JOINT COMMITTEE ON COMMUNICATIONS, NATURAL RESOURCES AND AGRICULTURE debate -
Wednesday, 25 Apr 2012

Post Office Network: Discussion with An Post

Chairman

I remind members, witnesses and members of the public to switch off their mobile telephones as they interfere with the transmission system in this room. I welcome Mr. Donal Connell, chief executive, and Mr. John Daly, director of retail, of An Post. This is their first appearance before the joint committee. I also express members' appreciation for their attendance at such short notice as the meeting was only arranged last week.

Before we begin I must inform the witnesses they are protected by absolute privilege in respect of the evidence they are to give to the committee. However, if directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against either a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I now invite Mr. Connell to make his opening statement.

Mr. Donal Connell

I thank members for their invitation to address this committee. I am Donal Connell and I am the chief executive of An Post. I am accompanied today by John Daly, who is the company's retail operations director. The joint committee has invited us to this meeting to talk about the post office network and, in particular, about processes pertaining to our decisions regarding the closure or otherwise of post offices. Before I go into the specifics, I believe it would be useful to set the context in which these decisions are made. Our business at An Post comprises three distinct areas, namely, the core mails business, our post office retail business and our subsidiaries.

Our core mails business has seen a fall of approximately 30% in revenue since the peak in 2007. This coincides with the fall in domestic demand in the economy since then of approximately 25%. As the joint committee will appreciate, a fall of such magnitude in the core revenue of our business means we must make significant changes. This is driven by the reduction in mail volume caused by the recession and the move by some customers to electronic alternatives such as online communications. I am sure members are aware of the initiatives by communications and financial services companies to encourage their customers to receive their correspondence online. In response, An Post has continued to reduce its cost base, including non-pay elements of cost, as well as a continued reduction in employee headcount. We also continue to invest in the latest mail processing technologies, which already deliver significant efficiencies within our mail pipeline.

On the other hand, our retail business has performed strongly in recent years with increasing demand for post office-based financial services and this performance has in many ways helped to mitigate some of the worst effects of the downturn in the mails business. More people are coming through our doors than ever before. We have approximately 1.7 million customer visits every week throughout our network. Last year, customers invested an additional €1.4 billion in State savings products, which we sell on behalf of the National Treasury Management Agency. This is money the State receives at an interest rate well below the prevailing yield on international bond markets or, in other words, the savings products we administer are very good value to the State at present, as well as being great value for our customers. These products also are a very important part of business for the post office network, as is the work we do on behalf of the Department of Social Protection. In 2011 alone, we paid out approximately €10 billion in social welfare payments.

We are continually experiencing downward pricing pressure in all of our business lines in common with other retail operators in the economy. As members are aware, retail is a highly competitive market and we have responded well to these pressures. In order to enhance our revenue base, we have focused on developing post office services for the State, utility companies and other commercial entities, to expand the range of products and services available and to remain relevant to businesses and communities across the country. We have state-of-the-art post office counter technology, which was the platform on which the payment of the full range of social welfare benefits was established through the post office. This laid the foundations for additional services such as passport applications and renewals, bill payments for various utility companies, Garda fine payments, mobile telephone top-ups for customers and so on. The introduction in 2011 by An Post of foreign exchange sales in post offices has been a great success. Within 18 months of starting, we now account for 30% of the retail market. Postfone is a value-for-money mobile telephone service that we launched recently and which now has a growing customer base. Furthermore, as the banks in Ireland continue to rationalise their branch network, we have added many new services on behalf of Allied Irish Banks in particular and of National Irish Bank and we are continuing to develop such services.

The third leg of the An Post revenue base is the money we earn from subsidiary companies. These include, among others, our business subsidiary in the United Kingdom, which manages magazine subscription and fulfilment services, as well as the Gift Voucher Shop here, which produces the One4All gift cards. This strategy has been very successful for us and we have seen significant growth in profits and revenue coming from many of our subsidiary companies.

I will now turn to talking about our post office network in greater detail. We are, by a long way, Ireland's largest retail and services network and serve business and communities the length and breadth of this country. Our 1,150 post offices and 170 postal agencies deliver retail, mail and State services to communities nationwide. I am sure members will be aware that the vast majority of these offices, 95%, are operated by independent contractors, our postmasters and postmistresses, with just 57 offices being operated by An Post staff.

I outlined earlier the difficult trading environment in which An Post finds itself and the need to cut our costs. The retail business is no different in this respect. In so doing we have, for example, outsourced our cash centres and are changing the business model of some company-owned offices to independent contractor status. We also seek to make savings in all of our non-pay costs by going to the market regularly through competitive tenders. The post office network costs a lot to run. Not only must we pay our contractors, but we also incur significant costs relating to the delivery and security of cash and premises, training, merchandising, the counter technology and other operating costs. As I indicated earlier, 95% of the network is operated by independent contractors. Each year some of these contractors choose to terminate their contracts for various reasons, such as retirement, change in business focus or whatever. When this occurs, we take the opportunity to examine the need to retain a service in that particular location and consider if we can perform the business in neighbouring offices, thereby reducing our costs while maintaining our service to our customers. We examine each issue on a case-by-case basis. We look at the locality involved, the business volumes, the type and pattern of transactions and the proximity to neighbouring post offices and we make our decision accordingly.

In managing the post office network, we must respond to Ireland's evolving society. Lifestyles have changed, people are more mobile and retail outlets are concentrated like never before. Our customers have followed these changes and they shop in towns increasingly rather than villages and in cities rather than towns. We must cut costs and continue to preserve the viability of the post office network as a whole. We are aware this may cause some minor inconvenience for some of our customers and we regret this. Our decisions are based on commercial criteria and founded in our knowledge of the business. We still have one of the most extensive post office networks in Europe. For example, a recent independent survey showed that we have 3.5 post offices per 10,000 of population, which ranks us third out of 31 European countries surveyed.

If a postmaster or postmistress decides to retire or to leave the business, this does not mean the post office will necessarily close - far from it. Since the start of 2011, we have seen 32 contractors resign, of which outlets 22 have reopened or will reopen soon. Nine have closed and one will close next week. Each of these decisions was made based on our examination of the relevant area and other factors I mentioned earlier, such as business volume and proximity to other offices. In most cases the customers experience an improved service, as many neighbouring offices upgrade their premises to facilitate their new customers with the additional business they get.

In essence, our approach has been one of maintaining an extensive post office network, driving additional customer footfall and increasing the diversity of our product offering for customers. At the same time, we must look at individual vacancies as they arise with a view to maintaining the best possible network and continuing to run it as a viable business for these same customers.

The joint committee has asked me to explain the process for filling vacancies once the decision is made to do so. The vacancy for the post office contract is advertised in the relevant post office and neighbouring offices. In many cases we notify the local retail multiples, such as SuperValu or Centra, and may directly contact other businesses in the area to notify them of the vacant contract. It is also advertised on our website. A detailed application form is then sent to any interested parties. This would include indicative payments, space needs and opening hour requirements. All applications received are reviewed and this includes an interview process and examination of the proposed premises. A recommendation on suitable candidates is submitted to a selection board for approval. Contracts are then signed and the successful applicant takes up the appointment at an agreed date when the premises are ready and have been inspected and approved. This is a comprehensive process that we take very seriously indeed.

The joint committee has also asked me to speak on strategic plans in place for the development of the post office network. Our strategy is to capitalise on the great strength of our footfall and the opportunity to cross-sell with real customer focus, anticipating customers' needs as they change in the new Ireland with the new economy we face, and ensuring that we cater for them. Our customers put their trust and confidence in us day after day, week after week, and year after year. By catering for their needs and by introducing value-for-money relevant services, we can maximise our revenue. That is a key part of our strategy.

It is worth noting that contractor fees are based on transaction levels and it is in their interest to maximise the amount of business we do in each office. If customers do not utilise their local post office, choosing instead to travel elsewhere or conduct their business in alternative ways, then that contractor's business shrinks with the inevitable consequences. Like our mails business, we fund all our development and investments from our own resources without any recourse to State subsidy or borrowings. We have been successful in maintaining that through some very difficult years in the economy.

It might be useful, at this point, if I was to go into our retail business in a little more detail. The mails business accounts for about 17% of post office revenue. In terms of externally earned revenues, the Department of Social Protection services account for 35%, State savings products we sell for NTMA account for 31%, bill payments for a range of different commercial companies account for 12%, licence services, 8%, money transmission - mainly Western Union - 7%, while banking and other services account for the remaining 7%.

The provision of Government services is one of our core competencies, and something we think we do very well. In addition, we have identified other areas of Government activity which we believe can be easily delivered through post offices at a cost benefit to the State. These include motor tax, household charges, septic tank registration and payments, as well as the provision of information services. We continue to engage with various Government Departments about this approach. We firmly believe that we have the network - in terms of size, IT capability and customer service expertise - to undertake these activities, and perhaps others as they arise, on behalf of the Government.

Our company, An Post, is unique in that it has retained a high level of trust among customers. We believe that utilising post offices in this regard would be successful for An Post and its employees, the Government Departments involved and, most crucially of all, our customer base. Each week, we welcome 1.7 million customers across our network. The post office is more relevant to these people today than perhaps at any previous time. Our customers can access mail services, welfare payments, pay a range of utility bills, purchase licences, passports, foreign exchange and even buy mobile telephones. They can do all of this within easy reach of their homes and businesses. We are proud to work with a group of motivated, highly trained, self-employed postmasters who want to be of service to their community now and well into the future.

