Report cautions against postal reforms

A new report from the National Audit Office (NAO) has cautioned against plans to introduce greater levels of competition in the UK postal sector, describing the likely outcome as increased prices and worsening service.

The report focused on the findings of postal regulator Postcomm, which has been granting limited licences, since its creation in March of last year, for the collection and delivery of items costing less than £1. So far six companies have successfully received licences to do so, operating within clearly defined geographical areas.

However, the NAO has warned that if Postcomm’s proposals for further liberalisation of the sector are carried through, the outcome would be a dilution of the current levels of service, with no guarantee against price rises.

However, the NAO conceded that without competition, Consignia – the new corporate identity of the Royal Mail – would have no reason to improve on its currently poor levels of performance, and would continue to struggle with deliveries and worsening industrial relations between management and staff.

Recently, talks have been held between Consignia managers and union representatives with the hope of averting further instances of strike action from staff at the Royal Mail.

Royal Mail staff have been rocked by recent developments which include a cost-cutting programme which could see 15 per cent of the workforce made redundant.

CWU is currently preparing to issue ballot papers in preparation for strike action during the next few months, and while the outcome is due next month, it is thought the UK could see a national postal strike as early as March. (CL)