Ofcom clears way for less post on Saturdays

The delivery of second-class letters on Saturdays is to be scrapped under an overhaul of Royal Mail’s universal service obligation being proposed by the regulator.

First-class letters would continue to be delivered six days a week, though, under changes to be put to consultation by Ofcom, which said there was strong support for the “fundamental principles of universality, affordability and uniform pricing”.

Ofcom said a review this year of the so-called universal service obligation (USO) had acknowledged changes were needed if the service was to remain “sustainable, affordable and reliable”.

The proposals align with suggestions made by Royal Mail, the former state postal operator which was privatised in 2013 and is in the midst of a £3.57 billion takeover bid.

Royal Mail has been increasingly pressing Ofcom and ministers to loosen the requirements, warning of an “urgent financial sustainability challenge”.

The operator is also braced for another multi-million pound fine after failing to hit delivery targets again last year.

Welcoming the proposals today, Martin Seidenberg, the group chief executive of International Distribution Services, Royal Mail’s parent company, said that “to save the universal service, we have to change the universal service” and that letter volumes have fallen from their peak of 20 billion to just 6.7 billion a year, meaning that the average household now receives just four letters per week.

“Yet whilst most countries have adapted their Universal Service requirements to reflect the new reality, in the UK the minimum requirements have not changed,” he said.

Ofcom received thousands of responses to its review this year, including from consumer groups, unions, businesses, public services and the wider postal industry, and said there was overall recognition that the way people and businesses use letters has changed.

Affordability is the most important feature of letter deliveries, Ofcom said, adding that it would therefore continue to ensure there is an “affordable option available for consumers, on a ‘one price goes anywhere’ basis”.

People also want a next-day service available six days a week for when they need to send the occasional urgent letter or card, Ofcom said, but “acknowledge that most letters are not urgent”.

The proposed changes could be made without parliament making changes to legislation and Ofcom plans to launch a detailed consultation early next year, before reaching a decision in the summer.

Lindsey Fussell, Ofcom’s group director for networks and communications, said: “We’re now looking at whether we can get the universal service back on an even keel in a way that meets people’s needs. But this won’t be a free pass for Royal Mail — under any scenario, it must invest in its network, become more efficient and improve its service levels.”