Tag: Europe

The liberalisation of the UK postal service has produced “no significant benefits” for either households or small businesses, a report has said.

That is the initial finding of an independent review of the UK postal sector commissioned by the government.

It warned there was now a threat to the Royal Mail’s financial stability.

The independent panel warned that the “substantial threat” to the Royal Mail’s financial security threatened the universal service – the collection and delivery to all UK addresses.

Maintaining the universal service is at the heart of this review – ensuring collection from pillar boxes and post offices and delivery to all addresses

As a result, the independent panel – which will produce its full report in the summer – said the continuing “status quo is not tenable”.

While the initial report said homes and small firms had not gained from the increased competition, it said large companies had “seen clear benefits from liberalisation – choice, lower prices and more assurance about the quality of the mail service”.

It says these large firms have benefited from the big growth in competition in the bulk mail sector – postal firms that collect, sort and transport bulk mail before handing it over to the Royal Mail for the final delivery.

Yet at the same time, the report found that the Royal Mail still had “virtually no competition” in the delivery of addressed letters over the “final mile” to letterboxes.

The core problem for the Royal Mail is that while it has lost business in the lucrative bulk mail collection and sorting market, it still has to uphold the universal mail delivery service, which struggles to make a profit.

The Royal Mail and regulator Postcomm have both declined to comment on the initial report.