RM application for relief from financial impact of IA

[POSTMAN]

Royal Mail’s application for relief from financial impact of industrial action – final decision issued



Wednesday 29 September, 2010



Postcomm today announced that it has decided to accept in full Royal Mail’s application for relief from the financial impact of failure to meet quality of service targets as a result of industrial action during 2009-10. Royal Mail will therefore not be required to pay compensation to bulk mail customers of £37.2m or to forego ‘allowed revenue’ of £49.2m in 2010-11.



Postcomm considers that there is strong evidence to support Royal Mail’s claim that the extensive industrial action which occurred in 2009-10 was a direct result of the company’s ongoing transformation of its business. This process of transformation has been identified by Royal Mail, Postcomm, the Hooper Review and Government as essential and urgent to safeguard the provision of the universal service in the UK. Postcomm’s primary duty is to safeguard the universal service. In making this decision Postcomm has therefore been mindful of the financial impact that compensation and forgoing revenue would have on Royal Mail’s financial position and its ability to finance its activities, including the universal service.



Postcomm acknowledges Royal Mail’s implementation of improved contingency arrangements and customer communications since previous industrial action took place in 2007-08, as well as the improvements for customers that have resulted from modernisation work to date. Postcomm welcomed Royal Mail’s commitment to fully take into account quality of service failings on the payment of bonuses.



Postcomm has considered all the representations submitted by interested parties who argued that the application should be rejected in whole or in part. Having regard to its duties, Postcomm considers that the interests of mail users are best served by accepting Royal Mail’s application and supporting the ongoing transformation of Royal Mail’s business.



Royal Mail’s application for relief from financial impact of industrial action – final decision



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Louise Nosworthy

Associate, Business Support

Postcomm - the independent regulator for postal services

Hercules House

6 Hercules Road

London

SE1 7DB

[bensonhedge]

a goodie..we might get a bonus

[plainpat]

Given their attitude and fines on RM in the past, this is either an extremely generous decision by Postcomm..

or maybe an admission that if they had gone against RM on this it might have been the straw that broke the camels back financially......?

[fishtank]

Given their attitude and fines on RM in the past, this is either an extremely generous decision by Postcom..

or maybe an admission that if they had gone against RM on this it might have been the straw that broke the camels back financially......?

If you consider that all of Postcomm's funding comes from Royal Mail it's a bit of a no-brainer.
You don't kill the golden goose etc.

[plainpat]

Given their attitude and fines on RM in the past, this is either an extremely generous decision by Postcom..

or maybe an admission that if they had gone against RM on this it might have been the straw that broke the camels back financially......?

If you consider that all of Postcomm's funding comes from Royal Mail it's a bit of a no-brainer.
You don't kill the golden goose etc.

Eh? Postcomm is a non - ministerial government department. Where does "all of Postcomm's funding comes from Royal Mail" come from?

[fishtank]

Eh? Postcomm is a non - ministerial government department. Where does "all of Postcomm's funding comes from Royal Mail" come from?

Their own accounts plainpat. http://www.psc.gov.uk/documents/975.pdf" onclick="window.open(this.href);return false;

Management Commentary
Income
In 2009-10 operating income of £7.993m was received, primarily from the Royal Mail Group. Details of income received can be found in Note 9 to the Resource Accounts. An additional £3.671m was collected from the Royal Mail Group on behalf of the Department for Business, Innovation and Skills (BIS) in respect of the costs of Consumer Focus, including its Consumer Focus and Postwatch legacy net property costs. This was subsequently transferred to the Department.

[fishtank]

Do you want another interesting fact...

Non-Executive Commissioners are on fixed term appointments. Appointments and remuneration are set by the Secretary of State for Business, Innovation and Skills after consulting the Chairman. Their remuneration is currently set at £22,824 per annum for 3 days per month.

Yes that is £22,824...for 3 days work per month.....or £634 per day.

[plainpat]

Point taken FT

I thought you were saying RM funded them directly, but of course their income comes from Licence Fees, which is indeed mainly paid by RM.