Category Archives: Post Office IT

Shedding new light on the Post Office Horizon controversy?

By Tony Collins

Dozens of families gathered in the ballroom of a Hilton hotel to hear independent investigators announce the most likely cause of an air crash that killed 132 air passengers.

Some wondered whether official investigations into air crashes always ended up protecting powerful corporate interests. For several years the manufacturer Boeing had denied that a technical malfunction was the cause of the crash. It blamed the pilots.

This was the longest inquiry in the history of the National Transportation Safety Board, an investigative organisation funded by the US government. Congress has mandated the Board’s independence and objectivity.

At first, each Boeing 737 incident was treated as a single unique event.  In the absence of any clear evidence of a technical malfunction, suspicion fell on the pilots.

The 737 is, after all, the best-selling commercial jet airliner in history. It has an extraordinary safety record.

Then evidence began to mount that various 737 incidents might have been linked.

After thousands of tests over several years, air crash investigators made a discovery – that a particular technical malfunction could, after all, have caused the incidents.

It was an intermittent malfunction – and one that occurred in a rare set of circumstances. It left no trace. It might have caused a succession of seemingly-unique major incidents.

Now the final verdict on the likely cause of USAir Flight 427’s destruction was imminent. As families sat in silence at the Hilton Hotel, Springfield, Virginia, five board members of the National Transportation Safety Board voted – in public – on whether they accepted the findings of their staff investigators who’d pointed to the likely cause being a technical malfunction, not the pilots.

The vote was unanimous; and some relatives wept.  The probable cause was not the pilots. It was “most likely” to have been a technical malfunction.

Boeing accepted the final report into the crash of Flight 427. “We respect the Board’s opinion,” said Boeing after the vote. It made rudder-related design changes that eventually cost more than $100m.

Human or machine?

What do various incidents involving Boeing 737s have to do with a campaign for justice for 198 former sub-postmasters and their families?

At issue in both cases is whether human or machine was to blame for a plethora of incidents.

Former sub-postmasters, who used to run local post offices across the UK, say that technical malfunction, or a combination of human error and unusual, unexpected equipment behaviour, was the cause of their distress, misfortune, jailing or bankruptcy.

The Post Office blamed them for losses shown on its “Horizon” system and required that they pay the shortfall in question. This led to financial ruin for some of them. The Post Office insisted its equipment was not at fault. It pointed to the lack of evidence of any technical malfunction.

But investigations into rare crashes of 737s show that it’s possible for a major corporation to be mistaken when it clears its own equipment and blames the equipment’s human operators.

The 737 investigations found that “no evidence of a technical malfunction” did not necessarily mean “no technical malfunction”.

The UK government reached a similar conclusion at the end of a campaign by families to set aside an RAF finding of gross negligence against two pilots, Flight Lieutenants Jonathan Tapper and Rick Cook, who died when a Chinook helicopter, ZD576, crashed on the Mull of Kintyre in June 1994.

For 16 years the RAF and Ministry of Defence insisted that there was no evidence of a relevant technical malfunction on the last flight of Chinook ZD576. They blamed the pilots for the crash. But leaked MoD technical papers established that the Chinook’s engine computer systems could fail in unpredictable ways – sometimes intermittently – and leave no evidence.

In the end – after a 17-year campaign for justice by the pilots’ families – the UK government set aside the RAF’s finding against Tapper and Cook, mainly because of doubts over whether the pilots or technical malfunction, or a combination of both, caused the crash.

Arguably, the Chinook and 737 controversies established the principle that, despite the absence of firm evidence of a technical malfunction, a major incident could still be caused by one, or a series of them.

This may be an important consideration in Post Office cases because, in some criminal trials of sub-postmasters, the absence of evidence of a technical malfunction that caused the losses shown on Horizon has counted against the defendants.

It counted against former sub-postmaster Lee Castleton who disputed in a civil action the Post Office’s claim that he owed amounts totalling £27,000. These sums were shown on Horizon as losses.

The judge in the case said, “It is inescapable that the Horizon system was working properly in all material respects.” Castleton lost the case and was left with costs of £321,000. The following year he filed for bankruptcy.

In a separate case, a criminal hearing where former sub-postmaster Seema Misra was the defendant, a jury agreed with the Post Office’s case that the Horizon system was tried and tested, had been in use at thousands of Post Offices for several years, and was fundamentally reliable and robust.

Misra was jailed for the theft of £75,000 in a case based on the Post Office’s computer evidence. She said she hadn’t taken a penny.

When sub-postmasters could not prove the existence of a fault on Horizon that explained the losses, the conclusion was that they were personally responsible for the shortfall.

About 30 of the 198 individual complaints against Horizon are from former sub-postmasters who received criminal convictions over the losses.

Boeing and the Post Office

With its turnover of about $94bn [£76bn), Boeing is nearly ten times the size of the Post Office. The Post Office has a turnover of less than £1bn. Boeing has vast facilities and specialist teams to investigate crashes full-time. Still, its judgments on the probable cause or causes of major incidents are not infallible.

A number of 737 incidents have shown that, even with relevant incident data available, it may take years of assiduous and expensive independent investigations to get to the likely truth.

In the case of the 737 incidents, the suspect component at the centre of investigations, a power control unit, was based on an old design (certified in the 1960s) – and straightforward in its operation relative to the Horizon system.

In comparison, the Horizon system has hundreds of thousands of lines of code and is complex, taking into account its many upgrades over more than a decade and its interactions with different hardware, networks, interfaces and a central data centre. Adding to this complexity are user uncertainties over procedures for dealing with problems.

But one of the most striking single aspects of any comparison between 737 crashes and the Horizon controversy is that it took professional full-time independent investigators in the US several years and thousands of tests on one suspect component only, before they were able to establish not that the component in question had been the cause of two fatal crashes and a succession of other incidents but that it had been the “probable” cause.

More than $1m was spent investigating the power control unit and still there was no firm evidence that the suspect component was the cause.

The Post Office has, arguably, required a higher standard of proof from local sub-postmasters.

By insisting that there was no evidence of a malfunction that resulted in losses, the Post Office put the onus on sub-postmasters to prove otherwise. Establishing that Horizon was the “probable” or “likely” cause – the standard of proof required in commercial aircraft accidents – was not good enough in cases of sub-postmaster complaints.

In response to the complaints of former sub-postmasters, the Post Office has made a number of similar statements:

“There is no evidence that faults with the computer system caused money to go missing at these Post Office branches. There is evidence that user actions, including dishonest conduct, were responsible for missing money.”

Another Post Office statement said,

“To date, and after two and half years of investigation and independent review, the facts are that Post Office has found no evidence, nor has any been advanced by either an Applicant [former sub-postmaster] or Second Sight [the independent investigators of sub-postmaster complaints], which suggests that Horizon does not accurately record and store branch transaction data or that it is not working as it should.”

Boeing made similar points in its submission to the National Transportation Safety Board on the crash of Flight 427. Boeing pointed to a lack of evidence of technical malfunction while pointing to evidence of the actions of human operators (pilots).

Boeing said,

“There is no evidence to support a conclusion that an uncommanded full rudder deflection occurred (the rudder moving in the opposite direction to that commanded by the pilots).

“While there is not conclusive evidence of a crew-commanded, sustained left-rudder input, such a possibility is plausible and must be seriously considered, especially given the lack of evidence of an airplane-induced rudder deflection.”

Indeed Boeing’s conclusion in its submission to investigators of 737 incidents was similar to the Post Office’s position that there was “no systemic problem” with Horizon.

Boeing said,

“There is no data to indicate that the Eastwind Flight 517 event, the United Flight 585 accident, and USAir Flight 427 accident were caused by a common airplane malfunction.” [Boeing had argued that each incident was different – a similar argument to the Post Office which said each complaint by sub-postmasters  about the Horizon system was “demonstrably different and influenced by its own particular facts”.]

In a separate submission to the National Transportation Safety Board, the manufacturer of the 737’s suspect power control unit, Parker Hannifin, made a point similar to Boeing’s.

“In sum, after years of one of the most critical examinations in aviation history, there is no evidence that the main rudder PCU [power control unit] from Flight 427 malfunctioned or was other than fully operational.”

Last word

But the National Transportation Safety Board, as a statutory authority, had the last word.

Its conclusion did not coincide with the view of Boeing or Parker Hannifin.

It said the most likely cause of the crash of Flight 427 was that the rudder moved in the opposite direction to that commanded by the flight crew. The final investigation report said,

“Probable Cause

“The National Transportation Safety Board determines that the probable cause of the USAir flight 427 accident was a loss of control of the airplane resulting from the movement of the rudder surface to its blowdown limit [full aerodynamic limit].

“The rudder surface most likely deflected in a direction opposite to that commanded by the pilots as a result of a jam of the main rudder power control unit servo valve secondary slide to the servo valve housing offset from its neutral position and over-travel of the primary slide.”

Could both sides be right?

On the face of it, the Post Office and former sub-postmasters have contradictory arguments, just as Boeing’s assertions and the investigators’ finding of likely technical malfunction may seem contradictory.

It’s possible, though, that these arguments are not as contradictory as they seem.

It is conceivable the Post Office was correct when it said there was no conclusive evidence of a technical malfunction; and it’s equally conceivable the former sub-postmasters were correct when they said a technical malfunction was partly or entirely to blame for the losses.

Possible similarities and differences

Campaign4Change has looked closely at some of the similarities and differences between 737 rudder incidents and the Post Office cases.

The Post Office and Boeing investigated each incident as a separate matter. Both organisations found no systemic problems. But, unlike Boeing, the Post Office always had the upper hand in its investigations: it was able to require that sub-postmasters pay, in many cases, tens of thousands of pounds that were shown as losses on Horizon.

There’s a risk of trivialising the consequences of 737 crashes when making comparisons with the Horizon controversy. It can be argued, though, that both involved major incidents that ruined lives; and both cases raise the question of whether any large corporation, once it has taken a position that its equipment was not to blame for a single major incident – let alone a number of incidents – will ever change its mind unless forced to.

One particular difference between the UK and US investigations into major incidents is that the US regulatory system allows Boeing to make a submission to the investigations board – which it did, contesting the board’s draft finding that blamed technical malfunction for 737 incidents and crashes – but Boeing had to abide by the independent board’s final decision.

The Post Office did not have to abide by the findings of its independent investigators Second Sight and was able to end Second Sight’s contract. The Post Office said it had given Second Sight “notice regarding its contract“.

Another difference: in the US, the regulatory system allowed the National Transportation Safety Board to require information from the various equipment manufacturers; and the Board’s investigators could obtain information independently of the manufacturers, usually with their cooperation but not necessarily.

In comparison, the Post Office determined what information it passed to Second Sight and the families. On this point Second Sight had its concerns.

In one of its reports for the Post Office, Second Sight said,

“We have experienced significant difficulty in obtaining access to a number of documents we believe are necessary for the purposes of our investigation, notwithstanding Post Office’s commitment to make requested documents available to us.”

The Post Office says it made available to Second Sight thousands of documents but not those that were the subject of legal privilege .

There’s a further difference between the US and UK investigations. In the US, the National Transportation Safety Board did its own investigations or supervised those carried out by equipment manufacturers. It even had the power to exclude equipment owners from participating in the inquiry.

In 2010 American Airlines was excluded from participating in an investigation into an incident involving one of its 757 aircraft because its technicians downloaded and accessed information from the plane’s black box [digital flight data recorder] before it was examined by independent investigators.

US regulations require that the National Transportation Safety Board is the first to see, download or access information from the black boxes.

A Board press release criticised American Airlines. It said,

“Although a thorough examination by our investigators determined that no information from the DFDR [digital flight data recorder] was missing or altered in any way, the breach of protocol by American Airlines personnel violates the Safety Board’s standards of conduct for any organization granted party status in an NTSB investigation.

“Because maintaining and enforcing strict investigative protocols and procedures is vital to the integrity of our investigative processes, we have revoked the party status of American Airlines and excused them from further participation in this incident investigation.”

When the Post Office investigated Horizon systems in the light of losses shown on the systems, it had the authority to retain full control of system information throughout.

As well as being the owner of the system, the Post Office was responsible for commissioning the investigations into the actions of the sub-postmasters. It was also the prosecuting authority and supplier of the material facts involved.

