Top financial advisors Grant Thornton have concluded that potential service contracts for the Post Office network could ensure savings of €85m, with €53m going to the taxpayer.
The Grant Thornton review of potential service contracts was conducted for the Irish Postmaster’s Union (IPU) and concluded that if Motor Tax was payable at Post Offices it could generate savings of €60.6m.
The General Secretary of the IPU, Brian McGann, welcomed the findings and said that, if implemented by the Government, the proposals would not only ensure massive savings for the taxpayer but would also go a considerable way to ensuring the continued viability of hundreds of Post Offices around the country.
“This detailed research proves beyond doubt that the Government would not only achieve vital savings for the Exchequer but would bring additional revenues to Post Offices who could continue to be sustainable businesses within the local community. It fully supports our “Open for Business” campaign in which we are trying to persuade Government of the benefits of putting additional services through our network,” he said.
Grant Thornton’s review, conducted with the cooperation of An Post, also concluded that the savings from additional banking transactions through Post Offices would generate €7.7m, that hospital charges such as A&E costs would result in savings of €8.5m while the savings from household charges would be €8.1m.
The importance of the social welfare payments contract to Post Offices is highlighted by Grant Thornton. They conclude that while the addition of the new contracts to the network would increase revenues by 8%, they would not be sufficient to replace the loss of that contract.
“Based on the detailed workings, potential revenues in a single year from all proposed contracts would amount to an additional 8% in revenues which, while positive, would not replace the loss of the social welfare contract.
The review by Grant Thornton for the IPU also examined the non-quantifiable costs and benefits of moving services to Post Offices. They conducted a number of consultations and focus groups with organisations such as the Irish Farmers Association, St. Vincent de Paul, Irish Rural Link and Age Action Ireland.
“The consensus from these community organisations was that the post office network plays an important role in the community and offers vital services to many people that would be difficult to replace and the decline of the network could have many unintended social and economic consequences notably in rural areas. One organisation has described the post office as allowing “people to live,” they said.
“For many local businesses and members of the community the closure of the local post office could result in significant additional expenses and time taken to travel to different post offices that are further away. Another important point that has been highlighted is that in many small villages, the post office is the only outlet for banking and financial services.
“The loss of the post office could increase financial exclusion and further exacerbate socio-economic inequalities. From a community perspective, the post office acts as the focal point and information exchange that facilitates social inclusion and reduces isolation.”
Commenting on the findings Mr. McGann said: “We believe that the Post Office can play a strategically important part in Ireland’s economic recovery and this review bears that out. The Government can achieve substantial cost savings by outsourcing transaction type services to Post Offices.
“Removing non-core activities will allow those who remain in the public service to be redeployed to do essential services. Post Offices will become more economically viable by driving more business through the unrivaled retail network of 1,100 offices and the public will have greater accessibility to services within their community.
“Because the network infrastructure is already in place, much of this new business can be taken on in a cost effective manner. The benefits to everyone are clear.
“We believe in taking a positive approach to securing the future of local Post Offices and we believe that our ideas, borne out by this research, are practical, realistic and achievable. We call on the Government to carefully examine these important findings and begin the process of implementing the changes required.,”said Mr. McGann. To read the Executive Summary please click here Irish Postmasters Union - Extended Executive Summary for circulation Final 3rd may 2012.pdf