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“Success is walking from failure to failure with no loss of enthusiasm” – Winston Churchill

By Tony Collins

Why the Post Office IT scandal happened and some of its largely-fixable contributory causes were covered in a Campaign4Change post yesterday. One conclusion was that the Post Office IT scandal was waiting to happen.

Today’s piece looks at some of the underlying causes of the scandal that are mostly unfixable. One problem is that parts of the government and Whitehall machine are deeply dysfunctional. It’s not the fault of any individuals. Author Diane Vaughan describes banal corporate cultures that lead to disaster as the “normalisation of deviance”.

Summary of mostly-unfixable underlying causes of the Post Office IT scandal

– It is perfectly normal in Whitehall to buy, accept and roll out defective systems. It has happened routinely since early government computerisations in the 50s, 60s, and 70s. This blog post lists some of relevant projects. In the context of government’s poor record on IT, Horizon was simply one of many flawed computer systems that were bought with public money, formally accepted by officials who would not expect to be held responsible for their decisions and rolled out to thousands of unsuspecting end-users.

– It would be a major break with convention for any publicly-funded institution, including the Post Office, to reveal publicly the faults in its core IT systems unless the faults were already public knowledge. Weaknesses in Horizon were known at the time of the system’s national roll-out. Had software specialists been free to call out those weaknesses publicly at the roll-out stage, it’s unlikely the Post Office would have been able to confiscate businesses and homes, remove livelihoods and secure hundreds of convictions based on Horizon’s robustness.

Cultish ideology

– In the absence of effective independent scrutiny or challenge, and within a Whitehall bubble that is itself not subject to effective scrutiny, a mini-authoritarian ideology took hold at the Post Office over Horizon. Little exists in Whitehall’s armoury to stop a cultish ideology over an IT system again taking hold, unacknowledged and under cover of confidentiality, almost anywhere in central government or the wider public sector.

Faulty presumption

– If other public institutions take innocent people to court based on data from a flawed IT system, judges are likely to take the prosecution’s computer evidence at face value, as they did with many victims of the Post Office IT scandal. An obsolescent Law Commission “Presumption” means that judges can regard complex IT systems much as a mechanical clock that is assumed to be working if the hands can be seen moving. But Horizon had thousands of faults, some of which were blame for intermittent balance discrepancies in branches. For the Law Commission to normalise treating such a complex system as a mechanical clock underlines how deviant and deeply dysfunctional the Whitehall machine can be. The backward-facing Ministry of Justice has refused to modernise the “presumption”. Barrister Paul Marshall has written an article headlined, “Government failings on computer evidence risk more miscarriages of justice.”

No consequences

– Whitehall has a convention of no individual consequences for failure. Sometimes there is accountability but “responsibility” is normally collective not individual. In more than 40 years of government-funded IT-based project failures, nobody was held responsible except at the BBC where the chief technology lost his job in 2013 over the failed £100m Digital Media Initiative. Post Office higher-ups had no fear of action being taken against them for collectively bad decisions. It appears that a demonstrable belief in Horizon was seen as an act of loyalty.

– Every major government IT project has a “senior responsible owner” who is ultimately accountable for a programme or project meeting its objectives, delivering the projected outcomes and realising the required benefits. In practice the SROs, as they are called, are not always told the whole truth about the projects for which they are responsible. Sometimes a project or programme has several SROs.

– The lack of effective checks and balances across central government is currently illustrated by the national roll-out today of defective IT to the courts. The “Common Platform” is a £250m IT project run by HM Courts and Tribunals Service which is part of the Ministry of Justice. It has taken a BBC “File on 4” documentary, which was broadcast last month, to show that the system has led to wrongful arrests. Indeed, File on 4 compares Common Platform to the Post Office IT scandal. The Common Platform is following the usual lifecycle of a failing major IT project.

The whole truth?

– A stage in this lifecycle is that senior officials make public statements in direct opposition to those made by the system’s end-users who, in the case of Common Platform, are judges, barristers and solicitors. It is commonplace in failing IT projects for protected interests in government to make public statements that contradict the criticisms of those who are simply using the system to do their work. This happened at the Post Office for 19 years. Sir Wyn Williams, the much-respected chairman of the Horizon IT inquiry, will have no power to change the Whitehall culture that encourages protected interests to present IT project failure as success.

– Senior officials have a difficult job to do when it comes to public communications on big projects that go wrong. One of their top priorities is to protect ministers and the government from embarrassment. Thus they will not want to say anything that could make the civil service look dysfunctional. To this end, they will keep quiet about facts that could be used by opposition MPs to make mischief. This helps to explain why successive ministers have, based on drafts written by senior officials, routinely given misleadingly positive statements on the status of IT systems such as Horizon.

– Such unjustified official optimism has dogged nearly every government-funded IT project disaster listed here.

– On the Common Platform project a government spokesperson told Mail Online that the system has “already successfully managed over 158,000 criminal cases and there is no evidence that Common Platform is compromising justice or putting parties at risk”. But the BBC said, “File on 4 has spoken with whistle-blowers from within the court service who say the system is unsafe, unfinished and beset with bugs, errors and glitches”.

– Similarly, the GOV.UK website has an unremittingly positive “overview” of the UK’s most costly non-military IT project, the Home Office’s Emergency Services Network. The overview gives no hint that the project is billions of pounds over budget, more than five years behind schedule and may never work. The £11.4bn project seems to be following the path of the £10bn National Programme for IT in the NHS, the government’s most costly IT project failure to date. The NPfIT, as it was known, was “dismantled” in 2011 after eight years of ministerial assurances about its success. Official statements on Horizon’s robustness followed a familiar general pattern of untruthfulness that concealed IT faults. This pattern is probably too ingrained within central government to be fixable.

Honesty and integrity unscrutinised

– It is enshrined into law that the civil servants who brief ministers must be honest, act with integrity, be neutral and tell the truth. But there are no punishments for breaches. Governments indeed expect that ministerial statements, at least on IT projects, will not cause any political embarrassment. Thus official briefings and draft ministerial statements are tailored accordingly: a selected set of facts usually gives the impression that all is well.

Lessons must be learnt – but how?

– “Lessons must be learned” is almost as familiar as the phrase “Post Office IT Scandal”. But the Whitehall machine is not set up to learn lessons from big IT-based project calamities. There is no institutional memory, civil servants come and go and each big IT project is regarded internally as unique.

– The private sector also has notorious IT disasters but, because the job of one or more senior executives may be at risk and the bottom line is of deep concern, the same mistakes tend not to be repeated.

– The public sector has its major and less visible IT successes. Perhaps the most unexpected success was the performance of Universal Credit during the pandemic.

Arguably the success of Universal Credit in recent years is because the systems had such a deserved bad press in their early years that it smoothed the path, politically, for serious faults to be admitted and therefore addressed.

Normalising deviance

– The deviant Whitehall conventions that are among the contributory underlying causes of the Post Office IT scandal don’t need to be written down or spoken about because they are an accepted part of Whitehall’s culture. Senior officials know how to act on the conventions without being told. But that self-protective, secretive, fault-denying culture is one reason few major figures from the world of private sector IT have lasted long in the Whitehall system.

– No incoming government has a vested interest in correcting deviant conventions. Prime ministers and their senior officials benefit from an absence of effective, independent and contemporaneous checks and balances and the non-reporting of IT project weaknesses. The non-reporting especially. After decades of campaigns for open government on IT projects still today there is no public reporting of faults in government systems other than in spasmodic, though usually thorough, reports of the National Audit Office. The Post Office is legally exempt from the National Audit Office’s scrutiny as are many public bodies.

Whitehall’s versions of the truth

– Ministers and officials have responded to criticisms about the non-reporting of publicly-funded failing IT-based projects by publishing a yearly (sanitised) report under the banner “Transparency Data” in which departments give their own summary of the status of their major programmes and projects. The government’s Infrastructure and Projects Authority publishes the report. But officials can in practice say what they want in the summaries. A project that is many years late and over budget can be recorded as on time and to budget if the project was secretly “reset”. The summaries give a red/amber/green status on major projects but the colour-coding is a subjective assessment that is not open to scrutiny. Convention dictates that departments mustn’t publish the internal reports on which their annual summaries are based. Thus nobody knows whether the annual summaries of projects tell the whole truth or not.

– The often-excellent recommendations in reports of the National Audit Office and Parliamentary committees that look at major IT and other projects are unenforceable.

– Given that public institutions operate in a world where they cannot go bust and there is no fear of individual consequences when things go wrong, the checks and balances need to be demonstrably rigorous and independent rather than deferential, in-house and largely confidential as now.

As the main fear of senior officials and political leaders is embarrassment, contemporaneous publication of internal reports on IT project faults could make the difference between success and failure on major projects such as Horizon. But some mandarins may choke on the words “full disclosure”.

– In the Post Office IT scandal, the main defence of those who allowed it happen is expected to be that they didn’t know the truth. Nobody seems to have known the whole truth. The Post Office didn’t even tell the whole truth to a High Court judge in the Bates v Post Office litigation. The systemic problem is that the whole truth doesn’t seem to have mattered to anyone in authority. It didn’t matter to governments if business officials were misled by the Post Office over Horizon’s robustness. No business department officials were going to jeopardise their job by accepting the Post Office’s version of events rather than sub-postmasters’. Business department officials would occasionally question the Post Office on its finances but rarely on its IT systems. On IT, the Post Office had operational autonomy. It was entirely within Whitehall conventions that officials usually took the Post Office’s assurances about Horizon at face value.

Remarkable lack of suspicion

– Some former postal ministers have suggested they were given misleading briefings about Horizon which is likely to be true. Officials had themselves been misled by the Post Office. It’s also possible that the whole truth became lost in the Post Office’s secretive silo culture. But the general lack of curiosity among those in authority seems remarkable. Early in the new millennium, Alan Bates, later joined by other former sub-postmasters and sub-postmistresses, wrote to constituency MPs about losing their livelihoods after unexplained shortfalls shown on Horizon. Those MPs then wrote to ministers. James (now Lord) Arbuthnot was a particularly active and campaigning MP as was Kevan Jones. Computer Weekly had published its first in-depth piece on the scandal, written by Rebecca Thomson, in 2009. It was also generally known that no IT system is infallible especially a complex one – and Horizon was said to have been the biggest system of its kind in Europe. An obvious question for incoming postal ministers or business officials to keep asking was: “Could the sub-postmasters be right about Horizon causing shortfalls given that no system is perfect?” Suspicion ought to have been the reaction to assurances that the system could not cause unexplained shortfalls. But neither officials nor ministers had any need for suspicion. A lack of suspicion was entirely within Whitehall’s conventions. Nobody was going to be fired for a lack of suspicion – or complacency. Indeed postal ministers have been briefed in recent years that if there were any genuine miscarriages of justice to do with Horizon there were procedures within the criminal justice system to correct them. Whitehall conventions almost guarantee official complacency when things go wrong.

– Nothing can be done to change the Whitehall convention in which senior officials will tell their ministers only what the officials want the minister to know.

– A technology journalist was some years ago asked to have an unofficial meeting in the House of Commons with a health minister who was sceptical about a briefing she’d received from her officials. It transpired that the minister was right to be concerned: the briefing paper she’d been given was one-sided and reflected the department’s self-interests. But it’s conceivable that officials who wrote the paper were acting in what they considered the national interest.

Jonathan Swift

– One business minister, exceptionally, seems to have challenged the Post Office’s complacency over Horizon. In 2015 Baroness Neville-Rolfe asked the Post Office’s incoming chairman to look at possible miscarriages of justice and whether the Post Office had behaved fairly and responsibly. The Post Office agreed but ordered an investigation from a safe pair of hands, a former top government lawyer memorably named Jonathan Swift. An important ten-part analysis of Swift’s final report has been written by Richard Moorhead, a professor of law and professional ethics at Exeter Law School. One of his conclusions is that the Swift review was a lost opportunity to “surface and deal with life-shattering miscarriages of justice years sooner rather than later”.

– Strangely the Swift report was not shown to the Post Office board. Indeed, it remained undisclosed in the Bates v Post Office litigation. Its public disclosure could have prevented the litigation which cost a total of nearly £100m.

