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Government publishes Kerr report on the future of post offices

 
dublin, 20 january 2016

  • final report of the post office network business development group published
  • government support for new measures to enhance viability of post offices

minister for communications alex white t.d. today (wednesday) published the final report of the post office network business development group, which was chaired by businessman bobby kerr.

 
"a post office network renewal process, recommended in the report, is being established immediately and will conclude its work within six months. it will build on an post's existing five-year strategy for the network and address the number and spatial distribution of branches, branch modernisation, the streamlining of products and services, postmaster payments and contracts, and training and qualifications for post office staff" said the minister. minister white and an post will invite mr kerr to oversee this work over the next six months. 
 

the minister also announced that the government had agreed:

 

  • to support the introduction and roll-out, by an post, of an 'epayment account' in 2016. the kerr report identifies this as essential to enhance post office activity in financial services, and
  • consistent with the kerr report, to establish the feasibility of offering motor tax services in post offices.

 

these initiatives are drawn from nine priority actions that the business development group identified among its 23 recommendations [details below].

 

minister white said: "an post is one of ireland's most trusted brands and it has invested heavily in its marketing and retail infrastructure. despite this, maintaining the relevance of the post office network continues to be a challenge in the face of changing consumer preferences. i asked the business development group to identify new business opportunities for the post office network. the group has achieved this and has provided the most comprehensive analysis available on the network and its future. its report outlines, in great detail, the measures needed to put our valued post office network on a sustainable footing into the future."

 

the report's 23 recommendations cover a number of areas including network renewal, financial services, government services, white labelling, and social capital and enterprise.  

 

commenting on its findings, minister white said: "the report clearly sets out the challenges that an post and postmasters face as they ensure that the network remains relevant in the context of an inexorable shift in consumer preferences, including the trend towards digital transactions. in this context, the work of the network renewal group will be vitally important to the future of the network."

 

the minister recognised that the implementation of the report's recommendations would be complex and challenging for the relevant departments and state bodies, but said he was optimistic that they would be able to deliver the required changes.

 

the minister acknowledged the contribution of bobby kerr as chairman of the business development group. "on behalf of the government i want to thank bobby kerr who maintained his focus on the project despite facing significant personal challenges. his dedication and commitment to finishing this work is a testament to his determination and his commitment to the future of our post office network." the minister also commended the role played by an post and the irish postmasters' union in the process.

 

minister of state ann phelan welcomed the report's recommendation of a nationwide pilot to identify the potential for local post offices to act as 'hubs' to facilitate other services such as health and transport. she said she would be writing to relevant departments to convene a working group to undertake this work. she said: "i congratulate bobby kerr and the group on this report, which is a significant recognition of the role that local post offices play in towns and villages across ireland. the post office is a defining facility in rural villages and can play an enhanced role in their development. to this end, i look forward to facilitating the nationwide pilot on the development of service hubs."

 

ends

 

notes for editors

the business development group was established by minister alex white in january 2015 to explore potential commercial opportunities available to the post office network.

 

the group was chaired by bobby kerr and its membership comprised the irish postmasters union (ipu), an post, the minister of state for gaeltacht affairs, the minister of state for rural economic development and the department of communications, energy and natural resources.

 

the group prepared an initial report for minister white in may 2015, which was published for consultation (a summary report is available on the department's website).

 

the group submitted its final report to the minister on 23 december 2015. the full report is available at www.dcenr.gov.ie/postofficenetwork. its priority recommendations are:

 

areadescription

network renewal

 

the group recommends that an post should, on foot of this report, review and amend, where appropriate, the five-year strategy for the network over the next 6 months with the input of the shareholder, postmasters and others (such as dsp) where appropriate. at a minimum, this strategy should address the following: the number and spatial distribution of branches, streamlining of products and services, grading system, postmaster payments and contracts, products & services, training and qualifications for post office employees. the group recommends that this work should start as soon as possible.

 

given the importance of the post office network to the local community, the group are concerned that during the transition that is envisaged in the proposed new strategy, the remuneration of post offices may reduce and their survival will be threatened. it is vital that the network is not undermined during this transitional stage and the approach to remuneration in the uk post office network be adapted to suit, with the necessary government support given to the process.

