Ofcom launches probe into Royal Mail’s failure to meet delivery targets in the past year

Royal Mail is facing a major investigation by an industry watchdog after failing to meet its delivery targets over the past year.  

The British postal giant fell short of its performance targets across the 2022 to 2023 financial year for first and second class mail and deliveries, following 18 days of strike action by thousands of workers last year. 

Regulator Ofcom claimed it would consider whether any ‘exceptional events’ explained why the company fell short. 

But if there was no ‘satisfactory explanation’, the communication watchdog warned it could slap Royal Mail with a fine, with the service previously having been hit with a £1.5million in 2019 for failing to meet targets.

The post service delivered only 73.7 per cent of first class mail within one working day across the year. The target was 93 per cent.

The news comes after a turbulent period for the postal service, which last year saw workers walking out during 18 days of strikes. Pictured is a protester with a flare outside Westminster in December

Royal Mail has failed to meet its delivery targets for first class and second class post for the past year. Pictured is a breakdown of its targets and what the postal service achieved 

Meanwhile for second class mail, 90.7 per cent was delivered within three working days, compared with the target of 98.5 per cent. 

And 89.35 per cent of delivery routes were completed on the required day, well behind the 99.9 per cent target.

Ofcom warned the impact of Covid was no longer ‘an excuse for poor delivery performance’.

If the Royal Mail is fined, it would be the second penalty since 2019, when the postal giant was forced to shell out £1.5million for failing to deliver first-class letters on time. 

Ofcom said: ‘In deciding whether the company is in breach of its obligations, we will consider if there were any exceptional events – beyond the company’s control – that may have explained why it missed its targets.’

Last year, an investigation into its missed targets was closed after the regulator ruled that greater staff absences and social distancing regulations resulting from Covid had impacted service.

It also decided not to open an investigation into Royal Mail’s service levels during the 2020 to 2021 financial year because of the ‘uniquely difficult circumstances’ of the pandemic.

The probe follows last week’s news that boss Simon Thompson will step down by the end of the year.

Simon Thompson, the former chief executive of Royal Mail quit with a six-figure payoff in the wake of strike chaos that hit millions of customers. He last week claimed it was the ‘right time to go’ and is expected to step down at the end of the year 

The dispute between Royal Mail and its workers dragged on for nearly a year before a deal – which included a 10 per cent raise for staff – was struck last month. Pictured is a rally by the Communication Workers Union (CWU) in Westminster on December 8, 2022

His departure was announced weeks after a lengthy dispute with the main postal union came to an end. 

Grant McPherson, chief operating officer of Royal Mail, said: ‘Improving quality of service is our top priority. 

‘We are committed to accelerating Royal Mail’s transformation and restoring service levels to where our customers expect them to be.

‘We’re sorry to any customers who may have been impacted by our performance during a year that has been one of the most challenging in our history.

‘With the plans we have in place to drive service levels and reduce absence, we hope and expect to see further progress in the coming months.’

Royal Mail also stressed its service improved over the first three months of the year, where 94.5 per cent of second-class mail was delivered within three working days and 78.9 per cent of first-class mail delivered within one.

Furthermore, 18 days of strike action organised by the Communication Workers Union (CWU) ‘materially impacted’ the quality of service, it argued.

It also blamed a high level of staff absences affecting operational performance.

Last month, Royal Mail agreed a deal with the CWU which would see staff get a 10 per cent salary increase and a £500 one-off payment.

The firm said it hopes the agreement will reduce absences, spread out workloads, and rapidly improve quality of service.

The proposed deal will be put to a ballot of union members in the coming weeks.