Post offices under threat despite deal

Postmasters have warned the future of 400 small post offices remains under threat, despite the announcement An Post is poised to retain a contract worth €58m per annum to handle social welfare payments.

The Irish Postmasters’ Union welcomed yesterday’s confirmation that the state-owned company is the preferred bidder for the delivery of over-the-counter cash services on behalf of the Department of Social Protection.

However, the IPU, which represents more than 1,000 postmasters, said dangers remained for the post office network because of government policy.

It claimed the Government’s drive for all social welfare payments to be delivered electronically could devastate the livelihood of postmasters, whose income is based on the number of transactions they process. The handling of social welfare payments accounts for 35% of all their business.

“If this is lost, it will be catastrophic for the network and communities both urban and rural,” said general secretary, Brian McGann.

“Let nobody be under any illusions. The post office network has not been made safe by this contract. Another tender is to be issued soon that could spell the death-knell to some 400 post offices throughout the country.”

Mr McGann accused Social Protection Minister Joan Burton of making contradicting statements by claiming the Government was committed to maintaining the post office network, while simultaneously pressing recipients to access their benefits electronically.

Mr McGann said An Post had to commit to assisting the Department of Social Protection to migrate people to electronic payments as part of winning the contract. He said the viability of post offices would be ensured by more Government business being diverted into the network, such as payments for motor tax, water charges, local authority rents and driver licence renewals.

The minister said An Post’s selection meant negotiations could begin on the details of a new contract.

The existing contract to provide cash payments of social welfare benefits and allowances expires at the end of this year. Ms Burton said 43.7m payments — half of all payments — were issued in cash through the post office network of 1,152 outlets in 2012.

Over one million people are in receipt of such payments which had a total value of €9.5bn last year.

The minister said it was envisaged the new contract would be for a minimum period of two years with the option to extend the contract for one or more periods of 12 months each up to a maximum of six years.

Ms Burton also stated that it was proposed all social welfare payments will be delivered to customers electronically, over time.

She confirmed that another procurement competition will be advertised later this year to provide “e-payment” solutions.

An Post reported an operating loss of €17.5m in 2012, with total losses of €40m.