Secrecy – a British disease?

– Nobody can do anything about Whitehall’s preoccupation with secrecy. It is said to the British disease. Francis (now Lord) Maude, Cabinet minister in the Coalition government, tried to bring into effect what he called the “most transparent government ever” but his reforms were widely derided among the higher-ups in the civil service and most of the changes he initiated have since been reversed.

– It’s difficult to see a time when any part of central government will embrace for its own good the idea of genuine openness and transparency. Indeed the concealing of faults on a major publicly-funded IT system such as Horizon is as easy today as it was between 2000 and 2019.

– The Freedom of Information Act has made government a little more open than it used to be. But most of what is released under the Act by the Post Office and the Department for BEIS has entire paragraphs and pages redacted (blacked out). The Act was supposed to give the public a right to know. Rather it seems to be interpreted by many public institutions as giving officials the right not to disclose the whole truth.

Government and big, complex technology-based schemes don’t always mix. Genuine successes seem to defy the natural order. The National Audit Office was right to point out last year that,

“Despite 25 years of government strategies and countless attempts to deliver digital business change successfully, the findings of this report show a consistent pattern of underperformance.

“This underperformance can often be the result of programmes not being sufficiently thought through before key decisions on technology solutions are made. This means that there is a gap between what government intends to achieve and what it delivers to citizens and service users, which wastes taxpayers’ money and delays improvements in public services.”

Comment:

Much credit is due Sir Wyn Williams, chairman of the Horizon inquiry, who has understood completely the frustrations and the harm to decent honest people who had the misfortune to be using an accounts system when it was not working as expected.

There is no doubt Sir Wyn will do what he can to mitigate the wrongs within the inquiry’s terms of reference. But an inquiry into the Post Office and Fujitsu’s Horizon system cannot fix the underlying wrongs that cost hundreds of self-made people their livelihoods, their savings, their homes, their savings and sometimes their lives.

Indeed, looking back on the scandal from its origins, it is remarkable how well the government machine has managed to brush off 19 years of official untruths and the biggest miscarriage of justice in British legal history.

It is as if a Whitehall conveyor belt is feeding all the untruths and injustices into a large box marked “Post Office Horizon system – untruths and injustices for archiving”.

Whitehall officials and successive government ministers have escaped scrutiny or criticism. The only people who have suffered are the hundreds who were punished by a system that will continue as it is. The “us and them” system will continue to punish the unprotected, which is why sub-postmasters and sub-postmistresses are still fighting for full and fair compensation.

The current government machine is ripe for misuse, witting or unwitting, by any number of the hundreds of other publicly-funded institutions that exist in the UK. Objective truth will continue to be nowhere in sight when big government IT-based projects go wrong. This is currently the case on the Ministry of Justice’s £250m Common Platform and the Home Office’s £11.4bn Emergency Services Network.

It is a deeply dysfunctional Whitehall system that political and civil service leaders will continue to describe as “world-beating” or the Rolls-Royce of government administrations, the envy of democratic countries across the world. All these claims are no more credible than the official claims – which lasted 19 years – that Horizon was robust.

Failures in the government administrative machine ought in no way to reflect badly on the many excellent and fully committed civil servants who often have to work against the system to succeed in what they do.

Full and fair compensation

How, in the Post Office scandal, will it be possible to single out one or two people as culpable?

The Horizon ideology gripped generations of Post Office boards, officials and prosecutors. State-supported aggression and mendacity in the name of the national interest was widespread within a formerly much-respected public institution. Within government, nobody persisted with asking the right questions about Horizon or the persecution of sub-postmasters because such challenges to the system were unwelcome. The main perpetrator of the Post Office IT scandal, the Mr Big, is not any one individual because the miscarriages of justice have continued so far for 22 years. About 80 convictions have been overturned but most victims are still waiting for full and fair compensation.

Journalist Nick Wallis who wrote the book The Great Post Office Scandal is unaware of anyone who has received full and fair compensation. It is remarkable that still after 22 years nobody in government is demanding that, finally, right is done before any more victims die.

The Mr Big in the Post Office IT scandal is the unreformable Whitehall system that not only let the large-scale misery happen but remained the Post Office’s silent investor in the extraordinarily unequal fight against sub-postmasters in the High Court. It wasn’t just unequal in money terms. One one side were sub-postmasters who’d had their livelihoods, homes and money taken from them by an aggressive state institution where responsibility was collective. The sub-postmasters were fighting for a return of their money and a semblance of their former lives. On the other side was the Post Office whose officials had lost nothing. The Whitehall system of operational autonomy allowed the Post Office to pour tens of millions of pounds into a legal fight to prove a point: that they were right about Horizon all along.

Justice in the case came only because of the single-minded tenacity of Alan Bates, his good fortune in having a gifted legal team and the final judgments of a genuinely independent and proficient High Court judge, Mr Justice Fraser, whom the Post Office tried to remove.

The government machine has reacted to the litigation it lost by managing to escape paying full and fair compensation in most cases although it is two years since the litigation ended. The Horizon inquiry may name and shame which is an important part of its task. But apart from tweaks the government machine will go on much as before.

Nobody doubts that Sir Wyn cares – really cares – but he has no power to change the Whitehall conventions that let the Post Office scandal happen. Untruths will continue, unsuccessful IT-based projects will continue to be passed off as successes, a pre-occupation with positive statements that conceal the truth will continue, individual consequences for bad decisions will continue to be non-existent, and the system as a whole will continue to escape scrutiny as the focus, whenever anything goes seriously wrong, will be on the specific institution(s) involved.

Given that most of the underlying causes of the Post Office IT scandal cannot be tackled, it is to Sir Wyn’s credit that he is concentrating the inquiry’s attention on full and fair compensation and on naming and shaming. These are challenges enough.

Perhaps nothing less than a Royal Commission into the Civil Service could bring any hope of a wider change in Whitehall’s deviant, reform-resisting conventions that let the Post Office IT scandal happen – and are now helping it to ulcerate.

Origins of a disaster by researcher Eleanor Shaikh

The Great Post Office Scandal by journalist Nick Wallis

Post Office attacked sub-postmasters who questioned Horizon, say victims – Karl Flinders, Computer Weekly

Prof Richard Moorhead’s 10-part analysis of the “Swift” review of Horizon miscarriages of justice

Investigating the Post Office scandal – podcast by journalist Nick Wallis and Rebecca Thomson who wrote the first articles on the scandal for Computer Weekly in 2009

The harm judges do – Lee Castleton’s story by barrister Paul Marshall

Scandal at the Post Office – The intersection of law, ethics and politics – Paul Marshall

Horizon issues log – campaigner Tim McCormack’s blog

The scandal’s fixable and unfixable underlying causes

By Tony Collins

Retired judge Sir Wyn Williams deserves much credit for the sensitive and thorough way he is chairing a public inquiry into the Post Office IT scandal. He said on You Tube last week that the evidence he has read and heard on the human impact has “made a deep impression upon me”. He added,

“On any view, the scale of the human suffering has been and in many cases continues to be very significant.”

He said he had an overriding duty to lay bare who knew what, when they knew it and what they did with the knowledge they acquired. “I am determined to expose the truth about these matters,” he said.

He may go much further. It’s conceivable he will urge Parliament to act on continuing delays in paying victims full and fair compensation.

But why the scandal happened and its underlying causes are questions not often asked. These articles look at possible answers to those questions. One conclusion is that the Post Office IT scandal was waiting to happen.

Part A is a summary of what could be said to be the scandal’s more obvious contributory causes, most of which are fixable. Part B is a summary of the underlying causes, few of which are fixable.

First, some of the scandal’s more obvious causes:

Part A: summary of the scandal’s more obvious contributory causes

– The Post Office is 100% owned by government and has many more branches than Tesco has stores. In 2000, the Post Office gave the go-ahead for a nationwide roll-out of a flawed outsourced accounts system, Horizon.

– The Post Office board knew that Horizon’s “accounting integrity” was uncertain at the time. But still Horizon was rolled out to 18,000 branches, according to Post Office board minutes in January 2000. Arguably, the single most important feature of any accounts system is its accounting integrity.

– Any large or small company that mistakenly buys an accounting system with uncertain accounting integrity is likely to reject it. The Post Office didn’t.

– Rejecting Horizon, even if the Post Office had wanted to, was fraught with difficulty. The contractor ICL (owned by Fujitsu) had strong political support.

– On the previous version of Horizon, a telegram from the British ambassador in Tokyo to No 10, the Cabinet Office and HM Treasury referred to a dispute over the project’s uncertain future. The telegram said,

“PROJECT HORIZON: ICL/FUJITSU VIEWS …FUJITSU COULD NOT UNDERSTAND HOW HMG [Her Majesty’s Government] COULD CONTEMPLATE QUOTE DESTROYING ICL UNQUOTE. IF THE PROJECT FAILED, THE FLOTATION OF ICL WOULD BE UNDERMINED AND FUJITSU WOULD RECONSIDER ALL ITS OPTIONS ON ICL. THIS MIGHT … INCLUDE SALE … A FAILURE OF PROJECT HORIZON WOULD UNDERMINE FLOTATION AND WOULD RESULT IN 700- 900 JOB LOSSES.”

The then prime minister Tony Blair preferred a reconciliation with Fujitsu. A settlement came, in part, in the form of the purchase of a truncated version of Horizon [called Horizon mark 2 for the purpose of this article], which was the system at the heart of the Post Office IT scandal.

Convention on not suing major IT suppliers to government

– The supply of big systems to central government has pros and cons. Among the cons are that the supplier may have to pay for large IT teams assigned to a particular project such as Horizon while government officials take weeks and sometimes months to take key decisions. One of the pros is that, once you are the chosen supplier, the chances of being de-selected are slim indeed, no matter what problems arise. The Post Office’s accepted a flawed Horizon mark 2 against this backdrop: there was little or no chance in practice of Fujitsu’s being asked to quit.

– Major international IT companies are willing to sue government if the circumstances warrant it but that willingness is not mutual. Senior politicians and civil service leaders do not want to confront one of their major technology suppliers in an open courtroom. One reason is that officials in the witness box may be challenged in public on their truthfulness and whether parts of Whitehall are dysfunctional. This reluctance of governments to sue their most familiar IT suppliers can put international technology companies in an extraordinarily powerful position in any serious dispute.

Lack of courage

– One of a series of Downing Street papers unearthed by researcher Eleanor Shaikh said that a lesson from the failure of Horizon [mark one] was that government lacked “courage” when it came to terminating a failing IT project. The paper said,

“Perhaps the most important lesson is a more general one: namely that when a project is clearly failing government needs to be bolder about cutting its losses, and tougher in its negotiating stance. There was a clear case for termination 12 months ago, although the Treasury and DTI [now the Department for Business, Energy and Industrial Strategy which funds the Post Office] favoured continuation. In effect, inertia led to continuation, since no-one at the centre had a sufficiently clear remit or reason to terminate. Throughout this period ICL assumed that the government would not have the courage to terminate. Only at the last minute, when they believed that cancellation was a real possibility, did they make real concessions. As a result the Post Office slipped a year in its automation strategy, and large sums of money were wasted both by government and by ICL.”

– Several decades ago, when government took the risk of putting officials in the witness box in a public context, two cases, Matrix Churchill and Peter Wright, proved particularly embarrassing for Whitehall and the government: Whitehall’s sometimes-distant relationship with the truth was exposed in both cases. A senior official in the Matrix Churchill case said, under questioning, that “truth is a difficult concept”. Journalist and author Richard Norton-Taylor wrote a book about the case. A different senior official in the Peter Wright case referred to a letter that had been “economical with the truth”. By not suing international IT suppliers in an open courtroom, government and Whitehall avoid the risk of this sort of embarrassing testimony.

Lack of open competition

– For the specific Horizon system the Post Office accepted for roll-out to branch post offices, there was no open competition. Competition was for the previous mark 1 version of Horizon. Fujitsu was then, as now, in an unassailably powerful position as a major IT supplier to the UK government.

