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Former Post Office Minister Paul Scully has warned that Royal Mail is facing “tough times” after the postal service was hit with a £10.5million fine from Ofcom.
The penalty was imposed after Britain’s national postal service failed to meet its delivery targets in the 2023-2024 financial year.
This marks the second fine in two years, following a £5.6million penalty issued in November 2023.
“No, I don’t think it is over for Royal Mail, but they’re really in tough times, because we ask them to do a lot of different things,” Scully told GB News.
Paul Scully has delivered a stark verdict of Royal Mail after receiving a fine of over £10million
PA / GB News
Royal Mail’s performance was well below the required 93 per cent target for first-class mail, with second-class post delivery also missing its mark, with 92.7 per cent delivered on time against a target of 98.5 per cent.
Scully explained that Royal Mail’s challenges stem from evolving consumer demands and market conditions.
“Most people now want parcels in and out, like with Amazon and all these sort of things. That’s what they want to compete with because that’s where the money is,” he told GB News.
The former minister highlighted that Royal Mail is “losing money hand over fist” due to its reliance on letter delivery.
Royal Mail has been fined by Ofcom due to ‘millions of letters arriving late’
PA
He pointed to a shrinking letter market that has become increasingly expensive to service.
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Scully explained: “If it’s a letter, it pretty much all goes through Royal Mail. But parcels, they can’t compete, because they’ve got to modernise and they want to modernise.
“But they need the infrastructure and investment to be able to do so.”
He added: “But they’re piling a lot of that money into propping up their letter delivery service. This year, the fine is double, because as I say, they’re on a slippery slope down.”
As Czech billionaire Daniel Kretinsky moves closer to acquiring Royal Mail from International Distribution Services, Scully noted that the postal service “needs investment” in order to sustain a “bright future”.
Paul Scully told GB News that the postal service is facing ‘tough times’ following the fine
GB News
Scully concluded: “This is why they’re subject to a takeover bid by Daniel Kretinsky, who already has a shareholding in the Royal Mail, he is a Czech billionaire that’s invested in postal services around the world.
“So he wants to be able to keep letter delivery, but really bolster up the investment in Royal Mail, which is if it’s going to survive, it’s going to have a bright future, it needs that investment.”
Kretinsky’s EP Group agreed to the purchase earlier this year, with several key concessions to gain approval.
The billionaire has guaranteed to maintain the universal service, which requires Royal Mail to deliver letters six days a week and parcels five days a week.
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