Thursday 27 April 2017

Half of our post offices are now 'unviable'

The unpublished Kerr report, sections of which have been seen by the Irish Independent, sets out in stark terms the huge difficulties facing the post office network (Stock image)
The unpublished Kerr report, sections of which have been seen by the Irish Independent, sets out in stark terms the huge difficulties facing the post office network (Stock image)
Charlie Weston

Charlie Weston

Half of the post offices around the country are not commercially viable, particularly those in rural areas, a stark report warns.

An Post management feels it only needs 600 post offices to deliver its contract with the Department of Social Protection to pay out welfare benefits.

This is out of a total of 1,130 offices in the network.

The contention from An Post management means some 530 post offices now face an uncertain future.

The grim assessment for the future viability of the post office network is contained in the confidential Kerr Report on the future of the network, and quoted in a memo to be presented to Cabinet today.

The unpublished Kerr report, sections of which have been seen by the Irish Independent, sets out in stark terms the huge difficulties facing the post office network.

The report was commissioned by the Government and produced by a group chaired by businessman and broadcaster Bobby Kerr. A memo to be presented to the Cabinet today sets out some of the findings of the report and recommends that post offices that are no longer viable could be turned into what is called "shared-value post offices".

Read More: 'An Post don't know value of community'

This would see post offices threatened with closure offering a range of services including welfare payments, the planned An Post current account, motor tax payment facilities along with a range of other services to attract people into the shared-valued post office.

Under this model, post offices would become social hubs and offer a range of other services to local communities such as expert advice, operate as coffee shops, and be centres for scanning, photocopying and access to broadband.

It is proposed that senior ministers sanction a €100,000 pilot study in four locations, with a view to converting 150 post offices to this model.

An Post is trying to fight transaction volume declines with plans for a new current account.

But the plans for the Smart account are being hindered by a dispute with the Irish Postmasters Union.

Postmasters are refusing to engage in training for the new account due to the level of commission they will receive.

Read More: Postmasters to resist plans by An Post to close up to 200 post offices in rural Ireland

The new Smart account is an attempt by An Post to stem the migration of customers away from using post offices to carrying out banking online or on mobiles. An Post is piloting the new low-cost current account among its own staff.

The need for the account is laid out in the Kerr Report, which outlines that there has been a 20pc fall in social welfare and bill payments transactions in post offices since 2007.

Over the same period there has been a 38pc decline in the revenue of the core mails business.

The report states: "The company has pointed out that of the 1,130 post offices in the network it only needs 600 post offices to satisfy its key commercial contractual obligations, principally the social welfare contract, which is responsible for annual income of circa €53m."

It goes on to say: "The company makes the valid argument that keeping the other 530 post offices in rural Ireland is costing the business over €10m annually, a figure which is increasing each year."

Irish Independent

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