Submission by the Irish Postmasters� Union

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					 Submission by the Irish Postmasters’ Union
                     to
The Oireachtas Committee on Communications,
      Natural Resources and Agriculture
              7th February 2012




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Mr. Chairman, Deputies and Senators, thank you for allowing the Irish
Postmasters’ Union the opportunity to meet with you and make a
presentation to you today.


My name is Brian McGann. I am General Secretary of the Union and with
me today is our Union’s President, Mr. Sean Maher, our Vice President, Mr
Simon Murphy, our Treasurer Mr. Sean Martin and Ms Breid Gallagher who
are all serving Postmasters.


Background
The Irish Postmasters’ Union represents the vast majority of self-employed
Postmasters who, on behalf of An Post, run the Country’s Network of 1100
Post Offices and who in turn, employ approximately 3,000 people in
local jobs within their community. Postmasters, many of whom come from
generations of Postmasters, are deeply rooted in the communities they
serve. They, and An Post, are trusted servants of the community providing
valuable services such as banking, welfare payments, mails services,
foreign exchange, investment products, Postfone and many other products
and services.


The Post Office serves 1.7 million customers every week over five and
half days, including Saturday. Every Post Office is fully automated and is
capable of providing any of An Post’s services in any part of the Country.


The Post Office is trusted, flexible and accessible. When customers walk
through the door of a Post Office they know that they are dealing with
people they can rely on and trust and that the sensitive information they
provide, in order to do their business, will be safe, secure and treated in
confidence.
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The Post Office provides banking transactions services for Allied Irish Bank
and National Irish Bank, while savings and investment products, many tax
and DIRT free, are also available at Post Offices counters. Post Offices
provide welfare payment services to 800,000 people and the provision of
this face to face service plays a significant role in fraud deterrence,


Around 18% of people in Ireland are ‘unbanked’, and we believe that this
figure is rising. For this group of people, the Post Office is the ‘supplier of
first choice’. The Post Office is their only point of access to financial
services.


The Post Office is the institution that allows people, in these hard times, to
make part-payments on their bills and, for those in straitened
circumstances, we provide a household budgeting service.


The Post Office is about much more than the services it provides. Many
people turn to the Post Office to get Government Department application
forms, seek advice on a range of citizen information issues and, in some
parts of the Country, Post Offices provide a valuable source of tourist
information and local knowledge of the area’s heritage.


Indeed, the value of the Post Office goes even further than that. In many
cases across the Country, the Post Office is a focal point of the community,
giving citizens an opportunity to exchange information on what’s happening
within their area and keep connected with their community. The Post
Office plays a vital role, even in this age of technology, in creating a sense
of connectedness and belonging.



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The upgrading of technology at Post Offices has taken place with the
introduction of flexible systems that can easily be adapted to provide a
range of services to customers within a short timeframe.


Amongst the many achievements and innovations in the Post Office that
we have taken on in recent times are;
           Banking Transactions for AIB and National Irish Bank
           Passport Express
           Mobile Phone Services with Postfone
           Commission free Foreign Exchange
           Garda Fines Payments and various bill pay services


In terms of State Savings we have grown the fund to €12bn


We deliver a faultless welfare payments service to 800,000 customers each
week and we developed a fully integrated solution for Garda fines in a very
short turnaround time.


This clearly shows that we are flexible, efficient and adaptable in embracing
new products and services. In this context we believe that the Post Office
has the capacity and appetite to take on much more business.


We’re not here to talk about what the Government can do for us. We’re
here to talk about what we can do for Government.


Development of Banking Services
In the banking area, given that the major banks are trying to reduce
infrastructure costs, the Post Office could become the provider of banking
transactions services for all major banks such as Bank of Ireland and
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Permanent TSB. Apart from helping the banks manage their cost base,
making banking services available through the Post Office will make these
services much more accessible to many communities, especially in rural
areas. Studies in the UK show that SMEs regularly use the Post Office for
banking services and therefore local availability would help local
businesses keep costs down.


We ask this Committee to request the Department of Finance to ask
all of the major banks to offer banking transactions services through
the Post Office Network, especially in rural areas.


Motor Tax Renewals
Motor Tax renewal is another service that could ideally be offered through
the Post Office. A majority of people don’t renew their motor tax online and
either renew by post or by going to a local authority office in person.


According to figures seen by the Union, the average cost of a Motor Tax
renewal is in the region of €5.00 and the average transaction time is 5
minutes. Quite simply, we can do it faster and we can do it cheaper.


In the context of 25,000 people being taken out of the Public Service, we all
know that those who remain cannot do the same level of work with fewer
resources. We would argue that non-core activity in the Public Service,
such as payments and transactions type services, should be transferred to
the Post Office allowing the staff remaining to concentrate on delivering
essential frontline services.




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In addition to this, making services such as Motor Tax renewals available
through the Post Office will make these services much more accessible to
many communities throughout the Country.


We ask this Committee to request the Minister for the Environment to
direct Local Authorities to transfer Motor Tax renewals payments to
the Post Office as a matter of the highest priority.


Amongst the other services that we could provide are;
        Driver Licence renewals based on a Passport Express type
          model
        The new Household Charge payment
        Water charges, rates, rents and other Local Authority payments
        Lodgements and withdrawal services for Credit Unions
        Value-added services for the Department of Social Protection
          such as signing-on, identity validation etc


Financial Inclusion
I’d like to deal with a number of key concerns that the Union have and
highlight the importance of these in ensuring that we have a sustainable
network of Post Offices for the future.


