Lifeline for rural post offices as they could receive up to €20,000 a year in government subsidies

Small rural post offices could receive up to €20,000 a year in government subsidies to stay alive.

Lifeline for rural post offices as they could receive up to €20,000 a year in government subsidies

A new An Post report into the future of 1,300 branches across the country has recommended that isolated post offices — which are the lifeblood of many communities — be supported financially to help them adapt and survive.

The report proposes subsidising loss-making or struggling post offices by way of a taxpayer-funded subsidy for between two and three years, to allow them develop themselves into a viable business, co-locate with another business or fold.

This is drawing from a similar system which is in operation in the UK.

Communications Minister Alex White is eager to implement the recommendations, which include giving post offices the ability to sell insurance, process motor tax, and to link up with credit unions.

Entrepreneur and broadcaster Bobby Kerr, who authored the government report, will now stay on for another six months to work on implementing the proposals.

These proposals will seek to tackle outdated postmaster payments and contracts and encourage branches to increase the number of services they provide.

A payment account system through the post office will also be introduced which will allow customers avail of banking services such as ATM cards and direct debits.

Mr White said: “Government has now committed to an implementation plan for the payment account within the next six months.”

However, reacting to the report last night the Irish Postmasters’ Union (IPU) said Mr Kerr’s report still shows there are serious challenges facing the post office network in the coming years and urged the Government to act quickly on the recommendations.

There were 198 closures between 2007 and 2010 and a further 24 net closures between 2011 and 2014. Mr Kerr said a value needs to be put on the social contribution that these rural offices have.

He said these at-risk post offices should be supported financially for a number of years until they are able to develop a plan to get on a “more solid footing financially”.

Mr Kerr said: “If we want the services in remote areas then we need to put a value on the social contribution that they make. That social contribution is significant in some places and that’s what we are going to be doing now as part of the next phase”.

Under the plans — which are based on a £20m UK programme supporting post office branches that operate the only retail outlet in a community — small post offices would be entitled to government funding for a number of years. Introducing a system similar to the UK would mean around €2m would be invested in struggling post offices here.

However the annual funding, which could be between €15,000-€20,000, would only be provided for around three years — again similar to the UK — and in that time post offices would have to co-locate with other businesses, become viable, or leave the network.

Mr Kerr said: “That’s what they did in the UK because they decided that the value that 3,000 of the 11,000 post offices was such that they put a social value on that sector and they allowed them transition to the new model.

“So there was a period of two or three years that allowed them to come up with a new range of products or services. It just meant there weren’t all these closures and there was a way of evaluating and making things work in rural areas where you don’t have the footfall.”

IPU president Paddy McCann called on a working group to oversee a pilot programme for the development of rural post offices as ‘service hubs’ to facilitate additional services such as health and transport to be set up immediately.

He said this would give branches “an opportunity to further develop the social and community role of post offices.”

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