Royal Mail to cut back on letter deliveries under new plans

Second-class post is to be scrapped on Saturdays under proposals for Royal Mail put forward by Ofcom.

The UK regulator said Saturday deliveries were only needed by people when they were sending the “occasional urgent letter or card”.

However, it said people would opt for a first-class stamp for these urgent deliveries. It said most letters were not urgent.

Ofcom suggested that scrapping second-class deliveries on Saturday would “enable Royal Mail to improve reliability, make substantial efficiency savings, and redeploy its existing resources to growth areas such as parcels”.

The regulator said it would carry out further in-depth research among postal users to assess whether to push ahead with the changes, which could take place without any update to legislation.

Lindsey Fussell, Ofcom’s head of networks and communications, said: “Postal users’ needs are at the heart of our review. If we decide to propose changes to the universal service next year, we want to make sure we achieve the best outcome for consumers.

“So we’re now looking at whether we can get the universal service back on an even keel in a way that meets people’s needs. But this won’t be a free pass for Royal Mail – under any scenario, it must invest in its network, become more efficient and improve its service levels.”

The proposals followed a consultation by Ofcom on the future of the so-called universal service obligation (USO) that requires Royal Mail to deliver letters six days a week.

Royal Mail suggested making changes to the second-class service in a submission earlier this year. Second-class mail is delivered within three days.

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The company proposed cutting deliveries of second-class post down to just three times a week, saying this would save it millions of pounds every year. Bosses said they would maintain a first-class post on Saturday.

Royal Mail has also called for a watering down of its quality of service targets, which require the company to deliver 93pc of first-class mail on time and 98.5pc for second-class post.

It has repeatedly failed to meet these targets in recent years, sparking significant fines from Ofcom.

Speaking on Thursday, Martin Seidenberg, the chief executive of Royal Mail’s parent company International Distribution Services, said: “To save the universal service, we have to change the universal service.”

He said change could “not come soon enough”, adding: “Letter volumes have fallen from their peak of 20bn to just 6.7bn a year today, meaning the average household now receives just four letters per week. We look forward to continuing to engage with all our stakeholders to secure a financially sustainable universal service for many years to come.”

The Communication Workers Union, which represents postal workers, took aim at Ofcom, saying it was “completely unsuitable to be the regulator for one of the UK’s key pieces of infrastructure”.

A spokesman said: “We have previously met with Ofcom and made it clear we recognise change in the USO is needed, but the debate on the future of postal services in the UK cannot be led by them and Royal Mail.

“The voices of postal workers, the public and businesses must be heard.”

The potential shake-up of the USO comes as Royal Mail gears up for a £3.6bn takeover by Czech billionaire Daniel Kretinsky.

The tycoon has pledged to continue Saturday deliveries for first-class letters as part of a series of undertakings to help ease concerns over the takeover.

It would mark the first time the postal service has fallen into private ownership in its 508-year history.