The challenge for me and my management team is to maintain the largest possible viable post office network, which reflects changing lifestyles, changing shopping habits and business practices. It is a network which is vibrant and always remains relevant to satisfying our customers' needs.

I thank the Chairman and other members of the joint committee for listening to my presentation. I will be happy to take any questions members of the committee may have.

Chairman

Thank you, Mr. Connell. I now call on Deputy Ó Cuív.

Deputy Éamon Ó Cuív

I welcome Mr. Connell and thank him for his presentation. We need to have a realistic discussion about the future sustainability of the post office network. One of the big challenges we face is to clarify in our own minds the current and future role of the post office, which is evolving rapidly. We also need to clarify whether there should be a State policy to use post offices. I will come to that point in more detail in a moment.

Whereas post offices will be known as such for many years to come, in reality we should redefine them as local State service offices. In other words, we should not see their primary purpose as being the acceptance and delivery of mail. Post offices should provide a whole range of State services, and private services in certain cases, locally to people throughout the country. It is inevitable that the volume of old-fashioned postal deliveries will continue to decline.

Mr. Connell has given us interesting statistics for the number of post offices around the country. Can he also provide us with a map showing where are all these post offices? Many people feel that the post office should be local to everybody in the country. People are worried that there may be a hit and miss approach to closing post offices as some contracts are relinquished. If so, some areas may be well endowed with post offices while others may be a long way from the nearest post office. It would be useful if Mr. Connell could provide us with a map outlining where all the post offices are located.

Mr. Connell referred to automation but information technology has changed dramatically in the past ten years, and it keeps changing. Are all post offices now automated? In other words, is the IT capability more or less equal across the range of post offices? I pose that question because it seems to me that one of the roles the post office could play is to become the central - but locally manned, although I do not mean that in any gender-specific way - IT office to help provide people who are not computer literate to access online services.

Whereas An Post is a State company, I am not sure that all our Departments have a clear policy to provide as many services as possible through post offices. We all have experience of tabling parliamentary questions to the Minister for Communications, Energy and Natural Resources - whoever the incumbent may be at any one time - on why, for example, the household charge cannot be paid through a post office. The reply one gets is: "That is not a matter for me. That's a matter for the individual Minister." While I would be as critical of the previous Administration as well as the current one in this regard, the Government needs to have a clear policy that as many State services as possible will be provided through the State-owned local post office network.

Mr. Connell mentioned the possibility of paying car tax in local post offices. I will mention two other services that could save the State a considerable amount of money and still boost the income of the post office quite considerably. The first one is Government advertising of State jobs. I believe we should no longer advertise any State jobs or contracts whatsoever in newspapers. There are two arguments against newspapers. First, it is incredibly expensive to advertise in newspapers, with a cost to the State some €50 million per year, a large part of which relates to the advertising of jobs. Second, if one does not purchase the newspaper on the correct day, one will miss the advertisement. For those who are computer literate, subscribers to the website of the Public Appointments Service, www.publicjobs.ie, can request to be informed when a suitable vacancy arises and can submit their application electronically. The argument against migrating entirely to an electronic system is the difficulties it would pose for potential applicants who are not adept at accessing this type of information online. The solution is to allow staff in local post offices - staff whom people trust with their post office book and all types of transactions - to submit applications on customers’ behalf by way of the website. This would lead to a substantial saving for the State in advertising costs and has the added advantage of ensuring potential applicants are not impacted by the restrictions of print advertising whereby a vacancy notice may be published only on one particular day. As I said, the online system also allows users to request a notification whenever the type of position or contract they are interested in becomes available.

As Minister for Social Protection, I examined the possibility of moving to an electronic system for the submission of social welfare applications. It is a change that would certainly require a considerable amount of investment but would be well worth it. As it stands, most social welfare applicants complete the relevant forms manually, which involves filling in various boxes with text. People do not realise that the form they submit is scanned into a computer and, where their writing is not perfect inside the text boxes, the computer cannot read it. In such cases the form must be reviewed manually by a departmental staff member and a correction made to the address, telephone number or whatever. If the handwriting is illegible in part or in full, errors will arise and the applicant may be requested to resubmit the application, which causes delays and costs the Department money. On the other hand, if all applications were submitted electronically, all of these legibility issues would be instantly eradicated. The argument against such a system is, again, that some people, particularly the elderly, might not feel competent to submit an application electronically. My proposal to counteract this would be to allow people who are applying for the old age pension, for example, to present their public services card and PIN number for identification purposes at the local post office where a staff member would then submit the electronic application on their behalf and according to their instruction. Politicians already fill out a great deal of forms on the instruction of constituents and are trusted to do so. This would lead to a huge saving for the Department in terms of the labour involved in re-examining forms and trying to make head or tail of often poor handwriting. The information would be accurate at the point of entry with no need for manual correction or an additional process stage to get the information into the computer system. However, such an arrangement can only be put in place if there is an official, nationwide policy to that effect.

What would be the impact for An Post if its social welfare contract were not renewed? Would it mean the end of business for smaller post offices in particular? I recall making inquiries in the Department about this and the attitude was along the lines that we should leave well enough alone. Whomever the contract is ultimately awarded to, the Department should stipulate that there be a dispensing office in every location in the country, as is the situation in practice under An Post's management of the contract. It is a very important consideration.

There are other issues I wished to raise but I am aware that colleagues are waiting to speak. Perhaps the Chairman will allow me additional time at the end.

Deputy Martin Ferris

I thank Mr. Connell for his presentation. We are all appreciative of the important social function carried out by post offices throughout the country. They have a vital role to play in offering connectivity to people living in rural isolation, which is becoming more prevalent as time goes on. As such, there is great concern in many communities regarding the future of the post office as we have known it and continuing uncertainty in areas, such as Mayo, for example, which have been badly affected by recent closures. What is An Post's long-term plan in this regard? Is it committed to maintaining a community and social service that is invaluable to rural areas?

In regard to the household charge, was An Post approached with a view to tendering for its collection and did any negotiations take place in that regard? If so, was the cost factor an issue in that contract not being secured, as was suggested in some media reports? How many post offices have closed in the past 20 years? What we are hearing from the public is that many areas feel themselves to be discriminated against through the loss of their post office. Is An Post taking strategic decisions for financial reasons to reduce the network into the future? I have been told by postal workers that the company is doing away with provisions in their contract regarding the transfer of appointments on retirement. It has long been the custom that a retiring postmaster will pass the business on to a family member, which has provided a sense of continuity and helped to safeguard relationships built up over many decades. What is An Post's policy in this regard and does it intend to maintain that type of generational service?

Has the company identified potential new areas of business which would serve to protect the viability of the post office network and enhance the range of services available to rural communities? While services in built-up areas tend to be profitable, the concern is that offices which are not as profitable or are not making a profit at all might not be maintained. Can Mr. Connell offer any reassurance in this regard?

Deputy John O’Mahony

I thank the delegates for their presentation. We all support efforts to preserve the postal network and postal services. Mr. Connell mentioned An Post's policy in regard to the process of office closures. I mention this in the context of the proposed closure of Knockmore post office in Mayo next week. It is the reason I initially requested that the delegates attend the meeting. It is a national issue, but I am referring to a particular instance in my own county.

I have been involved in this process from the beginning and I am aware that when a postmaster or postmistress notifies An Post that he or she wishes to retire, a review is carried out and each case is treated on an individual basis. As Mr. Connell stated, An Post considers the locality involved, the volume of business at the particular post office and various other commercial criteria. Why are such reviews conducted and decisions made before consultation takes place with local communities, particularly in circumstances where individuals and businesses within such communities are willing to take on the challenge of running post offices? Mr. Connell also referred to maintaining a network. Two post offices were closed in the parish to which I refer, which is the largest parish in Mayo, in the past 12 years. The first notification a community receives of a post office closing is when the decision is announced.

Mr. Connell stated that these matters are dealt with in a very businesslike way and that reviews are carried out on a commercial basis. If the review process is carried out in a meticulous way, why did An Post include incorrect distances to the nearest post offices at Ballina and Foxford in its reasons for closing the particular post office to which I refer? I have the correct details in that regard and I can supply them to Mr. Connell if he so desires. An Post also indicated that as a result of its transaction volumes, Knockmore post office is in the mid to bottom range of the national post office network. In that context, it comes 750th out of a total of 1,120 post offices. Does this mean that there are 370 post offices throughout the country at which less activity is taking place? If each of the postmasters or postmistresses at those 370 offices informed An Post tomorrow that they wanted to retire, would those offices be closed?

The post office at Knockmore is supposed to close on Friday next, two days from now. People who collect their pensions there have not yet been notified in writing as to which post office they should collect them from in future. What facilities will be available in Knockmore from Monday next for those who wish to post letters? Will there be any services available in the parish?

I have outlined the process as the people of Knockmore have experienced it during the past six weeks. Is An Post willing to try a different model in the context of the closure of post offices? Members of the community in Knockmore have drawn up detailed business plans and are willing to put their reputations on the line in respect of this matter. The postmaster is now willing to rescind his retirement notice to An Post and take part in a trial - not to run a social service - whereby the level of business at the post office in Knockmore might be evaluated. If business levels at the post office do not come up to the mark during this trial, the people who have put forward this suggestion would be willing to accept An Post's decision and give it their blessing. There is a need to change the model which applies in order to make this a win-win for everyone involved. Communities should be informed that levels of business at their post offices must increase or else those offices will be closed. Is An Post willing or brave enough to allow the trial to which I refer to proceed?

