The decision by the European Court of Justice that will allow An Post to retain the contract for dispensing welfare payments, in the absence of a tendering process, will come as a considerable relief to the company and to the Government. The contract, worth some €52 million a year, provides the backbone of retail services at many small post offices and its loss would inevitably have led to hardship and a reduction in the number of outlets.
But while the court ruled the European Commission had not established the welfare payments contract was of cross-border interest or that Irish-based companies had been unable to tender because they had been denied access to relevant information, that judgment may represent a breathing space, rather than a definitive conclusion in the EU's drive to open up public services to competition. Rather than doing nothing, this reprieve should encourage An Post to provide a more efficient and competitive service.
An estimated 900,000 people receive welfare payments amounting to about €7 billion a year. Traditionally, the dispensing system has been through post offices. But that is changing as technologies advance. European internal markets commissioner Charlie McCreevy has championed competition and supports liberalisation of the postal system. The Government, however, mindful of the effect of post office closures and likely industrial unrest, declined to put the welfare contract out to tender.
Two unexpected developments this year have provided An Post management and its employees with the time and opportunity in which to improve services and recover public confidence. In the first instance, the European Parliament voted, last July, to defer opening all postal services to full competition from the private sector for two years, until 2011. Now, income from the welfare payments contract has been protected
Change is coming to An Post. That is inevitable. The European Parliament's decision to defer rather than to reject full competition says it all. Four years remain in which the company will have an opportunity to revitalise its core business. At that stage, private companies will compete for all letter post, as well as parcel post. The outlook is not encouraging. Only 75 per cent of standard mail is delivered the next day, when the figure should be 94 per cent. In spite of that, the cost of letter post rose by 15 per cent this year. And there is growing public dissatisfaction with the quality of service. Workers at An Post have been granted an opportunity to get their act together and meet the challenges of a competitive system. They should take it.