Regulator Ofcom is due to report back this week on its review of the universal postal service provided by Royal Mail.
Downing Street has appeared to rule out allowing Royal Mail to scrap Saturday deliveries ahead of an imminent review of the postal service by the industry watchdog.
Regulator Ofcom is due to report back this week on its review of the universal service provided by Royal Mail after calls from the firm to ditch Saturday letter deliveries, which it says are “simply not sustainable”.
It is thought Ofcom could report back with some options for the future of the universal service as early as Wednesday, with changes to Royal Mail’s current six-day universal service obligation said to be among those.
Prime Minister's spokesman
The Prime Minister's strong view is that Saturday deliveries provide flexibility and convenience that are important for businesses and particularly publishers and the Prime Minister would not countenance seeing Saturday deliveries scrapped
But Downing Street said the Government “would not countenance” enabling Royal Mail to ditch its six-day-a-week letter postal service.
The Prime Minister’s official spokesman said: “Obviously Ofcom has a role here and is reviewing the future of Royal Mail.
“But the Prime Minister’s strong view is that Saturday deliveries provide flexibility and convenience that are important for businesses and particularly publishers and the Prime Minister would not countenance seeing Saturday deliveries scrapped.
“So I think we’ll see exactly what the outcomes are.
“But given the importance of these deliveries, particularly to businesses, it’s not something we would countenance.”
Ofcom spokesman
We will be inviting views on this, not consulting on specific proposals. It would ultimately be for the UK Government and Parliament to determine whether any changes are needed to the minimum requirements of the universal service
Ofcom has already stressed there would be no firm proposals at this stage.
The regulator also does not have the power to scrap Saturday letter deliveries, with the six-day-a-week service being part of the universal service requirement stipulated by law under the Postal Services Act 2011.
An Ofcom spokesman said: “This week we will set out evidence and options on how the universal postal service might need to evolve to more closely meet consumer needs.
“We will be inviting views on this, not consulting on specific proposals.
“It would ultimately be for the UK Government and Parliament to determine whether any changes are needed to the minimum requirements of the universal service.”
Royal Mail’s owner International Distributions Services (IDS) revealed at the end of 2022 that it had formally asked the Government to switch from a six-days-a-week letter delivery service to five, covering Monday to Friday, under its Universal Service agreement.
The group said it would look to maintain a seven-day parcel delivery service.
However, ministers have been quick to dismiss any suggestion that the Government would sanction the move.
Martin Seidenberg, IDS chief executive
We are doing all we can to transform, but it is simply not sustainable to maintain a delivery network built for 20 billion letters when we are now only delivering seven billion
The Royal Mail’s universal service obligation (USO) forces it to deliver letters six days a week to all 32 million addresses in the UK for the price of a stamp, no matter where the letters are going.
Royal Mail has urged the Government and Ofcom to review its obligations, given the decline in addressed letter post.
Martin Seidenberg, IDS chief executive, said last week: “We are doing all we can to transform, but it is simply not sustainable to maintain a delivery network built for 20 billion letters when we are now only delivering seven billion.”
It is also understood that Ofcom’s review of the universal service may look at reforms to Royal Mail’s delivery targets, the possibility of alternate-day deliveries in line with some other European markets such as Germany and Italy, offering state subsidy to support a six-day service and allowing Royal Mail to increase stamp prices.
Mr Seidenberg warned last week in a letter to Liam Byrne, chairman of the business and trade select committee, that it might need financial help unless there are reforms to the service.
He said that unless there are changes, it will have to “significantly” hike prices or possibly even seek aid from the Government in the form of a subsidy.
A Royal Mail spokesman added: “We have been consistent in saying the need for reform is urgent to ensure a modern and sustainable universal service.
“We look forward to reviewing the options presented by Ofcom.”