The Irish post office network has the skills, capacity and willingness to provide additional services for the Government in return for investment that could take the form of an annual contract fee.

That is the conclusion of an analysis of the economic contribution and financial position of the network carried out by Grant Thornton on behalf of the Irish Postmasters Union, which recommends the Government invests with urgency in post offices.

The report finds that the annual financial shortfall of the network now stands at an estimated €12m.

That is lower that the €17m estimated shortfall three years ago, with the reduction a consequence of post offices having identified and developed new commercial opportunities in the meantime.

These include advance export declaration parcels following Brexit, which has brought in around €2.2m, a new financial services partnership with Bank of Ireland worth €650,000 a year and the Pandemic Unemployment Payment transfer back accounting for €2.2m.

Nevertheless, the report claims the funding gap could be closed further if the Government were to invest in services delivered through the post office network.

Of the 933 branches in the Irish post office network, 888 are run by independent postmasters who operate them as small businesses, while 45 are operated by An Post.

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"Over the last two to three years, the Post Office Network has continued to evolve through investments in their people and by expanding their range of services," the report says, adding that it could provide further services.

Annual financial shortfall of the network now stands at an estimated €12m (file)

It claims there is a wealth of untapped resources within the post office network and given the opportunity and investment, it can continue to provide solutions to modern challenges for Government.

These include the expansion of identity verification functions to combat fraud and help process applications, as well as helping to improve efficiencies in Government services through form handling and form generation.

"The withdrawal of foreign banks from the Irish market and the closure of local branch offices by domestic banks has had a very significant economic and social impact on both rural and urban communities across the country," said Seán Martin, President of the Irish Postmasters Union.

"Approximately 540 post offices in Ireland are located in areas where there are no banks within a 5 km radius. Accessible banking for everyone should be a basic right and it can be met through our extensive network."

The IPU also claims identification services for passports and driving licences and the maintenance of the electoral register could and should be provided by local post offices.

"We could also be used for other government financial services including as a central hub for the processing and delivery of retrofitting grants," Mr Martin said.

The report claims a shift in consumer behaviour, brought on by trends such as the rise of remote working, will mean people will require services where they are working and living, including rural areas and town centres.

The analysis also suggests that post offices could assist the Government with achieving national targets on climate action as it would limit the amount of time spent travelling in local communities.

Post offices could also assist with rural rejuvenation and the development of local communities, the study claims.

That report concludes that if an annual contract fee were to be paid by the Government in return for the provision of new services to all citizens it would underpin the social value of the network.

It would also play a significant role in supporting local economies, due to a multiplier effect a local Post Office brings to local businesses and support social inclusion in accessing core citizen services, particularly for those who do not transact online.

Reacting to the Irish Postmasters Union commissioned report on the post office network, the Department of Communications said nothing at this point has been ruled in or out in relation to proposals for its future, including financial supports.

The department said it is engaging weekly on the viability of the network and is committed to a sustainable An Post and post office network.

It added that there are no plans for consolidation outside of the terms of the transformation programme, agreed with the Irish Postmasters Union in 2018, and there will be no compulsory closures of post offices.

The department also pointed to €60m in financial supports put in place by An Post to transform the post office network over three years and a Pandemic Recovery Fund worth €8.5m announced by the company last year.

"The Government fully recognises the importance and value of a high quality post office network to citizens across the Country and the central and trusted role of Postmasters in our community," it said.

"The work of an Inter-Departmental Group established to consider the feasibility of new Government services is being considered at present."