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Minister Denis Naughten secures €30 million in State funding to protect Post Office network

 

'Ireland's national postal network to become Gateway to Government services'

 

21st November 2017

 

The Minister for Communications, Climate Action and Environment, Denis Naughten TD, has today secured Government approval to immediately provide €30million of State funding to protect the future of the post office network and the continuation of a 5 day week postal delivery service to every address in the country.  The funding will be subject to stringent conditions and Key Performance Indicators, the delivery of which will be monitored on a monthly basis. Financing will be provided in the form of a repayable long-term loan.

 

The State funding underpins the Government's commitment to the delivery of services to rural Ireland in particular by ensuring the continued provision of a 5 day week postal delivery service and an expansion to 6 days for parcels.

 

The funding will inject the financial support urgently required to protect the future of the post office network and to substantially change and modernize the business model of An Post in the coming years against the backdrop of a systemic global decline in mail volumes.

 

It will allow the national postal provider to directly respond to the long term changes in the postal market brought about by an increased use of e-mail and the seismic advancement of on-line payment services.

 

Minister Denis Naughten said: "I have taken a very proactive approach to An Post since becoming Minister. Last year when presented with the stark financial facts at An Post I acted quickly by repealing the price cap enabling An Post to increase the price of the stamp. The main impact of this measure has been to avoid a cash crunch in 2017 and reduce the level of losses expected to be incurred for the year by the company. It also allowed the company time to construct a modernization plan. However without further remedial action, losses for the Group will simply keep going.

 

The local post office is an integral part of the fabric of our local community especially in rural areas. As Minister and as a rural TD, I recognise the importance of ensuring that this continues into the future therefore the Government is providing the company with significant State funding to ensure its survival. 

 

An Post has developed a comprehensive strategy to return the company to a sound financial footing and to develop it into a modern and cost effective operation. The Government wants to see An Post and its network not just survive, we want it to thrive in the future. The State funding of €30 million represents the tangible commitment by the whole of Government to sustaining a nationwide post office network.  There is no doubt that difficult decisions lie ahead but the reality is that without immediate action we could lose our national postal service.  Doing nothing jeopardises the very survival of our national postal service and I am not prepared to let that happen."

 

Gateway to Government services.

 

"The local Post Office is a defining feature of towns and villages across Ireland. Many people throughout Ireland still heavily rely on their local post office for essential public services. The value of this service is recognised by Government whose policy is to ensure a nationwide, customer focused network of post offices in the community is retained.  As well as being an integral part of the fabric of Irish society, the local post office remains the main point of contact with Government for thousands of people. The nationwide reach of the post office network makes it uniquely positioned to act as a gateway to Government.  We intend to enhance the interaction between customers and Government through our postal system. In addition to the existing range of Government business such as social welfare payments and passport express, a wide range of financial and banking services are being developed which may become a more extensive community-banking service; replacing lost services previously available from the banking sector. In addition a new initiative called 'Digital Assist' will use the local post office as a digital gateway for Government business," added Minister Naughten.

 

The proposed strategy put forward by An Post involves splitting the company into two distinct business units:

 

(i)  An Post Mails and Parcels and

(ii) An Post Retail.

 

Various additional services and opportunities are being acted upon.  

 

The An Post strategic plan harnesses the existing strengths of the company such as its nationwide reach, trusted brand and the relationship of postmasters with individual communities both rural and urban. These strengths are being used to develop new products and services and enhance existing lines of business such as parcels where the company now offers Saturday and evening deliveries.  An Post's parcel business is the backbone of e-commerce, delivering parcels directly to every home in the State. The company has launched new product lines such as AddressPal and Returnspal. An Post now collects returns (over 20% of everything bought Online is returned) from every house through returnspal.ie. 

 

"An Post is entering into a period of significant change but this change is critical to ensuring the long term success of our national postal service. Doing nothing is simply not an option," concluded Minister Naughten.

 

ENDS

 

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