The Officer Key Decision meeting scheduled for Thursday 3 September 2026 was set to discuss the award of a Pan-London Postal Goods & Services Contract. The decision maker, Caroline Holland, Corporate Director of Resources, was recommended to approve the award of this contract to Royal Mail.

Pan-London Postal Goods & Services Contract

The meeting's agenda included a discussion regarding the award of a call-off contract to Royal Mail for postal goods and services. This was to be conducted through a direct award under the Crown Commercial Service (CCS) RM6280 Postal Services & Solutions Framework, Lot 2. The report pack indicated that Royal Mail is considered the sole supplier capable of providing a fully integrated postal service, including the collection and delivery of 1st and 2nd class mail. This is due to Royal Mail's position as the Universal Service Provider under the Postal Services Act 2011, making it the only regulated provider offering a full service with next-day delivery for 1st Class post.

The recommendation was for Caroline Holland, Corporate Director of Resources, in consultation with Councillor Zulfiqar Ali, Cabinet member for Finance and Resources, to agree to award a contract to Royal Mail. This contract would be for a period of up to 18 months (12 months with a 6-month extension). The estimated cost to Newham Council was £3.50 million, with a total shared-services cost for Newham and Havering of £5.84 million. The report noted that the contract value could fluctuate based on usage and regulated price increases.

The background to this decision highlighted that the Council has an ongoing need for postal services to support various functions, including revenues and benefits, electoral services, housing, parking, and regulatory services. The existing contract, which was due to expire on 12 September 2026, was also used by the oneSource service to provide postal services to the London Borough of Havering.

Newham Council had previously participated in a pan-London postal services arrangement, coordinated through the London Boroughs Postal Board. This involved collaboration with other London boroughs on procurement, with each authority entering into its own call-off contract. A recent aggregated pan-London procurement exercise, run by the Government Commercial Agency (GCA) under the RM6280 Framework, concluded without a contract award due to a lack of compliant bids. This situation left the 21 collaborating boroughs needing to find an alternative route to secure a contract before the current one expired.

The report suggested that a further competitive procurement exercise at this time would not yield genuine competition or better value for money and would only cause delays. It was stated that feedback from suppliers indicated Royal Mail was the only provider capable of meeting the Council's postal service requirements. The direct award under the RM6280 Framework was considered a legally compliant route.

The estimated contract value had been revised due to anticipated price increases from Royal Mail in October 2026, with early indications suggesting an average increase of around 25%, and some services potentially rising by as much as 35%. The proposed 18-month contract duration was intended to allow boroughs to review their postal usage, explore alternative communication methods, and prepare for a revised pan-London aggregated procurement exercise under a new GCA framework.

The report also outlined alternative options considered and rejected, including doing nothing, extending the current contract, direct award under the Procurement Act 2023, and running a revised aggregated competition. The recommended option of a direct award under the CCS RM6280 Framework was presented as offering the best available value for money, with GCA oversight of pricing changes providing a safeguard against uncontrolled rises.

The financial implications detailed the estimated spend for Newham and Havering, noting that final costs would depend on service volumes and that the Council would not be committed to a minimum spend. Costs were subject to annual statutory increases authorised by Ofcom. Legal implications confirmed the Council's power to award the contract under the Local Government Act 1972 and the Localism Act 2011, and that the proposed direct award was permissible under the framework rules and compliant with the Public Contracts Regulations 2015. The report also stated that the decision was considered to represent Best Value and that the proposed award was a non-competed direct award for a maximum term of 18 months, which was a deviation from the original 5-year term agreed by Cabinet.

The report indicated that there were no equalities implications. The procurement implications referenced the PIF database reference and reiterated the failed pan-London aggregated procurement exercise. Other implications, such as HR, ICT, and Property, were noted as not applicable.