The Department of Social Protection envisages a payments environment that will ultimately deliver all payments to customers electronically. This is in line with wider Government policies and objectives such as better public services, better and more effective ePayments and is aligned to the objectives of the National Payments Plan published by the Central Bank recently. The progression to electronic payments is a critical element of the National Payments Plan which aims to reduce the very high levels of cash usage in the Irish economy, thereby contributing to improved national competitiveness.
All welfare customers paid through the post office network are paid in cash. This is an inherently expensive means of paying customers. This approach is inefficient, costly and imposes security risks on customers and staff alike who handle, distribute and receive these monies. The Government needs to move to more modern approaches for distributing these vast sums of money to customers weekly.
As the current contract with An Post expires at the end of 2013, the Department is undertaking two public procurement competitions for the delivery of welfare payments and will provide for progression over time from cash to electronic payment methods.
The first procurement for over the counter cash services for social welfare customers commenced in December 2012 and is now well advanced. This will replace the existing service contract with An Post and will ensure continuity in the delivery of cash payments to the Department’s almost 1 million cash payment customers. I anticipate a contract for these services will be signed by the summer and will provide similar services to customers to those they currently enjoy. The term of the contract will be for a two year period up to 31 December 2015. The contract may be extended, for one or more period(s) of twelve months each, up to a maximum of six years in aggregate. The services being procured under this RFT will be for a transitional period as the Department progressively increases levels of electronic payments.
In addition, and to further support the migration towards electronic payments, the Department will be procuring an ePayment solution(s) to complement the existing facility to make payments directly into customers’ accounts in financial institutions. It is anticipated that notification regarding this procurement will issue by end June 2013 and a new electronic payment method will be in place for customers towards the end of 2014.
Public sector contracts for the supply of products and services are generally subject to a competitive tendering process. This ensures that the taxpayer receives value for money and ensures that all potential suppliers are given the opportunity to put forward the most efficient, effective and competitive solutions for consideration and evaluation. The award of public sector contracts with a significant financial value is subject to various EU Directives. Because of the financial value of this particular service, the Department was required to publicly invite tenders for the new contract to deliver social welfare payments when the current contract with An Post expires at the end of this year.
I am conscious of the important role of the post offices around the country, notably the extent to which it is now a one stop shop where people can pay bills, purchase mobile phone top ups, use the passport application facility, pay local property tax and carry out a range of banking and other financial services. The Government has stated its commitment to maintaining the post office network in the Programme for Government.
