Postal regulator delivers a puzzle

[Big Daz]

From last september, but it makes Postconn look rather silly.

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Lots of stuff gets lost in the post. Millions of letters and parcels go missing every year, many of which are never found. But it's not just mail that vanishes. Taxpayers' money, political credibility and business reputations have been known to disappear inside a system that began 350 years ago and is now struggling to cope with commercial realities of the internet age.

For those hoping to make sense of Royal Mail and the Post Office, the hunt for clear, solid, facts often feels like trying to locate a few poorly addressed postcards inside the Mount Pleasant sorting room. We know they're in there, somewhere, but digging them out is harder than you might imagine, not least because there are stark conflicts of interest between a wide range of stakeholders.

Talk to management and you'll get one story; chat to the unions and you'll get another. Then there is Postcomm (the regulator), Postwatch (the consumer watchdog), the National Federation of Subpostmasters, Government ministers, consultants, review bodies, various customer groups, such as the Direct Marketing Association and Mail Users Association, and the European Union.

Read more by Jeff Randall
Royal Mail cuts may end Saturday post
Most, it seems, cherish and want to protect our postal infrastructure, especially the one-price-goes-anywhere Universal Service for private mail. But finding agreement on how to do it is another matter. To say that not all are singing from the same songsheet understates by the length of a Royal Mail truck the extent of mutual loathing between some of the protagonists.

Given a blank sheet of paper and the task of designing a postal service for the 21st century, only a moron would start from here.

Last week, The Daily Telegraph ran a front-page report that "postal deliveries on Saturday may be discontinued" under plans by Postcomm to save money for the Royal Mail. Within 24 hours, the regulator's chairman, Nigel Stapleton, in an official press release, said: "The story... has no substance whatsoever."

His message was unambiguous. Those who read it were invited to infer that our Consumer Affairs Correspondent had plucked a tale from the same thin air into which so much of Royal Mail's business has been vanishing: no substance, ie, nothing there.

I'm puzzled. Is this Postcomm by any chance related to the one whose chief executive, Sarah Chambers, told this newspaper last June: "There are other ways to deliver a service to customers in far-flung areas than insisting on a six-day-a-week service"?

Is it the same Postcomm that recently appointed Frontier Economics, a respected firm of business consultants, to investigate "the costs and benefits of modifying the Universal Service"?

The same Postcomm that, according to Frontier's terms of reference, asked for "alternative universal specifications to be evaluated", including the axing of Saturday mail services?

Surely this is not the Postcomm that, according to documents seen by The Daily Telegraph under a Freedom of Information request, has been in feisty correspondence with the Royal Mail's director of regulation, Mike Prince, over possible changes to the Universal Service, two of which were cutting Saturday deliveries and reducing First Class quality of service targets from an overnight hit rate of 93pc to perhaps 90pc or even 85pc?

My understanding is that there is a table in the Frontier report, dated April 2008, which shows how Royal Mail's costs would fall if Saturday services were dropped. This leads a reasonable man to conclude that such an outcome - strongly opposed by Royal Mail - is at least on the table for consideration by the regulator.

Yet, Postcomm insists: "The only threat to Saturday deliveries, for as long as customers need them, is from Royal Mail failing to be an efficient provider of the Universal Service."

When I put this to Pat McFadden, the Post Office Minister, in a Sky interview on Monday night, he told me: "We [the Government] are absolutely committed to the Universal Service obligation."

But when I pushed him on why Postcomm might commission a study into the costs and benefits of axing the Saturday service, he replied: "Well, you'd have to ask them."

OK, here goes. Mr Stapleton, why did you hire Frontier?

If Postcomm had no intention - none at all - of even contemplating a reduction in the six-days-a-week service, why waste taxpayers' money in finding out the costs and benefits of doing so?

I accept, of course, that not every study by a consultancy leads to action. Responsible regulators are expected to consider all plausible options before recommending change. As it stands, the Universal Service is enshrined in law. But laws can be changed.

It's perfectly possible that, after sober reflection, Postcomm might reject the axing of Saturday deliveries. But that's not the same as my colleague's report having "no substance whatsoever".

Royal Mail's chairman, Allan Leighton, is no mug when it comes to corporate infighting. He can duck and dive with the best of them. Dealing with Postcomm requires nothing less.