Royal Mail is proposing to cut the number of days second-class post is delivered in order to save the first-class service.
In its submission to regulator Ofcom's consultation on the future of the universal postal service, Royal Mail said it wants to axe second-class deliveries on Saturdays though it would keep a six-day-a-week service for first-class mail.
The company has long campaigned for its universal service obligation (USO), which requires it to deliver letters every day apart from Sunday to all addresses in the UK, to be relaxed.The cost cutting plans, which also include extending the delivery speed for bulk business mail to arrive within three days instead of two, would save it up to £300million a year, Royal Mail argues.
Company bosses voiced serious concerns about the future of the service if Ofcom did not act swiftly to introduce reforms by April 2025.
But Liberal Democrat MP Sarah Olney said: “These plans are a slap in the face for families being asked to pay more for less.“The cost of first and second class stamps has gone up sharply in recent years. It risks creating a cost of postage crisis, as people feel forced to pay for first-class stamps because second-class delivery days are being slashed.“People shouldn’t have to pay the price for Royal Mail’s failure, after executives missed their delivery targets and paid themselves eye-watering bonuses.”
Letter volumes have declined from a peak of 20 billion a year in 2004/5 to around seven billion in 2022/3 and are likely to drop to around four billion in the next five years.
Royal Mail said if the plans are approved by Ofcom, it would mean daily delivery routes cut by between 7,000 to 9,000 within two years, which would likely lead to job cuts.
It added that there would be "fewer than 1,000" voluntary redundancies but expects no compulsory redundancies as part of the proposed overhaul.
Martin Seidenberg, Group CEO of Royal Mail’s parent company International Distributions Services plc, said: “The fact that letter volumes have dropped from 20 billion to seven billion a year means that the Universal Service is now unsustainable.
“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 tosustainability.
“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.”
It comes as Royal Mail is reportedly investigating claims that people have been wrongly fined after being sent letters with new barcoded stamps.
Members of the public have complained they had to pay £5 penalties to collect post because the stamps were deemed to be counterfeit, the Daily Telegraph reported.
The issue has emerged since the postal service switched entirely to a new barcoded system last July.
Postmasters have said the allegedly fake stamps were bought from Royal Mail directly, prompting fears that they are wrongly being identified as counterfeit.
In December, many people complained Christmas cards went undelivered.
On Tuesday night, Post Office minister Kevin Hollinrake said he had held a meeting with Royal Mail chief executive Martin Siedenberg.
Mr Hollinrake said: "We spoke to Royal Mail and they are investigating and they are working alongside the Post Office and other retailers to try and ascertain the source of the problem."
Last week, Royal Mail insisted its processes are "secure" and that it uses "specialist equipment" to assess whether a stamp is genuine. Most stamps are verified using the service's scanning devices at sorting offices.
The Post Office and Royal Mail have been approached for comment.
