Blair failed to halt 'flawed' Horizon rollout despite warnings
Former Prime Minister Tony Blair failed to stop the flawed Horizon software rollout despite warnings, leading to devastating consequences for over 900 sub-postmasters, inquiry heard.
Sir Tony Blair failed to put a brake on the Horizon rollout although the former prime minister had been warned the Post Office IT software was flawed, the inquiry heard on Wednesday (13).
In a witness statement, Lord Mandelson, who served as business secretary in Sir Tony’s cabinet, said the “integrity of the new system itself” was not “called into question” ahead of the 1999 rollout of the software. The Labour peer’s account comes 10 months after the public inquiry into the scandal was shown a note drafted by Geoff Mulgan, special adviser at Downing Street, and sent to the then prime minister in December 1988, which described the system as “increasingly flawed”.
Sir Tony jotted a handwritten note on the document itself, asking for a “clear view” on its reliability.
On Wednesday, the final hearing of the last phase of the Post Office inquiry took place and 80 additional witness statements were published – including Lord Mandelson’s. In his witness statement to the inquiry, the Labour peer wrote, “Concerning the integrity of the new system itself, this was not called into question.
“The external review’s findings were accepted both within my department and in No 10, albeit with some conditionality.”
He added: “The recommendation to confirm the Horizon system was made to the Prime Minister and the final decision was his. I do not remember No 10 putting a brake on the programme at any stage.”
By 1998 the Horizon project, which was launched under John Major’s government, had been running more than two years behind schedule. As a result, the project was referred to Sir Tony to decide if it should continue. In his own witness statement submitted to the inquiry, the former prime minister said he was unable to recall some details of the period.
However, he wrote: “I have learnt that it is crucial to obtain advice from experts with deep experience in the field who can provide the necessary assurance. As I have explained, I sought and obtained assurances as to the reliability of the product being developed.
“It is now clear that the Horizon product was seriously flawed, leading to tragic and completely unacceptable consequences, and I have deep sympathy with those affected.”
More than 900 sub-postmasters were wrongfully prosecuted as a result of the Horizon scandal, which saw the faulty software incorrectly record shortfalls on their accounts.
New figures released today (13 January) reveal that for the first time on record, cash withdrawals at post offices exceeded £1 billion in a single month.
Post Office branches saw £979 million worth of personal cash withdrawals over the counter in December and £35 million worth of business cash withdrawals.
The previous record high was set in December 2023 when a total of £962.8 million worth of personal and business cash withdrawals were made.
In total, £3.7 billion worth of cash deposits and withdrawals too place across the counter at post offices in December. This compares with £3.53 billion in November.
Personal cash and business cash deposits totalled £2.69 billion in December up over 11 per cent year-on-year (£2.42 billion, December 2024).
Personal cash deposits totalled £1.53 billion, up 5 per cent month-on-month (£1.45 billion, November 2024) and up almost 16 per cent year-on-year (£1.32 billion, December 2023).
Business cash deposits totalled £1.17 billion, up 3.8 per cent month-on-month (£1.12 billion, November 2024) and up 6 per cent year-on-year (£1.10 billion, December 2023).
On Christmas Day itself, over £3.7 million in cash was withdrawn or deposited over the counter at 1,300 Post Office branches that were open.
“Our figures demonstrate that millions of people clearly still rely on cash to manage their budget on a day-to-day basis. We saw significant amounts of cash withdrawn every day in the run up to Christmas Day, highlighting just how vital it is for people to be able to withdraw the amount of cash that they need, to the penny if they require, at our branches,” Ross Borkett, Post Office banking director, said.
“It’s testament to the hard work of postmasters and their staff that over a billion pounds was withdrawn over the counter in a single month. They keep their branches open long hours, with many open at weekends. We know that where cash is withdrawn locally it tends to be spent locally, demonstrating the vital role postmasters play in keeping local high streets going and attracting footfall which benefits other nearby retailers too.”
One of the victims of the UK’s infamous Post Office Horizon scandal, Christopher Head OBE, has called on the government to urgently address issues with the redress schemes set up to compensate those affected.
In a letter dated today (7), Head has called on to Minister Gareth Thomas and Secretary of State Jonathan Reynolds to take concrete corrective actions at the earliest, detailing the "unfairness" and inconsistencies plaguing the schemes administered by the Post Office and the Department for Business and Trade (DBT).
This marks a follow-up to a previous letter sent in November 2024, which, according to Head, remains unacknowledged. His latest correspondence highlights delays, adversarial processes, and the mental toll on victims.
In the letter shared on X, Head expressed grave concerns about the "Fixed Sum Awards" system, which offers £75,000 or £600,000 compensation, depending on the scheme. He revealed that some claimants are opting to accept these amounts despite evidence suggesting their claims could be valued much higher.
He writes, "Only yesterday I received yet another email from a claimant I have been assisting for many months in the HSS scheme, who due to anxiety, stress and mental health problems is opting to accept the Fixed Sum Award of £75,000 even though I have advised it is likely from a legal perspective her claim is valued at a much higher level."
