Ofcom has suggested that Royal Mail could save up to £650m by delivering letters just three days a week, or £200m by ending Saturday deliveries. The regulator's review of the universal service obligation (USO) outlines options to address the financial unsustainability of the current six-day service amid declining letter volumes and rising parcel numbers.
The two primary options under consideration are reducing the number of delivery days or extending delivery times for first- and second-class letters to up to three days, alongside a next-day service for urgent items. The first option would require parliamentary approval, while the second falls within Ofcom's remit. A consultation is open until 3 April.
Consumer research by Ofcom found that 88% of respondents value reliability in letter deliveries, while 58% consider Saturday service important, down from 63% in 2020. Royal Mail's parent company, IDS, has long pushed for changes, with CEO Martin Seidenberg stating that the USO is 'unsustainable' in its current form, citing similar reforms in other European countries.
The government has opposed cutting Saturday deliveries, with Prime Minister Rishi Sunak reaffirming commitment to the current USO. Labour MP Liam Byrne called the USO a 'vital public service' and urged government talks with Royal Mail. The Communication Workers Union warned that a three-day service would 'destroy Royal Mail as we know it' and impact jobs.
Small business representatives and Liberal Democrats expressed concerns, with the Federation of Small Businesses warning of a 'slippery slope' and Liberal Democrat Treasury spokesperson Sarah Olney calling the proposal 'a slap in the face' for those already facing delays. Ofcom's review did not include state subsidies as an option.
