Postal Services: Motion.

Mr. Durkan

I move:

That Dáil Éireann,

acknowledges the:

central role and function of the post office and postal services in the social and economic life of the country;

commitment of the post office, collection and distribution services since the foundation of the State;

ongoing need for the provision of a modern, efficient, reliable and competitive postal service through An Post, in keeping with the demands and requirements of the consumer and deregulation;

potential value of the broadly based network of post offices, sub-post offices and staff; and

need for the necessary legislative or management decisions required to facilitate the provision of modern postal, packaging and transmission service in the future;

calls on the Government to:

address any outstanding labour relations situations within An Post which have caused unease and distrust in the workforce and clarify the circumstances whereby salary or pension payments or increases, due or anticipated, are to be met;

provide for the computerisation, modernisation and upgrading of the entire network of post offices and sub-post offices with a view to providing a reliable, efficient and cost effective next day delivery service throughout the entire country;

recognise the need to address the appalling low level of pay to a substantial number of postmasters who effectively have subsidised the service by providing premises and working at a rate below the minimum wage and in some cases, below the poverty line;

recognise the existence of a public service obligation, notwithstanding deregulation;

facilitate the development and extension of a wide range of compatible services through the post offices; and

encourage all Departments, such as the Department of Social and Family Affairs, to use the services of An Post for payments or other financial transactions or transmissions and the Department of the Environment, Heritage and Local Government to facilitate the provision of an accurate voters register.

I wish to share time with Deputies Crawford, Naughten, Hogan, Connaughton, Deenihan and Pat Breen.

An Leas-Cheann Comhairle

The Deputy may share his time.

Mr. Durkan

First, I call on the Government to use its influence in a positive way to address any outstanding issues relating to labour relations in An Post, which have caused unease and distrust in the past, and to clarify the circumstances whereby salary, pension payments or increases due or anticipated are to be met. I readily recognise that the chief executive officer of An Post has done a tremendous amount of work in this area and is obviously seriously engaged in the work. Both he and An Post will require the imprimatur of Government to ensure that all outstanding issues are dealt with. This is because the Government set aside sections 45 and 46 of the Postal and Telecommunications Services Act 1983 and made it difficult for us to raise questions about the matter afterwards. The Government was in the best position to positively influence what is required in this area. My colleagues will deal with this further.

I call on the Government to use its influence in a positive way to provide for the computerisation, modernisation and upgrading of the entire network of post offices and sub-post offices with a view to providing a reliable, efficient and cost-effective next-day delivery service throughout the country. The first thing we must realise is that to ensure there is a future for the entire postal service, we must have an efficient, cost-effective and reliable service. It is no good having glitches in the system. We must resolve all these problems once and for all. I know that some of these issues are in hand, but to deal with them effectively, the Government, particularly the Minister for Communications, Marine and Natural Resources, must bestir themselves and ensure that they are fully au fait with what is required.

We must recognise the value of the network and ensure we face competition. Two things can happen with deregulation, from which we are only a hair's breadth. We can maintain a strong, vibrant and effective postal service and ensure its existence into the future or we can throw our hands up in the air and say that nothing can be done. Some commentators say modern technology has replaced all this and that things will be done differently in the future, but I do not agree with this. There must and always will be a place for the transaction of business at local and community level throughout the country. There is so much emphasis on community enterprise at the moment that if we fail to recognise that critical element of bringing the technology to the people, we will fail the people. I call on the Government to use its combined influence in a positive way to ensure these matters are dealt with.

We must recognise and address the appallingly low level of pay to a substantial number of postmasters, who have effectively subsidised the service by providing premises and working at a rate below the minimum wage and, in some cases, below the poverty line. I do not know whether the House fully recognises the importance of this, but there has been a fairly sizeable number of postmasters who have worked and provided a service in their own premises to such an extent that they have effectively worked for nothing. A recent survey showed that approximately 75 or 76 of them have been working at a level of pay below the poverty line. There is now an opportunity to recognise and address these issues without more ado.

I presume the Minister will be home tomorrow and if he has given up the Tannoy in Hanoi, he will have time to return and address these issues in a very positive way. Even if he does not do so, I can rely on the Minister of State at the Department of Communications, Marine and Natural Resources, Deputy Browne, who, as a Member from Wexford, is fully aware of the critical role likely to be played by the postal service in the future and will recognise those people who have given of their best for so long with so little recognition. We now have the opportunity to recognise them.

Notwithstanding deregulation, we must also recognise the existence of a public service, or universal, obligation. The Minister or someone else might tell us there cannot be any assistance for a utility service because it is deregulated, but this is not true. Other countries have had to do so. In most European countries, some assistance is given either by way of direct grant, public service obligation or some other means. I do not wish to see the quality and service of the postal delivery services in this country drop down to the level of that in some European countries with which we were all familiar in the past. We laughed at the fact that, after we came back from holidays, the postcard we sent on the first day of our holiday arrived home two or three weeks after we arrived home.

Communications in the modern era are very important. We cannot underestimate the value of bringing the power of modern communications to local people in local areas. I have mentioned the need to computerise and upgrade. In addition to Fortis Bank, there is a vast number of compatible services which can be tagged on to the postal service with no additional cost. It can be done simply by fully utilising the availability of the services that are readily available and the goodwill of the staff involved.

We must facilitate the development and extension of a wide range of compatible services through the postal system and encourage Departments, including the Departments of Social and Family Affairs, to get involved. The Department of the Environment, Heritage and Local Government could be encouraged to get involved if it wishes to update and upgrade the register of electors on a regular basis. The obvious place to go in this regard is the post office whose staff go to almost every house in the country on a daily basis. No other group of people has the same access to and knowledge of dealing with the public as post office staff.

