UK Royal Mail’s GBP80m bill for poor service
Royal Mail’s bill for failing to provide adequate levels of service to business and retail customers last year will be up to GBP80m, the postal regulator will shortly announce.
Postcomm, the postal services commission, could also impose further penalties in the form of fines for what are understood to be escalating levels of failure by the state-owned postal services company in 2003-04.
Last year, Royal Mail was fined GBP7.5m for failing to meet service targets, but it has now brought in a system of compensating business and retail customers.
The 12-month period to April 2004 was the first year of operation for the business scheme, under which Royal Mail pays large businesses that have a contract with the company a rebate of up to 5 per cent of their total mail bill for the year. But Royal Mail can argue that poor service has been caused by special circumstances for which it should not be liable, such as a fire last year at its Northampton mail centre.
After taking special circumstances into account, however, Postcomm will say the amount of compensation Royal Mail owes business customers for the year to April is as much as GBP64m.
Total compensation al-ready paid to retail customers from October last year, when Royal Mail started a retail compensation scheme, to April was about GBP16m, Postcomm will say. Royal Mail said yesterday it could not comment until it had seen the final figures.
