Universal service obligation royal mail

The Universal Service Obligation (USO) is a regulatory requirement imposed on Royal Mail, the UK's postal service provider, to ensure that a minimum level of postal services is maintained across the country. The USO is designed to ensure that all households and businesses have access to a reliable and affordable postal service.

The USO was introduced in 1969 and has been amended several times since then. The current USO is set out in the Postal Services Act 2011 and the Universal Service Obligation (USO) Order 2012.

The key elements of the USO are:

  1. Six-day delivery: Royal Mail is required to deliver mail and parcels six days a week, Monday to Saturday.
  2. Next-day delivery: Royal Mail must deliver mail and parcels to 98% of addresses in the UK by the next working day.
  3. Two-day delivery: Royal Mail must deliver mail and parcels to 99.8% of addresses in the UK by the second working day.
  4. Collection and delivery: Royal Mail must collect and deliver mail and parcels to all addresses in the UK, including rural and remote areas.
  5. Price controls: Royal Mail is subject to price controls to ensure that postal services remain affordable for consumers and businesses.

The USO is funded by Royal Mail through a combination of revenue from postal services, advertising, and other commercial activities. The cost of maintaining the USO is estimated to be around £1.5 billion per year.

In recent years, the USO has been subject to controversy and debate, particularly in the context of Royal Mail's privatization in 2013. Some critics have argued that the USO is too expensive and inefficient, while others have argued that it is essential for maintaining a reliable and affordable postal service across the UK.

In 2020, the UK government announced plans to reform the USO, with the aim of making it more efficient and cost-effective. The reforms include introducing a new pricing system, increasing the use of automation and technology, and exploring alternative delivery models. However, the details of the reforms are still being developed and debated.