Daily post deliveries are vital to rural economy

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COUNTRYSIDE CAMPAIGNERS hope six-day-a-week postal deliveries to rural areas will be preserved after a major review was instigated by industry regulator Ofcom.

It comes after Ofcom said it would consider the future viability of the Universal Service Obligation as Royal Mail comes under pressure from commercial rivals in urban areas.

There have been growing fears that rural deliveries and collections could be marginalised and reduced to three days a week, a move which prompted the Countryside Alliance’s executive chairman Sir Barney White-Spunner, Rural Services Network chief executive Graham Biggs and other campaigners to seek reassurances.

In an open letter published, they wrote: “A postal service that offers a uniform price to send a letter or small package to 29 million addresses within the United Kingdom six days a week is a feature of a civilised society, where services meet all circumstances at all times. This service is now threatened by unfettered competition.

“As organisations that variously promote the interests of business and rural areas, we are all aware of the benefits competition can bring, both in terms of increased efficiency and better service. However, a situation where lucrative urban delivery routes are cherry-picked, leaving Royal Mail to cover unprofitable rural areas, is not sustainable.

“Ofcom’s own surveys of postal users; needs shows that 65 per cent of people in rural areas and 69 per cent of people in deep rural areas would ‘feel cut off from society without the post’.”

A spokesman for Ofcom said: “The postal market is changing rapidly as the needs of consumers and businesses evolve. Letter volumes are in structural decline, while parcel volumes are growing as larger numbers of consumers purchase more items online. New entrants are changing the competitive dynamics of these markets.

“In these circumstances Ofcom will continue to monitor the developments in the market closely, being alert to the potential consequences of competition for the universal postal service and ensure that the universal postal service remains appropriate and relevant for the needs of consumers and businesses in the future.”

The statement was welcomed by the Countryside Alliance’s head of policy, Sarah Lee, who said: “The Universal Service Obligation (USO) is the Royal Mail’s promise of a six-day-a-week postal service to all parts of the UK for a uniform tariff, and is enshrined in legislation.

“This daily delivery is vital for rural communities and businesses. However for many parts of the country – particularly rural areas – the costs of delivering mail can only be met by using revenues generated from urban and suburban areas.

“The current regulatory environment allows competitors to cherry-pick the easier-to-deliver-to areas, leaving the more challenging routes for the Royal Mail. If this continues at its current pace, it could present a serious threat to Royal Mail’s ability to deliver the Universal Service.

“We welcome this move from Ofcom to ensure that the USO is not a victim of greater competition in the postal industry.”

However the Royal Mail had wanted Ofcom to impose new conditions on the firm’s direct-delivery competitors. Chief executive Moya Greene had told MPs last week that its Universal Service commitments costs £7.2bn a year. “If you allow cherry-picking you undermine the economic,” she warned.

But Ofcom believes that competition from rivals such as Whistl - formerly known as TNT Post - will make the service more efficient.

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