Minster for Communications Denis Naughten has suggested pensioners travelling to the likes of Aldi and Lidl for their groceries are to blame for the imminent closure of village post offices around the country.

Defending the controversial An Post plan to cull 159 post offices, mainly in rural areas in the west, midlands and southeast, Mr Naughten said communities themselves had voted for it “with their own feet”.

“This is the fact of it, and some people have failed to acknowledge this, but the local community have bypassed some of those post offices, have gone to the bigger towns, have not used the local shop,” he said.

“I listened to a postmaster during the week, who made the point [that] they were going to some of the German retailers in the bigger towns, collecting their pensions there, and passing the local post office and now are complaining that the local post office is closing.”

Imminent closures

Before a specially-convened Oireachtas committee hearing to debate the imminent closures, Mr Naughten insisted they were “not a surprise to anyone”.

“Since the day I was appointed [Minister] I was dealing with questions in relation to the future of the post office network, and long before that,” he said.

“So communities knew that their post office was under threat, yet they continued to pass by the front door, and are now concerned in relation to it.”

Mr Naughten said: “The community has spoken themselves with their own feet.”

The entire post office network almost collapsed last year as it struggled to cope with mounting multimillion-euro losses, he told the Oireachtas Communications, Climate Action and Environment Committee.

An Post bosses had outlined for him a “very bleak future” and the “very real possibility” the State-owned company could go bust.

“The potential for a complete shutdown of postal services with the loss of thousands of jobs was undeniable,” he said.

Immediate action

Mr Naughten said the financial circumstances were so dire that immediate action was needed. “It was needed to ensure the survival of An Post,” he said.

“It was needed to safeguard the post office network. It was needed to protect thousands of jobs across the country.” Mr Naughten’s remarks were backed up by David McRedmond, the company’s chief executive.

An Post was “virtually insolvent” 18 months ago, he told TDs and Senators. Consultants brought in to assess the scale of the problem said the company faced further losses of €180 million over the coming five years, the committee was told. Mr Naughten also laid blame for the crisis on a failure to act by successive governments.

‘Underlying challenges’

But “after years of drift” the decision to restructure and consolidate the entire network means “the future is not as bleak”, although, he added, “underlying challenges” remain.

Responding to repeated calls for the post offices to emulate community banking models in New Zealand and Germany, the Minister suggested a link up with Ireland’s own credit union movement could be a better option. Mr McRedmond told the hearing “there have been some discussions” with the credit union movement about a possible partnership.

Postmasters

Mr Naughten denied a suggestion that postmasters were made “an offer they can’t refuse”, insisting the redundancy scheme leading to the closures was entirely voluntary.

That a majority of postmasters did refuse the severance package proved this, he told the hearing.

Postmasters themselves had asked for three things, he said: modernisation of the network; redundancy packages; and new services to bring in more customers.

The Minister said all these demands are being met.

Progress was being made bringing more government services to post offices while community banking services are being rolled out across the network, he added. Mr Naughten said An Post is the only postal service in the world “actually expanding” its services at moment, including in the most isolated rural communities. “But we can’t justify keeping a post office open that has 12 transactions a week,” he added.

Responding to repeated calls for the post offices to emulate community banking models in New Zealand and Germany, the minister suggested a link up with Ireland’s own credit union movement could be better option.

Mr McRedmond told the hearing that “there have been some discussions” with the credit union movement about a possible partnership.