I move amendment No. 2:
To delete all words after “Dáil Éireann” and substitute the following:
— the important role that An Post and post offices have played during the Covid-19 pandemic in its commitment to rural communities and to the elderly and vulnerable in our society, and its provision of a swift and sustained response to the crisis in the introduction of a number of initiatives, including check-ins on elderly and vulnerable customers, delivery of newspapers and a recent commitment to free mail to residents in care facilities until January next;
— that transactions within the post office network are down by an estimated 25 per cent due to the Covid-19 pandemic;
— that post offices provide crucial public and financial services to communities all around Ireland, especially to those in rural and isolated areas;
— that the Programme for Government commits to supporting a modernised post office network that ‘will provide a better range of financial services and e-commerce services for citizens and enterprise, as part of our commitment to a sustainable nationwide post office network’;
— that An Post has potential to do more and make a further significant contribution across many areas of public, business and community life in Ireland, with an evolving mandate An Post can emerge as a central hub for a wide variety of valuable community focused services; and
— the strides made by An Post in offering an enhanced suite of financial services through the network; and
— that the Government is committed to a sustainable nationwide post office network as a key component of the economic and social infrastructure in both rural and urban areas;
— in pursuit of this objective, Government efforts to support An Post in the roll out of new services and the delivery of its strategic plan to ensure the financial viability of An Post and the continued fulfilment of its mandate to deliver a mails delivery service and a viable post office network, including:
— the provision of State support to An Post of €30 million in 2017, €15 million of which was to support the post office network;
— the approval of a capital expenditure programme, which as part of the Company’s commitment to the sustainability of its network is designed to develop the newer elements of An Post’s financial services business and mitigate declining core mail volumes and revenues on the retail side of the business;
— the work under way, in consultation with An Post, to explore the scope to put more business through post offices; and
— the Provision of Offline Services Report, which will be published in the coming months and considered as part of a national digital strategy and which proposes a more coherent approach to providing offline services to citizens; and
— the commitment from the Minister for Employment Affairs and Social Protection that all weekly social welfare payments, which had been moved to a fortnightly schedule from the end of last March, will be fully restored to being paid weekly with effect from Monday, 2nd November, 2020, noting the value of these transactions to An Post.”
I thank Deputies for their contributions and the opportunity to address the motion. Although the Government is opposing the motion, I wish to put on the record that I agree with many of the sentiments expressed by the Deputies who put down the motion, as the network has the capacity to do more business for the Government. All Members agree on the end point, but where we differ is on how to get there.
I commend An Post and postmasters on the community initiatives put in place in response to Covid-19 which have been implemented with such goodwill and efficiency throughout the country. Throughout the pandemic, An Post has kept its network of 940 post offices open, playing a hugely important commercial and societal role in communities. Most recently, An Post announced that it will ensure free delivery of all card and letter mail posted to or from residents of nursing and care homes until the end of January. Enabling family, friends and colleagues to keep in touch is of great importance. The support provided to the elderly and most vulnerable through this and other important initiatives is an invaluable service during these times.
An Post, postmasters and the network are facing their own particular challenges. The ongoing decline in core mail volumes through e-substitution has seen An Post working hard to diversify its business in recent years and to seek new business opportunities. Deputies will recall that even before Covid-19 there were huge challenges for the business, with mail volumes declining by 6.3% in 2019, resulting in a €25 million decrease in revenue. An Post estimates that Covid has probably accelerated this process of volume decline by two to three years. A further difficulty in that regard is that once customers have adapted to digital alternatives, they rarely return to sending mail and, as such, the decline is likely to be permanent.
Like many other aspects of our lives, the way in which the public accesses Government services is likely to have been profoundly affected by the pandemic. We need to consider these changes and our response to them very carefully. To take the example of motor tax, under the existing arrangements, motor tax is payable in person or by post through motor tax offices in 26 local authorities. It is also payable online at any time, with the level of online usage increasing from 42% of all motor tax transactions in 2010 to just under 79% at the end of last year. Although overall motor tax transactions have reduced slightly in recent months due to Covid-19, the percentage of online transactions has increased significantly during that time, averaging 92% of all motor tax transactions.