– Big companies in the private sector, if contracting out core IT, usually maintain a level of control of the outsourced system and spend much time and care to ensure they fully understand the technology’s weaknesses throughout its life. Evidence has come to light that the Post Office’s understanding of Horizon’s faults was limited; it did not always want to know the truth and for years did not know of, or at least denied, the existence of Fujitsu’s Horizon Known Error Log which contained records of thousands of faults. A further complication in understanding Horizon was that, when unexplained shortfalls appeared on branch systems, the Post Office was, in part, beholden to Fujitsu to determine whether its IT was at fault and in what way.

Lack of competence?

– A paper by Geoff Mulgan, then head of No. 10’s Strategy Unit at No 10 summarised the lessons learnt from the Horizon mark 1 disaster. Mulgan addressed his paper to Tony Blair. It was copied to leading officials and ministers: Jeremy Heywood, David Miliband, Geoffrey Norris, Lord Falconer, Sir Richard Wilson and Jonathan Powell. This and other No. 10 documents are included in Eleanor Shaikh’s remarkable 579-page document on the origins of the Horizon scandal. Mulgan’s paper to Blair said, “Throughout this process, the relative lack of competence of the Post Office and their failure to develop a proper business strategy has been a key failing.”

– The lessons-learnt paper for Blair on Horizon mark 1 also said that “by most criteria Horizon has been a fairly disastrous project”. It was “misconceived from the start, has faced continual delays and problems, has over the last year taken up huge amounts of ministerial and official time and has delivered in the end a far from optimal solution”. It was an inauspicious start for Horizon mark 2.

Scandal could have been avoided

– Almost as soon as the truncated mark 2 version of Horizon began rolling out across the UK, sub-postmasters and sub-postmistresses began noticing unexplained shortfalls in their branch balances. Had the Post Office, knowing from the start that Horizon’s accounting integrity was uncertain, tenaciously pursued an explanation for every shortfall with Fujitsu and written off losses where necessary, as supermarkets write off shrinkages, a scandal could have been avoided.

– Corporate Post Office staff knew that Horizon had faults but it was difficult for them to establish the facts after sub-postmaster complaints, for at least two reasons. First the system was not owned or controlled by the Post Office and access to the main audit database could be costly, beyond a pre-defined “free” level of queries. Second, staff regularly raised concerns about Horizon but their queries, it seems, usually went unanswered or unresolved: there appeared to be little appetite among the higher-ups at the Post Office for thorough investigations of Horizon.

Us and them

– Among the Post Office’s higher-ups there appeared to be a belief that Horizon’s faults could not become public knowledge in case it undermined ongoing legal cases or the institution’s reputation. There was also a concern that any general knowledge of bugs could be exploited by unscrupulous postal workers for their own financial gain.

– Before, during and after the roll-out of Horizon there appeared to be an “us and them” corporate scepticism of the honesty of sub-postmasters and their staff. One of those who worked on the original Horizon project said he suspected that many sub-postmasters would exploit system weaknesses if given the chance. In nearly every dispute with sub-postmasters over Horizon shortfalls, the Post Office appears to have been pre-disposed to assume the sub-postmaster was dishonest or incompetent.

– Large sums of money were handled by branch postal workers. Horizon, with the help of manual “transaction corrections”, had to be trusted as an electronic police force watching out for theft. But the commercial imperative to trust Horizon ought to have been tempered by a full knowledge of its weaknesses. Without this knowledge, the commercial need to believe in Horizon turned quickly into a corporate ideology – the system was to be trusted whatever the circumstances. This was an irrational approach to take with any large-scale IT system but the buzz-phrase in Whitehall for the Post Office was “operational independence“. It’s still a Whitehall buzz-phrase today. It means that when things go wrong at the Post Office, its operations can be said to be independent of the government. Thus the Post Office was left unchallenged over Horizon matters. It had the operational freedom to believe in the rationality of the irrational.

– When shortfalls began to appear on Horizon, there was no need to investigate them thoroughly because the Post Office had an assured way of covering losses that appeared on the system: the institution had one-sided contracts between the Post Office and branch sub-postmasters and sub-postmistresses. The Post Office interpreted these contracts as requiring that sub-postmasters pay losses shown on the system, however big. The Post Office did not need to prove any actual money had gone missing. Sometimes it claimed phantom losses of more than £100,000.

– The Post Office went much further than claiming Horizon’s losses from sub-postmasters. It had its own 700-strong security community including a prosecuting authority that had no reliance on the Crown Prosecution Service or the police. Thus it began prosecuting postal workers for fraud, false accounting and theft on the basis of Horizon data. In the criminal and civil courts it achieved victory after victory. Each successful case added to the mythical status of Horizon as invincible. Successful cases also enabled the Post Office to confiscate homes, cars and other goods.

– Lee Castleton was a sub-postmaster who ended up having to pay the Post Office around £350,000. He was forced into bankruptcy. His case sent a clear message to other sub-postmasters who were experiencing unexplained shortfalls: if you try and challenge Horizon’s reliability you may go bankrupt too. [Today, 16 years later, Castleton still hasn’t recouped his losses despite various government and Post Office compensation schemes.] Castleton’s case was another symbol of the Post Office’s extraordinary operational freedom. If the Post Office today wanted to again spend £320,000 chasing a debt of £27,0000 in a different case it could. Barrister Paul Marshall has covered the Castleton case in his paper “The harm that judges do“.

– Judges were content to trust Horizon without proof of the system’s integrity or reliability. They sent sent dozens of people to prison on the basis of data from a faulty system. There was no requirement for juries to see facts such as Horizon’s error logs. In this respect, the UK joins authoritarian regimes across the world where people can be imprisoned without fair trials.

– No action is taken against prosecutors who don’t disclose relevant evidence. The UK courts, as currently set up, seem unwilling to punish the prosecution’s concealment of IT facts.

– When presented with Horizon cases, the courts had before them one poorly-funded man or woman in the dock. On the prosecution side were the statements of an international computer company and the Post Office, a well-funded public institution with a reputation for being a vital asset to local communities. For the person in the dock, establishing any credibility against such formidable legal opponents was difficult or impossible.

– Judges and juries, when presented with data from a system that was used successfully by thousands of postal workers every day, could not see how Horizon would be at fault in the one particular case before them.

– The accused stood little or no chance of proving their innocence by establishing that Horizon’s faults could show themselves in out-of-the-ordinary circumstances. The Post Office did not have always have unlimited “free” access to Horizon’s audit data and the courts did not require its disclosure.

– No serving judge has called for a reform of the criminal justice system in the light of wrongful convictions of more than 700 sub-postmasters and sub-postmistresses. This implies that judges and the courts would be content to convict another 700 innocent people if a different public institution were gradually, over 13 years, to prosecute hundreds of unfortunates by mistake on the basis of data from faulty computer system. In recent years, faulty data used by two other public institutions, the Ministry of Justice [“Common Platform”] and the Department of Work and Pensions [Universal Credit] have already had harmful consequences for individuals.

– The Post Office seems not to have noticed that a mass of prosecutions (more than 700) followed Horizon’s introduction. Before Horizon prosecutions were rare. Such was the Post Office lack of corporate awareness of its Horizon prosecutions that it kept assuring ministers and constituency MPs that the number of complaints about Horizon was “tiny”. In some letters to constituency MPs, the Post Office referred to Horizon complaints as numbering two, three or four – in total.

-The Post Office had no need to care whether the number of prosecutions was tiny, dozens or hundreds. As at the business department, an absence of the whole truth goes unpunished.

– The Post Office is without effective independent scrutiny. Had it not been for the public inquiry into the Horizon scandal, which was prompted by a High Court action against the Post Office led by former sub-postmaster Alan Bates, at a cost to his side of £46m, the Post Office would have remained protected from effective independent scrutiny. After the public inquiry, the Post Office is likely to revert to being a protected organisation.

– The business department BEIS may say that its oversight of the Post Office is subject to independent and effective scrutiny, at least though the Government Internal Audit Agency.

But the audit agency is, arguably, neither independent nor effective. On independence, it is one group of government officials marking the homework of another group of government officials. On effectiveness, its reporting is wordy, deferential in tone, generous in the use of business jargon and vague in a way that seems to say, “would you mind acting on our suggestions, perhaps?” Indeed, the agency suggested minor improvements to BEIS’s scrutiny of the Post Office in October 2019 which was three years after Alan Bates and his team had sued the Post Office. The agency’s audit reports on the Post Office are not published routinely. Nor do we know when or whether its audit suggestions are acted on. [What little we do know about the audit agency in relation to Horizon was unearthed by Eleanor Shaikh under the FOI Act.]

Shocked

– The business department BEIS could argue that the Post Office has independent scrutiny through Parliamentary committees and MPs’ questions. But Parliamentary committees have no power to enforce their recommendations. Nor can they force officials to be truthful. Former head of the Public Accounts Committee, MP Margaret Hodge, wrote a book “Called to Account” which suggested officials (out of loyalty to their department and ministers) rarely told the whole truth. At one hearing, Hodge shocked civil service leaders by calling for a bible and requiring a government lawyer to swear an oath to tell the truth. Later, the then head of the civil service made a formal complaint about Hodge.

– On whether MPs’ written and verbal Parliamentary questions provide effective and independent scrutiny, ministers, based on their civil service briefings, rarely give statements on IT projects that tell the whole truth. It’s not that ministers and or their officials are being mendacious: they are not telling the whole truth in the national interest, to insulate the government from possible embarrassment.

– The public spending watchdog the National Audit Office [NAO] is not permitted by law to audit the Post Office’s accounts, its computer systems or whether its decisions represent value for money for taxpayers. To a limited degree, the NAO was allowed to audit Horizon mark 1 but not subsequent versions. Mark 1 was eligible for investigation only because of the involvement in the scheme of a government department, now the Department for Work and Pensions. When the department ceased to be involved in Horizon, which was more than 20 years ago, the NAO ceased its investigations of the Post Office.

– The Post Office resisted independent scrutiny on the basis that it could restrict its commercial freedom. It opposed a political move to make the Post Office subject to oversight by the National Audit Office and, in the past, has challenged the role of the government’s one shareholder on the Post Office board.

A scandal waiting to happen

– The lack of effective independent scrutiny gives the Post Office an extraordinary operational autonomy. It has no shareholders except the government, it cannot go bust because it is publicly-owned, funding from taxpayers for costly mistakes is potentially unlimited and it has a remit to be commercially opportunistic but with no personal consequences for high-risk or for bad decisions. It could be argued that the Post Office IT scandal was waiting to happen.

– Government statements about the Post Office usually begin with words about the importance of branches to local communities and the country. It is therefore conceivable that Post Office’s senior managers and directors saw Horizon’s reliability as tied in with their organisation’s commercial interests and, therefore, the national interest, the two being the same. But almost anything can be justified in the name of the national interest, such as the shredding of important documents and denying that Fujitsu staff could change the balances of branch accounts without the knowledge of sub-postmasters.

– Some describe the Post Office as evil because it destroyed many lives. In some cases the Post Office’s pursuit of sub-postmasters and sub-postmistresses over supposed Horizon losses is said to have been a contributory factor in premature deaths and suicides. The events of the scandal indeed have no equal in scale and mendacity with any that have darkened the UK’s corporate record. But an allied tragedy may be that those at the Post Office, whose aggressive actions inflicted harm on thousands of independent business people who ran branches, might have been serving the Post Office as best they could. Doing the right thing didn’t come into it, except that right was whatever was judged to be in the Post Office’s best commercial interests. One illustration of this remarkable loyalty to the Post Office was a lack of truthfulness in some of the evidence given to the High Court in the Bates v Post Office civil litigation. The judge Mr Justice Fraser said several of the Post Office’s senior witnesses gave what he called a “party line” which was not always truthful. But how did a publicly-funded institution end up with the freedom to be untruthful and act as aggressively it did? One answer is that it had no effective independent scrutiny. Indeed, the organisation that supposed to be scrutinising the Post Office – the Department for Business, Energy and Industrial Strategy – was not itself subject to effective independent scrutiny (Part B).

