Category Archives: National Audit Office

Post Office IT scandal makes legal history – and now prosecutors will come under scrutiny

By Tony Collins

The Post Office Horizon IT scandal became part of legal history yesterday when the Criminal Cases Review Commission referred an unprecedented 39 potentially unsafe criminal convictions to the Court of Appeal.

The grounds for referral were “abuse of process” – a term that suggests the  integrity of the criminal justice system might have been compromised.

Helen Pitcher, chairman of the Criminal Cases Review Commission, said in a statement yesterday: “This [39 applicants] is by some distance the largest number of cases we will ever have referred for appeal at one time.”

The 39 convictions were for theft, fraud and false accounting. They are being referred on the basis of an argument that “each prosecution amounted to an abuse of process”.

The Commission did not explain what it meant by “abuse of process” but the Crown Prosecution Service gives general guidance on what the term means.

In exceptional circumstances, an “abuse o process” is cited by courts when they intervene to stop a prosecution because of “bad faith, unlawfulness or executive misconduct”.

The term “abuse of process” has been defined as “something so unfair and wrong that the court should not allow a prosecutor to proceed with what is in all other respect a regular proceeding”.

It can also refer to a past prosecution that was manifestly unfair for reasons that have only since become apparent.

The Criminal Cases Review Commission is a statutory body set up to review suspected miscarriages of justice. Its commissioners have been looking at the safety of convictions that were based on evidence from the Post Office’s Horizon branch accounting system.

The commissioners have taken into account judgements in civil court trials related to the Horizon system. The judge managing the trials,  Mr Justice Fraser, found that the Post Office tried to mislead him about the Horizon system. Flaws in Horizon were kept hidden while the Post Office wrongly pursued sub-postmasters for money they did not owe.

Using its power to prosecute without using the Crown Prosecution Service, the Post Office prosecuted dozens of former sub-postmasters citing evidence from Horizon. Mr Justice Fraser found that Horizon was not as robust as the Post Office said it was.

Yesterday’s announcement of the 39 referrals is likely to put the legal spotlight on the Post Office prosecutors. The Appeal Court may consider questions of whether the integrity of the  criminal justice system has been compromised.

A Post Office statement yesterday on the referrals said,

“The Post Office has been assisting the Criminal Cases Review Commission since applications were first made to them by a number of former postmasters. We have always accepted our serious obligations and responsibilities to the Commission’s work.

We have not yet received statements of reasons from the Commission about the referrals they are making to the Court of Appeal.  We will be looking carefully at the Commission’s decision when we have that information and continue to fulfil all their requirements of us.

“We have also been doing all we can to ensure that, in the light of the findings in the Horizon judgment, further disclosure is provided as appropriate in other cases where Post Office acted as prosecutor, not just those reviewed by the CCRC.  The CCRC’s reasoning will be applied to those cases, which are being reviewed by an external team of criminal lawyers.

“We won’t be commenting on individual cases, because it would be inappropriate to prejudge the outcome of the important work that the CCRC is continuing to do or the Court of Appeal’s processes.”

Comment:

Imagine if the Department for Work and Pensions mistakenly sent bills to large numbers of benefit claimants for tens of thousands of pounds they did not owe because of a faulty computer system; and then, when the distressed claimants could not afford to pay the phantom debts, the DWP took them to court, made them bankrupt and took away their homes and livelihoods.

In the Post Office’s case, it is an injustice that has been allowed to continue nearly two decades. And it has gone entirely unpunished, without fair compensation being paid.

But now that the Post Office Horizon scandal has made legal history, perhaps the civil service will take more seriously calls among MPs, peers and former sub-postmasters for a judge-led inquiry.

Until now, civil servants have regarded the scandal as a skin irritant that could be cured by applying a little soothing ointment.

The Criminal Cases Review Commission has shown it is taking the injustices seriously, as have Boris Johnson and the civil courts.  Civil servants could follow reluctantly, as if they were waiting for instructions from the Post Office. Or they could lead.

Thank you David Orr for emailing a link to the BBC story.

Post Office reviews more prosecutions – Nick Wallis

Sub-postmaster convictions to be considered by Court of Appeal – Computer Weekly

 

Horizon IT scandal: has Goliath won?

By Tony Collins

Have Post Office officials, despite a series of highly critical High Court judgements against them, escaped masterfully from what Boris Johnson called a “scandal”?

BBC Radio Wales has broadcast an excellent documentary on the Post Office Horizon IT scandal. It features Noel Thomas who had devoted his life to the Post Office, first as a postman for 32 years and then as a postmaster for 12 years.

He worked his way up since the age of 17. But one Thursday morning at 7.30am the life he’d built up over decades began to fall apart. A Post Office investigations team wanted to interview him about “having his hands in the till”.

His denials counted for nothing. Investigators insisted he had taken money. The Post Office’s Horizon branch accounting system supplied by Fujitsu showed shortfalls of £52,000. The Post Office prosecuted him and he was given a nine-month jail sentence in 2006.

After prison, Thomas was called a thief in the supermarket. His children suffered taunts that their father had been to prison.

An unsympathetic Post Office chased Thomas for debts shown on Horizon and he went bankrupt. He ended up losing £250,000; and all the while nobody at the Post Office told him that Horizon screens could show non-existent shortfalls without any fault on the part of the sub-postmaster.

In the years to come, as Thomas tried to come to terms with his new life as a family man who was now a convicted criminal, he learned that he was not alone: the Post Office had demanded hundreds of sub-postmasters make good inexplicable shortfalls shown on Horizon.

But for Thomas and other victims of the Horizon IT scandal things began to look up in March 2017 when, led by campaigning former  sub-postmaster Alan Bates, they won the consent of the High Court for a group litigation against the Post Office.

The litigation was a clear success for Bates, 550 other claimants and their legal team.  By the time the two sides sat around the mediation table late last year, the judge had made several rulings, largely in the favour of the sub-postmasters.

Would the judge’s criticisms put the Post Office on the defensive at the mediation? His main judgement had criticised the Post Office’s “oppressive” behaviour in its dealings with sub-postmasters.  Mr Justice Fraser also criticised the Post Office’s conduct in the litigation: given the high costs of the litigation, it was perhaps extraordinary that the Post Office was said by the judge to have “resisted timely resolution of this Group Litigation whenever it can …”

It was indeed obvious to the sub-postmasters that the more the publicly-funded Post Office delayed  the proceedings, the greater the risk its opponents would run out of litigation funding.

Was this fair?

The judge had also found that the Post Office tried to mislead the High Court and  keep relevant information from being heard.  The appeal court likened the Post Office to a Victorian mill-owner.

Now, as the two sides sat around the mediation table, the High Court was about to publish an entirely new ruling. It would say that sub-postmasters had been forced into paying shortfalls shown on a Fujitsu Horizon system that had hidden bugs and systemic weaknesses.

The Post Office had spent more than a decade denying that these faults existed and had given misleadingly reassuring statements to Parliament and the media. The Post Office had prosecuted dozens of sub-postmasters on the basis of “robust” evidence from Horizon while not saying that Fujitsu engineers could alter branch accounts without the sub-postmasters’ knowledge.

The new ruling would find that the Post Office’s own expert witness was partisan, as were some of the other Post Office witnesses.

If all this was a cue for a contrite Post Office to make amends at mediation, there was little sign of it. It emerged from the mediation paying barely the sub-postmasters’ litigation costs.

Indeed, the £57.75m settlement figure would not have covered the sub-postmasters’ costs had there not been voluntary fee and other reductions on the part of the group’s legal team and a company that provided loans for the litigation.

These reductions, which were made out of sympathy for the former sub-postmasters,  allowed a fund of about £11.5m from the £57.75m to be distributed among the 550.

But the fund will pay only a small percentage of losses. And it doesn’t pay compensation for ruined lives.

“Scandal” says Boris Johnson

The prime minister refers to the whole matter as a scandal. He spoke in the House of Commons of the “disasters that have befallen many Post Office workers”.

But a Post Office statement to BBC Radio Wales offered no hope of any further money for the 550. It referred to its shortcomings as in the “past”. The statement said,

“A comprehensive final settlement was jointly agreed by the Post Office and the claimants in the group litigation last year. We apologise to those affected by our past shortcomings and we are continuing to address these directly…”

That the settlement leaves Thomas with only a fraction of the £250,000 he has lost – and nothing in compensation – is not the concern of the Post Office or its parent department BEIS. organisation.

How did the Post Office extricate itself relatively painlessly mid-way through an embarrassing  litigation, in which its competence, credibility and conduct were questioned repeatedly by a High Court judge?

Mediation

It may be  thought generally that, in mediation, the two sides enter talks to settle their differences on equal terms.

Not in this case.

On one side was a publicly funded institution. The other side comprised small businessmen and women who were funded by limited, expensive loans.

Worse for the sub-postmasters, the Post Office had already made decisions during the litigation that showed it was prepared to add to costs for both sides. Its decisions included applying for the removal of the judge near the end of a lengthy trial.  Had its application succeeded, it would have necessitated the costly trial being abandoned and a new one started under a different judge.

