€17m annual Government support recommended for Post Office Network
A report Review of the economic contribution and financial sustainability of the Irish Post Office developed by Grant Thornton recommends that the Government invest urgently in the Post Office Network, as it provides a multi-fold economic and social return to communities, far in excess of the PSO.
The report’s key findings are:
- The annual cost of running the Post Office Network in 2021 is €70m generating a retail revenue of €53m, leaving a €17m shortfall
- Average losses of €19,181 per Post Office are forecast per annum from 2021 impacting all Offices small, large, urban and rural
- The shortfall is largely driven by the ongoing transfer of services traditionally delivered by the Network to an ‘online first’ approach and a reduction in the traditional mails business
- The Network faces unrestrained closures by the end of 2021
- COVID-19 is placing further strain on the Network
- To maintain the Network the PSO needs to be implemented within months.
The case for a Public Service Obligation presented in the report is:
- 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
- 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 hard to measure but very real social contribution to communities
- Based on a model used on the UK Post Office Network, the estimated annual social value of the Irish Post Office Network is €334-€776 million
- PSO models for Post Office Networks are not unusual and have already been introduced in the UK, France, Spain, Belgium, Italy, Finland and Poland and with European Commission approval
- Independent research carried out by RED C in February found that: 91% said their Post Office provided a valuable service to the local community, 86% support the Government providing financial support to keep their Post Office open and 86% want more State services available at their Post Office.