Royal Mail plan to end Saturday post blocked

Royal Mail’s plan to stop delivering post on Saturdays has been blocked by the government in a blow to the company, which has claimed a six-day service is financially unsustainable.

The postal company had requested that the government change the universal service obligation (USO) – a condition of its privatisation in 2013.

The business department said it had no plans to adjust the requirement to deliver on Saturdays, in a response to a report by MPs on the business select committee. MPs would have to vote through any changes to the obligation.

Kevin Hollinrake, a minister at the Department for Business and Trade, wrote: “We currently have no plans to change the minimum requirements of the universal postal service as set out in the Postal Services Act 2011 … including six-day letter deliveries.”

Royal Mail has been lobbying the government to have the obligation removed as it struggles to return to profitability after an annual loss of £1bn driven by postal worker strikes as well as the longer-run drop in profitability of letter deliveries.

The regulator, Ofcom, has said the move could save the company up to £225m a year, and carried out polling that suggested most people in the UK were indifferent about the prospect of no weekend letter deliveries.

The company was hoping a move to weekday-only deliveries would help it in its broader ambition to shift away from letters – which are increasingly replaced by digital messages – to parcels, which have boomed.

A Royal Mail spokesperson said: “The government has said before that it has no current plans to change the USO, but it is clear that when letter volumes have declined by more than 60% since their peak in 2004-05, in order to be financially sustainable, the [USO] requires urgent reform.”

Continuing Saturday deliveries “increases the threat to the sustainability of the universal service”.