The National Audit Office has warned that a rapid introduction of competition into postal services could damage services.

Sir John Bourne has cautioned that plans to remove the Post Office's monopoly protection could get in the way of its obligations to deliver universal services.

Forum Response: Consignia

A spokesman for Consignia told ePolitix.com: "We welcome publication of the NAO report as a detailed and wide-ranging analysis of the postal market and the challenges faced by the regulator, Postcomm. The report provides further compelling evidence that there are fundamental changes underway in the market and environment in which Consignia operates.

"Competition is already building up and the power and scope of Postcomm to intensify the pace at which more competition is introduced is set out in the report.

"The report makes clear, however, that there are major risks for Consignia in the approach Postcomm is developing. In particular, Consignia's ability to provide a universal postal service - delivery of letters to the UK's 27 million addresses at a uniform and affordable price - could be in jeopardy because of cream-skimming of profitable sectors of the mail market by companies given a licence by Postcomm.

"We recognise that a tough market will inevitably get even tougher in future. That is why the company is pressing ahead with its plans to reduce its costs by 15 per cent to sharpen its competitiveness and ensure its services meet the needs of customers.

"We are also pleased with the results of a survey by the NAO of Consignia's domestic and business customers. The research showed, said the NAO, "generally high levels of satisfaction with Consignia's services." The NAO further noted that the prices of Consignia's services "appear to be relatively cheap compared to postal providers elsewhere in the world."