We all know about the instructions given to the Department of Social and Family Affairs in respect of electronic money transfer. The post offices will now have the services of a bank alongside and integrated within them, which is to be welcomed. We should take full advantage of this. The Government should have the courage of its convictions and, through the Minister or the Taoiseach, if necessary, issue instructions to the Department of Social and Family Affairs to ensure the major amount of this business is transacted through post offices.

The time has come for us to provide a good, honest, reliable and effective service and to recognise the effectiveness of the service that once existed and should exist again if that driving force from the Government is there. I do not accept that we should leave all this to regulators or anyone else in the future. We have witnessed the farcical situation pertaining to regulators in the past few weeks where, flying in the face of public opinion and all other economic indicators, the Commission for Energy Regulation approved increases in gas and electricity prices, but subsequently climbed down and pretended that a reduction by a small amount in the increases now represented a decrease. That was the greatest farce of all time. I do not want to see the same thing happen in the postal services. It says much about the impartiality and independence of the regulators. Let there be a clear commitment on the part of the Government to put in place the measures necessary to ensure that the postal service will survive and will be effective, viable, sought-after and supported by the people.

Mr. Crawford

I thank Deputy Durkan for raising this very important issue in the Dáil. Only some months ago An Post withdrew fully the services of a post office in Rockcorry, a village in my constituency. It got the opportunity when the then incumbent was going out of business. Prior to this closure, the local post offices in Stranooden, Swans Cross, Doohat and Aghabog were closed. They were closed simply because the income the incumbents were receiving was so low that nobody else in the area was prepared to take them on. No great fuss was made by the rural population and they accept they cannot have everything and that costs must be taken into account. However, the removal of the postal service from Rockcorry, where many houses have been built and hundreds more are proposed, is completely unacceptable.

For reasons that have not been well explained, the closure was not indicated when it was first stated the post office would be moved from its existing location. We were initially told there would be an advertisement and that a post office would be put in the place of the old one but, as soon as the application appeared, it became very clear that the new operation would not be a post office but an agency. The applicants wanted an agency in the supermarket, filling station or wherever else they could put it. A number of applications were received and I wish the successful applicant all the best. However, one should remember that a service has been removed from an area that has no bus service or other means of transport to the nearest town, Cootehill, which is five miles distant. This town is not even in the same county.

In another post office in County Monaghan, which is smaller than the one in Rockcorry, there is a new computerised system. It is great and if it had been installed in the post office in Rockcorry, there is no doubt that it would have been able to provide a better service.

There should be political accountability. When the Minister in charge was contacted regarding the case in question, he said he had no role in the matter. He had handed over responsibility completely to An Post, which is totally in charge. Surely there should be ministerial accountability and some understanding that such closures should not happen.

Deputy Durkan referred to labour relations. It is vital that there is an agreement on the income of post office staff. If it were not for their receiving additional income, they certainly could not stay in business. Computerisation and modernisation of the village-type post office is required to ensure it is not done away with. It is important that An Post is warned that if it tries to remove the postal service from Cootehill, which is the main post office in the region, and turn it into some sort of agency or private affair, there will be a major reaction.

An Post has a great opportunity to build up a service. In the early days of the State, one could post a letter in Dublin and be sure it would reach County Monaghan the next morning. One could receive a reply the next evening. For some time, however, it has been taking weeks for letters to arrive. This must be addressed. There has been some improvement but dramatic change is required. An Post provides a useful service and the Government should not let the network be destroyed.

Mr. Naughten

Post offices are valued not only for the business they do but also for the wider social role they play. In rural areas and some deprived urban areas, post offices play a crucial role in sustaining local communities. In many areas, they help to keep open the only village shop or other retail outlet. They regularly provide support and advice for vulnerable people and can often act as a focal point for the whole community.

The Minister for Communications, Marine and Natural Resources must bear in mind the rapid speed at which rural post offices are closing. The local post office is the heart of many rural communities and there are serious concerns that the large number of closures will accelerate in 2007. County Roscommon has lost 20 post offices since 2000. Twelve have been downgraded to Post-point agencies with a limited service and eight have been closed completely. In County Leitrim, a further 20 have been affected in that 13 have been downgraded and seven have been closed completely. Such decisions have a direct negative impact on the communities served by the post offices. Not only are the communities losing existing postal services but, with the introduction of the full banking service by An Post next year, they will also be denied new and improved services in the future. The expansion of An Post into the banking sector will become important and many of the banks will pull out of the smaller towns. It is, therefore, very disappointing that nothing has been done in the past ten years to support the rural post office network.

The European Court of Justice recently notified the Minister for Social and Family Affairs that the €50 million social welfare contract, currently held by An Post, will be put to tender next year. It is anticipated that An Post could lose this contract because the Department seems intent on focusing on the electronic transfer system. As a result, it is likely that many more post offices around the country will close.

The network has become increasingly reliant on a few lines of business for the majority of its revenue. In order for the sub-post offices to remain viable, the number of services and volume of transactions must be increased dramatically. The use of information technology is fundamental to the maintenance of the post office network throughout the country. While it is stated Government policy to improve information technology and Internet access throughout the country, especially in rural communities, it has paid nothing but lip service to the concept. Many parts of the sub-post office network have not been upgraded with electronic services.

Responsibility for modernising the network clearly rests with An Post but the Government also has a role to play to ensure post offices have the resources to make the network operate efficiently. With immediate effect, the Government must ensure that every sub-post office throughout the country is computerised, thus dramatically expanding the number of services provided. This would allow non-automated sub-post offices to provide services such as Passport Express, issue prize bonds and offer banking services, which are unavailable at present.

