Denis Naughten
Question:50 Mr. Naughten asked the Minister for Public Enterprise the measures which she intends to take to ensure the viability of the rural post office network. [4249/02]
Written Answers. - Post Office Network.
Bernard J. Durkan
Question:141 Mr. Durkan asked the Minister for Public Enterprise if she has satisfied herself that services such as sub-post offices and full postal services will remain open, available and operational throughout the country; and if she will make a statement on the matter. [4819/02]
I propose to take Questions Nos. 50 and 141 together.
One of the first commitments I gave when appointed Minister for Public Enterprise in June 1997 concerned the post office network. I promised that there would be no forced closures of post offices. My position and that of the Government has not changed since then. We remain committed to a viable and competitive post office network.
In 2001, two reports on the post office network were undertaken. One was by Phil Flynn and the other by the interdepartmental group. Both reports concluded that the post office network is facing serious challenges over the next few years. The Government having considered both reports and the future of the post office network decided on the following measures: first, the introduction by An Post of postal agency arrangements. In accordance with the Flynn report, and with the agreement of the Irish Postmasters Union, this is currently being implemented by An Post on a voluntary pilot basis; second, an increase in the share capital of An Post by €12.7 million £10 million to facilitate the implementation of the overall package of reforms, in particular through payment of the increase for sub-postmasters recommended in the Flynn report. The pay increase for postmasters was implemented in November last year and the increase in share capital, which is subject to approval by the EU Commission, is expected to be cleared shortly; finally, the Government also approved the development of a Government services outlet network in situations where it is impossible to continue a post office service on an agency basis, having regard to the availability of already-existing equivalent community-based or statutory services, so as to meet the needs of the community within each county. This concept is being developed at present.
The partnership forum, chaired by Phil Flynn, which I established after the Government decision to facilitate negotiations on reform has concluded. Part of the work of the forum included agreeing the terms of 26 pilot postal agencies and examining the feasibility of routing additional government business through the network. I expect the report of the chairman to be published shortly. In addition, both An Post and my Department are exploring every opportunity to increase the level of business which can be undertaken by the network. An Post has recently succeeded in securing a number of business contracts, notably the ESB bill payment facility and the AIB contract giving access to the bank's customer accounts through post offices.
However, the Government recognised that none of the measures, which I have outlined, would in themselves resolve the severe financial difficulties facing the company without the implementation of cost reduction programmes by An Post. To achieve this a transformation agreement which provided for cost savings and organisational changes was concluded with the unions. While some progress was made, for a variety of reasons the agreed level of savings required were not met. The announcement last week by An Post on the necessity for major cost reductions to be achieved by early retirement, voluntary severance or redeployment is a reflection of the continuing challenges facing the company's finances. I would stress that no compulsory redundancies are planned and the management and the unions have agreed to enter into negotiations on the proposals. I know and fully appreciate the work undertaken by postmasters and postmistresses over the years in terms of providing excellent services to the customer, particularly in rural areas. I am committed to ensuring that the public service ethos offered by the post office network will remain. An Post is fully aware of the Government's position in relation to the network.