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Royal Mail could axe Saturday postal deliveries after £319m loss

Royal Mail could stop postal deliveries on Saturdays under reforms to save money (AFP via Getty Images)
Royal Mail could stop postal deliveries on Saturdays under reforms to save money (AFP via Getty Images)

Royal Mail could be allowed to scrap Saturday postal deliveries as part of a review expected to save the company hundreds of millions of pounds.

Ofcom, the UK’s communications regulator, will publish a review next week outlining options on how Royal Mail can “evolve to more closely meet consumer needs”.

The move could save the postal service between £125m and £225m a year in a decision to be made between parliament and the company, Ofcom said.

An Ofcom spokesperson said: “We will be inviting views on this, not consulting on specific proposals. It would ultimately be for the UK government and parliament to determine whether any changes are needed to the minimum requirements of the universal service.”

It comes after Royal Mail posted a £319m loss for the first half of this financial year and called for a reduction in postal deliveries to just five days a week between Monday and Friday.

The move could save the postal service between £125m and £225m a year, according to Ofcom (PA Wire)
The move could save the postal service between £125m and £225m a year, according to Ofcom (PA Wire)

The service blamed a requirment to deliver letters six days a week for rising stamp prices as causing the increase in daily costs.

Last summer the government denied its request to stop delivering post on Saturdays – a move which would have needed approval by MPs.

Announcing the review, Ofcom said: “The last few years have demonstrated the importance of postal services, but the way people use them is changing, and we expect these trends to continue.”

It added that the number of letters sent and received had declined 46 per cent over the last decade, as people and businesses moved to digital alternatives. With the decline in the number of letters delivered each day it said “the cost of delivery is increasing”.

Martin Seidenberg, the chief executive of Royal Mail’s owners, International Distribution Services, said in its trading statement this week: “With Ofcom due to publish options for the future of the universal service imminently, now is the time for urgent action.

“We are doing all we can to transform, but it is simply not sustainable to maintain a delivery network built for 20 billion letters when we are now only delivering 7 billion.”