Shropshire's daily postal service could be lost forever

The Royal Mail has given its starkest warning yet that rural areas should not presume that the existing deliveries will continue.

That means that Shropshire and Mid Wales may soon have to put up with a service every other day, or less.

It is a prospect that has angered the Country Land and Business Association, which points out that many parts of our region rely on the old fashioned post.

After all, internet and mobile phone coverage is patchy. Unlike big cities, rural areas can't always pick up messages online or by text. Financial transactions that are completed electronically in urban areas aren't always a realistic prospect where broadband is non existent.

The CLA says any change to the universal Royal Mail service could spell disaster for people who live or work in rural areas.

The loss of a daily postal service would not just be an inconvenience – it would cost businesses in Shropshire and Mid Wales hard cash.

Shop owners Adam Withington and Alex Barter say their business is reliant on a six-days-a-week post and that their situation is replicated thousands of times in the region.

They run Black Bough, a boutique gift shop in Ludlow.

Both Londoners, they have enjoyed their new life in the beautiful surroundings of Shropshire.

Adam ran the Great Western arts, crafts and design studios in West London and Alex was head of Sotheby's watches department, before the pair upped sticks to start their own business in 2011.

The shop is based in Ludlow's Market Street, but they have customers all over the country and Royal Mail's service is essential to running such an enterprise from somewhere like the small Shropshire market town.

He said: "We are reliant at the moment on its six-day-a-week service for fulfilment of our web order business, and also receiving things back from customers.

"We do use other couriers, but primarily we use Royal Mail, particularly for things under a certain value, because of its signed, insured and trackable service.

"It would leave us unable to assure customers that they can get things the next day.

"The cheapest way then would be to use other couriers and that would be quite a big leap in cost.

"If it was cut down from a six-day-a -week service to five days it wouldn't affect us too much – but it's whether it's indicative of a slippery slope where we see other public services start to be downgraded," he said.

"It seems like a back track on the assurances Royal Mail gave when privatisation took place.

"One of those was that they would continue to deliver at a flat rate across the country, because there were concerns it would not be profitable to deliver to places such as the Orkneys.

CLA Midlands regional director Caroline Bedell, who lives in Shawbury, near Shrewsbury, says: "The daily post is, and must remain, an intrinsic part of rural life. Without it, rural services, which are already under significant strain, will be seriously undermined – a situation made even worse by the lack of broadband and mobile coverage in many rural areas.

"The suggestion that Royal Mail is seeking to amend, or possibly abolish the Universal Service Obligation in the future, is a serious threat to everyone living and working in the countryside.

"If anything, the USO should be extended, not removed."

Mrs Bedell says the CLA will be writing to post regulator Ofcom saying that the concept of a universal postal service, where letters are delivered for a flat rate anywhere in the country, should be extended to other operators in the postal market.

"We recognise that a company like Royal Mail must seek to generate profit," she says.

"However, this has to be addressed through achieving fair competition, not removing a vital service from rural consumers."

Partially privatised

Ever since Rowland Hill devised the Penny Post in 1840, the concept of the universal postal service has been a fundamental cornerstone of Royal Mail.

And when Royal Mail was partially privatised last year, Business Secretary Vince Cable insisted it was the only way to protect the universal delivery service.

Then Business Minister Michael Fallon gave the assurance: "The six-days-a-week universal one-price-goes-anywhere service is absolutely separate and the ownership of Royal Mail can't affect that."

But 14 months on, Royal Mail chief executive Moya Greene has warned that the service is under threat after all.

While the Postal Services Act 2011, which paved the way for privatisation, included a clause requiring a commitment to delivering letters six days a week to all parts of Britain for the same price, there was also a clause saying that this was with regard to the universal service being "financially sustainable". And now Miss Greene says rival companies which are under no legal obligation to provide services in less lucrative rural areas — such as Shropshire — are threatening the sustainability of the service.

"The threat is now," says Miss Greene.

She is urging that the Government should overhaul rules which allow other companies to "cherry pick" cheaper letter deliveries around big cities.

This week Royal Mail announced a £70 million fall in its profits due to internet giant Amazon setting up its own delivery network.

Miss Greene says an urgent change in the rules is needed to "secure the sustainable provision of the universal service for the future".

After spending most of its existence as the UK's postal monopoly, the Royal Mail is struggling in an increasingly competitive environment.

And the warning about the daily post is a symptom of the difficulty it now faces as a private company having to please its shareholders.

Its parcels business is facing ever-greater pressure from the likes of TNT – now operating under Whistl brand – and Yodel, while Birmingham-based UK Mail is eating into its business letters service. Perhaps the biggest blow was the decision of online retail giant Amazon to scale back the parcel delivery work it used to route through Royal Mail and instead make increasing use of its own network for parcel deliveries.

As a result, when Royal Mail revealed its half-year figures this week a drop in profits was accompanied by talk of the "harsh realities" of competition and a warning that the UK parcels market will grow by much less than expected over the next two years due to the impact of losing its Amazon work.

A year on from its controversial flotation, Royal Mail's shares now stand at about 430p, having slumped by 30 per cent from a peak in February as investors become increasingly fearful for the historic postal giant's future.

As well as facing fierce competition in its parcels division, Royal Mail has repeated its warning that the way rivals such as TNT are given access rights to delivery routes threatens its commitment to the six-day a week Universal Service.

Some are now suggesting that the next-day delivery service could eventually come down to just three days a week. It wants regulator Ofcom to accelerate its review of direct delivery competition.

Graham Biggs, the Craven Arms based chief executive of the Rural Services Network, also fears for the sustainability of the postal service in the countryside, and says if nothing is done it could affect the rural economy as a whole.

He says Ofcom has a legal duty to protect the universal service, as well as the power to review the situation, but says the regulator has been reluctant to step in.

"Ofcom's reluctance to act puts the wellbeing and livelihoods of millions of people in rural areas across the UK at risk," says Mr Biggs. "If Ofcom continues to refuse to bring forward a review, the UK government should legislate to enable the Secretary of State to order a review."

The Communication Workers Union, which represents postal workers, blames the Royal Mail privatisation for the threat.

Deputy general secretary Dave Ward says unrestricted competition in the postal sector would make it difficult for Royal Mail to sustain its duty to deliver the universal service obligation in the coming years.

He said: "As we approach the busiest time of the year for Royal Mail, postmen and women will be working hard delivering letters and parcels six-days-a-week, right up to Christmas Eve.

"But amid such unfettered competition in the postal sector, it will be difficult for Royal Mail to sustain its duty to deliver the universal service obligation in the coming years.

"We need Ofcom to perform its primary statutory duty by urgently reviewing the threat competition poses to the universal postal service.

"We'd like to see a cap put on competition to Royal Mail."