Ofcom USO update

Ofcom is currently consulting on a proposal for changes to the Universal Service and we’ve now submitted our response.

Ofcom’s consultation recognises that the Universal Service needs to be modernised and reform is necessary given letter volumes have declined from 20 billion a year at their peak in 2004/05 to 6.7 billion a year in 2023/24.  Ofcom’s consultation proposes to remove the requirement for us to deliver Second Class post six days a week and allow delivery of these letters every other weekday, Monday to Friday.  There would be 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 for some customers
• The option of First Class and Second Class letters, giving people the choice of price and speed
• Parcel services which Royal Mail is required by regulation to deliver Monday to Friday, but which the company also delivers on weekends.

Changes to Ofcom’s package of reforms are required

However, we are concerned that key changes by Ofcom to Royal Mail’s proposed reforms will not deliver the efficient, reliable and financially sustainable Universal Service that customers need. We have three specific areas of concern:

1. Level of proposed reliability targets: Last year we proposed the introduction of new additional reliability targets to give customers greater confidence and reflect the fact that people increasingly value reliability over speed. We are however, concerned that the level at which Ofcom is proposing to set the new reliability targets is over specified and will add significant cost to the delivery of the Universal Service. This would put the benefits of Universal Service reform at risk and could lead to materially higher prices for customers.
2. Adding D+2 Access service to regulation: We are also concerned that Ofcom’s proposal to add a Priority (D+2) Access business service to postal regulation significantly reduces the chances of achieving a successful roll out of the new delivery model and goes against the wider Government drive to reduce unnecessary regulation.
3. The need to allow tracking on Universal Service products: We also propose that Ofcom enhances and modernises the Universal Service by removing unnecessary regulation that prevents us from offering parcel tracking for Universal Service customers.

We have urged Ofcom to publish its consultation decision and updated regulations by 1 July 2025 so that customers can benefit from a more efficient, reliable and financially sustainable Universal Service without delay.

For the latest on Universal Service reform, including our regularly updated frequently asked questions, please visit www.myroyalmail.com/universalservice