Other possible considerations

  1. In the US, there was no procedure for pilots to follow if they had a rudder hardover (where the rudder moves to its fullest extent and jams against a mechanical stop). The principle was that pilots were not trained to cope with problems that theoretically couldn’t occur. Were sub-postmasters faced with malfunctions that were considered impossible and so hadn’t been trained to cope with them?
  2. Human operators may make the ultimate mistake but they might have been reacting to malfunctions, problems with design, inaccurate information or confusing interfaces. [The Post Office had 1.5 million Horizon helpline calls in a three-year period which is a possible sign that many local post office staff did not fully understand the system or how it worked.]
  3. The US pilots’ trade union ALPA [Airline Pilots Association] was formed partly because of a perception that the government’s automatic response to major incidents was to blame pilots.
  4. After major incidents, the Post Office and Boeing have pointed to the extraordinary record of reliability of their equipment, the implication being that a systemic problem is highly unlikely. The 737 had (and still has) an extraordinary safety record: 264 million flight hours and an uncommonly low crash rate. Airlines have ordered at least 11,550 of them, more than any other commercial aircraft in history. It’s in use in 111 countries. Its reliability record is the best in the world. On average more than 2,000 737s are in the air at any one time. It has carried 17 billion passengers – about twice the world’s total population. It has flown about 120 billion miles, the equivalent of 640 round trips from the earth to the sun. The Post Office says of Horizon: “Horizon is robust and effective in dealing with the six million transactions put through the system every day by our postmasters and employees at 11,500 Post Office branches. It is independently audited and meets or exceeds industry accreditations.   There have been 500,000 users of the system since it was introduced.”
  5. The design of the 737 rudder system had been considered fail-safe. It was thought it would work properly even when problems occurred. The system had built-in “redundancy”. Every lever inside the lower power control unit had a second lever that moved in concert, in case one should break. There were two hydraulic systems in case one should fail. There was a standby actuator in case the main power control unit stopped working. Even so, after thousands of tests, investigators found it could fail in very rare circumstances.
  6. The Post Office has listed the many procedures and processes in place for subpostmasters to handle problems or technical failures. The Post Office said, “Horizon is capable of handling power and telecommunications problems. In Post Office branches, postmasters are responsible for power supplies and the cabled telecommunications lines. Interruptions in power supplies and telecommunication lines are a risk faced by all IT systems. There are, however, recovery systems built into Horizon to prevent losses occurring where there is a power or telecommunication failure. There is no evidence to suggest that either of these events would cause losses in branches where the recovery process has been correctly followed by branch staff. There is however evidence of branch staff failing to follow the recovery process properly. This would cause discrepancies in a branch accounts and could be a cause of losses. It is however the result of human error by Applicants [former sub-postmasters] or their staff, and not a failing of the Post Office or Horizon.”
  7. US air crash investigators were able to glean much from listening to voices in the cockpit shortly before incidents occurred. No such luxury existed in the investigation of Post Office Horizon losses. The Post Office cannot have known what was in the minds of the sub-postmasters at the time: whether they had criminal intent or were utterly baffled by what was appearing on their screens.
  8. The National Transportation Safety Board after its initial investigation into the fatal crash of United Airlines 585 at Colorado Springs in 1991, reached a conclusion that the probable cause was “undetermined reasons”. Would the Post Office consider such a possibility in the case of Horizon losses?
  9. After the unexplained crash of Flight 585, the National Transportation Safety Board kept tabs on 737 rudder problems even without evidence they were the likely cause of any serious incidents. Does this mark a different investigative approach to the Post Office which appears to have had a mindset that its equipment could not be to blame for losses?
  10. The fact that five leading members of the National Transportation Safety Board voted publicly on the probable cause, or causes, of a major incident limited the potential for an institutional mindset to develop. The Board often modified or rejected the findings of its investigators.
  11. Tests could not be carried out on 737 equipment until all parties agreed on how each piece would be tested. Agreement involved the Federal Aviation Authority as regulator, Boeing, the pilots’ union ALPA and the machinists’ union. In contrast the Post Office was in complete control of its investigations into Horizon losses.
  12. The existence of the National Transportation Safety Board is a check against parties protecting their own corporate interests, namely the reputation of their equipment, after a major incident. What similar check exists to prevent the Post Office from seeking to protect its corporate interests – namely the reputation of its equipment – after a number of major incidents?
  13. Would the conclusions of the investigations into the 737 incidents have been different if Boeing had been the authority in charge of the final report?

A useful book on the crash of Flight 427 is by Bill Adair, which is an inside account of the 737 rudder incidents. He had access to all the main parties involved.

Also useful is the final report of the National Transportation Safety Board into the crash of Flight 427. It contains Boeing’s submission.

In January 2017, the High Court granted Justice for Subpostmasters Alliance, which represents the accused former sub-postmasters, a Group Litigation Order against the Post Office.  There are 198 sub-postmasters on the High Court claim form and several hundred more are likely to join as claimants.

If the case goes to appeal, it could continue for years.

Or the Post Office could choose to settle rather than spend public money fighting a case which could be seen as a self-vindicating exercise – one that prolongs the misery for the subpostmasters and their families.

Campaign4change emailed the Post Office a list of detailed questions, based on this article. A Post Office spokeswoman replied that, “given that there is currently litigation it’s not appropriate for Post Office to comment”.

Last year, after a BBC Panorama documentary on the complaints of sub-postmasters and the Horizon system, the Post Office issued the following statement:

BBC Panorama – Our response

The Post Office wholly rejects extremely serious allegations repeated in BBC’s Panorama programme of 17 August 2015. The allegations are based on partial, selective and misleading information.

  • The Post Office does not prosecute people for making innocent mistakes and never has   
  • There is no evidence that faults with the computer system caused money to go missing at these Post Office branches 
  • There is evidence that user actions, including dishonest conduct, were responsible for missing money

We are sorry if a small number of people feel they have not been treated fairly in the past but we have gone to enormous lengths to re-investigate their cases, doing everything and more than we committed to do.

All of the allegations presented in the programme have been exhaustively investigated and tested by the Post Office and various specialists over the past three years or more.   The unsubstantiated claims and theories that continue to be levelled against the Post Office are at odds with the facts and are constructed from highly partial, selective and inaccurate information.

This is about individual cases and the Post Office will not discuss those in public for very good reason.  The Criminal Cases Review Commission (CCRC) is reviewing a small number of cases involving criminal convictions. It will be provided with all available information including confidential legal material not available to others and we believe the CCRC should be allowed to complete its reviews without external comment.  We also gave a commitment of confidentiality to people who put forward cases to us for re-investigation.

The Horizon computer system is robust and effective in dealing with the six million transactions put through the system every day by our postmasters and employees at 11,500 Post Office branches. It is independently audited and meets or exceeds industry accreditations.

Background facts

Prosecutions

The Post Office has always taken its duty to act fairly, proportionately and with the public interest in mind extremely seriously.  The Prosecutions it brings are scrutinised by defence lawyers before they advise their clients and are, ultimately, ruled upon by the courts.

If money is missing from a Post Office branch and the fact that cash is missing has been dishonestly disguised by falsifying figures in the branch accounts, the Post Office is entitled to take action and does so based on the facts and circumstances of that specific case. Though rare, where there is evidence of criminal conduct, a decision may be made to prosecute.

Prosecutions are brought to determine whether there was criminal conduct in a branch, not for the Post Office’s financial considerations.

Post Office prosecutors are all experienced criminal lawyers, many of whom have significant experience in prosecuting for both Post Office and the Crown Prosecution Service.   In the rare instances that prosecutions are undertaken, the Post Office follows the Code for Crown Prosecutors (the same code as the Crown Prosecution Service).  The Code requires a prosecution to have sufficient evidence and be in the public interest, both of which are kept under review right up to and including any trial.   It means there must be sufficient evidence for each charge – if a theft charge is brought, there must be sufficient evidence for a realistic prospect of a conviction for theft.

A charge upon which there is no evidence will inevitably fail. It is the duty of the defence lawyers to identify to the court where there is insufficient evidence to sustain a charge.  If the court agrees then the Judge must dismiss that charge.

The Post Office takes extremely seriously any allegation that there may have been a miscarriage of justice. We have seen no evidence to support this allegation.   The Post Office has a continuing duty after a prosecution has concluded to disclose any information that subsequently comes to light which might undermine its prosecution  or support the case of the defendant and continues to act in compliance with that duty.

The Horizon Computer System

Horizon is robust and effective in dealing with the six million transactions put through the system every day by our postmasters and employees at 11,500 Post Office branches. It is independently audited and meets or exceeds industry accreditations.   There have been 500,000 users of the system since it was introduced.

Nevertheless, rigorous re-investigations were undertaken into claims made by 136 mainly former postmasters that the system caused losses in their branches.

There is overwhelming evidence that the losses complained of were caused by user actions, including in some cases deliberate dishonest conduct. The investigations have not identified any transaction caused by a technical fault in Horizon which resulted in a postmaster wrongly being held responsible for a loss of money.

There is also no evidence of transactions recorded by branches being altered through ‘remote access’ to the system.  Transactions as they are recorded by branches cannot be edited and the Panorama programme did not show anything that contradicts this.

Resolution of cases

The Post Office was approached in 2012 by a small number of largely former Postmasters and MPs with the concern that faults in the Horizon computer system had caused losses at their Post Office branches.

In response the Post Office set up an independent inquiry and, when that found nothing wrong with the system, established a scheme to enable people to put forward individual complaints, providing financial support to those making claims so that they could obtain independent professional advice.

There were 150 cases put forward, 43 of which involved criminal convictions.

A number of the cases are now resolved, through mediation or otherwise, and the remainder of cases where the courts have not previously ruled have been put forward for mediation.

Mediation is overseen by the Centre for Effective Dispute Resolution (CEDR), an established leading and entirely independent organisation.   Those who have been offered mediation can still exercise their available rights if mediation is not successful – mediation itself doesn’t stop that.

Mediation cannot overturn a previous court ruling – only the courts can do so.

Campaign4Change’s questions to the Post Office

Based on this article, Campaign4Change put some questions to the Post Office:

  1. If an organisation the size of Boeing can be mistaken when it clears its own equipment and blames the human operators (pilots), it is possible that the Post Office was mistaken when it cleared its own equipment and blamed the sub-postmasters? [Boeing, which is much bigger than the Post Office, has vast test facilities and matching resources for investigations.]
  2. One outcome of the US investigations was that “no firm evidence of a technical malfunction” did not necessarily mean there was no technical malfunction. The 737 rudder system malfunction was found eventually to have been intermittent. It left no trace. [We know from the crash of a Chinook helicopter on the Mull of Kintyre in June 1994 that it’s possible for computer systems to fail to work properly – sometimes with an intermittent fault – and leave no trace.) Does the Post Office accept that mechanical or digital equipment can suffer from an intermittent fault that leaves no trace?
  3. Any comment please on the point that “no evidence of a technical malfunction” does not necessarily mean “no technical malfunction”?
  4. Any comment please on the point that large corporations, once they have cleared their equipment from blame after a single major incident – or further similar incidents – are unlikely ever to change their minds unless forced to?
  5. One of the most striking single aspects of any comparison between 737 crashes and the Horizon controversy is that it took professional full-time independent investigators in the US several years, millions of dollars and thousands of tests on one suspect component only, before they were able to establish not that the component in question had been the cause of two fatal crashes and a succession of other incidents but that it was the “probable” cause. There was no evidence that the suspect component was the cause. Has the Post Office required a higher standard of proof from sub-postmasters by requiring “evidence” to suggest that a Horizon malfunction or malfunctions caused the incidents in question?
  6. Boeing had to abide by the findings of the National Transportation Safety Board even though the Board did not agree with Boeing’s conclusions. The Post Office did not have to abide by the findings of its independent investigators Second Sight and was able to end Second Sight’s contract. Any comment please?
  7. In the US, the regulatory system allowed the National Transportation to require information from the various equipment manufacturers; and it could obtain information independently of the manufacturers, usually with their cooperation but not necessarily.   In comparison, the Post Office determined what information it passed to Second Sight and the families. On this point Second Sight had its concerns. In one of its reports for the Post Office, Second Sight said, “We have experienced significant difficulty in obtaining access to a number of documents we believe are necessary for the purposes of our investigation, notwithstanding Post Office’s commitment to make requested documents available to us.” Any comment please?
  8. The National Transportation Safety Board had the power (which it exercised) to exclude organisations that owned the equipment in question from participating in the inquiry. When the Post Office investigated Horizon systems in the light of losses shown on the systems, the Post Office, although owner and operator of the equipment in question, had the authority to retain full control of system information throughout.  Any comment please?
  9. The design of the 737 rudder system had been considered fail-safe and was certified on this basis. It had built-in “redundancy”. Even so, after thousands of tests, investigators found it could fail in very rare circumstances. The Post Office has explained at some length its Horizon failure back-up processes and procedures. Nevertheless could these prove fallible in very rare circumstances, in ways not yet fully understood?
  10. Boeing said it was open to any theory even if it meant Boeing was at fault. Is this the Post Office’s position?
  11. After the crash of United Airlines Flight 585 at Colorado Springs in 1991, the National Transportation Safety Board kept tabs on 737 rudder problems even without evidence they were the likely cause of any serious incidents.  Does this mark a different investigative approach to the Post Office which appears to have had a mindset that its equipment could not be to blame for losses?
  12. The NTSB after its initial investigation into the fatal crash of United Airlines 585 reached a conclusion that the probable cause was “undetermined reasons”. Would the Post Office consider such a possibility in the case of Horizon losses?
  13. Tests could not be carried out on 737 equipment until all parties agreed on how each piece would be tested. Agreement involved the Federal Aviation Authority as regulator, Boeing, the pilots’ union ALPA and the machinists’ union. In contrast the Post Office was in complete control of its investigations into Horizon losses.  Any comment please?
  14. The existence of the National Transportation Safety Board is a check against parties protecting their own corporate interests, namely the reputation of their equipment, after a major incident. What similar check exists to prevent the Post Office from seeking to protect its corporate interests – namely the reputation of its equipment – after a number of major incidents?

The Post Office’s reply (as mentioned earlier) was that “given that there is currently litigation it’s not appropriate for Post Office to comment”.

Postmasters tell their story – Computer Weekly investigation in 2009

Sub-postmasters and Horizon – timeline of events, 2009 to 2016 – Computer Weekly

Another village post office closed over Horizon IT controversy?

By Tony Collins

“I really have to apologise for not being able to offer the Post Office service the village deserves.

“The worst thing is that I cannot get a full response from the Post Office for their suspension of the service.”

These are the words of Neil Johnson, owner of the village Post Office located inside the Mace convenience store, High Street, Boosbeck, near Skelton, North Yorkshire.

The local Labour MP Tom Blenkinsop says on his website that the reasons for the closure of the Boosbeck post office are unclear but are “connected to a long running and national issue with the computer system and software used by the Post Office called Horizon”.

The closure leaves the village without a post office.

Dozens of subpostmasters have been forced to quit their local post offices over Post Office allegations that they acted criminally following losses shown on the Horizon system.

The Post Office has made no allegations against Neil Johnson.

