In regard to the extension of post office services, the Minister of State at the Department of Agriculture and Food with responsibility for rural development, Deputy Davern, will shortly publish a White Paper on rural development which will incorporate many of the suggestions to which I referred. Much of what he is proposing as Government policy in the White Paper relates to the cultivation of the rural post office network into a one-stop-shop concept. Thus, recent announcements in regard to the further modernisation of the post office network already formed part of proposed Government policy. In effect, we announced those proposals at the same time as the announcement on the contract.
The Deputy raised the £22 million figure with me previously and I have since checked it out. That figure relates to the Exchequer funding required for social assistance payments; the balance of the £36 million figure comes from the social insurance fund which relates to benefit payments generally. The overall figure for the contract is £36 million.
This is one of the first opportunities I have had to refer publicly to this issue as I have been precluded to some extent from commenting on it before now. Deputies, particularly those who have served in Government, will be aware that for any Minister or Department to intervene or show favouritism to a particular side when a Government contract is put out to tender, prior to the awarding of the contract, would leave the Department and the State in the dangerous position of a possible legal action being taken against them by aggrieved parties.
It is important that we provide some kind of historical view on this matter. A five year contract was awarded to An Post in 1992. In 1996 the Government Contracts Committee, under the Government of which the Deputies opposite were members, decided to extend the An Post contract for a period of three years after which time the contract would be awarded following a competitive process and having due regard to the relevant EU public procurement directive.
At that stage, it was recognised and understood that the contract would be put out to public tender and the Department proceeded on that basis. I attempted to ascertain whether legal advice was obtained from the Attorney General or others in 1996 on the issue of whether this service was a social or financial one. As far as I could ascertain, no advice was sought or given at the time.
When the matter of the contract arose, the Department was obliged within a certain timeframe, to publish a pre-indicative notice in the European Journal and that was done on the basis, understood for many years, that the contract would have to be put out to open tender. From as far back as last October or November, the Minister for Public Enterprise, the Taoiseach and I were involved in discussions with the Postmasters' Union and other interested parties as we were aware that this issue was coming up for consideration. Following long and detailed discussions involving the Attorney General, the Government felt confident about awarding the contract to An Post without undergoing the open tender process.
The Attorney General advised that the contract and the nature of the payment delivery service required from An Post does not come under the terms of the directive. I have no doubt Deputies on all sides of the House welcome that. I did not make any statements which indicated one way or another whether this contract would go out to public tender or to An Post. The issue had to be determined and only when I and my Cabinet colleagues sought legal advice, which was not previously sought, was a determination made as to whether the nature of the service was financial or otherwise.
