Ofcom proposes scaling back Royal Mail's services to save money, while the union raises concerns about worker conditions and service reliability.
Royal Mail is on the verge of potentially ending Saturday deliveries for second-class letters, according to a proposal by Ofcom , the communications regulator. Ofcom suggests a reduction in broader postal delivery targets as well. After a consultation process, the regulator has provisionally concluded that shifting the second-class letter service to alternate weekdays, while maintaining six-day-a-week first-class deliveries, would still meet the needs of postal users.
These changes could lead to annual savings of between £250 million and £425 million for Royal Mail, as estimated by Ofcom. These reforms to the universal postal service come as Royal Mail is undergoing a takeover by Czech tycoon Daniel Kretinsky. The £3.6 billion deal received government approval at the end of last year. Mr. Kretinsky has pledged to uphold the Universal Service Obligation (USO) after the acquisition. Ofcom has put forward proposals to adjust Royal Mail's core delivery objectives, including a reduction in the target for next-day delivery of first-class mail from 93 percent to 90 percent, and a cut for second-class mail delivery within three days from 98.5 percent to 95 percent. These adjustments aim to align Royal Mail's performance goals with other international and European standards. This news follows significant penalties imposed on Royal Mail for subpar service, with the company being fined over £16 million in the last 18 months for failing to meet its delivery targets. Natalie Black, Ofcom’s group director for networks and communications, emphasized the changing landscape, stating: 'The world has changed – we’re sending a third of the letters we were 20 years ago. We need to reform the postal service to protect its future and ensure it delivers for the whole of the UK. 'But we’re safeguarding what matters most to people – first class mail six days a week at the same price throughout the UK, and a price cap on second class stamps.' Ofcom's latest findings suggest that the public no longer requires a six-day letter delivery service, with annual deliveries plummeting from 20 billion two decades ago to approximately 6.6 billion today, and projected to fall further to four billion in the coming years. The regulator plans to continue consulting on its proposals until April 10, with a final decision expected in the summer. Emma Gilthorpe, CEO of Royal Mail, commented: '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.' The government maintains that a reliable and affordable universal postal service is essential for the UK. When asked about the Prime Minister's view on the proposed changes, a spokesperson from Downing Street responded: 'This is the start of a 10-week consultation - it would be wrong to pre-empt its conclusion. 'But we’re clear that a reliable and affordable universal postal service is crucial to the UK. It must work for customers, workers and businesses that help drive growth across the country. Parliament has given Ofcom a duty to seek a financially sustainable and efficient universal service obligation, and the priority here must be to ensure that Royal Mail is able to effectively serve its customers in the years to come.' The Communication Workers Union (CWU) expressed caution, stating that any revamp must ensure improved working conditions for Royal Mail staff and enhanced service. CWU general secretary Dave Ward warned: 'The trials that we have agreed with Royal Mail are strictly conditional on the basis that we see a significant improvement in service reliability for customers, as well as terms and conditions for postal workers being improved. Any failure to abide by these conditions will see our support withdrawn.
ROYAL MAIL OFCOM POSTAL SERVICE UNIVERSAL SERVICE OBLIGATION SAVING DELIVERY TARGETS TAKEOVER WORKER CONDITIONS COMMUNICATION WORKERS UNION
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