Head also warned that the rigid nature of these awards risks undermining the government’s promise of "full and fair redress." Inquiry Chair Sir Wyn Williams had previously raised concerns that fixed awards might be "lost forever" if claimants pursued a full assessment route.
Head criticized the absence of accessible legal support for claimants, many of whom cannot afford the necessary advice. He argued that victims should not bear the financial burden of a scandal caused by institutional failings.
He writes, "Post Office may have caused the original harm, but the harm is being further exasperated by the redress processes. If someone can clearly demonstrate they have a claim that exceeds £75,000, they should be able to receive this amount immediately under the current guidance and then advance a claim for the outstanding balance, which relieves the financial worries they may have and making the remaining process more tolerable."
Head highlighted disparities in how interest calculations on losses are handled across different redress schemes, describing the process as inconsistent and unfair. Using his own case as an example, he noted a significant difference between what he was offered and what he should have received under the methodology applied in other schemes.
“The approach is not consistent, which means we have further unfairness,” he wrote, adding that an independent oversight committee could help ensure fairness and consistency.
Head proposed specific reforms, including removing the “legally binding” stipulation on second-panel assessments in the Group Litigation Order (GLO) scheme. He also urged the government to give final reviewer Sir Ross Cranston a broader remit to resolve disputes earlier in the process.
He concluded by criticizing what he described as a "damage limitation and PR exercise" by Whitehall, rather than a genuine effort to deliver full redress.
Head urged ministers to act swiftly to prevent further harm to victims and ensure the redress process meets its promises.
"The overarching aim of every scheme should be fairness, consistency and benefit of doubt towards the Sub-Postmaster, Postmistress, employees or family members," he states.
Head recently received OBE for services to justice alongside fellow Post Office scandal victims Lee Castleton, Seema Misra and Jo Hamilton. Head stated that despite the OBE being a "huge honour", it was a "double-edged sword" as he, with many others, had not received full redress.
He was falsely accused of stealing more than £80,000 from his branch in West Boldon in 2006 before the criminal case against him was dropped. Head, who became the youngest sub postmaster at the age of 18 when he took over the West Boldon Branch, was then pursued by the Post Office through the civil courts.
The Post Office Horizon scandal saw more than 900 sub postmasters being prosecuted between 1999 and 2015 after faulty Horizon accounting software made it appear that money was missing from their accounts.
Hundreds are still awaiting compensation despite the previous Conservative government announcing that those who have had convictions quashed are eligible for £600,000 payouts.
An anonymous group consisting of current and former employees of the Post Office and Royal Mail have called on the Forfeiture Committee to remove of honours awarded to 14 individuals who are connected to the Post Office Horizon scandal.
The 14 names mentioned by the group includes former ministers, civil servants, and Post Office and Royal Mail bosses such as Vince Cable KCB, Ed Davey KCB, Jo Swinson CBE, Donald Brydon CBE, Moya Green DBE, Alan Cook CBE and Alwen Lyons OBE.
The group has written to the committee listing the names of individuals who it said “owned, oversaw, governed and ran the Post Office” during the scandal, Computer Weekly reported.
The letter, as seen by Computer Weekly, stated, “We are deeply concerned by the testimony given under or to the inquiry, particularly during phases five and seven which has revealed beyond any doubt the incompetence, negligence, restlessness, ethical corruption and wilful blindness (‘not me guv’ attitude) of certain individuals at the heart of Whitehall, all of whom have been bestowed with honours.
“There can be no better an example of rewards for failure than those who owned, oversaw, governed and ran the Post Office – a taxpayer-funded organisation – and have received honours for their public or related service.
“The Forfeiture Committee, therefore, does not need to wait to consider stripping honours from those other senior individuals responsible for the scandal who have blatantly contravened a range of governance and conduct codes, legal and fiduciary duties at the Nolan principles.
"Their abject behaviour or failure to act in accordance with these standards has brought the honours systems into disrepute.”
This comes a day after the release of a damning report by Commons MPs on the progress of compensation of Post Office Horizon scandal victims.
In the report by the Business and Trade Committee (BTC), MPs have called for the government to be fined if it fails to provide redress quickly enough to victims of the Horizon software scandal.
MPs have called on to introduce new legally enforceable time limits for each stage of claim processing.
The process of seeking compensation is "akin to a second trial for victims", the committee chair Liam Byrne said.
It is "imperative" applicants receive upfront legal advice paid for by scheme operators rather than applicants, the committee's report said, as evidence given by claimants' solicitors said when they get legal advice, their financial redress offers double.
More than 700 sub-postmasters across the UK were wrongfully prosecuted by the Post Office for theft and false accounting using the Horizon software made by Fujitsu which incorrectly generated shortfalls in branches.
Many more incurred large debts, lost homes, experienced relationship breakdown, became unwell in an effort to repay the imagined shortfalls and some took their own lives.
Commons Business and Trade Committee has called for legally binding timeframes on Government at each stage of processing claims under the Horizon Convictions Redress Scheme, backed by financial penalties awarded to the claimant if the deadlines are missed.
