The Royal Mail is facing the prospect of a multi-million-pound fine after missing delivery targets in the three months to June.

The industry's regulator Postcomm warned the figures, described as "appalling", could result in a financial penalty.

Just 88.3 per cent of first class letters were delivered on time between April and June against a target of 92.5 per cent.

The Communication Workers Union said the figures made "grim reading" and accused the Royal Mail of cutting too many jobs.

The Royal Mail is paying a record £50 million in compensation for late delivery of post.

The compensation followed disruption to the service last year when deliveries were hit by industrial action.

The Royal Mail missed all 15 of its targets during the three months to June but said it had since met four of them.

Changes to single delivery of mail were blamed by managers.

Adam Crozier, chief executive of the Royal Mail, who took personal day-to-day control of the letters business in May, said there was "real evidence" the service was getting better.

He said: "Clearly there were some problems in the spring but the service has improved, month-on-month, since May and we are now approaching our target level for first class mail."

Peter Carr, chairman of Postwatch, said the figures could not get much worse.

Deliveries over the quarter were the poorest for three years and meant that more than 1.7 million first class letters were not delivered on time in April, May and June, he said.

Wednesday September 01, 2004