Threat of Mass Closures in Post Office Network

Near half the post office network could close down. Courtesy Aisling Breathnach
Near half the post office network could close down. Courtesy Aisling Breathnach
Near half the post office network could close down. Courtesy Aisling Breathnach

A recent report by Grant Thornton Chartered Accountants says that up to 557 post offices could close by 2017 if the government persists with cost cutting measures as part of the programme for government. An Post latest figures which was for 2012 calendar year indicate that the organisation’s losses were at a staggering €37,243,000. The state owned company’s turnover was €807,295,000 however operating costs were at €824,779,000 while other expenses were at €19,750,000 making it An Post’s worst year on record.

In a bid to tackle the losses, the government seem to be taking aim at local post offices as new policies being introduced could spell disaster for the An Post network. Mass closures seem a distinct possibility. The Grant Thornton Report, which looked in to the possible consequences of these new policies has postmasters and postmistresses up and down the country fearing for their jobs.

An Post won the latest tender in June 2013 to be the majority distributor of social welfare from the Department of Social Protection. This contract covers the next two years with the option for an additional four on the current deal. At the moment An Post deliver an estimated €9 billion in social welfare payments annually which is worth €60 million a year to the post office organisation.

The government appear to favour ‘electronic funds transfer’ (EFT) which would mean social welfare would be paid directly in to people’s bank accounts instead of the traditional  ‘over the counter’(OTC) method. As it stands An Post are paying out 48% of the total social welfare payments. However, under the current programme for government, the Fine Gael/Labour government want to reduce this to 22%. If the government carry out this plan, it would inevitably lead to the closure of several post offices around the country.

The Grant Thornton report estimates that if the government are successful in this plan to leave only 22% of payments to An Post that 444 post offices would close which amounts to 39% of the total post office network. However if An Post lose the Social Welfare contract altogether, 557 post offices would close which is 48% of all post offices.

Rural Post Offices may be force to close. Courtesy Aisling Breathnach
Rural Post Offices may be force to close. Courtesy Aisling Breathnach

The EFT payments as it stands would be paid through the banks instead of An Post and as of yet post offices do not have the facilities to administer payments through EFT. However, the government would have to pay An Post to administer EFT payments whereas they do not have to pay the banks.

Seán Martin, treasurer of the Irish Postmasters Union (IPU) feels that if the government was to push ahead with using the EFT payment method, they must allow An Post to be the ones to administer it, or else the Department of Social Protection would be reneging on the tender won by An Post in June 2013. However as of yet the government have made no move yet to give An Post the facilities to administer EFT payments and the IPU remain very concerned.

He said, “We may have won the contract in theory but the business is being diverted away on a daily basis. We cannot survive if this continues.”

Martin also was quick to point out the advantages of allowing An Post to administer EFT payments. “If An Post is allowed to administer the payments, it will act as a deterrent to potential fraud as the account holder would have to become known to their local post office in order to receive payment, whereas they would be able to receive payment in any bank. The An Post workers would be in a better position to act as a deterrent to fraud as opposed to bank staff.”

He also alluded to another advantage, “when someone doesn’t collect social welfare from their post office, the money is returned to the social welfare office. However with the banks, this is not the case.”

However it is not just the government’s policies regarding social welfare that has the IPU worried. Pilot schemes are being launched which would see supermarkets be able to carry out many of the duties which post offices currently undertake, such as paying bills. As it stands the government have piloted the scheme in four Tesco outlets. However there are plans in place to introduce the scheme in a further ten Supervalu outlets.

Oifig an Phoist in An Rinn, Co Waterford. Courtesy Aisling Breathnach
Oifig an Phoist in An Rinn, Co Waterford. Courtesy Aisling Breathnach

There has been no contact between government and postmasters regarding the scheme and postmasters fear that if the scheme is rolled out nationwide that post offices will close. They fear that customers will use supermarkets to conduct business, as they will have longer opening hours. Another worry for the IPU is that staff in supermarkets will be untrained and not bound by the ‘Official Secrets’ legislation as An Post workers are.

Martin suggests that postmasters should be working in conjunction with supermarkets and it should be the postmasters running the outlets through the supermarkets, thus ensuring that jobs remain safe while also maintaining staff fully trained to undertake post office duties.

Martin continued, “The government need to monitor and cap the amounts of supermarkets used in the scheme in order to safeguard jobs.”

The IPU was also keen to point out the social impact if post offices closed. They say it will cause social isolation within elderly people as they would be electronically receiving payments instead of visiting their local post office.

The IPU already have held a protest outside the Dáil, where there were representations from nearly all of the 1,150 post offices in the country. The IPU has not ruled out further protests. They are calling on Minister for Communications, Energy and Natural Resources Pat Rabitte whose department is responsible for the running of An Post, to clarify the future plans with Tesco and SuperValu and to maintain negotiations with the IPU. They are also calling on Minister for Social Protection Joan Burton to ensure that her department honour the latest social welfare with An Post.

Both ministers offices have refused to comment on the potential closures but undoubtedly plans are in place which if carried out will result in post office closures.

Máire Breathnach who is the postmistress of the An Rinn post office in Co. Waterford is also anxious about her job in the future. “The post office in An Rinn dates back in my family over a hundred years. My husband’s grandparents ran it before passing it on to his parents. He then took over the running of the post office in 1974. Following my husband’s sudden passing in 1999 I have ran the post office since. If the government continue with their cost saving plan and we are forced to close, over a century of tradition will come to an end in An Rinn.”

Martin concluded, “Post Offices employ over 3,000 people, people’s livelihoods are at stake. They have to keep the post office network alive.”

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