Ofcom fines Royal Mail £10.5m for poor delivery performance

[Mr Rush]

Why is the fine to be met in full from "the public purse" and not the company, its executives and directors and/or its shareholders?

To address the latter half: RM is a Public Limited Company. Their investors have limited liability from legal action taken against the company. Thus, the fine comes out of RM's assets and not those of individual shareholders.

[Basildon Bond]

Offcom in cahoots with Royal Mail,as corrupt as they come that lot

If they were then why fine them £10.5m, when it's hardly a small, slap on the wrist type, fine?

Well it's kind of a slap fine - depends what your financial pain threshold is. I don't think it will really hurt RM enough for them to change their ways.

My maths may be off, but...

Broadly speaking, RM's revenue was something like £1.2 billion last year and the fine is £10.5 million. So that's 0.08% ish of the revenue. For every tenner in your wallet you are fined 82 pence. So, the equivalent would be if someone on £30,000 per year (net, but before considering all bills and living expenses) being fined roughly £2,484. If someone on £30k got a bill for £2.5k it wouldn't be insignificant, but if that person is determined to not change their ways it probably is not enough of a deterrent not to do it again. Ofcom saying that the board must resign and forfeiting any and all shares that person holds (and transferred in the past twelve months) if things do not improve would be, IMHO, a much greater threat than what appears to the "man on the street" as a "large" fine.

And one may be able to argue that a £10.5M fine "looks good" - good spin on the fresh monies to the government for pot holes etc. and a nice little warning shot. However, all privately arranged in advance so RM isn't caught off guard.

[Londonsburning]

Offcom in cahoots with Royal Mail,as corrupt as they come that lot

If they were then why fine them £10.5m, when it's hardly a small, slap on the wrist type, fine?

Well it's kind of a slap fine - depends what your financial pain threshold is. I don't think it will really hurt RM enough for them to change their ways.

My maths may be off, but...

Broadly speaking, RM's revenue was something like £1.2 billion last year and the fine is £10.5 million. So that's 0.08% ish of the revenue. For every tenner in your wallet you are fined 82 pence. So, the equivalent would be if someone on £30,000 per year (net, but before considering all bills and living expenses) being fined roughly £2,484. If someone on £30k got a bill for £2.5k it wouldn't be insignificant, but if that person is determined to not change their ways it probably is not enough of a deterrent not to do it again. Ofcom saying that the board must resign and forfeiting any and all shares that person holds (and transferred in the past twelve months) if things do not improve would be, IMHO, a much greater threat than what appears to the "man on the street" as a "large" fine.

And one may be able to argue that a £10.5M fine "looks good" - good spin on the fresh monies to the government for pot holes etc. and a nice little warning shot. However, all privately arranged in advance so RM isn't caught off guard.

It's 8 pence per tenner their wallet not 82 and equally £250 per £30,000. Insignificant as f**k to Royal mail in reality

[DaveF14]

Why is Royal Mail failing?

Weak management not dealing with work shy, lets play the mental health card, call in sick weekly, drag their heals, cry because its busy, individuals that get away with it time and time again.

Bring back job and knock. Years ago offices cleared because their was an incentive to knuckle down and get the job done. All you hear now is moan after moan, im only working to my time. Sky magazines, BT phone bills, weekly bulk postings. Head down and get it done. It was tougher back then and we got it done.

Job and knock gets stopped. The quicker postie comes back and gets told to take Mr slow 'lets walk backwards todays' mail. Guess what, no why should I, I will slow down to crawling pace too. Years later and its spiralled to a majority work force going slower than your 85 year old granny on a bad day.

Bring back job and knock.

[Londonsburning]

Why is Royal Mail failing?

Weak management not dealing with work shy, lets play the mental health card, call in sick weekly, drag their heals, cry because its busy, individuals that get away with it time and time again.

Bring back job and knock. Years ago offices cleared because their was an incentive to knuckle down and get the job done. All you hear now is moan after moan, im only working to my time. Sky magazines, BT phone bills, weekly bulk postings. Head down and get it done. It was tougher back then and we got it done.

Job and knock gets stopped. The quicker postie comes back and gets told to take Mr slow 'lets walk backwards todays' mail. Guess what, no why should I, I will slow down to crawling pace too. Years later and its spiralled to a majority work force going slower than your 85 year old granny on a bad day.

Bring back job and knock.

I remember them days, we wasn't lumbered with a partner on a van share started 3 hours earlier and had half as many calls on our singleton walking duties. Jobs snafu now unfortunately

[postslippete]

Well it's kind of a slap fine - depends what your financial pain threshold is. I don't think it will really hurt RM enough for them to change their ways.

My maths may be off, but...

Broadly speaking, RM's revenue was something like £1.2 billion last year and the fine is £10.5 million. So that's 0.08% ish of the revenue. For every tenner in your wallet you are fined 82 pence. So, the equivalent would be if someone on £30,000 per year (net, but before considering all bills and living expenses) being fined roughly £2,484. If someone on £30k got a bill for £2.5k it wouldn't be insignificant, but if that person is determined to not change their ways it probably is not enough of a deterrent not to do it again. Ofcom saying that the board must resign and forfeiting any and all shares that person holds (and transferred in the past twelve months) if things do not improve would be, IMHO, a much greater threat than what appears to the "man on the street" as a "large" fine.