The Post Office has required more than 150 subpostmasters to repay losses of thousands of pounds and, in some cases, tens of thousands of pounds – money they say was not a genuine loss but an accounting discrepancy shown on the computer system.

Many of the 150 were made bankrupt, jailed, or had their lives ruined because of what they say are unexplained faults related to the Horizon system.

No evidence has yet emerged that the subpostmasters in question received any of the money they are alleged to have taken. In some cases village communities have pulled together to raise money for the Post Office to be paid the “losses”.

Blenkinsop said of the temporary closure of the Boosbeck Post Office,

It just isn’t good enough and leads to an honest shopkeeper being possibly branded with an unfair image or tarnished by rumours…

“I did write on Mr Johnson’s behalf to the Post Office’s parliamentary liaison office, but all I have had back so far is the standard response that this is ‘being looked at’, and advice as to where the nearest other offices are – which I know anyway!”

Interviewed by The Northern Echo, a Post Office spokeswoman did not elaborate on the reason for the temporary closure. She apologised for any inconvenience caused to local residents.

“We would like to reassure customers that we will restore the service to the community as soon as possible and are committed to maintaining services in the area.

“In the meantime, customers can access Post Office services at Lingdale, North Skelton or Skelton in Cleveland.”

The Justice for Subpostmasters Alliance is taking a group legal action against the Post Office on behalf of the subpostmasters who say their lives have been affected by losses shown on the Horizon system.

An initial High Court hearing is expected to take place in January 2017.

One of the campaigners for justice is Tim McCormack, who worked in IT and later became a subpostmaster.

Although he did not personally have experience of unexplained losses, he believes strongly that problems with Horizon could explain the complaints of the accused subpostmasters.

He has written a fascinating analysis of the Seema Misra crown court case.

Suicide threat?

A subpostmaster has – unsuccessfully – made an anonymous FOI request to the Post Office for its Horizon “known errors” log.

The subpostmaster wrote,

“I am a subpostmaster with a big problem.  Over the last few months my branch has run up a huge loss and I am at my wits end trying to find out what has happened.

“I have contacted the NBSC [Post Office’s Network Business Support Centre] when it first started but they said I had to pay the money back but now it is too much and I just don’t have that sort of money.

“I have been looking on the internet for help and I see that there might be problems with Horizon that could have caused it.

“On this site someone has asked for something called the known errors report but you haven’t let them see it. Please could you tell me what these known errors are so I can try and track down what has caused this loss as I haven’t taken any money.

“I can’t report this to you because I read about Seema Misra and how she ended up in prison even though she said she didn’t take any money.

“Please please please let me see the errors so I can find what went wrong… I don’t want to go to prison I would rather kill myself first.

“Thank you to this site for letting me do this anonymously.”

The Post Office’s Gagan Sharma of the Information Rights team replied,

“Firstly, before I turn to your request under the FOIA, I would like to respond to the personal issues raised in your email. I am naturally especially concerned by the final line of your email and urge you to seek professional help via your Doctor or an organisation such as the Samaritans…

“One of the Post Office senior colleagues, Angela Van-Den-Bogerd would be keen to speak with you in complete confidence and anonymously to see whether we can help in any way…” [Gagan Sharma supplied a phone number.]

On the matter of the losses, the reply said,

“Regrettably, there has been some very misleading and inaccurate information about the Horizon computer system reported in the media. It’s important that you please contact the NBSC [Network Business Support Centre] again and ask for your report to be escalated to a Team Leader so that they can look into your concerns.

“The information that you have requested under the FOIA cannot be provided to you for the reasons I set out below …”

The letter confirmed that the “Post Office does hold information related to your request. However we believe that the information is exempt from disclosure”. The letter said disclosure was likely to prejudice commercial interests.

“… software updates for the Horizon system are released on a regular basis to ensure that operational performance is maintained at optimal levels… such updates include, for example, upgrades and improvements to functionality; and the introduction of new business capabilities for products and services and are, therefore, considered to be commercially sensitive…”

But subpostmasters have pointed out that it’s difficult for them to support their claim that the Horizon system was at least partly to blame for apparent losses if they cannot see the known errors log.

Comment

As has always been the case, the Post Office owns the system; it has a contractual right to claim from subpostmasters any losses shown on the system; it is the prosecuting authority when it believes that subpostmasters have taken the money shown as losses on the system;  it is the investigating authority and it can decide what information to divulge.

What chance do subpostmasters stand – even if innocent – in the face of such overwhelming power?

And how much fun is it to run a village post office when the Post Office could close it suddenly and inexplicably and, in doing so, strike fear into the heart of the local subpostmaster?

Thank you to Tim McCormack for his work and help in relation to the Horizon system. 

Post Office email reveals known Horizon flaw

The Post Office Horizon system and Seema Misra trial

Tom Blenkinsop MP battles for village Post Office

Post Office Horizon IT – for Julian Wilson time ran out on justice

 

 

Post Office prosecutions plummet

By Tony Collins

post officeThe number of Post Office prosecutions of postmasters has fallen sharply in recent years, from dozens a year to single figures, according to figures released under the Freedom of Information Act.

The Post Office has prosecuted subpostmasters in the past because of false accounting or theft after the Post Office’s Horizon IT system showed discrepancies in the accounts.

The law allows the Post Office to act as investigating authority – and prosecuting authority – when it suspects losses shown on the Horizon system are due to dishonesty by subpostmasters who run local post offices.

Some sub-postmasters have been jailed and some have been made bankrupt or ruined financially after the Post Office required that they repay losses shown on Horizon.

More than 150 subpostmasters are in the midst of a collective legal action against the Post Office. The action is being coordinated by the Justice for Subpostmasters Alliance. The Post Office is fighting it.

Subpostmasters say the losses were the result of faults in the Horizon or associated equipment and communications, which the Post Office denies. Subpostmasters say that evidence of discrepancies is not the same as evidence of theft.

These are the figures for Post Office prosecutions in the past six years:

post-office-prosecutions

The Post Office also gave figures for the number of postmasters suspended:

subpostmasters-suspended

Comment

In its Freedom of Information response the Post Office gave no reason for the plummeting number of prosecutions.

One possible factor is that the Post Office might have re-examined its approach to prosecutions. In 2013 forensic accountants Second Sight began reporting on complaints by about 150 subpostmasters that they were being incorrectly prosecuted or asked to repay money they did not owe.

In 2014 the BBC reported on the contents on of a leaked Second Sight report  that said Post Office investigators did not look for the root cause of the errors – and instead accused the sub-postmasters of theft or false accounting.

The Post Office has issued a point-by-point rebuttal of Second Sight’s reports.

In a separate blog post, I have suggested that the Post Office settle the Justice for Subpostmasters Alliance’s legal action – which would mean compensating the individuals and families involved – to avoid protracted legal proceedings causing more suffering.

Post Office Horizon IT – for Julian Wilson time ran out on justice

Justice for Subpostmasters Alliance

Second Sight’s report

 

Post Office Horizon IT – for Julian Wilson time ran out on justice

By Tony Collins

Julian Wilson was a subpostmaster, one of the founding members of Justice for Subpostmasters Alliance.

He and his wife Karen had their lives turned upside down after the Post Office’s centrally-run Horizon system, which was installed at the local branch they ran, showed unexplained losses.

He was one of more than 150 subpostmasters across the country whom the Post Office has blamed for losses shown on Horizon.

Subpostmasters run smaller post offices under a contract issued by the Post Office. Under their contracts, subpostmasters are personally responsible for deficits at their branches.

MPs and TV documentaries have raised concerns about whether the Post Office has accused subpostmasters of criminal actions when technical faults might have caused the losses.

The concerns of MPs were reinforced by the findings of forensic accountants Second Sight. At the request of MPs, the Post Office brought in Second Sight to investigate each of the subpostmaster complaints.

The Post Office criticised Second Sight’s findings and said there was no evidence that faults with the computer system caused money to go missing. “There is evidence that user actions, including dishonest conduct, were responsible for missing money,” said the Post Office.

Julian Wilson

TV investigative reporter Nick Wallis, who has reported on the Post Office Horizon IT system for the BBC’s The One Show, and has followed the story for many years, has written a moving post on the death of Julian Wilson who fought for justice for as long as he was able.

On his blog, Wallis says of Julian, “He was, I suppose, what we journalists call a contact.

“But his gentle manner, generous spirit and calm good humour made me think of him as more than that.”

Julian was prosecuted by the Post Office for false accounting. He pleaded guilty and went to his grave a near-bankrupt convicted criminal, says Wallis.

When Julian died, his conviction was one of 20 subpostmaster cases being considered by the Criminal Cases Review Commission.

Technical fault or crime?

More than 11,000 post offices have used Fujitsu’s £1bn Horizon system for branch accounting and rarely have had problems. At the close of each day, the system has balanced money coming in from customers and money going out.

If the system showed a shortfall, subpostmasters had few options: make up the deficit out of their own money, sign off the accounts as correct, or refuse to sign off – which might have meant closing the post office (and upsetting customers) while a financial audit took place.

The Post Office prosecuted subpostmasters who signed off the accounts as correct knowing there were unexplained losses; and it prosecuted in some cases for theft.

Dozens of subpostmasters have been jailed, made bankrupt or had their lives ruined after the Post Office took action against them in the light of discrepancies shown on Horizon.

Tears

Julian Wilson was determined to clear his name.

Wallis interviewed him in December 2014 alongside his wife Karen in a village hall in Fenny Compton, where the Justice for Subpostmasters Alliance met for the first time in 2009.

“Karen stood there with tears streaming down her face as Julian explained in his measured, Hampshire burr how problems with the computer system at their Post Office in Astwood Bank had caused their lives to fall apart.”

Wallis says there was never a trace of bitterness about Julian. “He accepted things with great patience even though he was still in danger of losing his house because of the Post Office’s pursuit of him.”

Julian found out he had terminal cancer towards the end of last year. “This summer he deteriorated rapidly,” says Wallis.

One of the comments on Wallis’s blog says of Julian,

“He carried on campaigning against the Post Office until he had no strength left to fight and I made him a promise – in the last few days of his life – that I would keep going along with the JFSA [Justice for Subpostmasters Alliance] until we got our long-overdue justice.

“What an absolute tragedy that such a good man should be taken from his beloved wife Karen and wonderful daughter Emma before his name had been cleared.”

Another said,

“RIP Julian – I am so sorry that we could not let you leave this world with the vindication you will certainly, but now posthumously, receive.”

Comment

Subpostmasters represented by Justice for Subpostmasters Alliance have issued a writ against the Post Office and the legal action is well and truly underway – but Julian Wilson’s untimely death shows that not all the individuals involved in complaints against the Post Office can afford the time to wait for justice.

In some cases, complaints go back at least eight years – so far.

The Post Office’s argument all along has been, in essence, that there is, and never has been, any evidence that Horizon caused the losses.

But neither is there evidence that more than 150 subpostmasters stole the money in question.

Institutional blindness?

In a BBC Panorama documentary on complaints about Horizon, Ian Henderson, a Second Sight investigator, told reporter John Sweeney,

“Horizon works reasonably well if not very well most of the time. In any large IT system it is inevitable that problems will occur.

“What seems to have gone wrong within the Post Office is a failure to investigate properly and in detail cases where those problems occurred. It’s almost like institutional blindness.”

The Post Office denies this and maintains that it has investigated each case thoroughly.

What strikes me, though, is the insularity of the Post Office’s case.

Crashes

Imagine if airlines and aircraft manufacturers were allowed to be the judge of whether pilots were to blame after major incidents.

The RAF’s hierarchy wrongly blamed two pilots for the crash of a Chinook helicopter on the Mull of Kintyre in June 1994. It took 17 years for the families of the dead pilots to win justice for their dead sons.

It was only after numerous independent inquiries, Parliamentary hearings and leaks of a mass of material about problems with the helicopter’s computer systems that the RAF’s finding of gross negligence against the two pilots was quashed.

The case showed that, despite the sincerely-held beliefs of two air marshals that the pilots were, without any doubt, at fault, the RAF was eventually found to have failed to take sufficient account of the possibility of a technical malfunction, or a chain of events involving a technical malfunction.

The restoration of the pilots’ reputation came about not because the RAF’s hierarchy changed its mind about the pilots’ gross negligence, but because there was a change of government in 2010 and setting aside the finding against the pilots was the will of Parliament.

The then Coalition government decided that a technical cause of the crash could not be ruled out.

Of course there was no air crash in the case of the subpostmasters. But there was a similarity: the RAF and Post Office are State institutions that dismissed complaints about their equipment and blamed the system “users”, with devastating consequences for the reputations and lives of the families involved.

There is also a fundamental difference: a regulatory authority always undertakes investigations into air crashes.

Airlines and aircraft manufacturers are not the legal investigating authority. In the UK it is the Air Accidents Investigation Branch. In its investigations into possible equipment failings, the AAIB has powers set out in law [including the Civil Aviation (Investigation of Air Accidents and Incidents) Regulations 1996] to require information from airlines and manufacturers.

In the case of the subpostmasters, the Post Office was the owner of the computer equipment that showed the losses; it was responsible for investigations into that equipment; and it was the prosecuting authority.

Contradictory evidence

There have been numerous commercial air crashes where regulatory investigating authorities have uncovered evidence that contradicted evidence from the airlines or manufacturers.

Sometimes it took regulatory authorities several years to discover the truth. Eventually they found technical faults where manufacturers had said initially there were none.

In the case of the Post Office Horizon controversy, there are no regulatory investigating authorities.

When accused subpostmasters have blamed the system for the losses, they have been unable to rely on an Air Accident Investigation Branch to produce a final report that could not be contested by the airline or manufacturers.

The Post Office could argue (rightly) that it operates under completely different laws, rules and regulations to the legal and regulatory framework that governs investigations of air crashes. In the Post Office cases, no public safety is involved.

