Dáil Éireann Debate, Tuesday - 21 October 2014
86. Deputy Willie O'Dea asked the Tánaiste and Minister for Social Protection how the Department’s policy to migrate to electronic payments affects the Government’s stated objective of protecting the post office network; and if she will make a statement on the matter. [39805/14]
Amharc ar fhreagraI tabled this question to ascertain how the Government can reconcile its repeated commitments to preserve the post office network as we know it with the headlong rush to an electronic payment system for social welfare recipients.
I am very conscious of the important role of the post office around the country, not only in respect of social welfare payments but also the extent to which it is now becoming a one stop-shop where people can pay bills, purchase mobile telephone top-ups, use the passport application facility, pay local property tax or Garda fines and carry out a range of banking and other financial services. This is the way to go for anybody who, like me, is very interested in seeing post offices do well. In 2013 the cost to the Department of issuing payments was in the order of €86 million. The Department must continue to ensure that the most cost-effective ways of delivering its services are employed to ensure best value for the taxpayer. In this regard, an issue for the post office network is that electronic payments are less expensive and many people who have bank accounts or are anxious to use electronic payment mechanisms choose to do so. I was very happy to sign a new contract with An Post last year for over-the-counter cash services for welfare clients following a public procurement competition. This contract is very valuable business for An Post. For example, approximately 3.5 million payments were cashed by welfare clients in local post offices in August.
One must bear in mind that with the development of bank accounts many customers who use Post Office services do not have other bank accounts. At present 72% of all child benefit clients and 84% of new clients to the scheme choose to receive payment directly into their accounts. This undeniably creates a challenge for the current business model of An Post.
Nobody in the Government has contradicted the opinion of the Irish Postmasters Union, which clearly states a move to electronic payments in the timescale envisaged by the Government, which is by 2017, would result in the immediate closure of 600 post offices out of the network of 1,100. This is supported by Grant Thornton and various other independent organisations. How does the Government reconcile this move to electronic payments within this timescale and this consequence with its commitment to preserve the post office network?
I am glad to say the post offices won the contract for over-the-counter cash services. Increasingly people with bank accounts who receive a State pension on retirement choose to use their bank account. I do not know whether the Deputy is suggesting that such customers should be forced to use the post office when they have a bank account. The same is true for people who receive child benefit.
In 2013 the Department used An Post for 14 million mail items with a value of more than €11.5 million and 44 million over the counter cash payments, with the transaction value of more than €58 million, were made. An Post has taken a range of other services which it offers, primarily to people who do not have a bank account, and it is very important that these services continue. If An Post wishes to expand these services it would need to have an offering in the electronic payments and banking area also, as this is a service of choice for many people because they already have a bank account and electronic banking facilities, which they are inclined to use.
