UK Mail Shake-up Fails to Deliver

08 May 2008

LONDON: A government report has found that the liberalisation of the UK's postal market has brought little benefit to smaller businesses or domestic customers.

British post services were fully opened up to competition in 2006 under the supervision of regulator Postcomm since when, says the review panel, competition in the lucrative collecting, sorting and transporting of bulk mail (before it is handed over to the Royal Mail for street delivery) has expanded rapidly.

Large companies have enjoyed more choice, lower prices and more assurance about quality.

However, there has been a distinct lack of interest in competing with the RM's delivery service – the final mile - which struggles to make a profit.

Households and small firms have had to put up with the scrapping of Sunday collections, the move to single daily deliveries and increased postage costs based on complicated weight and size criteria.

The preliminary findings of the panel, set up by the Department for Business, Enterprise and Regulatory Reform, conclude that liberalisation is now a threat to RM's financial security and to its ability to provide a universal postal service.

Changes are needed "to establish how best to create the incentives for Royal Mail to modernise its operation, providing a stable financial future".

Data sourced from BBC Online; additional content by WARC staff