The communications regulator has proposed cutting letter deliveries with second-class post arriving every second day and no longer on Saturdays.
Ofcom said Royal Mail customers’ postal needs would be met by keeping first class deliveries six days a week.
It also outlined provisional plans to reduce goals for the delivery company, bringing down the percentage of first class post delivered the next day from 93% to 90%, and second class mail delivered within three days from 98.5% to 95%.
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It comes as Ofcom said the universal service obligation – to deliver letters to every address in the UK, six days a week, at a uniform price – “urgently needs reform to reflect what people need and [to] protect its future”.
Royal Mail has been hit by hefty fines by Ofcom for poor performance, more than £16m in the last 18 months alone.
“Royal Mail’s delivery performance has not been good enough,” the watchdog said, but added distribution objectives need to be altered given the changes in how people send and receive goods.
Less than a third of letters are sent now than 20 years ago and is forecast to fall to about a fifth of letters previously sent.
“Given the postal market has changed significantly since Royal Mail’s delivery standards were set two decades ago, we believe it is right to reassess these targets with the future in mind,” Ofcom said, adding it would continue to hold Royal Mail to account.
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It’s good news for Royal Mail and its new owner, the Czech billionaire Daniel Kretinsky. Ofcom estimated the changes would bring savings of between £250m and £425m if successfully implemented.
The kind of service people want
People want reliability and affordability more than they want speed, according to Ofcom’s research.
The price of second class stamps will remain capped to reflect this, it said.
Most postal users told the regulator they do not need six days a week delivery for the majority of letters.
The research also indicated people are more willing to accept a reduced quality service than price rises to fund better services.