Chairman

An extensive number of questions have already been posed and a further five members - Senator Ó Domhnaill, Deputy Harrington, Senator Comiskey and Deputies Coffey and Calleary - are offering. I will, therefore, ask Mr. Connell to respond to the questions that have been asked up to now before we proceed to questions from the other five members to whom I refer. With regard to the latter, I will take questions from people who are members of this committee before those from individuals who are merely in attendance.

Mr. Donal Connell

I will attempt to answer all the questions that have been posed as best I can. I thank the members for their statements of support for An Post.

On Deputy Ó Cuív's first question, it will be possible for us to provide to members a map on which is shown the locations of the post offices throughout the country. We will supply that map to the committee in the coming days. The Deputy also inquired with regard to the computer network capability of post offices. All post offices are now automated, so over-the-counter payments and other transactions can be dealt with just as well in a small office as in a larger one. In the past, we could not afford that. As we continue to deliver cost reductions across the network, however, it enables us to make significant investment in the remaining outlets. It is important to understand that our network must be commercially viable. As we put such a network together, this enables us to invest in providing additional capabilities at our remaining offices.

I take the Deputy's point with regard to Government advertising for State jobs and social welfare forms. His suggestions in this regard were good and we will follow up on them. Deputy Ó Cuív inquired with regard to what would happen if we did not deal with the business from the Department of Social Protection. When the contract in this regard goes to tender, we believe we have a very compelling case in respect of it. I have no intention of losing the Department's business. The latter represents approximately 30% of our overall revenue so if it went elsewhere, it would clearly be a huge blow to us. I assure the Deputy and the committee that I have no intention of losing that business.

Deputy Martin Ferris inquired about An Post's long-term intentions. One of our core objectives is to maintain the largest possible - but commercially viable - post office network. We address all of the relevant issues in that context. Our mails business is under pressure as a result of the economic crisis and structural changes in the context of how people do business. Such changes are mainly driven by the Internet, e-commerce, etc. There are some opportunities for us in these areas but it must be stated that letter volumes are in significant decline and we must react to that fact. We are definitely committed to the postal service. We are the universal service provider and I am convinced that there will always be a significant postal service in any developed economy. We are best placed to provide such a service. There is now a fully open market in the postal business in Ireland. As members will be aware, this has been the case for over 12 months. We are committed to being the major player in that market. We believe we have a unique capability, although the economics of the business are under challenge in light of the significant reduction in volumes.

The reduction in volumes here mirrors the international trend. Every other economy in western Europe and also the United States are experiencing this problem. The postal services in these jurisdictions are all grappling with ways to justify the economics of a five-days-a-week, next-day-delivery service. It is a challenge financially but we are absolutely committed to it. It is our core business.

With regard to how many post offices have closed in the last 20 years, I do not have that figure. We can refer back to the committee on it. However, perhaps there is a different way to look at this. In Ireland we have one of the most extensive post office networks per head of population in the 27 EU countries, indeed, in a survey of 31 countries. That was the case ten and 20 years ago but, more importantly, it still is the case. We are very well resourced throughout the country in terms of post offices. We are particularly well resourced in County Mayo and in the area we are discussing here in detail.

The Deputy referred to postmaster contracts in the family. In the past there may well have been a different practice whereby it stayed in the family, but selecting somebody for such an important activity as running a local branch of a post office is an important role that, in my view, must be done by the company. While we recognise and honour the great service that many families have provided to the post office for generations, the awarding of such a contract is a decision for the company and management. Getting the right candidate in position is crucial to the long-term viability of the network. That is something the company will do and ought to do, although I acknowledge there was a different practice in the past.

With regard to other areas of service potential, we are committed to developing other revenue opportunities through the post office. I mentioned some of them in my presentation. We launched foreign exchange in the last year and a half, we do Postfone and we are trialling the sale of insurance products through the network. We also have a relationship with Allied Irish Banks, AIB, and National Irish Bank, NIB, whereby we offer banking services through our network. We hope we might be able to develop that more extensively in the months ahead. We are committed to developing additional revenue streams as well as other Government services, as has been mentioned. These are all potential growth areas for us.

Moving to the points raised by Deputy O'Mahony, as I outlined in my presentation with regard to the process of closure, if there is a resignation we review what makes sense for our position in the locality. The post office in Knockmore, County Mayo, which has been raised would be a case in point. We look at the area and how well our customer base is covered in the area by post offices. In this case it is covered very well. We have two offices in Ballina, a short distance away, and another in Foxford, which is quite convenient. It is not necessarily the ranking of post offices in terms of revenue in a national list that counts, but we ask whether there are post offices within reasonably easy reach of our customer base in the area. The answer to that is "Yes". I mentioned that the density of post offices in Ireland overall is at the high end of the European average. In County Mayo, the density is twice the national average. Mayo is very well covered and resourced for post offices. Therefore, when we went through the process we took a business decision. We look at all the aspects and determine what is the best thing to do. We also make sure our customers will be well serviced into the future. That is one of the most important issues for us.

It is important to recognise that we must answer for the financial performance of the post office in very difficult circumstances. One of the key tasks for us is to ensure we get value for money and reduce our costs in reaction to what is happening in the economy. Otherwise, we will not have the money to invest in activities such as automation, computer networking and so forth, which was raised by Deputy Ó Cuív, or to develop new products and services to enhance the viability of the remaining post offices.

With regard to the communication process, if there is an opening we advertise it extensively. We give people notice if we are, for example, withdrawing services in Knockmore. They will be able to go to Ballina, which is very close, or to Foxford, which is also close. These places are 10 km or less from the current outlet.

On the issue of facilities for posting letters, that is quite separate from the retail network. There will be no change to posting letters, collection or whatever in that area.

We listen to submissions, we have had extensive communications and there have been many meetings between senior people in An Post and local community groups. We do not take a decision like this lightly or happily. However, we have gone through all of this and arrived at the correct decision.

Deputy John O’Mahony

I wish to make a quick point, although there are many points I would like to discuss. There is no point in having meetings after the decision is taken. That is the bottom line. Also, in the case of local post offices there is no public transport. I wish to be respectful but that point should be made.

Chairman

Mr. Connell can continue.

Mr. Donal Connell

The customers in the area have been notified about services available locally from next Monday. As I mentioned, facilities for posting letters remain the same. With regard to the trial basis, we do not see a point in that. Submissions have been made relating to business plans but, frankly, they do not stack up. We have seen nothing that makes sense in terms of changing our minds about this decision.

Chairman

We can come back to this. Two other members are anxious to do so. In fairness, it was this issue that prompted the need to hold an immediate meeting in advance of next Friday. This subject was the basis of having the meeting and many members are anxious to discuss it. I will give everybody an opportunity to speak but the next speakers are Senator Ó Domhnaill, Deputy Harrington and Senator Comiskey.

Senator Brian Ó Domhnaill

It is great to have the opportunity to discuss this issue. I will cut to the chase and not take up much time. Mr. Connell said that Ireland is at the high end of the EU average in terms of its post office network. That does not surprise me because Ireland is a rural country. People traditionally lived in rural areas. Politicians are aware of that because people regularly seek planning permission in rural areas so they can live in their local townland. The largest city or town in the west of Ireland has approximately 50,000 people but there are people living in every townland. We are different from the UK and other European countries because their societies are based on the city model. Ours is not; ours is a rural society. That should be noted.

Mr. Connell outlined the opportunities for additional business through the post office network such as motor tax, the household charge and so forth. What strategy is in place to achieve these objectives and roll them out? What discussions have taken place with Government Ministers and departmental officials about motor tax and the household charge? Are these discussions ongoing? At what point is the strategy at present?

What investment has taken place over the last number of years in the network of rural post offices? I understand that the postal service in Devon, in England, undertook a survey or review of the consequences of post office closures in that area. Has An Post undertaken a similar review or is there a plan to undertake a review of the consequences of post office closures and the implications for rural areas?

Mr. Connell mentioned the banking services being provided for AIB and NIB. Are there discussions with any other financial institution or credit union to provide additional services?

The closure of small rural post offices is a burning issue. It is the reason the committee was anxious that Mr. Connell would attend this meeting, and we are grateful he has attended to address our questions. Two post offices have closed in my constituency in the last six months, one in Laghey in south Donegal and one in Meenlara in north-west Donegal. The post office in Meenlara was closed because the postmistress retired. The other post office closed because the contractor resigned. In each village, compelling business case arguments were put forward by other local businesses but were not entertained by An Post. There was no engagement. An Post did not enter into public consultation with local people.

What criteria are used for the closure of post offices? Mr. Donal Connell outlined commercial realities but is that based on the number of transactions in the post office or the mail being delivered from the post office? What is the minimum transaction requirement set by An Post? If it is as stated based on commercial reality, there must be a minimum standard. I would like to know the minimum standard for a post office. If An Post set minimum standards, what are the consequences for the 11,00 plus post offices across the country or the 400 post offices in rural areas?

I know that in both of these local communities there was no local consultation of any kind. An action group established in the Laghey area met representatives from An Post. Those meetings proved fruitless even though compelling business cases were put forward from both areas.

As outlined in the presentation, An Post goes through a process, it advertises the position and I appreciate that it makes a decision to close a post office or keep it open. If a rural post office closes due to a retirement or other reason, An Post appears to take the decision not to replace the person who may have resigned, be it a postmaster or post mistress. That appears to be the reality. We need to know the exact criteria. I received a letter from the chairman of An Post, which outlined that the closure of the post office in both Laghey and Meenlara was due to commercial realities. What criteria are used to determine those commercial realities? I would like to tease out this issue in detail.

