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 07 September 2008 02:20 BST

Post regulator urged to cut costs

Wednesday, 22 Mar 2006 04:07
Post regulator urged to cut costs
The postal regulator Postcomm has been urged to reduce the cost of regulation.

A new report from the National Audit Office (NAO) suggests Postcomm should reduce the burdens on the Royal Mail.

The NAO concludes that the Royal Mail's performance has improved since regulation was introduced, but certain postcodes in north-west and south-east London are still suffering from poor service.

Postcomm controversially recently levied a £13.8 million fine on Royal Mail for breaches in service agreements, against which the Royal Mail is appealing.

Auditor general Sir John Bourn said that these regulatory costs needed to be reduced.

"The problem of regulating a monopoly such as Royal Mail is that it tends to involve advocacy, litigation and dispute," Sir John said.

"That is why competition is in the long run a less costly and burdensome way of protecting consumers. This report encourages Postcomm to minimise the costs and maximise the benefits in the short term while withdrawing from detailed regulation in the medium term."

The report concluded that Postcomm needs to ensure it strikes a balance between protecting consumers and not overburdening the Royal Mail, and suggests that there are "shortcomings" to the current system.

It adds: "The long term success of the regime will depend on its ability to cope with a rapidly changing postal market, so that Postcomm withdraws from detailed regulation where possible."track End of story


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