Business advisors Grant Thornton have recommended that An Post be given an annual subsidy of €17m in order to save the post office network from collapse.

GT's report, Review of the Economic Contribution and Financial Sustainability of the Irish Post Office Network, concludes that the government must “invest with urgency in the Post Office Network, as it provides a multi-fold economic and social return to communities, far in excess of the Public Service Obligation requirement”.

Grant Thornton says that the cost of €17m per annum as a Public Service Obligation to the network is far exceeded by the value of the post office network as national asset.

“About 28% of the population (1.3 million people) continue to use the Post Office every week, including the distribution of €4.6 billion of social welfare related cash," the report states. “Post offices play a crucial role in spin-off support to other local businesses and economies, provide a service for those who are financially or socially excluded, and a difficult to measure but real social contribution to communities.

“Based on a model used in the UK to calculate the social value of the British post office network, an estimated annual social value of the Irish network is €330m to €770m.”

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Post offices are run by postmasters who are independent providers of the network under contract to An Post. There are 899 postmasters and 45 An Post-operated post offices in the country.

The Grant Thornton report, commissioned by postmasters, recommends:

• Immediate action must be taken to address the current and impending financial crisis for the Post Office network
• Recommendations from previous studies, even if implemented, are insufficient to provide the necessary revenue uplift for postmasters within the timelines considered
• The only realistic solution that provides the effective and efficient approach necessary within the timelines required is the consideration and approval of an annual Public Service Obligation worth circa €17m to compensate for the projected funding shortfall from 2021 onwards.

IPU general secretary Sean Martin said: “A Post Office PSO needs to be sanctioned this year and implemented by mid-2021. We do not have time to delay and do not need further evidence. The level of closures next year is potentially so significant as to mean a collapse of the Irish post office network as we know it.”

The report warns that the problem is due to reach crisis point by mid-2021 as new contract payments paid by An Post to Postmasters end. “An Post financial supports are unsustainable in anything but the short term. Establishing alternative funding options to maintain a sustainable future for the Post Office Network and for Postmasters is now essential,” it says.

Covid-19 is an added difficulty, as postmasters have reported a 25% reduction in transactions in August 2020 compared with the same month last year. 

The full report can be downloaded here.

Photo: Postmaster Tony Wall (left) and Irish Postmasters’ Union general secretary Ned O’Hara. (Pic: Conor Healy / Picture it Photography)