But the Post Office has had a succession of serious incidents: the lives of 150 or more subpostmasters and in many cases their spouses have been thrown into turmoil.

Is this not a succession of serious incidents in which none has been the subject of an inquiry backed by a regulatory authority?

It’s a credit to the tenacity of Justice for Subpostmasters Alliance that legal proceedings have been issued. But the wheels of justice turn slowly. With appeals, the case could drag on for years.

More uncertainty and suffering for the families involved?

It’s also obvious that the Post Office has deeper pockets than those of individual subpostmasters.

That’s one reason why, after serious air incidents, the independent investigating authorities have complete control over their inquiries. Air accident investigators recognise that lawyers for airlines and manufacturers may seek to defend their organisations after a serious incident.

Sometimes air accident investigators will conduct parts of their investigations without relying on evidence from the manufacturers.

In the case of the accusations against subpostmasters, what powerful independent organisation exists to challenge the evidence of the Post Office?

The Post Office was able to commission Second Sight and later to discontinue its contract. The Post Office was also able to issue a point-by-point denial of Second Sight’s findings.

Imagine an airline or aircraft manufacturers being able to order independent investigators to discontinue their inquiries after a succession of serious incidents?

The Post Office said in response to Second Sight’s reports that it was “unable to endorse” the findings. After serious air incidents it would not matter if the airline or manufacturers disputed the report of regulatory authorities. The regulator’s report would stand.

Fairness?

The Post Office has a duty to prosecute subpostmasters who steal. But could it also do more to recognise that the imbalance of power and resources puts subpostmasters who have gained nothing – and lost much as a result of losses shown the system – at a severe disadvantage?

As the prosecuting authority, and the investigating authority, the Post Office is not open to serious challenge except through the courts where it has the money and resources to sustain costly and protracted battles.

Is this fair? Is this just?

The Post Office has every legal right to carry on exactly as it is, but could it not instead consider the cases on the basis of “benefit of doubt?”

In other words concede that there is doubt over whether subpostmasters had criminal intent?

Taking into account ordinary fairness and magnanimity in the face of its extraordinary power, the Post Office could settle the cases now, and not put the families of so many subpostmasters through any more suffering.

Nick Wallis’ post on Julian Wilson

Post Office faces group litigation over Horizon IT as subpostmasters fund class action

Justice for Subpostmasters Alliance

Jailed and bankrupt because of “unfit” Post Office IT? What now?

Communication Workers Union warns subpostmasters of flaw in Post Office Horizon accounting system

Horizon not fit for purpose at some branches?

Labelled as criminals – Telegraph

Post Office closes amid Horizon broadband problems

By Tony Collins

A Post Office has closed – temporarily perhaps – because the postmistress is refusing to spend more of her own money balancing the books on the Horizon IT system.

The York Press has published an article on the concerns of Wendy Martin who runs a Post Office branch in Clifton, York.

A broadband connection from her branch to the Horizon system goes down regularly, which she says stops payments being processed centrally. This has left her business hundreds of pounds down at the end of the month and her covering the shortfall.

Under her contract with the Post Office – and all such contracts – subpostmasters are responsible for any losses shown on Horizon.

About 150 sub-postmasters have complained to the Post Office about shortfalls which they say were accounting discrepancies related to Horizon problems rather than theft or fraud.

The Post Office’s legal action following cash shortfalls has led to the ruin of  dozens of subpostmasters who have lost their livelihoods, been made bankrupt or gone to jail. There were criminal convictions in 43 cases.

Subpostmasters claim the Post Office failed to investigate irregularities properly before launching criminal proceedings.

Wendy Martin has closed her Post Office until the connectivity problem is corrected.

The self-employed postmistress, who has worked in various shops during an 18-year career, says she is concerned that the problem will increase and could leave her paying in more money each month until the shop goes bust.

She told The Press: “The public feel I’m doing them a dis-service because the shop is shut but I could be in a situation where I may end up in prison.

“It costs me £400 just to keep the shop closed and if I keep putting in the money I will go bust. I hope the Post Office takes this seriously and come out to sort this, but until they do I’ll have to stay shut.”

Since the York Press article was published on 29 August Wendy Martin says the Post Office told her it would be “out asap and will sort this out”. She says she “cannot afford to keep putting money in for lost transactions due to this”.

Some subpostmasters have set up a Facebook page to air some of their grievances.

The Post Office says it does not prosecute people for making innocent mistakes and never has. In response to a BBC Panorama documentary last month on Horizon and the complaints of subpostmasters, the Post Office said:

“There is no evidence that faults with the computer system caused money to go missing at these Post Office branches. There is evidence that user actions, including dishonest conduct, were responsible for missing money.

“We are sorry if a small number of people feel they have not been treated fairly in the past but we have gone to enormous lengths to re-investigate their cases, doing everything and more than we committed to do…

“The Horizon computer system is robust and effective in dealing with the six million transactions put through the system every day by our postmasters and employees at 11,500 Post Office branches. It is independently audited and meets or exceeds industry accreditations.”

Mediation latest

John Munton, a director of the Centre for Effective Dispute Resolution, which is mediating in the disputes between the Post Office and subpostmasters, has written to the Post Office on the results of his review of the mediation so far.

Of the 20 cases that have gone through mediation, 8 have been resolved which is 40%.  Munton says this settlement rate is “somewhat lower than the average settlement rate that we see across all the mediations that CEDR conducts”.

In an average year its settlement rate “tends to range between 65% and 75% with a further 10% to 15% of cases resulting in some progression towards final resolution”.

Munton suggests there is a fundamental mismatch between the expectations of the subpostmasters and the object of mediation which is not to award compensation but to achieve an agreement between the parties.

Subpostmasters expect to enter into talks on compensation for their lost livelihoods and money they have paid to the Post Office to cover accounting shortfalls. The Post Office’s representatives make it clear they need credible evidence to justify the claims for compensation.

The mediation process has been more effective, says Munton, “where a continuing contractual relationship is still in place between subpostmasters and the Post Office, and where both parties would like it to continue.”

Comment

The Post Office, in mediation and its entire approach to the complaints of subpostmasters, is taking an empathetic but legalistic approach. To subpostmasters who say Horizon was responsible for losses, the Post Office’s lawyers say in essence: “Prove it.”

The subpostmasters can prove little or nothing, perhaps because Horizon is not owned or run by them. All the information subpostmasters possess is supplied and owned by the Post Office or its main supplier Fujitsu. The Post Office says there is no evidence that Horizon has caused the discrepancies complained of by the subpostmasters.

This is not like a train crash where there would be an independent statutory investigation, the findings of which would have a statutory authority. In these cases, the Post Office has chosen to commission an independent investigation from forensic accountants Second Sight. The findings have no statutory authority. The Post Office is entitled to reject Second Sight’s findings. And it has.

It is unclear whether all the facts in these cases have surfaced, whether the Post Office still possesses all the potentially relevant data from disputes that date back many years, or whether it has made any mistakes in its interpretations of the facts.

The Post Office will continue to benefit from a purely legalistic approach because subpostmasters may be able to prove that Horizon can go wrong but they will never prove that it did go wrong in their particular case.

Even when statutory investigations take place into public safety incidents, it may take years to find possible or likely causes. And that’s the point. There are only possible or likely causes. In fatal air crashes involving large passenger jets, for example, the outcome is a “probable” cause or “probable” causes.

By requiring evidence of a definite cause or causes of shortfalls, the Post Office is demanding the impossible.  On the other hand, why would it pay compensation when subpostmasters cannot prove that Horizon and the Post Office’s training or procedures were at fault?

Perhaps the only sensible way for these disputes to be settled is for lawyers to stand aside and allow managers to resolve cases on the balance of probabilities.

It’s clear to outsiders that 150 subpostmasters have not had criminal intent when, as happened in some cases, they signed off unreconciled accounts as correct. Many are victims of miscarriages of justice and deserve to have adequate compensation and their names cleared. The sooner this happens the sooner the Post Office can reclaim its reputation for fairplay.

If the cases are not settled the campaign for justice could go on indefinitely.

Mediation – letter from Centre for Effective Dispute Resolution to the Post Office. CEDR – mediation review

York Post Office closes amid cash row

Post Office Horizon and last night’s Panorama

 

Post Office’s Horizon IT and tonight’s BBC Panorama

By Tony Collins

This evening BBC1 is due to broadcast a Panorama [7.30pm] on the Post Office’s Horizon IT system and complaints by more than 100 subpostmasters.

The Radio Times says of the programme:

“Dozens of sub-postmasters have been prosecuted after their computers showed that money had gone missing, but could there be other explanations for the cash shortfalls? John Sweeney meets a whistleblower who says there were problems with the IT system, and also investigates claims that the Post Office charged some with theft even when the evidence didn’t stack up.”

John Sweeney is one of the most dogged reporters in TV. Another journalist Nick Wallis helped in the making of the programme. He has already presented short documentaries on the Horizon system and the complaints of subpostmasters on BBC’s “One” programme.

The broadcast is likely to add weight to a Parliamentary campaign for justice for subpostmasters who have been made bankrupt, lost their homes and livelihoods, gone to jail or had to pay to the Post Office tens of thousands of pounds the Horizon system said they owed.

The Post Office says that exhaustive investigations have shown there is no systemic fault with Horizon.

Last month the PO urged aggrieved subpostmasters to “engage” with its mediation scheme. But the campaigning group the “Justice for Subpostmasters Alliance” says that it is “not aware of a single case that has been to a Mediation meeting where the applicant has been the slightest bit happy with the outcome, or that the meeting brought resolution between the two parties, which was the stated aim of the Scheme”.

It adds that the Alliance is “aware of a number of cases that have been to Mediation meetings where the applicants have been left distraught and angry at Post Office’s unwillingness to listen or even consider the issues that they have raised”.

The PO says it acknowledges that the mediation scheme has “taken longer than all those involved would have liked”. It adds in an email to subpostmasters: “However, we do now have the opportunity to sit down with you and your professional adviser if you have one, to discuss your complaint in detail and look forward to the opportunity to do so”.

Comment

BBC2 has been running a series on the Post Office, “Signed, Sealed, Delivered – inside the Post Office” which was filmed with the PO’s co-operation.

In part it shows the PO’s difficulties trying to recruit subpostmasters for local post offices that may otherwise face closure. The government has said the Post Office must keep all of its 11,500 branches open. Not allowing a single branch to close is a huge challenge for the Post Office.

Now another part of the BBC is due to broadcast a Panorama programme on how some subpostmasters have had their lives ruined when they have run into difficulties that involve the Horizon system.

Are those difficulties one reason the PO is struggling to recruit 600 subpostmasters to keep some local post offices alive?

The pressure on the PO to take unambiguous action to right the perception of a massive injustice is growing. Aside from the bad publicity, and the campaign for justice led by MPs, next month a tribunal is due to take place of Fozia Rashid who claims she was sacked from the Post Office’s Knaresborough High Street branch, in July 2013, after witnessing and attempting to report a series of criminal activities, including potential institutional fraud and errors in the Horizon software. Her hearing starts on 3 September 2015 in Leeds.

She says on Twitter that the Post Office has made her offers to settle. Any publicity of the case is unlikely to make it easier for the Post Office to recruit more subpostmasters.

When will the PO accept that more than 100 people, many of whom signed up in search of an idyllic village life running a local post office,  cannot all have been dishonest and were likely victims of circumstances beyond their control?

Tonight’s Panorama is well worth watching.

Jailed and bankrupt because of “unfit” IT?

Post Office looking to replace Horizon? – Computer Weekly

Decent lives destroyed by the Post Office? – Daily Mail

Post Office “failings” over cash shortage investigations – BBC

MPs attack Post Office subpostmaster mediation scheme

Justice for Subpostmasters Alliance

Some lesser-known costs of outsourced IT?

By Tony Collins

An outsourcing contract may work well in general, but what when things go wrong and the customer needs  non-routine or extra-contractual information and answers from the supplier ?

 

The Post Office has received a reliable, nationwide IT service from Fujitsu for more than 14 years. A centrally-imposed contract ties in post offices across the country to using Fujitsu’s Horizon accounting system

The Post Office is delighted with the system and the service, and always has been. For some years its officials considered Horizon infallible, according to evidence given to the Business, Innovation  and Skills Committee last week.

Fujitsu has continued to enhance the system and service – sometimes at its own cost.  Most post office staff have had no complaints with the system – but more than 150 subpostmasters say they have had problems that, in some cases, have ruined their lives.

During a hearing that lasted nearly three hours, the Committee’s MPs heard that the Post Office’s contract with Fujitsu meant that investigating some complaints or queries with the system was not always contractually straightforward.

Kay Linnell, a forensic accountant and fellow of the Institute of Chartered Accountants,  told MPs:

“My understanding is that the Post Office had to pay for metadata from their contractors Fujitsu. This meant that when a shortage or overage arose and subpostmasters tried to investigate it and asked the Post Office about it, there was an extreme reluctance to investigate each and every shortage or overage.”

And Ian Henderson, a chartered accountant and forensic computer specialist with 2nd Sight, told the Committee:

“… The software … works well most of the time. Like any large system, it occasionally generates errors.

“Our concern is the response by Post Office to supporting sub-postmasters when they face those problems. Yes, there is a helpline facility, and, yes, training is provided, but there is no formal investigative support.

“Under the contract, sub-postmasters are not entitled to investigative support when they say, ‘Look, we’ve got this discrepancy. I don’t understand how it happened.’

“They are left largely to their own resources, supported by the helpline and so on, to get to the bottom of those problems.

