Royal Mail has once again been hit with a huge fine for failing to meet its delivery targets.
Regulator Ofcom has handed Britain’s postal service a £21m fine after only 77 per cent of first class and 92.5 per cent of second class mail was delivered on time, well short of the 93 per cent and 98.5 per cent targets it had set.
The penalty, which is the third largest the regulator has ever imposed, represents the third time Royal Mail has been fined in as many years, after it was fined £5.6m in November 2023 and £10.5m in December 2024.
Ofcom said Royal Mail had breached its obligations by failing to provide an acceptable level of service without justification. It took “insufficient and ineffective steps” to try and prevent this failure, impacting millions of customers who did not get the service they paid for.
“Millions of important letters are arriving late, and people aren’t getting what they pay for when they buy a stamp. These persistent failures are unacceptable, and customers expect and deserve better,” said Ofcom director of enforcement, Ian Strawhorne.
“Royal Mail must rebuild consumers’ confidence as a matter of urgency. And that means making actual significant improvements, not more empty promises. We’ve told the company to publicly set out how it’s going to deliver this change, and we expect to start seeing meaningful progress soon.
“If this doesn’t happen, fines are likely to continue.”
‘Admissions of liability’
The eight-figure fine included a 30 per cent reduction from the £30m the regulator would otherwise have imposed, reflecting Royal Mail’s admissions of liability and agreement to settle the case.
Royal Mail also fell short of its delivery targets in 2020-2022, but Ofcom said it did not impose any penalties because of the impact of the Covid-19 pandemic on the company’s operations, which was beyond its control.
Ofcom has instructed Royal Mail to “urgently” publish and implement a credible plan that “delivers significant and continuous improvement”.
The regulator has already relaxed the delivery targets it expects Royal Mail to meet under reforms to the universal service unveiled in July.
A Royal Mail spokesperson said: “We acknowledge the decision made by Ofcom today and we will continue to work hard to deliver further sustained improvements to our quality of service.
“A key area of focus and investment has been the detailed work ahead of full implementation of our new delivery model, enabled by Ofcom’s changes to the Universal Service. This is critical to enable us to drive a step change in quality of service.
“We have also implemented important changes across our network including recruiting, retaining and training our people, and providing additional support to delivery offices.”