Royal Mail has been hit with a record £10.5 million fine by the postal regulator for delivering more than a quarter of its first-class letters late.
Ofcom said the company has failed to meet its obligations to deal with letters quickly enough, marking its second financial penalty in just over a year.
Under its legal obligations, Royal Mail is required to deliver 93 percent of first class letters within one working day of collection and 98.5 percent of second class letters within three days. However, between April 2022 and March 2023, the company managed to achieve only 74.7 percent for the first class and 92.7 percent for the second class, which falls short of its targets and affects millions of customers.
The company partly blames its poor performance on its financial problems, having made a £348m loss last year. However, Ofcom concluded that Royal Mail had taken “insufficient and ineffective” steps to address delays, following a year in which many households received Christmas cards weeks late.
This is the largest financial penalty ever imposed on Royal Mail for delayed mail, surpassing the £5.6 million fine imposed last year. Although Ofcom had considered a £15 million fine this time, it reduced the amount by 30 percent after Royal Mail admitted liability and agreed to settle.
Ian Strawhorne, director of enforcement at Ofcom, said: ‘With millions of letters arriving late, far too many people don’t get what they pay for when they buy a stamp. Royal Mail’s poor service is now undermining public confidence in one of Britain’s oldest institutions.”
The regulator acknowledged that Royal Mail’s performance has improved marginally and that it is following an improvement plan published earlier this year. However, it urged the company to accelerate progress and restore public confidence.
Royal Mail stressed it is “making significant changes to drive improvements” and pointed to better year-on-year figures. It called for “urgent reform of the Universal Service” to reflect modern postal use and ensure a sustainable, reliable service for the future.
The fine comes as Czech billionaire Daniel Kretinsky nears a £3.6 billion takeover of Royal Mail’s parent company International Distribution Services. Government approval is expected in the coming weeks.