The UK’s communications watchdog has outlined two options for changes to letter deliveries as part of a review expected to save the company hundreds of millions of pounds.
Ofcom said the two “primary options” could include letters being delivered to households and businesses five or even three times a week, or the slow down of deliveries across three or more days.
The first move could save Royal Mail between £100m and £650m and the second between £150m and £650m, according to the regulator.
It comes after Downing Street, which would have to approve any changes, appeared to rule out the company being allowed to scrap Saturday deliveries.
But Ofcom chief executive Dame Melanie Dawes said that changes to the postal system could be required as the number of letters being sent each year has halved since 2011, while people are getting many more parcels than they used to.
Ofcom said Royal Mail could cut the frequency or speed of deliveries as part of a cost cutting exercise
(PA Wire)
Currently, Royal Mail has an obligation 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, which recorded a £419 million loss in its previous financial year, said the current service requirement is “simply not sustainable”.
Dame Melanie said: “Postal workers are part of the fabric of our society and are critical to communities up and down the country. But we’re sending half as many letters as we did in 2011, and receiving many more parcels.
“The universal service hasn’t changed since then, it’s getting out of date and will become unsustainable if we don’t take action.
“So we’ve set out options for reform so there can be a national discussion about the future of universal post. In the meantime, we’re making sure prices will remain affordable by capping the price of second class stamps.”
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.”