Sweetener of up to €1,000 a month for postmasters in attempt to keep post offices open

The Government is preparing to pay postmasters a sweetener of up to €1,000 a month in an attempt to keep post offices open.

he Irish Independent understands that a state subvention of between €10,000 and €12,000 per year is being considered under a comprehensive national plan.

There are around 900 post offices across the State at present, most of which are independently operated by postmasters and postmistresses who are contracted by An Post. They are neither state employees, nor are they employees of An Post.

The post office network is undergoing change in line with a 2018 Transformation Agreement, agreed by the Government and the Irish Postmasters’ Union (IPU).

However, its pace has been slowed by Covid-19.

In addition, mail volumes are falling and there is a lot of uncertainty about the business.

Minister of State with responsibility for Postal Services, Hildegarde Naughton, is preparing to go to Government in the coming weeks with a “targeted and time-bound proposal” for a financial support scheme for post offices, the Irish Independent has learned.

If agreed, it will be the first time Government has introduced such a support package for the post office network.

While “time-bound”, the scheme is expected to operate for a number of years, and could become permanent.

It is aimed at keeping post offices open through provision of direct financial assistance to the operators.

The scheme is expected to operate like others that subvent an uneconomic service in which businesses have a public service obligation.

“This will allow the transformation plan to be completed, and to give postmasters time to grow their business,” a senior source said.

“This is the first time the Government may provide direct support to postmasters who operate so much of the network.”

Those developing the scheme say it will also allow An Post, the umbrella for all the offices, to continue to seek and win new business, using its extensive network as a selling point.

The scheme is expected to find favour at Cabinet, where ministers have been worried for some years about the decline of the post office at branch level – which also holds the seeds of electoral misfortune for local TDs.

Ms Naughton was not available for comment yesterday, but officials confirmed extensive work on the pay for postmasters has already been completed and a proposal will go to Government within weeks.

It comes after Ms Naughton helped deliver an €8.5m support package to postmasters in July last year, which was funded by An Post.

However, that arrangement runs out at the end of this year, and there have been dire warnings that there will be a domino effect of widespread closures because the operators cannot survive on current revenues.

A source said: “We are mindful of the need to preserve the network, particularly given that Census 2022 results due next year could well identify growing areas of population.

“Minister Naughton wants to give postmasters financial security to allow them focus on growing their business. In addition, it would provide certainty to the hundreds of thousands of people who use their local post office every week.”

The network currently provides postal services, pension and welfare payments, banking services and access to other Government services, including passport renewals, and the payment of fines.

However, officials stressed that this does not mean that some post offices will not close, due to retirement or personal decisions, but rather they should not close due to lack of Government support.

“If they go, in many cases it will be a personal decision of the postmaster,” said the source. But it is believed the payments will be sufficient to enable the vast majority to remain in business.

“We believe it is vitally important that we do not repeat the mistakes of the past and allow post offices to close,” said someone with insight into the draft package.

“We all believe we have to protect the network, but if post offices close and there turns out to be future demand, it
will be very difficult to get them back.”

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