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Joint Oireachtas Committee Meeting on Impact of Retirement Package for Postmasters

Denis Naughten TD

Minister for Communications, Climate Action and Environment

Joint Oireachtas Committee Meeting on Impact of Retirement Package for Postmasters

Tuesday, 4 September 2018

 

Check Against Delivery

 

I want to thank the Committee for the opportunity to address it today.

 

I know we all share the same concerns on the issue of post office closures. I come from one of the most rural constituencies in the country so I know only too well the anxiety that people can experience when there's a threat of a withdrawal of any service. 

 

On the issue of post offices, as Minister, the practical expression of that concern – the actions that deliver on words – is ensuring a sustainable post office network available to all our citizens, rural and urban, for the medium and for the long term.

 

Much has been made in the press over the past week on the impact of these closures and while I completely accept that the closures will have an impact on the communities they serve, the background to this particular issue has not been very well represented. 

 

It is important to put the announcement by An Post of changes to the Post Office Network into context.  97 weeks ago I was presented with a future for An Post and the post office network that was uncertain and extremely bleak. I was determined the company would not go under - which was a very real possibility - on my watch because of the failure to act by successive Governments.

 

The potential for a complete shutdown of postal services with the loss of thousands of jobs was undeniable. Immediate action was needed. It was needed to ensure the survival of An Post.

It was needed to safeguard the post office network. It was needed to protect thousands of jobs across the country.

Those imperative requirements needed decisions. I can tell the Committee that decisions have been forthcoming.

 

I did not shirk away from my responsibility as Minister. We have worked tirelessly to restructure the company in order to save it.

 

I am sure you remember the urgent need to introduce legislation to facilitate an increase in the price of a stamp. This was an essential first step to avoid a cash crunch for the company and to give An Post time to construct a plan for a sustainable future.

 

The challenges facing An Post were recognised across all political parties. That legislation was widely supported in its passage through the Oireachtas.

And I want to thank the members of this committee for their support in providing An Post with the window needed to put a strategic plan in place.

 

I also worked hard on securing a Government investment of €30million for An Post in order to safeguard the 5 day a week mails delivery and collections and to protect post office counter services.

 

Two years later, critically important decisions have been made.  An Post has been stabilised, because action has been taken.

 

The fabric of services it delivers has been strengthened. The company is changing from a 19th Century model, to one that has relevance and can have resonance in the Twenty First Century in rural and in urban areas. In fact the current postmasters contract dates back to 1907 – I think we can all accept that things have changed substantially since then.

 

Today the future is not as bleak for An Post but underlying challenges remain.

 

Mail volumes continue to decline. eSubstitution and the move to online payments and online banking continue to impact on the post office network. Standing still is not an option.

 

If politically we thread water, if we shirk decision making we won't have a stronger post office network, we will have a weaker one, and potentially ultimately we will have no post office network at all.

 

I believe in An Post as a public company, delivering a public service. That is why I am determined to embrace change, because change is required to deliver for post offices and a postal service for the future. That change is especially required in rural areas.

 

There is widespread acceptance that the post office network requires modernisation to build, to maintain and to protect a service that meets the needs of communities across the country.  Investment of €50 million in the network which is equivalent to €45,000 per post office, is about getting communities to use the enhanced services in their local post office which forms part of a modernized network.

 

As part of its strategic plan, An Post announced a renewed vision for the post office network which centres on the availability of new services in a modernised, revitalised network.

Such services must include a better range of Government services, financial services and e-commerce services for shoppers and small businesses.

I was one of only a handful of Oireachtas members to make a submission to the Kerr Report as a backbench TD in 2015. 

 

 

I argued strongly for the need to channel more Government services to the post office network. I remain as committed to that position today as I did then – even more so. 

 

Since taking Office I have been driving this with my officials, my Cabinet colleagues, with An Post and with the Office of Government Procurement and other agencies.

