Royal Mail said it welcomed the Ofcom review, announced yesterday (5 September), and reiterated its standpoint that the Universal Service Obligation (USO) was outdated and in need of urgent reform.

It cited Ofcom research from 2020 which found that a Monday-Friday service would meet the needs of 97% of consumers and SMEs.

The CWU said it was “vital” that Ofcom took into account the views and experiences of postal workers. After a long and bitter dispute its members agreed a new deal over pay and terms over the summer. 

A CWU spokesperson said: “They have witnessed the deliberate dismantling of the USO and the destruction of quality of service over a sustained period of time.

“This has only worsened since the BEIS Select Committee earlier this year and Ofcom should be holding Royal Mail to account, not opening the door to facilitate their manufactured crisis.”

The CWU said it would play a full part in the review, and its position was not about “opposing change for the sake of it, but about focusing on protecting the postal services of the UK, delivering the best possible service to the customers, restoring quality of service and ending the relentless pressure that is currently on our members”.

Royal Mail also pointed out that over the course of almost two decades, letter volumes have fallen by more than 60% – from a peak of 20bn per year in 2004/5 to 7bn in 2022/3.

Over the same timeframe sending a letter or card has become much more expensive. The price of a First Class stamp has risen from 28p to the new rate of £1.10 introduced earlier this year, and which is set to go up again to £1.25 from 2 October – an increase of more than 346% on the 2004 price.

The number of UK addresses has risen by 4m over the same period, to 32m.

Royal Mail stated: “Being required to provide a service that customers have said they no longer need, at significant cost to Royal Mail, increases the threat to the sustainability of the USO. We want to work with all stakeholders including Ofcom, Government, our unions and our customers to enable change quickly and to protect the long-term sustainability of the one-price-goes-anywhere Universal Service.”

Over the summer, Ofcom also announced a proposal that the price to send letters Second Class will be pegged to inflation until at least 2029. The consultation was completed at the beginning of this month, with a decision expected later in the year.