Ofcom sets out next steps

Ofcom has today provided an update on its plans to reform the Universal Service and has set out a timeline for next steps. It states: “there is a clear and urgent need to align the USO specification for letters more closely with the reasonable needs of users, and to ensure the sustainability of the service.” 

The update confirms Ofcom's intention to undertake further consultation with a range of stakeholders in early 2025, specifically in relation to Royal Mail's proposal for reform. A decision would then be expected in summer 2025. 

Whilst Ofcom has now set out a timeline for a future consultation on Universal Service reform, we remain concerned that the urgency of the situation is not properly recognised by Ofcom, and we will continue to lobby Ofcom to act faster.

Letter volumes have fallen from their peak of 20 billion nearly 20 years ago to 6.7 billion a year today meaning the average household now receives just four letters per week. Yet whilst most countries have adapted their Universal Service requirements to reflect the new reality, in the UK the minimum requirements have not changed.

The Universal Service is unsustainable in its current form and the need for reform is urgent. To save the Universal Service, we have to change the Universal Service.

A reminder of Royal Mail’s proposal for Universal Service reform

In April we submitted our own proposal to Ofcom on the future of the Universal Service. We developed our proposal after listening to colleague feedback, and following discussions with thousands of customers, businesses and stakeholders, including both our trade unions.

Our proposal includes limited changes to deliver a more efficient and more financially sustainable Universal Service, and is designed to protect what matters most to our customers:

• First Class letters would continue to be delivered six days a week (Monday to Saturday) to recognise the importance of next day and Saturday deliveries
• All non-First Class letter deliveries, including Second Class, would be delivered every other weekday (Monday to Friday)

The proposal we have put forward can be achieved with regulatory change, so Ofcom could make the changes required without needing Government or Parliament to amend any laws.

It is important to bear in mind that, at this stage, no final decisions have been made by Ofcom and they will need to consider the views of a wide range of stakeholders. Nonetheless this is a positive step forward and we will continue to take forward our detailed planning so that we are ready to act quickly to deploy reforms once Ofcom has made its decision on the appropriate reforms.

You can read more about our proposal here, as well as submitting your comments and questions: www.myroyalmail.com/universalservice