Dáil Éireann Debate, Tuesday - 27 June 2017
54. Deputy Brian Stanley asked the Minister for Communications, Climate Action and Environment the position regarding changes with An Post retail and mail businesses in the context of the retention of the universal social obligation. [30081/17]
View answer57. Deputy Thomas P. Broughan asked the Minister for Communications, Climate Action and Environment his plans for the post office network; if he has sought a report from the chief executive officer of An Post on the future of the post office network across the country; and if he will make a statement on the matter. [29936/17]
View answerMy question relates to the uncertainty around the survival of our post office network and the mail distribution network, comprising four mail centres. What are the options for the survival of the post office network and the mail centres? We have had the Kerr and the McKinsey reports. What has happened to the former report? Two years or more were spent on that but we are in the dark in terms of what is happening with it. Those who work in the industry and the public are very concerned.
I propose to take Questions Nos. 54 and 57 together.
Will I briefly introduce my question?
When questions are grouped only the Deputy who tables the first question in the group makes some introductory remarks.
As Minister for Communications, Climate Action and Environment, I have responsibility for the postal sector, including the governance of An Post, to ensure that the company is fully compliant with the code of practice for the governance of State bodies and the governance functions included in the statutory framework underpinning An Post. Operational matters and the role of developing commercial strategies for An Post mails and retail businesses, including the post office network, are a matter for the board and management of An Post and are not matters in respect of which I, as Minister, have a statutory function. Consequently, measures to maintain, enhance and diversify the post office network are fundamentally a matter for An Post.
The Post Office Network Business Development Group was established at the end of 2014 by the then Minister for Communications, Energy and Natural Resources to explore the potential for commercial and additional Government services which could be transacted through the post office network. I was one of those who made a submission to the group. Following publication of the final report of the group in January 2016, two working groups were established to progress the recommendations of the report, namely, the network renewal implementation group, chaired by Mr. Bobby Kerr, and the post office hub working group, chaired by the then Minister of State, Deputy Michael Ring.
On foot of a reconfiguration of Departments in July last year, responsibility for the post office network transferred to the Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs. In March 2017, that Department published the final report of the post office hub working group, in which it was outlined that the Department intended pursuing the possible opportunities for services such as community banking and motor tax renewal for the network. Arrangements are in hand to reassign responsibility for the post office network to my Department in light of my overall responsibility for An Post.
The network renewal implementation group report was undertaken by Mr. Bobby Kerr for An Post and I understand the report is under consideration by the company.
It is Government policy that An Post remains a strong, viable company that is in a position to provide a high-quality, nationwide postal service and that it maintains a nationwide, customer-focused network of post offices in the community. However, the environment in which the post office operates is changing and the network needs to change to thrive, particularly with the move to digital transactions. This involves harnessing existing strengths, such as its trusted brand and the relationship of postmasters with individual communities, in order to build the network of the future. The post office plays an important role in serving the needs of business and domestic customers alike and this is at the forefront of An Post's mandate.
Deputies will be aware that a fundamental review of An Post, including the post office network, which will identify the strategic changes and restructuring necessary to maintain the company on a sound financial footing, is ongoing. Naturally, the outcome of the review will impact on the extent to which the recommendations contained in the network renewal and post office hub reports can be implemented.
While decisions on restructuring An Post and the operation of the post office network are operational matters for the board and management of An Post, I am monitoring the position closely and hope that a pragmatic approach that will ensure the long-term sustainability of An Post and the post office network can be agreed. I had a number of meetings with the chief executive officer and chairman of the company and my officials also meet An Post management on a regular basis. I have encouraged An Post to continue to work closely with all parties to find an agreed solution to the renewal of the network. The Government will be briefed once a definitive strategy has been agreed but until such time, it would not be appropriate for me to comment further on this process.
The post office network has evolved a social role in the widest meaning of the term, one which is highly valued by local communities. I envisage a strong future for the post office network by using its existing strengths to remain a significant player in the provision of Government, financial and other services. It has been long-standing policy that An Post remains in a position to compete in a liberalised market and continue to provide wide-ranging services to urban and rural communities.
