GCA reacts to Ofcom’s £5.6m fine after RM missed delivery targets
The GCA has stressed the importance of Royal Mail keeping its promises in the wake of the UK’s major postal service being fined £5.6million for missing delivery targets – although no evidence was found that parcels were prioritised over letters.
On the back of the industrial action which decimated the postal service last Christmas, it was announced on Monday, 13 November, that communications industry regulator Ofcom had imposed the financial penalty for missing first and second-class delivery targets by a “significant and unexplained margin” causing “considerable harm” to customers.
Only 73.7% of first-class post arrived within one working day in the 2022-2023 financial year, far below the statutory target of 93%, while the 90.7% of second-class mail delivered inside three working days was below the 98.5% expected level – and posties only completed 89.35% of routes each day a delivery is required, way under the 99.9% expectation.
Even after adjusting Royal Mail’s performance for the impact of the long-running industrial action, extreme heat in July and the Stansted runway closure – exceptional circumstances can be submitted to explain missed targets – its first and second-class performances were still only 82% and 95.5% respectively.
“Our members know the importance of Royal Mail keeping its promises,” GCA ceo Amanda Fergusson said in a statement issued to the media following the news of the fine imposed. “After last year’s strikes, especially in the run-up to the festive season, nothing’s more important than knowing when Royal Mail says a card will be delivered, it will arrive on time.
“The fact you can send a card from one end of the country to another for just 75p is one of the things that makes our postal service special.
“But the Royal Mail must keep their promises – their role is fundamental to our members in our creative industry. An undelivered card or one that arrives late, disrespects the effort that’s gone into making and sending it.”
The Ofcom statement said the figures mean Royal Mail breached its obligations by failing to meet its targets by a significant and unexplained margin which caused considerable harm to customers, and “took insufficient steps to try and prevent this failure”.
The £5.6m penalty – payable to HM treasury within two months – would have been £8m but it was reduced by 30% to reflect Royal Mail’s “admissions of liability and its agreement to settle the case”.
Ian Strawhorne, Ofcom director of enforcement, said: “Royal Mail’s role in our lives carries huge responsibility and we know from our research that customers value reliability and consistency.
“Clearly, the pandemic had a significant impact on Royal Mail’s operations in previous years. But we warned the company it could no longer use that as an excuse, and it just hasn’t got things back on track since.
“The company’s let consumers down, and today’s fine should act as a wake-up call – it must take its responsibilities more seriously. We’ll continue to hold Royal Mail to account to make sure it improves service levels.”
As part of the investigation Ofcom considered concerns about how parcels and letters might be prioritised for delivery but said from the evidence assessed it “did not identify any suggestion that Royal Mail’s senior management had directed the prioritisation of parcels over letters outside of recognised contingency plans, such as during the pandemic and during the industrial action in 2022/23”.
However, there are concerns over the operation of delivery offices, which the regulator views as “fundamental” to the company meeting its quality-of-service obligations.
Ofcom said: “Royal Mail appears to have insufficient control, visibility and oversight over local decision-making at certain delivery offices where high absence and vacancies may have led to customer operations managers – who are responsible for individual delivery offices – making on-the-day decisions about what to deliver.
“Royal Mail must ensure its customer operations managers are provided with appropriate training, so they are equipped to make such decisions. We will be keeping a close eye on the company’s performance this year, and the steps it is taking to return delivery offices to pre-Covid practices.”