Deputy Noel Harrington

I welcome Mr. Connell and Mr. Daly to today's meeting. I am a postmaster, who would prefer to be in the post office more often than I am in Dublin. I have been working in the post office since 1992 and have seen huge change both in the network and in individual offices. The greatest change has been the automation of offices and the addition of greatly enhanced services to the community. It is worth noting the systems that were introduced in the middle 1990s, were for their time, extraordinary. They are still the platforms on which are based the services post offices provide to their customers. Very little has changed in terms of technology since then. There have been additions and software extras but it is frustrating that the potential of the system, which could so much more, was not used.

In the past 20 years I have seen the reasons that post offices will close. Chief among them, is the way postmasters and postmistresses resign in an ad hoc non-strategic manner. The contract may well have been offered but the remuneration was so small that it was not worthwhile for a new person to take the contract and refurbish a new premises. It is worth noting that postmasters and postmistresseses in both urban and rural areas could be getting a remuneration of approximately €15,000 to €18,000 and in return they provide the premises, the salaries, the light and heat, they pay the rates and insurance on the premises and remain open for five and a half days a week. I do not believe that if such a contract went to tender there would be a single response.

The second point is that by and large, the postmaster or postmistress is paid per transaction, as mentioned in the report, however as the number of transactions increases, the rate decreases. There is an issue for other offices. It comes to the point where there is a disincentive to take on extra business because they may have to take on extra staff, which is a flat cost, and the relative increase in remuneration does not make it worth it. There are many issues that challenge the post office network, from An Post, the postmasters, the community and the Government although no single element is threatening the viability of the network.

Mr. Connell mentioned a post office in County Mayo but I am not familiar with that case. I would like to open a discussion on it. If there was a strategy to look at the network strictly from a business point of view, irrespective of the age profile of the postmaster or the intention of the community, would that post office have been on a hit list? Would other offices that are not being examined in a strategic way by An Post be invited to engage with An Post and by extension with the community, where the service is looked at in the round? For example, if one post office is doing a certain level of business and an office five miles up the road is doing five times that amount could there be a discussion on that, taking account of other factors, such as the age profile of the postmaster or the individual contract? The message that goes out to the community may be entirely different.

The Irish Postmasters' Union embarked on what was called "a use it or lose it" campaign. I am not going to put members under pressure but do they pay utility bills at the post office? I do not want to be advertising the post office but I am trying to put out a call to communities to consider the post office as a place to do business. The point has been well made that before a decision has been taken to close the post office it should be a requirement to consider where the following transaction are undertaken: collection of the child allowance, payment of utility bills, foreign exchange and so on. Does one do these transactions through the banks or at the post office? There are so many more transactions that could be conducted at the post office. We should look to the Government and put the case for the post office as the place where one pays the motor tax, the household charge, the septic tank charge and a range of more form filling services as well as verification of signatures. I would say that in the case of one in five applications forms, one must go to a Garda station to get verification that the person who signs the form is the person who is making the application.

The success of the NTMA contract was referred to in the presentation. It is difficult to sell the post office as a product because one is not competing on price but on the ease of doing business and accessing information on line. One cannot go into a sub-office of the post office and ask for a balance. One will not get that information. We need a portal in the sub-offices to expand the business that can be done at the post office. The company is two years behind the curve in achieving ease of access as convenience is what will bring in the customer. It is convenience that drives the customer to the direct debits in the banks and to conduct their business online rather than attend the post office. The first time they hear about an office being threatened, we receive telephone calls, emails and letters.

There is an overarching responsibility and the company has to lead the way. My impression is that it looks inward when examining the cost challenges faced by the post office network and is less likely to look at the potential of a network of 1,150 post offices situated in every corner of the country. Attracting business to them will save them. If a community cannot rise to the challenge of saving its post office, I do not think it has a case. Even if we had a postmaster who was not intending to resign, it could be put to the community that we needed to talk about this issue. That would be more strategic than what is happening and it is leading to intense frustration in places such as Knockmore and those mentioned by Senator Brian Ó Domhnaill. The impression is that the post offices in question are viable. They can stand alone and if there was a lead-in time, they could become even better. However, that impression is not being given.

There is a big push to get every citizen to have an account for different reasons, including transferring farm payments to another account. An Post is woefully behind the curve on this issue. We still have to go around with passbooks which are cumbersome, inconvenient and not the thing to have, yet we still have them. That thinking will have to change if we are to make the post office network viable in the 21st century. The company, post offices, communities and the Government can do more. If we can get this message out from the committee, it would be a strong one.

Senator Michael Comiskey

I welcome the delegates and thank them for their presentation. Many of the points have been covered.

On my 12 to 13 mile stretch of road in rural Ireland we used to have four post offices until about 15 years ago. We have to see where this process is going to stop, as we cannot continue to close down post offices. Villages are losing theirs and we worry about post offices in smaller towns in which there might not be many transactions. Is there be a danger being posed to them? We must look at new ways of thinking.

Deputy Éamon Ó Cuív spoke about Government and other jobs. Years ago if somebody wanted to employ someone else, he or she would have called the local postmaster or postmistress to seek a reference. That is how well regarded they were in rural Ireland. They did a lot for the people.

The household charge was a missed opportunity, which is a pity. It would have created revenue for An Post because it has to be paid each year. Social welfare payments account for 35% of the company's business and it is crucial that this business is not lost. It is important for us to make sure communities continue to use the post office network because if they stop using it, it is doomed. This is something for us all to work on, with An Post.

Mr. Donal Connell

As some of the questions overlap, I will try to deal with the common themes. If I leave anything out, committee members should feel free to correct me.

There were general questions about new sources of revenue and how we might chase business opportunities. I have mentioned several examples of ideas we have launched in recent times. We are committed to driving the provision of additional products and services through the post office network, as long as they are suitable for it and it makes sense to do so. We interface with a range of customers, including Departments and Ministers, as well as utility companies, financial services companies such as the big banks and insurance companies. We have a sales and marketing team which is a core part of what we do. There have been substantial results in products such as foreign exchange. We are trialling the provision of insurance products through the network and perform financial services for AIB and NIB. We are open to considered any other opportunities identified.

I do not accept that we are two years behind the curve. We have invested substantially in new product capability and seen substantial growth in NTMA products in the last few years. The acid test of a product's success is whether it is growing in the market. That fund has grown in size from €6 billion five years ago to over €14 billion today. It has almost tripled in size during a period in which the country finds itself in very difficult financial circumstances. We are very happy to be able to say customers are voting with their feet on such an issue.

Chairman

I am sorry to interrupt, but a vote has just been called in the Chamber.

Mr. Donal Connell

I was just getting going.

Chairman

We will give Mr. Connell an opportunity to refuel. We will suspend the sitting and reconvene as soon as the vote has been completed.

Sitting suspended at 11.25 a.m. and resumed at 11.40 a.m.

Mr. Donal Connell

I was asked what sort of investment we had made in the network in the past five years. I do not have the exact number, but the amount is substantial - more than €20 million. That went into security systems, training of staff, new computer systems, automation of the entire network and the development of new products and services. It is a substantial amount of money. It is important to note that we are committed to reducing the cost base of the network. One benefit of doing that is that we free up money for investment in the remaining offices. This is not just a benefit; it is essential, in the current situation, that we make these investments and that, financially, we are able to do so. That is one of the core planks of our strategy.

A point was made about postmaster remuneration. The number quoted - €15,000 to €20,000 per year - is wildly inaccurate.

Deputy Noel Harrington

That pertains to some offices.

Mr. Donal Connell

Maybe I made a mistake, but that is what I noted.

Deputy Noel Harrington

There are people who are paid that amount. It is a minority of offices.

Mr. Donal Connell

I noted down a comment about the average remuneration; maybe I made a mistake. The average remuneration for postmasters is substantially above that - that is, multiples of it. There is nothing wrong with that. The job is well compensated, as it should be, because postmasters must run premises, employ staff and do a whole range of different things. There are few postmasters on the type of payment mentioned. If there are such cases, it is because transaction levels are extremely low due to the locations of the offices concerned. There is a sliding scale for transaction fees, which is appropriate, and it works reasonably well for us. We are in discussions with the Irish Postmasters' Union about modernising and improving the postmaster contract to reflect the modern economy in which we work and the commercial realities with which we must deal. We have had constructive engagement with the Irish Postmasters Union, and I look forward to its continuation.

There were some questions about where this will stop, and whether a particular post office in Knockmore would be on the list for closure if we were to look at things differently. The answer is "Yes". The criteria are those I mentioned in my address. One of the key criteria is the number of post offices we have in an area and their closeness to the customer base. As I have mentioned several times before, County Mayo in general and this area in particular are very well served with post offices, so it would qualify based on those criteria.

Senator Ó Domhnaill asked about the impact of closures. Did I miss another one from the Senator?

Senator Brian Ó Domhnaill

Yes; I spoke about the review of post office closures that was carried out in Devon. What similar studies are being carried out? What criteria are being used and why is there no local public consultation? When a post office is determined to be viable or non-viable, what are the economic criteria in terms of a minimum level of transactions?

Mr. Donal Connell

We do not have in mind any specific minimum level of transactions. We consider a whole range of factors, which I mentioned in my address. These include the volume of transactions, but they also include location. Our objective is to maintain a nationwide, extensive, profitable post office network that is commercially viable and can invest in itself. In order to maintain service throughout the country, there will need to be a significant number of relatively low-transaction outlets, whereas in the cities there will be higher-transaction outlets, so it does not make sense to have a blind threshold based on a number of transactions per week.

Senator Brian Ó Domhnaill

There must be some economic criteria. It cannot just be based on the post office being in a certain area.

Mr. Donal Connell

The economic criterion is that we maintain the financial performance of the post office network. We look at it as a whole, not regionally or individually. On that basis, it must be profitable and be able to pay its way. That is our charter under legislation.

