I propose to take Questions Nos. 29 and 33 together.
As Minister, I am responsible for the postal sector including the governance of An Post. Operational matters relating to the company’s retail business, including the post office network, are matters for the Board and management of An Post. Nonetheless, I am acutely conscious of the value placed by communities in both rural and urban areas on services provided by post offices and am concerned to ensure the needs of those communities continue to be met.
An Post’s Annual Report for 2017, published last week, records an operating profit for 2017 of €8.4m reflecting the hard work that has been undertaken over the past year to restructure the company. In response to the challenges facing the company, the Board has overseen the preparation of a comprehensive strategic plan, the objective of which is to secure the long term viability of both the post office and mails businesses and return the company to a sound financial footing. The €30m Government loan provided to An Post late last year ensures that the company can continue to roll out its strategy quickly, building on the momentum of actions already taken including the continuation of daily mail deliveries and the renewal of the post office network.
The strategic plan harnesses the company's existing strengths such as its nationwide reach, trusted brand and the relationship of postmasters with communities, both rural and urban. At the same time, An Post has recognised that it must embrace the digital agenda and this is reflected in the plan, especially in the emphasis on growing the parcels business. Enhanced banking services are becoming available through the post office network with the smart bank account. It is expected that further such opportunities will be available across the network, especially as high-speed broadband becomes widely available through the roll-out of the national broadband plan. The Government has also committed to exploring the potential for extra Government business to be channelled through the network and my Department is engaging with other relevant Government Departments in this regard.
As part of the strategy for modernising the post office network, An Post has established a dedicated business unit within An Post, An Post Retail. Last week An Post announced its plans for a modernised Post Office Network. The vision centres around the availability of new services around a modernised, revitalised network. Such services will include a better range of Government services, financial services and e-commerce services for shoppers and small businesses. The announcement by An Post is supported by an agreement reached with the Irish Postmasters Union executive following 3 months of intensive negotiations under the guidance of Mr Turlough O’Donnell SC. While I am conscious that final acceptance of the agreement is still subject to a ballot of IPU members, the announcement represents a positive first step in reinvigorating our national post office network and making it a viable service that meets the needs of communities across the country, particularly in rural areas. The fact that there would be no compulsory closures of post offices is a highly significant outcome of the negotiations. The deal will see An Post invest €50m in growing and modernising the network and includes agreement on a protocol which I specifically sought to help manage the modernisation of the network in a transparent and community focussed manner. IPU members will be balloted on the proposals later this month.
I am also pleased to advise that further Government funding of €80,000 has also been secured to roll out a pilot scheme for “Digital Assist” which will see 10 post offices equipped to help citizens with online Government interactions. Ten pilot schemes will be located in rural post offices and will be in place later this year.
Given the scale of the challenges it is facing, the Company will have to pursue an ambitious agenda across its various business areas and there is likely to be significant change and new business models implemented in the coming years. This should be viewed positively as it will result in a solid, sustainable business for the future.
In considering this issue, there are two elements to consider, the funding of An Post and the adequacy of income for individual postmasters. For the smaller post offices, it is difficult to see how some postmasters will be in a position to adapt to the changes necessary to renew the network and, in some instances, the best option for them may be to exit the business.
While financial and structural challenges remain, achieving a common view of the steps we need to take to regenerate the network is of great significance as the company re-builds and takes action to secure the future of the company and the network. The agreement is a significant milestone and shows that An Post, the IPU and Postmasters have the potential to work together to deliver a viable and sustainable future for the post office network to the benefit of all parties and most importantly our citizens.