– Mr Justice Fraser’s High Court judgments included a finding that the Post Office seemed to operate in a parallel world. He compared some of the Post Office’s logic to a Lewis Carroll nonsense rhyme. But these findings caused no alarm in government or the business department BEIS which funds the Post Office.

– By not imposing any effective independent scrutiny, successive governments seem to have left the Post Office with one foot in reality and the other in a parallel world where reality was sometimes interpreted in an abnormal way.

– Trigger events for going into a parallel world seemed to be the perception of external threats such as Mr Justice Fraser’s unwelcome findings, thorough analyses of Horizon-related problems by forensic accountants Second Sight and unflattering coverage of Horizon by media organisations such as BBC’s Panorama. In response to these perceived “threat” events, the Post Office sacked Second Sight, tried to remove the judge and made representations to the BBC and other media organisations about their actual or intended coverage of Horizon-related matters.

– But by far the biggest challenge to the Post Office’s Horizon ideology came from sub-postmasters and sub-postmistresses. We know how the Post Office reacted.

– One major contributory cause of the Post Office IT scandal, therefore, is that nobody in government or the business department BEIS had any particular wish to ensure the Post Office always had both feet in the real world.

– Another major contributory cause is that criminal court judges can also operate in a parallel world when it comes to complex IT systems. They will assume a massively-complex computer system works properly merely on the basis of the owners’ say-so. The owners need to produce no evidence of what they say and can usually hide the system’s faults with impunity.

Most of the above contributory causes of the scandal can be fixed. Most of the underlying causes listed in Part B (which is scheduled for tomorrow) cannot.

Origins of a disaster by researcher Eleanor Shaikh

The Great Post Office Scandal by journalist Nick Wallis

Post Office attacked sub-postmasters who questioned Horizon, say victims – Karl Flinders, Computer Weekly

Prof Richard Moorhead’s 10-part analysis of the “Swift” review of Horizon miscarriages of justice

Investigating the Post Office scandal – podcast by journalist Nick Wallis and Rebecca Thomson who wrote the first articles on the scandal for Computer Weekly in 2009

The harm judges do – Lee Castleton’s story by barrister Paul Marshall

Scandal at the Post Office – The intersection of law, ethics and politics – Paul Marshall

Horizon issues log – campaigner Tim McCormack’s blog

By Tony Collins

The Post Office’s maximum legal costs over the Horizon IT scandal are estimated to be about £177m – 16 times the compensation received by 500 victims whose High Court case exposed the UK’s widest miscarriage of justice.

A breakdown of the Post Office’s estimated costs is set out in a  letter from the postal affairs minister Paul Scully to Labour MP Darren Jones who chairs the House of Commons Business, Energy and Industrial Strategy Committee. Scully’s letter follows a hearing of the committee in January 2022 on compensation related to the scandal. 

The Post Office, which is 100% owned by the government, used its own prosecutions unit to accuse about 700 sub-postmasters and sub-postmistresses of fraud, theft or false accounting on the basis of financial discrepancies – shortfalls – shown on the organisation’s Horizon accounts system. 

Dozens went to jail or were made bankrupt on the basis of unreliable data from the faulty Horizon system which was supplied by Fujitsu. The Post Office and Fujitsu hid Horizon’s faults from the courts.

In 2019, former sub-postmaster Alan Bates and his legal team won a group litigation against the Post Office which exposed Horizon’s faults and institutional mendacity on a grand scale.

Following the litigation, the Post Office set up various schemes to compensate victims of the scandal but Bates’ group is excluded from claiming under any of them.

To compound the group’s sense of injustice, Scully, Boris Johnson and other ministers have left Bates’ members to pay a £46m legal tab for taking on a state-owned institution in the High Court.  This means that the group’s members have received a total of about £11m in compensation – an average of only £20,000 each – from a £57.75m settlement. Many of the group’s members lost hundreds of thousands of pounds. But Scully’s ministerial speeches – which were drafted by officials at the Department for Business, Energy  and Industrial Strategy – say the High Court settlement was “full and final”.

Now it has emerged that the Department for BEIS expects maximum legal and related costs of about £177m for dealing with the Horizon IT scandal. This is 16 times the amount about 500 members of the Bates group have received in compensation.  

Below is a breakdown of costs and compensation as set out to the BEIS committee. Scully’s letter emphasises that some of the figures are the maximum possible cost, rather than the expected amounts. Scully also suggests there may be further costs in the coming year that have not yet been finalised.

The figures cover only the period after 2016 when the Bates group litigation began. The costs before the group litigation, including the Post Office’s Complaint Review and Mediation Scheme, are not included in the figures.

These are the figures from 2016 to 27 January 2022:

Costs

Horizon-related costs made within BEIS budgets and costs. The sums include maximum anticipated legal costs.

-£43m related to the Bates v Post Office High Court hearing which included the Post Office’s legal and professional consultancy fees connected with the litigation and other costs indirectly related to the litigation.

– £69m legal and administrative costs of the Historical Shortfall Scheme. It includes design, set-up and running costs of the scheme and is an estimate upon closure of the scheme once all payments have been made

– £16m current forecast of legal and administrative costs of paying compensation following overturned convictions (about £6m has been paid in such compensation to date).  

– £30m of “other Post Office costs” up to the end of 2021. This comprises legal fees relating to legal obligations, response and support activities in relation to postmasters who wish to appeal their Horizon-related convictions. It includes costs associated with identifying and contacting potential future appellants, discovery and disclosure of more than 4.5 million documents and preparation and representation at hearings before the Court.

– £19m of “other legal, project management, governance, operational reviews, improvement implementation and contracts, regarding Horizon-related issues and requirements, to the end of FY2021/22”.

Total £177m

*Additional cost estimates for the rest of 2021/22 and 2022/23 are not yet finalised. Scully says these figures will be provided in a future update to the BEIS Select Committee on Horizon-related costs.

Compensation

– £57.75m settlement of the 2016-2019 Bates v Post Office High Court case, of which about £46m went in Bates’ costs, leaving the “successful” litigants with £11m, an average of £20,000 each. Many lost hundreds of thousands of pounds in the scandal, including Lee Castleton who lost £348, 000 and went bankrupt.  

– £153m for the Historical Shortfall Scheme (likely estimated overall amount). There are 2,361 eligible claimants, about 900 of whom have received offers to date. How many have refused offers is unclear but the Post Office says the “vast majority” of the 900 have accepted an offer and have been paid.  

– £780m is the maximum potential spend on compensating those whose convictions have been overturned. It covers an interim payment of up to £100,000, which is paid within 28 days of an overturned Horizon-related conviction, and the final settlement. Actual costs will be determined by the total number of overturned convictions and the individual settlements reached. The £780m estimate comprises £94.4m for interim payments and £685.6m for final settlements.

Total: £990.75m

Government costs to date of the Horizon IT public inquiry

– £1.6m costs of running the inquiry in the years 2020/21 and 2021/22. The inquiry is not expected to finish until the summer of 2023 or possibly later.  

Comment

In the current era of Covid-related state spending that runs into hundreds of billions, £177m for the legal and related costs (excluding compensation) of dealing with Horizon IT scandal seems a small amount – until it is set against the paltry total of £11m paid to the Bates 555 group.

The business minister Scully and the prime minister Johnson express much sympathy for the ordeals suffered by the Bates 555. But ministerial sympathy costs nothing; it doesn’t return the 555 to the financial position they would be in now had the state not tried to ruin many of them.  

Nearly 120 MPs have signed an Early Day Motion calling for the Bates 555 litigants to “receive compensation that is commensurate with the suffering they have faced” and strongly urges the Government to “put in place an external compensation scheme that is outside the scope of the Post Office and provide this group with the redress they not only deserve but are entitled”.

In addition, the BEIS select committee has produced an excellent report this month that demands fair compensation for the Bates group.

But perhaps if Bates had access to the Post Office’s pot of money for lawyers, his campaign for fair compensation would not have to rely on a Parliamentary campaign for justice, a complaint to the Parliamentary Ombudsman and pressure on the government through media coverage.

Since the early 2000s, Bates’ campaign for justice has been a David and Goliath affair. Without access to the seemingly unlimited funds the Post Office enjoys, it still is.     

**

The British people are waking up to a scandal that happened under their noses – Computer Weekly

33 former staff died before getting justice in Post Office IT scandal – Daily Mail’s front page – 14 Feb 2022

The Great Post Office Scandal – by Nick Wallis

43 years of state IT disasters – and they’re still happening– Part 1

43 years of state IT disasters – and they’re still happening Part 2

43 years of IT disasters – and they’re still happening – Part 3

By Tony Collins

Post Office lawyers are to be investigated over claims that sub-postmasters were bullied into admitting crimes they didn’t commit, said the Sunday Mirror yesterday.

The Sunday Times also has a story yesterday under the headline “Post Office lawyers in Horizon scandal to be investigated”. It said the Solicitors Regulation Authority is investigating the part played by Post Office lawyers in Horizon-related convictions that have been overturned.

About 700 post office workers were wrongly prosecuted and some were jailed for theft, false accounting or fraud on the basis of “losses” shown on the Post Office’s Horizon system. In reality, the Post Office’s Horizon accounting system caused numerous unexplained shortfalls for which sub-postmasters and sub-postmistresses were blamed. The Post Office and Horizon’s supplier Fujitsu hid the system’s faults from the criminal courts and civil court judges.

The Solicitors Regulation Authority [SRA] has applied to the High Court for an order under 44B of the Solicitors Act 1974, which can be used to require the provision of documents where the SRA is satisfied it is necessary to do so for the purpose of investigating whether there has been professional misconduct by a solicitor or whether there has been a failure to comply with any legal or regulatory obligations.

The SRA will normally only exercise this power as part of an investigation and where the solicitor has declined to offer up the requested documents voluntarily. But the Post Office said the wording of the  disclosure notice has been agreed with the SRA. It told the Law Society Gazette that it is “fully complying with the notice and will be providing relevant documents within the timeframe requested”. The Post Office said, “The disclosure notice does not relate to individuals that are involved with the Post Office today.”

It’s unclear whether the Solicitors Regulation Authority is committed to a full investigation of the possible misconduct of particular lawyers or whether it merely gathering documents. The Authority told the Sunday Mirror,

“We are gathering all relevant information before deciding any next steps.”

The SRA has been reluctant in the past to investigate lawyers involved in the Post Office Horizon scandal. Barrister Jacob Meagher is among critics of the SRA’s lack of action.  There are, however, a growing number of detailed complaints about lawyers involved in the scandal, which may make it difficult for the SRA to refuse a full investigation.

Among those who have written to the SRA is Aria Grace Law which represented Tracy Felstead, Janet Skinner and Seema Misra in their successful appeals against Horizon-related convictions. Aria Grace Law’s letter to the SRA’s Chief Executive Officer in May 2021 said,

“There is no doubt from the judgment of the Court of Appeal dated 23rd April 2021 that from 2013, the Post Office pursued a policy of denial that it knew of any substantial weakness or defect in the Horizon IT system. That was false. That strategy can only have been devised by the Post Office by and with reference to legal advice and by the Post Office board upon such advice. Doing so has been found by the Court of Appeal to have subverted the criminal justice system and to have undermined public confidence in it. My clients would like a personal assurance from you that the organisation of which you are CEO will be fully and effectively investigating this matter without any delay. On their behalf, I look forward to that confirmation.”

Sub-postmasters and sub-postmistresses told the Horizon public inquiry last week that they were offered deals by Post Office prosecutors: if the accused agreed to plead guilty to false accounting and not mention Horizon, the Post Office would drop the more serious theft charge.

Among those who accepted the plea bargain was Jo Hamilton who was planning to plead not guilty to theft. Hamilton told the inquiry: “… The Post Office offered a plea bargain, ‘If you plead guilty to 14 counts of false accounting, don’t mention Horizon on sentencing and repay all the money [£36,000], we’ll drop the theft’.”

Hamilton agreed and was spared prison but given a supervision order and had a criminal record from 2008 until her conviction was quashed last year. She told the inquiry,

“It just is a horrible thing to be accused of dishonesty when you’re not dishonest.”

She had to re-mortgage and have a collection in the local community to “repay” £36,000 demanded by the Post Office because of Horizon-based shortfalls in her accounts. Her parents had strokes within three months of each other.  