I also want to be clear that there is no threat to the mails delivery or universal service obligation. An Post will continue to deliver post to every address every working day, which is a European Union requirement. The recent amended approach to pricing aims to ensure An Post can fulfil its obligation in this area.
While I thank the Minister for his reply, it did not provide much enlightenment. We now know that responsibility for An Post has reverted to the Minister, which is welcome because it caused problems for all of us when three Ministers had responsibility for the company. While, strictly speaking, the Minister is correct that operational issues are a matter for An Post, he is a shareholder on behalf of Joe and Mary Soap and the general public. He has a responsibility and cannot, therefore, act as a spectator. The reviews of An Post have been ongoing since 2014. The Kerr report appears to have been buried, while the McKinsey report has not yet been completed.
What is the future of the four mail centres, including the centres in Portlaoise and Athlone? Some 200 people work in the former, which takes on an additional 150 staff every Christmas. Every night, 450 mail deliveries enter and leave the Portlaoise centre, which deals with 28,000 parcels per day. It is a very busy facility that operates at far in excess of the capacity it was built to handle. A separate facility built recently to handle distribution at the centre, including leaflets, has been a great success.
The public owns the post office network and An Post is a semi-State company. I am fed up with Ministers telling us the company operates at one remove from the Oireachtas and Ministers cannot act on operational matters. They take the information provided to them by chief executives of semi-State companies at face value. Deputies take an interest in An Post on behalf of the public and the Minister is our representative. I also met the chief executive of An Post to discuss the issues that concern all of us.
I too am concerned about An Post. I visited the mail centre in Athlone where I spoke to staff.
Did the Minister visit the centre in Portlaoise?
Like Deputy Stanley, I am a local Deputy. Given that the Athlone centre was the only facility McKinsey did not visit, it was appropriate that I visit. The facility has a spare building which could easily cater for additional volume.
Unlike some people, I take the view that the universal service obligation is critical infrastructure. In November and December 2016, when the House discussed the serious difficulty in which An Post finds itself, we debated whether to alter the universal service obligation or seek the approval of the European Commission to alter it. I was not prepared to entertain either course of action.
One of An Post's strong advantages is that it has a van passing every door five days per week, every week of the year. The company is also trusted by the public, enjoys brand recognition and has a nationwide network. We need to put in place a plan that builds on these four key strengths. I am of the view that a plan which sustains not only the post office network long into the future but also the mails business, which has the potential to grow, especially in parcel deliveries, can be put in place.
What is the Minister waiting for?
I welcome that the Minister referred to the Portlaoise mail centre. The Athlone centre is critical for the west and north east and the Minister's visit to the facility was welcome. My concern is that we have only four major mail centres whose future is critical in terms of distribution. As An Post has emphasised, the company is now moving into the personal network, which is a very good development.
I welcome the Minister's restatement of his commitment to the universal service obligation. We are all on the same page on that issue. Sinn Féin, in its discussions with An Post, made some suggestions on how the universal service obligation can be implemented more efficiently. It is essential that postal deliveries are maintained for five days each week.
The issue is that the post office network and the future of the mail centres are intertwined. For a long time, various Ministers dealt with different aspects of the postal service and there was a danger that it would move in different directions. The Minister is interested in the post office network, I will give him that. Now that responsibility for it has transferred to his Department, I ask him to take a direct interest in the issue, pull everything together, move the process forward and retain the mail centres in Athlone and Portlaoise. These facilities are now taking overflow business from Dublin that the capital cannot handle. We must also retain as many post offices as possible. The key point, however, is that this process is like watching paint dry in that we have been waiting for years for new services to be devolved to post offices. There is a broad consensus in the House and among communities on the need to implement the suggestions that have been made in this regard. We must move ahead and make the network viable.
I understand the Deputy's frustration.
Time is of the essence.
When I was an Opposition Deputy, I questioned the commitment of many previous Ministers to the post office network.
However, that is neither here nor there. I was equally frustrated that there was no movement in this regard.