Opportunities exist to diversify into new lines of business, including e-commerce and one-stop shops for Government information and carrying out transactions. Over recent years, the Department of Agriculture and Food has facilitated on-line access for farmers but, owing to the lack of broadband in rural areas due to the Government's incompetence, access to the service is limited severely. The Department, in conjunction with An Post, should devise a scheme to allow post office staff make electronic returns on behalf of farmers. Many more Government services could be developed if the political will existed, but it does not seem to be evident at present.

The social role of post offices is important in rural areas. In many rural areas, post offices have remained while other services have been withdrawn. New lines of business should replace most, if not all, of the lost revenues. I commend the motion to the House.

Mr. Hogan

I thank Deputy Durkan for allowing me a few minutes of his time to make some general points about the importance of the post office network throughout the country, not just in rural areas. The Taoiseach and Leader of the Minister of State's party has made much play of the importance of community. He even brought in an American sociologist, Mr. Putnam, some time ago to educate the parliamentary party about the importance of community. This, however, does not seem to resonate too well with the Minister of State and his colleagues when one considers how they have stood idly by and allowed the post office network to disintegrate without any interest from the party in helping to ensure that some vital responsibilities and services are left, such as the service in many rural areas.

This recalls the comments and expert advice that suggested the Garda station should be in a central location and the squad car with one or two gardaí would solve all the problems within a 20-mile radius. We know now that anti-social behaviour and criminal activity are not confined to the precincts of a Garda station in a central location but are rampant throughout the country. We need to relocate and reopen Garda stations that Fianna Fáil Ministers and the Progressive Democrats Minister for Justice, Equality and Law Reform have closed down, through their policies, in recent years. It makes no sense that, at a time of unprecedented growth in housing developments in many villages, some planned but much of it unplanned, provision is not made for essential community services, such as crèche and sporting facilities, Garda stations or post offices.

It is difficult to understand the Government's rural development policy. Before the last general election, the Minister of State at the then Department of Agriculture, Food and Forestry, Deputy Davern, published a very noble rural development policy mentioning, among other things, the importance of the post office network. He said a viable community would need a central State service such as An Post that could disseminate information or other services. Instead, in my constituency of Carlow-Kilkenny — I am particularly familiar with the Kilkenny end of it — post offices have been closed in Stoneyford, Hugginstown, Kells and Jenkinstown. Even that in my parish of Tullaroan was recently downgraded. An Post is buying off the post mistress or master with a few euro, creating a redundancy package for the individual, closing the post office network without the Government intervening to halt this undesirable development.

The motion before the House calls for the upgrading of a service that has stood the test of time. Apart from the economic service, it has been essential to social contact and communication. The Fianna Fáil and Progressive Democrats Deputies know that this issue will strike at the heart of rural communities if it is not resolved quickly. I ask the Minister of State to take an interest in intervening in these matters as the then Taoiseach, John Bruton, did in 1996 when his post office was under threat in Kilcloon, County Meath. He intervened directly, stating categorically to the board of An Post that as a matter of Government policy he was not prepared to accept the downgrade. That is the type of initiative required to ensure that we have an essential rural service.

I ask the Minister of State to ensure, in small urban or rural communities, a State network through An Post that provides a wide range of services, apart from post office responsibilities. What better way to take on board the one-stop shop provision, enunciated in the motion, than through an existing State network, the post offices. The Government should take into account its social responsibility to all the people, rural and urban, and ensure that the computerisation of those services is not further neglected. It should ensure that other post offices do not follow those already closed which are starved of investment until the post master or mistress is bought off with a few euro and the service is no longer available. Deputy Durkan has done the House a good service in tabling a motion that will put it up to the Government Members tomorrow when the vote is called. We will see what kind of amendment the Government uses to challenge the Opposition in providing an essential rural and urban network for service provision.

Mr. Connaughton

I too congratulate my colleague, Deputy Durkan, on this important motion. The only problem in An Post is that it has no overall strategy because the Government does not want it to have one. The easiest way out of this problem is to let the light go out slowly across the country as long as it does not come back to shine on the Government. I know of no other national organisation that provides a service such as An Post, yet seems not to have any objectives. If it had targets it could not meet them. It allows this to happen because it knows that neither the Minister for Communications, Marine and Natural Resources nor the Government could care less what it does.

If this Government is allowed to continue the erosion of services from rural Ireland not only will there be less traffic through the local post office but there will be fewer post men and women. Instead of daily deliveries, post will be delivered only three days out of five in rural areas. That is coming down the track. Did the Minister of State see what the regulator said about An Post's delivery service? One expects a letter posted in Dublin to arrive in Ballinasloe or Clonakilty the next day. There is no magic in this. The post office was better able to do this 20 years ago than now. Only 74% of letters posted in Dublin this evening will reach the provinces tomorrow. What happens the other 26%? No one notices that. This is an insidious procedure because the Government hopes that the network will pull itself down until it says it could not possibly make a delivery in the far-flung regions of the country every day of the week. That is where we are heading.

The Government is ensuring that every component of the An Post service is under pressure. Everyone talks about the minimum wage, and rightly so because the non-nationals who come here are entitled to be treated with dignity. Most of our own people, however, working behind the post office counters for 12 hours every day receive less than the minimum wage. They are in some of the best buildings in the most advantageous places possible in our towns and villages, yet they are paid a pittance.

