Royal Mail CEO accused of ‘incompetence or cluelessness’ by MPs

Royal Mail CEO accused of ‘incompetence or cluelessness’ by MPs

17 Mar    Finance News, News

The chief executive of Royal Mail has been accused of “incompetence or cluelessness” by MPs calling on the regulator Ofcom to investigate whether the company broke legal service requirements.

Parliament’s cross-party business, energy and industrial strategy (BEIS) committee has asked the watchdog to investigate a suspected breach of the universal service obligation (USO), which requires the postal operator to deliver letters nationwide six days a week.

MPs have accused Royal Mail of prioritising parcels over letters and claimed on Friday the company had “systemically failed to deliver” parts of its obligations.

Royal Mail’s chief executive, Simon Thompson, gave evidence to the committee in January but, in an unusual move, was recalled last month after he was accused of giving an inaccurate testimony.

Thompson then admitted digital tracking devices carried by postal workers were used to pressure them to work faster, and blamed rogue managers for using the information in breach of company policy.

The chair of the committee, Darren Jones, said that, after the first hearing, he had received almost 1,500 communications, with evidence that showed tracking information from postal digital assistants (PDA) carried by workers was “100% being used” to discipline and performance-manage staff. Thompson has argued that the devices are used to “balance the workload evenly across the whole of the team”.

Jones said: “I find it hard to believe that such widespread breaches of company policy and legal obligations are down to a national network of rogue workers conspiring against management at Royal Mail.”

The Labour MP said the committee had been “inundated” with evidence “challenging the accuracy of answers” given by Thompson. “Frankly, the failures in company policy which Mr Thompson has admitted to can only be due to either an unacceptable level of incompetence or an unacceptable level of cluelessness about what is happening at Royal Mail,” he said.

In a report by the committee, MPs noted Royal Mail had failed to hit first-class delivery targets every year since 2017. The company’s “USO performance has definitely not been good enough”, Thompson told MPs.

Relations between Royal Mail executives and its workforce have been strained during a months-long dispute over pay and working conditions that has led to strikes. Talks with the Communication Workers Union, which represents about 115,000 postal workers, continue.

Royal Mail has threatened to separate its domestic and international businesses if “significant operational change” cannot be agreed with the unions.

The company also suffered a ransomware attack that crippled its deliveries from the UK to other countries. It refused to pay an $80m (£67m) ransom sought by hackers linked to Russia afterwards.

A spokesperson for the company said: “Royal Mail is proud to deliver the universal service, and our policies are clear that parcels and letters should be treated with equal importance. We have informed the committee that we will be reviewing the consistent application of our policies regarding the delivery of letters and parcels across the business.”

The company said it would share the findings of the review with Ofcom and rejected the suggestion MPs were misled.

An Ofcom spokesperson said: “Royal Mail’s recent performance is clearly well short of where it should be. We’re very concerned about this and have asked the company to explain what it’s doing to bring service levels back up as a matter of urgency.”

Ofcom said it assesses Royal Mail’s performance for the previous 12 months each April and added that the regulator would not “hesitate to take enforcement action if required”.

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