The Department of Finance published a strategy on financial inclusion last
year. Under this strategy, those who do not have a bank account would be
given a “basic” bank account. The strategy, driven largely it must be said,
by the Department of Social Protection, envisages that the “unbanked”,
mainly welfare recipients would then be paid their welfare payments
through this bank account.

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This strategy is flawed in that the provision of a bank account, in itself, will
not lead to financial inclusion. Indeed last year alone 100,000 credit card
accounts were closed1 as people moved away from the mainstream
banking services and back towards more direct forms of controlling their
finances.


People, especially the “unbanked”, don’t trust the banks and many don’t
want to be forced into a relationship with institutions who they fear will take
control of the small amount of money they have.


If financial inclusion is to be achieved, the Post Office must be at the centre
of any solution.


People trust organisations like the Post Office and the Credit Union.
However, the Post Office alone has a single, coherent, accessible
infrastructure that can deliver the banking solution that will help to achieve
financial inclusion.


The experience in other Countries, such as Brazil for example, has shown
that financial inclusion measures work best when the Post Office is the
vehicle used to provide basic banking services.


We recommend that this Committee should ask the Minister for
Finance to ensure that the Post Office is at the centre of any plan to
address financial exclusion.


1
    source Irish Independent newspaper 2/2/12 Charlie Weston



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Social Protection
Moving on to the Department of Social Protection, the Union would like to
highlight the importance of the welfare payment business to the long term
sustainability of the Post Office Network. Much investment was made in
computerising the Post Office Network to facilitate the delivery of the
welfare payments business for the Department.


The Union is gravely concerned that the Department is planning to take this
business away from the Post Office as early as 2013 and the Union has
received many reports that the Department are, at the moment, actively
trying to drive business away from the Post Office by forcing people to have
payments made though bank accounts. We believe in consumer choice
but people should be free to choose the Post Office if they want to receive
their payments there.


If the welfare payments business is removed from the Post Office Network,
the Union believes that this would lead to the immediate closure of up to
600 Post Offices. The effect of this, particularly in rural areas, would be
catastrophic. Not only would Post Offices disappear but many shops in
towns and villages would disappear too, as in many cases, the shop can
only exist if the Post Office remains open. Studies have found this to be
the experience in the UK2.


The Union has been seeking a meeting with the Minister for Social
Protection since last March but, to date, we have not been granted a
meeting.

2
    Impact of Post Offices Closures in Devon - Report November 2011

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We ask that this Committee would write to the Minister for Social
Protection highlighting their concern regarding the impact on the
Network if the welfare payments business is taken away from Post
Offices. The Minister should be asked to clarify the position without
any further delay and give a commitment not to undermine the
viability of the Post Office network.


Need for a Vision and Strategy for the future
We have a clear vision and strategy for ensuring that Post Offices are part
of this Country’s future. We believe the local Post Office plays a vital part
in the economic and social life of communities throughout the length and
breadth of the Country.


By adopting our ideas, Government can:
      Ensure greater access to services such as banking and Local
      Authority services, especially in rural areas
      Free up limited public resources and achieve efficiencies
      Enhance the viability of the Post Office network


For our part the Union has commissioned Grant Thornton to produce a
report on the Future of the Post Office Network in Ireland, with a focus on
growing the business to make it more sustainable. We have worked
closely with An Post to develop a strategic approach to securing a viable
future for the Retail Network.


The Union has, in conjunction with An Post, launched a competition for
Postgraduate students in the Institutes of Technology, to design a Post
Office of the Future. The competition has two elements, one to design an
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urban Post Office and one to design a rural Post Office. We believe that by
taking initiatives such as this we will get people, especially young people, to
think about what they want the Post Office to be for them in the future.


However, what is needed now, is the political vision to take on board our
ideas and create a roadmap that will ensure the survival of the Post Office
Network in the future.


We must ensure that the local Post Office survives as a focal point for
communities and to ensure that Irish Citizens have an institution serving
their needs in which they can place their trust and which is accessible to
them within their own community.


We ask this Committee to call on the Government to engage with the
IPU and An Post to deliver a commercially based solution that will
improve access for customers, that drives real savings and delivers
on Government strategy. A plan should be drawn up and implemented
that will


        Ensure a sustainable network of Post Offices in the future
        Identify opportunities to drive more business through the
            Post Office Network such as banking, motor tax, Local
            Authority payments etc. and
        Invest in the Post Office Network (especially rural Post
            Offices) to ensure that consistency in standard of office and
            service offering is achieved.




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Conclusion
We believe that the Post Office can play a part in Ireland’s economic
recovery. The Government can achieve substantial cost savings by
outsourcing transaction type services to Post Offices. Removing non-core
activities will allow those who remain in the Public Service to be redeployed
to do essential services. Post Offices will become more economically
viable by driving more business through the Retail Network and the public
will have greater accessibility to services within their community. Because
the Network infrastructure is already in place much of this new business
can be taken on at a marginal cost making it very cost effective. The
benefits to everyone are clear.


We believe in taking a positive approach to securing the future of local Post
Offices and we believe that our ideas are practical, realistic and achievable.
As I said earlier, we’re not here to talk about what the Government can do
for us. We’re here to talk about what we can do for Government.


We are the Post Office and we are open for business.


Thank you for inviting the Irish Postmasters’ Union to make a presentation
to you today. We need your support to help us secure the future of the
Post Office Network. We need action now. We need a strategy, a vision
and a plan. We cannot afford to wait, as day by day, we see the
disintegration of infrastructure within our communities. If we lose the Post
Office we lose the heart of the Community.




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