Former sub-postmaster Noel Thomas accepted a Post Office plea bargain in which he agreed not to mention Horizon but he still went to prison. He had worked for the Post Office for 42 years. He told the Horizon inquiry that about 10 minutes before he went into court charged with theft his barrister approached him and said, ‘They’re offering you a bargain …They’re going to drop the theft as long as you take the charge of false accounting and also that you don’t mention Horizon’.  And I said, “Well, what does that mean? Will it keep me out of jail?” and he said, ‘Well, hopefully’.   I did sign a piece of paper with my barrister to say that I wouldn’t mention Horizon …” But still Thomas received a nine-month prison sentence.  His conviction was quashed last year.

In 2021, the Court of Appeal criticised the actions of some Post Office prosecutors and found that many of the accused were denied a fair trial. Even though the Post Office suspected the IT system was faulty, it continued to hound sub-postmasters through the courts.

In Hamilton’s case she discovered from a report by forensic accountants Second Sight that Post Office investigators had known that there was no evidence she had stolen anything or deliberately-inflated cash figures. Despite knowing this, the Post Office charged her with theft – until they dropped the charge as part of a plea bargain.

When Hamilton discovered the existence of the document containing the investigator’s comments, she asked the Post Office for a copy of his report, without success. Hamilton told the inquiry that when the report was not forthcoming, she emailed the Post Office saying she would get a copy of it from Second Sight. Hamilton told the inquiry

“… then they [the Post Office] wrote back to me and said, ‘You will never have that document. It’s a legally privileged document’ and they don’t know why Second Sight quoted it in their report.”

 But Hamilton eventually saw the document at the Court of Appeal hearings last year. At the Horizon inquiry last week she was asked whether it said exactly what Second Sight had reported it as saying.

“Yes, exactly,” said Hamilton. “There was that paragraph ‘having examined all the Horizon records, I can find no evidence of theft or deliberate cash inflated figures’.  But it was that piece that just made me so angry … why did they do that?”

The SRA has powers to give a written rebuke, impose a fine, publish details of the case, or disqualify the lawyer in question from acting as a head of legal practice or head of finance and administration or being a manager or employee. It can also refer a case to the Solicitors Disciplinary Tribunal which can strike off or suspend a lawyer for a specified period or indefinitely. The Tribunal can also impose unlimited fines.

Any further reluctance of the SRA to act decisively in the widest miscarriage of justice in British legal history may raise questions about whether it is unwilling to act against a major public corporation and its representatives. The Post Office is 100%-owned by government.

**

The British people are waking up to a scandal that happened under their noses – Computer Weekly

33 former staff died before getting justice in Post Office IT scandal – Daily Mail’s front page – 14 Feb 2022

The Great Post Office Scandal – by Nick Wallis

43 years of state IT disasters – and they’re still happening– Part 1

43 years of state IT disasters – and they’re still happening Part 2

43 years of IT disasters – and they’re still happening – Part 3

By Tony Collins

A cross-party committee of MPs has called on the government to commit urgently to “ensuring that the 555 are fully compensated for all of their losses on the same basis as other victims of this scandal receiving compensation”.

The committee’s statement refers to the 555 members of the Justice For Sub-postmasters Alliance who defeated the Post Office in the High Court in 2019 by proving that its Horizon system was faulty and caused shortfalls for which sub-postmasters were wrongly blamed.

Today’s report of the Business, Energy and Industrial Strategy Committee asks the government to consider paying the 555’s legal fees, which were about £46m. It says the payment ought to be an interim amount pending determination of full compensation.

If the government agrees to pay the £46m it would mean average individual payments to the 555 of about £83,000.

To date, the Post Office has paid the 555 an average of only 20,000 each after costs. Typically, the 555 lost hundreds of thousands of pounds each.

The Post Office wrongly prosecuted more than 700 sub-postmasters and sub-postmistresses for fraud, false accounting or fraud on the basis of untrustworthy Horizon data. To date, only 72 convictions have been overturned. Most victims of the scandal are not seeking to have their convictions overturned. Some are known to want nothing more to do with the Post Office.

Today’s committee report is the first independent Parliamentary appraisal of the Post Office and ministerial actions since the end of the High Court action in December 2019. Much of the report will make uncomfortable reading for business ministers and senior civil servants.

It says,

“We are deeply disappointed that the 555 group action litigants, who took the Post Office Ltd. (POL) to court and who exposed the Horizon scandal, should be worse off than other victims of Horizon who would otherwise not be in a position to make claims.

“It is a perverse situation that the prolonged legal proceedings and the resulting delay to POL’s decision to settle have reduced the compensation the 555 were entitled to. Both the Post Office Ltd. and the Minister accept that this is unjust. We agree with the POL CEO, Nick Read, that it will be impossible for the POL to move forward until this issue is fully addressed. Our view is that the responsibility for addressing this injustice lies with the Government. Consideration should be given to recompense the legal fees of the 555 as an initial payment whilst full determination is considered.

“We demand that the Government as a matter of urgency commit to ensuring that the 555 are fully compensated for all of their losses on the same basis as other victims of this scandal receiving compensation.”

Some bullet points from the report:

• There’s an “unacceptable irony” that the Bates 555 group has made possible a “Historical Shortfall Scheme” for thousands of victims of the scandal but the group is itself denied access to fair compensation through the scheme.
• There’s a need for an independent intermediary body as a trusted first point of contact for those wrongly convicted because of Horizon, in particular for the 576 convicted sub-postmasters who have not yet come forward.
• The Committee wants monthly updates on the number of interim payments made for those whose convictions have been overturned, including the number of final payments made, and the range of amounts paid out to reach full, fair and final settlements. The report says this is needed “because of the nature of the Horizon scandal, transparency on these issues is crucial to restoring trust.”
• There’s a need for far more information on why some sub-postmasters whose convictions have been overturned are being denied interim compensation payments. The Committee will need convincing that the scheme has genuinely independent oversight.
• The Committee is “concerned that a firm involved with the discredited HBOS Reading scandal is involved with the Historical Shortfall Scheme, and that the Post Office Ltd. (POL) CEO was unaware of the issues surrounding the HBOS compensation scheme. Though Herbert Smith Freehills may have experience in establishing such schemes we are not reassured by the Minister or the POL CEO’s arguments that the issues associated with the HBOS scheme do not necessarily question their role in the Historical Shortfall Scheme. In responding to this report, we expect the Government to explain how the Historic Shortfall Scheme differs from the HBOS Reading scheme and what safeguards have been built in to avoid the problems that the latter scheme experienced.”
• There is much criticism in the Committee’s report of the Historical Shortfall compensation Scheme, which has received claims for compensation from more than 2,500 sub-postmasters and sub-postmistresses. The Committee questions the scheme’s independence and is concerned that the Post Office is involved in making initial recommendations regarding claims. It says that, given that the Post Office bears a major part of the responsibility for the Horizon scandal, “it seems perverse that POL is making initial recommendations regarding claims”. The Committee adds, “It is worth remembering that a key criticism made of POL at the height of the scandal was that effectively it acted as judge, jury and executioner when deciding on convictions of sub-postmasters.”
• The slowness in paying compensation claims means more claimants will die awaiting their cash, given their age profiles. “We are disappointed that so few claims have been processed by the Historic Shortfall Scheme considering it was closed over a year ago. The conclusion of only 30% of claims does not represent significant progress.”
• The Committee is concerned about the low amounts of compensation, the difficulties in making claims, the lack of support and expert advice available and onus being on the claimant to prove losses when the Post Office may not have the relevant paperwork.
• The Committee wants details of claims refused where there was paperwork missing.
• Given that the Post Office has profited from taking money from sub-postmasters on the basis of Horizon data, there needs to be a “significant level of benefit of doubt when compensation is calculated”.
• The Committee calls for more transparency over the costs of compensation schemes. The Committee noted that it hadn’t been told about a £685.6m direct grant to the Post Office over Post Office historical matters.

Comment – What happens now?

Ministers are free to accept or reject any of the Committee’s recommendations. They must, however, publish a formal response, usually within two months.

There is no doubt that the Committee’s report will add to pressure on government and the Treasury to pay at least the Bates 555 group’s £46m legal costs.

The traditional government reply to awkward reports of Parliamentary committees is to fudge, which can mean seeming to accept recommendations without actually acting on them. But the Parliamentary momentum for the Bates 555 to be properly and fairly compensated may now be too great for ministers to continue with the present undeclared strategy of promising much, talking regularly to the 555 and delaying actual government-funded compensation payments indefinitely.

That said, there is little appetite in Whitehall to pay the 555 any government money, especially as the group’s expose of the scandal has made the Post Office technically insolvent and created a huge amount of extra work for the civil service. There is also the technical problem of proving to the Treasury that compensating the 555 is value for money. This is where ministers come in. With the help of Downing Street and the Treasury, the Postal Affairs minister Paul Scully could make things happen. But to date he has been has been weak and vacillating.

The hope now is that’s BEIS’s commendable report will help create an unstoppable Parliamentary force for the right thing to be done. There is nothing in the report that any right-thinking person could denigrate or dismiss. The report is a landmark in the post-litigation era of the Post Office IT scandal.

**

MPs demand urgent compensation for Post Office scandal victim group – Computer Weekly

Post Office received £1bn taxpayer subsidy last year as part of IT scandal compensation – Karl Flinders, Computer Weekly

The Great Post Office Scandal

43 years of state IT-based project disasters and they’re still happening – Part 3 – Campaign4Change

Among the systemic reasons for around £40bn of IT-related failures may be truth decay, excessive secrecy, no consequences for getting it wrong and the misleading of Parliament – a decades-old “conceal-and-deny” approach.

A public inquiry into the Post Office IT scandal, chaired by a much-respected judge Sir Wyn Williams, is looking at the Horizon system as supplied by Fujitsu. But what of the Whitehall culture that made a cover-up of Horizon’s faults possible, a culture that makes central government, with some impressive exceptions, a dysfunctional buyer of large-scale IT systems?

By Tony Collins

Part 3 – The Whitehall Bubble

Libra and ICL [Fujitsu]  

The Libra project to computerise magistrates’ courts got off to a bad start when ICL [later rebranded Fujitsu] was the only bidder. Its bid price of £146m increased to £184m by the time the contract was signed seven months later. In the following year, 1999, ICL [which was by then starting to roll out its Horizon system to thousands of post offices], sought to renegotiate the Libra contract because its cash flow forecasts showed a £39m deficit over the life of the deal.

ICL said that it would be unable to continue with Libra if this gap in its finances could not be closed. It wanted the negotiations to be concluded by 21 March 2000 as it would otherwise have had to declare a loss in its 1999–2000 accounts. It needed to make a decision on whether to walk away by that date.

Whitehall officials and ICL agreed a revised contract for £319m over 14.5 years which included more PCs and printers. But ICL brought in a new management team that re-evaluated the plan and found it was not deliverable. ICL told the Department – a predecessor of the Ministry of Justice – that its forecast losses were now so high that it could not continue with the project unless the contract was substantially renegotiated.

This was the second time ICL wanted the contract renegotiated.

The supplier was in breach of the contract for failing to meet the delivery date for core software at the first courts site. But officials decided to negotiate with ICL rather than terminate the contract and sue for damages. Suing ICL appears never to have been a serious option given that civil service decision-makers had not been on hand when needed and there had been a lack of clarity at the start of the contract about exactly what the magistrates’ courts wanted. Suing was also not possible because Whitehall considered the systems too important to allow ICL to default.

In any case, Whitehall’s leaders would not let senior civil servants go into a witness box in an open courtroom where they might reveal how dysfunctional Whitehall departments could be, especially in the commissioning of large-scale IT-based systems.

One common result of the state’s dysfunctional IT buying big problem was that suppliers and buyers usually discovered only after contracts were signed that the project as configured was doomed.         

Walk away?

ICL told officials that its maximum potential loss on the project was £200m and that it would repudiate the contract unless the Department negotiated to cover the loss.

At one point, senior managers from ICL made it clear to project officials that deadlines were being dictated by their parent company, Fujitsu, in Japan.

