Post watchdog waives fines for missed targets
Postal group Consignia could have been fined #8 million for failing to achieve its end-of-year targets but regulators decided a penalty would have been counter-productive, it was announced today.
Postcomm said it was concerned at the poor standards of delivery to certain post codes, particularly in London, and that the company “had not tried hard enough” to achieve targets for its 1st and 2nd class response business services
The industry watchdog, however, said a financial penalty would not have benefited customers and is instead working to improve services with the company, which had been losing #1.5 million a day.
Overall standards had improved in the last financial year and it was keen to see standards maintained and bettered in the next, the watchdog added.
“For some of those services where the target was missed, Postcomm believed Consignia had not contravened its licence because it had made reasonable endeavours to meet the standards specified,” it said in a statement.
“However, Poscomm says it will review the detail of Consignia’s current action plan for 2002/2003 for improving its quality of service to see whether it is adequate.
“If not, Consignia will face enforcement action to ensure customers receive the agreed standards of service.”
Referring to the business services, Postcomm officials believed Consignia had breached its licence by “failing to use all reasonable endeavours” to achieve its end-of-year targets.
“Postcomm’s board of commissioners considered imposing a monetary penalty but felt that at this stage it would have been counter-productive,” the statement went on.
“Instead, Postcomm is working with Postwatch, the consumer body, and Consignia, on arrangements within its licence which will require Consignia to pay compensation to customers if it fails to meet its licensed targets in future.
“The compensation scheme is expected to be published along with Postcomm’s price control proposals within the next month. Had a financial penalty been imposed this time, based on the proposals being developed, it might have amounted to #8 million.”
Responding to the comments, Mick Linsell, Royal Mail’s managing director for service delivery, accepted that services had to get better but there had been improvements.
Increases in basic pay for staff to #300 a week and moves from a six to a five-day week would help in the coming year, he said.
“If employees feel better about their jobs then that will feed through into better service to customers. Service comes from the heart,” he said.
“It is worth noting, however, that Consignia met or surpassed the performance targets in nine out of the 14 key targets specified in its licence from Postcomm.”
This included Second Class mail, which accounts for two-thirds of all mail, and special delivery, he added, and Consignia was disappointed to have missed the key First Class target of 92.1% by just 0.6 of a percentage point.
Mr Linsell welcomed Postcomm’s decision not to impose fines but said that First and Second Class response services accounted for about 2% of the total mail volume of some 82 million letters every working day.
“We agree with Postcomm that a fine would not have achieved any benefit for customers,” he said.
“Postcomm is right to say that the best outcome is to agree a compensation scheme so that in the event of future performance failings, there will be a mechanism to compensate customers.”
