Future of post offices depends on social welfare contract

THE future of the post office network depends on the retention of social welfare payments at all outlets, postmasters warned yesterday.

With 500 post offices closing in the past few years, the Irish Postmasters’ Union has called for Government action to ensure the €50 million-plus social welfare contract remains with An Post. A position paper on the importance of social welfare payments to the post office network was outlined at the IPU’s annual conference in Mullingar yesterday.

IPU general secretary John Kane said: “The network is in rapid decline. There are now 1,200 post offices following 500 closures in the past eight years, and the stark fact is that the future of there being a localised network depends on the retention of social welfare business.” The share of the social welfare contract handled by post offices has declined from 80% in 1998 to 55% in 2005, as people have been encouraged to have payments paid directly into their bank accounts.

The Government is currently reviewing the social welfare contract and has yet to make a decision regarding the delivery of payments.

“The welfare payments system accounts for 40% of all income generated at post offices,” said Mr Kane. “The decline of this business has a ‘double whammy effect’ as a large volume of people who claim social welfare at their post office also use the BillPay service on the same visit.”

According to the IPU, the average net income of a post office was €13,000 in 2005 and a decline in social welfare business leaves a large number of post offices “vulnerable to swift decline and closure”.

The union said that current Government policy in relation to the post office network is “vague and ambiguous” as, unlike the majority of EU countries, Ireland does not have specific minimum requirements in relation to network size and coverage.

“This ambiguity allows politicians to fully support the principle of the retention of post offices, while at the same time not actually doing anything about it. It also means that closures are taking place in an ad hoc manner and not driven by any restructuring plan,” said John Kane.

The IPU called for a number of key actions to address the difficulties faced by post offices:

* A commitment by the Government to the post office network as the “provider of choice” for the delivery of welfare payments.

* The Government and An Post to decide on what size, distribution and quality of network should be available to the public.

* Computerisation and proper resources for the remaining post offices.

* A public service obligation to maintain offices in sparsely populated areas.

* A “suitable and agreed exit package” as part of any reduction in the size of the network.

“The reality is that if the Government continues to do nothing the network as a localised service will collapse on an ad hoc basis in a short number of years. Therefore, political progress from Government is urgent,” said Mr Kane.