The postal regulator, OFCOM, has developed a reputation for being hand in glove with the direction of travel set in motion by the privatisation of Royal Mail. Long-term pressure from shareholders wanting to make more for their investments has produced the problems outlined in the recent Panorama programme “Royal Mail: Where’s My Post?”: BBC One – Panorama, Royal Mail: Where’s My Post?. The opening times of staffed customer service counters have been cut, whilst the price of a First Class stamp rose by 15p in October 2023 to £1.25 – the third increase in 18 months. Postal worker terms and conditions of service have been under almost constant threat.
Now OFCOM has been “consulting” on the idea that there is a need for change, either to the Universal Service Obligation (USO) applied to Royal Mail or to how it is supported.
Experience tells us that the public rarely gets its act together to respond to these consultations in sufficient volume to affect the way policy eventually goes – though the rail ticket office episode shows that things do not always go the grifters’ way.
Still, hope can triumph over experience and one benefit of doing a response to these things is that it can make our alternative position clear and form a platform for making our case.
It will not surprise anyone that we have responded to this OFCOM consultation in a way that is critical of its approach and proposals, of the way in which it and the company have worked together to pursue the post-privatisation agenda of Royal Mail, and – maybe this is a bit more technical – of the way in which they deploy a distinction they make between USO and non-USO items (basically, a lot of what comes through the letter-box is not classed as being covered by the USO). We have also circulated copies of our response to our local MPs.
OFCOM’s Consultation Document refers in several places to changing postal behaviours such as the decrease in letters and the growth in parcels. Strangely, though, it does not appear anywhere to provide any causal argument between these developments and the perceived “need for change” in the USO. Indeed, there is no link between the fact that people are getting less USO classed letters and the idea that they should consequently get letter deliveries on fewer days. It is a non sequitur.
The Document refers to the suggested changes in the USO as “better reflecting changing needs of users” – but this is a false description. The changes proposed are not directed at meeting citizen needs that are currently unsatisfied. No evidence is presented to suggest that they are changes users are clamouring for, but rather that they are changes that users wouldn’t mind. The real motivation is just cost saving: “We consider that changes to delivery speed and/or delivery frequency for letters could still continue to meet users’ needs …………… while offering scope for significant cost savings” and “the existing specification ……. does not appear sustainable without substantial subsidy from industry or the state”. This potential saving reflects an orientation towards “isolating” the cost of the USO within Royal Mail operations, and portraying it as a “burden”.
In fact, it is becoming increasingly common knowledge that Royal Mail standards are faltering in respect of letter delivery, and that this is sometimes linked to a policy of giving parcels priority. This in itself is a consequence of non-USO work accounting “for the majority of Royal Mail’s volumes and revenue” and of the company wanting to prioritise the point of operations in most direct competition with the “Sorry We Missed You” (Ken Loach 2019) delivery companies. There is thus a tension between the company’s USO obligations, which OFCOM sympathetically refers to as an “unfair financial burden”, and the more profitable lines that delivering the USO gives it access to. Relaxing the regulation of letter post appears in this context most obviously as a “helping hand” to give the company more flexibility in diverting efforts away from letters towards parcels, whether the latter are technically USO work or not. The service is consequently, in our view, in danger of being distorted by the infection of the system with commercial pressures that have more to do with how privatisation sees the company functioning overall than by any particular “costs” of the UCO itself.
Whilst it is probably true that users “wouldn’t mind” the proposed changes in many circumstances, they increase the risk of specific instances of delay in delivery that they would mind. It is a common feature of cuts in public services that they begin with detriments which only a limited number of people initially actually notice. It is only down the line, when awareness has become more widespread, that we realise that there has been an overall decline in capacity and effectiveness.
“Citizens Advice” has in recent years provided evidence of the impact that failure to meet the existing standards can have on people. In February 2022 they reported about the 2021 Christmas period that:
“…a staggering 2.5 million people missed important documents, health appointments, or were unable to pay a fine or bills, sometimes resulting in further penalties.
Of those who experienced delays:
- 3% of people said they couldn’t pay a bill, 8% said they missed an important document, and 4% said they were left out of pocket
- 7% said they missed a health appointment. This rose to 16% of those on an NHS waiting list”.
Tina McKenzie, policy chair of The Federation of Small Businesses, has been quoted by “i” newspaper (27/02/24) as saying: “Trading essential services for short-term savings is a slippery slope that may compromise the trust small businesses place in Royal Mail.
“Considering that 25 per cent of them rely on the postal service, these proposals could cause real disruption to our economy. They will not just impact the householder waiting for birthday cards or hospital appointments”.
The exercise to attribute a “financial burden” to the USO seems to us to be pointless to the point of adding insult to injury. The essence of privatisation is that a commercial company takes over a public service in order to make money, so the idea that it is carrying the obligations associated with that contract as a “burden” is fundamentally ridiculous. Yes, there may be things the company has to do that may in isolation be loss-making. But it does them because they are part of the package that gives it the chance to make a profit. There would only be a burden if the company was making a loss and the shareholders, directors and executives were making regular contributions to ensure the USO was delivered
Hopefully, this consultation will have the unintended consequence of being the straw that breaks the camel’s back in respect of public toleration of Royal Mail’s privatisation. According to polling commissioned by “We Own It” 68% of the public support taking the company back into public ownership. Given the Governance issues that have been exposed at Post Office Ltd., which the privatisation of Royal Mail left with “greater autonomy from government than most public bodies” according to the “Institute for Government”, a re-integration of our postal services could be the platform for a re-assessment of the structures required for more effective public accountability as well as for considering the establishment of new Crown Post Offices with post banks in areas that the retail banks are abandoning.
Before being sold off, Royal Mail turned a profit and had high levels of customer satisfaction. It is time to return to a Royal Mail that works for us and is owned by us.