Rural postal service under threat

REGULAR postal deliveries to remote communities must continue, the Rural Services Network has warned.



The network made the assertion in a written submission to the House of Commons Business, Innovation and Skills Committee.


MPs on the committee are investigating competition in UK postal sector and the Royal Mail's universal service obligation.


Under the obligation, Royal Mail must deliver to any address in the country six days a week – the same service for rural and urban areas.


But the recently privatised company argues that competition from other companies threatens to make regular daily postal deliveries to rural areas unsustainable.


The Rural Services Network said the rapid expansion of letter delivery competition in urban areas threatened Royal Mail's ability to provide an affordable rural service.


The network said: "People living in rural areas value the six-day-a-week, one-price-goes-anywhere service that Royal Mail provides and want to see it continue."


In many cases, the universal service was the lynchpin of small businesses in rural areas who used the post to communicate and to send and receive goods around the country and abroad, it added.


Ofcom had a legal duty to protect the universal service and the power to review the situation, said the network in its submission to the BIS committee inquiry.


The network said it was "increasingly concerned" that the rapid expansion of end-to-end postal deliveries would have negative implications for rural postal services.


Despite consistent warnings, Ofcom had refused to conduct a review the situation until the last possible moment allowed under legislation – at the end of 2015, said the network.


"We believe that Ofcom should bring forward its planned review of end-to-end competition as a matter of urgency," the network said.


"Ofcom's reluctance to act puts the wellbeing and livelihoods of millions of people in rural areas across the UK at risk," it added.


"If Ofcom continues to refuse to bring forward a review, the UK government should legislate to enable the Secretary of State to order a review."


Mail delivery costs to less densely populated, harder-to-deliver rural areas were met using revenues generated from more densely populated urban and suburban areas, the network said.


But the current regulatory environment allowed Royal Mail's competitors to choose where they delivered, what they delivered and when they delivered.


"If this cherry-picking continues, we believe this could pose a serious threat to the financial sustainability of the Universal Postal Service, and consequently rural postal users, e-commerce consumers, and the rural economy as a whole."

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