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Thursday, 24 January, 2002, 08:33 GMT
Finance experts warn on post reforms
A Royal Mail train
The Royal Mail faces increased competition
Plans to open up the UK's postal services to competition and further dilute the Royal Mail's monopoly could push up prices and make services worse, a National Audit Office report has warned.

The report examined the work of regulator Postcomm, which is set to propose wider liberalisation of the sector next week.

Post Office postman
Will Consignia survive?

Postcomm, set up last March, has already given six companies limited licences for certain types of pick-up and delivery in prescribed geographical areas.

Part of the regulator's remit is to open up the market for the collection and delivery of mail weighing less than 350 grams or costing less than 1.

Price threat

But the NAO said that if Postcomm was not careful, greater competition could damage the guarantee of universal service and make it impossible to keep prices at current levels.

Consignia - the new name under which the state-owned Royal Mail operates - is already struggling with poor industrial relations, late deliveries and sizeable losses after years of turning a regular profit.

However, without increased competition Consignia will have little incentive to improve its performance, the NAO added.

Consignia this week appointed former Asda chief executive Allan Leighton as interim chairman.

See also:

21 Jan 02 | Business
Consignia names new chairman
21 Jan 02 | Business
The world's busiest businessman?
14 Dec 01 | Business
Post strike threat withdrawn
26 Nov 01 | Business
UK post operator loses 1.5m a day
03 Oct 01 | Business
Consignia cuts 1bn to stem 'crisis'
13 Jul 01 | Business
Consignia to axe 2,100 jobs
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