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Explainer: Why hundreds of post offices may close, and what can save them

The Irish Postmasters’ Union has said that talks with An Post have broken down, and is urging the government to take action.

TODAY, THE IRISH Postmasters’ Union (IPU) announced that it was withdrawing from current talks with An Post, at a critical stage in the future of the post office network in Ireland.

An Post, meanwhile, has said the talks “have been most productive and positive”.

Postmasters also picketed outside the Department of Communications today, urging the government to take a more hands-on approach to provide solutions that will mean post offices don’t close en masse.

They may not have gained access to the building – unlike a recent protest at another government department – but the union did drop off a letter detailing how and why it thinks the government should urgently intervene.

So what’s going on here? And why do postmasters fear that they’ll lose their businesses?

Why are postmasters worried?

Postmasters are, in effect, self-employed private sector workers in that they win a contract from An Post and then take responsibility for operating the business as a franchise.

An Post furnishes them with an income that corresponds to how much business the office does.

Each transaction – be it a social welfare payment, a stamp sold or a parcel sent – means an extra bit of income for the postmaster who must then use this income to pay wages for staff, pay rent and run the business.

Over the last few decades, however, there has been a shift away from the core service the post office had provided for people.

People can now pay bills online, send emails instead of letters and have their welfare payment paid directly into their bank account.

While not a death-knell for the post offices, there is a recognition among the people who run these businesses that they need to adapt, and offer different services, in order to secure their livelihoods and their future.

80 Rural Post Offices Will Be Closed Down The postmasters' protest outside the GPO in March Source: RollingNews.ie

While the plight of rural post offices and the risks they face have been well documented, urban postmasters told TheJournal.ie in March that they too may face closure if serious changes are not made.

The signs from An Post so far, however, have not been encouraging from the postmasters’ point of view.

The head of An Post told RTÉ’s Prime Time in April that 265 post office branches serve “no discernible area of the population”.

CEO David McRedmond warned that “the whole system could collapse” if changes are not made and said that the company had to “be real” about its prospects.

There appears to be a degree of acceptance from postmasters that some offices will have to close as, this week, IPU general secretary Ned O’Hara said that an agreement needed to be reached with An Post for an “exit process for offices which are not financially viable”.

So, what could be done to save post offices?

Quite a bit actually.

In January 2016, a report commissioned by the government on how the post office network could be saved was published. The Bobby Kerr report, as it is known, outlined a series of measures that post offices could use to win new business and protect their incomes.

Among its 23 recommendations were measures such as extended opening hours, a basic payment account for social welfare recipients, introducing ATMs and offering a credit union structure to provide credit.

To bring in the measures that postmasters want, they say it’ll require an investment from the government of €56 million over four years.

O’Hara said: “An Post are in a difficult financial situation. They have no money.

Someone needs to invest in the business. The government is a major shareholder, and we think that they should be able to provide it.

Little progress has been made on implementing these recommendations, however, so far. Postmasters staged a protest outside – and inside – the GPO in March to call for widespread uptake of these suggestions.

They made their point by marching inside the foyer of the GPO on O’Connell Street, delivering a letter asking An Post CEO David McRedmond to urgently meet with the postmasters’ union to discuss how the post office network should operate going forward.

Since May, the postmasters’ union has been in talks with An Post on bringing in essential measures, including offering a new current account.

This new current account – or Smart Account – has been positioned as an alternative to customers getting money transferred straight to their bank accounts and still using An Post services.

As An Post operates some of its own offices, outside of contracted postmasters, the Smart Account has been rolled out in around 200 offices so far.

Postmasters, however, say that the Smart Account, on its own, is bad for business and would only make financial sense if it was done alongside the other recommendations in the report.

However, the IPU has decided to withdraw from these talks, telling members that there was “no prospect of agreement at present”.

What’ll happen if they don’t agree?

The outlook in this regard is not good.

Post offices have been steadily closing for years. In 1992, there were nearly 2,000 post offices across the country. A quarter of a century later, that figure is just over 1,100.

Postmasters fear that as many as 700 post offices could go in the near future.

At the opening of talks in May, IPU general secretary Ned O’Hara said: “An Post needs to embrace these types of opportunities and look ambitiously towards what the network can deliver for communities, rather than trying to push through closures.

We need to move ahead with delivering motor tax and basic banking services – within an agreed plan for the future. We also need to look at how post offices can support more public and financial services – as well as transport, tourism and training in communities.

Today, O’Hara told reporters at the protest that they walked away from these talks because “nothing is happening”.

“We don’t want to give the false impression that something is happening, when it’s not,” he said.

1922 Postmasters protest_90518311 The protest earlier today outside the Department of Communications Source: Leah Farrell/Rollingnews.ie

With talks at an impasse with An Post, postmasters are looking to the government to provide some fresh impetus, and funds.

The responsibility for post offices in the government rests with the Department of Communications. It wasn’t always clear which Minister was in charge here, however.

Then-Minister of State for Regional Economic Development Michael Ring drew a withering response when he told the Dáil he had no statutory responsibility for An Post. Eventually it was clarified that it was Minister Denis Naughten who has the responsibility under Leo Varadkar’s government.

Tramore postmaster Sean Martin said that they are trying to get the government to “sit around the table and plan a viable future for the post office network over the next five years”.

“If we don’t do that, it’s imminent that the network will collapse,” he said.

A lot of post offices are subsidising their communities. The money handed out locally is spent locally… It needs investment now.

Ciaran McEntee, postmaster in Threemilehouse in Co Monaghan, said that the post office is beneficial to other businesses in the area and that effect becomes tangible when an office closes down.

He said: “They took a post office out of the town just up from me, and a shop and a butchers closed. That just shows what happens when a post offices goes.”

Next steps

When approached for a comment from TheJournal.ie, a spokesperson for An Post said: “Our discussions with the IPU have been most productive and positive, and we look forward to resuming them as quickly as possible.”

This is at odds with O’Hara’s description of the talks having “gone nowhere”.

A spokesperson from the Department of Communications, meanwhile, sent this statement to TheJournal.ie:

The Department of Communications is aware that the Irish Postmasters Union is holding a protest outside the Department’s Head Office on Adelaide Road today.  The Minister is attending Cabinet so is therefore unable to speak with the group however he has asked his advisor to meet with the members and receive their letter for his attention.

Solidarity-PBP TD Bríd Smith was at today’s protest. She said that “it’s very evident” that since the responsibility was switched to Minister Naughten, that the issue of post offices is like a “football kicked around the place and no one wants to deal with it”.

“It’s a political poisoned chalice,” she said.

Smith said that the Kerr recommendations are considered and fair, and that postmasters had agreed to take a hit to secure the long-term future of the business.

She added that “no one is taking responsibility” and said that this issue is being dealt in a similar manner to the way the Bus Éireann dispute was handled earlier this year.

Paddy O’Shea has been a postmaster for 37 years in Upper Aghada, near Midleton in Cork.

1893 Postmasters protest_90518312 Paddy O'Shea addressing reporters at today's protest Source: Leah Farrell/Rollingnews.ie

He estimates that, at the next count, his wages may have dropped by up to €10,000.

“If it keeps going this way, people will give up the post office,” he said. “They’ll have to.”

[If my office closed] I wouldn’t know what to do to tell you the truth. I feel terrible about it. Nearly everyone who comes in is a friend. They come in and we can help them out. It’ll be a huge loss.

Read: An Post can’t say how it got a woman’s data to send out a TV licence

Read: The long, slow death of the Irish post office

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Sean Murray

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