Deputy Tom Barry

I welcome the witnesses and thank them for their time. What are the criteria for rejection of a post office? Is there a checklist? My experience of this is in Kilworth in County Cork, where there was zero engagement with us, the local representatives. In my representational role, I find this strange. If An Post does not make contact and consult locally in time, it cannot evaluate whether there is potential. What is the number of offices needed to provide adequate cover across the country, from where it is at the moment? I presume there is a target, or some metric.

Mr. Connell said that if customers do not use their local post offices, there will be consequences. It is not the fault of the contractors involved that customers do not use their post offices. There is also a higher requirement for An Post to make sure customers want to use their premises. I would not be assigning blame in any direction.

I agree that An Post needs value for money, but does this mean, in these times of austerity, that it needs to protect the higher earners at the cost of contractors and customers? One person's idea of value for money is completely different from another's. As a person who runs a business, I know that one must look at a business as a whole. Business growth must come into it. Show me some innovative thinking. I have not seen any innovation in what the representatives have been saying. Most of their aims are to do with selling services or contracting for Government activities such as the collection of household charges and water charges. They say they want more State-funded business, yet they are closing down rural services. For me, that does not wash.

Has An Post explored other options such as linking a rural post office with a large urban post office that is obviously more profitable, sharing staff and resources, before it decides to shut it down? Where is the entrepreneurial spirit? Does An Post have a business growth model for both domestic and external business, outside its traditional areas? The ideas behind two of the four income streams it has demonstrated here were thought up only in the past few months. These are soft ideas. They do not challenge me, and I hope they do not challenge the representatives. The document is interesting in that it states how good An Post is despite a 30% fall in its mail business. As a managing director of a business, I would not project my business in this fashion. If I had a 30% reduction in business, whatever the reason, I would not be saying "We are happy enough where we are." I was in the unenviable position of having experienced a 60% reduction in business in one year and having to find ways out of it. I do not blame the introduction of information technology. It should be embraced because that is where we are headed one way or the other. An Post has been in a cushy position and somewhat dominant. A business with 1.7 million customers has considerable potential. Perhaps a shake-up at executive level is needed to introduce an aggressive entrepreneurial spirit. An Post should not rest in its dominant position. The delegation has stated it wishes to free up money for investment in other offices by closing down inefficient ones. However, a critical balance must be struck. With what level of profit would An Post be happy? What service will it eventually provide? Whatever is the level of profit, a fair share of the pain endured should be taken at all levels of the organisation.

Deputy Paudie Coffey

I welcome Mr. Connell and Mr. Daly and thank the Chairman for allowing me to speak, as I am not a member of the committee, but this matter interests me greatly. I will try not to go over old ground since many speakers have covered some of the issues I wished to raise. I acknowledge the service An Post historically has provided for the people. As public representatives, we acknowledge that the network has been a vital and essential part of the fabric of communities. I appreciate that An Post now finds itself in a different place and that considerable challenges lie ahead with regard to how services are to be delivered. The main issues arising include those relating to the decision-making process An Post adopts in arriving at decisions to close post offices, the consultation engaged in by the company and the communication of these decisions. I will return to these matters and refer to sample cases.

I concur wholeheartedly with Senator Brian Ó Domhnaill in his comments about the viability threshold. With due respect, I do not believe Mr. Connell has answered the question adequately. He gave a general, broad-brush response to the question of how the viability of a post office is measured in terms of the overall national service and how it can remain viable. However, he has given no specific viability measurements or analysis of how An Post arrives at decision. To date, the committee has heard of cases in the west in County Mayo and the north west in County Donegal. I will refer to cases in the south east, all of which relate to how decisions have been made to close post offices which appear to be opportunistic and ad hoc without any strategy or plan. The experiences of public representatives in various areas of the country are the same. The treatment of customers by An Post has been shabby.

Mr. Connell will be aware of the position in Kill, County Waterford because I have written to him about it on several occasions. A burglary took place in the post office in Kill and it closed in early October. Subsequently, engagement took place between An Post and the operator of the post office and the contractor resigned. I wrote to Mr. Connell in early November about the closure highlighting my concerns on behalf of constituents in a vast rural area of mid-eastern County Waterford which has a population of approximately 5,000 people. The population has increased since the last census. Without having examined or analysed the matter too deeply, I presume the office has a certain viability. However, it took a full two months for me to receive a reply from the chief executive of a semi-State agency. That is inadequate in this day and age. There was no consultation with the customers of An Post or the community in this area. It was only at the request of Oireachtas Members that a meeting took place between senior officials of An Post and the community, by which time a decision had been well made, reflecting the experiences of various public representatives here. The way the matter is being handled is not good enough or acceptable. An Post could do a better job in informing communities. If a decision must be made for economic reasons, people should be properly consulted and the issues involved properly communicated to them. However, this has not been my experience and record is there to show this.

I wish to hear about the viability level in more detail. If An Post cannot give details, the delegation should tell us why. Questions were asked about the long-term strategy. It could be good for some post offices, but it could also be bad. If a proper strategic and planned approach was adopted by An Post, it might mean the closure of some post offices not on the radar. I would welcome the adoption of a more strategic approach, including a properly planned analysis of where post offices will be needed in the future.

I share the view that there is a conflict in the An Post strategy which, on the one hand, wishes to attract new Government business. I support An Post in this regard and will continue to do so, as for several years I have been calling for the An Post network to be utilised by the Government in meeting car tax and other bill payment requirements, including the household charge, as well as water charges to be introduced in 2014. However, on the other hand, An Post is closing its network and reducing its reach and ability to service the same customers. This conflict must be resolved and I suggest it can only be resolved in a strategic way.

The way in which the people of Kill were dealt with was most unsatisfactory. Operators were willing to take up the contract and consider running the post office in a commercial way. They asked to be given a chance to prove its viability in the short term, but this was not afforded to them, which was most disappointing. Little consideration was given to the needs of these customers, for many of whom the nearest post office is more than 10 km away. It may be true that many use online facilities, but a large section of society do not have access to such facilities and have no access to transport either. Such persons are discommoded. The An Post presentation suggests this was a minor inconvenience for many. It may only be a minor inconvenience for many, but An Post should also acknowledge that it is a major inconvenience for another section of society, including the elderly and vulnerable persons living in isolated rural areas.

The strategy provides the solution. There should be more proactive engagement between An Post and the Government. As a Government party member, I will be supporting An Post in this regard. However, it must involve other stakeholders in the process, including communities and postmasters. A good deal of work remains to be done in this regard. We still have time on our side, but if we continue to drift, there will be further closures. Mr. Connell would probably have an easier job as chief executive. He would also have a smaller network and a more confined business to manage, but this does not adhere to the ethos of An Post which should serve as many citizens as possible.

Deputy Dara Calleary

I thank the Chairman for giving me the chance to speak as I, too, am not a member of the committee. I welcome Mr. Connell and Mr. Daly and also acknowledge the presence of Mr. Angus Lafferty. Knockmore provides my case study, but, as Deputy O'Mahony suggested, it could be anywhere.

The delegation referred to the need for trust and confidence in An Post and the organisation having a certain reputation with its customers. I would have shared this view before experiencing what we have had to go through in the past two months. Frankly, my trust and confidence in An Post as a business model have been eroded extensively by the manner in which this issue has been dealt with. It would be easier to decipher the third secret of Fatima than it is to decipher the An Post commercial strategy.

Between Knockmore and the adjoining parish there are approximately 4,000 people on whom An Post is turning its back. Some ten years ago there were three post offices in the area. Will Mr. Connell confirm for the record that An Post intends to close Knockmore post office on Friday? In the months since Christmas the parish has raised more than €80,000 for two causes. The people of the area mobilised and donated €80,000 to two very good local causes. Those involved in the projects are the same people championing the retention of the post office for which they have presented two business plans. There was a meeting held on Holy Thursday at which one plan was refined and then presented not only to An Post but also to the Taoiseach who has given it his backing.

The An Post delegation has referred to the serious pressures exerted on the business and the wish to diversify. One of those of business plans is based on a survey of a couple of hundred people in the parish, done on a door-to-door basis. It shows that An Post stands to lose about 75% of its existing business in Knockmore if it moves post office. It seems it is happy to stand over that. It will lose the higher margin business, such as mobile telephone credit, foreign exchange and the other aspects it was trumpeting.

Deputy Ó Cuív asked for a map of Ireland containing the location of all post offices. Can the delegation consider that? It clearly does not understand the geography of Mayo. It told us about all the post offices in Mayo, which is great, but welcome to our world. It is the third largest county in the country and by its nature has dispersed communities. The delegation told us only minor inconvenience will be caused. Can it define what it means by "minor inconvenience"? I can tell it what it means for people in Knockmore.

An Post said there are three post offices in the area but there are only two, the main post offices in Ballina or Foxford. The second post office in Ballina requires a journey of about 40 minutes to buy stamps or get a social welfare payment. Pensioners do not have access to public transport such as the Luas, DART or Dublin Bus. They have to make arrangements with their families to collect pensions if they get them in the post office. We want to encourage people to use the post office. Such people will now have to go into Ballina post office.

There was a great team in the post office which works incredibly hard. I do not know if the delegation has stood in it on pension day or any day. There is a good chance it would end up standing on the street because the post office is too small for the volumes of business it does. Is standing on the street on a day like today a minor inconvenience? Currently, one can drop into a post office in the middle of the parish, deal with one's business and keep the business within the community.

