Royal Mail has been given the go-ahead to remove bulk mail – most commonly used for direct mail – from the Universal Service, despite concerns that it could lead to “social exclusion” for people living in some rural areas.
The move means that services may no longer be exempt from VAT, and also that Royal Mail could switch from a six-day to a five-day delivery week for bulk mail.
It has been approved by regulator Postcomm following a consultation with industry groups, including the DMA, who Postcomm said had been supportive of the decision.
But the Federation of Small Businesses and the Communication Workers Union both slammed the potential impact on postal rates, while consumer group Consumer Focus has also expressed concerns about the impact on small businesses and First Class bulk mail users, particularly in rural areas.
They warned that Royal Mail would most likely adopt zonal pricing for bulk mail, that could lead to “social exclusion for people living in areas where mail is more expensive”.
Postcomm claimed Royal Mail would be unlikely to reduce its delivery of bulk mail because of the potential revenue it generates but stopped short of demanding it.
Royal Mail’s operating licence has been changed so that its Universal Service obligations are much more based on single piece mail. The changes take effect immediately, except for those affecting Mailsort 1400 First and Second class services, which will see changes taking effect on December 6.
The Universal Service refers to the minimum level of service expected of the postal operator – and will be an important “backstop” when Royal Mail is sold into private ownership.
Powers are being transferred from Postcomm to Ofcom under the terms of the postal reform legislation, The Postal Services Act 2011, adopted earlier this summer.
