The wheels are coming off the Royal Mail. New Ofcom data, leaked late last night, reveals the service delivered only 74% of first class post on time for the financial year to March. Their target is 93%. That is not a miss. It is a collapse.
Whispers from the boardroom suggest Chief Executive Simon Thompson is clinging on by his fingertips. One senior source told me: 'The mood is grim. Investors are rattled. Ministers are livid.'
Ofcom is not bluffing. They have already slapped the company with a £5.6m fine over missed targets in 2022. Now they are threatening 'further regulatory action' – read: a referral to the Competition and Markets Authority, or even the nuclear option of stripping the universal service obligation. That would be seismic.
For context: the universal service obliges Royal Mail to deliver letters to every UK address six days a week. It is the foundation stone of the company's existence. Lose that, and the business model fractures.
The political fallout is intensifying. No 10 is watching closely. The Business Secretary has demanded an urgent meeting with Thompson. Labour is piling on, with Shadow Business Secretary Jonathan Reynolds calling it 'an indictment of years of mismanagement'.
But here is the dirty secret Whitehall won't say aloud. The universal service is a loss-making dinosaur. 20 billion letters were sent in 2004. Today, it is 7 billion. Yet the Tories are terrified of being seen to 'abandon the postie'. Labour is equally cagey. So everyone kicks the can.
The question now: how long can Thompson survive? The board is restive. Major shareholders are asking pointed questions. And the regulator? They are loading the gun.
Watch this space. The next 48 hours will be brutal.
