557 post offices predicted to close if welfare payment contract lost
TDs and Senators briefed on impact to communities if post office network decimated
Print20 February 2014
Post offices across the country have expressed "serious concern" about the government’s commitment to moving social welfare payments to electronic transfers as part of its eCommerce strategy.
A report commissioned by the Irish Postmasters Union from Grant Thornton has found that if the social welfare contract is lost to An Post, some 557 post offices nationwide would close down.
Threat to network
The report, launched at a briefing for Oireachtas members and media in Dublin on 19 February, found that by 2017 there would be a decline of 557 post offices (48%) in the network which has 1,150 post offices at present.
In another scenario, if direct electronic payments are introduced and 75% of payments occur via electronic funds transfer (EFT) and the remainder are delivered via over-the-counter transactions, 444 post offices would be lost by 2017; a 39% decline in the current network size.
The two-year social welfare contract is currently held by An Post with possible extensions for up to four additional years. However postmasters are worried that the existing contract will be threatened by a move to EFT.
Additional government business neccessary
Grant Thornton said additional government business through the post office is necessary to help sustain the network. The business advisor firm found that if motor tax renewals were available in post offices it would save the exchequer €60.6m over a five year period. However, Grant Thornton concluded that the additional business alone would not compensate for the loss of the welfare payments business.
Commenting on the report’s findings, the general secretary of the Irish Postmasters Union, Brian McGann said immediate government action was required to ensure the viability of the post office network into the future. He expressed concern that, although An Post had won the welfare payments contract, the Department of Social Protection was actively driving customers into using bank accounts to receive welfare payments.
However McGann welcomed the fact that a Technical Group of TDs, led by Seamus Healy and John Halligan, has put down a private members motion for debate next Tuesday and Wednesday (25 – 26 February), calling for a plan to be rolled out within three months.
Tesco development a ‘grave concern’
He also expressed the union’s "grave concern" that An Post is partnering with Tesco to develop an alternative network that will seriously impact on the network. He predicted that this development – which he believes is a result of government inaction on maintaining the post office network – would destroy the network within two years.
McGann spelled out what would happen if the network were to be decimated. "Post Offices will close, communities will suffer – and the disadvantaged will suffer disproportionately.
Devastating social impact
"Ballymun, with a population of 30,000 has only a part-time bank and people there are heavily dependent on the post office to do essential business to sustain family life…The social impact will be devastating," he said.
McGann called on the government to put a plan in place immediately. The Grant Thornton report and the Joint Oireachtas Committee on Communications report can provide the roadmap, he said.
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