Safeguarding the UK's universal postal service

[TrueBlueTerrier]

http://consumers.ofcom.org.uk/2012/03/s ... service-2/" onclick="window.open(this.href);return false;

Ofcom has set out measures to ensure that UK consumers and businesses continue to benefit from a universally-priced, affordable postal service, six days a week.

The decisions outlined today give Royal Mail greater freedom in the way it sets its prices, but introduce safeguards to ensure that consumers and competition are protected.

Securing a high quality UK postal service

Huge changes are affecting the postal industry, particularly the decline in postal volumes as consumers and businesses switch to other means of communications such as text, email and online services. The sustainability of the UK’s universal postal service in the UK is at severe risk.
The challenges facing the industry call for a new approach to regulation. Ofcom’s new regulatory framework for post is designed to secure the continued sustainability of the universal postal service.

Royal Mail, the designated Universal Service Provider, will have freedom to set its own prices for the majority of its products including First Class stamps and most business mail. In future, subject to the safeguards we are putting in place, Royal Mail will make decisions on the price of stamps, not the regulator.

Safeguards to protect consumers

Royal Mail will have considerably greater commercial freedom under the new framework but subject to important safeguards. They include:
1. A safeguard cap on Second Class stamps for standard letters

Ofcom has put a cap on the price of Second Class stamps for standard letters to protect vulnerable consumers. Over the next seven years, this will ensure that Royal Mail can price Second Class stamps no higher than 55p. The cap will be indexed in line with inflation.

The average household spends around 50p per week on post: low income families typically spend less. Ofcom believes the safeguard cap will ensure that postal services remain affordable for such families and vulnerable consumers more generally.

2. A safeguard cap to Second Class small parcels and large letters

To further protect vulnerable consumers and small businesses, Ofcom has decided to extend the cap to Second Class small parcels and large letters up to 2Kg in weight. This will be linked to the Second Class safeguard cap and Royal Mail’s price increases for 2012/13 will not be constrained. Ofcom will consult on the level of the cap in April 2012.

3. Effective monitoring of Royal Mail’s performance

The new regulatory regime will provide Royal Mail with more flexibility to manage the company and, most critically, improve efficiency levels. Ofcom will monitor Royal Mail’s performance closely, focusing particularly on the provision of the universal service, efficiency and affordability.
This will help ensure that Royal Mail meets its universal service obligations, becomes more efficient over time, and sets prices at levels which are both affordable and sufficient to cover the costs of the universal service.

4. Requiring Royal Mail to continue to provide network access to its competitors

Ofcom will continue to require Royal Mail to provide competitors with access to its delivery network. Royal Mail will have the freedom to set the ‘wholesale price’ for access to its network but will be subject to rules regarding the margin between its wholesale and retail prices. This will help ensure that efficient competitors can compete effectively with Royal Mail.

Ofcom will also assess on a case-by-case basis any proposal to provide ‘end-to-end competition’ in the UK, where a postal operator collects and delivers letters without using Royal Mail’s network.

The central aim of the decisions announced today is to ensure that Royal Mail’s Universal Service Obligation (USO)* is financially sustainable and provided efficiently. Without regulatory changes there is a risk that Royal Mail may not be able to continue to deliver the USO to the same standard as today.

The USO requires Royal Mail to collect and deliver letters six days a week (and packets five days a week) at an affordable and geographically uniform price to every address in the UK.

Ofcom’s decisions will incentivise greater efficiency at Royal Mail and ensure that the universal service is viable in the long term.

Ongoing Monitoring of Royal Mail

The regulatory framework will apply for seven years. This will be combined with ongoing monitoring and Ofcom will retain the ability to intervene if the new regime fails to safeguard the universal service and the affordability of mail services.

Stuart McIntosh, Ofcom’s Group Director of Competition, said: ‘Ofcom’s decisions are designed to safeguard the UK’s postal service, ensuring it is sustainable, affordable and high-quality, to the end of the decade and beyond.

‘The measures ensure that Royal Mail’s products remain affordable for vulnerable consumers and small businesses.’

[TrueBlueTerrier]

Securing the Universal Postal Service - Decision on the new regulatory framework


http://stakeholders.ofcom.org.uk/consul ... statement/" onclick="window.open(this.href);return false;

Statement Published 27|03|12

Summary

1.1 In October 2011, the Postal Services Act 2011 ("the Act") came into force and Ofcom gained the responsibility and powers to regulate postal services. In the same month we published a consultation ("the October consultation"). Our principal duty under the Act is to secure the provision of a universal postal service. With that duty in mind, the October consultation proposed a major change in the regulation of the sector. In broad terms, it proposed to grant Royal Mail pricing freedom coupled with key safeguards to ensure that it would have strong incentives to improve efficiency and to protect vulnerable consumers.

1.2 In December 2011, we consulted on the range of regulatory conditions that apply to either Royal Mail or other postal operators operating in the UK ("the December consultation"). This consultation proposed to simplify the overall structure of regulation affecting more technical and operational areas. We also proposed to grant Royal Mail further commercial and operational freedoms so that it could adapt to the considerable challenges facing the market.

1.3 We received 72 and 28 responses to the October and December consultations respectively, which we have fully considered in reaching our decisions. We have also had regard to the House of Commons Business Innovation and Skills Committee's report on stamp prices, which was published in March. This document sets out our conclusions on the proposals set out in the October and December consultations.

