Royal Mail has been fined £10.5 million for missing postal delivery targets.
Regulator Ofcom said 74.7% of first class mail and 92.7% of second class mail were delivered on time in 2023/24.
The targets were 93% and 98.5%.
It is the second time Ofcom has fined Royal Mail since the pandemic and it “needs to do much better”, the regulator said.
The company blamed its poor performance on a “difficult financial situation”, Ofcom said in a statement.
There were also “delays in voting on an agreement which followed industrial action the previous year”.
But Ofcom said it “considered neither of these reasons to justify Royal Mail’s failure to provide the levels of service expected of it”, adding that the company had ” failed to fulfill its obligations.
Royal Mail also took “insufficient and ineffective measures to try to avoid this failure”, with millions of customers likely to have been affected, the regulator said.
He continued: “Ultimately, it is up to the company to manage its financial situation taking into account its obligations. »
The fine will be paid “in full” to the “public treasury”.
Ofcom “regularly puts pressure on Royal Mail” over its plans to redress the situation.
“While there has been some progress, its overall performance in 2023/24 was only slightly better than its reported performance in 2022/23, and it must do much better,” the regulator said.
“At a minimum, we expect to see a clear, credible and publicly communicated plan setting out how Royal Mail will get back on track through meaningful, sustainable and ongoing improvements for customers.
“Having failed to meet its targets in 2022/23, Royal Mail has not set out a clear improvement plan for 2023/24. »
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Ian Strawhorne, Ofcom’s director of enforcement, said: “Royal Mail’s poor service is now eroding public trust in one of the UK’s oldest institutions. »
Royal Mail had “provided an improvement plan” and there were “some signs of progress”.
But he said the company “needs to go further and faster to provide the service people expect”.
High quality service is “hugely important to us”, a Royal Mail spokesperson said, adding that changes were underway.
However, they said the requirement for a single price, applicable everywhere, required “urgent reform”.
Royal Mail is required to deliver letters six days a week and parcels five days, but this is under review.
Royal Mail said: “Between the last two quarters of 2023/24 (excluding Christmas), first class quality improved by 7.8% and second class by 3.4%.
“We remain fully focused and committed to continued improvement throughout 2024/25, supported by an affordable and sustainable level of investment. »
He also declared himself “committed to a quality action plan for 2024/25”.
The fine was issued as the government continues to deliberate on a £5.3bn buyout deal this could see Royal Mail’s parent company owned by Czech billionaire Daniel Kretinsky.
Czech businessman Daniel Kretinsky. File photo: Reuters
A spokesperson for the Communication Workers Union said of the fine: “This is a direct result of the deliberate and sustained dismantling of the UK Postal Service by a failed board and management team.
“Partially blaming the poor performance of 2023-2024 on the impact of industrial action when the last day of the national strike was in December 2022 shows the lack of credibility and integrity of a board that has oversaw the most shameful period in Royal Mail’s history.
“Whatever happens with the current takeover bid, this moment must mean the end for so many individuals who put their own obsession with attacking frontline workers ahead of their obligations to their own employees – as well as to the public and businesses across the UK.
“Royal Mail is also talking about moving forward with the change to the universal service obligation as if it were a no-brainer.
“We must be very clear: there will be no agreement on these changes from the CWU unless quality is restored and our members’ terms and conditions are improved. We cannot and will not let the same people who destroyed the service claim to be its saviors.