Royal Mail handed £10.5m fine after delivery targets missed

07:54 , Graeme Evans

Royal Mail has been fined £10.5 million for failing to meet its first and second class delivery targets in the 2023/24 financial year.

This is the second time that Ofcom has found the company in breach of its regulatory obligations in recent years, having fined it £5.6 million in November 2023.

Ofcom requires Royal Mail to deliver, in each financial year, 93% of first class mail within one working day of collection and 98.5% of second class mail within three working days.

From April 2023 to March 2024, Royal Mail delivered 74.7% of first class mail on time and 92.7% of second class mail on time.

The company blamed the performance on its challenging financial position and delays to the ballot on a deal that followed the previous year's industrial action.

Ofcom said: "We do not consider either of these to be justifiable reasons for Royal Mail's failure to provide the levels of service expected of it. Ultimately, it is for the company to manage its financial position taking account of its obligations."

Director of enforcement Ian Strawhorne added: "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.

"This is the second time we've fined the company since the pandemic. Royal Mail has provided an improvement plan, and we're seeing some signs of progress, but it must go further and faster to deliver the service that people expect."

Capital Economics said today's 0.1% dip in UK output in October means there's every chance that the fourth quarter as a whole will show a decline.

The consultancy said it was hard to tell how much of the monthly fall is temporary due to activity being put on hold ahead of the Budget.

The ONS reported that some manufacturers, retailers and employment agencies said that turnover was "negatively affected" but others benefitted as activity was brought forward.

Chief UK economist Paul Dales said the starting point for the quarter means that it is unlikely that GDP will match its 0.2% Q4 forecast or the Bank of England's 0.3%.

He added: "That said, with the Bank still worrying that inflation is too high, we don't think the economy is weak enough to prompt the Bank to follow November's 0.25% rate cut with another cut at next Thursday's December meeting.

"That said, we're not as confident about that as we were before this data release."