 

network modernisation: refresh, renew, reinvent

the group recognises the work that an post has undertaken to date on how it presents to the public. however, the group is recommending that there is a need for the network to continue to improve and modernise. the group recommends a similar process be examined for irish post offices to that followed in the uk. in the first instance, the preparation of a modernisation plan for all post offices needs to take place. in line with the proposed re-grading of post offices into retail+, service+ and community categories, post offices falling into different categories should be modernised in different ways in order to best fit the community that they reside within. improvement and modernisation should be not be optional, all post offices should be expected to reach a defined standard.

 

performance targets for post offices

it is important that every post office plays its part within the network. while the group recognises that every post office is different, it is imperative that an post identify, agree, implement and actively manage performance targets for all post offices. these targets should be appropriate to the size of post office and the level of transactions that they undertake. it is important that postmasters play an equal part in growing the business.

 

co-location

it is evident that for the majority of post offices unless they co-locate with other services, be it a shop or otherwise, there is little prospect of them surviving and thriving. the stark choice is to modernise, co-locate or vacate. rather than viewing this as a threat to the status quo, it should be seen as opportunity for renewal and growth. co-locating post offices need to be with retailers which are already commercial entities. the post office business needs to be seen as incremental rather than the main income source, with the details around ownership, including co-ownership or otherwise, would be dealt with as part of the new postmaster contract.

 

where possible, remove secure facilities from smaller post offices

modern post offices need to create a new image for consumers. it is noticable that the majority of the banks, as they reduce their cash transactions in branches, are starting to move away from facilities that are dominated by secure facilities, with an increasing number of staff moving to 'front of counter' and increased automation of services. this approach is more accessible and engaging for the customer. aligning this to the devlopment of a modernisation plan, an post should look at removing secure facilities from those post offices that don't handle large amounts of cash on a daily basis. evidence from the uk shows that there is no increased risk of theft or robbery as the safes preclude large amounts of cash to be withdrawn quickly. this enables smaller post offices to be better integrated with the businesses within which they are co-located.

basic payment account

 

the group recommends that the government and an post finalise their discussions and agree on a business model to facilitate the introduction by an post of payment accounts to dsp clients, amongst others. the introduction of the account is of critical importance to the post office network and should be designed to actively incentivise users to transact in post offices. ideally, this will allow post offices to not only retain an important revenue stream from this business, but also grow the level of footfall from these customers and the additional business that brings. this payment account must include:

 

•             debit card;

•             full access to atm and point of sale worldwide;

•             standing orders and direct debits;

•             jam jars to facilitate budgeting; and

•             internet, phone and app based banking.

 

a marketing plan should be introduced to underpin the rollout of the new accounts and signify the arrival of an post as a new banking force.

 

it is also important that dsp continue to offer the cash payment at post offices option to their clients and the group recommends that the cash option has the same status as eft payments in all dsp claim forms.

motor tax

 

the group is of the opinion that the feasibility of the provision of additional motor tax payment channels should be considered.  providing that additional (or alternatives to) the current channels for the payment of motor tax are deemed to be cost effective, that the provision of an additional channel should be examined.

financial services strategy

 

the group recommends that, as part of the 5-year strategic plan review, an post, with the input of postmasters and the shareholder, develop and articulate a clear financial services strategy that would set out its ambitions for the area over the short-term (12 – 18 months), medium-term (18-36 months) and long-term (36 months+). this strategy should be aligned to the ongoing evolution of retail financial services in ireland and the move towards a better customer experience.

credit unions

 

the group recommends that an post develop a formal structure with the credit union movement, either through a representative organisation or interested unions, to establish what, if any, scope there is for linkup.

establishing the social value of the post office network

 

we understand that where post offices provide additional support services that facilitate social and economic development such as local it access, local access to state agencies and forms and a suite of additional services, an economic value will be required for this additional workload. the group recommends that the social and economic value to the local community and that the social and community services that local post offices already provide should be quantified and that a monetary value be placed on both the existing unpaid and any proposed new services.

 

services to sme customers

 

the group recommends that an post investigate whether it could provide additional services to sme customers through the post office network, such as a parcel drop and collection service or additional banking facilities.
procurementwhile the focus on public procurement is on delivering value-for-money, it is often highlighted as a way in which multiple policy goals can be delivered via a single instrument. the group notes the work of the office of government procurement in respect of social clauses in public sector and suggests that the ogp bring forward guidance on their potential application in public procurement.
white labellingthe group recommends that an post actively seek to complement their existing white labelling offerings with new products and services across the telephony, energy and financial services. 

 

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