Next, the Department and ICL signed a legally binding Memorandum of Understanding, which placed Whitehall officials in a less favourable position than they would have been if they had simply continued with the existing contractual arrangements and relied on existing contractual rights.

In the end, the Department signed a revised contract with ICL (by then known as Fujitsu Services) for £232m over 8.5 years to supply mainly PCs, printers and networks – but not the much more tricky software to handle magistrates’ cases. The software had been the main reason for buying the system.

Whitehall officials had to buy the case-handling software separately. This meant the total costs of Libra soared to £390m, up from the initial bid price of £146m. The Public Accounts Committee branded Libra as “one of the worst IT projects ever seen”.

That ICL had threatened to walk away from the contract and had twice sought to renegotiate it were state secrets until the National Audit Office produced an impressively-detailed report in 2003.

But the National Audit Office’s investigation came about because MPs on the House of Commons’ Public Accounts Committee persuaded the NAO to investigate. Had Computer Weekly not been publishing articles on Libra there might never have been an NAO report on the project.  

There are indeed no checks and balances within the Whitehall system to ensure that all major IT-related project failures are independently investigated or that Parliament is given a truthful picture when big programmes begin to fail.

Misleading Parliament by omission – the norm on major failing state IT-based projects

Parliament was given the impression all was well with Libra when the scheme was, in fact, at its lowest point. Parliamentary replies to MPs’ questions misled not by lies but by omitting inconvenient truths.

In November 2021, Conservative MP John Berkow, then in opposition, asked the Lord Chancellor’s Department for that year’s costs of Libra.

The government minister’s reply gave not a hint that ICL (then wholly owned by Fujitsu) was in breach of contract, threatening to repudiate the contract because of potential losses of £200m and the total estimated costs at that time had soared from the initial £146m to £319m. This was the reply ….

“The estimated costs of the Libra project in 2001–02 amount to £26.5 million. This is made up of internal costs, payments to ICL for the rollout of the first phase of the project and payments by the Magistrates Courts Service for the ongoing usage of Libra.”

That was the end of his reply. And not a hint that, at that time, new case-handling software for the courts had been delayed indefinitely.

Separately the Lord Chancellor and Chief Secretary to the Treasury published a combined report in 2001 that included Libra as one of their “achievements” of the past year.

Inconvenient truths were nowhere in sight. The report made no mention of Libra delays, major cost overruns or the supplier’s breach of contract and uncertainty over whether case management software would ever be rolled out successfully.

Instead, the report contained a foreword by then Lord Chancellor which used the future tense when referring to Libra. [It’s commonplace when things go wrong on major IT-related projects that Whitehall reports on what will be achieved, which avoids explaining the failures to date – a variation on the “conceal-and-deny” theme.]

The Whitehall report on Libra said,

“The Libra project will provide computer systems and equipment to around 500 magistrates’ courts in England and Wales. It will offer standard office automation throughout the magistrates’ courts and dedicated IT support for key business processes. The major benefits it will bring are:

– linking with other criminal justice organisations to speed the flow of information (joined-up service delivery);

– enabling police and other prosecuting authorities to provide summons information electronically;

– the provision of hearing information and key case information on a secure website for other criminal justice agencies and solicitors to access;

– a nationwide network infrastructure with external e-mail for all staff;

– courtroom computing – providing online access during hearings;

–  a data warehouse for policy evaluation and performance information;

–  potential for the future – the national infrastructure and central database provide the platform for re-examining business process and electronic service delivery.”

Watchdogs with few teeth  

Nick Davies, Programme Director at the Institute for Government, told LBC this month of weaknesses in checks and balances on the award of major state contracts. He said that watchdogs have limited power and not many teeth.  He said,

“The problem in so many of these cases is that government is effectively marking its own homework.”

He said that if watchdogs find something wrong they have to rely on government “to do the right thing”. But he added that “too often many governments but particularly this one” have shown that they do not think rules apply to them.

He also suggested that open government remains as elusive as ever. He said,

“Generally when it comes to government spending and transparency … this government has taken backward steps.”

He said that fewer freedom of information requests are being answered satisfactorily and government has failed to publish contract awards “months and months into the pandemic when the initial rush was over … when they were actually required to do so”.

Libra and other similarly-flawed government IT-based programmes suggest a structural failure of checks and balances in Whitehall. Although the National Audit Office and the Public Accounts Committee publish reports on some IT-based project failures, departments need pay no attention to any lessons when they come to buy new large-scale IT systems.      

In 2017, the Commons’ Public Administration and Constitutional Affairs Committee said [Lessons still to be learned from Chilcott inquiry] that  

“… our system currently lacks ‘a statutory or a convention-based enforcement system to ensure compliance with proper standards and accepted rules of how government should be conducted’.”

The National Audit Office has also expressed concerns about Whitehall’s conflicts of interest in reporting impartially to Parliament in its report “Accountability for Taxpayers’ money”.”  

https://www.nao.org.uk/wp-content/uploads/2016/02/Accountability-for-Taxpayers-money.pdf.

There is indeed nothing to stop governments continuing to commission flawed IT-based projects and giving falsely-reassuring statements to Parliament on their progress.

It means that the state, as a dysfunctional buyer of large-scale IT over decades, remains under no pressure to change.

Smart Meters – a failing £11bn programme or another Whitehall “success”?

The Department for Business, Energy and Industrial Strategy continues to issue reassuring statements on the roll-out of smart meters. One of its latest statements, in 2022, is this,

“Smart meter technology is designed to accommodate the evolution of communication services over time, meaning people’s original smart meters can remain connected.”

That may be the intention but is it a reality?

Many experts support the idea of smart meters in principle. But they say costs of the roll-out have soared and the technology – which does not work with 4G or 5G – has obsolescence built in. New “smart” meters work only on 2G or 3G which are to be phased out.  

Nick Hunn, a technology specialist at WiFore Wireless Consulting, last month told the Financial Mail on Sunday,

“Many billions more will now have to be spent replacing smart meters.”     

Alex Henney, a former Government adviser on energy said,

“What is being provided is obsolete equipment at a ludicrously high cost. This troubled roll-out of smart meters is nothing but a total waste of taxpayers’ money. 

“The Government does not seem to have given any thought about forcing smart meters on to us without realising they will become obsolete when the mobile signals change.” 

But the Department for Business, Energy and Industrial Strategy, which is in charge of the smart meters roll-out, continues to publish statements that give no hint of any serious problems. The Department says on the GOV.UK website that the rollout is,

“… modernising the energy system and transforming the consumer experience by replacing traditional meters with smart meters. It is delivering accurate billing, advancing competition in energy provision, enabling faster and easier switching, and improving customer service and information.”

The Department describes the roll-out of smart meters as “successful”. It says the roll-out involves £13bn of private energy sector investment (which is to be recouped from consumers), delivers benefits of £19bn (which are unproven), and supports 15,000 jobs.

Inconvenient truths

The National Audit Office, in a report on smart meters, urged the Department for Business, Energy and Industrial Strategy, to

“make sure the team culture does not become defensive, and resistant to inconvenient truths”.

In 2018, the National Audit Office reported that 70% of the original “SMETS 1” smart meters did not work when householders switched suppliers. It said,

“The facts are that the programme is late, the costs are escalating, and in 2017 the cost of installing smart meters was 50% higher than the Department assumed…

“The full functionality of the system is also dependent on the development of technology that is not yet developed.”

The NAO also said,

“ … it is currently uncertain whether the industry cost savings forecast by the Department will materialise.”

But the Department for BEIS is entitled to reject anything said by the National Audit Office in its value-for-money reports. Indeed, from BEIS’s viewpoint, it may be better support its ministers by continuing to be defensive and resistant to inconvenient truths than being candid about the roll-out’s problems which could lead to political embarrassment.  

It was left to Rachel Reeves MP, then head of the Business, Energy and Industrial Strategy Select Committee, to tell it like it is. She said,

“The smart meter rollout has been beset by problems and delays… yet, from our evidence hearing and the subsequent Ministerial correspondence, the Government’s tendency is to sugar-coat and pretend that everything will turn out alright in the end.”

Her comment about “sugar-coat” could apply to almost every government statement on a major IT-based programme in the past 43 years.

But the absence of any compulsion to tell the truth about the state’s biggest IT-based projects could explain why Whitehall has found it easy to normalise a “conceal-and-deny” approach to its most egregious blunders.    

Part 4 – Pathway and Horizon – to follow

**

Moving witness statements to Post Office Horizon inquiry – transcripts and video:

Day 1 – 14 February 2022

Day 2 – 15 February 2022

33 former staff died before getting justice in Post Office IT scandal – Daily Mail’s front page – 14 Feb 2022

The Great Post Office Scandal – by Nick Wallis

43 years of state IT disasters – and they’re still happening– Part 1

43 years of state IT disasters – Part 2

By Tony Collins

Last week Campaign4Change published a list of major IT projects where, when things went seriously wrong, Parliament was not told the whole truth and sometimes nothing like the truth.  

The article said that, among the systemic reasons for around £40bn worth of state IT-related failures, may be truth decay, excessive secrecy, no consequences for getting it wrong and the misleading of Parliament – a decades-old “conceal-and-deny” approach.

Part 2 – Slippery with the truth

Margaret Hodge, former minister and chairwoman of the Public Accounts Committee, wrote in her book “Called to account” about the slipperiness of some witness evidence on IT and other projects.

In one case, a whistle-blower sent her committee a brown package of papers, including departmental documents, which directly contradicted evidence given to the committee by a senior Whitehall official. 

About two decades before, a senior civil servant had told the Scott inquiry that truth is a “very difficult concept“. He was referring to the information (or rather the misinformation) given to Parliament over the so-called Matrix Churchill affair.

All of which raises a question of how it is possible for most big state IT-related projects to succeed when their leaders work under cover of state secrecy, are not held responsible when large programmes fail and are working within a Whitehall system that encourages the omission of key facts in Parliament statements, replies and evidence to committees.

Disinformation, which implies an intent to deceive, is rare. But civil servants draft ministerial speeches and Parliamentary replies on IT-related projects with, it seems, a loyal intent to desensitize, or cushion the effect, of what ministers tell MPs and peers when things go wrong. Negatives are turned into positives – what the National Audit Office has calls a “good news” culture or a “bunker mentality”.

On the £9.3bn Emergency Services Network [ESN] project, which is £3.1bn over budget, the Public Accounts Committee said in 2019,

“An unhealthy, ‘good news’ culture in the Department [Home Office] meant it failed to heed warning signs that the programme was undeliverable. Many of the issues with the Department’s original approach were foreseeable and should have been challenged earlier…

 “We have been warning that ESN is a high-risk programme since 2016, but only now does the Department accept that it was too optimistic about how long it would take to build ESN. The Department admits that where problems had been identified, they were not escalated properly, which meant the Department missed opportunities to correct its approach earlier.”

Home Office secrecy was such that even the departmental head of the ESN project, the senior responsible owner, was not shown a key internal report on some of the issues and risks with programme including an unclear approach to managing the scheme’s several suppliers.

It meant that the UK senior responsible owner of one of the biggest IT-related programmes in Europe was kept in the dark by his own staff on a key report about the project’s difficulties.

Subsequently, the Home Office sought a new senior responsible owner (at a salary of £140,000) for the ESN programme.

This job search negated the whole point of having a senior responsible owner as a senior civil servant who saw a major project through from start to finish.

Problem? What problem?

Officially, the Emergency Services Network is on course to be a transformative success. This was a glowing Home Office account of the project on GOV.UK,

“ESN will transform emergency services’ mobile working, especially in remote areas and at times of network congestion. It will create a single platform for sharing data and imagery and enable faster adoption of successful mobile applications. ESN also represents value for money for the taxpayer through delivering steady state savings of over £200 million per year.”

Indeed, GOV.UK currently has a 1,500-word account of the project and not a sentence hints that the project has been beset by seven years of delays, an overspend of £3.1bn, the use of technology that may be obsolete by the time it is due to roll out in 2024, or a dependence meanwhile on a 22 year-old “Airwave” communications system that costs £1.7m a day to run.

