Royal Mail fined record £10.5m for late deliveries

Royal Mail has been fined a record £10.5 million by the postal regulator after more than a quarter of first-class letters were delivered late.

Ofcom said the company had failed to meet its obligations to deal with letters quickly enough, marking the second financial penalty it faces in just over a year.

Under its regulatory obligations, Royal Mail must deliver 93 per cent of first class letters within one business day of receipt and 98.5 per cent of second class letters within three days. However, between April 2022 and March 2023, it managed only 74.7 percent for first tier and 92.7 percent for second tier, falling short of its targets and affecting millions of customers.

The company attributed its poor performance in part to its financial struggles, after recording a loss of £348 million last year. However, Ofcom concluded that Royal Mail had taken “inadequate and ineffective” steps to address the delays, after a year in which many families received Christmas cards weeks late.

This is the largest financial penalty ever imposed on Royal Mail for mail delays, exceeding the £5.6 million fine imposed last year. Although Ofcom had considered imposing a £15m fine this time, it reduced the figure by 30 per cent after Royal Mail admitted liability and agreed to settle.

Ian Strawhorn, Ofcom’s enforcement director, said: “With millions of letters arriving late, too many people are not getting what they pay for when they buy a stamp. Royal Mail’s poor service is now eroding public confidence in one of the UK’s oldest institutions.” .

The regulator has acknowledged that Royal Mail’s performance has improved slightly and it is following an improvement plan published earlier this year. However, she urged the company to accelerate progress and regain public confidence.

Royal Mail insisted it was “making fundamental changes to drive improvements” and pointed to better year-on-year figures. He called for “urgent reform of the comprehensive service” to reflect modern postal use and ensure a sustainable and reliable service for the future.

The fine comes as Czech billionaire Daniel Kretinsky closes in on a £3.6bn takeover of Royal Mail’s parent company, International Distribution Services. Government approval is expected in the coming weeks.