James Hartley of solicitors Freeths, which represented sub-postmasters in the litigation, gave  an interview to Computer Weekly shortly after the mediation settlement was announced in December last year.

He said that if his side had carried on with the litigation it was likely the sub-postmasters would have ended up with nothing. He said his side had obtained the best deal possible but sub-postmasters would not recover anything like their full losses.

“This was always understood by everyone because we knew the group action would have a lot of costs,” said Hartley. Had a settlement not been reached, the two further trials planned would have needed more funding.

“Even if we had got that funding, which is not certain, for every £1m we got from the case, £3m would have to go back to the funders. Every month that had gone on in the case, the value of damages available to claimants would have gone down, to the point where they would have got nothing even if we had won.”

The Post Office has made the point in its public statements that the settlement figure was agreed by both sides.  But mediation was not conducted on an equal financial footing.

In a different context, a few months before the mediation, Mr Justice Fraser had commented on the Post Office’s power when compared to the sub-postmasters.

He had said in his “Common Issues” judgement of March 2019,

“There is no doubt that the Post Office is in an extraordinarily powerful position compared to each and every one of its SPMs [sub-postmasters][. It appears to wield that power with a degree of impunity.”

Did the Post Office still wield power with impunity?

Convictions

At least Thomas, if he is not to recover his losses or receive any compensation,  can look forward to having his criminal record removed – his name cleared.

Or could even this be denied him?

There is no time pressure on the state to overturn wrongful convictions.  The simplest solution would be to set aside convictions en masse on the basis that all the prosecutions arose out of untrustworthy shortfalls shown on a computer system that was not as robust as prosecutors claimed.

But the state could, in theory, handle each wrongful conviction referred to appeal separately, review thousands of pages of documents in each case, and eventually overturn convictions when some of the falsely accused are no longer alive to see justice.

This may indeed be the state’s preferred route although there have already been years of delays in reviewing the cases.

Whether the P9st Office would prefer a group or individual review of convictions at appeal hearings is unclear. What is obvious, though, is that the longer it takes to quash convictions, the more it delays any civil claims for damages and compensation arising out of wrongful prosecutions.

A Houdini escape?

Nearly 20 years after Alan Bates had his contract to run a local post office in Wales terminated without reason when he queried apparent phantom shortfalls on Horizon, he is still seeking justice.

He has raised tens of millions in litigation funding, won the right to launch a group litigation order and his legal team has proved in the High Court that Horizon was not the robust system the Post Office had claimed.

His team could hardly have been more successful in exposing the inherent institutional failings that led to hundreds of miscarriages of justice.

Why then does  justice still elude him?

Comment

The Post Office says it is changing. It is learning lessons. It has a new CEO. But the judge’s comments suggested that the Post Office’s resentment of criticism and critics is deeply institutional.

The judge said the Post Office seems to act with impunity. The word “impunity” means acting as if exempt punishment, penalty of harm.

How can a public institution, however many new CEOs it has, change its spots?

Arguably the Post Office remains as financially powerful, dominating and secretive as ever. Recently, it is said to have reached secret settlements with Horizon victims who were not part of Bates’ group litigation.

For Bates and other sub-postmasters, their campaign or justice moves from the High Court to Westminster. But politicians may not, it appears, have the final say.

“Rats”

There is no provision in law to punish prosecuting authorities that prosecute wrongfully. But the public at least has a right to expect that elected politicians will be able to hold prosecuting institutions to account.

Boris Johnson wants an independent inquiry into the Horizon IT scandal, as do MPs, Alan Bates and many others.  But does the civil service and particularly the Department for Business, Energy and Industrial Strategy, the Post Office’s parent?

Lord Arbuthnot, a long-time campaigner for justice, told BBC Radio Wales that he is heartened by the prime minister’s support for an inquiry.

“I was given enormous heart that the prime minister himself described this as a scandal and he said there would be an independent inquiry.

” Now the rats will try to get at that. They will try to make it less independent. They will try to bring it under the Department for Business and Enterprise and that is something I hope the Prime Minister, who seems to have a good deal of sway in this government will be able to resist”.

Noel Thomas, Alan Bates and other former sub-postmasters sued the Post Office seeking damages for financial loss, deceit, duress, unconscionable dealing, harassment and unjust enrichment.

But the civil service seems not to accept that any of these things merit an independent inquiry.

It is extraordinary that a publicly-owned institution has been established in the High Court to have been behind hundreds of grievous miscarriages of justice and yet the victims have not received a full refund of their losses let alone compensation. And those responsible have not been held to account.

Unless Parliament intervenes and orders the setting up of an independent inquiry, it is clear that Goliath, with the support of civil servants at BEIS, will win in the end.

**

Thank you to Tim McCormack whose extensive knowledge and understanding of Post Office affairs never ceases to surprise me.

**

BBC Panorama – scandal at the Post Office – Monday 23 March

Journalist Nick Wallis will present this documentary about when senior managers at the Post Office knew the truth. Did they continue to prosecute postmasters for stealing when they knew technology could be to blame?

Wallis investigates what the BBC says could be Britain’s biggest ever miscarriage of justice scandal and uncovers evidence of a cover-up at the Post Office.

Alan Bates – the details man

Secret Post Office deals cause fury – Computer Weekly

BBC Radio Wales – Post Office IT scandal

Postofficetrial website

Only a judge-led inquiry will change “rotten” Post Office as IT scandal continues, MPs told

By Tony Collins

Former subpostmaster Alan Bates, who spearheaded legal action against the Post Office over its Horizon IT system, told MPs on Tuesday that the Post Office is “rotten underneath” and will not change without a judge-led inquiry.

Horizon victims Wendy Buffrey and Tracey Felstead also called for a judge-led inquiry at a hearing of the Business, Energy and Industrial Strategy committee.

The committee had its first hearing this week on the Post Office Horizon controversy. At its second hearing on  24 March, its MPs are expected to question the Post Office’s CEO Nick Read, the former CEO, Paula Vennells, Fujitsu, a business minister and a representative from UK Government Investments which has a place on the Post Office board.

The scandal is, in part, over the Post Office’s decision to dismiss unjustly hundreds of business people who ran local post offices. They were dismissed  because of shortfalls shown on the Horizon branch accounting system which had many hidden defects.

While keeping faults hidden, the Post Office, pursued sub-postmasters for supposed debts based on “evidence” from Horizon. Dozens of sub-postmasters  were prosecuted on the basis of Horizon evidence and many made bankrupt. Hundreds of lives were ruined.

Since a judge’s scathing criticism of the Post Office in rulings last year, the Post Office and Martin Callanan,  a business minister in the House of Lords, have said lessons will be learnt but Bates said he has “yet to be convinced things will change at the Post Office”.

He said the Post Office has promised to change its ways many times before but “it never happens”.

Bates said he had spoken briefly to Nick Read who took over the job as Post Office CEO in September last year. Bates said he wished Read well but described him to the BEIS committee as “very much like a new coat on old paintwork”.  He added that the wood underneath is “rotten” and called for a judge-led inquiry to “get to the bottom of things”.

Bates might have been referring, in part, to some of those within the corporate Post Office who chased sub-postmasters for questionable shortfalls and took legal actions against them.

Also giving evidence to MPs were Andy Furey of the Communication Workers Union and chartered accountants from 2nd Sight whom the Post Office paid to investigate sub-postmaster complaints. The Post Office dismissed 2nd Sight after their interim findings criticised aspects of the Horizon system.

What the witnesses told MPs indicates that many questions over the scandal remain unanswered:

  • Who on the Post Office board agreed to spend an estimated £100m or more, over time, on avoidable legal costs to fight the claims of sub-postmasters?
  • Does the civil service have a conflict of interest in deciding whether to support a judge-led inquiry, given that a judge may criticise officials for being a party to, or turning a blind eye, to the Horizon scandal as it unfolded?
  • Does the Horizon IT scandal continue?  It emerges that the Post Office maintains control over, and is dealing in secret with, an unknown number of sub-postmasters who were not part of Alan Bates’ High Court litigation but who have experienced problems with Horizon, including shortfalls. The Post Office has made no commitment to paying them compensation or returning their losses.
  • Why have people not been held to account although it is months since a High Court ruling was scathing in its criticism of the Post Office’s conduct and costs during the litigation, its dealings with sub-postmasters,  the inaccuracy of corporate statements to the media and Parliament and the withholding of relevant evidence from the court?
  • Could sub-postmasters continue to be blamed for shortfalls they know nothing about if nothing fundamentally changes?
  • Will the minutes of Post Office board meetings be published to enable scrutiny of the costly and a futile decision last year to try and remove the judge in the Horizon IT litigation?
  • Will those minutes, if published, reveal whether the civil service has been a party to Post Office board’s decisions?
  • In any dispute between he civil service and MPs, including Boris Johnson, over whether to hold a judge-led inquiry, who would win?

Asked whether the Post Office’s compensation of £57.75m to former sub-postmasters represented justice., Furey replied  “Absolutely not.”

He said it is “so important to get a judge-led inquiry”.” He added that the  vast majority of people operating local Post Office “want to provide a fabulous community service and are part of the fabric of society”. But when money went missing, the Post Office’s position was to “presume the sub-postmasters were guilty”.

