic issues relating to the post office network. The challenge for the company is to develop a comprehensive strategy that satisfies the needs of existing customers while attracting new customers into the post office.

In this regard the company has had some success in winning new banking and bill paying contracts, and these services are now available at the post office counter. The network also benefits from substantial existing contracts with the Department of Social and Family Affairs for social welfare payments, and the National Treasury Management Agency for a range of Government savings products. I accept that to ensure that our post offices remain attractive to customers, any future strategy must satisfactorily address electronic technology issues in a comprehensive fashion. In the interim, An Post is implementing a pilot project to computerise ten manual post offices.

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