Downsizing of post office network to spark fierce response

An Post says more than half of the company’s 1,100 outlets are ‘uneconomic’

Postmasters and politicians are awaiting plans by An Post, expected in the coming weeks, for the downsizing of the post office network which are sure to spark a fierce response from rural campaigners and TDs.

An Post, now led by a new chief executive and facing a cash squeeze which required emergency legislation this month to increase the price of stamps, has employed management consultants McKinsey to advise it on rationalisation plans.

McKinsey’s advice, and the proposals to be brought to the An Post board by management shortly, are the subject of some trepidation amongst staff and rural communities who fear the loss of small post offices.

A report by businessman Bobby Kerr – currently with the company but not yet published – suggests that up to 80 small post offices could be closed. However, The Irish Times understands that the number mooted for closure will be much greater than that.

The company points out that over half of the company's 1,100 outlets are "uneconomic", and that it needs only 600 post offices to fulfil its contract with the Department of Social Protection.

Political furore

There are fears that up to half of the post offices could be nominated for closure, but reliable sources say that the number will be less than that – perhaps in the region of 300-400. However, that would cause a political furore, and politicians insist that nothing like that number will be closed.

This week the new chief executive David McRedmond met representatives of the postmasters, who run the post office branches, but gave them little information about the scale of the company’s restructuring plans.

The postmasters want the company to implement the Kerr report, which would see a retirement package available for postmasters who wish to close their outlets. It has suggested that €56 million be made available by the Government for the restructuring plan.

The postmasters hosted a briefing for TDs and Senators in Leinster House earlier this week, at which they pressed for the publication and implementation of the Kerr report. There is support amongst many TDs for the postmasters, but sources in the Government are more inclined to listen to the company.

“There are better ways to spend €60 million on the post office network than to give it to the postmasters,” said one high-level source who has been briefed on the subject.

Make a living

One TD with some experience of the plight of rural post offices is Michael Healy-Rae, who is himself a postmaster in Kilgarvan Co Kerry. Healy-Rae says that neither the Government nor An Post will close post offices – the postmasters themselves will close them because they can no longer make a living.

“People are talking about 80 or 100 post offices closing. I’m telling you it will be 700,” he says.

Healy-Rae is critical of the postmasters’ union, which is seeking a rescue package. “That’s not what we want,” he says. “Give us more work.”

He says post offices should be allowed to offer “community banking” facilities, as has been done in Germany and New Zealand. However, the Department of Finance is said to harbour objections to the idea.

Along with the forthcoming recommendations by McKinsey and the Kerr report, a third report – drawn up by a group headed by Minister of State Michael Ring – will be published next week.

Legal position

Responsibility for An Post is split in Government between Ring's Department of Rural Affairs (where Heather Humphreys is the senior Minister) and the Department of Communications, where Roscommon Independent TD Denis Naughten is the Minister.

The technical legal position is that Ring and Humphreys have responsibility for the network of post offices, while Naughten has responsibility for the company itself. There is now more or less open conflict on the issue in Government, not on the prospect of closures but on who takes the blame for it. The reality is that none of them want political responsibility for closing post offices, something now seen by all sides as inevitable.