Tag: UK

The GBP500,000 a-year head of the Royal Mail has admitted Britain’s much criticised postal service is “falling short” of public expectations.

Chief executive Adam Crozier apologised for huge disruption caused in some parts of the country by strikes and a move to a single daily delivery. On Radio 4’s Today programme, Mr Crozier said: “We have to get the situation sorted as quickly as possible.”

He said the move to a single delivery, designed to save GBP350million a year, was the biggest change to Britain’s postal services for half a century.

He added: “Where it has been bedded in, it is working extremely well.”

The UK postal service has descended into chaos with millions of letters lying undelivered for weeks.

Hospital operations have been missed, business orders cancelled and birthdays unmarked as sorting offices struggle to switch from a morning and afternoon service to a single delivery. Postmen complain that the move – designed to save the Royal Mail GBP 350 million a year – has been implemented badly, with some staff having to carry heavy sackloads of mail on trolleys.

Delivery rounds that used to take two to four hours now last up to eight hours, and some postmen have given up on the new arrangements. There are reports of mail being thrown away and postbags being dumped. Times of deliveries are also unpredictable and backlogs of unsorted mail are growing.

The Royal Mail will face fines of at least GBP50m following the release next month of annual performance figures that are expected to show a sharp deterioration in the punctuality of its deliveries.

The record penalties would stem from the introduction of a tough new regulatory regime, designed to compensate business customers. A spokesman for Postwatch, the independent body that monitors the Royal Mail’s performance, said: “The Royal Mail has got 15 licence service standards and it is unlikely that it achieved any of them in the past year. Because of the automatic compensation scheme for large mailers, the Royal Mail will have to return many millions of pounds to large customers.”

He added: “If the scheme had been in place last year, it would have cost pounds 40m. Performance has worsened and it will probably cost more.”

Royal Mail has delivered a damming verdict on plans to open up the postal market to competition, claiming that it will lead to an increase in the price of stamps.

The comments are directed at the regulator, Postcomm, which is thinking of levying VAT on postal companies. Royal Mail, chaired by Allan Leighton, enjoys a VAT-free status, which gives it an advantage when bidding for mail contracts with organisations such as charities and financial services companies that are themselves exempt from the tax. Postcomm wants to end Royal Mail’s special status and is preparing to recommend that the Treasury introduce a 5 per cent VAT rate for all postal companies.

Nigel Stapleton looks slightly too large for his modest office in a civil service building behind Waterloo station.

The government-issue chairs are hardly commodious, the walls are a little thin and his salary is distinctly public sector at {GBP}76,500 a year for his three-day a week job as chairman of the Postal Services Commission.

It cannot be what he is used to after a career in the more lavish corporate world. But he is excited by his new job, which he began in January, and talks enthusiastically about the intellectual challenge of regulating the postal industry, the chance to use the economics he learnt at Cambridge and his desire to be of service to customers.