When the incumbent retires or takes the few euro redundancy, An Post has an opportunity to close that post office. The age profile of postmasters and mistresses is rising by the day. There will be no trouble closing more post offices by stealth when the incumbents have retired or died, whether the post office has many customers. That is where the link is broken. The Government should insist on An Post having an overall set of objectives or a plan for where it wants the organisation to go in the next ten, 15 or 20 years, taking into account the importance of balanced regional development and all the other issues which I do not have time to cover. The local post office provides an important service in all areas. I assure anyone listening to or watching this debate that if more direction is not provided from the Government to ensure An Post gets its act together, there will be considerably fewer post offices, postmen and postwomen, and far fewer letters delivered.

Can one imagine the blow it is to places in my constituency of Galway East such as Clonbern, Newbridge, Kiltormer, Kilreekill and a host of other places? In those relatively big areas, one cannot even post a letter and one certainly cannot draw the pension. That is some service in rural Ireland.

Mr. Deenihan

The post office network plays a critical part in the social and economic life of rural Ireland. The postman or postwoman is probably the only person with whom many old people, in particular, would have contact on a regular basis. He or she is the only person calling to many houses on a weekly basis, apart from perhaps a doctor or relative. That is why the network is so important for the future of rural communities.

I refer to conclusion No. 4 of the FGS report which states that Government policy on the post office network is vague and, unlike the majority of EU countries, Ireland does not have a specific minimum requirement in regard to the size and coverage of the post office network. It also stated that, as a result, current policy in regard to the post office network would do little to prevent the current ad hoc decline in the number of post offices. This statement highlights the lack of specific policy on the post office network which arises due to the ambiguity as to what is meant by “sustainable” and “nationwide service”. It is this ambiguity which allows politicians to fully support the sustainable development of the rural post office while, at the same time, the number of post offices is in rapid decline.

Irish policy is in marked contrast to two thirds of that in EU countries where specific criteria exist regarding the number of post offices. Given that the Government uses 1997 as a benchmark for defining economic policy, I remind the Minister that on 1 July 1997 there were 1,818 contractors operating post offices on behalf of the Government, while the current number is 1,294.

Mr. Durkan

And falling.

Mr. Deenihan

That is 524 fewer than in 1997 and the number is falling. That is a massive drop. The number of company staffed branches has fallen from 97 to 84. We have lost 537 post offices since the Government came to office which is a major indictment of the Government.

Many European countries have adopted a specific strategy that sets a ratio of post offices to population that guarantees access for all citizens to a post office within a given number of kilometres from their home. Few of the European post office networks are capable of being self-financing or require support from their respective governments in some fashion, which they are getting. Some support is by way of direct subsidisation while in other cases it is merely by way of intermittent contributions to network modernisation. The bottom line is that they receive direct support. The absence of Government policy and the size and distribution of the network is the fundamental problem to be overcome before addressing the future of the network and how it should be secured.

I thank Deputy Durkan for raising this issue in Private Members' time because the post office is very much a part of all our lives. Likewise, the postmaster is an important individual in communities. With regard to the range of services operated from post offices, we should seriously examine making post offices tourism information points also. A new system of tourism information has been rolled out by Fáilte Ireland wherein all tourism points have been centralised under its control. Fáilte Ireland should investigate the possibility of using post offices.

I seek clarification from the Minister on one point. It appears the Department of Social and Family Affairs is encouraging people to have pension payments paid directly into bank accounts which would remove post offices from the equation. That is becoming the norm for social welfare payments. In itself, this will affect a significant number of post offices.

Mr. P. Breen

I commend Deputy Durkan on bringing this motion before the House. The closure of rural post offices has been before the Government for the past nine years and there is little evidence of any substantial progress in reversing the decline. The figures are startling in that one quarter of post offices have closed since 2000. There are now only 1,365 post offices in the country and just 84 of them are full post offices. The remainder are sub-offices and these are in grave danger also. A substantial number of these post offices are still non-automated. Recently, in my constituency, two post office closed. One was in Kilnamona, and it is not intended to replace it, and the other is in the rural area of Carrigaholt. As previous speakers stated, few people are interested in taking up the position of postmaster there as An Post does not pay enough for them to make a living.

Deputy Connaughton referred to the fact that post offices are located in prime villages but they also are in vulnerable locations. Recently a major robbery took place at the post office in Doonbeg in which €40,000 was taken. Post offices are a constant security risk.

A study in Britain by the New Economics Foundation found that in urban areas every €15 earned in post offices generated €24.30 for the local economy. The ratio would probably not be as great in rural areas but it is no less important. The loss of a village post office can have a detrimental effect on the local economy. If pensioners are no longer drawing their pensions in post offices, they are no longer providing business to the local shop. They are forced, where possible, to drive to the nearest large town. For those with access to transport, which many people do not have, it creates further congestion on our roads and further expense for the individuals concerned, or their relatives, in making the trip. Post offices are a centre not only for the local community but also for local businesses.

It is not good enough for An Post management to wash its hands of a sub-post office when it fails to find an operator to take over a post office when a postmaster or postmistress resigns. Equally, it is not sufficient for the Minister for Communications, Marine and Natural Resources to state in reply to parliamentary questions that he has no role in the operation of post offices and that the issue in question is a matter for An Post. That is evading responsibility because, ultimately, the Government has responsibility for such matters.

