Maintain the integrity of Royal Mail and Britain

Ofcom, the postal services regulator, has issued a damning report about the financial state of Royal Mail, a privatised company since 2013. This is a threat to a part of our national infrastructure which is still vital.

Royal Mail has been under fire for its performance for some time. Last November Ofcom fined the company £5.6 million for badly missing performance targets. A quarter of first class mail arrives late.

Unsustainable

Ofcom says in its report published on 24 January that there is “…an increasing risk [Royal Mail] will become financially and operationally unsustainable in the long term” unless it is allowed to ditch its requirement to deliver letters six days a week.

Regulators generally have a poor track record in protecting infrastructure and services. Alarm bells ring when they talk about reducing services in the name of modernisation.

Threat

The Communication Workers Union (CWU) represents postal workers. It is well aware of the threat, as its response to the report shows. The wider public too ought to pay attention, and question the mantra that there’s no longer a need for a mail service.

Almost as soon as it was privatised ten years ago, Royal Mail has sought to restructure and modernise. That has generally meant worse conditions for postal workers and a worse service for customers.

Obligation

Royal Mail complains that the Universal Service Obligation (USO) is holding it back. That was a condition imposed by law at the time the company was split off from Post Offices. It requires the company to deliver every day from Monday to Saturday, with delivery targets for first and second class post, across the whole of Britain however far-flung.

‘Ofcom proposes a service taking three days longer.’

In its latest report, Ofcom laid out proposals to change Royal Mail’s legal and regulatory obligations. These include reducing the number of days it is forced to deliver letters from six to five, or even three. And it proposes reforming first and second class post so that most letters are delivered through a service taking up to three days longer.

The main argument is that the network used to process 20 billion letters a year, but now it delivers 7 billion. But even that volume is still a significant and important amount of communication.

Endangered

Ofcom does not recognise, or will not admit, that a deterioration in service frequency will have a further negative impact on the future scale of the post, which endangers the whole service. Calls for even higher stamp prices will have a similar damaging effect.

Measures which reduce and marginalise services are often a prelude to ending them altogether. It looks as if the true intention and objective of this report is for an eventual end to the postal service in Britain.

Many industries rely on the post having regular frequency and on Saturday deliveries and collections. This includes magazine publishers, greeting cards makers and other small businesses. Importantly the NHS and local councils still send many communications by post.

There is a widespread assumption that personal letter-writing and the sending of greeting cards are dead and buried. Certainly the trend to online communication is strong, but that does not mean eliminating physical mail entirely.

At least 1.5 million homes in the UK don’t have internet access – that’s according to Ofcom’s own figures. And many more will prefer postal communication, at least for some matters.

Failure to consult

The CWU has criticised Ofcom’s failure to consult postal workers. CWU says that it “…will work with economists to produce an alternative and independent view on the future of postal services in the UK and embark on a major engagement exercise with our members, businesses and the public.”

“Ofcom have abandoned their responsibilities.”

Branding it completely wrong to debate the future of Royal Mail in the absence of its workers, the union added, “Ofcom have abandoned their responsibilities on quality of service and are now attempting to do the same on the USO.”

The union believes that the regulator, rather than having a positive ambition for the future of the service, is following a failed agenda originating from the now-departed senior leadership of Royal Mail.

Needs

CWU says that the union and its members understand the need for change. But their view is that service changes should be based on customer need and the security of postal workers’ jobs. CWU calls for “…an ambitious growth strategy that sees the infrastructure, fleet and presence in every community as Royal Mail’s key assets.”

The growth in online shopping has resulted in a massive increase in the number of parcel deliveries in Britain – from 1.7 billion ten years ago to 3.6 billion in 2022-23. The volume was over 4 billion during the exceptional pandemic period, but has dropped back.

Failure

Royal Mail delivers parcels as well as letters in a separate operation, Parcelforce. But it has failed over the years to capitalise on the growth in parcel traffic. Nor has it integrated the networks, although there have been talks with the union about that.

A 90-day consultation period on the Ofcom report has begun. It said that it would “be for the government and Parliament to determine whether any changes are needed to the minimum requirements of the universal service.”

Pressure

As with the fight to retain rail ticket offices, the government and parliament are susceptible to public pressure, but are likely to go ahead with service cuts in the absence of strong opposition.

A parliamentary debate two weeks before the report was published passed largely unnoticed. But Royal Mail unconvincingly rebutted suggestions that it wanted to sack 10,000 workers – it was just going to do let “natural attrition” achieve the reduction.

Cohesion

The USO commitment plays a great part in the cohesion of the whole of Britain and it should not be jettisoned but defended. Ending it would be a threat to the integrity of the postal service. And there’s also an urgent need to deal with persistent failures in the current service. Otherwise it will be easier to justify withdrawing daily deliveries.

This issue does not only affect postal workers and their union. Industries and sectors reliant on the post should be responding to the consultation too. But so far there has been little or no organised public response. An e-petition might be useful. And everyone has a postie (for now); we should think of ways of galvanising this potential into mass support.