An Post says it is assembling a "pandemic fund" from its own resources to provide cash payments for the next 18 months to the postmasters who independently operate most post offices, to help maintain their incomes which have been hit by a loss of business due to coronavirus.
The company’s senior management told TDs and Senators at an Oireachtas committee hearing on Wednesday that it hopes the payments will kick in from July 1st, when a previous round of top-up payments from a restructuring deal are due to run out.
The Irish Postmasters’ Union (IPU) had warned last week that the average reduction in rates paid to post offices when the top-up payments end could be around 20 per cent. An Post’s management suggested to the committee that the pandemic fund will be used to plug that gap.
Of An Post’s network of 931 post offices, 45 are operated by the company, with the rest run independently by postmasters. Of those, about 300 are on legacy contracts, with the rest – more than 580 – operating on payment-per-transaction rates that will be affected by the end of top-up payments.
David McRedmond, An Post’s chief executive, told the Oireachtas Joint Committee on Transport and Communications that the company had submitted a proposal on this issue to Government and expected to soon enter negotiations with the IPU. He declined to provide financial details on the proposed fund.
“We don’t see any money particularly coming from Government,” he said.
Reduction in income
Debbie Byrne, the managing director of An Post's retail network, also appeared at the virtual committee meeting alongside Mr McRedmond. When pressed for details by the committee chairman, Fine Gael's Kieran O'Donnell, on whether postmasters would see a reduction in their income from July 1st, she said that, with the pandemic fund, it would be "the same".
Ms Byrne said the fund payments would reflect the loss of business caused by a reduction in footfall due to most social welfare payments, such as the Pandemic Unemployment Payment (PUP), being paid straight into bank accounts with no element of “signing on” at a State facility.
The fund would help post offices to “normalise” over the next 18 months after the pandemic ends.
“We need to equip post offices with the commercial skills and marketing supports to run their business. And a post office is a business, no less than running a cafe or a Spar.”
She said the pandemic fund would also include incentive payments to get post offices to promote additional services, such as banking transactions An Post facilitates for banks that are scaling back their branch networks.
She said An Post is “actively renegotiating” its contract with Ulster Bank with a view to providing more services for the bank as it withdraws from the market, while the company is also in talks with AIB.
She urged the Government to provide more State services through post offices, specifically mentioning planning applications. She also called for traditional jobseekers’ payments that replace PUP to be paid through post offices, and not directly into bank accounts.
“We need that recipient back in post offices... we need more footfall,” she said.
The IPU has warned that up to 200 post offices are at risk of closure due to network consolidation. When asked if this was a fair assessment, Mr McRedmond acknowledged that “inevitably some post offices will close”. The company said 63 per cent of its post offices are now “co-located” with shops.