Deputy Crawford referred to a closure in his constituency. One cannot blame people for closing down offices as many people are making as little as €15,000 a year for working long hours and opening five and a half days a week. In many cases, post offices are not commercial entities and they are not sustainable as such. On the other hand, An Post made a profit of €41 million last year. This shows there is clearly something wrong in terms of priorities. While An Post is to be congratulated on the range of services now provided in main post offices, including savings and investment schemes, prize bonds, banking and paying bills, money transfers and insurance products, An Post should not be in it just for the money. There is nothing wrong with making substantial profits but my concern is how those profits are used. Much of those profits should be put back into the branch network to make rural branches viable as businesses. Deputy Durkan stated that we should recognise the existence of a public service obligation notwithstanding deregulation.

An Post's service has declined in recent years. Previously, if one posted a letter in Ennis at 8 p.m., it was delivered locally the following morning. If one's letters are not posted at the main post office in Ennis by 5 p.m., they will not be delivered the next day. They will have to go to the central office in Cork and, as Deputy Connaughton said, delivery could take up to three days. In this day and age a letter should be delivered within 24 hours and there should be a following day delivery rate of 95%.

An Post management needs to make some fundamental policy changes affecting the profitability of rural post offices if the decline in their numbers is to be reversed and we are to avoid turning rural villages into ghost towns. As Deputy Hogan said, this is already happening in the case of Garda stations and rural pubs.

Minister of State at the Department of Communications, Marine and Natural Resources (Mr. Browne)

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"recognises:

the challenges facing An Post in regard to electronic substitution, postal liberalisation and the competitive threats from private operators to both the post office and mail services;

the substantial progress made in restoring An Post to financial stability after a series of losses amounting to almost €70 million between 2001 and 2003, inclusive, and the need, because of the low margins in the postal industry, to be vigilant against slippage into a loss-making position again;

the putting in place of a new industrial relations framework following difficult negotiations between company management and trade unions in order to turn An Post into a vibrant customer-focused organisation and to ensure there will be no repeat of the scale of the losses experienced between 2001 and 2003;

the statutory underpinning of the postal network, as set out in the European Communities (Postal Services) Regulations 2002 which provides for universal service obligations, USO, including nationwide postal deliveries at uniform tariffs and, in recognition of the USO, the designation of An Post as the sole operator in part of the postal market;

the key role for the post office network, as set out in the programme for Government and in the White Paper on Rural Development building on the intrinsic strengths of the network in terms of nationwide reach, high customer footfall and strong relationship between postmasters and their customers; and

the high degree of automation already undertaken in the post office network, with 1,000 of the offices already computerised and with automated offices undertaking over 95% of post office business;

notes:

the payment of €20 million to An Post employees and postmasters in October which represents Sustaining Progress arrears;

the remuneration increase of 63% paid to postmasters since the end of 2000;

the number of extra contracts obtained for the post office network in recent years including the AIB contract, utility business payments and Garda fines;

the work undertaken by Mr. Eamonn Ryan, at the request of the Minister for Communications, Marine and Natural Resources, to facilitate improved interaction between An Post and postmasters in relation to strategic issues facing the network;

the commitment of the Government to the post office in terms of the arrangement with the Department of Social and Family Affairs for welfare payments and the NTMA for retail savings products; and

commends:

the commitment of the Government to the future development of the post office network, as evidenced by Government approval to the joint venture proposal with Fortis which will harness the existing strengths of the network to develop a financial services business providing a range of banking services, thereby providing an improved income stream for postmasters".

The Minister, Deputy Dempsey, regrets he is unable to be present.

Mr. Durkan

I bet he does.

Mr. Browne

I wish to share ten minutes of my time with the Chairman of the Joint Committee on Communications, Marine and Natural Resources, Deputy O'Flynn.

The communications sector is changing rapidly. As part of that sector, the global market for postal services is facing a number of significant challenges, including an increasing amount of correspondence conducted by e-mail, falling mail volumes and the threat to post office business from a move to the on-line provision of services. There are, however, a number of opportunities for postal operators, including An Post, particularly in the stimulation of parcel business caused by increased Internet use. However, the opportunities arise in an increasingly competitive environment. For this reason it is key that An Post continues with its current phase of restructuring in order to provide the range of products and services necessary to thrive in a competitive environment.

The Government is firmly of the belief that there will continue to be a key national role for An Post, both in delivery of mail and as a quality service provider of Government and financial services through its nationwide network of post office outlets but, like all national postal operators, it has to change rapidly to stay competitive and commercial in the European postal market. One thing is certain: it is absolutely imperative that An Post avoids a return to the loss-making situation. In order to achieve this it will require hard work, a commitment to achieving the goals set out in the company's recovery plan and a strong entrepreneurial outlook to exploit opportunities as they arise. This can be done by making the best possible use of its long-established and trusted brand name and deploying its resources in a manner which continues to serve existing customers' needs and attract additional customers for a range of new services.

Deputies will be all too aware of the financial difficulties An Post has faced in recent years, where it recorded losses in excess of €70 million between 2001 and 2003. There is widespread agreement that change is required if the postal services of An Post are to adapt to the modern business environment and the likely increase in competition to ensure it continues to offer a top class nationwide delivery service to the customer into the future. With this in mind, the board and management of An Post prepared a recovery plan, incorporating details of proposed new collection and delivery arrangements which are now in the process of being implemented and which will re-establish the company on a more secure financial footing.

To successfully overcome the range of challenges presented by the prospect of greater competition and electronic substitution, it is important that changes in the company's collection and delivery operations are implemented. In this regard, the company's recovery plan provides for a reduction in numbers of approximately 1,400 in collection and delivery, through voluntary redundancies and non-filling of vacancies, together with changes in existing work practices. The changes will increase operational flexibility and significantly reduce the company's existing cost base. Such changes will enable the company to provide a cost effective mail service and quality of service standards which meet customer expectations. Furthermore, a key element of the plan concerns the continuing implementation of a major change programme throughout the company to deliver significant cost savings and efficiencies. The scale of the change required is, inevitably, having an impact on staff throughout the organisation, as it involves the restructuring and rationalisation of management positions, reductions in staff numbers and curtailment of overtime, as well as substantial non-pay cost cuts. Members will recall that the recovery plan was the subject of a very difficult industrial relations exercise last year and has now been resolved successfully.

