O'Rourke follows British plan to save post offices

THE Irish government plans to put pressure on banks to provide up to £15m in business for rural sub-post offices over the next five years.

Mary O’Rourke, the public enterprise minister, will ask cabinet colleagues later this month to endorse a strategy aimed at saving the country’s post office network.

Within the past two weeks, senior officials from her department have held discussions with British counterparts on a scheme introduced by Tony Blair under which banks passed business on to post offices to compensate for closures of their own branches.

Although the Irish government is unlikely to adopt the “universal banking” system in Britain, O’Rourke believes there is a compelling case for banks here to provide “transitional funding” to the troubled post office.

Later this month, an inter-departmental group, established by the minister to provide a blueprint for future funding of post offices, will finalise a report to come before cabinet. It is expected this will emphasise to banks their responsibility to provide banking services in rural areas, if necessary through post offices.

While O’Rourke has previously signalled her desire to get banks to provide a cash lifeline to post offices, this will give the idea a formal basis.

Last night, a senior government source, said: “The banking community was not slow in asking the taxpayers to bail out AIB in the 1980s when a levy was introduced. They should not forget that episode.”

The critical issue for the government is the future of the 1,800 sub-post offices which are not run directly by An Post. Overall, the outlook is bleak. Last year, An Post made profits of £3m but this year it is facing a loss of £12m and it is forecast to reach £82m by 2004.

Closing huge numbers of small post offices in not an option for the government because of the potential political fallout in rural areas.

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Copyright 2001 Times Newspapers Ltd.