The Minister for Public Enterprise, Ms O'Rourke, would appear to have lost the battle in Cabinet to keep all rural sub-post offices open, now that the Government has decided to contract out their services on an agency basis. Before the last general election, Fianna Fβil undertook to maintain the existing network. But mounting financial losses and a refusal by the Minister for Finance, Mr McCreevy, to foot the bill, caused a review of that commitment. Ms O'Rourke still insists there will be no forced closures, but the nature of the scheme endorsed by her ministerial colleagues last week will inevitably lead in that direction.
The village post office has been an essential part of rural life, providing a range of State services and a focal point for social congress. State pensions and various welfare payments are paid there. Small savings schemes are arranged. Bills for utility services are paid. And such things as dog and television licences are purchased. Increasing competition and shrinking margins in its core business resulted in An Post declaring that it could no longer maintain its network of 1,900 offices, especially as half of that number conducted 95 per cent of its business. It argued it could not secure investment from an international strategic partner until uncertainty surrounding its rural network was resolved. Two years ago, the Minister commissioned a report on the sustainable development of An Post's rural network. It found that a State subsidy of £70m would be required by 2004 to pay for projected losses. Rather than take that direction, however, the Cabinet has opted for a shake-out of the existing system.
The proposed scheme includes a mix of redundancy payments and other incentives designed to establish sub-post offices as agencies within local shops, petrol stations, supermarkets or other commercial outlets. Those sub-post offices which do not participate in the new scheme may continue with an improved level of payment. And where no offer is received for the postal franchise, the Minister has spoken of opening a network of "Government service outlets" which would involve local authorities and other public bodies. Such a system has not been costed. But it would be expensive and difficult to locate in remote areas. In spite of the soothing words of Ms O'Rourke and the Government's pledge to retain the entire postal network, this decision marks a turning point. The old-style country post office is on the way out.