I understand all pay increases provided for under Sustaining Progress, including the payment of €20 million in back pay, which were the source of much of the industrial unrest at the company have now been paid to staff members and passed on to the company's pensioners. It is up to all parties to ensure the process for full implementation of the change programme that is so essential to placing the company on a firm financial footing and securing its future is achieved fully.

With regard to the post office network, the Government and the board of An Post are fully committed to the objective of securing a viable and sustainable nationwide post office network through a strategy of maximising the volume of both public and private sector business handled by the network. This is set out clearly in the programme for Government.

In this context, An Post needs to implement an IT platform to comply with this and other requirements. While the Government will support the network in any way it can and the Minister has made it clear to the board and management of An Post that he will be supportive of them in their efforts to ensure the post office network continues to develop and thrive, the development and continued viability of An Post and the post office network is, in the first instance, a matter for the board and management of An Post. Consequently, the way forward is for An Post to enhance existing services and, building on existing strengths, to develop new product offerings. There is also an urgent need for it to diversify its income streams and those of postmasters. In this regard, the Government is aware that An Post, in partnership with postmasters, has had some recent success in acquiring new business for post offices. Many Members will no doubt be aware that, in accordance with a contract between An Post and AIB, customers of that bank can now transact business at more than 1,000 post offices.

The key to ensuring the post office network remains competitive and attractive to customers is to ensure it is technologically in the best possible position to retain its current contracts and avail of business opportunities as they arise. A key step in this regard has been the automation of the network which was completed in 1997.

Mr. Durkan

In 1997.

Mr. Browne

Some 95% of all post office business is conducted through its automated offices. The company has recently conducted a pilot project to computerise ten small post offices. The automation pilot project has recently been completed and the results of this trial are being assessed with a view to informing future decisions on network automation. I understand the Minister will be informed of the results once the analysis has been completed.

On foot of large-scale investment in the computerisation of the network, the company has also had some degree of success in winning new business. The past year has seen business growth in its contract business with AIB, Western Union gift vouchers, Garda fines and Billpay. Reflecting this improved business activity, since 2000 postmasters' income has increased by 63%, which compares with increases of 34% under national wage agreements over the same period and 22% in the consumer price index. The Government recognises that the matter of postmasters' remuneration is still of concern to the IPU.

Challenges remain and like all businesses, if An Post is to prosper and to grow, it must adapt to the demands of its customers and place delivery of quality services to its customers as its primary focus and objective. Automation and technology alone will not bring in the business required to support the network.

Mr. Durkan

It would help though.

Mr. Browne

The challenge for the company is to develop a strategy that satisfies the needs of existing customers, while attracting new customers into the post office in order to maintain as large a network as is viable. Despite what has been said on the far side of the House, the Minister requested the company to develop a strategy for the long-term development of the post office network. In response to this request An Post examined options relating to the operation of a jointly owned entity termed An Post Financial Services, APFS, to supply a wide range of retail financial services through the post office network and other channels, using the An Post brand and other An Post assets.

Negotiations were concluded between An Post and Fortis in the summer and the Government approved the An Post board to proceed with the joint venture which it is anticipated will be launched in early 2007. Its launch will see the establishment of a full service retail bank which will be a separate legal entity to An Post and Fortis, in which both An Post and Fortis will have an equal shareholding; the introduction of a state-of-the-art banking IT platform — the joint venture will invest significant sums of money in upgrading the network in the next five years; the opportunity to diversify and increase the revenue streams for An Post and postmasters through commissions for the sale and servicing of products; the initial employment of approximately 250 people, which number will rise to 500 within five years; an enhancement of banking services in rural areas; and the introduction of additional competition to the banking sector. The primary delivery channel for product and services will be via the post office network, with An Post being appointed as sole provider of financial services.

This deal will result in real investment in the post office network and technology that should place An Post on a platform to continue to win more business and, in particular, higher value financial services and ensure An Post can compete for business on a level footing with other financial services institutions. The deal will enable the company to deliver the quality customer services now demanded by the public and also means that social welfare recipients will have more options on their preferred method of payment. We all regularly hear concerns about the future of our extensive rural post office network. This deal will result in investment in the network in both urban and rural areas at a time when many of the private sector financial institutes are withdrawing their facilities from many rural locations.

The way forward for the postal services is to ensure that we have, on the one hand, adequate competition and, on the other, no diminution of the universal service. The development of further competition, allied with a modernised and customer-focused An Post, will provide the basis for the further development of the postal sector.

It is disheartening for me to recall the selling off of high street properties and tracts of land to fund the day-to-day operations of the company. The latter came about as a result of poor financial management and industrial relations. In addition, €150 million——

When this report and that relating to the pilot scheme are considered in 2007, I hope we will move towards ensuring all post offices will become fully automated.

Mr. Durkan

Hear, hear.

Mr. O’Flynn

The Minister of State has indicated post office work is high volume in nature and involves low margin transactions such as welfare and utility bill payments. Such payments can be transferred to any banking facility. As the Minister of State said, the network is dependent on the two contracts currently in place, namely, that relating to social welfare payments and the NTMA's small savings products.

I seem to recall the representative of the Irish Postmasters Union informing the joint committee that its members would embrace this technology. I am disappointed that the union has withdrawn from the negotiations.

