Regulation `over-burdening UK Royal Mail`

The Royal Mail was over-burdened by parts of the regime regulating its services, according to an official report today.

The National Audit Office (NAO) said there was scope to improve the way the regulations were implemented by Postcomm, which would reduce the burdens.

These included cutting the length and detail of investigations into Royal Mail services, according to the report, Opening the Post.

The study found that postal deliveries had been improving since regulation was introduced, although it singled out areas including North West London and South East London where target levels were not being achieved.

Sir John Bourn, head of the NAO, said: “The problem of regulating a monopoly such as Royal Mail is that it tends to involve advocacy, litigation and dispute.

“That is why competition is in the long run a less costly and burdensome way of protecting consumers. This report encourages Postcomm to minimise the costs and maximise the benefits in the short term while withdrawing from detailed regulation in the medium term.”

Conservative MP Edward Leigh, chairman of the Public Accounts Committee, said: “Royal Mail has not been delivering on its promises. Undoubtedly its performance has improved in recent years but there are chronic failures at a local level.

“There are still areas in the country – urban areas especially in London, surprisingly – where it is consistently failing to meet its target for delivering first class post within one working day.

“If Royal Mail is to improve further, then it needs to be free from burdensome regulation. At the same time, the regulation in place must support the development of a truly competitive postal market.

“I am pleased to see that the regulator’s proposals for changes to the regime go some way to addressing this with fewer targets and more automatic penalties.

“But Postcomm must resist the temptation to launch investigations at the drop of a hat which may drag on for months. Its investigations into poor performance, in the past, have taken far too long.”

A Royal Mail spokesman said: “We agree with the thrust of this report urging less regulation. Royal Mail has consistently said that regulation should be light-touch.

“It’s the customers whose voice should always be the strongest. Royal Mail also welcomes the NAO’s recognition of the importance of quality of service. It’s Royal Mail’s number one priority.

“Royal Mail is currently delivering a record high quality of service to its customers, but we’re determined to do even better.”

A spokesman for Postcomm said: “We welcome such a thorough report on which we worked closely with the NAO.

“Postcomm’s key concern on service quality is to make sure people have trust in the reliability of postal services.

“With 97% of the market, Royal Mail does not yet face effective competition and until it does, Postcomm will need to ensure customers get a fair deal by regulating its service quality.

“However, as foreseen in the NAO report, as competition increases we expect to reduce the burden of regulation on Royal Mail.”