He said the culture of the Post Office was to defend Horizon at all costs. “From the outset they could not have a position where Horizon could be questionable because that would jeopardise its business plan, its operating model and its ability to make profits”.  After accusing local businessmen and women of taking money that had been shown as shortfalls on Horizon, the Post Office escorted them out of their buildings and told them they could not visit their own post offices again even if their homes were above or at the back of them.

“This is a national scandal,” Furey told MPs, adding, “It has impacted on peoples’ reputations and the Post Office needs to be held to account”.  What is known about the scandal today has emerged only because of the litigation brought about by Alan Bates and other claimants, he said.

“The PO should hide its head in shame.”

Chartered accountant Ron Warmington of 2nd sight said his company only agreed to accept a contract with the Post Office to investigate the complaints of sub-postmasters on the basis that it wanted to establish the truth,

But the Post Office withheld information.  “Frankly,” he said,  “it was one of the worst and most difficult investigations I have ever carried out in terms of the client relationship.”

BBC Panorama is due to broadcast a documentary on the Horizon scandal on 23 March – how the Post Office covered up evidence of miscarriages of justice.

Comment:

Alan Bates called during the hearing for the “dead wood” within the Post Office to be cleared out. He referred to people who “knew the truth” but carried on with the actions against sub-postmasters.

But clearing out dead wood is not going to happen: the civil service and the Post Office do not want accountability or a judge-led inquiry.

Boris Johnson has suggested that he supports an inquiry but it is likely the civil service will have the final say.

Antony Jay, co-writer of “Yes minister”, said one thing he had learned in researching the TV series was that the civil service was the “real government”.  .

He told the Daily Telegraph that, deep in their hearts, most politicians respected civil servants but “deep in their hearts most civil servants despised politicians”. He said,

“After researching and writing 44 episodes and a play, I find government much easier to understand by looking at ministers as public relations consultants to the real government – which is, of course, the Civil Service.”

Which raises the question: why would the civil service want a judge-led inquiry? By funding and sanctioning Post Office actions that led to the scandal, the civil service has much to lose by any inquiry and nothing to gain.

Indeed it is clear it failed in its role of scrutinising, challenging and not accepting at face value what it was told by the Post Office.

A judge-led inquiry may still happen though, if MPs, peers, committees and Parliament generally, keep campaigning for one.

Clearly, for the victims of the scandal, what the Post Office has done and what the state has sanctioned, knowingly or not,  can never be undone. But not having an inquiry, not paying fair compensation, not holding people to account and offering up a plate of platitudes instead makes things much worse.

As things stand, officials and business ministers seem happy to accept 20 years of injustice and hundreds of lives ruined in order to protect a public institution and the civil service.

Today, across the world, the UK has a reputation for justice and a sometimes grudging fairness. But the more the state tolerates the damage caused by the Horizon scandal, the more it openly and fragrantly repudiates those virtues of justice and fairness.

MPs told to hold to account those responsible for Horizon IT scandal

Falsely accused ex Post Office workers demand judge-led inquiry – New Statesman

PM commits to Post Office inquiry – Nick Wallis’ blog

BEIS civil servants – are they hoisting their own petard? – Problems with Post Office Ltd blog

Accountability of the civil service? – Eleanor Shaikh’s research

Did Post Office chiefs get off lightly CWU, commnications union blog

 

Some of this state-sanctioned conduct would not be out of place in China or North Korea… the Horizon scandal in summary

By Tony Collins

  1. A knock on your mother-in-law’s front door at 3am. A state-sanctioned investigations team wants to interview you over stolen money you know nothing about.
  2. Your hands are bound and you are also handcuffed to one police officer on your left and another on your right. A state-owned institution says thousands of pounds is missing. It is confident you have taken it.
  3. You haven’t taken a penny but your protests count for nothing. The institution has the evidence from its computer system.
  4. You are not allowed to see your family. You are put in a vehicle and not told where you are going.
  5. You are taken to prison, kept in a cell all day and fed through a hatch. You see another prisoner who has committed suicide.
  6.  Before sending you to prison, a judge says you’ve stolen from pensioners. You are asked if you’ve used the stolen money for your recent holiday.
  7. In fact you are in prison because you had the misfortune to be a user of the institution’s computer system – called “Horizon” – at a time when it was showing discrepancies.
  8. Once a large and inexplicable shortfall appears on Horizon, more follow.  It’s the usual pattern.
  9. You are required to make good every shortfall now and in the future.  It is no excuse to say you haven’t stolen any money or made any mistakes. Evidence from Horizon is sacrosanct.
  10. If you cannot pay for the shortfalls, the institution, the Post Office, will make monthly deductions from your income, make you sell your home or make you bankrupt.
  11. You were given an impossible choice: a) accept the computer’s evidence at face value and agree to give to the Post Office any amount of money it requires you to pay now and in the future, or b) challenge the computer’s evidence and be prosecuted as dishonest.
  12. You challenged Horizon and ended up in court. Here, the denials of a branch counter clerk were unlikely to be believed against the evidence from a large and much-respected publicly-owned institution.
  13. The jury accepted that the computer was correct.  The computer seemed to work well for thousands of people every day. Why would it go wrong just in your case? But you didn’t realise then that, to everyone who complained about Horizon, the Post Office said they were the only one.
  14. You lose your job, cannot pay the mortgage and lose your home. You are traumatised, have an electronic tag, go on medication and try twice to commit suicide.
  15. Why have the courts and jury preferred the evidence from a computer system to your denials?
  16. Many years after prison has left an indelible mark on your mental well-being, it will emerge that thousands of reports on Horizon-related problems have been kept secret.
  17. The system’s problems are kept a secret for more than a decade while the Post Office, with apparent impunity, prosecutes and persecutes.
  18. To clear your name, the onus was on you and other accused to prove the system was flawed.
  19. But you had no right to see the system’s audit data. You had no way of proving whether the computer was showing non-existent shortfalls.
  20. Some families try to avoid the prosecution of a family member by raising tens of thousands of pounds to pay the Post Office for shortfalls they suspect are not real but cannot prove it. The Post Office still prosecutes.
  21. In one of the world’s most advanced nations, governments and civil service leaders turn a blind eye to a scandal that has been obvious for years to those not employed directly by the Post Office.
  22. Far from holding anyone accountable, the UK state appoints those ultimately responsible for running the Post Office and  Fujitsu, supplier of the Horizon system, to top jobs in the public sector.
  23. The Post Office has no close oversight because it is an “arm’s length body”. The state owns more than 100 ALBs. What is to stop any number of them turning on the public as the Post Office has turned on hundreds of Horizon users? In 2015, a committee of MPs found there was little understanding across government of how arm’s length bodies ought to work.
  24. It’s the job of state-funded auditors, non-executive directors, ministers and civil servants to challenge what they are told by the boards of arm’s length bodies.  If they accept assurances at face value, the governmental system of oversight breaks down. But in 2020 business minister Martin Callanan suggests that civil servants were unknowingly misled by the Post Office. Was this confirmation that the system of oversight has failed with appalling consequences?
  25. Since 2010, the media and Parliamentarians, particularly former defence minister James Arbuthnot (now Lord Arbuthnot) have tried to draw the attention of ministers to the Horizon scandal. But civil servants and postal services ministers have preferred the word of the Post Office to the pleadings of constituency sub-postmasters.
  26. After setting up a costly mediation scheme and hiring forensic accountants Second Sight to address the concerns about Horizon among MPs, particularly Arbuthnot, the Post Office ends the mediation scheme and summarily dismisses Second Sight whose report criticises Horizon.
  27. In totalitarian states, it may not be unusual for innocent people to be handcuffed and taken to prison because they questioned the output of a state-owned institution’s computer system. But in the UK?
  28. BBC Panorama reveals in 2015 that it is possible for engineers working for Fujitsu, Horizon’s supplier,  to access Post Office branch accounting systems and alter lines of code, to fix bugs, without the local Horizon users knowing.
  29. These changes could affect the branch’s financial records as shown on Horizon.
  30. Panorama is correct. Fujitsu staff can alter branch Horizon systems remotely but the Post Office issues a lengthy public denial of Panorama’s correct disclosures. Ministers and civil servants accept the Post Office’s denial.
  31. In at least two families,  the misfortune of being a Horizon user at the time of a glitch or training-related issue becomes a factor in  suicide. In other families there are attempted suicides. A  sub-postmaster suffers a stroke shortly after the Post Office wrongly suspends him, claiming incorrectly that he owes £65,000.
  32. The Post Office had the power to enrol state resources in prosecuting sub-postmasters on the basis of “robust” evidence from Horizon.
  33. Even after the extent of Horizon’s problems has come to light during High Court trials, the UK government continues to hold nobody to account.
  34. That the scandal was obvious to outsiders helped Alan Bates, a former sub-postmaster who was one of Horizon’s earliest victims, to obtain venture funding, via solicitors Freeths, of tens of millions of pounds for a High Court case against the Post Office.
  35. The Post Office tried to oppose Bates’ group litigation by claiming every individual case was different. The judge disagreed and the group litigation went ahead in 2017.
  36. Even after the first of a series of planned High Court trials started, the full extent of Horizon’s problems were kept hidden.
  37. Thousands of internal reports on Horizon’s problems were not given to the High Court until late 2019 – after several hearings and judgements in the case.
  38. In 2020, Kelly Tolhurst, the then Post Office minister, refused a request to pay a fair sum in compensation to former sub-postmasters.  She suggested in her letter that the compensation being paid by the Post Office (about £58m) was enough. Last week business minister Martin Callanan also refused state compensation. His words were almost identical to Tolhurst’s, implying that their words were drafted by civil servants at the Post Office’s parent organisation, the Department for Business, Energy and Industrial Strategy, which appears to see its role as defending the Post Office against outside criticism.
  39. To those who sold homes and lost businesses because of the Post Office’s demands for payment, under threat of criminal and civil action, the compensation being offered is no compensation at all  It will not, in the end, come close to covering their losses.
  40. Today, 10 years after a pregnant sub-postmistress fainted in the dock as she was sentenced to 15 months for stealing money she knew nothing about, and woke up in hospital in handcuffs she tried to hide, her criminal conviction has not yet been quashed. She considered taking her own life.  The state’s overriding duty to protect its citizens seems not to have applied to her.
  41. Another ordinary law-abiding Horizon user went to prison in handcuffs but her criminal conviction is still in place nearly 20 years later.
  42. Her conviction is likely to be quashed this year or next but she will have endured for much of her adult life being branded a criminal by the state. No amount of compensation can replace 20 lost years of being presumed guilty.
  43. Boris Johnson last week promised an inquiry into the Horizon IT scandal but it is likely to be resisted by civil servants. Officials may see anything other than a narrow inquiry into procedures, contracts and technical matters as not being in their interest.
  44. Last week BEIS confirmed it will not hold anyone accountable. Instead, the new business minister Lord Callanan offered Parliament a series of promises from Sir Humphrey’s phrasebook: a new framework … a working group … ministerial meetings …. cultural and organisational changes … learning lessons …  a major overhaul … strengthened relationships … productive conversations … close monitoring of progress … constant reviews … genuine commercial partnerships … direct addressing of past events … the delivery of support on the ground… accelerating a programme of improvement … engaging with stakeholders … seek evidence of real positive change. .. further accountability mechanisms.
  45. It is likely that some or most the above stock phrases will be used by every BEIS minister when giving a formal response to the Horizon IT scandal in letters, statements and Parliamentary debates.
  46. But those seeking justice will continue to campaign for fair compensation at a minimum.
  47. The campaigners in Parliament include Lord Arbuthnot, Lord Berkeley, Gill Furniss MP, Kate Osborne MP, Kevan Jones MP and Lucy Allan MP. For campaigners, the High Court rulings in favour of the sub-postmasters mark only the end of the beginning.
  48.  Some of the points below may add to grounds for the state to pay fair compensation.

