By Tony Collins
The BBC’s “PM” programme returned to the topic last week of subpostmasters who were stripped of their post office contracts and bankrupted because of theft, fraud and false accounting. Some went to jail.
“Is it possible they were innocent and that a computer system was to blame instead?” asked Eddie Mair, the programme’s presenter.
The BBC has seen a leaked copy of an independent report the Post Office commissioned into its “Horizon” branch office accounting system. An interim version of the report by consultancy Second Sight was released last year.
The leaked report says the system was unfit for purpose in some branches, says the BBC. When Post Office investigators checked out shortfalls they did not look for the root cause of the errors – and instead accused the sub-postmasters of theft or false accounting, says the BBC, quoting from the report.
£1bn Horizon system
More than 11,000 post offices use Fujitsu’s £1bn Horizon system for branch accounting and rarely have problems. At the close of each day, the system balances money coming in from customers and money going out, to banks, energy companies, for tax disc sales and for lottery tickets.
If the system showed there was a shortfall, subpostmasters had few options: make up the deficit themselves, sign off the accounts as correct, or refuse to sign off – which might have meant closing the post office (and upsetting customers) while a financial audit took place.
The BBC PM programme last week re-broadcast its interview in June 2012 with a gently-spoken Welshman, Noel Thomas, who worked for the Post Office for 42 years before he had problems with the Horizon branch accounting system at Gaerwen. When he went to balance the accounts the system kept telling him there was a deficit – a shortfall in the daily takings.
Prison
After speaking to the Post Office helpline several times he believed the matter would be sorted out in time. He signed off the accounts – and the Post Office took him to court for false accounting. He pleaded guilty and went to prison; and he went bankrupt.
In his interview with Eddie Mair, Thomas came across as a man of guileless integrity.
“I had a very busy post office,” said Thomas. “I am not ashamed to tell you I had a very good income of between £20,000 and £30,000 a year. I worked very hard for it: I looked after my customers.”
Mair: What was the first sign of trouble?
“I did have trouble over about 12 months actually. The last six months it went worse. You just couldn’t balance. It was going in the end (into deficit) at the rate of £2,000-£3,000 a week.”
Mair: This wasn’t your own personal books – you weren’t filling in a ledger – this was the computer system?
“This was the computer system. In the end I was convicted on the basis that I false accounted for over £50,000.”
Mair: They thought you’d stolen it?
“Yes. But when it came to the court case they dropped the theft [charge] very very quickly and just went for false accounting.”
Mair: You went to jail?
“Yes… I was lucky. I only had eight days. Time went very very quickly.”
Mair: But I am guessing for you that was not really the problem, the passing of time. You’d been branded a criminal?
“Yes. That’s what got me you see.”
Mair: The Post Office still says it is confident about this computer system. It is still happy with it.
“It would say [that], wouldn’t it?”
Mair: As for you, are you confident you didn’t make a lot of mistakes?
“Yes. I can say I didn’t make mistakes. I can say with my hand on my heart I didn’t take the money.”
Mair: What effect has this had on you?
“A big effect, because I was declared bankrupt. The Post Office are paying my pension but they took my private pensions away.”
Mair: What would you like to happen?
“Not for me myself but for (other subpostmasters and mistresses). It has ruined their lives hasn’t it? If you pilfer off the Royal Mail you need to be punished –”
Mair: But Noel if you are correct – and obviously the Post Office has a different view of this – if you are right then you have been made bankrupt, you have lost almost everything –
“Yes.”
You have been to jail –
“Yes.”
Over a computer mistake –
“Yes.”
Mair: What do you want from them?
“That we can get justice for everybody.”
Criminals or faulty systems?
Thomas had given up trying to prove his innocence when he received a phone call from retired senior probation officer Roch Garrard who said the same thing had happened to his local postmistress in Hampshire.
In time Thomas found that dozens of middle-aged, middle-class subpostmasters and mistresses who had never put a foot wrong were being branded criminals.
“It didn’t make sense to me so I started to contact some of them and said to them ‘this is what happened to our postmistress, what happened to you’ and the stories were all so similar that I thought there must be something wrong,” he said.
Now, more than 150 sub-postmasters say they were wrongly prosecuted, or made to repay money, because of the system. The Post Office remains defensive. Its public statements express little sympathy. It is, though, in secret talks with the subpostmasters over possible compensation. But can money ever put right injustices that have ruined lives?
