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Off the west coast of Scotland, there is a small island called Kerrera. It’s home to just 35 people and an array of wildlife, including several peacocks.
Mark is one of the island’s residents and the local postie. Every Monday to Saturday he makes the ferry journey to the mainland to collect the post and goes back to deliver letters and parcels to his fellow islanders.
In December, I made the journey myself and was struck by the vital role he plays keeping the community connected, including delivering post to four properties that are only accessible by quad bike!
Serving even the most remote parts of the UK is something we at Royal Mail are deeply proud of.
It’s also one of the reasons that we have been fighting for reform to the Universal Service Obligation for many years.
We want to protect what makes Royal Mail unique and continue to serve 32m addresses across the UK for the same price, however remote they may be.
Lower demand: Letter volumes have declined from 20bn a year at their peak to 6.7bn today. The average household now receives just four letters a week
The Universal Service is a special thing. It is an important backbone of the UK economy, supporting businesses of all shapes and sizes, and ensuring friends and families stay connected.
But we can’t escape the reality that letter volumes have declined from 20bn a year at their peak to 6.7bn today.
The average household now receives just four letters a week, yet the number of addresses we deliver to has grown by 4m, so it is becoming more costly to deliver each letter.
Ofcom’s net cost calculations show that it costs Royal Mail £1million to £2million every day to provide the current regulatory requirements of the Universal Service.
This just isn’t sustainable for a company that lost £348million last year. Without change, there is a real chance the one-price-goes-anywhere service won’t survive.
Ofcom, the regulator that oversees Royal Mail, agrees that without reform the sustainability of the Universal Service is at risk.
It has launched a public consultation, seeking views on a modern Universal Service framework fit for the future.
Looking to the future: Royal Mail chief exec Emma Gilthorpe says reform of the postal service is crucial
Under the proposals, Royal Mail will continue to deliver first-class letters six days a week. We’ll deliver all other letters (including second-class) every other weekday.
There will be no changes to the one-price-goes-anywhere service to all parts of the UK. Next-day and Saturday deliveries will continue, giving people the choice of price and speed.
Customers tell us that a reliable service is what matters most. So, we’ve also proposed the introduction of new, additional reliability targets for first and second-class services to give customers greater confidence.
These proposals were developed by Royal Mail following consultation last summer with thousands of consumers, large and small businesses and vital public services such as the NHS, as well as groups representing our most vulnerable customers.
We’re confident these proposals meet the needs of all of these customer groups. And the great news is Universal Service reform could save up to £300million a year.
That’s money we can use to invest to build a modern, sustainable and reliable postal service fit for the future.
The Government has a laudable goal of encouraging economic growth and productivity.
The changes we have set out would do exactly that, without the need for primary legislation or taxpayer money.
Now we need to get on with the change without delay, to secure a future for Royal Mail and the essential services we provide day in, day out to each and every corner of the UK, Kerrera included.
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