 

Government funding of €80,000 has been allocated to roll out the "Digital Assist" programme. Digital Assist means 10 post offices are being equipped as we speak with digital hubs to help citizens navigate online Government services and other online goods and services. The 10 post offices are Kanturk, Cork; Carndonagh, Donegal; Athenry, Galway; Castleisland, Kerry; Ballymore Eustace, Kildare; Crossmolina, Mayo; Newbliss, Monaghan; Ballaghaderreen, Roscommon; Tubbercurry, Sligo; Fethard on Sea, Wexford.

 

 

There is already a rapid expansion of banking services happening in our post offices. You can now get US, Canadian and Australian dollars and Sterling cash and currency cards without having to order it in advance. Post offices will have credit card services and be able to provide loans to small businesses, and personal loans along with the An Post Smart current account. An Post has committed to investing €50m in growing and modernising the post office network over the next few years.

 

Essential to delivering on a renewed vision for the post office network is the agreement reached with the Irish Postmasters Union. 

 

This agreement follows months of intensive negotiations which were overseen by Senior Counsel Turlough O'Donnell at my invitation. I want to take this opportunity to once again thank Turlough for his work and time and his commitment to this process.

 

In its negotiations with An Post, postmasters sought both the modernisation of the network and a voluntary redundancy package for those who wanted to leave the business.

 

It is important that the decision of those who wish to leave the business is respected. These are not decisions that have been taken lightly or without good reason. There are a number of reasons that postmasters are availing of this offer including age, low population levels, as well as the fact that some postmasters are not even earning the minimum wage as a result of declining transaction levels and mail volumes.

 

I must repeat - the decision whether or not to accept the package was a decision for the individual postmasters. All closures have been made on a voluntary basis and Ned O'Hara of the Irish Postmasters Union has publicly confirmed this. No-one was forced to take the package. 

 

It is also important to state that any retailer in the locations of the 159 post offices can apply to An Post to be considered to take over some or all of the services of that closing post office.

 

The reality is that by facilitating those who wish to exit the business, neighbouring offices will be further supported thereby ensuring a sustainable network for the future. Where a post office closes, 70% of the business transfers to a neighbouring office.

 

This agreement removes a level of uncertainty that has existed as a result of the piecemeal approach associated with closures of post offices to date.  The IPU has acknowledged this.

 

An Post has given a pledge that every community of over 500 people will have a post office and 95% of the population would be within 15 kilometres of at least one other Post Office. An Post has also committed to opening at least 5 new offices and 36 vacant post office contracts across rural and urban areas are currently up for renewal. 

 

Declining transactions over recent years reflect the reality of the world we live in so we must equip our post offices with the range of services that will attract and retain footfall.

 

But these measures are meaningless unless the public use the service the post office provides. Key to the survival of this renewed network is the willingness of all of us to use it.

 

Last week at a public meeting in Athleague I spoke about Imelda Burke.  Imelda is the postmistress of Ahascragh post office. 18 months ago she sent out one thousand letters to her community asking them to please use her services.  She received three positive replies.  Last Friday she sent out another 800 letters again pleading with her community to use her services.

 

I am aware of the suggestion from various quarters that some form of PSO or State subsidy should be provided to maintain the post office network in its current form. I must be clear that it is longstanding policy that postal services will not be directly subsidised by Government.  Successive Governments have also held this view.

 

An Post is a commercial State body with a mandate to deliver a postal delivery service and a viable post office network.  Aside from State aid and other competition related issues, it is likely that a subsidy to retain those offices in which postmasters have opted to take the package  – in most instances because the business is no longer sustainable - could have a negative impact on the remaining offices.

 

They would lose the opportunity to enhance their existing businesses and such a move could jeopardise the long term sustainability of the entire network.

 

While much has been achieved in terms of An Post over the past two years, there must be a clear focus on continued delivery for the future.

 

This is critical to ensuring the long term success of our national postal operator and a sustainable post office network to serve our future generations. 

 

After years of drift, there is now a clear direction for An Post.

Innovation and change are embraced.

 

New services to meet new needs are the future. Politically our responsibility, and the responsibility I take as Minister, is to lead change, to strengthen An Post as a public company delivering a public service, and to support the decisions required to translate that aspiration into effective action.

 

Thank You

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