We need to consider our overall approach to offline service provision in light of our experience, and not in terms of individual services but rather as a whole. Rather than considering individual services, a centrally driven, whole-of-government approach to offline service provision, similar to the adoption of digital government, would help to realise the commitment in the programme for Government to a sustainable nationwide post office network. I am considering the report of the offline services group with a view to bringing it to the Government in the weeks ahead.
The Government has recognised in its programme that a modernised post office network will provide a better range of financial services and e-commerce services for citizens and enterprise. We need to be imaginative and to explore other ways to use the post office network. The Minister for Environment, Climate and Communications, Deputy Eamon Ryan, made reference in the House last week to the potential to use post offices as hubs for remote working. Engagement has already begun with An Post and I am keen to work with it to explore this potential. It has also been imaginative, diversifying and expanding the services it offers. It recently launched its green hub facility as a one-stop shop for home retrofitting. New services such as these will drive footfall through post offices.
There is no doubt that Covid has had a negative effect on post office footfall, with an estimated 25% decrease in transactions. Social welfare cash payments, which were reduced to a fortnightly payment in March, will return to a weekly payment of on 2 November. This announcement has been welcomed by postmasters. The recent report commissioned by the Irish Postmasters Union, IPU, on the post office network states that without the introduction of a public service obligation and further Government services through the post office network to increase turnover, the network faces an annual shortfall of €17 million per annum from 2021 onwards. These issues need to be addressed quickly and I can assure Deputies that work is under way in this regard.
A significant amount of time and effort has been spent in the past three years working on restructuring An Post, and I acknowledge the work of my predecessors in that regard. This work was critical to save An Post and protect jobs and the post office network. An Post has invested in training for all post offices in 2019 and 2020 to better equip postmasters to run their business, manage a profit and loss account and promote their businesses locally. Significant investment has been made in redefining the network, including reducing the number of post offices, modernising the postmaster contract and updating the brand.
The consolidation of the post office network has assured the widest possible distribution across the State with an ever-improving network. The focus of the business is on developing a full range of financial services which will mitigate the ongoing reductions on the retail side. The key focus continues to be on future-proofing the company and keeping it relevant to its customers with regard to the types of services it provides. This restructuring has seen the development of new areas of business, particularly in parcel delivery but also in new retail areas and in financial services, which has resulted in a return to annual profitability since implementation of the plan first began.
It is important to remember that, as with any business, it needs to grow and develop new products and meet the changing needs of its customers. An Post already has a significant presence in financial services, providing local banking through approximately 940 branches. In recent years, it has launched a current account, a credit card offering and loans. It also has a growing foreign exchange business. It has expanded in the area of e-commerce and has seen massive growth in its parcel business as well as in new green initiatives, placing sustainability at the heart of its business and adapting its fleet to provide zero carbon emission deliveries in Dublin.
An investment loan of €40 million from the European Investment Bank aims to support the implementation of a number of the projects underpinning An Post's strategic plan including post office renewal to allow An Post to offer upgraded retail services in fit-for-purpose outlets with appropriate digital and physical infrastructure. Government made €30 million available in State funding to support the renewal of the post office network and the continued fulfilment of a 5-day-per-week mail delivery service. This reflects the Government commitment to sustaining a nationwide post office network and daily mail service. The Minister, Deputy Eamon Ryan, has also recently approved a capital expenditure programme which, as part of the company's commitment to the sustainability of its network, is designed to develop the newer elements of An Post's financial services business and mitigate declining core mail volumes and revenues on the retail side of the business.
Government acknowledges that An Post has the potential to provide additional Government services. As the Minister of State responsible for An Post, I intend to work closely with the company to see if there is scope to channel more services through the network. It is my intention that all options will be considered fully and that efforts will be redoubled to give effect to our commitment to ensuring a sustainable and viable post office network.