Sector responds to Ofcom postal USO report

The Ofcom research on the postal Universal Service Obligation, which we reported on last week, has drawn mixed reviews,  with potential recommendations including reducing the number of letter delivery days in the service from six to five or three. 

Royal Mail says it welcomes Ofcom review but reform is urgently needed. Martin Seidenberg, Group Chief Executive Officer at IDS, said: “Ofcom’s report demonstrates that reform is urgently needed to protect the future of the one-price-goes-anywhere Universal Service. We are doing everything in our power to transform, but it is not sustainable to maintain a network built for 20 billion letters when we are now only delivering seven billion.

“We have been calling on Government and Ofcom to tackle this issue for four years, and the lack of action means that we are now facing a much more serious situation.

“Whilst other countries have grasped the opportunity to change, the UK is being left behind. There has been a lot of discussion about dropping Saturday letter deliveries in the UK, but as other countries have shown, there are a range of options to consider.

“A modern and sustainable postal service is crucial for our people, our company and the customers we serve. We want to engage with all stakeholders as part of the process to find an outcome that will allow us to compete and adapt to today’s realities.”

Communication Workers Union General Secretary Dave Ward commented: “In the ongoing debate, Ofcom now have no credibility whatsoever, and their views are an irrelevance to the discussion that must take place between postal workers, businesses and customers.

“To produce a report without any input whatsoever from frontline workers or their union is an attempt to railroad through the failed agenda of the previous Royal Mail management team.

“The CWU will not stand for that. We will now launch an extensive engagement exercise and produce our own report on the future of Royal Mail, taking on board the views of our members and customers.

“This will be a blueprint for a sustainable Royal Mail that can grow our economy and our communities.

“We now challenge Royal Mail to join us in properly discussing the future of the universal service obligation (USO), and to reach a position that protects the customers that rely on this company and our members.

“We are not resistant to change, but we will not sign up to a three-day USO, which would destroy Royal Mail as we know and would impact on thousands of jobs.

“Royal Mail has the biggest fleet in the country, a presence in every community, and boasts and unrivalled infrastructure.

“This is the bedrock that a serious growth agenda – and the future of the company – can be built.”

David Beirne, Manager of Postal Relationships at technology company Quadient  “As the Government recently stated, a six-day postal service is vital for many businesses. Halving the number of Royal Mail delivery days would have a serious impact, as many organisations still rely on letters as their main communication method. Imagine how many more NHS appointments will be missed, and the number of home purchases that will fall through. All of this will have a costly knock-on impact, both for organisations and the general public.

“If the Royal Mail’s obligation falls to five days a week or lower, organisations will need to be prepared. They urgently need to review the way they currently communicate with customers, prioritise letters that are the most time-sensitive, and ensure mail room processes and technologies are set up to get them out the door as quickly as possible.”

Morgan Wild, Interim Director of Policy at Citizens Advice, commented on the impact of the recommendations on consumers:

“Given Royal Mail has failed to meet its targets for nearly half a decade, it’s clear the current Universal Service Obligation (USO) is falling short of its fundamental purpose: safeguarding consumers. Any changes must prioritise their needs, not Royal Mail’s bottom line.

“We agree that improving reliability is essential. Late post has real consequences – people miss vital medical appointments, legal documents and benefit decisions.

“Cutting services won’t automatically make letter deliveries more reliable, so we must see proposals to tackle the cause of Royal Mail’s persistent failings. Ofcom and the government have to spell out how any revised USO will start to deliver for the millions of us who rely on it.”

To read a debate about the future of the postal USO including interviews with PostEurop, Citizens Advice and Royal Mail sign up for the next issue of MER, published in February.