1.4 Taken together this statement sets out the basis for a new regulatory framework in the postal sector.

[TrueBlueTerrier]

http://stakeholders.ofcom.org.uk/binari ... tement.pdf" onclick="window.open(this.href);return false;

[DirtyHarry]

I wonder who it is they are trying to kid?

Once it ceases to be publicly owned, and is in the hands of ruthless privateers, anything and everything will be done, not only to make a profit, but to ensure an ever-growing profit for the benefit of shareholders.

The day the UK's postal service ceases to be public, is the day the USO becomes meaningless twaddle.

[Wessex]

What's the betting that in the future the 2 nd class stamp will equal delivered when royal mail want to deliver it,I think it will be the soft shoe in the door of a two tier system.

[daveallum]

Why don't we drop the USO,hardly anyone in the world delivers on a saturday nowadays and before people start spouting off that it would lead to job losses,I believe that when we are privatised that there will massive job losses anyway.

[Straight4ward]

Why don't we drop the USO,hardly anyone in the world delivers on a saturday nowadays and before people start spouting off that it would lead to job losses,I believe that when we are privatised that there will massive job losses anyway.

The USO requires us to deliver any address in the UK if we have mail for them, Saturday deliveries are only a small part of the USO.

Royal Mail has an obligation to deliver mail to every UK address every working day and we go to considerable lengths to deliver to remote and isolated communities across the UK. Whilst we will make every reasonable and practicable effort to deliver mail to every address, no matter how remote, there are a small number of addresses where we are unable to do this due to exceptional circumstances. These addresses are known as exceptions to the delivery universal service obligation (USO). They are permitted by both UK and EU law.

[DirtyHarry]

Why don't we drop the USO,hardly anyone in the world delivers on a saturday nowadays and before people start spouting off that it would lead to job losses,I believe that when we are privatised that there will massive job losses anyway.

Don't worry dave, once the bean counters have cottoned on to the amount of money they will save by cutting out the unnecessary Saturday delivery, deliveries on Saturdays will go.
And I, for one, cannot wait.

[daveallum]

Why don't we drop the USO,hardly anyone in the world delivers on a saturday nowadays and before people start spouting off that it would lead to job losses,I believe that when we are privatised that there will massive job losses anyway.

Don't worry dave, once the bean counters have cottoned on to the amount of money they will save by cutting out the unnecessary Saturday delivery, deliveries on Saturdays will go.
And I, for one, cannot wait.

Same here,they keep telling us that the USO benefits business and residential customers but at my DO I would reckon that at least 95% of firms do not have a saturday delivery and when we talk to owners of domestic properties,again the majority of them couldn't give a t*** if they have a delivery on saturday or not as they are normally out doing family activities,the only time they do care is when they are expecting a special delivery or something similar.

[Lounge Lizard]

Why don't we drop the USO,hardly anyone in the world delivers on a saturday nowadays and before people start spouting off that it would lead to job losses,I believe that when we are privatised that there will massive job losses anyway.

Don't worry dave, once the bean counters have cottoned on to the amount of money they will save by cutting out the unnecessary Saturday delivery, deliveries on Saturdays will go.
And I, for one, cannot wait.

Same here,they keep telling us that the USO benefits business and residential customers but at my DO I would reckon that at least 95% of firms do not have a saturday delivery and when we talk to owners of domestic properties,again the majority of them couldn't give a t*** if they have a delivery on saturday or not as they are normally out doing family activities,the only time they do care is when they are expecting a special delivery or something similar.

But it's not about firms receiving a delivery on Saturday, and it's not about if households want to receive a delivery on Saturdays, it's about if businesses want households to receive a delivery on Saturdays which they do.

[BELIAL]

All complete bollocks of course if the regulator allows TNT et al to cherry pick prime areas with a two day week service. Death by a thousand cuts,it may take five years ,but it will happen. Charlatans

[borders]

one sweep of the postboxes a day , the cuts are many and along go the jobs with it .....

[DirtyHarry]

Why don't we drop the USO,hardly anyone in the world delivers on a saturday nowadays and before people start spouting off that it would lead to job losses,I believe that when we are privatised that there will massive job losses anyway.

Don't worry dave, once the bean counters have cottoned on to the amount of money they will save by cutting out the unnecessary Saturday delivery, deliveries on Saturdays will go.
And I, for one, cannot wait.

Same here,they keep telling us that the USO benefits business and residential customers but at my DO I would reckon that at least 95% of firms do not have a saturday delivery and when we talk to owners of domestic properties,again the majority of them couldn't give a t*** if they have a delivery on saturday or not as they are normally out doing family activities,the only time they do care is when they are expecting a special delivery or something similar.

But it's not about firms receiving a delivery on Saturday, and it's not about if households want to receive a delivery on Saturdays, it's about if businesses want households to receive a delivery on Saturdays which they do.

Yeah, right.
No point in grinning inanely, your chums will count the cost, and cut, cut, cut, just as they always do. Saturdays are very nearly the last option left for a chinless wonder to use as a means of jumping two steps up the ladder.
Already, in my office at least, they have cut so far, so fast, the only thing left to cut/make savings from, is Saturdays. Won't be long before everyone else catches up.

[blackadder]

they wont get rid of saturdays cos im pretty sure r.m. have already asked for that to save money. what i think will happen is that you be getting a delivery 3 times a week and not the 6 you getting now