Rural postal service under threat

PRESS RELEASE
For immediate release

4 November 2014

Regular postal deliveries to remote rural communities are under threat, MPs have been told. 

The Rural Services Network [1] made the assertion in a written submission to an inquiry by the House of Commons Business, Innovation and Skills Committee.

MPs on the committee are investigating competition in the UK postal sector and the Royal Mail's universal service obligation [2].

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 Rural Services Network argues that competition from other companies threatens to make regular daily postal deliveries to rural areas unsustainable.

The rapid expansion of letter delivery competition in urban areas threatens Royal Mail's ability to provide an affordable rural postal service, the network warned.

That is because the cost of delivering mail to more isolated rural areas is often met using revenues generated from more densely populated urban and suburban areas, the network said.

But current rules allow Royal Mail's competitors to choose where they deliver - enabling them to cherry-pick the more lucrative urban areas and not deliver to rural areas at all.

Network chief executive Graham Biggs MBE said: "People living in rural areas value the six-day-a-week, one-price-goes-anywhere service. They want to see it continue."

He added: "If this cherry-picking continues, we believe it could pose a serious threat to the financial sustainability of the rural postal service - and the rural economy as a whole."

The network's submission to the inquiry says Ofcom has a legal duty to protect the universal service - as well as the power to review the situation.

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

Mr Biggs said: "We believe that Ofcom should bring forward its planned review of end-to-end competition as a matter of urgency."

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

"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."

ENDS

Media contact:

Graham Biggs
Rural Services Network
E: graham.biggs@sparse.gov.uk
T: 01588 674 922
M: 07966 790197


NOTES TO EDITORS:


1. The Rural Services Network is a group of more than 200 organisations working together to improve the delivery of rural services across England. The two operating arms of the network are the Sparsity Partnership for Authorities Delivering Rural Services (SPARSE) and the Rural Services Partnership. Further information and a full list of members are available at http://www.rsnonline.org.uk

2. The terms of reference of the inquiry into competition in the UK postal sector and the universal service obligation are available at http://www.parliament.uk/business/committees/committees-a-z/commons-select/business-innovation-and-skills/news/competition-in-uk-postal-sector/

3. The full text of the Rural Services Network submission to the inquiry is available at http://www.rsnonline.org.uk/images/files/rsn-bisinquiry-postalsubmission-autumn2014.doc

4. The Rural Services Network seeks to establish best practice across the spectrum of rural service provision. The network has representation across the complete range of rural services, including local authorities, public bodies, businesses, charities and voluntary groups. We are devoted to safeguarding and improving services in rural communities across England. We are the only national network specifically focusing on this vital aspect of rural life.

5. The Rural Services Network exists to ensure services delivered to the communities of predominantly and significantly rural England are as strong and as effective as possible. The term 'predominately rural' refers to counties and Local Authority districts with at least 50 percent of their population living in rural settlements (ie. rural towns, villages, hamlets and dispersed dwellings) as identified in the Office for National Statistics' rural definition, and including larger market towns as identified in the Defra classification of Local Authority districts. The term 'significant rural' refers to those Local Authorities who are between 25% and 50% rural under the same classification. The rural definition and classification were devised by the Rural Evidence Research Centre (RERC) at Birkbeck College. Further information on these can be found on the RERC website at www.rerc.ac.uk.

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