“As we have seen time and again, they have failed to do that. In some cases, Post Office has refused to provide information to them on the grounds of cost – this comes back to the contract with Fujitsu. They say, ‘It is too expensive. It is outside the terms of our service level agreement. We cannot provide you with the detailed information that Post Office holds…'”

Investigations into some of the more serious complaints by subpostmasters require access to Horizon’s audit trails. These were available for up to 42 days before 2010 and 60 days since.  MPs heard that sometimes the audit trails would be needed for investigations when they were no longer available.

Missing emails?

Henderson  claimed that 2nd Sight had requested copies of emails for 2008 but was given them for 2009. He told MPs he has still not had the emails for 2008,which the Post Office disputes.

Henderson said:  “Unfortunately, the e-mails that were provided were for the wrong year. We were investigating a specific incident in 2008 and the year’s worth of e-mails that we were given related to 2009. Therefore, it was not surprising that we said, “We have asked for 2008, please provide it.” We have still not had that…

“We were told at the time that with the first batch there were some technology issues relating to the provision of the 2008 e-mails. Two years down the line, we still don’t have those.”

But Angela van den Bogerd for the Post Office replied:  “We provided what we were asked for at the time, so, clearly, there must have been some misunderstanding. We would not have pulled a year’s worth of e-mails for a wrong year.”

Costs of storing data 

Like most commercial organisations the Post Office has to pay to store data, so it has a policy of destroying data after several years. The Committee heard that “some of the cases [being investigated] are regrettably very old, so some of the data are simply not there”.

Comment

When big organisations, particularly councils, outsource their IT, do they always take into account the costs associated with investigations of problems – accessing old audit trails, retrieving other old data such as emails, or searching for information that might have been destroyed to save money?

It’s unclear whether the outsourcing of its IT has helped or hindered the Post Office’s investigations into the complaints of subpostmasters.

Lives ruined by IT glitches? Post Office officials face the critics

By Tony Collins

post officeAfter dozens of subpostmasters were jailed, bankrupted or lost their livelihoods because of irregularities and shortfalls they say were not their fault, MPs met on Tuesday [3 February 2015) to question senior Post Office officials and their critics.

It was the first time, in public, that Post Office officials have answered a comprehensive set of points made by their critics.

Ian Henderson of forensic accountants Second Sight, who were brought in by the PO to investigate possible miscarriages of justice and complaints by subpostmasters, made some trenchant criticisms of Post Office IT, processes, attitudes and culture.

Dozens of subpostmasters were accused of false accounting, fraud or theft because of shortfalls in their daily balances that, they say, were due to  a lack of training or IT problems related to the Post Office Horizon system.

Some were jailed. Some have had their lives ruined by having to pay back to the Post Office tens of thousands of pounds they say they did not owe. Some have had to sell their homes to pay the Post Office.

Those answering questions at a hearing this week of the House of Commons’ Business Innovation and Skills Committee included Paula Vennells, Chief Executive of the Post Office.

The uniqueness of the hearing and the incisiveness of the points raised make it worthwhile to report on the proceedings in depth. Excerpts are below.

The campaign for justice is important not only because of the impact that accounting discrepancies have had on the lives of more than 150 subpostmasters but because of the wider questions:

–  how has it come to be that the output of a computer system has been trusted over the integrity of individuals who are – were – pillars of their local communities?

– should independent controls exist to ensure innocents are not branded criminals because of output from a complex system that has multiple interfaces and known fallibilities?

Excerpts from Business, Innovation and Skills Committee, House of Commons, 3 February 2015.  Witnesses:

– Andy Furey, Assistant General Secretary, Communication Workers Union

– Mark Baker, National Branch Secretary, Postmasters Branch, Communication Workers Union

– George Thomson, General Secretary, National Federation of Subpostmasters

– Alan Bates, Chairman, Justice for Subpostmasters Alliance

– Kay Linnell, Chartered Accountant, Kay Linnell & Co, adviser to the Justice for Subpostmasters Alliance

– Ian Henderson, forensic computing expert, Advanced Forensics (Second Sight Ltd). The Post Office commissioned Second Sight to investigate complaints by subpostmasters.

– Paula Vennells, Post Office Chief Executive

– Angela van den Bogerd, Head of Partnerships, Post Office Ltd

 

Mediation Scheme [set up by the Post Office in August 2013 to deal with complaints by subpostmasters that they have been incorrectly blamed for shortfalls in daily balances shown on the PO/Fujitsu Horizon system].

Paula Vennells: “As you have heard, 136 cases have come into the scheme. We set it up [the mediation scheme] with the ambition to find out exactly what those people are concerned about, because it is of concern to me and the Post Office that we do that…

“What we have seen from the scheme is that yes, as you heard earlier, it has taken longer than we would have liked. The reason for that – this is one of the benefits of having put the scheme in place –  is that we have investigated every single case in the most thorough detail.

“We have been rigorous about this. As chief executive of the Post Office, I could not put this scheme in place and not do it properly. The system and the people who work in our branches are too important for that.

“Perhaps the most significant finding from it is that we can continue to have confidence in the Horizon system and how people are running post offices across the country…”

**

Andy Furey (Communication Workers Union): “Our concern overall is the hundreds of postmasters who seemingly have not had justice.

“They were dismissed for irregularities that were not down to them as individuals or their staff, and which are seemingly a problem of the system.

“We were pleased that the mediation scheme was erected and set up, but we do not think it has delivered as it was envisaged to in the first place. We are concerned about the pace of the process of mediation, and the number of cases that seem to have fallen out of the process. Overall, we are not particularly happy with the way that the mediation scheme has been conducted.

**

Angela van den Bogerd (Post Office):  “I am part of the working group, and I have been the Post Office person who has been in there from the start until today. As you heard earlier, the investigation—the whole process of cases into the mediation scheme – has taken longer than we all anticipated it would, at every stage, from the applicant putting in their initial application, through to asking whether they want an investigation to Second Sight doing theirs.

“These are individual cases and very complex. What we have wanted to do, and are very committed to doing, is a thorough investigation of each of the issues raised by each of the applicants to the scheme. That has been a very long process.

“We have not dragged our feet. I have had 20 people working on this full-time for over a year. We have produced thousands and thousands of pieces of evidence in support of each of the cases that we have put.

“I would have liked it to have been quicker, but not at the expense of a thorough investigation.”

George Thomson (National Federation of Subpostmasters):  “Can I just say, firstly, 99% of postmasters are dead straight and honest? But on this very important issue about mediation, I think it was probably the training.

“Some people believe that money went missing and it had to be Horizon where it was maybe staff error. But the third point, and this is contentious, the difficulty the Post Office must have is that some of the people are chancing their luck…

**

Alan Bates (Justice for Subpostmasters Alliance): “… from what I am hearing from the membership who received these [mediation] reports of their cases from the Post Office, basically the Post Office are saying that they have done everything right and the sub-postmaster did everything wrong. That seems to be the summary of the majority of the cases at the moment.”

**

Mark Baker (Communication Workers Union):  “I have three members in the mediation scheme and from our experience, it is agonisingly slow. I have only got one member who got to the stage where he gets the Post Office response…I do not know why Mr Thomson comments on the mediation scheme; he does not have any members in it.

“The scheme could do with some form of external body sitting on it that could perhaps keep the pace of progress going a bit faster and maybe offer a bit more of a robust challenge to the Post Office on some of the reasons it gives why things have to be done the way they are. ..”

**

Kay Linnell (Fellow of the Institute of Chartered Accountants and Liveryman of the Worshipful Company of Arbitrators): “The reason the working group is not as fast at pushing this scheme through to mediation as it was, is because some of the goalposts have been moved by the Post Office…”

**

Katy Clark (Labour MP and member of the Business, Innovation and Skills Committee): “Is there anyone with an IT background on the mediation scheme?”

Vennells: “The mediation scheme is the scheme where the individuals go into -”

Clark: “I understand that, but can you answer the question of whether there is anyone on the scheme with an IT background?”

Vennells: “When you say on the scheme, as part of the working group? No, there is not.”

Clark: “Are you aware that that is a major criticism?”

Vennells: “Yes, I am.”

Clark:  “Are you able to address that at this stage?”

Vennells:  “For each of the 150 cases for which we have now concluded our investigations, where there have been IT issues, we have looked into those and taken the right advice from our IT experts in the business. Yes, we have.”

**

Contract between Post Office and subpostmasters

Kay Linnell:  “When the Post Office moved to a computerised system in 2000-01, they did not amend the contract between the sub-postmasters and the Post Office. The individual subpostmaster remained totally responsible for all gains and losses, but they were no longer able to check each and every transaction because there were no slips.

“My understanding is that the Post Office had to pay for metadata from their contractors Fujitsu. This meant that when a shortage or overage arose and subpostmasters tried to investigate it and asked the Post Office about it, there was an extreme reluctance to investigate each and every shortage or overage…”

**

Ian Henderson (Second Sight, forensic accountants investigating individual cases):  “Over a period of time, Post Office has quite sensibly introduced a number of system changes.

“Some have benefited sub-postmasters and Post Office, of which the changes to lottery and scratch cards are a very good example.

“Bearing in mind that, under the contract, the sub-postmaster is responsible for making good all losses, I am concerned that a number of those process changes have reduced costs to Post Office or have benefited Post Office, and have acted to the disadvantage of sub-postmasters.

“A number of those changes have been implemented without any consultation or adequate consultation. I am concerned that, over time, Post Office has been gradually transferring risk from itself to sub-postmasters, which is ultimately being reflected in the losses they are bearing…

“While the contract has been changed in part, it has remained substantially the same for 20 or 30 years. We think that it does not provide sufficient safeguards for sub-postmasters.

“For example, there is no entitlement to investigative support. We have been told that many sub-postmasters were not even provided with a copy of the contract.

“In the contract, it states that investigative support will be provided only in cases of suspected criminality – in other words, if a criminal prosecution can or may be brought by Post Office.

“It does not seem to cover a situation where a sub-postmaster identifies a problem, has exhausted all the readily available help mechanisms and wants some serious, professional help from a trained Post Office auditor.

“To his surprise, he will find that he has no entitlement to that. Bearing in mind that Post Office holds all the data, we find that surprising. In the context of modern business practices and best practice, we think that that is unfortunate.

“Our view is that the contract needs a fundamental overhaul to reflect far better an appropriate relationship. It strikes us that it is written very much in words reflecting a master/servant relationship that perhaps was appropriate 70 years ago but should not be part of a modern contract.

“Sub-postmasters are described as partners, but it is certainly not a partnership of equals. The risk is largely borne by sub-postmasters, and some of the changes that have happened recently have benefited Post Office.”

Training

Brian Binley (Conservative member of the Committee): I would like to take a vote. Was the support and ongoing training good enough when this sizeable system was launched? Yes or no?

George Thomson: Yes.

Andy Furey: No.

Mark Baker: No.

Alan Bates: No.

Kay Linnell: No.

**

Mark Baker: “As a serving sub-postmaster, live, as we speak—I should be back at the branch, but I am here—perhaps I should tell you that training is generally received by serving subpostmasters through the form of manuals. We call them Branch Focuses.

“They arrive every week and we read them to receive training and instructions on how to operate certain transactions. They are hopeless.

“My wife prepared a 54-page dossier, randomly taking one month’s selection of Focuses and highlighting all the misinformation and errors contained within them, which she sent to the board of directors. She did not get a single reply from any director.

“The file was passed on to a functionary further down the line, who made a hopeless job of trying to explain everything my wife was trying to point out. She was trying to point out that we are reliant on receiving the correct instructions in order to be able to operate Horizon and perform the transactions, and the people who are telling us how to do it cannot even get it right. That is the reality in the Post Office world as we speak today.”

**

Mark Baker: “The training started off reasonably good, but as the system evolved there was no back-up training of any adequacy. Postmasters are just sent manuals and are expected to not only teach themselves but have to teach their staff as well. So training is a huge issue.”

**

Alan Bates: “I was also involved with the training at that point when the system came in, and I was a sub-postmaster then. I had one and a half days’ training, my staff had one day’s training and I believe that the regional people who worked for the Post Office had two and half days’ training.

“I, too, received a 500-page pack to take away and learn how to use the system afterwards. That is how it was dropped on everyone. I had five members of staff who did training at that session. One of them had never even turned on a computer before, but she did a day’s training and then she was certified as being sound and correct and fine to use the system at the end of one day.

“It was madness; she had no idea what she was doing. Staff were just abandoned at that point.”

 Chaotic IT?

Mark Baker: Apart from representing postmasters nationally, I am still a serving sub-postmaster. I have been doing the job now for 27 years, and 10 years prior to that I was working for the head Post Office. Horizon was introduced for a specific purpose: mainly to fulfill the wishes of the Department for Work and Pensions to have more automated process for pension allowances.

“Horizon could also do other things in its early says, but its basic requirement changed as the DWP changed their requirements and the Post Office needed to use Horizon for more commercial reasons and had developed application upon application upon application. They had more and more data centres talking to each other, exchanging information.

“It is a very chaotic, behind-the-scenes set of circumstances in IT terms.”

Glitches?

Ian Henderson: “… the Post Office disclosed to us that a number of software defects had been identified that affected 76 branches. It took some time for those defects to be identified—somewhere in the order of 12 months.

“A feature of a number of the matters reported to us appeared to be the old and unreliable hardware that features in the Horizon system – old Horizon and new Horizon.

“We have heard about communication failures and the consequences of that. We have been advised that approximately 12,000 communication failures occur each year, and all of those can have consequences for sub-postmasters…

“Particularly under new Horizon, the servers are located centrally. All the branches, and indeed Crown offices, have to communicate electronically with those servers. There are fall-back procedures…some rural branches have broadband and technology problems. Some of those branches also suffer from a poor mobile phone signal…

“Failures are inevitable with that infrastructure. In general, Horizon has a robust recovery mechanism to cope with those failures. The cases we have looked at are primarily the 150 applications to the mediation scheme.

