Financial implications of quality of service failure due to industrial action – 2008-09
On the 28 May 2008, Royal Mail asked Postcomm if it could suspend its bulk compensation scheme and adjust the C-factor for another year. These arrangements were first made for 2007/08 because industrial action made it difficult for Royal Mail to meet its quality of service targets, which would have triggered compensation payments to bulk mailers and reductions in future revenue. It now wants to repeat the scheme in 2008/09.
A consultation letter is seeking stakeholders' views on Royal Mail’s request, which was made on the basis that there may be further industrial action in the future. Stakeholders are invited to respond to the letter by the 27 June 2008. We expect to make a decision by the end of July 2008.
Notes for editors:
- As well as being liable for compensation payments, poor quality of service affects Royal Mail’s income for the following year under a section of Postcomm’s price control known as the ‘C’ factor. For 2007/08 Royal Mail estimated that if the bulk mail compensation scheme was not suspended it could have cost the company £300 million.
Related Documents:
- Consultation letter (pdf, 33KB)
Related links:
- 28 May 2008- news release
- Postcomm consults on repeating the suspension of Royal Mail's compensation scheme and adjustment to the 'C' factor to 2008-09
- 1 May 2008 - news release
- Royal Mail submits its case on quality of service failures in 2007/08
- 15 April 2008- news release
- Royal Mail to present its case on quality of service failings at open meeting
- 26 June 2007 - news release
- Royal Mail's request to suspend bulk mail compensation during industrial action
