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Royal Mail to cull letter deliveries in second-class post shake-up

royal mail
royal mail

Second class letters will be delivered just three times a week under new proposals submitted by Royal Mail.

The postal service has outlined plans to deliver second class post on every other weekday as it looks to shore up its finances amid a slump in letter sending.

Bulk business mail would also fall under second class, meaning bank statements, bills and tax returns will arrive within three working days rather than two.

However, Royal Mail said it would continue to deliver first class post six days a week as it acknowledged the importance of next-day and Saturday deliveries for industries such as magazine publishers and greeting card makers.

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The company is also in talks with the NHS over ways to ensure greater reliability for time-sensitive medical letters.

This could mirror the hybrid system currently used by many GP practices, which issue electronic letters that are then printed and sent by Royal Mail.

The proposals were put forward in Royal Mail’s submission to regulator Ofcom, which is reviewing the postal service’s so-called universal service obligation (USO).

This requires the company to deliver Monday to Saturday and sets delivery targets for first and second class post.

Ofcom has estimated that the USO imposes a financial burden of between £325m and £675m on Royal Mail and warned it could become “financially and operationally unsustainable” unless the rules are eased.

The company lost £319m in the first half of the year as it warned that letter volumes are likely to drop to 4bn in the next five years, down from their peak of 20bn two decades ago.

Royal Mail, which has long campaigned for the USO to be overhauled, also called for its quality of service targets to be relaxed.

Currently, Royal Mail is required to deliver 93pc of first class mail on time and 98.5pc for second class post.

Royal Mail has repeatedly failed to hit these targets in recent years, as it struggled amid a lengthy strike by postal workers.

Last year, Ofcom fined the company a record £5.6m after it failed to deliver more than a quarter of first class post on time.

Bosses said a relaxation of the rules, coupled with new reliability targets, would bring the UK in line with other European countries, including France and Italy.

Royal Mail said the changes would reduce the net cost of the USO by up to £300m, though it warned they could take up to two years to implement.

The plans would reduce daily delivery routes by up to 9,000 and lead to around 1,000 voluntary redundancies. Royal Mail said these would be managed through natural turnover wherever possible.

Ofcom is expected to provide an update on its consultation in the summer, though any changes would ultimately have to be approved by Parliament.

Martin Seidenberg, chief executive of Royal Mail parent company International Distributions Services, said: “If we want to save the universal service, we have to change the universal service. Reform gives us a fighting chance and will help us on the path to sustainability.

“Our proposal is based on listening to thousands of people across the United Kingdom to ensure it meets their needs. We have worked hard to come up with a proposal that is good for our customers, good for our people and would allow Royal Mail to invest in products and services that the UK wants.

“We have serious concerns that the urgency of the situation is not properly recognised by Ofcom. With no need for legislation there is no need to wait.”

An Ofcom spokesman said: “At this stage, we’ve not made any proposals to change the universal postal service. We’ve set out evidence suggesting it risks becoming unsustainable if we don’t take action, as people send fewer letters and receive more parcels.

“We’ve laid out some potential options so there can be a national discussion about its long-term future. We’ll carefully consider all the feedback received, and provide an update in the summer.”