The delegation spoke about the new business models. It said since the start of 2011, 32 contractors have resigned. Deputy Coffey is right. It reviewed the business after the 32 contractors resigned. It seems post offices are only reviewed when people resign. Some 22 have reopened, nine have closed and one will close next week - I assume it is Knockmore. Can the delegation give me the name of the other nine post offices which have closed and, more importantly, the 22 which have opened?

It did not give the business community in Knockmore information. It spoke about writing to Centra and local multiples, and directly contacting other businesses. It did not give anybody the chance to make a pitch to An Post as to what it would do and the kind of model it might employ in running a post office in 21st century Ireland. It spoke about being an agent for AIB and National Irish Bank. Why does it not let people outline a business model as to how they could be an agent for An Post?

We might not talk about the salary for a postmaster if An Post it was willing, as Deputy Barry said, to consider different models and think outside the box. We all have to do that. There are very successful businesses in Knockmore from a standing start. There are also successful community enterprises from a standing start which were willing to offer a service and engage with the representatives but that did not happen. The decision was made before any Deputies, local county councillors or the local community were told. This is the prototype all over the country, namely that the decision is made and no matter what the circumstances, An Post will not change it.

I was struck by what Deputy Harrington had to say. He is on the inside. The delegation picked up one small aspect of his contribution and did not engage with his broader remarks in terms of it being behind the loop. It strikes me that it is behind the loop with communities and customers. Communities around the country are rallying in many different ways to deal with the problems they face but An Post is stuck in a model that is more in line with the era before the current crisis. Communities are willing to engage with it.

It said that An Post would fight hard for its social welfare business. Normally we would support it in that because it is very important. However, when it closes three post offices in one of the largest, most active parishes within ten years and withdraws social welfare outlets, it is driving people towards the banks. We have engaged with local representatives and heard the poor mouth about the tough times it is experiencing. We were told everyone is leaving An Post because the Department of Social Protection want payments to be made into bank accounts.

I understand Deputy Harrington used the word "convenience." We now do things for convenience and An Post is making it harder for people to engage with it in its core business. Knockmore is affected now but other communities in Donegal and Waterford will be affected in the future. It strikes me that An Post has a business model more reflective of the situation many years ago. As has been said, it has a monopoly and presence in communities for which people would give their right arms. It is not engaging with the communities it seeks to serve to try to give them a better service and maximise its revenue. That is what today is about.

Deputy Michelle Mulherin

I do not want to repeat what was said. Deputy Coffey's comments reminded me of the situation in Knockmore post office which seems to be common around the country. It strikes me that even though An Post is a State company, there is a real democratic deficit in how it conducts its business. I say this from my experience of the situation relating to Knockmore post office.

While there is a grand master plan and the delegation has outlined some details, when it comes to specific areas or communities it cannot say where particular post offices are falling down, where improvements need to be made or what are the targets for a service to be maintained in a particular locality. People are in a vacuum. Notwithstanding that, in the case of Knockmore, as has been described, a number of plans were put to the delegation.

In this day and age I do not expect An Post to run its business with something out of the goodness of its heart. There has to be a serious business proposal. Why will An Post not engage with communities? Why is it making decisions it will not change? Its conduct and decision-making is unilateral. While I respect the integrity of the business and the decisions it had to make, it has a bigger mandate than business concerns.

Why will it not seriously consider a business proposal? Why does it show no flexibility in regard to business models? It should put it up to communities, and tell them as they are not hitting certain targets, in line with the plan for post offices which have a certain level of business some will not be able to remain open. People know what is happening and An Post should be open about things. If the company is willing to stand over decisions, as the cruel taskmaster it now appears to be, it should open things out and let people know what is happening. It is very difficult for somebody who is elected to go to public meetings and not be able to give people any facts or figures as to why one post office should be kept open one while another should not.

We need figures to show which post offices are not making the grade. When a community is prepared to go with the targets it thinks are feasible, based on consultation, and is prepared to grow business such a proposal should be considered. Many people in communities are not aware of the business conducted by An Post which is a communications deficit on its part. It should inform people of the services it offers and encourage them to use them.

It is a challenge for An Post and the best way forward would be to engage with communities who want to do X, Y or Z, ask them to do something on a trial basis and see how things work out. In this day and age we can expect more in the country. We want to move away from the way business was done by An Post when it closed down post offices. It offends any sense of fair play that simply because a person is retiring An Post decides it has too many post offices. When I ask this question the reply is always that An Post has too many post offices. I ask the delegation to explain to me why some survive and some do not, purely due to the retirement of a postmaster. An Post has an opportunity now, either with regard to Knockmore or other post offices, to take a different approach. If it takes this approach it will be more difficult for anyone to criticise it. People would be happier if it engaged with them and listened to their plans. In any event, it will not take long to decide whether a plan is viable. It seems it will shut down a post office because a post master reaches a certain age and retires while the business of this post office would be there to be continued on. I ask the delegates to take a fresh look at this policy and to listen to our concerns and to avoid a situation where there is tension and disquiet about how An Post is doing business. This is my request to the delegates.

Chairman

I have two or three points to put to the delegates. The issue of the consideration of the closure of rural post offices has been well aired. Mr. Connell did not refer in his presentation to the upcoming national lottery licence. I ask for his comments. Second, the committee, much to our surprise and in Mr. Connell's defence, was given notice of a ComReg decision to question the next-day delivery targets. In spite of all the representations we receive about matters pertaining to An Post, the question of the next-day delivery target has never been raised as an issue with any of the members of the committee. Third, Magazines Ireland has expressed concern - I have also written to An Post on this matter - regarding the change in the rates applicable to package mail delivery and in particular, the two weight categories which most affect Magazines Ireland. It would seem there is a symbiotic relationship between An Post and Magazines Ireland, in so far as the more it sells, the more business is generated for An Post. I suggest an alternative as proposed by Magazines Ireland might have been considered by An Post. I invite Mr. Connell to reply to those questions.

Mr. Donal Connell

I thank the Chairman and members and I will attempt to cover those questions. I will also deal with some general themes. The first question is with regard to the criteria in general for size or closure of post offices. An Post does not have a definitive template for the closure or otherwise of post offices. As I mentioned in my opening address and on several other occasions here, we look at each situation as it arises. We consider the geography and the location, the business volumes, the type and pattern of transactions and the proximity to neighbouring post offices. We make a decision based on those factors. It is a commercial decision which An Post needs to make. We communicate with local groups.

I was asked a specific question about the 32 resignations since 11 and I will provide that detail to the committee. Some 22 post offices will reopen, nine have closed and one will close next week. I confirm that the post office which will close is in Knockmore as I was asked specifically to confirm that closure. An Post has had intensive interaction with those concerned. It is not an ad hoc drive. Our overall approach and policy is that we want to maintain the most extensive post office network which can be commercially justified in order to provide the greatest and most extensive range of services to the community. We have been successful in this regard because Ireland has one of the most extensive networks as measured by population in the EU group of countries.

I refer to comments about innovative thinking and entrepreneurial spirit. My comments regarding the 30% decline in mail volume is to underline that this is an inherent change in our type of business which we need to deal with. I mention it as an example of a challenge which An Post is dealing with. We are responding to this challenge by developing revenue streams in a range of subsidiary companies and to which I referred, and these include An Post's business and gift voucher shop. We are succeeding thus far in maintaining the finances of the company in good shape, despite dealing with a seismic shift in mail volumes which has come about as a result in changes in society and the economy. It promises to be a feature of the next few years. It is a common international phenomenon. I reject any comment that this means An Post is accepting this change or that we are not engaging in innovative thinking. Because we referred to government services we are not just looking for easy pickings. Our ability to deliver government services in a high quality way and extensively and cost-effectively throughout the country is a key part of our mission and I do not make any apologies for saying it. This is an area in which we can develop our presence.

An Post has developed new revenue streams such as foreign exchange services and insurance products, for example. In our relations with the banking sector we have a significant opportunity to grow that service further. I refer to new product and new revenue development which is a key aspect of our strategy. Despite the massive decline in mail volume of over €100 million in the past four years and which has been a significant hit for the company, we have succeeded in maintaining An Post revenues at the same level overall by compensating from other sources. This is no mean achievement.

Some opportunities for growth are developing substantially and I refer to e-commerce as an example. Overall, we must be realistic in our projections and we must factor in the issues in the mails business as I discussed earlier.

As regards the question on how to deliver government business given the issue of the size of the network, the fact that we are working on additional revenue streams in order to develop more revenue, which is very important, does not preclude us from also having the most economic-sized network. We do not have a master plan of achieving a certain number of post offices within a certain timeframe because this is not the direction of our policy. I listened to the comments from members but I am explaining our current thought process in this regard. We look at each office in terms of its performance. If a situation arises we examine whether it makes sense to continue with that office.

I have referred specifically to Knockmore and I have explained that it is well served by Ballina. I have stood in Ballina post office and I have been in Ballina delivery office and I am familiar with the Ballina part of the service. It is a fine operation. There may be queues very occasionally at peak periods but the town of Ballina is well served by the main post office and the second post office. I agree with the Deputy's comments that the staff do a great job.

We have looked at the business plan put forward by the Knockmore group and it does not stack up. I have to make a commercial decision as I am responsible for running An Post and I must answer for its financial performance. I have to evaluate whether it makes sense to us and it just does not make sense.

Deputy Dara Calleary

If I may interject, it is great for Mr. Connell to say that but I ask if he could engage with the community representatives to explain why it does not stack up and to give them the reasons for the decision.

Mr. Donal Connell

We have met the community group several times-----

Deputy Dara Calleary

We have been at those meetings. There has been no real detailed engagement.