New Second Sight report
BBC reporter Dan Johnson said the latest report explains exactly was going on with the Post Office computer system. “The thrust of this report is that it was faults in that computer system as well as communication problems, and issues around training that led to these mistakes. It wasn’t dishonesty,” said Johnson.
The report said training was not good enough for those without IT skills and power failures and communication issues made things worse. Helpline staff gave conflicting advice or said problems would sort themselves out.
Second Sight found in its research on Horizon that bugs were not unknown. It said in its interim report that “some combinations of events can trigger situations where problems occur”.
A tearful Sarah Burgess Boyd, from Newcastle-upon-Tyne told the BBC she lost her life savings in repaying an incorrect shortfall. She said of the Post Office, “I just don’t know of another business that would conduct themselves in such a callous and inhumane manner.”
The Post Office said the leaking of the report was “unhelpful”. In a statement, the Post Office told the BBC:
“Although we will not comment on the contents of any confidential documents, after two years of investigation it remains the case that there is absolutely no evidence of any systemic issues with the computer system which is used by over 78,000 people across our 11,500 branches and which successfully processes over six million transactions every day.”
The Post Office is in mediation with some of the affected subpostmasters, in part because of campaigning for justice by MPs, particularly North East Hampshire MP James Arbuthnot.
Also leading the campaign is the Justice for Subpostmasters Alliance, which was set up to “raise awareness of the problems around the Post Office Horizon system which for many years Post Office Limited has denied exist”.
Despite the mediation, the relationship between the accused subpostmasters and the Post Office remains strained. Alan Bates, a former subpostmaster in Wales who founded the Justice for Subpostmasters Alliance, continues to submit FOI requests to the Post Office, the latest being August 2014. The Post Office tends to refuse his requests or gives him unsympathetic replies.
In one of his FOI appeals, Bates tells the Post Office that the concern is not about the millions of successful weekly and monthly financial reconciliations that take place but the “numerous unsuccessful reconciliations that take place that Post Office refuses to even consider may occur”. Post Office management “seems blind to such possibilities”.
He told BBC Wales in 2012:
“One of the big problems with Horizon is the inability to fully examine all the data you have put in the system. You were not allowed to interrogate it. They restricted the access. I refused to be held liable for a system that I and my staff were unable to access to check.”
Under the FOI Act, Bates asked the Post Office last month for the total amount in value and number of all “transaction correction” invoices and credit notes issued to post offices in the latest accounts period; and he asked in April 2014
“Has Post Office ever been made aware of faults within the software of their Horizon System that would have impacted in any way on the accuracy of the accounts of any post office?”
The Post Office did not say. Its reply was that the question was not specific enough.
Ministers have been unsympathetic to the accused subpostmasters – although the campaign to clear the names of the accused has come mostly from Conservative MPs. Minister Jo Swinson told the House of Commons last year that the number of subpostmasters who’d complained about the Horizon system was “tiny, tiny”.
The National Federation of SubPostmasters has also been unsympathetic and has backed the Post Office. The Federation said: “We continue to have complete confidence in the Horizon system, which carries out hundreds of millions of transactions every week at 11,500 Post Office outlets across the country.
“The NFSP has seen no evidence to suggest that Horizon has been at fault and we believe it to be robust.”
Contract Law
Bhavisha Parekh, a case handler at Contact Law, was approached in 2009 by a sub-postmaster whose accounts had been audited that morning – and they’d found a loss of £7,000.
Parekh writes on the Contract Law website:
“The client had found this loss when doing her daily accounts a week earlier and asked the Post Office auditors to assist her and investigate the matter to locate the loss and rectify the accounts.
“Post Office accounts consist of cash, stamps, and postal orders as well as anything else they trade in; everything is given a financial value. The client’s loss was not of cash and all her transactions were showing to be completed correctly.
“However, upon the auditor’s confirmation of the loss she was charged with theft from the Post Office and given notice of being given a statutory demand for the £7,000.
“The client was in tears over the phone as she felt she had been wrongly charged; the client had run the Post Office for many years without fault and had become a pillar of the community.
“She felt victimised, as when trying to resolve this problem with the Post Office she had asked them to audit her branch and now she was being charged with theft.
“That day I gave the client details of a firm local to her (solicitors) to assist her with this matter. A few weeks later when calling the client to get feedback on the outcome of her case, she explained that she had had been investigated by the Post Office but they had not found anything to show she had taken the money.
“When auditing her branch the final accounts showed a loss; however, the auditors were unable to trace where this loss occurred. After further investigation and having a forensic accountant look into the matter, there were still no answers as to where this loss had occurred.