Comment

A scandal perpetuated?

To be fair to the Post Office, it has acted as if it were answerable to nobody because it was indeed not answerable.

It had the very occasional polite tap on the knuckles by officials at its parent organisation, the Department for Business, Energy and Industrial Strategy [BEIS]. But nothing more.

In effect the Post Office was untouchable. It received hundreds of millions of pounds from BEIS in state aid but not even the National Audit Office was able to investigate how the money was spent.

Again, to be fair to the Post Office, it was partly in the hands of Horizon’s supplier Fujitsu when it came to understanding faults in Horizon. Fujitsu kept its own central error logs and the reports of Horizon problems. It could charge the Post Office for access to data beyond a certain point.

Given the circumstances, the Post Office did what large institutions tend to do when things go badly wrong: they  blame the weakest links in the corporate chain, the human operators.

Fatal crashes of the Boeing 737 Max were, at first, blamed on the weakest inks – pilots – instead of on a poorly-designed onboard computer system.

Again, after the Chernobyl nuclear reactor explosion, the plant’s human operators, the weakest links, were blamed, which initially helped to cover up the reactor’s design and construction deficiencies.

And after the crash of a military Chinook killed 25 VIPs on the Mull of Kintyre, the two dead pilots, the weakest links, were blamed while deficiencies with the helicopter’s computer systems were hidden.

In the case of the Horizon scandal, the weakest links when the system went wrong were the sub-postmasters. About 550 sub-postmasters took part in subsequent litigation but the Horizon shortfall scandal might have claimed another 500 or so victims who hadn’t realised at first that they weren’t alone.

That the Post Office’s parent department BEIS appears to have no interest in paying compensation or holding accountable anyone for the Horizon scandal is not a surprise given that it is part of the problem.

Indeed, it’ll be no surprise if its civil servants resist making good on Boris Johnson’s promise of an inquiry. There are already signs of this, according to Computer Weekly.

For years, BEIS and its successive postal services ministers have accepted the Post Office’s word when it was obvious to Computer Weekly and Parliamentarians that a scandal was taking place under the noses of those running the department.

The Post Office’s party line continues?

In their carefully-worded reactions to the Horizon IT scandal, the current Post Office CEO Nick Read, Post Office chairman Tim Parker, former Postal Services minister Kelly Tolhurst and a current business minister Lord Callanan, have all referred to wrongs as being “in the past”.

Perhaps unwittingly, they appear collectively to be following a party line – although Sir Peter Fraser QC, the High Court judge in the Horizon case, was particularly critical of Post Office witnesses who appeared to follow a party line.

Perhaps Read, Parker, the Post Office press office and Lord Callanan wish to consign the Horizon scandal to history.

-In its corporate apology the Post Office’s statement said,

“We accept that, in the past, we got things wrong …”

In his apology, Tim Parker, Post Office chairman, said that the December 2019 High Court judgement,

“makes findings about previous versions of the [Horizon] system and past behaviours …”

In January 2020, the then postal services minister Kelly Tolhurst said in a letter to Justice for Sub-Postmasters Alliance that the Post Office accepted and recognised that,

“… in the past they had got things wrong…”

Last week, business minister Lord Callanan said at the end of a short debate in Parliament on the Horizon IT scandal,

“Post Office Ltd has accepted that, in the past, it got things badly wrong … ”

“We accept that, in the past, we got things wrong …”

“the Post Office is also continuing to directly address past events for affected postmasters …”

Nick Read, the current Post Office CEO said there was a need to

“… learn lessons from the past.”

[My emphases]

But the scandal is not in the past. Far from it.

In February 2020, Mark Baker, a sub-postmaster and spokesman for the communications union CWU, told a BBC File on 4 documentary that he knows of Horizon shortfall incidents of nearly one a week continuing in one UK region alone this year.

File on 4 also raised the question of whether it is easier to blame “user error” than the Post Office’s having to fine Fujitsu for not fixing a bug within a pre-defined time limit.

Another reason the apologies of the Post Office and ministers for “past” wrongs are disingenuous is that they avoid any apology for the Post Office’s conduct in the litigation.

In his High Court rulings, Sir Peter Fraser was prolific in his  criticisms of the Post Office’s dealings with sub-postmasters but he also attacked its conduct in the much more recent litigation.

It is this conduct that demeans the reputation of UK government and public sector institutions as a whole.

When ministers and the Post Office refer to such conduct as historic they are, in essence,  excusing it. By apologising for past events only, business ministers appear to have become apologists for the Post Office’s conduct in the litigation … conduct such as this:

  • Several Post Office witnesses did not give accurate or impartial evidence to the High Court in 2018 and 2019.  That wasn’t in a past era.
  • A current Post Office director tried to mislead the High Court, as did a witness from IT supplier Fujitsu. This wasn’t in a past era.
  • The Post Office opposed the setting up of a group litigation order, sought to have no substantive trial listed at all and, when this failed, tried to strike out much of the evidence of sub-postmasters before the trials started.
  • During the first trial the Post Office, said the judge, seemed to try and put the court “in terrorem”  – which means serving or intended to threaten or intimidate.” None of this was in a past era.
  • The  judge said some Post Office costs were “extraordinarily high, unreasonable and disproportionate”.
  • In addition to the above costs, the Post Office hired four QCs and two firms on solicitors. It also fielded 14 witnesses against the six lead claimants for the sub-postmasters.
  • The publicly-funded Post Office appeared to be trying to rack up costs, perhaps to drain the funding of the former sub-postmasters and force them into submission.
  • The Post Office sought to have the judge removed – a highly unusual and costly approach to the litigation.  The judge expressed surprise that the Post Office applied to remove him near the end of a lengthy trial. If the judge had stood down, a re-trial would have happened, adding greatly to costs that were already tens of millions of pounds by this stage. It was only last year that the Post Office sought to have the judge removed –  not in a past era.

How many more business ministers will try to consign the Horizon scandal to the past?

That the scandal is one of the most serious group miscarriages of justice in decades is not in doubt.

But by not paying fair compensation, the state is, in essence, sending a signal to the public sector that if another group of innocent people are handcuffed, bundled into a van and taken into prison for doing nothing more than questioning the system, the state will care even less than it does today.

Holding nobody to account and not paying fair compensation also sends a message to the public and Parliament: that it is acceptable for a state-owned institution to conduct itself as if it were answerable to nobody.

One question that still remains unanswered is how a state-owed institution was able – perhaps is still able – to maintain a control and influence similar in status to that of a cult.

