Ofcom’s Royal Mail USO review hits the buffers before publication
Ofcom’s plan to outline options for reforming Royal Mail’s universal service obligations has gone mainstream as the GCA pulls out all the stops with the media, mps and other interested parties in a battle to protect Saturday postal deliveries, which are in real danger of being scrapped.
The good news is that prime minister Rishi Sunak has come out in support of the industry association’s plea to keep the full six-day delivery service in the UK.
The GCA Royal Mail sub-committee acted swiftly as soon as it got a sniff that Ofcom’s consultation paper was to be published today, Wednesday, 24 January, which flags up the potential loss of Saturday deliveries – read the full story of Ofcom’s review and call for responses here.
A hard-hitting press release was immediately sent out to the national media over the weekend by the association’s pr agent Arena PR, really ramming home the reasons why any suggestion of cutting the frequency of postal deliveries must be quashed.
Comparing the threat of reducing the days Royal Mail delivers to the Beeching cuts in the 1960s which decimated the railway network “because no one had the imagination to ask what they could be,” GCA ceo Amanda Fergusson added: “We must not let that happen to our Royal Mail service. It’s simply a remarkable British treasure that we can send a card absolutely anywhere in the country for 75p.”
Kicking things off, Sky News reported at the weekend the news of the communications regulator’s consultation paper on the future of the USO, which industry sources believe is likely to include reforms such as modifying first and second-class delivery targets; cutting Saturday deliveries or following European markets such as Germany and Italy in moving to alternate-day deliveries; providing a state subsidy to support the USO; and allowing Royal Mail to impose even higher stamp prices.
All manner of media channels have picked up on the news, with the Telegraph, Guardian, Sun and high-profile radio programmes such as BBC Money, BBC Today programme and Radio 5 Live sharing coverage which is gathering pace by the hour.
In fact, the interest was so great for yesterday morning’s Radio 5 Live phone-in on the subject that the station ran out of phone lines. “I have suggested they send the recordings of what people were saying to Ofcom,” said Amanda.
And in one BBC segment at the same time, which included comment from the GCA, a major magazine publisher was also objecting, taking the row from a business news article to mainstream.
By 6.25am yesterday David Falkner, director of Cardology and a GCA council member who is lead for the GCA Royal Mail sub-committee, had appeared on both the BBC Money and BBC Radio 4 Today programmes – and by lunchtime his interview had been shared on 48 different programmes in total across the country from Orkney to the south coast
And, as Dame Melanie Dawes, Ofcom’s ceo, was on the Today programme this morning, David was back on BBC 5 Live, with Amanda appearing on LBC backing the regulator’s campaign for a “reliable and affordable, postal service and the importance of posties in the community.
“We need Royal Mail to be consistently achieving the levels of service stability they’ve previously delivered before the nation can start discussing changes to any USO obligations in any meaningful way,” David said.
“Our sense is we will otherwise risk sleepwalking into an ever-increasing doom spiral of requests for interventions, future postal price rises and/or bailouts,” and on the high-profile radio programmes he made the point that, in the face of its declining revenues from its postal service, Royal Mail should “step back and re-imagine what the service could be, rather than manage for decline”.
Adding weight to the GCA’s campaigning, prime minister Rishi Sunak’s spokesperson told the BBC on Monday, 22 January: “The PM’s strong view is that Saturday deliveries provide flexibility and convenience. They are important for businesses and particularly publishers. The prime minister would not countenance seeing Saturday deliveries scrapped.”
And that assurance has been championed by the GCA, with Amanda saying: “We welcome the government’s renewed commitment to the six-days-a-week delivery standard consumers and businesses value.
“We stand with consumers, communities across the UK and other organisations such as Citizens Advice and the Communication Workers Union in wanting to ensure service levels are maintained, the delivery service we all rely on remains affordable and posties are supported.
Dave Ward, general secretary of the Communications Workers’ Union which represents postal workers up and down the country, has criticised the review, calling it “dead in the water” following the prime minister’s earlier intervention.
But Martin Seidenberg, chief executive of Royal Mail’s parent company International Distributions Services (IDS), wrote to mps last week: “Delivering the current Universal Service requirements – in a financially sustainable way – is increasingly difficult, if not impossible, to achieve as the mix and number of parcels and letters changes.
“The bar set by the regulations is unrealistic given the market realities.
“We are doing all we can to transform, but it is simply not sustainable to maintain a delivery network built for 20 billion letters when we are now only delivering seven billion.”
He said there were several ways to address the challenges facing Royal Mail, “including significantly increasing prices, seeking a government subsidy, and/or reforming the Universal Service so that it is more reflective of the customer needs and market realities of today, not the needs of the past”.
And he added: “While we welcome the forthcoming Ofcom review of the Universal Service, the inertia we have experienced means that we are now facing a far more serious situation than we would have been if action had been taken sooner.”
“Its first priority must be to restore trust with customers and consumers by delivering on its current promises, breaking free from the continuous doom spiral of poor performance leading to a never- ending number of regulatory interventions.”
Setting out the greeting card industry’s concerns in an article in the Telegraph yesterday, it picked up on the phrase that Britain is “sleep-walking” towards the loss of the six-day post – the service started in 1635 when King Charles I allowed the public to use the Royal Mail which had been created in 1516 by Henry VIII to ensure his letters were delivered.
The newspaper article by Luke Barr and Tim Wallace told how association members, who make up a £1.5bn creative industry, want their voice to be heard – not least because 42% of the British public now say they only use Royal Mail for sending greeting cards.
Summing up the industry’s message, Amanda message to journalists is clear: “Our 500-plus members have been very clear – our creative industry depends on a postal service that remains reliable, national and affordable, commitments that cannot be diluted.
“A service that delivers on time, to all UK households and at a simple flat price that’s good value, is crucial to the future of our both our members and their communities.
“We will robustly counter any move to water down that obligation – it seems perverse that Royal Mail may be rewarded for the reduction in service levels over the last few years, with a loosening of its obligations.”
The battle continues…
