Ofcom has fined Royal Mail £10,500,000 for failing to meet its First and Second Class delivery targets in the 2023/24 financial year.
An investigation by Ofcom found that from April 2023 to March 2024, Royal Mail only delivered 74.7 per cent of First Class mail (target 93 per cent) on time and 92.7 per cent of Second Class mail (target 98.5 per cent) on time. The company blamed its poor performance on its challenging financial position, and delays to the ballot on a deal that followed the previous year’s industrial action. But, Ofcom didn’t think these reasons justified the poor performance, stating that ‘Ultimately, it is for the company to manage its financial position taking account of its obligations.’
Just over a year ago, Royal Mail was fined £5.6m for its performance in 2022/2023.
Ian Strawhorne, Ofcom Director of Enforcement said: “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.”
Royal Mail has issued the following response to the Ofcom announcement:
“We acknowledge the decision made today (13/12/2024) by Ofcom. Throughout this year we have continued to implement substantial changes to drive improvements. This is shown in our latest quality of service results with both First and Second Class mail improving year-on-year. Ofcom also note that we are ‘on a recovery path to significantly improve performance’.
Delivering great quality of service is extremely important to us and we are making the necessary changes to deliver for our customers. However, it is essential that these efforts are backed by urgent reform of the Universal Service, restoring it to a level that meets the needs of today’s postal users, not the needs of customers 20 years ago. Combined this will help create a modern, sustainable and reliable service for future generations.
In April, we submitted our proposed reforms on the Universal Service. This proposal is designed to protect what matters most to customers. We look forward to Ofcom’s upcoming consultation in January which will enable the required regulatory changes to be made by summer.”
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