Royal Mail fined £10.5m for late deliveries in second sanction in just over a year

13 December 2024, 08:16 | Updated: 13 December 2024, 09:29

Royal Mail has been fined £10.5 million for late deliveries this year, as less than 75% of post is delivered on time.

Royal Mail has been fined for the second year in a row for missing its post delivery targets.

The £10.5 million fine covers the 2023/2024 financial year, as less than 75% of post was delivered on time.

The regulator Ofcom said the poor service is ‘eroding public trust’ in the institution.

It is the second fine in two years, after the watchdog also gave Royal Mail a £5.6 million penalty in November 2023.

Ofcom said the fine will be passed in full to the public purse.

The penalty was brought down from the original amount of £15 million, reflecting Royal Mail’s admissions of liability and agreement to settle the case.

Just under 75% of first class post was delivered on time during the period, well short of its 93% target.

And 92.7% of second class post was delivered on time, below its 98.5% target, Royal Mail said.

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.”

A Royal Mail spokesperson said high quality service is “extremely important to us” and that it is making changes to deliver it.

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But they added that its one-price-goes-anywhere so-called universal service obligation needs “urgent reform”, as it does not meet modern customers’ needs.

The universal service currently requires Royal Mail to deliver letters six days a week and parcels five days a week, but is under review.

Responding to the fine on Friday, Tom MacInnes, director of policy at Citizens Advice said: “Failing to hit a single delivery target for nearly five years is simply unacceptable by Royal Mail, and it’s consumers left facing the consequences.

“Letter delays leave millions of people missing urgent medical appointment letters, legal documents and benefit decisions.

“This comes despite Royal Mail routinely hiking their prices, meaning consumers are getting less despite paying far more.

“Today’s fine from Ofcom goes some way to show it recognises Royal Mail’s persistent failings.

“But in a virtual monopoly, fines at this level clearly aren’t pushing Royal Mail to improve standards for all of us relying on our country’s postal service.”

The fine comes as Czech billionaire Daniel Kretinsky closes in on a deal to buy Royal Mail from current owner International Distribution Services.

Daniel Kretinsky’s EP Group agreed to buy IDS earlier this year, but is believed to have agreed to several concessions to gain approval.

He had already guaranteed to maintain the universal service.

Mr Kretinsky has also pledged not to raid the group’s pension surplus, and keep the brand name and Royal Mail’s UK tax residency and headquarters.

There was also an agreement to respect union demand for no compulsory redundancies until 2025.

It is thought some of these safeguards, such as the commitment to avoid compulsory redundancies, could be extended as part of a new agreement.

The deal would still need security approval after it is agreed with the Government.