Mr. Durkan

They will not do anything unless they are paid.

Mr. Durkan

The Deputy should vote with us tomorrow.

I wish to share time with Deputies Moynihan-Cronin and Upton.

Acting Chairman

Tá go maith.

Mr. Broughan

I pay warm tribute to the postmen and women of Ireland, with the postmasters and postmistresses, as they enter their busiest season. One must remember that at this time every year, the post office renders outstanding service to the nation. Over the next three and a half weeks or so, it will deliver large volumes of mail to every household and business in the State. That is a really hard job, and we often find ourselves walking around parts of our constituency with postmen and women. I commend and salute them on the valuable work they do for the nation. I congratulate them and once again look forward to a very happy Christmas for our delivery and post office staff.

I also commend Deputy Durkan and Fine Gael on introducing a motion on the vitally important issue of the post office network. It is ironic that in April the Minister for Communications, Marine and Natural Resources, Deputy Dempsey, told delegates at the Irish Postmasters Union conference that the "government recognises the strong social function that the post office plays ... and it represents a link between the citizens and the state ... that should be maintained and strengthened".

If that is so, why is the network slowly being decimated? In practice, the Minister has overseen an unprecedented attack on the long-term sustainability and viability of the post office network. The number of post offices plummeted under the Minister and his predecessors, Deputy Dermot Ahern and former Deputy O'Rourke. The rate of closures is now so great that at one stage last year I calculated that there was one every ten days. This year that has risen to one every seven days and it approaches one every six days, a truly appalling record on the part of the outgoing Government on a key national service.

Even worse, it has evoked no response from the Minister, Deputy Dempsey, or his Government colleagues. Throughout his period in office as Minister for Communications, Marine and Natural Resources, he has prepared no national plan or strategic policy for the post office network but has allowed post offices to close right, left and centre from one end of Ireland to the other.

Mr. Durkan

Hear, hear.

Mr. Broughan

We continually hear the Taoiseach and Ministers regurgitating a long list of statistics before the cameras. We must listen to it daily, and today it concerned the Minister of State's portfolio in the health area. The Taoiseach told us how many hundreds of millions the Government had spent, but the one statistic that Fianna Fáil and the Progressive Democrats do not want us to know is that they have closed almost half the post offices in Ireland.

Ms B. Moynihan-Cronin

Hear, hear.

Mr. Broughan

They have eviscerated the post office network. If I started reading out the names of those closed since summer 1997, I might be here until 9 p.m. That is a disgraceful record. In the last 11-month period, communities around the country, including Whitehall and St. Margaret's in Dublin, Brandon in Kerry, Tomhaggard in Wexford, Grangecon in Wicklow, Church Cross, Kildinan and Carrigrohane in Cork, Martinstown and Holycross, Kilmallock in Limerick, Crosspatrick in Tipperary, Drumcree in Westmeath, Cranford in Donegal and many others have been bereft of a critical postal service.

The list of closures is staggering. In the past five years no corner of Ireland has been left untouched by the hammer-blow to the local community that a post office closure entails. Last week, when I spoke on the issue on RTE, I made the point that for a long time, as everyone in the House knows, the post office was the focal point of each community and a visible sign of the Irish nation and our Republic in every hamlet and town. The Government has slashed that service across the board.

Although there has been a massive decrease in numbers of post offices, it has been difficult to get a completely accurate picture, since the Minister, as Deputy Durkan will know, has continually practised obfuscation when providing figures and tried to include all kinds of elements such as postal counters, agents and so on. However, he cannot deny that there have been 44 shameful closures in the past 11 months.

A report that I recently received on the period since 2000 shows that 505 post offices have closed. The newspaper article associated with it termed it the death of the rural post office. That is one example of what the Government has done to the country. As Mr. John Kane, the very helpful General Secretary of the Irish Postmasters Union, starkly told the Joint Committee on Communications, Marine and Natural Resources, "parts of the state have been denuded of post offices, particularly on the western seaboard from Donegal to west Cork". He also said that post offices had been closed across the country on a "haphazard basis".

I had that experience in my constituency, not in a small rural area but in one of 2,000 households and 8,000 people, the parish of Priorswood in Dublin North-East. The post office was transferred from the local shopping centre where people could access it, without reference to anyone, to a new Tesco centre over a mile away. Many senior citizens now face a weekly trek to the new shopping centre at Clare Hall or to the Northside Shopping Centre, causing them great dismay, which is also felt by mothers of young children and the many customers in the area who may live over a mile from public transport.

Local business people, led by a very popular local pharmacist, Mr. John Corr, immediately contacted An Post and me to seek a reversal of the decision as the closure of Priorswood post office was such a grave inconvenience to those 2,000 households. In this building, I met the chief of operations, Mr. Larry Donald, who has since left the company. We had a lengthy discussion on the subject, but, as in my contact with the outgoing chief executive, Mr. Donal Curtin, I learned that there are no criteria to decide whether a post office should close, none on expanding rural areas such as those on the periphery of the Minister of State's fair city of Limerick or my own, Dublin, and none on opening new post offices. No one knows what the criteria are, and if An Post knows, it is not telling us. Perhaps the Minister, Deputy Dempsey, will not allow them to do so.

We fought a valiant battle in that area but were unsuccessful. The Acting Chairman will know that I have tried to represent a valiant group in his constituency, the Lombardstown Post Office Action Group in Mallow, County Cork, led by Mr. John Paul O'Shea, which has been in regular contact with my office, in its desperate campaign to retain a service. Among its key problems is that it is not computerised, and the chairman of the committee mentioned that there are almost 400 such offices around the country. I have made representations and I see that Ardgroom, on the western edge of the Beara peninsula in County Cork, with others across this country, particularly in the western counties, has made representations for automation that simply does not happen.

