What is being proposed under the Royal Mail delivery shake-up and why?

A long-awaited report from postal regulator Ofcom has laid out suggestions for a shake-up of letter deliveries, including cutting Royal Mail’s service down to as few as three days a week.

The proposal has not gone down well with the Government, small businesses groups and trade unions, who argue it would short-change households and firms and could lead to more job losses at Royal Mail.

Here the PA news agency looks at what is being put on the table and why:

– What is Ofcom proposing?

The regulator has outlined two “primary options”, including changes to the number of days that letters are delivered a week.

That could mean cutting Royal Mail’s letter delivery service from six days to five, or even three, a week.

The other option is to extend how long it takes letters to be delivered, meaning that it would take three or more days for most letters to arrive, but with a more expensive next-day delivery service available when required.

Ofcom has said that this could see deliveries anchored around a second class service that takes slightly longer, while a first class service could come with greater next-day guarantees at a more premium price.

– What is the universal postal service?

Royal Mail’s universal service obligation (USO) stipulates that it must deliver letters six days a week to all UK addresses for the price of a stamp.

– Why is Ofcom looking to overhaul the service?

The watchdog said that the universal service risks becoming “unsustainable” without reform.

It said Britons are sending half as many letters as they did in 2011, down from 14.3 billion to 7.3 billion now, and instead receiving many more parcels.

Royal Mail has also argued that the service needs to change, and has called for Saturday deliveries to be axed.

The group has been heavily loss-making, while it has also failed to meet its delivery performance targets, which landed it with a £5.6 million fine from Ofcom last year.

– How does it work in other countries?

Ofcom said the UK is not alone in needing to change delivery services due to fewer letters being posted as people instead use email and social media.

It said other countries have cut the frequency of delivery or extended delivery times for letters, such as Sweden in 2018, Belgium twice since 2020, and Norway and Denmark twice each since 2016.

– Are these Ofcom proposals going to happen?

Ofcom has been quick to stress that these are not firm recommendations, just options for review.

But it has said that the service needs to change in some way, while Royal Mail has cautioned it may otherwise need a state subsidy to survive.

However, Ofcom does not have the power to reduce delivery days, scrap Saturday letter deliveries or reduce the delivery days, with the six-day-a-week service being part of the universal service requirement stipulated by law under the Postal Services Act 2011.

The Government and Parliament would therefore have to agree this change – and Downing Street has said it would not sanction reducing the six-day service.

Ofcom said the option of extending delivery times was “more within our gift” as it can make that change within its own regulation, but also insisted it did not have a “front-runner” proposal.

– Will this mean deliveries will become more expensive?

Ofcom has said it has recommitted to capping the cost of posting second class letters until March 2027, ensuring that on average it will rise by no more than Consumer Prices Index inflation.

But it does not cap first class delivery costs and has said that it could be an option for Royal Mail to charge more for this in return for a more premium next-day service.

– What will happen from here?

Ofcom wants there to be a “national debate” on the future of the UK’s postal service and is inviting views on the proposals until April 3.

People can have their say by writing to Ofcom or sending an email to futurepostaluso@ofcom.org.uk.

It will also hold events across the UK, such as round table discussions with various groups, from next month ahead of the deadline.

Ofcom aims to report back with an update in the summer.