An Post respond to union report claiming a €17m hole in finances 

Postmaster Tony Wall (left) and Irish Postmasters’ Union General Secretary Ned O’Hara (right) back the recommendations of the report that Government introduce a PSO levy to maintain the Post Office Network. Picture: Conor Healy / Picture it Photography

An Post has responded to a report from the Irish Postmasters Union, claiming the network will collapse unless the State acts quickly.

The report, which was published by Grant Thornton and commissioned by the union has recommended an annual Public Service Obligation (PSO) of €17m for the post office network. It states that urgent government investment is needed, as it provides "a multi-fold economic and social return to communities, far in excess of the PSO requirement."

The report warns that action is needed as soon as possible as the network "faces significant levels of unrestrained closures by the end of 2021".

"Many local Post Offices, large and small, urban and rural, will likely be forced to close if the financial conditions under which they operate do not change in the short-term," it said.

The report forecasts average losses of €19,181, which it says will impact all post offices in the country.

Grant Thornton has recommended that the Government implement the Public Service Obligation model, which would raise €17m to compensate for the projected shortfall from 2021 onwards.

This model is already in place in the UK, France, Spain, Belgium, Italy, Finland and Poland. It would see services traditionally delivered by the network to be delivered by an 'online first' approach and a reduction in mails business.

The review stressed the importance of the Post Office network, describing it as a "highly valuable national asset which contributes far more to the economy than the cost of the PSO."

Almost 30% of the population use the Post Office every week, including the distribution of €4.6 billion of social welfare related cash. It provides spin-off support to other local businesses as well as providing services for people who are financially or socially excluded.

Though it is difficult to measure the social value of the service, the British model of calculating social contribution finds the Irish Post Office Network worth €334-€776 million annually.

The Covid-19 pandemic has also created difficulties for the company, with a 25% reduction in transactions in August 2020 compared to the same period last year.  

President of the IPU Sean Martin said no further review is needed. "We do not have time to delay and do not need further evidence. The level of closures next year is potentially so significant as to mean a collapse of the Irish Post Office Network as we know it.”

In a statement in response, An Post said that the Post Office network and the delivery network are "performing very well" through the Covid-19 pandemic.

The group acknowledged the higher level of footfall in post offices due to the double social welfare payment schedules during the crisis and said they are working with Government to restore these.

They wrote that any subsidies for independent postmasters are an issue between the Government and the postmasters. 

An Post say that while the pandemic will cost "a significant amount", the company's "strong balance sheet" will fund the network.