Parliament is to launch an inquiry into delays in compensation settlements for sub postmasters affected by the Horizon scandal.
The newly-formed Business and Trade Select Committee will call ministers, subpostmasters and their lawyers to give evidence next week with a second session to follow in mid-November. The Committee’s chair, Liam Byrne MP told ITV News that there was “definitely a delay” in people coming forward for payment.
“What we’re hearing from subpostmasters is that if there is an argument about how much should be paid out, the first offer is made quite quickly but if there’s a negotiation, that negotiation is dragging.
“We on the committee are going to batter away at this, week in, week out, until it is job done. All of us on our committee are frankly horrified and outraged by how long this has taken and we’re just not going to give up, ” he said.
Sir Alan Bates, the Post Office campaigner and chair of the Justice for Subpostmasters Alliance, is expected to be invited to give evidence. Earlier this month, Sir Alan states that his own claim had not been addressed and that he had written to prime minister Sir Keir Starmer asking for his intervention.
“Like many of the groups, my claim has not been completed. It’s ridiculous. I am one of just many in this position. This is why I wrote to the Prime Minister at the start of October, asking that he instruct the department to ensure that all claims – and I’m talking about in the GLO group, the original 555 – have been completed by March next year," he said.
This comes weeks after the Post Office's outgoing CEO agreed the government is using the company as a "shield" over compensation schemes. Nick Read, who resigned last month, was giving evidence at the Post Office Horizon IT Inquiry for the second day, with a focus on delays to victims' financial redress.
He also admitted that the compensation process has been "overly bureaucratic" and expressed "deep regret" that the Post Office had not lived up to delivering "speedy and fair redress".
In a major shake-up, Labour ministers are exploring plans to potentially transfer ownership of the Post Office to thousands of sub-postmasters across Britain.
The Department for Business and Trade has engaged management consultancy BCG to examine options for mutualising the 364-year-old institution. This could include an employee-owned mutual model, similar to that used by the John Lewis Partnership.
The Post Office is currently wholly owned by the state, with the public's shareholding managed by UK Government Investments (UKGI).
The exploration of new ownership models is seen as part of efforts to repair the Post Office's battered finances and reputation following public anger over the Horizon IT scandal, which saw hundreds of sub-postmasters wrongfully convicted of theft. Many affected sub-postmasters suffered ill health, marital breakdowns, or died before being exonerated.
The scandal has also prompted calls for a review of the Post Office's ownership model.
Andy Furey, a national officer at the CWU Union, stated, "There has to be a totally new operating model for the Post Office going forward to remain relevant for society."
A report from BCG is expected to be delivered to Business Secretary Jonathan Reynolds in the coming months, according to Sky News. BCG's work on mutualising the Post Office is expected to include assessing the viability of an employee-owned model.
Both Reynolds and Gareth Thomas, the minister overseeing the Post Office, are scheduled to give evidence to the public inquiry into the Horizon IT crisis next month. They may be questioned about the BCG project during their appearances.
Post Office executives changed data on the Horizon IT systems used by post office operators as recently as last year, it emerged during the public inquiry into the scandal on Wednesday (16).
In the recent hearings of Tracy Marshall, the retail engagement director at the Post Office, the inquiry was shown a letter from Calum Greenhow, the chief executive of the National Federation of Sub Postmasters (NFSP) and a post office operator for 22 years, written to the Post Office raising the issue in May last year.
Greenhow said in the letter addressed to Marshall, "It has come to my attention that [Post Office] personnel are visiting Postmasters, including audits where Area Managers/Auditors are entering stock values onto Horizon without either consultation or agreement with the postmaster."
"If these facts are correct, then the NFSP would like to know who has authorised this policy within [Post Office] and why it has not been discussed with the NFSP in advance?"
He added that in one case the post office operator “wasn’t even present”.
Marshall denied being part of this investigation but told the inquiry, "I wasn't specifically involved in investigating the issue. The reason I got the email is because, at the time, I was accountable for the relationship with the NFSP but the issue was investigated, yes.
"As a result of the investigation, I believe Post Office held its hands up and said, 'Absolutely, this shouldn't be happening' and, as a result of that, that practice has absolutely stopped now in branches. There was a follow-up call with Mr Greenhow and, I think, Keith Richards from the NFSP as well, a short time after this, to update them on the outcome of our investigation and assure them that that wasn't now happening."
