We thank the Chairman and members of the committee for the invitation to attend. I am joined by Sean Martin, postmaster in Tramore, County Waterford and president of the union; and Ciarán McEntee, postmaster in Three Mile House, County Monaghan and vice president. We are pleased to appear before the committee and hope our contribution will help in its deliberations.
The Irish Postmasters Union, IPU, is the representative body for postmasters in Ireland and celebrates its 100th anniversary this year. We represent 90% of Ireland’s postmasters. Most post offices - and many people do not know this - are independent businesses run by postmasters under contractual arrangements first developed in 1907. We are independent small and medium enterprises contracted by An Post to run post offices. We are not State employees. We are not paid a fixed salary but make our living on a fee-per-transaction basis.
The post office network is a well-established national asset and is ever evolving. It is the largest retail network in Ireland with 920 branches. Some 875 post offices are run by independent postmasters who operate as small businesses and provide employment for almost 1,500 full-time equivalents.
The network provides a range of traditional postal, financial, e-commerce and Government services to over 1.3 million people, or 28% of the population, every week. The key services provided through the network are mails and parcels; social welfare payments; An Post Money, involving current account, credit card and personal and green loans; everyday banking for commercial banks, involving lodgements and withdrawals for Allied Irish Bank and Bank of Ireland; Government services such as television and dog licences, Garda fines and passport express; financial services for the National Treasury Management Agency, including prize bonds, fixed-terms savings, regular savings and deposit accounts. In the commercial arena we provide retail products for bill pay, money transfers, Western Union, national lottery, gift vouchers, mobile phone top-ups, iTunes vouchers and the Postmobile service.
We serve a valuable social purpose and play an important role in local communities. We act as an anchor providing a local government, business and social presence. It connects family and friends, fosters democracy and is a key part of our emergency and national infrastructure. We provide an essential public service in urban and rural communities, helping to address financial and social exclusion as we fill the gap left by retreating banks, Garda stations and struggling high streets. We operate in places where other retailers do not and we offer services that other retailers do not. We are one of the last institutions offering five and a half days of face-to-face service. In many communities, the post office is the last remaining entity for financial services as retail banks reduce their branch networks or withdraw from the market entirely.
Throughout the Covid19 pandemic, postmasters defined the essence of public and community services, keeping the network open to ensure the continued distribution of cash to customers and the economy. We operated without interruption providing a full range of financial services, vital social welfare payments and much needed business continuity that supported the national economy.
It is hard to put a price and value on this service - indeed, it is actually priceless - but the social value of the post office has been independently valued to be at least €344 million in a report by Grant Thornton that was published in 2020. The union recently published a new report by Grant Thornton, which found that the network has the capacity to provide solutions to modern challenges. It identified a range of Government services that can be provided through the network that will support Government in achieving its central policies, including rural development, remote working and climate action.
On the provision of everyday banking services, approximately 540 post offices in Ireland are located in areas where there are no banks within 5 km. Accessible banking for everyone should be a basic right and it can be met through our extensive network.
In the same way, with Garda stations closed in many communities and to alleviate the administrative burden on gardaí, identification services for passports and driving licences and the maintenance of the electoral register can and should be provided by local post offices. The network is ideally placed to ensure that people have the option of person-to-person offline access to vital services, particularly for those who do not transact online. Covid-19 has highlighted that significant numbers of people are not online and many leaned on their post office for services, information and advice. There is an opportunity for the network to become a green hub for the processing and delivery of retrofitting grants and delivery of vital services and actions to achieve our climate targets and a low-carbon economy.
A re-think of how the post office network is being funded for its role in supporting wider social and community goals is now urgently required. The Grant Thornton report recommended that the Government invest with urgency in the post office network and pointed to a €12 million funding gap which needs to be met by Government investment in order to retain the valuable services provided by postmasters. This funding gap, which was previously estimated at €17 million, has been reduced by €5 million through the efforts of postmasters investing in our businesses, working with An Post, getting trained, securing additional services and responding to community needs.
We are reaching a crisis point. That is the stark reality. The Irish post office network is at a critical juncture. We now need a firm commitment from Government that it will pay a contract fee of at least €12 million for the delivery of essential services and we need that commitment in the coming weeks or post offices will close. We receive calls daily from burnt-out postmasters in all areas of the country who are seriously considering their immediate future. Many local post offices - large and small, urban and rural - will likely be forced to close if the financial conditions under which they operate do not change. If Government does not take action and take it very soon, large scale resignations - the term we use is "unrestrained resignations" - and closures will be inevitable.
Throughout the pandemic, postmasters never once shut the doors. We more than proved our worth and our importance to society but we are now left fighting for our own survival. The post office is one of the most trusted brands in Ireland. It is hard to think of another business that offers as many essential everyday services while at the same time providing a vital service to the community. Allowing post offices to fail would harm the national economy while devastating many vulnerable households and communities. We are calling on the Government to recognise the national asset it has in the post office network. It matters as much today as it did 100 years ago and will be even more critical in the future.
