PPA Blog

Ofcom issues statement on review of postal regulation

By PPA Public Affairs Team

20 Jul 2022

Ofcom has set out how it will regulate Royal Mail over the next five years, including continuing to set annual delivery targets and to impose a cap on second-class stamp prices.

The review found that these safeguards continue to be the best way to protect people and businesses that use the universal service.

In its statement, which cited PPA evidence several times, Ofcom disagreed with suggestions from the PPA and others that price caps and binding efficiency targets should be introduced. Ofcom argued that as competition increases and the postal market continues to evolve, Royal Mail should have the commercial flexibility to deliver efficiency improvements and modernise its operations.

However, the regulator has strengthened its monitoring requirements (a proposal the PPA welcomed) to gain a deeper understanding of the financial sustainability and efficiency of the universal service. Ofcom states that its new framework provides a stable regulatory environment, and ensures that Royal Mail competes on a level playing field, allowing competition to drive benefits to postal users.

The PPA was pleased to see that, in her response to the consultation, Helen Hayes MP raised the issue of poor quality of service experienced by Mark Allen Group, a publisher in her constituency. As Hayes noted, significant subscription cancellations often correspond with unreliable postal delivery services.

The PPA will continue to engage with Ofcom as it develops its plans to strengthen monitoring requirements for Royal Mail.


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