Royal Mail fined record £10.5m for late deliveries

Royal Mail has been fined a record £10.5 million by the postal regulator after delivering more than a quarter of first-class letters late.

Ofcom said that the company failed to meet its obligations to handle letters swiftly enough, marking the second financial penalty it has faced in just over a year.

Under its regulatory obligations, Royal Mail is required to deliver 93 per cent of first-class letters within one working day of collection and 98.5 per cent of second-class letters within three days. However, between April 2022 and March 2023, it managed only 74.7 per cent for first-class and 92.7 per cent for second-class, falling short of its targets and affecting millions of customers.

The company blamed its poor performance partly on its financial struggles, having recorded a loss of £348 million last year. However, Ofcom concluded that Royal Mail had taken “insufficient and ineffective” steps to remedy 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 post, surpassing the £5.6 million fine handed down last year. Although Ofcom had considered a £15 million penalty this time, it reduced the figure by 30 per cent after Royal Mail admitted liability and agreed to settle.

Ian Strawhorne, Ofcom’s 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.”

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 insisted it is “making substantial 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 usage and ensure a sustainable, reliable service for the future.

The fine comes as Czech billionaire Daniel Kretinsky closes in on a £3.6 billion takeover of Royal Mail’s parent company, International Distribution Services. Government approval is expected in the coming weeks.