Post Office “tries to sabotage” mediation scheme it set up after IT complaints?

By Tony Collins

BBC R4’s Today programme broadcast interviews yesterday with campaigning Conservative MP James Arbuthnot (who is standing down at the next election) and Mark Davies, Communications Director at the Post Office.

At issue is whether the Post Office wants genuinely to establish the facts after complaints by more than 150 subpostmasters that they have been unfairly treated – in some cases jailed, made bankrupt or forced to remortgage their homes – because the PO’s Horizon IT system wrongly showed cash shortfalls.

The Post Office contends that there’s no evidence the systems were faulty in the cases in question.  But, as I am quoted in today’s Financial Times as saying,

“It’s going to be very hard to detect what went wrong. The Post Office is behaving as if its system was virtually infallible when, in fact, no system is, especially when there are many different network interactions involved.”

Last year the Post Office set up a mediation scheme, in part to respond to 144 MPs who’ve had representations from former subpostmasters about the Horizon system.

But the MPs announced yesterday that they have lost faith in the mediation scheme.

Arbuthnot, who leads the group, said in a press release, “The [mediation] scheme was set up to help our constituents seek redress and to maintain the Post Office’s good reputation. It is doing neither.

“It has ended up mired in legal wrangling, with the Post Office objecting to most of the cases even going into the mediation that the scheme was designed to provide.  I can no longer give it my support. I shall now be pursuing justice for SubPostmasters in other ways.”

Andrew Bridgen MP said:

“MPs have been working with the Post Office for two years now in the belief that they would work towards a solution to this issue. It would appear that this belief is increasingly looking misplaced.”

Mike Wood MP said:

“Either the Post Office is awash with criminals who open Sub Post Offices for personal gain or something has gone terribly wrong. MPs are inclined to believe the latter and we are all shocked that the Post Office seems not to want to get to the bottom of all this.”

Kevan Jones MP who will lead the Parliamentary campaign for justice for subpostmasters when Arbuthnot stands down at the election, said: “My constituent has lost everything – his livelihood, his house, his good name, and he is not the only person who faced ruin.”

Huw Irranca-Davies MP said: “The mediation process has failed even those sub-postmasters who were originally included. But there are also many who fell outside the scheme, and have had no chance to be heard. They all deserve fair play, they all deserve justice, so the fight goes on.”

The big unanswered question is whether the Post Office is deliberately hampering mediation because the scheme, as it turns out, is not going in its favour.

The Post Office hired forensic accounts Second Sight to investigate the Horizon system. It found that the system was not fit for purpose in some branches. The Post Office has said the leak of that Second Sight report was “regrettable” and it has not released it.

Yesterday on the Today programme (approx 0735) Arbuthnot told presenter John Humphrys:

“At considerable public expense the Post Office set up a medication scheme but sadly they are now trying to sabotage that very mediation scheme they set up. They are doing it in secret. It’s an extraordinary story.

“They are trying to bar from mediation 90% of subpostmasters for whom it was set up. They are arguing that those like Jo Hamilton, who pleaded guilty to false accounting, shouldn’t have the mediation scheme available to them, despite having agreed expressly with MPs that those who had pleaded guilty to false accounting should have it available to them. They are doing it in secret, and they are doing it at a stage when there is no legal representation available to these subpostmasters…  I am afraid I have no confidence that the Post Office is trying to clear it up.

Humphrys:  What they say is that they  pay for people to get independent advice; they have advertised for people to come forward with their stories; they have investigated the cases; they have done everything that could be reasonably requested of them.

Arbuthnot: “They talk about this legal advice but then they try to prevent the subpostmasters from going into the mediation scheme at a stage of the process when the subpostmaster is not represented.

“You won’t get any of the [Post Office’s] legal advisers coming onto this programme because the Post Office has bound them to secrecy.  You won’t get Second Sight, the independent investigators, coming onto this programme, because the PO has bound them to secrecy.”

Humphrys:  They have a relationship  with their clients and therefore they are inevitably bound to secrecy?

Arbuthnot: “Yes. There was a concern at the beginning of this that Second Sight, the independent forensic accountants whom the Post Office chose and are paying for, did have a relationship with the Post Office. That worried MPs about whether they would have the independence required, but they have had.

“Now that they have shown that independence the Post Office is doing its utmost to pooh-pooh the recommendations that Second Sight  is putting forward. It is trying to override those recommendations, possibly because of that very independence.

Humphrys:  The investigation isn’t over. That may change.

Arbuthnot: “That is my hope.  But since this investigation and mediation scheme which is in the hands largely of the Post Office is paid for by the Post Office, for myself I have lost faith in the Post Office’s determination to see this through to a proper end.”

Humphrys turned to Mark Davies, the Post Office’s Director of Communications. It is a very serious charge: that you sabotaged this scheme?

