Royal Mail has been fined £10.5million for missing its post delivery targets in the 2023-24 financial year by the country's regular in charge of monitoring the postal service. Ofcom has slammed the company for its "poor service" just before Christmas due to "millions of letters arriving late" over the period.
This latest fine for Royal Mail is its second penalty over the space of two years following a flood of complaints from Britons across the UK. In November 2023, Ofcom levied a £5.6million penalty for its service provision.
According to Royal Mail, only three-quarters of first class post was delivered on time during the period, which falls short of its 93 per cent target. On top of this, 92.7 per cent per cent of second class post was delivered by Royal Mail on time, below its 98.5 per cent target
Ian Strawhorne, Ofcom director of enforcement, called on the postal service to "go further and faster" in improving its business practices to avoid future penalties in years to come.
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Royal Mail has been fined by Ofcom due to "millions of letters arriving late"
PA
He shared: "With millions of letters arriving late, far too many people aren’t getting what they pay for when they buy a stamp.
"Royal Mail’s poor service is now eroding public trust in one of the UK’s oldest institutions.
"This is the second time we’ve fined the company since the pandemic.
Royal Mail has provided an improvement plan, and we’re seeing some signs of progress, but it must go further and faster to deliver the service that people expect."
A Royal Mail spokesperson asserted that achieving a high quality service is “extremely important to us” and that the company is making the necessary changes to meet its targets.
However, the spokesperson noted that its one-price-goes-anywhere, its universal service obligation, needs “urgent reform”.
Royal Mail claims the current model does not modern customers’ needs.
As part of this universal service, Royal Mail needs to deliver letters six days a week and parcels five days a week. It should be noted that this is currently under review by the company.
This latest fine from Ofcom comes shortly after Czech billionaire Daniel Kretinsky agreeing to a deal to buy Royal Mail from current owner International Distribution Services (IDS).
Earlier this year, Kretinsky’s EP Group agreed to purchase the postal service as part of a £3.6billion takeover deal but is believed to have agreed to several concessions to gain approval.
LATEST DEVELOPMENTS:
The postal company's service is under fire from Ofcom
GettyThe billionaire has already guaranteed to maintain the universal service.
Furthermore, he also promised not to raid the group’s pension surplus, and maintain the brand name and Royal Mail’s UK tax residency and headquarters.
On top of this, part of the agreement includes union demand for no compulsory redundancies until 2025. It is understood some of these safeguards may be extened as part of the new deal.
It should be noted that any deal to takeover Royal Mail will need to pass a security approval after the deal is accepted by Government ministers.
