There is an element of political scare-mongering in the controversy over the possible closure of hundreds of rural post offices because of a Government proposal to put the provision of social welfare payments out to tender. Last February, the Department of Social, Community and Family Affairs placed an advertisement in the official EU journal indicating its intention to go to tender for agents or partners who would process approximately 45 million payment transactions a year, beginning next year. The "strong preference" of the Department was for a "cost-effective, card-based electronic and fund transfer system".
By indicating such a strong preference in its notice of intent the Department and its Minister, Mr Dermot Ahern, clearly signalled that the counter-based services provided by An Post were too expensive. The Minister has a point. It costs the State 70p for each and every over-the-counter payment made through post offices to citizens, while an electronic, card-based, fund transfer system would be expected to cost a fraction of that sum.
The crux of the issue is that many of the smaller post offices in rural Ireland depend for their survival on the delivery of such payments. Loss of the service - or a serious reduction in the charge level - would almost certainly mean their closure. Small wonder then that the general secretary of the Irish Postmasters' Union, Ms Vera Hogan, raised the matter at their annual conference. From there, it became a hot political potato as the local and European elections loomed.
There is disagreement at Cabinet over Mr Ahern's intentions. The Government has delayed a decision until after the elections. But there is no gainsaying the fact that efforts should be made to modernise the State's social welfare payments systems and to make them more cost-effective. In this regard, it is instructive to know that An Post has automated only slightly more than half of its 1,900 post offices. The remainder were not computerised because of cost considerations and low volumes of business. It would seem that 1,000 post offices conduct 95 per cent of all transactions.
There has been exaggerated talk of 1,500 of the State's 1,900 post offices being forced to close if the tender for social welfare payments is lost to An Post. Such a prediction may be based on political considerations rather than economic realities. For, even if the social welfare contract is put out to tender, it is difficult to see any other agency being able to compete with An Post because of its huge range of outlets.
On the face of it, both An Post and the Government appear unwilling to invest in the infrastructure of small rural societies and small towns. Post offices provide a vital network of support and cohesion within local communities and should be preserved where possible. Before the last general election, Fianna Fail undertook to "make the computerised local post office a one-stop shop for most State services." It should now honour that promise.