It is perfectly possible a new government will pull the plug on the whole programme, in part because, by 2024, police, ambulance or fire services may not want to pay for the rising costs of the system.

Unreassuringly, the GOV.UK website on the ESN programme has not been updated for a year. Also, as is routine on big IT-related programmes, the government and Whitehall have published no internal progress reports on the scheme.

Tensions are known to exist between the Home Office and at least one of the scheme’s main suppliers. But in Parliament ministers continue to give an impression all is well. Indeed the then policing minister denied last year that the programme was in trouble.

He told the House of Commons last year,  “The programme continues to make steady progress, and confidence in the technical viability of the solution continues to increase. The core network has been built, and much of the ultimate functionality has already been demonstrated. We are working hard to demonstrate the emerging product and agree realistic plans with users for the final stages of delivery and deployment.”

The obvious contrast between ministerial assurances on the Emergency Services Network programme and its potentially fatal problems suggests that the state’s implicit decades-old strategy of “conceal and deny” on major IT-based programmes remains active.     

As a footnote to the minister’s assurances on the programme, he told Parliament that the cost of the Emergency Service Network “is actually only – ‘only’ – £4.2 billion”. But two years before this assertion the National Audit Office put the cost at £9.3bn. Above is a screenshot of a part of an NAO report on the Emergency Services Network that confirms the cost.

The minister’s statement, therefore, suggested to MPs that £9.3bn figure was a myth. In fact the National Audit Office and the minister’s officials were giving the projected costs over different time periods.

But how were MPs who questioned the scheme’s costs in Parliament to know this?  

(More on the Emergency Services Network is in the last post in this series.)

World-beating track and trace system

The prime minister told MPs a “world-beating” Covid track and trace system would be ready by 1 June 2020 but his statement had little to do with reality. 

No world-beating track and trace system was ready by 1 June. Or even a working one. Contract tracers struggled to log onto the system and had error messages they didn’t understand and nobody explained. When they were able to log in, there was nobody to trace, according to BBC’s Panorama.

A centralised database for a contract tracing app was fatally flawed, unnecessarily complicated and phones failed to communicate via bluetooth. Multi-million pound IT contracts came to nothing.  But when ministers updated Parliament, their statements turned truth on its head.  A minister, when asked about the track and trace app, told Parliament on 18 June 2020 of “terrific progress”. He also spoke of the track and trace programme as a “remarkable national asset that protects us from the virus …”

But Reuters reported in June 2020 …

Sky News told a similar story:

The whole truth?

When ministers assure Parliament of progress on a big IT project in their department, they may not know the whole truth. In Parliament, they sometimes read out statements drafted by their civil servants word for word. 

Former Cabinet Office minister Francis Maude told the Financial Times,

“There were a lot of failures in DWP [Department for Work and Pensions] and it isn’t good that it took a review commissioned . . . by the secretary of state to disclose what was going on…

“You’ll find a lot of ministers don’t know a lot of things going on in the department because there’s no way you’ll find out.”

A general lack of openness and transparency is not helped by a government-wide ban on central departments publishing internal reports on the progress or otherwise of IT-based projects. This thin-skinned approach is summed up by the then Justice minister who told Parliament in 2019 that his ministry would not publish the results of a review into what had been described as an IT meltdown in the courts.

The meltdown happened  in 2019 when multiple Ministry of Justice IT systems failed at one time. Trials were delayed, jurors were unable to enrol and lawyers were prevented from confirming attendance that enabled them to get paid.

But the minister said the review report would not be made public in order to “protect the department’s security and commercial interests”.

Bob Neill MP, then chairman of the Commons justice select committee, was concerned about what he saw as unnecessary secrecy. He said,

“This [refusal to publish] is a troubling decision which could set a dangerous precedent. “Commercial confidentiality” should not be a used as a blanket reason for withholding information from proper scrutiny, and if there are legitimate security concerns, there are well-established precedents for publishing reports in a redacted form. The government should consider doing that in this case.”

But the justice minister used a familiar Whitehall technique for responding publicly to IT failures: he told Parliament what was not the case rather than what was: his Parliamentary reply said there was no evidence of foul play and no data was lost during the incident – although nobody had suggested either of these things had happened.

Indeed, the government kept its review report into the courts IT meltdown secret. This meant there was little or no incentive for the department to avoid IT-related chaos again and the wider public sector was denied an opportunity to learn from what happened.     

Part 3 –  “Whitehall’s alternative reality” to follow

Part 1 – 43 years of state IT project disasters – and they’re still happening – Campaign4change

Troubling secrecy after IT meltdown in the courts – Law Society Gazette

Track and Trace – BBC Panorama

The Great Post Office Scandal – Nick Wallis’ book

Post Office received £1bn subsidy as part of IT scandal compensation – Karl Flinders, Computer Weekly

Barrister Paul Marshall on the Post Office scandal – the intersection of law, ethics and politics

Among the systemic causes of around £40bn of state IT-related failures are truth decay, excessive secrecy, no consequences for getting it wrong and the misleading of Parliament – a decades-old “conceal-and-deny” approach.

A public inquiry into the Post Office IT scandal is looking at the Horizon system alone – not the Whitehall culture that makes central government, with some notable exceptions, a dysfunctional buyer of IT.

Part 1 of a multi-part series of posts

By Tony Collins

Campaign4Change has compiled a list of major IT projects that have contributed to around £40bn worth of government IT-related failures since the 1970s. One current project in trouble is costing £9.3bn.

Below is a summary of 13 projects where, when things went seriously wrong, Whitehall officials or government ministers did not tell Parliament the whole truth and sometimes nothing like the whole truth.  

1) The cost of a project to computerise magistrates courts involving ICL [Fujitsu] and a predecessor of the Ministry of Justice nearly trebled from £146m to £447m and did not work properly years after the roll-out;

2) The Rural Payments agency’s Single Payment Scheme cost around £350m – four times its original estimate of £75.8m – and had to be replaced. Its £155m successor system led to farmers making subsidy claims on paper;

3) A £475m IT system for a purpose-built air traffic control centre in Swanwick, Hampshire was due to go live in 1996 but was delayed by six years while costs increased by £180m; 

4) Costs almost trebled on a prisons IT system [National Offender Management Information System] known as C-NOMIS from £234m to £690m and even then the National Audit Office described the system as “ultimately unsuccessful”;

5) The House of Commons was told the Ministry of Defence’s Defence Information Infrastructure would cost £2.3bn. It turned out to be £7.09bn, while there were long delays rolling it out and civil servants described parts of the system as an unmitigated disaster;

6) A £9.3bn communications system for police, ambulance and fire services, the Emergency Services Network,  is currently running seven years late, is £3.1bn over budget [49%] and may never work as originally intended;

7) Whitehall’s “ FireControl” project to replace the 46 Fire and Rescue Services’ local control rooms across England with nine purpose-built regional control centres linked by a new IT system ended in failure, with £469m and seven years of work wasted while costs to maintain empty control centres continued to burden taxpayers;

8) The government-owned Post Office spent £600m on a flawed computer system, Horizon, whose defects led to hundreds of sub-postmasters and sub-postmistresses losing their homes, businesses and, in a few cases, their lives, while more than 700 miscarriages of justice have left taxpayers facing a £1bn compensation bill, a potential debt that leaves the Post Office technically insolvent;

9) An earlier £1bn government-funded “Pathway” computer scheme to pay benefits via a card, a project that involved social security officials, the Post Office and supplier ICL [Fujitsu], was ended after delays, a series of disagreements and an exchange of breach-of-contract notices;

10) The National Audit Office found that a new system at passport offices forced at least 500 people to cancel their holidays because passports could not be issued on time;

11) Public Accounts Committee MPs found that the Home Office continues to struggle with IT, at a “staggering” cost to the taxpayer. Its failed e-borders project cost £340m plus £185m for a legal case against supplier Raytheon in the wake of the contract’s cancellation, plus a further £173m on a delayed successor scheme. The Home Office had given “false assurances” to Parliament, had failed to be open and transparent and had continued its “miserable record of exorbitantly expensive digital programmes that fail to deliver for the taxpayer,” said the committee in 2021.

 12) In the 1990s a predecessor of the Department for Work and Pensions set a then-record for overspent IT projects when a technology scheme that Parliament was told would cost about £700m in fact cost £2.6bn. At the outset, the director of the “Operational Strategy” IT project, when asked by MPs if the £700m costs would rise in real terms, replied that equipment costs would, if anything, “come down”.    

13) In perhaps the biggest state IT failure to date, the Department of Health lost up to £10bn on the National Programme for IT in the NHS [NPfIT], which was “dismantled” in 2011, eight years after critics had said it could never work and after Parliament was repeatedly assured that it was making good progress. Added to the wasted billions was a reportedly huge payment to Fujitsu, one of the NPfIT suppliers. After its contract was terminated, Fujitsu sued the government for £700m. A settlement was reached in secret.

Consistent underperformance

 In 2021, the National Audit Office reported that, despite 25 years of government strategies and countless attempts to deliver digital business change successfully, there has been a “consistent pattern of underperformance”.

The NAO highlighted repeated causes of failure such as lack of digital expertise among decision makers.

But its cross-government report last year, “The challenges in implementing digital change”, failed to mention the systemic cultural causes of decades of IT project failures. Below are some of these underlying causes:  

– In Whitehall, project failures have no bottom-line consequences. No individual need be concerned.

– Senior officials and ministers don’t have to be available on big IT contracts to make awkward decisions.

– Leaders keep changing including senior responsible owners, senior officials and ministers

– Responsibility for failure is nebulously collective and individual responsibility is, in practice, non-existent, which is not the way to run a big IT project.

– For some suppliers, there may be a huge gap between those bidding for contracts, whose promises are sometimes abundant and extravagant, and those who have to deliver.

– A “keep-it-simple” philosophy in Whitehall is rare. Hundreds and sometimes thousands of change requests are routine. Big IT programmes are often characterised by their gold-plated complexity even when simplifying business processes to suit a proven IT system is more likely to lead to success.  

– when things go badly wrong, a top priority of senior officials, it appears, is to protect their minister and omit inconvenient facts from draft Parliamentary replies, speeches and government statements.

– No matter how poor the performance of big IT companies,  ministers and Whitehall’s senior officials will not let a dispute with one of their major technology suppliers reach an open courtroom for fear of civil servants being put on the stand where they could reveal, under cross examination, how dysfunctional parts of government can be.

Truth?

Suppliers may, however, sue their public sector customers which EDS [later HP] did in 2000. During cross-examination in court, an official said Parliament was not told the whole truth about progress on a £50m project for a new air traffic control system in Scotland.

He said the House of Commons’ Transport Committee was told that, although the project’s timetable had slipped, for reasons unrelated to the contract, EDS was performing well. But MPs were not told that, a week before the committee hearing, a different supplier, Raytheon, had been asked about the possibility of taking over the EDS contract. 

The official was asked in court whether he had reported his concerns over the truth of evidence given to the transport committee. He replied that MPs were given information based on “other factors”. He said it was not his job to go and correct what the committee was or wasn’t told.

Part 2 – Slippery with the truth – follows on Monday

By Tony Collins

Police have re-interviewed two people as part of an investigation into a Post Office computer scandal that saw hundreds of workers wrongly convicted of crimes, says the Sunday Mirror.

The Post Office pursued more than 700 sub-postmasters and sub-postmistresses for theft, fraud and false accounting based on information from Fujitsu’s faulty Horizon system.

The Metropolitan police are now investigating the accuracy of evidence from two people who worked for Fujitsu, after a High Court judge referred the case to the Director of Public Prosecutions.

The man and woman were spoken to under caution on suspicion of perjury, says the paper. It adds that dozens of postal workers were jailed between 1999 and 2015 and that courts were not told about the system’s flaws, say campaigners. It is alleged the Post Office and Fujitsu covered up the flaws.

Scotland Yard told the Sunday Mirror that a man and woman in their 60s have been re-interviewed under caution on suspicion of perjury. A spokeswoman said, “No arrests have been made and enquiries continue.”