An Post has correctly signed a deal with the Fortis group of Belgium, a famous financial services company with a brilliant track record, to provide such services in every locality in Ireland. However, there will now be 600 or 700 such areas that cannot have the service because the Government has presided over the closure of their post offices. Second, another 400 cannot offer it because they are not automated, which is crazy when, at long last, An Post has undertaken a positive initiative.

The Government must also bear responsibility for the allied problem of social welfare contracts. We know that there is electronic substitution and that the Department of Social and Family Affairs is very interested in moving towards such payments, but we do not understand why the Government has not stood up for An Post at European level regarding the post office contract.

We have also heard threats from the National Treasury Management Agency. It attended the Committee on Finance and the Public Service and stated that it would withdraw from the Post Office Savings Bank, which represents small beer and so does not matter. However, it matters because it is a key function and the NTMA has an obligation to fulfil it, having been given it by this and previous Governments. It is important that such business, often representing up to 75% of that of postmasters and postmistresses, is left in the hands of the post office.

We have also recently seen the notorious problem, particularly in urban areas, of "tiger" raids, disgusting attempted and actual abductions of postmasters and postmistresses. The Labour Party is concerned about the response of the Minister for Communications, Marine and Natural Resources, Deputy Dempsey, to these outrageous attacks on workers who provide such an invaluable service to their communities. When Deputy Durkan and I tried to raise this matter on the Order of Business recently, moreover, we got short shrift from the Tánaiste.

The 2009 deadline for the full liberalisation of the postal market is significant. The Labour Party believes a national postal strategy is essential, but it will not happen without Government action. Some weeks ago, a dynamic chief executive officer of a private postal operation in my constituency visited me in Leinster House. It was clear from our conversation that he is content to cherry-pick the best aspects of the postal service. It seems he is not, however, prepared to offer a postal service in the Beara Peninsula, west Clare, the midlands and other rural areas. The Government must devise a strategy to address this issue.

The Labour Party welcomes the positive developments in labour relations in An Post in recent months. It is regrettable, however, that workers were not paid the agreed arrears for so long. In addition, An Post pensioners were treated disgracefully. We support the Fine Gael motion and call for a strategy for An Post, whether by means of a White Paper or legislation. This strategy must set out its future beyond 2009 in the face of ever-changing means of communication and the prospect of deregulation.

Ms B. Moynihan-Cronin

I welcome the opportunity to speak on this important motion regarding the post office network and the future of postal services. As a representative of a mainly rural constituency, it is an issue close to my heart. This is not the first time we have discussed in this House the reduction in postal services in rural areas, but it is all the more pressing now given the ongoing phenomenon of the withdrawal of postal services from rural areas.

The Minister of State is laughing but this is not a laughing matter for people in Kerry. When I raise these issues with the Minister for Communications, Marine and Natural Resources, I am advised that he has no official responsibility to the Dáil in this regard and that they are a matter for An Post. When I ask the Minister for Health and Children, Deputy Harney, about health related matters, I am told they have nothing to do with her. This seems to be the mantra of every Minister. Why is the Minister of State sitting there listening to this debate? He might as well go to Grafton Street for a coffee because the Government is not taking responsibility.

The Minister for Communications, Marine and Natural Resources must heed the concerns of people in rural areas. It is clear that the policies of the Government are leading to the destruction of their way of life. People in Dublin seem to have forgotten it was the people of rural Ireland who made this city.

Dr. Upton

I welcome the opportunity to contribute to this debate. I disagree in some respects with my colleague, Deputy Moynihan-Cronin, because I am mindful of the lack of post offices in urban areas. My rural background allows me to sympathise with what is happening in rural areas. I spoke earlier today to friends and colleagues about the impact the closure of post offices is having on the rural communities I remember from my childhood.

This issue is not confined to rural areas, however. I speak on behalf of my constituents and those of Deputy Quinn in raising the matter of the closure of three sub-post offices — Terenure, Kenilworth and Rathgar — in my area in 18 months. Local people can no longer walk to these offices to avail of the facilities and services they provide. These services were particularly important for elderly people, for instance, as well as for young mothers collecting welfare and child benefit allowances.

Post offices provide far more than merely a commercial or economic service. They offer a community service that we simply cannot allow to be decimated because of lethargy, inaction and a determination to ignore what is happening. I raise this issue regularly with An Post. It is simply not good enough for those concerned to throw their hands in the air and claim they cannot find suitable premises. I do not blame those who work in post offices, most of whom are unable to earn anything remotely like a decent living. The income they receive from providing postal services is entirely inadequate when one takes into consideration the costs of paying staff, renting premises and so on. It is impossible to make a living and some who attempt to do so are living below the poverty line.

We have the worst of all possible worlds. The knock-on effect of poor postal services is grumpy, disgruntled and disillusioned consumers of those services, and who can blame them? I last spoke on this issue in the House in 2002 and I could easily have recycled that speech today. My colleagues and I predicted much of what is happening now. We also pointed to all the actions that could and should be taken to make the post office much more than a facility for posting letters. What became of the proposal to provide Internet cafés? What progress has been made in terms of computerisation? Post offices could provide many modern community services and facilities but such services are largely unavailable locally.

Debate adjourned.

Dáil Éireann debate - Tuesday, 5 Dec 2006

Postal Services: Motion.

Dáil Éireann debate -
Tuesday, 5 Dec 2006