Royal Mail has unveiled a £500 million investment plan aimed at addressing persistent late deliveries, with significant changes to second-class postal services set to take effect next month. As part of this overhaul, second-class mail will be delivered every other weekday and will no longer be available on Saturdays, while first-class post will continue to be delivered daily from Monday to Saturday, and parcel services remain unchanged, operating up to seven days a week.
Regulatory Pressure and Union Agreement
The move follows a record £21 million fine imposed by the regulator Ofcom in October last year, after Royal Mail delivered only 77% of first-class post and 92.5% of second-class post on time during the 2024-25 period. In response, the courier has committed to meeting new delivery targets by next May, as part of a deal brokered with the Communication Workers Union (CWU) and Unite, which ended a lengthy dispute over the second-class post changes. The CWU is now balloting its members on these adjustments.
Investment and Workforce Changes
The £500 million investment over the next five years includes provisions to allow 6,000 part-time postal workers to increase their average weekly hours if necessary, funded by savings from modifications to the universal service. This comes amid recent stamp price hikes, with first-class stamps now costing £1.80 and second-class stamps at 91p, despite criticism from Citizens Advice for providing what they termed a "failing service." In February, Royal Mail attributed service issues to stormy weather and high staff sickness levels.
Union Concerns and Government Oversight
Dave Ward, general secretary of the CWU, expressed cautious optimism, stating, "We welcome any serious proposal that seeks to reverse customer service failings at Royal Mail, but what really matters is what happens on the ground to make that change happen." He highlighted concerns over workforce resourcing, manageable workloads, and Royal Mail's historical reliance on top-down management, which prioritises finance over staffing and quality. Ward noted the company's poor track record in keeping promises, prompting the union to urge continued government accountability.
Revised Delivery Targets
Royal Mail aims to improve first-class next-day delivery to approximately 85% within nine months of implementing the changes, ultimately reaching Ofcom's target of 90% within a year. For second-class letters, the goal is to deliver 93% within three days in nine months, hitting 95% by May next year. Ofcom has adjusted its targets, lowering the requirement for first-class next-day delivery from 93% to 90% and for second-class within three days from 98.5% to 95%, effective from 1 April. Additionally, a new enforceable backstop target mandates that 99% of mail must be delivered no more than two days late.
Leadership and Future Outlook
Alistair Cochrane, chief executive of Royal Mail, described the plans as a "step change" in performance across the UK, acknowledging past service shortcomings. "We recognise our service hasn't always been the standard our customers rightly expect and we're determined to do better," he said. This restructuring occurs a year after Czech billionaire Daniel Křetínský's EP Group completed a £3.6 billion takeover of International Distribution Services, Royal Mail's parent company.
The changes reflect a broader effort to stabilise Royal Mail's operations amidst financial and regulatory challenges, with a focus on enhancing reliability and meeting customer expectations in the evolving postal landscape.