“They have shown that when there has been an unusual combination of circumstances – they are relatively rare, and I would emphasise the point made previously that, most of the time, Horizon works well – such as power and telephone communication failures, errors being made at the counter or some of the other errors that we have now highlighted and that we will report on in our next report, it is how the Post Office has responded to those that has contributed to the problem. This is partly about a lack of training, partly about a lack of support and, in particular, about a lack of investigation.”

**

Kay Linnell:  “If you talk to anybody who has served in one these smaller, independent subpostmaster branches, you will see that there is a succession of people who have had problems with the hardware, the software or the support, and there are unanswered questions as to why the differences arose—small or large. It is that not knowing how the difference arose for which they are responsible that has, frankly, driven some of them to the edge of sanity.

**

Mark Baker:  “I think there are a lot of areas which have been highlighted since Second Sight issued their first report. I have the benefit, because it was issued to one of my members, of reading their report that they prepare for the mediation scheme, where they are now highlighting lots of areas that have the potential to cause discrepancies.”

**

Andy Furey: “I think it is that question of whether there are some glitches in the system that have created problems for some individual postmasters. Let me put this into scale. There are 11,500 post offices and 30,000 or 40,000 Horizon terminals up and down the length and breadth of the country, so this is not a wide-scale problem, but nonetheless it is a problem for the individuals who were impacted, who have lost their livelihoods.”

**

Mark Baker: “There will always be human error when humans interact with computers. However, what has been systemic and consistent throughout Horizon’s life is the failure to recognise that parts of the infrastructure could be to blame for some of these discrepancies occurring.”

**

Kay Linnell: “We have evidence of historic failures. A lot of the connections on very complicated things like ATMs were done through a mobile phone connection, which sometimes dropped before both ends of the transaction were captured…”

**

Mark Baker: “I have a lot of experience in another life in IT network systems working over virtual private networks, and I have been doing a lot of research into data flow disruption. Horizon just produces packets of data. It has to be transmitted, and it needs a secure network over which to be transmitted. The ADSL lines are not interleaved. If you do not interleave an ADSL line and put other equipment on it, you run the risk of disruption happening to the data flow.

“Power can cause the same kind of disruption. The infrastructure in branch has not been maintained at all since it was introduced. The power lines have never been checked. The plugs have never been PAT tested.

“The trip control switches, which are designed to protect the electrical circuitry, have never been looked at since the day they went in. I have no idea whether they still work, so what damage can power surges and power outages cause.

“The interaction of Horizon when it loses its ADSL connectivity for whatever reason and defaults to its modem is another area of concern to me. We are doing highly encrypted secure banking transactions on a mobile phone chip, and that is a recipe for disaster.

“In the rural areas, it will be worse than in the urban areas. Urban areas get the same problem, but in the rural areas, you are a long way away from your BT exchange.

“The signals are not always very good if you have to go on to the backup through the modem, and it is a recipe for disaster. This is not only my opinion. Second Sight have raised this issue, particularly if you read the report that they have provided to the mediation scheme.

**

Angela van den Bogerd: [Regarding telecommunications problems and a loss of power]. “The system is designed to cope with that. If there is a loss of power or of communication mid-transaction, none of those data are lost. It freezes in time, and when the system comes back on, the screen asks the user to give it some information about what point in the transaction you were at. Did that transaction complete? Had you given money? Had you taken money?

“That recovery process, as it is called, actually resets the system to that moment in time, so no data are lost. Yes, it is inconvenient, and yes it is frustrating for branches and sub-postmasters and assistants, who want serve their customers, but that does not cause the discrepancies that it has been claimed it does. It does not do that.”

**

Ian Henderson:  “In terms of IT support, we are concerned about some of the interfaces with third-party partners such as Bank of Ireland and other banks, ATMs and so on. The issue is those interfaces and the flow of information from those third parties, which of course would not happen in a high street bank where everything is integrated. It is those third-party interfaces that seem to cause a disproportionate number of problems… In 2009, when the Post Office performed an audit of 20 branches relating to the lottery scratchcards. Those 20 branches caused £147,000 in losses, and as a result of that, certain process changes were eventually developed.

“In 2010, over a three-month period, more than 1,000 transaction corrections –TCs – were issued to branches, the financial value of which was £744,000.

“To our minds, that indicates that there was a system-wide problem with lottery scratchcards. Two years later, the Post Office introduced a number of changes that largely prevented that problem occurring. However, it was three years before those early problems that had been identified were fully resolved, and I am sure there were other examples.”

Mike Crockart (Lib-Dem member of the Committee): “And during those three years, sub-postmasters would have been expected to make up the loss?”

Henderson: Correct.

Angela van den Bogerd:  “We have tried to automate products, so that less human interaction is required. In the case of lottery scratchcards, those error notices were particular to cases where sub-postmasters had sold scratchcards before they had booked them in.

“They were selling scratchcards with a value of, say, £200 that they had not actually booked into that account. So they would have had a surplus of £200, which if you scale up reaches a sum of £700,000. So it is not an actual loss; it is just that they have accounted for it incorrectly at the start.”

Aren’t Crown-owned Post Offices hit by discrepancies?

George Thomson:  “If there was a systemic issue … there would be big problems in the Crown offices as well. I cannot recall a single big issue where someone in Crown offices has blamed Horizon.

“If it was systemic, it would be a nonsense to suggest that the only time there are computer faults is to do with independent sub-postmasters or franchise sub-postmasters; and yet there does not seem to be any noise at all that has developed with the Crown offices over 15 years. That is very strange, given they are doing 16% of all the volumes.”

**

Alan Bates: “One of the few documents that has come to light in all of this is a 2007-08 internal report from the Post Office, which showed that the Crown offices lost £2.2m across their counters that year. So Crown offices do lose money.

Henderson:  “Crown offices have one significant difference compared with branches: they have the ability to write off losses up to certain levels. A sub-postmaster cannot do that; he is accountable for every penny.

“If there is a discrepancy, he has to make that good. The same principle does not apply to Crown offices.

“Another of the outstanding questions we have put to Post Office is that we want data comparing and contrasting losses written off by Crown offices and the equivalent losses borne by sub-postmasters.

“Our work to date has indicated that they both suffer from the same underlying problems. However, the solutions are very different because, generally speaking, a sub-postmaster cannot write off a loss; he has to make it good.”

Is the Federation of Subpostmasters supporting members hit by shortfalls?

Alan Bates: “The reason why the Justice for Subpostmasters Alliance was set up was that the Federation refused to support sub-postmasters in any cases about Horizon. It never once supported people in court cases or anything like that.

“It was just saying to people, ‘Right, you’re saying it’s a Horizon problem. Oh, I’m sorry. There’s nothing wrong with Horizon. The Post Office has told us there’s nothing wrong.’ That is why the JFSA came about. Every one of our members wants their dues back from the federation because of its so-called support -or lack of support – over the years.

“It is really frustrating to have to sit here listening to somebody who is meant to be representing sub-postmasters – it is like they are in a paid position in the Post Office.”

**

Kay Linnell: “Frankly, it [the Federation] is supposed to be representing sub-postmasters who have lost their livelihoods, their homes, their money and their reputation because of faults put at their door by the Horizon system.”

**

George Thomson: “We have to be careful that we are not creating a cottage industry that damages the brand and makes clients like the DWP and the DVLA think twice…

“We pay out £18bn a year for the DWP in Government benefits. The DWP would not have re-awarded the Post Office card account contract … in the last month if they thought for a minute that this computer system was not reliable…

“If we are not careful, we damage the brand, we damage the franchise and we cost my members’ ability to sell the franchise.

“If we lose big contracts, Andy’s members lose their jobs as well. So we have to be careful that we do not create a cottage industry that is built on supposition.”

Proper investigation of shortfalls?

Kay Linnell: “My understanding is that the Post Office had to pay for metadata from their contractors Fujitsu. This meant that when a shortage or overage arose and SPMs tried to investigate it and asked the Post Office about it, there was an extreme reluctance to investigate each and every shortage or overage.

“When they [subpostmasters] made calls to the helpline supporting them, these were not dealt with, or were marked with low priority…”

**

Mark Baker:  “The Post Office failed to recognise that they needed to drill down into each and every kind of discrepancy – whether that was a surplus or a shortage is irrelevant: it is a discrepancy; and refused to look at their system and analyse, ‘Is it fit for purpose in the modern day? Is it independently audited by accredited IT professionals?’

“It was not supporting the postmasters – the ones that find themselves in the JFSA group – or looking into their cases. Why has that happened over the years that Horizon has been in life? That very much is the core reason why we find ourselves here today.

**

Alan Bates:  The Post Office never investigate cases if a sub-postmaster has an issue. If they raise that they have a problem, they suddenly get landed on by Post Office’s audit and, more than likely, they will be thrown out or even charged afterwards.

“That is what has gone on in the past. I think they are trying to change it these days, but I do not know how successful because two or three new people a week call me, and these are serving sub-postmasters having problems as well. There are ongoing issues.

**

Henderson:  “… we think that there have been prosecutions brought by the Post Office where there has been inadequate investigation and inadequate evidence to support some of the charges brought against defendants -sub-postmasters and former sub-postmasters.

“In particular, we are aware -this, again, is why we need to see the full prosecution files – that a common tactic employed by the Post Office, or lawyers acting on its behalf, is to bring charges for both false accounting, which is a relatively easy charge to prove, and theft; then, as a bargaining point -a plea-bargain, almost – before trial, they drop the charge for theft on the basis that, first, the defendant will probably avoid a custodial sentence and, secondly, the evidence is much simpler.

“When we have looked at the evidence made available to us – bear in mind that I have been an expert witness for the Crown Prosecution Service, instructed by the CPS on fraud cases – I have not been satisfied that there is sufficient evidence to support a charge for theft. You can imagine the consequences that flow from that. That is why we, Second Sight, are determined to get to the bottom of this matter, which we regard as extremely serious.”

How many postmasters are affected?

Mike Crockart:  “I want very briefly to try to get a feel for the size of the problem because we are talking in generalities here. Andy, you just said that hundreds of postmasters have had this problem. How big is the problem? How many postmasters have reported incidents?”

George Thomson:  “I will put it in perspective over the whole 15 years. At one time, 100,000 postmasters and their staff were dealing with Horizon every week on the computers when the network was bigger; that is down to 50,000. It has always been a tiny amount. Going on to Paul’s point to put it together, some of it is training. A small element is that –

Crockart: “I am trying to get an idea of the size of the problem. You said that it is a small number – what does that mean?”

Thomson: “It’s tiny, because you are talking about something in the region of more than 30 million transactions every single week. It used to be about 60 million transactions.

Crockart: “The question was: what number of postmasters are affected by this? Perhaps I can turn to somebody else.”

George Thomson: “Tiny.”

Alan Bates: “During the 12-week period in which the mediation scheme was open, we had 150 people apply for it. Since then, probably a similar amount have been trying to get into the scheme, but it is closed.

“Before that, the JFSA was going for maybe two or three years and we had probably a similar amount. There are still people finding out about all of this all the time, so it is a growing number.”

Crockart: “There are 150 in the mediation system and roughly 150 that you know about that would have liked to, but have missed the boat.”

Bates: “And there are more coming along.”

Did postmasters have full control over their accounts?

Kay Linnell:  “The problem that the members of JFSA and the complainants have is that the analysis and evidence has not been produced…  What has happened with the small sub-postmasters is that, even where there is only the subpostmaster operating the tills, money has gone missing which is outwith their control.

“For example, if cash collection is picked up and remitted to head office, it is sometimes not logged against them in head office and a shortage arises.

“Sometimes, an entry goes through -a transaction correction or credit – and they do not know about it. Although the sub-postmaster is personally responsible to pay cash, they are not aware of how the differences have arisen.

“If this mediation scheme had told the complainants – the applicants – where the money had gone, there would be a lot of settlements, but we still do not know. The accounting is outside the subpostmasters’ control.”

Binley: “But how can the sub-postmaster be responsible?”

Linnell: “Because, under the contract with the Post Office, they are responsible…”

Binley:  “How can they be expected to be responsible when in fact they do not have the tools to carry through that responsibility? Is that the nub of it?”

Linnell: “That is absolutely the key question.”

Support when things go wrong?

Linnell: “People today are still getting shorts [shortfalls] and overs [surpluses] on a daily basis and still have no clue why the accounting systems that they can see do not balance.

“To my mind, that is the support that the subpostmaster on the ground needs today. Helplines are all very well, but you get a person on the end who may log the call and mark it low priority. That doesn’t help you.”

**

Ian Henderson: “The core system – the software, for want of a better word – works well most of the time. Like any large system, it occasionally generates errors. Our concern is the response by Post Office to supporting sub-postmasters when they face those problems.

“Yes, there is a helpline facility, and, yes, training is provided, but there is no formal investigative support.

“Under the contract, sub-postmasters are not entitled to investigative support when they say, ‘Look, we’ve got this discrepancy. I don’t understand how it happened.’ They are left largely to their own resources, supported by the helpline and so on, to get to the bottom of those problems.

“As we have seen time and again, they have failed to do that. In some cases, Post Office has refused to provide information to them on the grounds of cost – this comes back to the contract with Fujitsu. They say, ‘It is too expensive. It is outside the terms of our service level agreement. We cannot provide you with the detailed information that Post Office holds.’ It is not prepared to disclose that information to sub-postmasters, even though, under the contract, it has a legal obligation to make good those losses. It is matters such as that that we are looking into.”

**

Paula Vennells:  “We monitor very carefully the training and support that we give. The first point that I want the Committee to hear is that there are always opportunities for us to do it better. I have no doubt about that; it applies to any organisation. We are not perfect, and we continually try to improve things.

“The satisfaction rate for the support desk for the sub-postmasters is running at about 87%. It has improved since we put in place changes last year, but it has always been good.