For more than two decades, the civil service and ministers accepted the Post Office’s criticisms of sub-postmasters. The courts and judges too.

The Post Office was also able to enlist the support of some the UK’s top QCs in litigation to fight sub-postmasters.

And the Post Office’s most senior witness in the case, whom the judge described as a very clever person,  seemed “entirely incapable of accepting any other view of the issues other than her own”, said the judge. She exercised her judgement to “paint the Post Office in the most favourable light possible, regardless of the facts”.

Other Post Office witnesses in the case were expected to give impartial evidence to the court but followed its party line. Even the Post Office’s expert witness who was professionally required to give impartial evidence to the court was, according to the judge, “partisan” in favour of the Post Office’s case.

The Post Office’s control extended to the sub-postmasters’ supposed trades union, the National Federation of Sub-postmasters: the Post Office secretly gave the Federation millions of pounds that could be clawed back if the Post Office disapproved of the Federation’s public criticisms.

Are BEIS civil servants and ministers, therefore, under the influence of a cult-like institution when they tell MPs the Horizon scandal is in the past and they refuse to apologise for conduct in the litigation, refuse compensation and refuse to hold anyone accountable?

Are the BEIS civil servants and ministers also remarkably naïve when they ask MPs and peers to accept a series of Sir Humphryisms instead of fair compensation for hundreds of damaged or ruined lives?  …  a new framework, ministerial meetings, a monitoring of progress… phrases that could be the output of platitude-generating software?

Do ministers really believe that the Post Office, after decades of control  and influence is able to change suddenly now that it has a new CEO and the Horizon scandal is acknowledged at the top of government?

If ministers want to convince us that the Post Office, BEIS and the government are genuinely contrite, they will pay fair compensation to former sub-postmasters  and hold to account those responsible for the scandal and the failure to put an early stop to its all-too-obvious traumatic consequences.

Acknowledgements:

Alan Bates

Karl FindersNick Wallis, Tim McCormack, Mark Baker, James Arbuthnot, Eleanor Shaikh,  Private Eye, File on 4, Panorama, Christopher Head

Is the Post Office to blame for Horizon IT dispute – or is it really ministers and civil servants?

By Tony Collins

How does a public institution behave when it has little effective oversight?

Mr Justice Peter Fraser is expected to rule shortly on a critical question that is at the heart of a long-running IT dispute between the Post Office and hundreds of former sub-postmasters.

His ruling may answer the question of whether the Post Office’s “Horizon” IT or sub-postmasters were likely to have been to blame for unexplained shortfalls of sometimes tens of thousands of pounds shown on local branch systems.

If the Post Office loses the High Court case, it could end up paying damages of hundreds of millions of pounds – which could fall to the taxpayer. The state owns 100% of the Post Office. Public funding of the Post Office amounted to £2bn between 2010 and 2017 and a further funding package of £370m is agreed until 2021. Any damages could be on top of this.

If the case ends up with the Post Office’s needing a taxpayer bail-out, this would raise some obvious questions:

  1. Who in government and the civil service provided oversight when the Post Office decided controversially to trust what was shown on a proprietary computer system rather than the word of hundreds of local branch sub-postmasters?
  2. Who in government and the civil service endorsed the Post Office’s decision to defend litigation that could end up costing taxpayers hundreds of millions of pounds?
  3. Who in government and civil service endorsed the decision to continue defending the litigation – and indeed deepening it – despite excoriating criticisms of the Post Office by two High Court judges?

It is still possible for the Post Office to win the case in which event its actions and decisions may be vindicated. But it has lost every interim ruling so far, in a case which has lasted two years to date.

When asked about their oversight of the Post Office, ministers have distanced themselves.

In August 2019, the then Minister for Postal Services, Kelly Tolhurst, said in a letter that Post Office Limited “operates as an independent, commercial business and the matters encompassed by this litigation fall under its operational responsibility”.

But thanks to extensive research by Eleanor Shaikh, a reader of the blog of journalist Nick Wallis, who is crowd-funded to cover the High Court hearings, we know that civil servants reporting to ministers have extensive responsibilities for oversight of the Post Office.

The state categorises the Post Office as an “Arm’s Length Body”]. Shaikh learned that the Department for Business Energy and Industrial Strategy is required to “exercise meaningful and commensurate oversight of ALB [Arm’s Length Body] strategy, financial management, performance and risk management”.

A 2014 Civil Service document, Introduction to Sponsorship, adds that,

“the Secretary of State is ultimately accountable to Parliament for the overall effectiveness and efficiency of each ALB of which their department is responsible.”

It’s not only about oversight. Civil servants are,

“… expected to play an active role in the governance, financial management, risk management and performance monitoring of ALBs and are responsible for managing the relationship with an ALB on behalf of the Minister and the AO [accounting officer].”

Wallis reports in full on Shaikh’s findings.

How effective has civil service oversight been so far?

The judge’s comments in his ruling of March 2019, which the Post Office is seeking leave to appeal, suggest that there has been little effective civil service challenge to Post Office’s decisions. Indeed, one of the judge’s findings was that,

“The Post Office appears, at least at times, to conduct itself as though it is answerable only to itself.”

The judge also criticised,

  • untrue statements by the Post Office
  • threatening and oppressive behaviour by the Post Office.
  • the Post Office’s appearing “determined to make this litigation, and therefore resolution of this intractable dispute, as difficult and expensive as it can”.
  • the Post Office house style for some senior management personnel giving evidence which was to “glide away from pertinent questions, or questions to which the witness realised a frank answer would not be helpful to the Post Office’s cause”.
  • a culture of secrecy and excessive confidentiality generally within the Post Office but particularly focused on Horizon
  • Post Office witnesses in general who have become “so entrenched over the years, that they appear absolutely convinced that there is simply nothing wrong with the Horizon system at all …”
  • attempts by the Post Office to prevent some evidence from emerging into the public domain by applying to have it struck out as irrelevant
  • attacks by the Post Office on the credibility of sub-postmasters whom the judge found credible as witnesses in the case.
  • some Post Office procedures that went from the sublime to the ridiculous,
  • some Post Office submissions that were “bold, pay no attention to the actual evidence, and seem to have their origin in a parallel world”.
  • the Post Office’s asking a sub-postmistress to extend the local branch’s opening hours a day after her husband, who ran the branch, had died.

Of the Post Office’s most senior witness, a director, the judge described her as highly intelligent. She on occasions gave clear and cogent evidence. She helped to improve the Horizon system and had provided some useful evidence.

But in describing parts of her evidence he also referred to a “degree of obstinacy”, extraordinarily partisan”, “sought to obfuscate matters…”, “disingenuous” and a “disregard for factual accuracy”. He said at one point in his ruling, “I find that she was simply trying to mislead me.”

He concluded, “I find that it is necessary to scrutinise everything she said as a witness, both in her witness statement and in cross-examination, and treat it with the very greatest of caution in all respects.”

Comment

If the judge is right in his criticisms – and it is too early in the appeals process to say conclusively that he is right – is he simply describing the behaviour of a state institution that is, in essence, without higher control?

Civil servants from, among others, the Department for Work and Pensions, HM Revenue and Customs, the Ministry of Defence, Home Office and DEFRA appear regularly before the Public Accounts Committee and are the subject of value-for-money investigations by the National Audit Office. The Post Office has little of this scrutiny.

A large private company has many shareholders and the threat of going bust to keep it in check. But the Post Office is too big and important to the community to be allowed to fail.

When Boeing’s aircraft technology is the subject of independent, detailed and widespread criticism, its planes are grounded indefinitely while regulators investigate.

The Post Office has no fear of any regulators shutting down its Horizon system.

In an accountability vacuum, how can a state institution be expected to behave?

Individuals within a large organisation will have a sense of right and wrong. But collectively, can people within state institutions be expected to do much more than meet the requirements of the culture and law as they perceive it?

That is why effective and rigorous oversight of state institutions is critical, if only to protect the interests of taxpayers.

When the widow of a sub-postmaster who’d died the previous day took over his branch, the Post Office asked her to extend the opening hours, which seems to have surprised the judge. Wouldn’t that behaviour surprise anyone?

When shortfalls were shown on the computer system, how easy was it for the Post Office to demand that sub-postmasters made good the losses sometimes without full investigations? It was easier, perhaps, without effective oversight.

Can the Post Office be held entirely responsible for the Horizon IT debacle? It is a state institution. Responsibility for the debacle lies, therefore, with ministers and civil servants, whatever the outcome of the Horizon dispute.

Nick Wallis’ trial coverage including Eleanor Shaikh’s research on the oversight that ought to be provided by ministers and the civil service.

Computer Weekly’s useful summary of the latest position

 

Civil servant in charge of £9.3bn IT project is not shown internal review report on scheme’s failings.

By Tony Collins

“If people don’t know what you’re doing, they don’t know what you’re doing wrong” – Sir Arnold Robinson, Cabinet Secretary, Yes Minister, episode 1, Open Government.

Home Office officials kept secret from the man in charge of a £9.3bn project a report that showed the scheme in serious trouble.