Mr. Donal Connell

Our view is that we have taken part in detailed engagement but that the proposals do not stack up. Likewise, I very much reject the notion that we are outside the loop or behind the curve in our strategy. In terms of post office business, we are investing in our future, in both our retail and mail business, in what are unprecedentedly difficult circumstances. It is important to clarify that we have a monopoly neither in the postal business nor in the retail business. We compete, usually on a tender basis, for all of the business we secure from the Government and other customers. There are providers competing with An Post for business. The Payzone payment channel, for instance, operates in retail outlets throughout the country. We are obliged to stack up against our competitors and win the business on a straightforward commercial basis.

In regard to the national lottery licence, the Government announced a contract renewal process in recent weeks. An Post owns 80% of the company which operates the lottery under licence from the Government. That licence will be put out to tender some time in the next 12 months. The Department of Public Expenditure and Reform is seeking to design it in such a way that it will attract a substantial up-front payment, with the terms and rewards for the operator set out in that context. The details of the licence must be clarified before a precise value can be put on either the up-front payment or the longer term potential of the contract, with the Government indicating a 20 year licence period will apply. The Department has invited input from interested parties and we will continue to engage with its advisers in this regard. Our intention, assuming the terms and conditions stack up, is to bid for the licence. It is likely that in so doing we would go in with a partner or several partners. It is a critical issue that will unfold in the coming months.

In regard to ComReg's action arising from its claim that the service provided by An Post was deficient, we were as puzzled by this like anybody else. As it is the subject of court action, I will not go into the details other than to iterate our surprise and intention to defend it. In regard to Magazines Ireland, I do not have the precise information requested by the Deputy on the change in rate categories. I will get back to the committee with the numbers.

Deputy John O’Mahony

I have several questions in respect of which I would appreciate it if Mr. Connell gave me a "Yes" or "No" answer, with further clarification if required. He said the closure of any post office, including Knockmore post office in County Mayo, was a commercial decision. Is it the case that if the last postmaster had not retired, more post offices would have remained open? When did the postmaster at Knockmore first inform An Post of his plans to retire? Where does Knockmore rank compared other post offices in County Mayo? Could a situation arise where customers would be directed to another post office the business of which was smaller than that of the office closing?

A clear pattern is emerging in our discussion today of what is happening throughout the country. While we are all concerned with our own situation, the nationwide pattern is the overarching concern. My frustration is focused on the process used for closing post offices. I am asking Mr. Connell, setting aside individual cases, whether he can put forward a better way for engaging realistically with communities whose service is threatened. In other words, does An Post intend to amend in any way the model being inflicted on communities throughout the country, as outlined today? What we are seeing, as public representatives, is a disconnect between the company and the communities it serves. Deputy Dara Calleary observed that despite all of the individual decisions made, An Post remained a good brand with a great tradition, the tentacles of which reach into every community in the State. I am afraid I have lost my train of thought, but I will return to my final point presently, with the Chairman's indulgence.

Deputy Paudie Coffey

I am very disappointed with Mr. Connell's response to the questions we have put to him. His admission that there is no master plan or overall strategy for the postal network amounts to a deficit in the company's structure and operations which must be addressed. Colleagues and I asked specific questions about the viability thresholds and associated information - again, that information was not given. It is not specific to the problem I referred to in County Waterford, as it runs right through the discourse, but Mr. Connell did not even attempt to explain the issues around the lack of consultation with customers and communities and the delay in communication until after decisions are made. That is most disappointing. I agree with Deputy John O'Mahony that An Post should devise a protocol for engagement with communities prior to future closures.

Deputy Noel Harrington

We all agree that the only way forward for An Post is to increases its business, whether by supplementing the mail network or otherwise. It is a large company, but it must be more flexible. Subject to correction, I cannot recall a single instance in the past 20 years where An Post has requested individual offices in various locations throughout the State to consider how they might better promote their business. Banks, for example, often target and incentivise different types of depositor and so on, but post offices have never been given that option. Many offices, irrespective of their location, might be in a position to avail of different opportunities because a particular town offers unique potential in a specific area. If we had a more efficient and flexible model, there would be better feedback, whether from communities, post offices or the Government. That type of engagement is not taking place and the potential is not being exploited. Mr. Connell says such opportunities might not stack up, but the point is that the opportunity is not even being given.

Many offices are located in rural areas where there is potential for providing services such as mail order services for those with no online access. Such a facility could be introduced as a retail business to supplement the mail business. I have never heard of anything like that happening, perhaps because there was a model that did not stack up. However, these are the challenges An Post must seek to address by way of consultation with individual post offices and communities. There is more than one stakeholder in the process. The company should initiate that engagement by incentivising these initiatives and being more flexible in its approach.

I was asked to raise a particular issue relating to the former post office in Kilbrittain in west Cork. I will not go into the details, other than to say it has been closed for some time. The community is seeking assurance that a contract will be offered for the service and that it will be restored in the near future. They have done without a service. I do not want to go into the details of this ongoing matter as they are sensitive. The service is important for the future of the community, which is quite engaged with the problem. I would like the witnesses to comment on that.

Deputy Éamon Ó Cuív

Mr. Connell mentioned in his presentation that An Post has 170 postal agencies. What range of service is provided by a postal agency, by comparison with a post office? The issue of cash transport has been raised with me in the context of postal agencies. I understand that a person who has a postal agency has to pick up the cash wherever it is available. That can be a huge cost. If one has a postal agency, those who are responsible for delivering cash will not deliver it to one, even if they are going past one's door to a post office ten or 20 miles down the road. One has to collect the cash, which can be very expensive. My own experience is that the cost of insurance can be expensive in such circumstances. One's insurance company will insist that one sends two people to collect the cash because of the risk associated with it. For security reasons, one will not be insured if one does not do that. Mr. Connell might comment on that. In the past, when a post office closed, the agent was often offered the chance to run a postal agency. I often wondered whether the agency is any good to the agent or any good to the community. Perhaps it should be a case of a post office or nothing. Has this kind of hybrid model really offered anything to communities? My feeling is that most people want a post office or nothing.

Senator Brian Ó Domhnaill

I would like to ask a few additional questions about aspects of this issue that have not been covered. We all appreciate the excellent work that is being done by the postal service, particularly by the foot soldiers on the ground up and down the country. I refer to those working in post offices and to the postmen themselves. The postman is often the only point of contact with whom elderly people living in rural areas engage on a daily basis. Some of the people in question might not see anyone else from day to day. Perhaps there are opportunities in that regard.

The State has to do a massive job to correct the anomalies in the electoral register. Have there been any discussions with the Department on the work that the genuine postman on the ground could do to help councils and the Department to correct the electoral register? The postal service could be offered the chance to do that work in return for remuneration. If there are two or three people of the same name in an area, no one is more likely to know about it than the local postman who deals with them on a daily basis.

I have previously spoken about two business cases that were made by local people in relation to small rural post offices. Maybe An Post did not pick up on that. I refer to the business cases that were made in respect of Laghey and Meenlaragh post offices. No responses were received from An Post. In the case of Meenlaragh, there was no engagement whatsoever. There were no meetings with local community groups and no contact was made. Local people contacted An Post by telephone, but they received no explanation for the closure of the post office. There were some meetings in the case of Laghey, but as in Mayo no explanation of the reason for the closure of the post office was given. That is the bottom line.

It is fine to give the sweeping brush answer that refers to national criteria, such as the geography of the area, the business volumes and the type of transactions, but that does not answer the question about the criteria being used by An Post. If no defined criteria are in place, what is the rationale for closing any post office? Is it a question of making sure the generic post office sector is as financially viable and profitable, rather than examining the service that is being provided to local areas? Has An Post done any surveys on the impact of the closure of a post office on the local community and small businesses? If such a study has not been done by An Post, how can it be sure that a closure would have a limited impact on a small community? How can it definitively say that the closure of a post office in a certain location will have very little negative impact on the local community, when no study has been done to back that up?

Absolutely no structure appears to be in place to ensure that a certain local consultation period is observed when the closure of a post office is proposed. We all accept there may be circumstances in which a post office has to close, but the local users of the service should be consulted before the post office has to close. That could be done easily. In that context, is An Post is satisfied with the manner in which it is closing post offices? Examples of closures have been given here today.

Deputy Michelle Mulherin

I wish to respond to Mr. Connell. It is a bit of a joke that every elected person at this table has failed to get information. Representatives of this committee were at a couple of those meetings in Knockmore. The amount of information specific to Knockmore was absolutely dismal, as was the amount of information on the post offices in Ballina and Foxford, where An Post is proposing to transfer the business. People are putting forward a business plan in a vacuum. A simple question relating to whether Knockmore post office is running at a loss could not be answered. Similar questions about whether Ballina and Foxford post offices are viable could not be answered. All that has happened is lip-service rather than engagement. An Post is operating like a secret society.

Senator Mary Ann O’Brien

I apologise for missing part of this meeting. I would like to follow up on what Deputy Mulherin had to say. Can Mr. Connell share his five-year plan? Can he be much more transparent about how he communicates with his partners? I would consider Deputy Harrington to be one of his partners because he is a postmaster. They are working within the same group or company. If I were a postmaster, would I have been given a roadmap or template? Would I know what I have to do to break even? Is An Post transparent in its sharing of information? I suggest, on the basis of what I have heard this morning, that it is not.

