Universal Service update

Today, Royal Mail has submitted its response to Ofcom’s call for input into the Universal Service.

The Universal Service is the legal requirement for Royal Mail to deliver to all 32 million UK addresses six days a week. But with letter volumes declining from 20 billion down to just seven billion, it is now unsustainable and requires urgent reform to meet the changing needs of our customers.

Many other countries have already successfully modernised their Universal Service requirements – in the UK ours hasn’t changed for 20 years despite major changes to how people communicate. 

If we want to save the Universal Service, we have to change the Universal Service.

What is our proposal?
We have developed our proposal after careful analysis and looking at a range of options for reform. We listened to your feedback, and had thousands of discussions with customers, businesses and stakeholders, including both our trade unions. 

Our proposal is designed to protect what matters most to customers, with no changes to:

• The one-price-goes-anywhere service to all parts of the United Kingdom
• First Class letters delivered daily, six days a week (Monday to Saturday) to recognise the importance of next day and Saturday deliveries, especially for the NHS, publishers and senders of greeting cards
• The option of First Class and Second Class letters, giving people a choice of price and speed
• Parcels delivered up to seven days a week as currently
• Collections six days a week.

The proposal includes limited changes to deliver a more efficient and more financially sustainable Universal Service:

• All non-First Class letter deliveries, including Second Class, would be delivered every other weekday
• The delivery speed of standard bulk business mail (used by large mail shippers for bulk mailings such as bills and statements) would be aligned to Second Class, so they arrive within three weekdays instead of two currently.
• The introduction of new, additional reliability targets for First Class and Second Class services, alongside revised, realistic speed targets, to give customers further confidence
• Tracking added to Universal Service parcels to reflect customer demand.

We estimate this proposal, if fully and swiftly implemented, could save Royal Mail up to £300 million a year.

What does this mean for our posties?
The changes we want are focused on making our network more efficient, improving how we deliver the mail and setting ourselves up to manage future letter decline and parcel growth. 

Some of the benefits for our posties include:

• Opportunities for more Saturdays off: As all non-First Class letters would only be delivered every other weekday (Monday to Friday), there would be fewer routes overall on a Saturday. This will open up opportunities for colleagues to take more Saturdays off, depending on attendance patterns.
• Smaller walking routes, with more addresses visited: Walking routes would reduce in distance, whilst our posties would be delivering letters to around seven out of 10 addresses compared to around four out of 10 today. This will mean less wasted walking and a more efficient network.
• More choice of duties: Over time, the number of walking routes would reduce while the number of van-based parcel roles would increase. Core delivery duties would become either:

• A traditional walking delivery role* delivering letters (all types e.g First Class, Second Class, access and retail bulk mail) and small parcels, or
• A van-based role delivering First Class letters and parcels

• Greater job security: The proposals are designed to make our business more financially sustainable, protecting tens of thousands of jobs and the best terms and conditions in the industry.

We expect there to be no compulsory redundancies and fewer than 1,000 voluntary redundancies. Any reduction in roles would be managed through natural turnover (not replacing people when they leave) wherever possible.

What happens next?
It is important to bear in mind that, at this stage, this proposal is our response to Ofcom’s call for input and not a firm plan. Ofcom will consider the views of a range of stakeholders before coming to any decision.

The good news is, the proposal we have put forward can be achieved with regulatory change, so Ofcom could make the changes required without needing Government to pass any laws.

Ofcom has said it will provide an update in ‘the summer’. We have serious concerns that the urgency of the situation is not properly recognised by Ofcom and are calling for them to act swiftly to introduce reforms by April 2025 at the latest given no need for legislative change.

We estimate that it would take around 18-24 months to fully implement the changes, from the point at which changes to regulation are brought into force.

Visit myroyalmail.com/universalservice for employee resources including FAQs, office handouts and a Worktime Listening and Learning brief.

Plus, use the form on the site to have your say on the proposal, or ask a question.

*walking delivery roles include all types of ‘walking role’ e.g. park and loop, HCT