Call for input: The future of the universal postal service
Royal Mail shouldn’t be rewarded for half a decade of service failures with a licence to slow down deliveries and charge up to £7.35 for a next day stamp. It does not meet its targets - and is under little pressure to do so as a monopoly presence in much of the postal market. What’s more, it is not clear it is any more efficient than it was a decade ago.
No one doubts that the USO (Universal Service Obligation) imposes duties on the firm - but these duties were known to investors from the point of privatisation onwards. Cutting them with no strings attached appears guaranteed to see the company requesting further reductions to its requirements in future.
Reform to the USO may be advisable - it is certainly not providing effective consumer protection in its current form. But Ofcom cannot propose a set of options designed to reduce requirements on - and generate substantial savings for - Royal Mail with no commensurate proposals to tackle the issues that matter most to service users. Consumers, businesses and taxpayers should expect enforceable guarantees that the service will be extended to all, meet its targets and be affordable.
It is welcome that Ofcom is having this debate in the open. But ultimately, changes to Royal Mail’s obligations should be made - as Parliament intended - through democratic debate. One of the options Ofcom proposes would see the target speed of delivery for important letters, including hospital appointments and benefits letters, reduced. Unlike reductions to delivery days - which require legislative scrutiny - this change could be implemented unilaterally by Ofcom. But reducing the speed would have very similar practical implications to reducing delivery days - and we believe should therefore be subject to the same degree of political scrutiny. Ofcom should fulfil its statutory duties by advising Parliament on a way forward, and must not be seen to be avoiding the necessary debate.