As mentioned in the report titled "Post Office and Horizon scandal redress: Unfinished business" released by Commons Business and Trade Committee on Wednesday (1), just £499 million of the £1.8 billion set aside for financial redress has been paid out across the four redress schemes, with 72 per cent of the budget for redress still not paid.
In the case of the Horizon Shortfall Scheme, 14 per cent of those who applied before the original 2020 deadline have still not settled their claims.
The Committee found that the “schemes are so poorly designed that the application process is akin to a second trial for victims” with an excessive burden placed on claimants to answer complex requests for information about their losses in the scandal, and delays processing those requests and disclosures back from the Post Office.
On the scheme administrators’ side, legal advice has been extensive and costly. To date, Post Office Ltd has spent £136 million on legal fees relating to the redress schemes, including £82 million to just one firm, Herbert Smith Freehills, for services including their legal advice on the HSS and Overturned Convictions Scheme.
Victims however have been offered no legal advice up-front in submitting their claims, despite being required to grapple complex legal concepts about the amount of redress they were owed.
The committee also mentioned that many years had passed and the victims no longer had access to the financial records of where Horizon’s systemic errors had occurred. The Committee says it is “imperative” now that claimants are offered legal advice up front, at no cost to themselves but paid for by the scheme administrators.
Chair of the BTC Rt Hon Liam Byrne MP said, “Years on from the biggest miscarriage of justice in British legal history, thousands of Post Office Horizon victims still don’t have the redress to which they’re entitled for the shatter and ruin of their lives.
“Ours is a nation that believes in fair play and the rule of law. Yet victims told us that seeking the redress to which they’re entitled is akin to a second trial. Payments are so slow that people are dying before they get justice. But the lawyers are walking away with millions.
“This is quite simply, wrong, wrong, wrong.
"The government has made important steps forward. Almost half a billion pounds of redress payments are now out the door, the budget has gone up to being fully funded and the Post Office was ordered to write to everyone who might be owed something for what happened to them.
“But we can’t go on like this. Justice delayed is justice denied. So today, we’re setting out a practical, common-sense plan to reboot the redress system.
“Victims should have upfront legal advice to help make sure they get what’s fair. We need hard deadlines for government lawyers to approve the claims with financial penalties for taking too long. Crucially, we need the Post Office, which caused this scandal in the first place, taken out of the picture.”
The Committee calls on Government to remove the Post Office from administering any of the redress schemes and to introduce binding timeframes for scheme administrators at each individual stage of each scheme, with financial penalties passed on to the claimant if these deadlines are not met.
The MPs have also asked the Government to appoint an independent adjudicator for each scheme and empower them to provide directions and case management to ensure claimants move through the process swiftly.
The Government is also called on to provide clear, strong instructions to taxpayer-funded lawyers to maximise the speed of redress, eliminate legal delays, enhance the benefit of doubt given to claimants, and publish the costs spent on lawyers for the public and Parliament to see.
Westcotes postmaster, Hemandra Hindocha, has been recognised by the King for services to his Leicester community and other postmasters.
Better known as “H” by customers, he has been at the heart of his Westcotes community for nearly 38 years after initially starting his postmaster career in Northampton, for five years.
The long-serving postmaster, who has served people in the Midlands for 43 years, has been awarded a British Empire Medal for the important difference he has made, including starting a support group for postmasters in the Midlands.
“H” was born in Uganda and had gone to university in India when his family had to flee Uganda in 1972 under Idi Amin’s rule. When he gained his degree in accountancy, he joined his family in the UK in 1973. His first postmaster role was at Northampton’s Regent Square Post Office until he moved to a bigger branch at Westcotes in 1988.
Soon after he set up a support group for postmasters in Midlands to help new or less experienced postmaster or those needing help to share knowledge and advice. It was also a social group for business people running Post Offices. Hemandra then also went on to Executive Office for Midlands for the National Federation of Subpostmasters.
Hemandra Hindocha and wife Kirti
“H” and his wife, Kirti, along with staff managed to keep Westcotes Post Office open throughout the pandemic to maintain vital services to the community.
He notched up 40 years’ service in 2021, and as soon as pandemic restrictions allowed he celebrate his achievement with a special Indian meal with 45 local postmasters and Post Office colleagues.
The 73-year-old has always considered the role of a being a postmaster as a “prestigious position” and maintains that it has been an honour to work for the Post Office.
“I was surprised and delighted to find out I had been named in the New Years’ Honour list. I still love coming to work every day, even on my days off,” Hindocha, said.
“I especially enjoy the rapport with my customers and understand the importance of building good relationships with them – they are like extended family. I have got to know several generations of the same family. People I served in my early days, many now have children and grandchildren.
Hemandra Hindocha and wife Kirti
Post Office area manager Ezra Nadasen said: “We want to sincerely thank “H” for running Westcotes Post Office for nearly 38 years and a branch in Northampton before that. He is a first-class postmaster who really cares about the community that he serves and also goes above and beyond for other postmasters, especially those who are new to the role or need advice. He is also held in high regards by other postmasters.”