The Emergency Services Network is being designed to give police, ambulance crew and firemen voice and data communications to replace existing “Airwave” radios.  The Home Office’s permanent secretary Philip Rutnam describes the network under development as a “mission-critical, safety-critical, safety-of-life service”.

But Home Office officials working on the programme did not show an internal review report on the scheme’s problems to either Rutnam or Stephen Webb, the senior responsible owner. They are the two civil servants accountable to Parliament for the project.

Their unawareness of the report made an early rescue of the Emergency Services Network IT programme less likely. The scheme is now several years behind its original schedule, at least £3.1bn over budget and may never work satisfactorily.

The report’s non circulation raises the question of whether Whitehall’s preoccupation with good news and its suppression of the other side of the story is killing off major government IT-based schemes.

With the Emergency Services Network delayed – it was due to start working in 2017 – police, ambulance and fire services are having to make do with the ageing Airwave system which is poor at handling data.

Meanwhile Motorola – which is Airwave’s monopoly supplier and also a main supplier of the Emergency Services Network – is picking up billions of pounds in extra payments to keep Airwave going.

Motorola may continue to receive large extra payments indefinitely if the Emergency Services Network is never implemented to the satisfaction of he emergency services.

EE is due to deliver the network component of the Emergency Services Network. Motorola is due to supply software and systems and Kellogg Brown & Root is the Home Office’s delivery partner in implementing the scheme.

Has Whitehall secrecy over IT reports become a self-parody?

The hidden report in the case of the Emergency Services Network was written in 2016, a year after the scheme started. It said that dialogue between suppliers, notably EE and Motorola, did not start until after the effective delivery dates. Integration is still the main programme risk.

MP SIr Geoffrey Clifton Brown has told the Public Accounts Committee that the report highlighted an absence of clarity regarding dependency on the interface providers, which caused something of an impasse.

He said the report “alluded to the fact that that [a lack of clarity around integration] remains one of the most serious issues and is not showing any signs of resolution”.

Stephen Webb has been in charge of the project since its start but he is the business owner, the so-called “senior responsible owner” rather than the programme’s IT head.

In the private sector, the IT team would be expected to report routinely to a scheme’s business owner.

But in central government, secrecy over internal assurance reports on the progress or otherwise of major IT-related projects is a Whitehall convention that dates back decades.

Such reports are not published or shared internally except on a “need-to-know” basis. It emerged during legal proceedings over the Universal Credit IT programme that IT project teams kept reports secret because they were “paranoid” and “suspicious” of colleagues who might leak documents that indicated the programme was in trouble.

As a result, IT programme papers were no longer sent electronically and were delivered by hand. Those that were sent were “double-enveloped” and any that needed to be retained were “signed back in”; and Universal Credit programme papers were watermarked.

The secrecy had no positive effect on the Universal Credit programme which is currently running 11 years behind its original schedule.

Webb has told MPs he was “surprised” not to have seen review report on the Emergency Services Network. He discovered the report’s existence almost by accident when he read about it in a different report written a year later by Simon Ricketts, former Rolls Royce CIO.

This month the Public Accounts Committee criticised the “unhealthy good news” culture at the Home Office. The Committee blamed this culture for the report’s not being shown to Webb.

The Home Office says it doesn’t know why Webb was not shown the “Peter Edwards” report. The following was an exchange at the Public Accounts Committee between MP Sir Geoffrey Clifton-Brown, Webb and Rutnam.

Clifton-Brown: When you did that due diligence, were you aware of the Peter Edwards report prepared in the fourth quarter of 2016?

Rutnam: No, I’m afraid I was not. The Peter Edwards report on what exactly, sorry?

Clifton-Brown: Into the problems with ESN [Emergency Services Network], in particular in relation to suppliers.

Rutnam: I do not recall it. It may have been drawn to my attention, but I’m afraid I do not recall it.

Webb: It was an internal report done on the programme. I have not seen it either.

Clifton-Brown: You have not seen it either, Mr Webb—the documents tell us that. Why have you not seen such an important report? As somebody who was in charge of the team—a senior responsible officer—why had you not seen that report?

Webb: I don’t know. I was surprised to read it in Simon’s report. [Simon Ricketts.]

Chair: Who commissioned it?

Webb: The programme leadership at the time.

Chair: That is the board?

Webb: The programme director. It was a report to him about how he should best improve the governance. I think he probably saw it as a bit of an external assurance. It probably would have been better to share it with me, but that was not done at the time.

Clifton-Brown: “Probably would have been better to share it”? That report said that dialogue between suppliers, notably EE and Motorola, only started after the effective delivery dates. The report highlighted that there was not clarity regarding dependency on the interface providers, and that caused something of an impasse. It also alluded to the fact that that remains one of the most serious issues and is not showing any signs of resolution. That was in 2016, in that report. Had that report been disseminated, would we still be in the position that we are today?

Webb: I think that we would have wanted to bring forward the sort of [independent] review that the Home Secretary commissioned, and we would have done it at an earlier date.

Clifton-Brown: Why did you need to? You would not have needed to commission another review. You could have started getting to the root of the problem there and then if you had seen that report.

Webb: Yes.

Comment:

Webb and Rutman seem highly competent civil servants to judge from the open way they answered the questions of MPs on the Public Accounts Committee.

But they did not design the Emergency Services Network scheme which, clearly, had flawed integration plans even before contracts were awarded.

With no effective challenge internally and everything decided in secret, officials involved in the design did what they thought best and nobody knew then whether they were right or wrong. With hindsight it’s easy to see they were wrong.

But doing everything in secret and with no effective challenge is Whitehall’s  systemically flawed way of working on nearly all major government IT contracts and it explains why they fail routinely.

Extraordinary?

It’s extraordinary – and not extraordinary at all – that the two people accountable to Parliament for the £9.3bn Emergency Services Network were not shown a review report that would have provided an early warning the project was in serious trouble.

Now it’s possible, perhaps even likely, the Emergency Services Network will end up being added to the long list of failures of government IT-based programmes over the last 30 years.

Every project on that list has two things in common: Whitehall’s obsession with good news and the simultaneous suppression of all review reports that could sully the good news picture.

But you cannot run a big IT-based project successfully unless you discuss problems openly. IT projects are about solving problems. If you cannot admit that problems exist you cannot solve them.

When officials keep the problems to themselves, they ensure that ministers can be told all is well. Hence, ministers kept telling Parliament all was well with the £10bn National Programme for IT in the NHS  – until the scheme was eventually dismantled in 2011.

Parliament, the media and the public usually discover the truth only when a project is cancelled, ends up in the High Court or is the subject of a National Audit Office report.

With creative flair, senior civil servants will give Parliament, the National Audit Office and information tribunals a host of reasons why review reports on major projects must be kept confidential.

But they know it’s nonsense. The truth is that civil servants want their good news stories to remain uncontradicted by the disclosure of any internal review reports.

Take the smart meters roll-out. Internal review reports are being kept secret while officials give ministers and the Department for Business, Energy and Industrial Strategy the good news only. Thus, the latest Whitehall report on smart meters says,

“Millions of households and small businesses have made the smart choice to get a smart meter with over 12.8 million1 operating in smart mode across Great Britain. This world leading roll out puts consumers firmly in control of their energy use and will bring an end to estimated bills.”

Nothing is said about millions of homes having had “smart” meters installed that are neither smart nor compatible for the second generation of smart meters which have a set of problems of their own.

The answer?

For more than 30 years the National Audit Office and the Public Accounts Committee have published seemingly unique reports that each highlight a different set of problems. But nobody joins the dots.

Sir Arnold, the Cabinet Secretary said in “Yes Minister“, that open government is a contradiction in terms. “You can be open, or you can have government.

This is more than a line in a TV satire.  It is applied thinking in every layer of the top echelons of civil service.

Collective responsibility means civil servants have little to fear from programme failures. But they care about departmental embarrassment. If reviews into the progress or otherwise of IT-enabled programmes are published, civil servants are likely to be motivated to avoid repeating obvious mistakes of the past. They may be motivated to join the dots.

But continue to keep the review reports secret and new sets of civil servants will, unknowingly each time, treat every project as unique. They will repeat the same mistakes of old and be surprised every time the project collapses.

That the civil service will never allow review reports of IT programmes to be published routinely is a given. If the reports were released, their disclosure of problems and risks could undermine the good news stories ministers, supported by the civil service, want to feel free to publish.

For it’s a Whitehall convention that the civil service will support ministerial statements whether they are accurate or not, balanced or not.

Therefore, with review reports being kept secret and the obsession with good news being wholly supported by the civil service, government’s reputation for delivering successful IT-based programmes is likely to remain tarnished.

And taxpayers, no doubt, will continue to lose billions of pounds on failed schemes.  All because governments and the civil service cannot bring themselves to give Parliament and the media – or even those in charge of multi-billion pound programmes –  the other side of the story.

Home Office’s “unhealthy good news culture” blamed for Emergency Services Network Delays – Civil Service World

Emergency Services Network is an emergency now – The Register

Home Office not on top of emergency services programme – Public Accounts Committee report, July 2019

Will Post Office need state bail-out if it loses Horizon IT trial?

