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Royal Mail could cut postal deliveries to as few as three days a week, as regulator Ofcom set out long-awaited reform proposals that have already attracted fierce opposition from politicians and some businesses.
The regulator on Wednesday laid out options for overhauling the lossmaking service, including the politically contentious move to cut deliveries from six to five, or even three days a week, in a bid to ease financial pressures on the postal provider.
The postal service is “getting out of date and will become unsustainable if we don’t take action”, said Ofcom’s chief executive Melanie Dawes.
Ofcom said that the postal service — which reported losses of £169mn in the first half of its financial year — could save up to £650mn if it delivered letters on only three days a week, and £200mn if it scrapped Saturday deliveries.
Prime Minister Rishi Sunak had earlier this week objected to the idea of scrapping Saturday deliveries, with his spokesperson stating that they “provide flexibility and convenience for businesses”. Downing Street confirmed that Sunak would not rule out legislating to ensure this remained the case.
The set of options are part of a broader review of the universal service obligation, the Royal Mail’s legal obligation to deliver post across the country six days a week. Scrapping the number of delivery days would require UK ministers and parliament to change primary legislation.
Royal Mail’s obligations have not changed since 2011 even as the volume of letters it services has halved over the same period, while parcel delivery has became an increasingly central part of the business.
Royal Mail, which was privatised just over a decade ago, has battled flagging demand for its services, strikes and growing competition from groups such as Amazon.
Some businesses are concerned that the cancellation Saturday deliveries would add to a growing list of financial pressures they have experienced over the past year, in the face of rising labour costs and damp consumer sentiment.