It has emerged in the inquiry that staff at Fujitsu, which runs Horizon and controls access to post office operator transaction data, was able to remotely access branch operators’ systems and make changes. While Post Office executives knew of this ability in the early 2010s, executives publicly denied for years that the capability existed.
In April, the inquiry was shown emails and letters between 2010 and 2011 involving Marshall showing that she knew about the remote access issue, which the organisation at the time had denied was possible.
Marshall, who joined the Post Office in 1998 and took on her current role in 2020, wrote in a 2011 email that Fujitsu could access an individual branch remotely and “move money around”, but “this has never happened yet”. She went on to say that any remote changes would be “spotted and the person making the change would be identified”.
Giving evidence to the inquiry on Wednesday, Marshall said she was just repeating what she had been told by other senior executives because in her role she “certainly wouldn’t have known the ins and outs of the Horizon system or remote access”.
“I would accept here there are mails where I have relayed information to people that concern remote access,” she said. “I wouldn’t say I was involved … in anything involved in remote access. This was an area very much outside my expertise and comfort zone. I wouldn’t have written this without very clear direction from experts on what to say.”
In an undated letter circa 2011-12 to a sub post-office operator who was appealing against allegations of financial wrongdoing, Craig Tuthill, a Post Office appeals manager, cited Marshall's statements to claim that she was “fully satisfied that the Horizon systems and the accounting processes around it are robust and fit for purpose”.
The inquiry is examining the IT scandal, which involved hundreds of post office operators being prosecuted for shortfalls in their accounts based on evidence using the Horizon software which was later shown to be faulty.
Post Offices handled £3.55 billion in cash deposits and withdrawals in September, shows the new figures released today (14).
The total cash deposits value totalled £2.65bn, a slight decline compared to this summer’s record-breaking numbers, but a year-on-year increase of 10.5 per cent. Cash withdrawals amounted to £903.92m, a 6.5 per cent rise YoY.
Demand for cash amongst Post Office customers has remained strong into the autumn months. September's figure of £3.55 billion is just short of the record-breaking £3.77 billion in cash deposits and withdrawals seen in July. This followed two consecutive record-breaking months for cash handling at Post Offices in April (£3.49 billion) and May (£3.57 billion).
Business cash deposits across the UK saw growth, reaching over £1.16bn, an increase of 7.2 per cent compared to the same period last year. Personal cash deposits across the UK exceeded £1.48bn, reflecting a significant year-on-year increase of 13.2 per cent. These increases demonstrate the ongoing reliance on cash for both individuals and businesses in navigating their financial transactions.
Regionally, there was also a strong year-on-year increase for business and personal cash deposits and withdrawals. Wales experienced the largest year-on-year increase of 7.7 per cent in cash withdrawals and 12.7% in cash deposits. In England, business and personal cash deposits reached £2.21 billion, reflecting a 11.0% growth year-on-year. Northern Ireland also experienced a noteworthy 6.8% year-on-year increase in cash withdrawals, highlighting strong cash handling activity in the region.
Ross Borkett, Banking Director at Post Office, said, "Our September figures show that demand for cash remained strong into the start of Autumn, as both individuals and businesses continue to rely on it. Many individuals continue to use cash as a trusted method for managing their day-to-day expenses, while businesses continue to rely on physical transactions to adapt to market fluctuations and uncertainties. Postmasters and their teams play a crucial role in helping small businesses thrive by offering a secure and convenient place to deposit cash takings, with many branches offering extended hours and weekend availability.”
Post Office Cash tracker data – September 2024
Cash deposits value (business & personal)
MOM%
YOY%
Cash withdrawals value (business & personal)
MOM%
YOY%
Total cash deposits & withdrawal value for September 2024
UK
£2.65bn
-1.9%
+10.5%
£903.92m
-3.3%
+6.5%
£3.55bn
England
£2.21bn
-1.5%
+11.0%
£708.70m
-3.1%
+6.6%
£2.92bn
Scotland
£175.39m
-5.6%
+7.7%
£60.80m
-4.3%
+4.2%
£236.19m
Wales
£140.84m
-4.3%
+12.7%
£71.75m
-5.0%
+7.7%
£212.59m
Northern Ireland
£127.05m
-1.3%
+3.5%
£62.67m
-2.6%
+6.8%
£189.72m
Business cash deposits
Personal cash deposits
Personal cash withdrawals
Banking Hubs
As at 16 July, 66 hubs have been opened in partnership between Cash Access UK and the Post Office. 147 Banking Hubs have now been announced by LINK with further openings planned for later this year.
