PRIVATIZED
Royal Mail pays £26m to customers as complaints surge

James Warrington
Thu, 7 December 2023 

Royal Mail

Royal Mail paid £26m in compensation to customers last year amid rising complaints about the quality of its postal service.

The compensation, which is paid out when customers experience loss, damage or delay to letters and parcels, rose by 46pc compared to 2022.

The total number of complaints leading to compensation jumped 37pc to almost 1m, according to new figures from Ofcom, which found that the average amount paid rose by £1.76 to £26.93.

The figures highlight how a worsening service is adding to Royal Mail’s financial difficulties.

The company was hit with a record £5.6m fine by the regulator last month after it failed to deliver more than a quarter of first class post on time.

Royal Mail’s most recent quality of service reports show it remains significantly below targets, with the company blaming this on high levels of staff absence and vacancies.

However, in its report, Ofcom said: “We are concerned that Royal Mail’s performance has not shown any signs of improvement in recent months and are disappointed that it has been unable to provide us with a timeline for when its performance will improve.”

Royal Mail posted a £319m loss in the first half of the year, which was partly due to a pay deal struck with unions in April - SOPA Images/Getty Images Contributor

Martin Seidenberg, who took over as chief executive of Royal Mail owner International Distributions Service in the summer, has vowed to “pull out all the stops” to avoid disruption over Christmas.

Royal Mail has said posties will be paid a bonus of up to £500 if they meet delivery targets over the crucial festive period.

The company will also hire 16,000 seasonal workers and open five temporary sorting centres.

The downturn in delivery performance comes as Royal Mail attempts to stem deepening losses, which have been sparked by lengthy strike action and a decline in letter sending.

Royal Mail posted a £319m loss in the first half of the year, an increase of £100m compared to the same period in 2022.

This was partly due to a pay deal struck with unions in April, which saw workers handed a 10pc pay rise over three years and a one-off payment of £500.

But Royal Mail is also facing structural issues as fewer Britons send letters and as competition from couriers grows.

The Ofcom figures show that Royal Mail lost market share over the year, as parcel volumes were down almost 8pc on pre-pandemic levels, while letter volumes dropped by a quarter.

Royal Mail has called for a relaxation of its universal service obligation, which requires the company to deliver letters from Monday to Saturday.

Ofcom is currently reviewing the rules but any changes will ultimately require Government approval.

A Royal Mail spokesman said: “Royal Mail takes every complaint seriously. To some extent the compensation figures reflect the market trends of increased parcel volumes and lower letter volumes.

“As people send more parcels over letters - which may contain items of higher value - we are likely to see increased compensation figures.”