“As you heard from George Thomson, the vast majority of people have no issue with the system, and they are actually quite satisfied with the training and support around it. We are dealing with a very small number of people who have had some really difficult things happen to them.

“Going through this process, which Angela has built on, we have learned where we could have done some of those things better. However, that is not to say that throughout that period—we are talking about 10 years—the system, the support and the training were not good. In the vast majority of cases, they were. Angela will tell you about what we have done and the improvements that we have made.”

**

Angela van den Bogerd: “If a branch finds that it has a large unexplained loss, the first port of call is for them to ring the helpline. There is a process in place for them to be helped remotely. If the helpline cannot solve their problem at the time, it goes to another team—a branch support team, which has a bit more expertise and can dive a bit deeper into the information.

“If that fails, we send someone out to visit the branch and see if they can help them there. That process is in place.

“Looking back over the cases that we have investigated, we could have done that a bit better in some of those cases. It is not that there is a culture of denial here. I have personally been involved in each of those 150 cases and got into the detail.

“Where we could have done better – it is only a handful of cases – we have absolutely said that. I cannot accept that we are in denial about that, because we are looking at it…

Is PO/Fujitsu forthcoming with information?

Ian Henderson:  “I have spent a lot of the past 12 months, frankly, dealing with Post Office, requesting access to documents that have been challenged, as I understand it, on legal advice.

“One issue we have been looking at relates to the Fujitsu office in Bracknell. We first requested documents relating to that in February 2013 – almost two years ago. We have still not been provided with those documents.

“We are very concerned about the operation of the suspense account by Post Office. We have been asking for that information since July last year. Perhaps the most important failure to disclose to us is the full access to the legal and prosecution files.

“When this scheme first started we were given full access to those files. Again, presumably on legal advice, that access has been extremely restricted. We feel that this is a very severe constraint on our ability to conduct an independent investigation into what has happened.”

**

Alan Bates: “It [the mediation scheme] was originally launched in 2013 and it closed on 18 November that year. There were thoughts that it would be a matter of weeks for the Post Office. I think the Post Office allowed four weeks to look at cases and investigate them, whereas it has been taking them four, five, six or seven months to investigate a case.

“Second Sight is also taking not quite as long, but it is certainly taking considerably more time to investigate these cases. So it is taking far longer than was thought. One of the problems is trying to get hold of information. I think people have been struggling to get hold of information from Post Office and from Fujitsu down the way to investigate records. No, it is not satisfactory how long it has taken. You are quite right.”

**

Angela van den Bogerd:  It is not that we are not sharing information; it is about understanding the format the information is in.

**

Paula Vennells:

Second Sight are independent; there will be disagreements about requirements for information at some stage. I do know that where we are able to we have shared everything we possibly can.

**

Nadhim Zahawi (Conservative MP on the Committee):  “Mr Henderson, did you ask for the e-mails from 2008?”

Henderson: “Yes, we did.”

Zahawi:  “And you were provided with 2009 instead?”

Henderson: “We were provided with 2009. We were told at the time that with the first batch there were some technology issues relating to the provision of the 2008 e-mails. Two years down the line, we still don’t have those.”

Zahawi:  “You are saying that you actually asked for the correct ones, and you still don’t have those?”

Henderson: “Yes.”

**

Henderson:  “The final category, and probably the most important, is full access to the legal and prosecution files held by Post Office.”

Chair: “I understand that they did do that initially.”

Henderson: “Initially, yes; but for the past year access to those files has been blocked…”

**

Henderson: “When we were first appointed, we were told that the principle behind what we were doing was to seek the truth, irrespective of the consequences.

“We could look at anything that we felt,  as an independent investigator, was necessary to conduct our investigation. Unsurprisingly, with cases that came into the early part of the scheme that involved a criminal prosecution, we were provided with full access to a small number of files.

“As further cases were accepted into the scheme, we unsurprisingly asked for full access to those legal files. Responses were to the effect, ‘Under no circumstances are we going to give you access to those files. You are entitled to the public documents that would normally be available to the defendant if the case had gone to trial.’

“We felt it was necessary for us to review the internal legal files, looking at the depth of any investigation that had happened and possibly even legal advice relating to the prosecution…”

Zahawi:  Angela, will you provide it? If your CEO cannot answer, will you provide the prosecution files as requested by Ian Henderson?”

Angela van den Bogerd: Mr Zahawi, as Ian said, we have previously provided them, and we have provided the information necessary for those investigations as a pack. So there are thousands of pieces of information already provided to Second Sight.”

Zahawi:  “But we have heard already that he has been obstructed from getting the legal files that you use internally, which he used to get before. That is what I have heard. Will you now commit to providing those files going forward?”

Angela van den Bogerd:  “We provided them to Second Sight early in the investigation.”

Zahawi: Will you provide them?

Angela van den Bogerd:  “Just let me finish, please. We have been working with Second Sight over the last few weeks to get to an understanding of what we need to provide. We are working through those, and information has been flowing.”

Zahawi: “So you do not understand what you need to provide?”

Angela van den Bogerd:  “We have been providing what we agreed we would provide at the outset. In some cases, Second Sight have concluded their investigation on that basis. What has been asked in the last few weeks is for access to further information that we were not providing under the agreement that we had.”

Zahawi:  “What he is asking you for – there is no wriggle room – is to provide the prosecution files going forward. Will you commit to doing that? That is all I am asking.”

Angela van den Bogerd: “What I am saying is that we have already been exchanging that information over the last few weeks.”

Zahawi: “So you have been providing them?”

Angela van den Bogerd:  “We have been providing that over the last few weeks.”

Zahawi: “Is that right, Mr Henderson?”

Henderson: “No, it is not, I am sorry to say…”

**

Henderson: “Chairman, may I add something by way of clarification? It is the general counsel of Post Office, to whom I have spoken, who said that he is not prepared to disclose to us the full legal files. I do not know to what extent he gave the same answer and advice to the chief executive of the Post Office.”

Binley: “Thank you, Mr Henderson.”

Chair: “That is very helpful indeed. Could you just repeat who it was for the record?”

Henderson: “The general counsel -the head of legal for Post Office.”

**

 PO approach to mediation dominated by lawyers?

Alan Bates:  “At the outset, the people who were involved with it, JFSA, Post Office and Second Sight, all thought we were doing one thing. We were heading in one direction.

“But since the scheme has moved forward, I think we are finding ourselves at odds with each other. People are becoming far more partisan in their approach. Post Office has gone straight to lawyer-based support and response to queries. So it has become very unsatisfactory.”

Culture of denial?

Paul Blomfield (Labour MP on the Committee)  … “It appears that there is a culture of denial about the problems…”

Vennells:  “In terms of the culture, the reason I came today, is that I really want the Committee to hear that that is not the case. We put this scheme in place because we wanted to find out what was going on.

“Inevitably, because of their distress, the people who have gone through this are very vocal and very challenging about what they have been through – quite rightly so. As we have gone through the investigations, we have looked at where there are things we could improve. There were things that we could improve, absolutely.

“The only point I am trying to make to the Committee is that for the vast majority of people—70,000 people are using the system today, and half a million people over the last 10 years have not had those problems.

“I am not denying at all that there are problems. Of course there are—there are problems in any organisation – but this is about the reputation of the Post Office.

“This system works well for the vast majority of people. For those it does not work for, we are doing our utmost. I have worked for huge businesses before, but I have not worked for any that could have done this as well as we have, in terms of our rigour and the detail we have gone into to try to get to the bottom of this.”

Blomfield:  “We have heard considerable evidence from all involved that the system usually – overwhelmingly works well, but the focus of this inquiry is how the Post Office handles that small number of cases where it does not.”

Vennells: Yes.

**

Henderson:  “On the culture point, until we issued our interim report, the mantra that we regularly heard from Post Office was, ‘Horizon is perfect. We have total confidence in the Horizon system’.

“That position is slowly changing; however, in the limited cases that we have looked at – we are very concerned about the prosecution cases – we have seen no evidence that the Post Office’s own investigators were ever trained or prepared to consider that Horizon was at fault. That was never a factor that was taken into account in any of the investigations by Post Office that we have looked at…”

Audit trails

Angela van den Bogerd: … “The information that the sub-postmaster needs to balance their accounts is available in branch. There has always been an audit trail in branch. Before we went on to the online system in 2010, the reports were available for a period of 42 days.

“They could look back into their accounts for 42 days. Since 2010, that has extended to 60 days, so the information has always been available in branch. The difficulty with some of those cases is that they did not declare their loss at that time. In some cases, they have hidden the loss and falsified their accounts, and we have only discovered later that the error occurred. Those reports in branch have then obviously expired.”

**

Ian Henderson: May I come back on a couple of points made by Angela? She is quite correct on the numbers that she has quoted, referring to the audit trail available to sub-postmasters; for a long time, there was a limit of 42 days. Unfortunately, the transaction corrections that they are asked to accept – if they do – often generate losses for that branch and that sub-postmaster.

“When the audit trail was 42 days, the delay in producing the corresponding TC [transaction correction] that they needed to investigate was in the order of three months. It was three months late, and therefore outside the 42 days of the audit period.

“That, I would argue, is another example of a systemic flaw in the overall process, because we have a mismatch between the TC – the adjustment made by Post Office – and the audit data available to the sub-postmaster.

False accounting

Henderson:  “False accounting is a relatively easy charge to bring. When we have spoken to sub-postmasters who have been charged with that – some of whom have pleaded guilty – their response has been, ‘I had no options; I was not aware at the time of the range of options available to me at the end of a trading period, when I was faced with a substantial discrepancy that I didn’t understand and hadn’t investigated properly, and on which I had had inadequate support by the help desk. I therefore did the only thing that I felt was possible or sensible at the time: I entered false figures into my month-end balances. I did that out of desperation because I did not know what else to do’

“Bear in mind that the help desk does not operate 24/7. At the end of trading periods, often when sub-postmasters are working late at night to try to resolve a significant discrepancy, the help desk is not even available.”

Angela van den Bogerd:  “The help desk has always been available after the trading hours of the post offices – until 10 o’clock at night, back in those days – and if they were unable to get hold of somebody, they were able to leave a message for a call back.

“There was always some access to help in those situations… a sub-postmaster has a choice. At the time that they make their balance and find that they have a discrepancy, they have a choice to declare that loss and make us aware of that, or – as happened in some cases, unfortunately – cover up that loss and hide it from the Post Office. That is false accounting.

As Ian said, that charge is quite easy to bring, because it is evident, but they have a choice at that point and they are not forced to do anything; it is a conscious decision.”

Are subpostmaster  “losses” in a secret PO suspense account?

Henderson:  “We know that every year Post Office takes the credit of its profit and loss account, generally a six-figure number, from a suspense account. The concern raised by a number of sub-postmasters is that some of those credits actually relate to transactions where they have suffered a loss.

“We have been asking for that data since July last year. We had a meeting with the new finance director of Post Office yesterday and we hope we will make some further progress, but it is already almost nine months since we first asked for that data.”

Thousands of abandoned helpline calls

Binley:  “Evidence has been submitted to us by a very high-level person, James Arbuthnot (MP – leader of Parliamentary campaign for justice for postmasters), who has been looking into this matter for a considerable time. As part of his evidence, he says: ‘The Post Office has accepted that its support systems left much to be desired, and as a result it has changed them. The sheer number of calls to the Post Office helpline is astonishing. The calls are from professional users,’ and this is the bit that counts, ‘but tens of thousands of them were abandoned; they were not just made, but abandoned.’ Does that cause you considerable concern?”

Angela van den Bogerd: “… We do not want to have tens of thousands of calls abandoned … Obviously, as you are aware with contact centres, when people ring up initially, there might be other options that take them to a different route and they therefore go a different route and they put the phone down. It does not necessarily mean they are not answered.”

Destroyed documents

William Bain (Labour MP on the Committee):  “We have heard some evidence that some documents that could be relevant in mediation have been destroyed as a result of your particular policy. What steps are you taking to ensure that that does not happen?”

Vennells:  “As soon as we went into the scheme, I had a conversation – in fact, I have had it several times because I know that people are concerned about this – with Mr Arbuthnot and Mr Bates – to reassure them that nothing would be destroyed when the scheme was set up.

“Prior to that, we did not know that we were going into the scheme. We have a data retention policy that is the same as many businesses. Some of these cases are regrettably very old, so some of the data are simply not there. As soon as the scheme started, we made sure that we did not destroy any data related to it at all. That would have lacked integrity.”

Bain:  “And your policy is to keep everything from the last seven years?”

Angela van den Bogerd:  “Sorry, not everything. The seven years is the information in the Horizon system. The hard files for post offices are kept for six years. Within branches, there are different retention periods, but the majority of where we got the information from is the Horizon system, and that is seven years.”

Bain:  “Why did you make that particular distinction when you drew up the policy?”

Angela van den Bogerd:  “So normal retention policies for commercial organisations are for six years. That is in line, usually, with the statute of limitation. We have gone a little bit further with the Horizon system, where it is seven years.

“In branch, we ask them to keep some reports for two years and others for six years. It comes down to volume and how you store paper. That is a decision that most commercial organisations take, because it costs to store all the data.”

PO deficient  in duty of care to subpostmasters?

Chair: “Do you not accept that the Post Office has been deficient in its duty of care towards the sub-postmasters who are so important in reinforcing that positive brand?”

Vennells:  “Not at all, in terms of the vast majority. As we have said to you today, yes, in some cases we could have done better in terms of training and support.”

Improvements

Katy Clark:  “The Post Office will obviously be very aware of the high level of concerns among MPs on a cross-party basis about this issue – a huge number of MPs have been involved in the group that Sir James Arbuthnot has been involved with – and they have no doubt read the transcript of the recent Adjournment debate, which made very clear the anger among many MPs about how this whole matter has been handled. What do you think you are doing or could do to address these concerns?