I dealt with Enterprise Ireland yesterday on behalf of my own business as part of its Leadership 4 Growth programme. Many people from outside the country were grilling us. I have a chocolate and dessert factory. I was reminded to think way outside the box. Reference was made to the fact that Kodak's core business was photographs but that business is now gone. An Post's core business is still mail. I commend An Post because it appears to be thinking outside the box. Enterprise Ireland has asked us to take on young people from the Smurfit School of Business or from universities abroad. Companies like PayPal, Google and Yahoo were started by kids from Silicon Valley. We need the brains of the youth in the information technology sector to come in and do some work of that kind.

The main question I would like to ask relates to transparency and communication with one's partners. I did not mean to get into the second matter I raised. I would love to know whether those involved with the post office mentioned by Deputy O'Mahony knew what they needed to do to break even.

Mr. Donal Connell

I will deal with the main issues that have been raised. I was asked whether a post office would stay open if the current postmaster had not retired. We have made it clear that we do not compulsorily close post office outlets. We are aware of the performance of each individual outlet. We have targeted programmes to encourage sales of products through our major outlets. The "Customer Plus" programme identifies a detailed business performance metric for the top 300 outlets, which account for more than 70% of our business. That programme is very much in place and is very much driven.

Deputy John O’Mahony

The answer is "Yes". It would still be open.

Mr. Donal Connell

Yes. It would still be open.

Deputy John O’Mahony

How can one say in another breath that it is a business decision?

Mr. Donal Connell

An opportunity has arisen to restructure how we offer our services in that area. We take the right business decision in doing so.

With regard to Mayo, I do not know the answer off-hand. We can figure it out and revert to the Deputy.

On engagement with communities, the decision is one for company management to take in regard to the case in question and others. We engage with communities. We have been involved in an intensive engagement process with Knockmore post office, for example, and we are happy to explain our case.

I have listened to many of the comments by members and noted every single post office closure tends to receive an awful lot of attention. The members do not need me to talk about the state of the economy and the major challenges that we face; suffice it to say that An Post faces some very significant challenges financially. I have mentioned the changing mail volumes. These are considerable issues that threaten financial viability.

With regard to the retail network, we are very generously resourced with post offices. I mentioned that we rank very highly regarding the penetration of post offices. We are very well aware of the impact of a change such as the one proposed on our customers. We examine this intensively. This is an issue to which we need to face up, and we need to implement the change to improve our business.

Deputy Paudie Coffey

Mr. Connell has not answered the question on consultation or the lack thereof. We acknowledge the difficulties and challenges that arise.

Mr. Donal Connell

I am trying to answer the question.

Deputy Paudie Coffey

Why is there no consultation with the communities? The question has not been answered.

Mr. Donal Connell

I am trying to finish my response to the other questions. I have explained several times the process engaged in when an opportunity like this presents itself. We examine it according to the criteria, which criteria I have mentioned several times today. In doing so, we make a decision. We have communicated with the local community but the decision is driven by us based on our charter.

We are certainly very well aware of the strength of the An Post brand. It is a tribute to both the company and the employees. It is very valuable and has been critical to us in previous years.

With regard to goals, we have performance data on each post office outlet. The business in each area involves payment on a transaction basis, as Deputy Harrington will know. There is an intensive programme to incentivise sales and drive activity in our top 300 outlets, which cover the vast majority of our revenue.

I have dealt with all the points. I have listened intently to what the committee members said. We will go through all the points and concerns raised. We operate according to a five-year plan. This is communicated intensively to our suppliers and partners on the retail side, such as the Irish Postmasters Union, and also staff and industry groups.

Deputy Éamon Ó Cuív

What is the position on agencies?

Mr. John Daly

Deputy Éamon Ó Cuív is correct that there are 170 agencies. They primarily do social welfare business and have been set up where small rural offices have closed. Some sell stamps and do some bill-pay transactions. The Deputy is also correct that these bodies are responsible for getting their own cash. That is part of their business model behind them. We realise there are some difficulties in this area but it is part of the business model.

Deputy Éamon Ó Cuív

I know from experience that cash transport is a major problem. Mr. Daly obviously has a national cash transport arrangement for post offices and is responsible for bringing cash to them. What if there were a commercial fee and an agency paid the cost? The ways in which An Post and an agency transport cash are chalk and cheese, given that An Post has proper security, etc. It is fair to say most agencies just throw the cash in the car and drive away. My memory is that most insurance companies require two people to be in the car. It is an expensive operation for a small agency. I understand the agencies do not get paid the same amount of money as the post office.

Mr. John Daly

That is correct.

Deputy Éamon Ó Cuív

The delivery of money to 1,150 parties could at least be priced and offered as an add-on service that the agent would pay for. If there were willingness to pay, it would be possible, under a national contract for moving cash, to deliver to the premises also.

Mr. John Daly

That is something we can consider. Where a security company delivers cash to an outlet, there are very significant obligations on that outlet with regard to safes, the manner in which the cash is transported, etc. We will examine what is proposed but the cost could be prohibitive for each of the retailers.

Deputy Éamon Ó Cuív

While all those obligations arise when cash is being transported, I presume the agent must meet all of them in any case because he must transport the cash safely. It is much harder for one to transport it personally than it is by using a van designed to do the job safely. There is a huge difference between throwing a lot of cash in one's car and using a specially designed van with fail-safe devices with which a thief must contend. I presume the agents are already required to have safes, etc., so the money can be looked after safely by them.

Mr. John Daly

They do have safes. Primarily, the agencies will get the cash from their businesses. In most cases, they generate the cash from their businesses rather than getting it from the banks. However, we will consider the Deputy's proposal.

Deputy Michelle Mulherin

Will the provision of a service on an agency basis be considered for Knockmore?

Mr. John Daly

With regard to recent closures, very few agencies have been set up, sometimes for the reason Deputy Ó Cuív has outlined. It is probably too late in the day to be setting up an agency in Knockmore. Deputy Mulherin, as a Deputy for the area in question, will be aware that the postmistress in Foxford has spent some money developing her premises in order to take on the extra business.

Deputy John O’Mahony

Two questions have not been answered. It was stated people in Knockmore were notified. The evidence I have is that they were not. Will people collecting pensions this Friday or on Friday week be contacted directly to state they must collect them somewhere else? This has not happened although today is Wednesday.

My second question concerned when the postmaster in Knockmore first got in contact with An Post.

Mr. Donal Connell

I will ask Mr. Daly to answer those questions.

Mr. John Daly

With regard to the second question, I do not have the exact date. We were informed but one is obliged to give at least three months' notice of resignation.

Deputy John O’Mahony

Can Mr. Daly find out?

Mr. John Daly

I can find out.

On the second question, we do not write directly to social welfare clients to tell them there has been a change. A notice goes up in the office to tell them of the change. My understanding is that a notice has gone up to that effect this week.

Chairman

I will have to draw our discussion to a close because I am conscious that Mr. Connell has an engagement at 1 p.m. I thank him for his time here.

In summary, the issue of how An Post makes decisions about the future of post offices has been given a fair airing today. The very least that the committee members would ask is that Mr. Connell will take on board what has been said. He should review it with a commitment to reviewing the process. A basic principle in reviewing whether a post office will continue to exist is on foot of a resignation or closure. As Mr. Connell has said, he has a principle of not closing a post office - whether commercially viable or not - while there is an active contract. There are larger post offices where it would be considered obvious that An Post would continue. In that vein, would it not be better to consider a protocol - this would help transparency - whereby it was accepted that once a post office was going to be closed An Post would consider the option of whether it will renew or offer a new contract? Is it accepted from Mr. Connell's point of view? It would be better at that stage to make that known and tell people in the community it is up to them, in that before An Post makes a final decision it wants to see a business plan and that it will adopt a model with a 12-month trial following the closure to see if it hits the targets that are worked out between it and the community. At least then everybody would know where they stood from day one. Perhaps the three-month notice period should be extended to six months. In that period the onus would fall on whomever, commercially or elsewhere in the community, to put forward a viable business plan that could be discussed. It is not much different to what is happening at the moment but it would save a lot of grief. The issue concerning the manner of engagement seems to be the biggest single issue that has arisen today.

I should have declared at the outset that my brother-in-law is a postmaster. I had forgotten that. He will not be impressed. He is a postman and his wife is a postmistress as it turns out. I am familiar with some of what goes on in the post office business.

Mr. Connell made one other point about the way An Post has grown extra revenue through its savings schemes and we would all accept that. If I see an advertisement which says, "Save with An Post savings certificates", it is seen as a safe haven for deposits, much safer than some of the alternatives. That is based on well-earned goodwill that has been built up. An Post has given a return, although it might not have been as dynamic as some of the star performers of the day but it is still here and it is a survivor. We should bear in mind that such goodwill exists and is a point of access for the future.

Deputy Calleary outlined the level of fundraising undertaken by many people in rural areas. Such people are prudent and do save. If there is a post office at hand they will lodge money into it because they know they can access it quite easily - perhaps not as simply as from an ATM - and they know it is safe. That principle should be built upon.

I thank the witnesses for their engagement with us. Forthright and heartfelt views have been expressed, especially from some Deputies where there are current issues in counties Mayo, Waterford and Donegal. Those were the main examples we heard about. I would ask the witnesses to take on board the contributions, opinions and concerns that were raised today about An Post's model. Much of it is good but this is something that needs to be worked on. It is a semi-State company in which people have a lot of faith. It would be a shame to see that diminish.

I will adjourn the meeting now as there is no further business.

Deputy Michelle Mulherin

As regards the Chairman's summation, it seems to me that An Post's remit to ensure postal deliveries throughout the country is commercially and bonus-driven. That is what we will take away from here today.

Chairman

I wish to adjourn the meeting as there is no further business.

The joint committee adjourned at 12.55 p.m. until 10.30 a.m. on Thursday, 26 April 2012.