Royal Mail has committed to reaching its letter delivery targets by May next year as part of a £500 million transformation plan.
The postal company, now privately owned, will allow part-time postal employees to work longer hours to enhance its services. This decision follows an agreement with the Communication Workers Union (CWU) and resolves a long-standing dispute over second-class mail reorganization. The implementation of a new letter delivery model will commence nationwide next month.
Under the new system, Saturday second-class deliveries will be discontinued, shifting to alternate weekdays – three days one week and two days the next. Royal Mail aims to enhance its first-class next-day delivery to approximately 85% within nine months of the reforms, ultimately achieving the 90% target set by regulator Ofcom within a year.
Additionally, the company plans to deliver 93% of second-class letters within three days within nine months, reaching a 95% target by May the following year. Last year, Royal Mail faced a record £21 million fine by Ofcom for failing to meet delivery targets.
Furthermore, Ofcom has revised the delivery targets, reducing the requirement for first-class post to be delivered the next day from 93% to 90% and for second-class post to be delivered within three days from 98.5% to 95%. However, a new enforceable backstop delivery target mandates that 99% of mail must not be delivered more than two days late.
Royal Mail’s substantial investment of £500 million over the next five years will support the service improvements and allow around 6,000 part-time postal workers to extend their weekly hours as part of the second-class post reforms. The funding for these enhancements will come from savings made through changes to the Universal Service.
Despite rising stamp prices, including a 10p increase to £1.80 for first-class stamps, Royal Mail’s owner, Daniel Kretinsky, expressed regret for the late deliveries while denying any worsening trend. Alistair Cochrane, Royal Mail’s CEO, acknowledged past service shortcomings and emphasized the company’s commitment to enhancing performance with the substantial investment.
Following Ofcom’s call for a credible improvement plan supported by investments, Natalie Black, Ofcom’s group director, stressed the importance of Royal Mail promptly implementing the proposed changes to boost performance.
Royal Mail’s plans to streamline second-class letter deliveries were initially approved by Ofcom last year but faced delays due to disagreements with the CWU. The recent agreement, subject to a CWU member ballot, will extend Universal Service reforms to more delivery offices, ensuring completion across the network by December.
Dave Ward, CWU’s general secretary, welcomed proposals aimed at addressing customer service issues at Royal Mail but emphasized the essential need for practical measures to drive actual change. Postal workers seek reassurance on resource allocation, input in change implementation, workload management, and resolution of critical issues.