Major reforms of Royal Mail proposed

Ofcom has released a consultation document proposing a range of reforms to Royal Mail’s Universal Service Obligation (USO), designed to ensure it remains financially sustainable while retaining key services.

The consultation from Ofcom, the government-approved regulator for the UK’s communications services, has been released in response to letter volumes declining and costs rising. It aims to align Royal Mail’s service with current needs while improving efficiency and affordability.

The consultation is open until April 10^th, 2025, with a decision based on the consultation expected in the summer. Any changes to the USO will take effect upon publication.

Ofcom has encouraged those interested to review the consultation details and submit a response by the April 10^th deadline. Information including a downloadable response form can be found at the following link.

The Strategic Mailing Partnership, a professional body that represents the interests of printers and mailing houses in the UK, is among the organisations that are encouraging individuals and businesses to respond to the consultation.

In 2024, Royal mail proposed a range of changes to the USO, a set of UK laws designed to ensure a minimum quality and affordability standard for the UK’s mail services.

Royal Mail’s proposals for the USO included only delivering non-first class letters every other weekday, keeping its six-day-a-week service for only first-class letters.

In December 2024, Ofcom fined Royal Mail £10.5m for failing to meet its targets for first- and second-class deliveries in 2023/24.

In the same month, the UK government approved a £3.6bn takeover of Royal mail by Czech billionaire Daniel Kretinsky’s EP Group.

As part of its purchase of Royal Mail, EP Group has made a ‘legally-binding’ commitment to maintain the USO during the entirety of its ownership.

Commenting on Ofcom’s consultation, Emma Gilthorpe, chief executive officer of Royal Mail says: “Ofcom has recognised the urgent need for change so that the future of the Universal Service can be protected for all.

“Our proposal was developed after speaking to thousands of people across the country and is designed to preserve what matters most for our customers – maintaining a one-price-goes-anywhere service to 32 million UK addresses and first class deliveries six days a week.”

In her statement, Gilthorpe highlights the gap between the Royal Mail’s current service network and the actual number of letters being sent by mail, saying: “As Ofcom’s analysis shows, it is no longer financially sustainable to maintain a network built for 20 billion letters when we are now only delivering 6.7 billion.

“Reform is crucial to support a modern, sustainable, and reliable postal service for our customers, our company, and our people.”