By Tony Collins

The Government is now aware, if it wasn’t before, that Horizon IT trials could end up costing the publicly-owned Post Office hundreds of millions of pounds.

Is continuing the case a gamble with public money?

Tom Cooper, the Government’s shareholder on Post Office board

Journalist Nick Wallis has questioned a minister and a senior official on the possible cost implications if the Post Office loses a High Court case over the Horizon IT system.

His questions to the Post Office minister Kelly Tolhurst and civil servant Tom Cooper, who is the government’s representative on the Post Office board, could help to ensure that the Government is aware that the Horizon IT trial may end up costing the Post Office hundreds of millions of pounds if it loses.

This awareness could raise questions among ministers and civil servants about whether the Post Office will face financial problems or even insolvency if it loses the Horizon trials.

The litigation began in 2017 and the Post Office has lost all of the several rulings so far. Judgements have been strongly critical of the Post Office, its approach to the litigation and its behaviour.

Hundreds of millions of pounds?

Tom Cooper joined the Post Office’s board as non-executive director last year. On the board he represents, on behalf of the Department for Business, Energy and Industrial Strategy,  the Government’s 100% shareholding in the Post Office.

He is a director of UK Government Investments, which is wholly-owned by HM Treasury and represents government interests on the boards of arm’s length bodies including the Post Office.

Wallis asked Cooper about the government’s strategy if the claimants win the case. Claimants are about 550 former sub-postmasters who are suing the Post Office – potentially for hundreds of millions of pounds – because they say they were unjustly forced to make good non-genuine losses shown on the Horizon system.

The Post Office is strongly defending the case, arguing that Horizon is robust and that the sub-postmasters were to blame for actual losses.

In his reply to Wallis, Cooper explained that claimants have not declared the size of the damages they seek. Wallis cited Freeths solicitors, which represents the former sub-postmasters, as saying the litigation could cost the Post Office hundreds of millions of pounds.

Cooper replied that no sums of that nature had been mentioned in court. At this point, one of Cooper’s colleagues politely terminated the interview.

Bail-out?

Wallis also questioned Post Office minister Kelly Tolhurst on the possible cost implications if the Post Office loses the case. She politely declined to answer directly saying, “I can’t really go into the litigation stuff… I’m not being evasive. I can’t speak to you about it.”

Wallis asked whether, if the Post Office loses, the government could end up bailing out the Post Office. Tolhurst said she wouldn’t “get into theoretical-based outcomes of the litigation.”

But Tolhurst disclosed that there were conversations going on between the Post Office, civil servants and the ministry [Department for Business, Energy and Industrial Strategy which is the Post Office’s parent ministry].

HM Treasury’s UK Government Investments is responsible for ensuring the Post Office has enough investment and subsidy funding to ensue it is commercially sustainable in the longer term, whilst meeting its social obligations, particularly around minimum network coverages requirements.

UK Government Investments also advises ministers on Post Office commercial and policy issues.

Comment

Wallis’s interviews with Cooper and Tolhurst are important developments: they mean that officials and ministers cannot credibly deny in future that, if they end up bailing out the Post Office, it has come as a shock.

In Wallis’ questions, he made it clear that solicitors Freeths had said the litigation could end up costing the Post Office hundreds of millions of pounds.

Cooper tacitly acknowledged in his reply that he had heard what Wallis said. Indeed, Cooper’s impressive financial background indicates that he will have a good understanding of the possible cost implications for the Post Office if it loses the case.

Cooper was global co-chairman of mergers and acquisitions at Deutsche Bank. He was at UBS Investment Bank for 21 years where his various roles included head of European merger and acquisitions.

Of course, ministers and officials could argue internally – at the moment – that taxpayers are not funding the litigation.

Indeed, Whitehall officials have obtained a written assurance from the Post Office that it will fund the Horizon litigation from its own money, not public money that is allocated to modernisation and new investment in the Post Office’s network.

But it’s a different story if the Post Office runs into financial trouble.

The Government would have no choice but to use public money for a bail out. It could not allow the Post Office to go bust.

And thanks to Wallis’ questions yesterday,  ministers could not argue they were unaware of the full possible cost implications of losing the case.

Indeed, it is incumbent on civil servants now to make sure ministers are aware of what could happen if the Post Office loses the case and cannot afford to pay damages and costs from its own money.

When fully aware of the risks – the gamble with public money – will ministers and officials allow the Post Office to continue spending large sums on the High Court case – or will they urge it to settle now before many more millions of pounds are spent on legal costs?

The judge in the trials, Mr Justice Fraser, has said the case will continue for “years”. Ministers and officials could therefore take the attitude that they may be long gone by the end of the trials and therefore costs are a matter for their successors.

Or they could do the right thing and urge the Post Office to limit its potential liabilities by settling now.

Wallis has a full account of his conversations with Cooper and Tolhurst on his postofficetrial blog.

Post Office Ltd and the money tree – Tim McCormack’s blog

Post Office ordered to pay £5m towards claimants’ costs – part of Computer Weekly’s coverage of Horizon trials

How is Post Office paying for increasing costs of Horizon IT litigation – MP asks questions

The Post Office has lost all four High Court rulings  (so far) in a series of hearings over its Horizon IT system. There are still three trials to go. With appeals, the number of hearings and judgements, and  the duration of the case, are indeterminate.

How is the publicly-funded Post Office paying for litigation that is, in essence, its defence of the Horizon system?

By Tony Collins

Labour MP Kevan Jones has this week asked a series of pertinent questions about costs and the Post Office’s dispute with former sub-postmasters over the Horizon branch accounting system.

His Parliamentary questions are likely to draw the attention of business secretary Greg Clark to the increasing costs of a High Court trial in which more than 550 former sub-postmasters seek compensation and damages from the Post Office. They say they were made to pay for unexplained shortfalls shown on Horizon that could have been caused by bugs or other system weaknesses.

The Post Office says Horizon is robust and the shortfalls were the result of dishonesty or mistakes by sub-postmasters or their staff. The Post Office has pursued sub-postmasters for “debts” shown on the Horizon system of millions of pounds in total.

Kevin Jones’ questions follow a judgement last month in which a High Court judge, Mr Justice Peter Fraser, referred to the Post Office’s approach to the costs of the litigation.

“The Post Office has appeared determined to make this litigation, and therefore resolution of this intractable dispute, as difficult and expensive as it can,” said the judge.

Since that judgement, costs have risen further because the Post Office has decided to appeal last month’s judgement. The Post Office has also applied for the judge to remove himself from three remaining trials over the Horizon system. which caused the second trial to be suspended.

This week it has emerged that costs, which could run into tens millions of pounds, are set to rise again. Although the judge has refused permission for the Post Office to appeal his refusal to remove – “recuse”  himself, the Post Office can ask the Court of Appeal to grant that permission.  BBC legal commentator Joshua Rozenberg has tweeted,

 

 

Kevan Jones has asked the business secretary Greg Clark:

  • what steps he is taking to ensure the Government is held accountable for the decisions and actions of Post Office Limited in the handling of postmasters’ problems with Horizon.
  • whether public money has been used to pay costs involved in the ongoing dispute with postmasters since 2000.
  • whether the Lord Chancellor will determine the extent of any conflict of interest on the part of Tim Parker by reason of his dual roles of (a) the Chairman of Post Office Limited; and (b) the Independent Chair of the HM Courts and Tribunal Service Board.
  • what the anticipated increased cost implications are for Post Office Limited in its dealing with serving Subpostmasters following the High Court decision handed down on 15 March 2019.
  • whether the Post Office has ever taken into profit from its suspense accounts any unreconciled sums recovered from Subpostmasters.

Former sub-postmaster Alan Bates, founder of Justice for Subpostmasters Alliance and lead claimant in the case, told Computer Weekly, 

“This move by Post Office Ltd to have the judge recused was just another act by an organisation abusing the use of public money to litigate a valid case into the ground in order to protect the reputations of just a few individuals and a dysfunctional business.”

The Post Office said, “We will be seeking to appeal the judgment on the recusal application and to continue to vigorously defend this litigation. We believe the overall litigation remains the best opportunity to resolve long-standing issues in order to ensure a stable and sustainable Post Office network for the benefit of the communities who rely on our services every single day.”

Freeths, solicitors for the sub-postmasters,  has submitted an application for the Post Office to pay the legal costs in the first trial, likely to be for several million pounds.

Comment:

Kevan Jones is right to ask questions about the publicly-funded Post Office and costs. The Post Office appears to have no cap on how much it is prepared to spend on the litigation; and it has shown little or no concern about how many years the case will continue.

Institutions, particularly public ones,  have a duty to spend money wisely. Not cutting your losses when you are losing a series of High Court hearings is poor judgement.

The Post Office has a choice: continue to pour money into a case that looks, on the basis of evidence so far, to be unwinnable.  Or pay the millions it is giving lawyers to its former sub-postmasters instead.

It’s a decision the Post Office will not make on its own – in which case Kevan Jones and his Parliamentary colleagues must continue their campaign for justice.

Thank you to sub-postmaster “Mrs Goggins”  and former sub-postmaster Jo Hamilton whose tweets alerted me to Kevan Jones’ questions.