I see digital not as a threat to the post office network, but as an enabler with considerable potential. The difficulty to date has been that digital is seen as a threat. It is like trying to hold back the tide. We now have a chief executive in place in An Post who sees the significant potential and resource that it presents. An Post has been slow to get back into the parcels business after getting out when it was beginning to grow and its competitors have since got into the business. An Post's one strong element is the universal service obligation. It needs to exploit that asset as much as possible. In fairness, it is developing a pilot in four towns to determine how best to utilise the fact that it has vans that go from towns into rural areas on a five-day basis. This is a small step in the right direction.
The Minister stated that operational matters at An Post were for its board and management, but he has an overriding responsibility. This is not just a rural issue, but the oft-quoted threat to 256 post offices also makes it an urban one. Last December, the Minister told me that the strategic review would report in May, but we are now approaching the end of June. What is the timeframe for the review?
Regarding the Kerr report of the post office network business development group, has the Minister invigilated that each of the targets and new areas of development is being proceeded with and that additional funding is being provided? In recent weeks, there was a major threat to our post office in Howth. It was advertised on a number of occasions, but no business came forward to take it on. By the look of things, there has been a stay of execution for a year. There were previous threats to the post office in Sutton and there are no direct post office services in the north Coolock area, which has a large population.
The Minister is presiding over a massive national business with nearly 2 million customers and 9,500 employees. He needs to move on this matter in a strategic way. So far, though, his approach has been disappointing.
I thank Deputy Broughan for his question, although maybe not his comments. As he said, if no one is willing to come forward and take on the business in towns like Howth, a fundamental question needs to be asked: how do we modernise the offering so that people will want to take it on? What hope have we of keeping sub-post offices in rural Ireland open if people are not prepared to take on a post office in towns like Howth? Key to this is using digital as a driver. We all know of the post office's role in social welfare and how older people in particular use it. There is a significant opportunity for the postmaster to be used as the gateway to the digital world and for State and non-State services to be provided. Websites like Switcher.ie and bonkers.ie can offer people up to €300 in savings on their electricity and gas bills, yet many older people are not availing of them because they are not able or willing to go online to do so. This is an opportunity for providing a service through the local post office. Many other similar services could be provided in support of what the Government is doing.
On the other side, we also need to get young people to start going to their post offices. It is not good enough that the only time people go to a post office is at Christmas to buy a stamp or in the summer to get a passport.
The Minister needs to take the initiative. We have read about the new Smart current account, but we have been discussing current accounts and so on for some time. In New Zealand, for example, Kiwibank is run by the post office network. The report to which I referred proposed the idea of close liaisons with the credit union movement. In Germany, the Sparkasse bank is headquartered in Bonn. There is a range of measures, but the Minister needs to take the lead role.
The Minister mentioned towns like Howth. My constituents, particularly older ones, were deeply concerned at the time about the possible closure, but the chief executive of An Post, Mr. McRedmond, did not seem to make a dynamic approach to our local chamber of commerce or major businesses in the area to encourage them to ensure that this key aspect of the social community framework would remain on their peninsula.
The Minister needs to take a more dynamic approach. He must publish the strategic plan, get on with matters and try to centre our post offices. The post office's operations are vital in many areas, for example, the Beara Peninsula, where they are a focal point for towns, villages and communities. The Minister needs to set an example.
The Minister referred to IT. While there is scope for a return to the parcels business, there is also considerable scope for An Post to take a leading role in terms of IT, given the question marks that seem to he hanging over some email providers, for example, Google's security.
I will take up Deputy Broughan's final point. Deputy Dooley was critical of me earlier, but with the roll-out of fibre across rural Ireland, 97% of post offices will have access to high speed broadband within the next 77 weeks. That piece of infrastructure needs to be fully utilised for the benefit of communities, older people and people who do not have access to the Internet at the moment. One in seven people has never used the Internet. In this light, the post office can be used to provide such people in urban and rural Ireland with significant opportunities and we need to exploit those opportunities fully.
In fairness, the chief executive of An Post, Mr. David McRedmond, gets it. He sees the opportunity presented by the development of financial services, the parcel system and developments in the digital economy as an enabler to drive the business forward. Work is ongoing in terms of the Kerr report and the feedback from the McKinsey report and NewERA, but the board will have to make the ultimate decision. There is also ongoing and regular engagement with my Department. That will continue until we have a blueprint for the future.
