Sunday 19 November 2017

Nothing short of revolution will save rural sector from extinction

The problem is fewer people are going into post office to claim child benefit or the State pension. And the numbers paying bills in post offices is falling (Stock image)
The problem is fewer people are going into post office to claim child benefit or the State pension. And the numbers paying bills in post offices is falling (Stock image)
Charlie Weston

Charlie Weston

The prospects for the post offices in rural areas all over Ireland are gloomy. The revelation that An Post's senior managers feel they only need 600 post offices to fulfil their commercial obligations means that more than 500 post offices are facing the real threat of closure.

Mangers in the semi-state are of the view that now is the time to place the network on a commercial footing.

Led by chief executive David McRedmond, the management team feels that no State subsidies should be paid to the company to keep loss-making post offices going. That stark statement is contained in an appendix to the Kerr Report just days before it was completed at the end of last December.

Businessman and broadcaster Bobby Kerr was asked to look in depth at the future of post offices. His committee, officially called the 'Network Renewal Implementation Group', completed its report just before Christmas.

The Kerr report and a memo to go to Cabinet today set out in stark terms the problems being faced by the country's 1,130 post office network.

Just 600 post offices are needed to satisfy An Post contractual obligations to pay social welfare payments on behalf of the Department of Social Protection.

The Kerr report states that An Post makes what it says is 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.

The problem is fewer people are going into post office to claim child benefit or the State pension. And the numbers paying bills in post offices is falling.

Up to 90pc of new social welfare claimants have the money paid into a bank account. This is why many post offices are loss-making, even though some 1.7 million people use post offices every week. The Kerr Report proposes a €56m bail-out for the post office network over a four-year period.

One thing that could make a difference for An Post is having its own current account. That way An Post and the postmasters could capture some of the transaction value by getting social welfare recipients who want their payments to go into a bank account to sign up for the planned An Post Smart current account.

But that is the minimum rural post offices need to survive in the age of Apple Pay and Android Pay.

The move to push the price of a stamp to €1 will not sort out An Post's many problems.

Nothing less than a revolution is needed, one that sees post offices becoming fully fledged community banks.

Post offices could be used to access almost every service in the State, such as payments, grants, the collection of taxes, levies, fees, fines and charges.

Countries such as Germany, Japan and New Zealand have successful postal banking services.

The similarities between Ireland and New Zealand are interesting. Both have similarly-sized populations, with many of the citizens living in rural areas.

Kiwibank was set up in 2002 to ease the pressure on the post office network and counter the influence of Australian retail banks. Although post offices have closed, putting Kiwibank branches into post offices has proved to be hugely successful. We now urgently need to think along similar lines in this country.

Otherwise, the mail bags of postmen will be bulging with contract termination notices for postmasters - as hundreds of post offices are forced to shut.

Irish Independent

Promoted Links

Today's news headlines, directly to your inbox every morning.

Promoted Links

Editor's Choice

Also in Irish News