Report to suggest merging of post offices and shops

Up to 800 unprofitable post offices should be amalgamated with retail
services or established as Government services outlets, according to
an official report to be published this week. No details of costs were provided in the interdepartmental report,
which was brought to Cabinet last Friday by the Minister for Public
Enterprise, Mrs O’Rourke. But the Government sanctioned an investment
of only (pounds) 10 million in An Post’s services instead of the
(pounds) 70 million sought by the company over a three-year period. The Government is anxious to keep all 1,800 post offices open,
even though half of them conduct only 4 per cent of the company’s
business. The Government appears determined An Post will use its reserves of
(pounds) 170 million for this purpose, rather than receive a large
subvention from the State. The chief executive of An Post, Mr John Hynes, is to meet
officials from the Department of Public Enterprise this week to
discuss what has been described as “a crisis in the post office
network”. He has argued that because half of An Post’s outlets are
loss-making – and cannot be closed because of a Government decision –
the State should subsidise them directly. Last year, industrial relations consultant Mr Phil Flynn reported
to Mrs O’Rourke that the post office system was technically insolvent
and would quickly become bankrupt without a change in the way it was
funded. The “only real option” was for the State to pay a subvention,
he said. The Minister for Finance, Mr McCreevy, is understood to have
resisted this. Subsequently, Mrs O’Rourke established a study group drawn from
six Government departments to devise a strategy to retain the post
office network. Its report will be published within the next few
days, according to reliable sources, and will urge that small post
offices be amalgamated with commercial enterprises or established as
Government services outlets. Defending the decision to provide only (pounds) 10 million, in
spite of the findings of the Flynn report, Government sources said
the company had significant reserves of (pounds) 170 million which
could be used to sustain the network, rather than for capital
projects. They also argued for further economies within the postal system,
changes in work practices and the provision of more services. Some of
the biggest losses in the postal network were being incurred in large
towns and cities, they said. The interdepartmental report recommends an expansion of existing
services, and the merger of small post offices with a local shop or
other commercial outlet. Where that isn’t possible, a Government
services outlet should be established to include the post office.
Services would vary but the report said it was important to retain
the idea of State involvement and commitment in peripheral and
deprived rural areas. In the past year, An Post has taken over bill-paying services from
the banks in return for a sizeable subvention. But this new income
will be insufficient to stem losses. Ms O’Rourke has urged that the
range of services, particularly electronic, should be expanded. An
Post resisted this on the basis it would be uneconomical and, given
the imminent deregulation of the services, could only be justified on
the basis of a direct Government subvention.IRISH TIMES, 30th July 2001