6th May 2008
The liberalisation of the UK postal service has produced "no significant benefits" for small businesses, a governmental review of the sector has concluded.
The review, carried out by the Department for Business, Enterprise and Regulatory Reform (BERR), states that while large companies have "seen clear benefits from liberalisation" in terms of "choice, lower prices and more assurance about the quality of the mail service", small businesses have not gained from increased competition.
"Where big businesses have benefitted from competition created in the bulk mail sector, small firms within communities across the UK are losing out," said Phil McCabe from the Forum of Private Business (FPB). "A reduced service means vital lines of communication are being disrupted, and that costs businesses money."
The report also notes a "substantial threat" to the Royal Mail's financial security, and that the "status quo is not tenable." It concludes that BERR needs "to establish how best to create the incentives for Royal Mail to moderate its operation, providing a stable financial future."
In March, the Federation of Small Businesses (FSB) called on politicians to "take every possible step to retain the post office network". FSB research revealed that 82% of small businesses think the loss of their local post office would have a significant impact on their business, in some cases leading to closure.
McCabe echoed these sentiments, stressing the importance of the Royal Mail's service for small firms: "For many small businesses, particularly those in rural areas, the universal delivery and collection service that has traditionally been provided by the Post Office is a lifeline, and losing it would be devastating."
However, Chris Hannant, head of policy at the British Chambers of Commerce said that the only way the Royal Mail can improve its service and win back lost business, is by "pushing ahead with modernisation."
"Firms want an efficient, value-for-money and reliable service, which Royal Mail must be able to deliver without the fear of more industrial action," he added.
Small firms 'losing out' on benefits of postal competition
The liberalisation of the UK postal service has produced "no significant benefits" for small businesses, a governmental review of the sector has concluded.
The review, carried out by the Department for Business, Enterprise and Regulatory Reform (BERR), states that while large companies have "seen clear benefits from liberalisation" in terms of "choice, lower prices and more assurance about the quality of the mail service", small businesses have not gained from increased competition.
"Where big businesses have benefitted from competition created in the bulk mail sector, small firms within communities across the UK are losing out," said Phil McCabe from the Forum of Private Business (FPB). "A reduced service means vital lines of communication are being disrupted, and that costs businesses money."
The report also notes a "substantial threat" to the Royal Mail's financial security, and that the "status quo is not tenable." It concludes that BERR needs "to establish how best to create the incentives for Royal Mail to moderate its operation, providing a stable financial future."
In March, the Federation of Small Businesses (FSB) called on politicians to "take every possible step to retain the post office network". FSB research revealed that 82% of small businesses think the loss of their local post office would have a significant impact on their business, in some cases leading to closure.
McCabe echoed these sentiments, stressing the importance of the Royal Mail's service for small firms: "For many small businesses, particularly those in rural areas, the universal delivery and collection service that has traditionally been provided by the Post Office is a lifeline, and losing it would be devastating."
However, Chris Hannant, head of policy at the British Chambers of Commerce said that the only way the Royal Mail can improve its service and win back lost business, is by "pushing ahead with modernisation."
"Firms want an efficient, value-for-money and reliable service, which Royal Mail must be able to deliver without the fear of more industrial action," he added.
Tags: Office, Retail & Shop
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