And one may be able to argue that a £10.5M fine "looks good" - good spin on the fresh monies to the government for pot holes etc. and a nice little warning shot. However, all privately arranged in advance so RM isn't caught off guard.

The revenue for IDS to March 2024 was indeed over £1.2 billion, of which £7,834 million consisted of RM revenues.

And I agree with you if the people in charge were held to account, instead of the company, then that would hold a much greater threat for them to pull their socks up. IDS instead have asked shareholders to approve hiking Martin Seidenberg's pay by £300k so he would take home just over £3 million - twice what he earned last year. This comes off the back of Seidenberg potentially earning £5 million in share sales from the deal. There needs to be a way to stop millions being paid to bosses for failure and prevent them laughing all the way to the (Czech) bank.

As it stands the fine simply represent the costs of doing business and Ofcom have already produced reports which suggests how the universal service could be reformed and how much RM would stand to gain financially from it. Does anyone really believe that delivering mail every other day will substantially improve our quality of service if it is designed to reduce the net cost of the universal service by up to £300 million a year?? The better, more practical solution imho is to get government approval for a 5 day USO and ensure that the company improves its quality of service over 5 days instead of 6. The savings that RM would make from having just one day off the universal service would be invested to ensure that duties are achievable over 5 days instead of allowing RM to fail duties to make bigger profits.

Our business has always been profitable; it is just that they are good at manipulating the accounts to show losses because they desperately want rid of the universal service. There are many ways that IDS are doing this but what I look at is the group's overall balance sheet and while I agree with change, from what I've seen this is not an ailing business.

[goneaway]

Ofcom passes fine in full TO the public purse

Oh, I misread OFCOM's press release. Although it is poorly worded and can be read both ways. Apologies for causing any confusion.

[TopperGas]

Well it's kind of a slap fine - depends what your financial pain threshold is. I don't think it will really hurt RM enough for them to change their ways.

My maths may be off, but...

Broadly speaking, RM's revenue was something like £1.2 billion last year and the fine is £10.5 million. So that's 0.08% ish of the revenue. For every tenner in your wallet you are fined 82 pence. So, the equivalent would be if someone on £30,000 per year (net, but before considering all bills and living expenses) being fined roughly £2,484. If someone on £30k got a bill for £2.5k it wouldn't be insignificant, but if that person is determined to not change their ways it probably is not enough of a deterrent not to do it again. Ofcom saying that the board must resign and forfeiting any and all shares that person holds (and transferred in the past twelve months) if things do not improve would be, IMHO, a much greater threat than what appears to the "man on the street" as a "large" fine.

And one may be able to argue that a £10.5M fine "looks good" - good spin on the fresh monies to the government for pot holes etc. and a nice little warning shot. However, all privately arranged in advance so RM isn't caught off guard.

The revenue for IDS to March 2024 was indeed over £1.2 billion, of which £7,834 million consisted of RM revenues.

And I agree with you if the people in charge were held to account, instead of the company, then that would hold a much greater threat for them to pull their socks up. IDS instead have asked shareholders to approve hiking Martin Seidenberg's pay by £300k so he would take home just over £3 million - twice what he earned last year. This comes off the back of Seidenberg potentially earning £5 million in share sales from the deal. There needs to be a way to stop millions being paid to bosses for failure and prevent them laughing all the way to the (Czech) bank.

As it stands the fine simply represent the costs of doing business and Ofcom have already produced reports which suggests how the universal service could be reformed and how much RM would stand to gain financially from it. Does anyone really believe that delivering mail every other day will substantially improve our quality of service if it is designed to reduce the net cost of the universal service by up to £300 million a year?? The better, more practical solution imho is to get government approval for a 5 day USO and ensure that the company improves its quality of service over 5 days instead of 6. The savings that RM would make from having just one day off the universal service would be invested to ensure that duties are achievable over 5 days instead of allowing RM to fail duties to make bigger profits.

Our business has always been profitable; it is just that they are good at manipulating the accounts to show losses because they desperately want rid of the universal service. There are many ways that IDS are doing this but what I look at is the group's overall balance sheet and while I agree with change, from what I've seen this is not an ailing business.

If we're only delivering 75% of 1c daily on time now just how bad will it be if the proposed USO reforms are introduced, which seems likely from the latest CWU update, when it's being done on alternative days by the DPR drivers, as what are they going to concentrate on, Tracked or 1c, if they are struggling to complete their duties?

It's surprising Labour seem to be just sitting back and doing nothing, particularly after the hard time Daniel Jones gave Thompson at the PC hearings.

[Mr Rush]

Ofcom passes fine in full TO the public purse

Oh, I misread OFCOM's press release. Although it is poorly worded and can be read both ways. Apologies for causing any confusion.

It is poorly worded. That's the Office of Communications for you. The passive voice creates ambiguity, so it reads as if the responsibility for payment will be passed rather than the proceeds. Actively it should read "Royal Mail (subject) will pass (verb) £10.5m (object) to HM Treasury (dative)".

[scoobydo79]

RM knew this was coming. That’s why they increased the price of stamps and are putting in S h1t revisions. It’s already paid for and then some

[GizzardPuke]

How many posties can you employ for £10.5 million?
At £35,000 each (rough figure to make the maths easier) that's 300. Across the whole country.

It'll take a few thousand extra posties to get everything delivered daily. Until the fines get above £50 million RM will just laugh it off.