Postcomm has yet to make an official announcement; however, PrintWeek can exclusively reveal that the postal regulator is set to stick by its "minded to" decision to relax price controls for 2011-2012 to allow Royal Mail to raise an extra £100m in revenue.
The move, which is expected to be announced next Tuesday (22 February), will come as a huge blow to UK mailing houses and will have been carried through in spite of a concerted effort to reverse Postcomm’s decision.
PrintWeek understands that the DMA has been unofficially tipped off by Postcomm that it will stand by its original decision, despite having received more than 80 responses to its November consultation, compared with just 15 to its previous consultation on regulatory changes to Royal Mail in May 2010.
Included in the responses were many from DM printers warning of the impact the proposed rises would have on their clients' mailing spend and long-term commitment to the medium.
However, it is believed that Postcomm will allow Royal Mail to press ahead with increases of up to 19% on bulk mail for fear that failure to do so would place the Universal Service at risk.
Royal Mail, which declined to comment until the result of the consultation is officially announced, has previously said that it will come close to utilising its full borrowing capacity in 2011-12 and that it needs additional funding for its modernisation programme.
Royal Mail is required to give 90 days’ notice of any price increases, which means that the proposed price hikes could come into force from the 24 May (assuming they are announced immediately following the publication of Postcomm's consultation on 22 February).
Earlier this month, Royal Mail announced an average hike of 15% on the wholesale prices it charges downstream access providers for access to its delivery network, due to come into effect in May this year.
The largest single increase was on 1400 Manual Letters, including small-format catalogues that have been sized to take advantage of Royal Mail’s Pricing in Proportion savings, which are facing an increase of up to 21%.
Postcomm declined to comment.