Computer Weekly’s coverage

Journalist Nick Wallis’ coverage

Former sub-postmaster and campaigner Tim McCormack’s blog

 

Will more campaigners die as they await justice in extended Post Office IT dispute?

A High Court dispute over the Post Office Horizon IT system is expected to cost tens of millions of pounds. But what is the human cost of delaying the outcome?

Tomorrow a High Court judge will consider an application by the Post Office to recuse – remove – himself from a series of trials that relate to the Post Office’s Horizon IT system. The Post Office accuses him of bias.

The Post Office’s application means that the second of four trials is currently suspended. A final outcome of the various hearings, after appeals,  could be years away.

Will any delayed final outcome have an effect on the 600 or so sub-postmasters who are part of the litigation?

It is a concern expressed by the judge in the case, Sir Peter Fraser, QC who is head of the High Court’s Technology and Construction Court. In his 1,100-paragraph judgement delivered last month after the first trial, he said,

“Even on that intended timetable, some Claimants [sub-postmasters] may be waiting far longer than is ideal to have their claims fully resolved either in their favour, or against them.

“Some of the Claimants are retired; some are elderly; some have  criminal convictions under review by the Criminal Cases Review Commission.

“Nobody involved in this litigation is getting any younger as time passes. The Post Office itself is under a cloud in respect of these unresolved allegations and I consider it to be an obvious point that resolution of this litigation as soon as possible is in the interests of all the parties – all the Claimants and the Post Office – in the interests of justice and the wider public interest.”

Is the Post Office trying its best to expedite an outcome? Mr Justice Fraser suggested the opposite. His judgement said,

“The Post Office has appeared determined to make this litigation, and therefore resolution of this intractable dispute, as difficult and expensive as it can.” [Par 544].

Separately, the judge said,

“It does appear to me that the Post Office in particular has resisted timely resolution of this Group Litigation whenever it can, and certainly throughout 2017 and well into 2018.” [Par 14]

The judgement referred to the Post Office’s “attritional approach of the Post Office to this litigation”. [Par 569]

If the judge is right and if the Post Office board is determined to make the litigation as difficult and expensive as it can, what of the human cost of any delays taking into account the age of some of those involved and the hopes of those with criminal convictions whose cases are under review?

Traumatised

Journalist Nick Wallis who is covering the High Court trials reports that he has been told that some sub-postmasters remain “traumatised” by their experience of losses shown on the Horizon system that they were required to make good.

Some of the sub-postmasters, says Wallis,  “are having to work long past retirement age” with all their life savings taken to pay for losses that are now in dispute as part of the sub-postmasters versus Post Office litigation.

The Post Office contends that Horizon is robust and that it was justified in holding sub-postmasters responsible for discrepancies and shortfalls shown on the system. The sub-postmasters claim damages saying the Post Office unjustly required payments for losses shown on an imperfect Horizon system. They argue the losses were not real shortfalls.

For one justice campaigner, Julian Wilson, a former sub-postmaster from Redditch in Worcestershire,  time ran out in 2016. Nick Wallis knew Wilson as a gentle, generous and good humoured man. The Post Office prosecuted Wilson for false accounting after unexplained shortfalls on the Horizon system.

The Criminal Cases Review Commission was reviewing his conviction when he died.

Wilson had been sentenced to 200 hours of community service and had to pay the Post Office £27,500 plus £3,000 costs. He told the Daily Telegraph in 2013,

“Initially, when there were discrepancies [on the Horizon system], my wife and I were putting the money in. As the discrepancies got larger and larger, we were no longer able to afford it.

“I told my line managers on several occasions that I was concerned about this, and the comment I got back from them was: ‘Don’t worry, the system will put itself right.’

“But it never did, so I was taken to court. I hadn’t taken a penny. Everything we’ve got has gone. In the last few weeks, we’ve been doing car boot sales to try to get some money to put some food on the table. My wife even had to sell her engagement ring.”

Comment

It is by no means certain that all of the 600 or so former sub-postmasters who are fighting for justice will live to know the final outcome of the trials.

If sympathetic to its former sub-postmasters, the Post Office could settle the litigation or seek expedited judgements. On the other hand, the Post Office could, given its deep pockets as a public institution,  seek to replace trial judges and appeal judgements. If so, a final outcome could be delayed with no end date in sight,

Business minister Kelly Tolhurst MP has responsibility for postal affairs. In deciding whether or not to intervene, will she weigh up the cost in human terms of a dispute that began more than 10 years before the start of the High Court Horizon trials?

MPs called the Post Office Horizon dispute a national scandal but to the family of Julian Wilson it is a tragedy. They live with the knowledge that he went to his grave a near-bankrupt convicted criminal whose wife ended up selling her engagement ring  because of events that followed losses shown on a branch accounting system.

Nick Wallis’ Post Office trial coverage

Post Office lacked humanity in treatment of sub-postmasters, says peer – Computer Weekly’s coverage of the Post Office’s trial

Blog of campaigning former sub-postmaster Tim McCormack

Could MPs hold Post Office directors to account for Horizon IT trial costs – after they have left?

By Tony Collins

The Public Accounts Committee and the National Audit Office have been alerted to the costs of the High Court trials over the Post Office Horizon IT system.

Parliamentary committees have the power to hold people to account after they have left an organisation.

Could this happen in the case of the publicly-owned Post Office whose directors have decided to spend, potentially, tens of millions of pounds on an avoidable High Court litigation?

Nearly 600 sub-postmasters are suing the Post Office because they say their lives were ruined when the Post Office required them to make good non-existent shortfalls shown on an imperfect Horizon system. The Post Office says Horizon has always been robust and that they were entitled to hold the sub-postmasters liable for losses shown on Horizon.

The Post Office appears resolved not to settle the case despite campaigns for justice in Parliament and by the Justice for Sub-postmasters Alliance. One unanswered question is whether the Post Office board is hardening its position in the face of the campaigns.

Campaign4Change emailed the Public Accounts Committee about costs of the litigation. As a result, the National Audit Office, which works closely with the accounts committee, contacted UK Government Investments, which represents the Government’s interest as sole shareholder of Post Office Limited.

The Committee told us,

“The NAO has now completed its enquiries and reviewed supporting evidence.

“Post Office Limited is a government owned company which is primarily funded through income from it is operations and is not audited by the Comptroller and Auditor General.

“The NAO has therefore limited its enquiries to understanding the role of UKGI [UK Government Investments] given it has no remit to audit the actions of Post Office Limited.

“The NAO discussed the case with UKGI to understand the governance in place between Post Office Limited and UKGI and to confirm there was appropriate oversight of Post Office Limited’s decision to defend the litigation.”

Regarding the accountability of individual Post Office Limited’s directors, the National Audit Office said,  “Since Post Office Limited’s inception in 2012, UKGI has had a representative on the Board as a Non-Executive Director. The same government representative is also a member of the subcommittee of the Board which specifically considers this issue. These committees are involved in decision making around the litigation case and the representative regularly reports to ministers on these matters.

“From the work performed by the NAO, they have concluded that the involvement of UKGI in decision making appears appropriate and the level of oversight proportionate.”

The Committee said the National Audit Office has not  directly considered the actions taken by the Post Office Board but the case is being kept under review.

Following the NAO’s investigation, the Department for Business Energy and Industrial Strategy, which is responsible for the Post Office, sought an assurance from the Post Office’s CEO Paula Vennells that departmental funds meant for transformation and business investment will not be used on the Horizon litigation.

Also the BEIS department now requires regular written assurances that BEIS funding will be used for the intended purposes only.

Summons?

When a Parliamentary committee decides to summon a witness formally, the witness is summoned to attend the committee by an order signed by the chairman.

Failure to attend a committee when formally summoned is a contempt and if a witness fails to appear, when summoned in this manner, his or her conduct is reported to the House of Commons which can deal with the matter as an act of disobedience.

MPs and peers are expected to look more closely at the actions of the Post Office in the light of its decision to try and remove Sir Peter Fraser, the judge in the Horizon IT case. The Post Office’s application to remove the judge could greatly increase costs of the case which are already expected to run into tens of millions of pounds.

Following the Post Office’s application for the judge’s removal, the second of four High Court trials has been suspended and will not resume until 3 April.

Journalist Nick Wallis reports that the application for the judge’s removal coincided with evidence being given, in part, by the chief architect for the Horizon system at Fujitsu. He was being questioned on the system and possible errors.

Thank you to campaigner Tim McCormack whose Freedom of Information requests unearthed the letter dated January 2019 to the Post Office from the Department for Business, Energy and Industrial Strategy that seeks assurances on funding for the Horizon IT litigation.

Postofficetrial– Nick Wallis

Post Office Horizon IT trial suspended after Post Office accuses judge of bias – Computer Weekly

The power to summon witnesses

The process for formally summoning a witness is outlined in a House of Commons paper: 

“When a committee decides to summon a witness formally, the witness is summoned to attend the committee by an order signed by the chairman. Failure to attend a committee when formally summoned is a contempt and if a witness fails to appear, when summoned in this manner, his conduct is reported to the House… If he still neglects to appear, he will be dealt with as in other cases of disobedience.

“It is the House which will ultimately decide how a case of disobedience should be dealt with.”