Davies: “It is an extremely serious charge John, and clearly we reject it outright. It is very regrettable, some of the things Mr Arbuthnot has said.”

What did he say that was wrong?

“To go back to the original setting up of this inquiry, we the Post Office take our responsibilities extremely seriously.”

What did he say that was wrong?

“If I could just finish the point. It is really, really important to set this out. The Horizon system that Mr Arbuthnot refers to is used  every single day by about 80,000 people. In the course of the last decade half a million people have used that system, without any problems, face to face with customers,  across the 11,500 branches in the Post Office network.

“That said, a very small number of people came to us  through their MP with some questions, some issues. They said they had problems with the system. That amounts to 0.03% of those people who have dealt with the Horizon system.”

It’s still 150 people …Each individual with their own life being ruined. Now what was it that Mr Arbuthnot said  about your handling of this scheme that is wrong?

“What is wrong is that the scheme, first and foremost, hasn’t finished yet, John.  Two and half years ago we set up a review into the Horizon system. That review has found no evidence at all of any systemic problems with the Horizon system.”

That was your own review?

“It was with independent forensic accountants John. We set up the complaints mediation scheme for those 150 people who came forward. Look – we advertised for people to come forward.  We went to our people across the Post Office network and said, if you feel you have been treated unfairly please come and talk to us about that. If we weren’t taking this seriously we would not have done that.

But you heard the story of Jo Hamilton there. She has tried to do everything that she could … and she has got nowhere.

“You’ll forgive me John for not getting into an individual case.”

I understand that but nonetheless she is representative of many like her and they are in desperate trouble now. They have a case don’t they?

“I am really sorry if people have faced lifetime difficulties – lifestyle problems – as a result of their having been working in Post Office branches. It does not necessarily follow though that the Post Office is responsible for the issues people have had. I think our commitment to seeking to look at every single case is underlined …

But you have barred 90% of them?

“No. That’s not true. I don’t accept that figure at all.”

What is the figure?

“If the working group, which is chaired independently by a former High Court judge, is bound by confidentiality, the Post Office is bound –

So you can’t tell me how many have been barred? It might be 90%?

“I’m afraid I can’t John because the working group was set up with confidentiality in mind. We are bound by that.”

I am not asking you for the names of the people. I am asking you for the number of people who have been barred [from the mediation scheme].

And I cannot go into the details of …

So we’re entitled to accept what Mr Arbuthnot said which is that it is 90%?

“I don’t accept that at all. It is not 90%.”

Without being able to give me a figure, with the best will in the world, it is impossible for us to do anything other than accept the figure Mr Arbuthnot’s gives.

“We are being placed in an intolerable position at the Post Office because we are bound by a confidentiality agreement which was agreed with all parties including the Justice for Subpostmasters Alliance.

“We are in an extremely difficult position. It’s not the case that 90% have been rejected. We are actually looking at every single case, on a case by case basis. We are absolutely committed to doing that… in some cases there is evidence whereby we have looked at what’s happened and we have held our hands up and said in some cases we could have done some things differently and we have reached agreement with some people. In other cases we have not reached that conclusion because we have to take it extremely seriously.

“We are a large retail organisation. We conduct audits in our branches, across 11,500 branches, every single day. Where there are cases of losses in those branches,  then clearly we have a duty to look at those, and you’d expect  us to do that on behalf of customers, on behalf of taxpayers.”

A very quick word Mr Arbuthnot?

Arbuthnot: “Mark Davies says it is a tiny proportion of transactions in the Post Office and yet one single miscarriage of justice ought to galvanise the nation. I have more than 140 MPs, some of them with more than one case. This is not a small problem.”

Davies: “If evidence emerges where there is evidence that a case should be looked at through the legal processes, absolutely the Post Office has a legal duty to take that forward and we will do so.”

Pleaded Guilty

Jo Hamilton, Arbuthnot’s constituent, used to run a sub-post office from her village shop in South Warnborough, Hampshire. She pleaded guilty to false accounting following a discrepancy of £2,000 in December 2003.

She told the BBC: “I rang the helpdesk and they told me to do various things and I did that and the amount I was down doubled.  I asked to speak to a supervisor.  Whatever we did, it would not go back to minus £2,000. The upshot  was they asked me to pay the money into the Post Office which I didn’t have.  Then they decided to take my wages to pay it back. …at the time they told me I was the only person who had had problems with Horizon. I did think I was the only person in the world who had had problems with it.  I hadn’t taken any money but I didn’t know what the hell was  going on…

“I had to remortgage the house and repay the money. Originally, I was charged with stealing. They said if I repaid and pleaded guilty to 14 counts of false accounting, they would drop the theft, so the decision was made – I’d be less likely to go to prison for false accounting than theft.