The Post Office has recently explored resuming the practice of taking branch owner-operators to court, as mounting losses from shortfalls in its network of 11,500 outlets hit £12 million a year, it emerged in the public inquiry last week.
On Wednesday (9), the inquiry was shown the notes of a recent quarterly meeting between Post Office executives and UK Government Investments, the body that manages the state’s interests in businesses in which it owns a stake. The minutes revealed that a return to court action was formally explored last year.
The Post Office chief executive, Nick Read, giving evidence at the inquiry last week, said that while the organisation had no current plans to resume court-led civil recovery proceedings it was becoming more confident in how robust its investigations are.
“What we saw at this particular time was an escalation in potential liabilities, with losses starting to grow in the network, and the shareholder [government] was asking why,” he said. “This was a conversation that arose as a consequence of that.
“We are building a team that know how to properly interrogate and investigate Horizon data. We are confident about … the way we can go about an investigation and identify where there are shortfalls and discrepancies.”
Read said he did not know what had become of the paper that had been worked on for the government but that there was currently no testing of civil court cases of alleged fraud.
During the Horizon IT scandal more than 900 operators were wrongly prosecuted over discrepancies caused by the faulty accounting software, many of them brought privately by the Post Office, a practice it stopped in 2015 and has promised not to restart.
However, the Post Office continued to use the court system for the civil recovery of losses from branches until 2018.
In the wake of damning high court judgments a year later, the state-owned company currently only pursues losses if there is an agreement with the branch owner-operator, or assists the police if the issue is of a scale that it may become a criminal case.
This has led to the Post Office having to write off increasingly large amounts of money in its own accounts, which has prompted the organisation to once again look at how to recoup losses through direct action.
“What we were seeing was after two months if we thought a postmaster owed us money and the postmaster didn’t pay it then we wrote that off to the P&L [profit and loss account],” said the former Post Office finance director Alisdair Cameron, who left the company in June, in testimony to the public inquiry into the Horizon scandal last week.
“You could see the scale of that very quickly. It was £2m a year when I joined. It went up to £5m a year and suddenly it was £12m a year.”
Compensation process has been "overly bureaucratic", said the Post Office's outgoing CEO Nick Read, expressing "deep regret" that the Post Office had not lived up to delivering "speedy and fair redress".
Read, who resigned last month, was giving evidence at the Post Office Horizon IT Inquiry for the second day, with a focus on delays to victims' financial redress when he admitted that the the government is using the company as a "shield" over compensation schemes.
Edward Henry KC, representing wronged sub-postmasters caught up in the Horizon scandal, asked Read if the government "is using the Post Office as a shield or a fire curtain".
He replied, "That could be a description, yes."
Henry continued, "The fact you're [the Post Office] administering two out of the three schemes gives the government a degree of protection… one step removed gives it room for plausible deniability?"
Read responded, "That's true."
The outgoing Post Office boss denied the company has been instructed "to minimise or suppress compensation claims whilst avoiding public scrutiny".
Read admitted, however, that the compensation process has been "overly bureaucratic" and expressed "deep regret" that the Post Office had not lived up to delivering "speedy and fair redress". However, he insisted the "approach" and way of "engaging" with victims has changed in the last few months, with "lessons learned" since the start of the year.
"I think we are genuinely open and moving towards a better system," Read told the inquiry. "There are proper appeals processes, proper independent panels now working."
He added there is a "commitment… to get this right," and said he believes "things will start to flow" despite "mistakes hav[ing] certainly been made".
Read also addressed the "terrible" fact that hundreds of sub-postmasters have died before receiving compensation. A total of 251 people have died without getting full financial redress, according to data cited at the inquiry.
Nick Read insisted "a lot of time" has been spent "trying to work out how do we improve and speed up the process", adding it was a "constant point of conversation" with the government.
Read said it was "astonishing" the Post Office was involved in the administration of compensation schemes and said the "corporate view" was that the Post Office should not have anything to do with them.
When asked why that view was not communicated to the inquiry in meetings, Read responded, "It's a good question. I'm unsure why we didn't make that very explicit…clearly we should have done."
He said the lack of communication on this was a "failure". Read also today told the inquiry how Post Office employees "implicated" in the Horizon scandal may "still be operating at the heart" of the business.