The Justice for Sub-Postmasters Alliance says a cover-up of Horizon’s IT problems involved Whitehall departments as well as the government-owned Post Office. The Alliance’s founder Alan Bates wants the criminal investigations to be widened. So far more than 70 victims have had their convictions overturned after one of the biggest miscarriages of justice in UK legal history.

In January 2020, the Metropolitan Police Service received a letter from Mr Justice Fraser via the Crown Prosecution Service. Mr Justice Fraser was the High Court judge who found that “Legacy” Horizon, which was in use at the Post Office until 2010, had numerous bugs, errors and defects and was not remotely robust. The system’s successor, known as HNG-X also had a “significant” number of bugs, errors and defects. The judge learned that various courts had been told of the efficacy of Horizon.

The Met police subsequently assessed Mr Justice Fraser’s letter and opened a criminal investigation. The Met has confirmed it is aware of the Criminal Cases Review Commission’s referrals to the Court of Appeal and subsequent proceedings.

Sunday Times

Yesterday the Sunday Times reported that ministers have set aside more than £1 billion to settle claims with victims of the Post Office IT scandal. It said the business department, BEIS, has “quietly made three grants available to the Post Office”, which confirms that “compensating sub-postmasters could cost more than £1 billion”. The last grant in December 2021 was for £685m.

Karl Flinders of Computer Weekly first reported on the £1bn set aside as compensation money last Monday. His article said at least three payments were paid by the Department for Business, Energy and Industrial Strategy (BEIS) to the Post Office last year. One of over £94m was made in July and another of £685m on 20 December, both labelled as their purpose “rescue aid” – part of a subsidy scheme known as Post Office Historical Matters Compensation. In March last year, £233m was paid with the purpose labelled as “employment” within a subsidy scheme known as Post Office Historical Shortfalls Scheme.

A BEIS spokesperson told Computer Weekly the subsidy figures are a top estimate of what could be needed, and had been set aside for potential use. “It has not been spent and will only be given to the Post Office in arrears if and when required.”

Journalist Nick Wallis, author of The Great Post Office IT Scandal reports on his blog that the money set aside for paying compensation makes the Horizon IT disaster a “fully-fledged £1bn scandal”.

He also says it is mystifying that neither Paul Scully MP, who is the Postal Affairs minister, nor the two senior civil servants who sat either side of him at a hearing of the BEIS Select Committee in the House of Commons on 11 January 2022 [Carl Cresswell and Tom Cooper], mentioned anything about the £685m compensation grant. Wallis says that compensation was exactly what the committee was there to discuss.

The absence of any ministerial reference to £685m or the other amounts at either the BEIS committee or a House of Lords debate on 10 January which was specifically on Post Office compensation, suggests that openness and transparency over the scandal may be more of an aspiration than a reality for government and Whitehall, and particularly for the Department for BEIS.

Comment

In a scandal characterised by government and Whitehall cover-ups, it is perhaps unsurprising that both houses of Parliament – in separate exchanges this month over Horizon-related compensation – have been left uninformed about the £1bn set aside for compensation.

The Department for BEIS can argue that the money was not mentioned to Parliament because it has not been allocated yet: it is merely set aside for possible compensation.

But is it not important for MPs and the public to know that the scandal may cost taxpayers £1,000,000,000?

It is as if Scully and his officials at BEIS see the cost of dealing with the scandal as purely a matter for government rather than a matter for the public, MPs and taxpayers.

But it is public money involved (and it is public money that pays the salaries of ministers and BEIS officials).

Compensation doublespeak?

Orwell’s 1984 includes the memorable slogans War is Peace, Freedom is Slavery and Ignorance is Strength. In the context of the Post Office IT scandal, perhaps the ministerial words “as soon as possible” mean the opposite.

Scully uses the phrase as soon as possible repeatedly when referring to a need to pay compensation to all victims of the scandal. But it is more than two years since Alan Bates and his group of 555 won their High Court case and still they have not received full compensation.

The latest ministerial ruse is to announce that paying the Bates 555 fair compensation needs a “mechanism”. Which seems to be a means of delaying proper compensation indefinitely.

Events in government over the last few weeks raise questions about poor standards in public life. Indeed today, in the 22nd year of the Post Office IT scandal, the whole affair continues to be characterised by a lack of openness and transparency, doublespeak and deliberate delays in paying full compensation to all victims.

But Scully, with the support of BEIS officials, seem proud to defend their way of doing things. For them, the payment of full compensation to the Bates 555 is a technical and legal matter – a mechanism, a work-related affair that has no personal consequences whether full compensation is paid or not. In this Whitehall world of no consequences, time, in fact, is not of the essence.

More people may die awaiting the money that is owed to them. But to Whitehall devising a mechanism for making payments is more important.

**

The Great Post Office IT Scandal – Nick Wallis’ book

£1bn set aside to pay compensation – Karl Flinders, Computer Weekly

By Tony Collins

The Sunday Mirror has reported that former sub-postmasters who exposed the biggest miscarriage of justice in British legal history plan to launch a fresh claim for £300m “fair” compensation.

The paper says that sub-postmasters won a settlement from the Post Office in 2019 but received only an average of £20,000 each.

The government has insisted the settlement is full and final but the Justice for Sub-postmasters Alliance, led by Alan Bates, is seeking “fair” compensation of £300m. That figure equates to, on average, about £540,000 for each member of his 555-strong group.

The Post Office wrongly accused hundreds of people who were running branch post offices of fraud, theft or false accounting on the basis of money shown as missing on the Horizon accounts system. Horizon’s supplier Fujitsu and the Post Office concealed bugs and defects that were causing unexplained losses and let innocent people lose homes and businesses, go to prison or be made bankrupt. A small number of those blamed for Horizon shortfalls committed suicide.

Bates and his group exposed the scandal by suing the Post Office in the High Court. Since the litigation ended in December 2019, more than 70 wrongful convictions have been quashed and hundreds more appeal cases are in the pipeline.

But Bates and his group are denied access to government compensation schemes. He said,

“It seems the Government is determined to keep punishing us and denying us the money we are owed because we dared to expose the failings of the Post Office”.

Nick Wallis, journalist and author of The Great Post Office Scandal, reported in December 2021 that the Department for Business, Energy and Industrial Strategy and its Postal Affairs minister Paul Scully were still insisting that the settlement reached at the end of the litigation was “full and final”.

But Bates says that, although the settlement was signed in good faith, it later emerged that the Post Office had withheld a vital document, the so-called Clarke Advice, which could have shown that the institution’s managers knew as early as 2013 that it was wrongly prosecuting postal workers.   

Had the Clarke Advice been disclosed in 2013 it could have undermined the Post Office’s case for going to the High Court in defence of Horizon. The Clarke Advice was not disclosed until after the settlement – and only then because of the tenacity of barrister Paul Marshall.

Bates seeks a legal firm to help him have the settlement agreement set aside as fundamentally flawed.

Labour MP Kevan Jones said:

“The postmasters who uncovered the Horizon scandal deserve to be compensated. It’s unacceptable for the Government to carve them out of existing compensation schemes, and we urgently need to see proposals to reverse this.”

The Clarke Advice was dated 15 July 2013 and was written by a barrister, Simon Clarke, who worked for solicitors that had been instructed by the Post Office in relation to prosecutions. The document revealed a failure to tell the courts about Horizon’s bugs while sub-postmasters were put on trial on the basis that the system was robust.

This failure to disclose the bugs put the Post Office in breach of its duty as a prosecutor, said the Advice. “By reason of that failure to disclose, there are a number of now convicted defendants to whom the existence of bugs should have been disclosed but was not,” it said.

Today’s hearings

This morning, the Business, Energy and Industrial Affairs [BEIS] Committee will question Nick Read, CEO of the Post Office, Paul Scully, the government minister in charge of the Post Office, Carl Creswell, a director of the Department for BEIS which provided public funding for the Post Office and Tom Cooper, director of UK Government Investments who was the government’s representative on the Post Office board.

They will be asked about the obstacles facing former sub-postmasters seeking financial compensation and how effective the Post Office and the Government have been in attempting to address the financial loss suffered by sub-postmasters.

Ministers and civil servants who appear before select committees are usually briefed on how to answer possible questions and what they can and cannot say, particularly if the subject matter is considered legally sensitive.

If there are any new disclosures of information they are likely to have been pre-agreed by departmental communications teams and lawyers.

Under civil service conventions, civil servants who appear before select committees must represent their departments and particularly their minister. They rarely give their own opinion unless it is one consistent with the departmental and ministerial “lines to take” as pre-agreed.

Civil servants have a duty of honesty and integrity but there is no statutory requirement for officials or ministers to be open and candid in what they tell MPs. The Matrix Churchill affair in the 1990s showed that there can be a Whitehall expectation that half-truths, if deemed in the national interest, may be necessary when answering Parliamentary questions.

Select committees have little power to force the full truth from witnesses. On one occasion the Public Accounts Committee made a government lawyer representing HMRC give evidence on oath but it caused a furore among leading civil servants and has not been repeated.

Comment:

The “patronising disposition of unaccountable power”

Postal Affairs minister Paul Scully used an odd expression last month.

He was describing the reasons for giving the Post Office government funding to pay compensation to former sub-postmasters and sub-postmistresses whose convictions have been quashed. He said,

“… we are not making the funding available from the goodness of our heart; we are doing so because it is the right thing to do. I do not think anybody—as well as being a Government Minister, I am a constituency MP and a human being—can read these cases and listen to those involved, and fail to be moved by what has happened over the last 20 years.” [My emphasis]

The expression “right thing to do” was odd in the context of a scandal in which the government refuses to pay a penny in compensation to hundreds of sub-postmasters who were not convicted but still lost homes and businesses on the basis of Horizon “evidence”. Some including Lee Castleton lost, directly, hundreds of thousands of pounds. Many former sub-postmasters and sub-mistresses have not received full refunds of money they were made to pay for Horizon losses.

In this context, it is possible to see the phrase “right thing to do” as evidence of the patronising disposition of unaccountable power – the title of an official inquiry report into the Hillsborough disaster.

The phrase right thing to do can be used entirely inappropriately. It would be unsurprising if the Chinese government used it to explain why it was putting its citizens into “re-education” camps that are surrounded by barbed wire.

It is also an inappropriate phrase when used by a UK government minister in the context of dividing scandal victims into two groups – those worthy of full and fair compensation and those not.

Doubtless the phrase was written for Scully by officials in his business department, BEIS. These officials would appreciate the irony of saying it was the right thing to do to pay some victims and not others, especially when the unfunded group has exposed deep-rooted flaws in the Whitehall machine and embarrassed mandarins.

Also aggravating the injustices suffered by the Bates 555 is the government’s repeated use of the phrase full and final to deny fair compensation to the group. The phrase suggests that the settlement was negotiated entirely in accordance with established and accepted patterns of conduct and behaviour.

But how can that be the case when the Post Office withheld from the settlement negotiations – and from the High Court – a document that, if disclosed, could have fundamentally undermined the Post Office’s £40m defence of Horizon?

That the Post Office went ahead with the litigation and reached a settlement as if the Clarke Advice had never existed has never been explained.

If government ministers had genuinely wanted to do the right thing, they would have set aside the settlement last year and paid full and fair compensation to Bates and his group members.

It ought not to require a new Bates-led legal action to show that the deal was one-sided and flawed.

Has much changed?

The lack of openness and transparency continues. The Post Office is still refusing routinely to supply documents despite freedom of information requests from campaigners including Eleanor Shaikh and Tim McCormack.  Looked at from the outside, the Post Office machine looks bright, modern and newly-polished but inside, from a Whitehall viewpoint, its original trusted engine is reassuringly familiar.

It is possible today that the minister Scully will reiterate vague promises he has made before about compensating the Bates 555 but the longer government and the Post Office hold onto money that belongs to the group’s members, the more the use of the phrase right thing to do will look incongruous, even ridiculous.

**

100 MPs sign letter calling for full and fair compensation for the Bates 555 – Christopher Head initiative

Nick Wallis’ book The Great Post Office Scandal

Scandal at the Post Office – the intersection of law, ethics and politics – Paul Marshall

Government inquiry to look into compensation for scandal victims – Karl Flinders, Computer Weekly