Rural postal service under threat

A Royal Mail delivery van and postman.
A Royal Mail delivery van and postman.

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

The Rural Services Network 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.

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. 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. 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.”