“This seemed pretty strange; the client in the meantime was told she could not work in the Post Office or even enter the building so she was left without an income and fear of being criminally prosecuted.
“However, after a month or so the Post Office wrote to her to state they had dropped the charges. She would however not be able to commence work as a sub-postmaster, and no explanation of the matter was given.
“Since speaking to this client I was approached by two more former sub-postmasters with the same case. However, they have not been as ‘lucky’ as my initial client – one was dismissed as a sub-postmaster and asked to repay this ‘lost’ amount, and the other was charged with theft and imprisoned for 18 months as well as ordered to pay a sum of £75,000.
“In all three cases the Post Office and their trained auditors have been unable to locate what this loss is; further they have not been able to trace any money into the postmasters’ accounts. Apart from there actually being a loss, there has been no evidence of any theft ever taking place.
“I have only spoken to three sub-postmasters; however this is happening at an increasing scale all over England. Computer experts are now stating that the ‘Horizon’ software the Postmasters use is flawed and so showing these losses.
“Potentially, due to this computer error, many sub-postmasters have lost their jobs, been imprisoned, and left traumatised by the Post Office’s actions.”
Comment
The Post Office deserves credit for investigating some of the complaints (after years of pressure from MPs) and it is said to have settled some of the less serious cases. But five years since the accumulation of problems came to light the convictions against subpostmasters remain. Computer Weekly highlighted the plight of subpostmasters in 2009.
Second Sight’s latest report will add to concern that lives were ruined because unexplained deficits on the Post Office’s Horizon system were not thoroughly investigated – and the root cause established – before the Post Office ticked the legal box to prosecute.
There is scope for systems to go wrong when there are multiple interfaces, occasional power failures and faults in networks and communications equipment. The Post Office’s Horizon system has multiple interfaces; and in any case no IT system is perfect. That Horizon works well for tens of thousands of subpostmasters is no guarantee it will work well for all.
Telling the family of someone struck by lightning that millions of people are not struck by lightning every year is extraordinarily insensitive. What’s the point of the Post Office’s continuing to insist that most subpostmasters have no problem with Horizon? Clearly there are no system-wide issues but nobody is saying there are – and why would those sent to prison, made bankrupt or deprived of their livelihoods care if IT issues were systemic or not? They say it happened to them.
Nobody in the general population would believe that 150 or more subpostmasters were dishonest.
Who would put the integrity of a computer system above the integrity of 150 subpostmasters?
The Post Office, as the prosecuting authority, could argue it is only doing its job in protecting its money and the investments of taxpayers. But in doing their jobs Post Office managers seem to be behaving more like machines than humans. They prosecuted for false accounting because they could.
They could, because sub-postmasters, when confronted by a deficit they didn’t understand, signed off accounts after being told by the IT helpdesk that the problems would probably clear in time. Strictly speaking, signing off accounts as correct when they are known to be incorrect is false accounting. But was it something the Post Office should have prosecuted, given the mounting complaints about the accuracy of the system’s deficit figures?
Still the Post Office is refusing to answer subpostmaster’s questions. Its managers know they have the legal and contractual upper hand; and as owners of the system they possess the facts. What they do not have is the moral upper ground: they lost any claim to neutrality when they took subpostmasters to be dishonest before properly investigating the potential for shortcomings of the system.
It will be damaging to justice and the reputations of the subpostmasters if the Post Office continues to conform to the stereotype of a large organisation that, once it has denied liability for anything, refuses repeatedly to alter its position, whatever the facts.
As individuals, Post Office managers are probably understanding. As an institution the Post Office appears hostile to those whose lives have been ruined. It seems content to allow the cry for justice to stretch out for years, while it remains defensive and unsympathetic.
Shadow business minister Ian Murray asked in the House of Commons last year:
What processes will be put in place to compensate sub-postmasters and former sub-postmasters who have been disadvantaged, fined, lost their businesses, homes or even jailed, as a result of the problems with the Horizon system?
Wronged subpostmasters deserve far more in compensation than the sums originally in dispute. Is the Post Office institutionally capable of righting egregious wrongs?
Are disaffected subpostmasters having to sign gagging orders?
Subpostmasters tell their story
Justice for Subpostmasters Alliance
Campaign4Change 
Pingback: Mr Bates vs The Post Office: Data Rights in Action — Naomi Korn Associates
Pingback: Why Do We Need Software Craftmanship? | Zombie Code Kill