Royal Mail is fined £1.5m for failing to deliver 93% of first class post within one working day of it being collected

• The company missed its target for 2018/19, with only 91.5% delivered on time
• Ofcom issued the fine as the group did not provide 'a satisfactory explanation'
• Royal Mail also 'did not take sufficient steps to get back on track during the year'
• The group said it was on course to meet the target prior to the Covid pandemic 

Royal Mail has been fined £1.5 million by Ofcom after failing to deliver at least 93 per cent of first-class post across the UK within one working day of it being collected.

The communications regulator said Royal Mail missed its target in the financial year ending in 2019, with only 91.5 per cent of first-class post reaching its destination on time.

The company did, however, meet its obligations the following financial year. 

The watchdog said it handed the hefty fine as the group did not provide a 'satisfactory explanation and it did not take sufficient steps to get back on track during the year'.

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Royal Mail has been fined £1.5 million by Ofcom after failing to deliver at least 93 per cent of first-class post across the UK within one working day of it being collected

Ofcom is responsible for ensuring a universal postal service is provided under the Postal Services Act 2011. 

In March 2012 it designated Royal Mail as the universal service provider in the UK and imposed a number of Designated universal service provider (DUSP) conditions.

Failure to meet these, which include performance targets, can result in fines. 

Royal Mail said it is 'disappointed' with its first-class postal service for the 2018-19 year and 'accepts and understands' the decision by Ofcom.

In a statement, it added: 'We worked hard to restore our service quality in 2019-20 and, were it not for the pandemic and its impact on our business in the latter half of March, we were on course to deliver the requisite first-class regulated quality of service target of 93 per cent.

'Despite our best endeavours, some areas of the UK experienced a reduction in service levels during March.'The regulator also fined Royal Mail £100,000 for overcharging customers for second-class stamps for seven days in March last year.

Royal Mail increased its price for second-class stamps to 61p on March 25 2019, overcharging customers for seven days until the cap increased from 60p on April 1.

The company said it predicts that the move saw customers overcharged by around £60,000, which it is unable to refund.

'We accept and note Ofcom's decision around the 2019 second-class price cap. We made a mistake,' Royal Mail said.

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A Royal Mail postman empties a postbox in Glasgow during the coronavirus crisis on April 1

'At the time, we sought to put this error right by publicly acknowledging our mistake.'

Gaucho Rasmussen, Ofcom's director of investigations and enforcement, said: 'Many people depend on postal services, and our rules are there to ensure they get a good service, at an affordable price.

'Royal Mail let its customers down, and these fines should serve as a reminder that we'll take action when companies fall short.'

Royal Mail revealed last month it is cutting 2,000 jobs as it announced a management overhaul to help slash costs in the face of the coronavirus crisis.

The postal service said the restructuring plans will see it save £130million in staffing costs next year as it reported a 31 per cent fall in annual profits. 

Royal Mail is also cutting £300million in spending over the next two years. It has 9,700 managers, with senior executive and non-operational roles to be hardest hit. 

It came just weeks after the group's chief executive Rico Back quit following two years in charge and major battles with unions over a £1.8billion restructuring plan.