UK watchdog urgers stiffer penalty over missing post

The watchdog for postal services was today urging the industry regulator to fine the Royal Mail more than the proposed £11.7 million over the amount of post which is lost, stolen or damaged, and poor performance in areas of London.

Postwatch has argued that Postcomm’s proposed financial penalty should be increased to £26.85 million – 5% of the Royal Mail’s operating profit in 2005 – to send a firm message to the postal service.

The proposed fine represented 2% of the Royal Mail’s operating profit last year and included a penalty of £271,000 for poor delivery across three London postcode areas – SE, WC and E – where two million letters were delivered late during 2004/5.

Postcomm said it had uncovered some “serious” shortcomings in 2004/05, when 14.6 million letters, packets and parcels were lost, stolen, damaged or interfered with.

It also found that some important features of Royal Mail’s procedures were not being applied across the business.

The most significant weakness was said to be the “poor management” of the recruitment and training of agency staff.

Postcomm said the Royal Mail appeared to have improved its performance “substantially” as a result of its review but the regulator added that it could not ignore the “serious failures” to observe important parts of its licence obligations.

Chair of Postwatch, Millie Banerjee CBE, welcomed Postcomm’s move to fine the postal group, but said that a stiffer penalty would help to improve the service.

“Large fines are a good way to make sure Royal Mail’s senior management turn their attention to delivering on their rhetoric that `every single letter is important’.

“Customers used to post with confidence and through this action Royal Mail will have the incentive to ensure they can do so again.”

Ms Banerjee added that while the Royal Mail has introduced procedures to recruit, vet and train new staff, letters and parcels were still being lost and stolen.

“The fact is, letters are still being lost daily, some are stolen and many are misdelivered.

“Customers are increasingly worried that organised criminals are able to use stolen mail to perpetrate identity theft.”

The Royal Mail has 28 days to make representations to Postcomm about the fine, which is the biggest it has ever faced.

The Postal Services Act 2000 allows Postcomm to impose financial penalties on the Royal Mail equivalent to up to 10 per cent of the group’s turnover.

Postwatch is independent organisation set up to ensure that post offices, Parcelforce, the Royal Mail and any competing postal providers provide the best possible service to customers.

For more information about Postwatch visit www.postwatch.co.uk