Rural post faces inflated costs

Rural areas like the Western Isles rely on the USO to keep delivery costs down.
Rural areas like the Western Isles rely on the USO to keep delivery costs down.

Western Isles residents could face an increase in postal service costs if the Royal Mail can no longer support its Universal Service Obligation.

Under the Universal Service Obligation (USO), Royal Mail must collect and deliver letters, six days a week, to all 29 million addresses across the UK, all at the same price.

Royal Mail is urging Ofcom to review the work of postal service competitors to protect the service which it says is ‘vital’ to those in rural communities.

Royal Mail Delivery Director, Deborah Rodger, said: “We fear that a point could soon be reached where direct delivery competition leads to the Universal Service being unviable.

“Were this to happen, it could represent the loss of a vital service upon which thousands of communities up and down the UK rely.”

Ms Rodger said that competitors, such as TNT Post UK, are undermining the USO service by being able to cherry pick the services, products and geographical areas that they provide.

London, Liverpool and Manchester are currently the only cities where TNT provide machine sequenced bulk business mail deliveries.

It is this kind of services that the Royal Mail relies on to subsidise services to rural areas. TNT have confirmed plans to provide these services to areas surrounding Glasgow and Edinburgh by 2017, and has said that demand for TNT Post services is strong in Scotland.

Angus MacNeil, Westminster Member of Parliament for Na h-Eileanan an Iar, said: “People right throughout the islands have regularly contacted me in large numbers expressing concern over the future of postal services.

“We made it abundantly clear that privatisation posed a real threat to the future of the Universal Service Obligation, which is of huge importance Na h-Eileanan an Iar.”

Royal Mail was privatised in September last year.

Mr MacNeil continued:“The Scottish Government have made clear that the Universal Service is so important to Scotland that we would bring the Royal Mail service in Scotland back into public ownership under Independence.

“The importance of this is clearer than ever today and only a Yes vote can now protect this vital public service.”

However, a Royal Mail spokesperson said: “Privatisation has made no difference to the Universal Service we provide.

“We have been facing the impact for a long time – now that direct delivery has actually started it is more obvious.

“The actual cost of delivering first class to Stornoway is not in reality 62p given the planes and network you use to get the mail there.

“Scotland is more an importer of mail than an exporter. It costs us £7.1 billion to run the USO in the UK.”

An Ofcom spokesperson said: “Protecting the Universal Service is at the heart of Ofcom’s work, and our evidence clearly shows that the service is not currently under threat from competition to Royal Mail.

“We would assess any emerging threat to the service quickly, in the interests of postal users.”