Vennells:  “I completely understand that MPs are concerned, quite rightly, because people have suffered some pretty terrible things as a result of what has happened.”

Clark: “Yes, with people going to jail.”

Vennells: We have listened very carefully. We have been in contact with all the MPs. We offered all the MPs with constituents involved in the meetings, at the beginning of the process and throughout it, after the Westminster Hall debate—

Clark:  “I am not particularly concerned about the MPs; I am concerned about what the Post Office is doing to get its own act in order. What lessons are you learning from everything that has happened so that you can improve your organisation?”

Vennells:  “I think we have learned a number of lessons as we have gone through this. You have heard about the improvements we have made in training and support. The other thing that is important for us today is that the Committee can hear both sides, because the Post Office has put a huge amount – ”

Katy Clark: I asked a question, and I would like an answer to the question. What are you doing, or what have you done, to improve the way that your organisation works?

“For example, one of the issues that has been put to me is that there is a lack of qualified people within the Post Office hierarchy with whom it is possible for a sub-postmaster to have a discussion when there is a technical issue to do with the Horizon system. What are you doing to improve that, for example, and what other lessons have you learned?”

Vennells: I would say that that isn’t true. If sub-postmasters have queries, they can escalate them as high as they need to. I get phone calls and e-mails, and I personally take them on a regular basis.

Clark:  “But you are not an IT specialist?”

Vennells:  “If they have an IT query, I will immediately go to my CIO, and she is prepared to talk to any sub-postmaster about it. The organisation wants to help sub-postmasters to run post offices properly- of course we do- and we have put ourselves out as much as we possibly can.

“Where we have got it wrong, because human error happens, then we have put in really significant changes in terms of the training and support that is available. The fact that you can access training 24/7 has to be a significant improvement.

“We have set up a branch user forum – we have sub-postmasters coming to it who are very critical of us, which is why we did it – is to learn the things that we can improve.

“We would not have wanted to be in this situation. As soon as I found out about it, we set up the [mediation] scheme. We put in hours and hours and hours of detailed work to make sure that we have done investigations as thoroughly as we can. At the same time, we have a list of things that we will deal with as we go along.”

Clark:  “What do you think needs to be done as a result of everything you have learned from that process so that these kinds of problems do not happen again?”

Vennells:  “We have outlined some of those things already, such as the way that we listen to sub-postmasters through the branch user forum, and the training. It seems to me that one of the big issues to come out of this is that in some cases – not the majority, but I accept Mr Blomfield’s point that this is about the small number of cases here today – we could have done things better.

What should happen now?

Alan Bates: “First, Post Office has to be investigated – it has to become part of the investigation. It is trying to act as an agent and as everything – it is trying to control the information coming out, what is released and all the rest of it.

“It has to be investigated and taken out of the scheme, which Government have to take over. They really do. While Post Office is still sat there controlling all the information, we will never really find out the truth.”

George Thomson:  “For a tiny percentage of complaints over a 15-year history, it would be nonsense for the Government to take over. Let’s bring it to conclusion as quickly as we can.

“The cases that are in mediation, let’s deal with them. Let’s get out the way, let’s move forward and let’s try to make sure that Post Office has a decent future as a stand-alone company outside the Royal Mail group. Let’s get on with that.”

Andy Furey: I would suggest that the mediation scheme needs to be opened up for some of the contemporary cases that are ongoing today.

“I would ask the Post Office to withdraw any obstacles in the way of CWU [Communication Workers Union]  representing postmasters. Mark gets lots of obstacles, such as lack of recognition for representing postmasters.

“The filtering through the walk-in group to stop cases getting to mediation needs to be removed and they need somebody to bring some independence in the mediation scheme beyond the current people involved.”

“Kay Linnell:  “The initial complaint review and mediation scheme, with 150 cases in it, needs to be drawn to a conclusion by making the Post Office go back to the original brief and stop doing this legal defence thing.

“But I also think that a permanent, Government-based solution for new complainants to a third-party individual such as an ombudsman for future fault reporting, without any recrimination or redress from the Post Office on the person raising the complaint, is an essential way to go forward.

“We need something for future complainants to do, albeit that the MPs have been fabulous. It should not be necessary for somebody with a current problem to fall back on their MP and raise it in that way.”

Mark Baker:  “We [the Communication Workers Union] are an organisation that is excellent at advocacy and being able to sort the weaker claims out from the stronger claims; and we know how to work with Post Office.

“We know how to challenge it—we are not in awe of it, as some people are. We would make a valuable contribution to improving and moving the mediation scheme on.

“If that cannot be achieved, I would support what Alan said: perhaps the Government should take it over and get it sorted out.”

Business, Innovation and Skills Committee hearing on Post Office Horizon system and mediation scheme – 3 February 2015

 

Post Office Horizon IT – Commons hearing today

By Tony Collins

Paula Vennells, Chief Executive of the Post Office, is due to answer MPs’ questions today on whether the PO’s Horizon system was partly responsible for ruining the lives of dozens of subpostmasters.

A hearing of the Business, Innovation and Skills Committee will give MPs a chance to question Vennells directly rather than through a minister, as before.

At issue  is the irreconcilable. On one side are PO officials who say the Horizon system has no systemic problems and has not been proven to have caused shortfalls in accounts that led to subpostmasters being accused of theft, fraud or false accounting.

Years after the discrepancies occurred it may be impossible to prove the existence – or absence – of any faults in the system at the time.

On the other side are more than 150 subpostmasters who are represented by Alan Bates, Chairman, Justice for Subpostmasters Alliance. They cannot prove that shortfalls shown on the Horizon system were not their fault.

In the middle are forensic accountants Second Sight who were called in by the Post Office to investigate possible miscarriages of justice. After Second Sight raised questions about Horizon’s possible fallibility, the PO criticised Second Sight’s findings.

A complicating factor is confidentiality. Under pressure from MPs, the PO set up a mediation scheme to adjudicate on individual cases. Several times the PO has invoked the need for confidentiality as a reason for not discussing reasons for the mediation scheme’s slow progress. The scheme was set up in August 2013 and is ongoing.

It’s unclear why there is a need for confidentiality given that subpostmasters have been willing to discuss their cases and prosecutions are in the public domain.

Labour MP Kevan Jones has called the ruin of many subpostmaster lives a national scandal. He told the House of Commons in December 2014:

“That more than 150 individual sub-postmasters and sub-postmistresses, who have worked tirelessly in their local communities, for decades in some cases, have suddenly all worked out that they can defraud the system is complete and utter nonsense.”

Witnesses at today’s hearing of the Business, Innovation and Skills Committee are:

– Andy Furey, Assistant General Secretary, Communication Workers Union

– George Thomson, General Secretary, National Federation of SubPostmasters

– Alan Bates, Chairman, Justice for Subpostmasters Alliance

– Kay Linnell, Chartered Accountant, Kay Linnell & Co

– Paula Vennells, Chief Executive, Post Office Ltd

– Angela van den Bogerd, Head of Partnerships, Post Office Ltd

– Ian Henderson, forensic computing expert, Advances Forensics (Second Sight Ltd)

A Parliamentary campaign  for justice for the postmasters has been led by MP James Arbuthnot. Referring to today’s hearing, Arbuthnot told Computer Weekly that at a select committee hearing people cannot avoid answering questions because the MPs will keep returning to the question until they are satisfied.

Comment

Nobody outside the Post Office believes the subpostmasters were guilty of taking money.  But the subpostmasters are in no position to prove they didn’t.

It’s a seemingly irreconcilable situation, especially as the righting of miscarriages of justice will require “give” –  possibly even compassion and humility – on the part of PO officials.

Update:

Regarding Kevan Jones’s comment, the Post Office has pointed out that a minority of cases in the Mediation Scheme involve criminal convictions, not 150. There were 150 applications to the Scheme and some of these have been resolved.

Private Eye on the Horizon controversy

Jailed and bankrupt because of “unfit” IT systems? What now?

Justice for Subpostmasters Alliance

 

Post Office’s Horizon IT – an unusual case study?

By Tony Collins

post office logoIn the House of Commons in December Conservative MP Andrew Bridgen spoke about his constituent Michael Rudkin, a former Post Office subpostmaster.

Rudkin was a magistrate. He also served as the most senior member on the national executive of the National Federation of SubPostmasters. He  was chairman of the Federation’s negotiating committee, responsible for negotiations with Post Office Ltd and Royal Mail Group.

In 2008, after Post Office accounts showed a loss of £44,000 at his local branch office, Rudkin lost his business, his reputation, his position as a magistrate, some property and his good name, and he has been unable to work since.

Bridgen claimed in the House of Commons on 17 December 2014 that a Post Office auditor told Rudkin of the £44,000 loss the day after Rudkin had visited the Fujitsu/Post Office Ltd offices at Bracknell.

Campaign4Change put the whole of Bridgen’s speech to the Post Office. It declined to comment on the specifics but gave a strongly-worded statement (below).

Bridgen’s speech

Like other MPs, including Labour MPs, who spoke at the debate, Bridgen began by paying tribute to Conservative MP James Arbuthnot who has been leading a Parliamentary campaign for justice for more than 150 subpostmasters, some of whom have been jailed, made bankrupt and have had their lives ruined after the Post Office’s Horizon system showed shortfalls on local branch accounts.

Arbuthnot had secured the “adjournment” debate on the Post Office’s mediation scheme that was set up to resolve disputes between subpostmasters and the PO over discrepancies shown on the Horizon system.  Arbuthnot said it was the first time in his 28 years in Parliament he had sought an adjournment debate (a debate that ends with no vote).

“In 28 years in the House, I have never needed to apply for an adjournment debate, but the way in which the Post Office has treated sub-postmasters and members of parliament who have expressed concern about the matter is so worrying, and to my mind shocking, that in my final few months in Parliament it has become necessary for me to apply for an adjournment debate,” said Arbuthnot.

Bridgen said in the debate (the names he mentioned are not included here):

“The issue first came to my attention because of the plight of a constituent, Mr Michael Rudkin. For 15 years, he was a sub-postmaster… He was responsible for negotiations with Post Office Ltd and Royal Mail Group, so he is an experienced sub-postmaster.

“I would like to share with members his experience of the problems with the Horizon system, which demonstrates that significant questions need to be asked of the Post Office, although it is reluctant to answer them.

“Mr Rudkin’s story starts on Tuesday 19 August 2008. In his official capacity as a negotiator on behalf of sub-postmasters, he was invited to a meeting at the Fujitsu/Post Office Ltd offices in Bracknell to discuss problems with the Horizon system.

“If Mr Rudkin is telling the truth, which I have no doubt he is, this sequence of events raises questions about the system, which the Post Office must answer.

“On arrival that morning, my constituent signed the visitors’ book in reception and waited for his chaperone, a Mr R.

“Mr R took him to the second/third floor, and they entered a suite where Mr Rudkin recognised Horizon equipment on the benches.

“There was only one other person in the room – a male of approximately 30 to 35 who was reluctant to engage in conversation with Mr Rudkin or Mr R.

“Mr R asked Mr Rudkin to follow him through a number of pass card-protected security doors to some stairs. They went down to the ground floor and then entered the boiler room [an office in the Fujitsu building].

“Mr Rudkin states that a number of men dressed in casual office wear were standing around the doorway. They became very uncomfortable about Mr Rudkin’s presence and left.

“Having entered the boiler room, Mr Rudkin instantly recognised two Horizon terminals. There were data on both screens, and an operative was sitting in front of one of them, on which the pure feed for the Horizon system came into the building.

“Mr Rudkin asked if what he could see were real-time data available on the system. Mr R. said, ‘Yes. I can actually alter a bureau de change figure to demonstrate that this is live’ – he was going to alter a figure in a sub-postmaster’s account.

“He then laughed and said, ‘I’ll have to put it back. Otherwise, the sub-postmaster’s account will be short tonight.’

“Mr Rudkin expressed deep concern, because he had been told that no one had remote access to a sub-postmaster’s account. At that point, he was politely but speedily taken to reception, and he was told to leave the building.

“Mysteriously, the next day, Wednesday 20 August 2008, a Post Office Ltd auditor—a gentleman Mr Rudkin knew, by the name of P.F. – arrived at Mr Rudkin’s sub-post office. He proceeded to tell Mr Rudkin that his branch had a loss of £44,000.

“Interestingly, Mr Rudkin maintains that the investigator knew the size of the loss before he even entered the premises.

“Mr Rudkin was absolved of all knowledge of the loss by Post Office Ltd, but he was ordered to pay the money back at the rate of £1,000 a month from his salary.

“As we have heard, the sub-postmaster is completely liable under the contract for all losses.

“As Mr Rudkin points out, why would someone steal money from themselves when they know that?

“After Mr Rudkin had paid £13,000 back to Post Office Ltd, the Post Office started proceedings against Mr Rudkin’s wife for false accounting. It also applied for a confiscation order on all his property and had his bank account frozen under the Proceeds of Crime Act 2002.

“Mr Rudkin has since cleared all his debts to Post Office Ltd. In the process, he has lost his business, his reputation, his position as a magistrate, some property and his good name, and he has been unable to work since.

“Second Sight – the team of independent investigators appointed by the Post Office to look into the matter – questioned the Post Office about Mr Rudkin’s allegations and his visit.

” Initially, Post Office Ltd consistently denied the visit had ever taken place – until Mr Rudkin produced an e-mail from Mr R. from the day before the visit, which invited Mr Rudkin to visit and said that Mr R. would meet him in reception, at which point the Post Office did admit that the meeting had taken place.

“Second Sight has repeatedly requested e-mail data from before, during and after Mr Rudkin’s visit, as well as a copy of the visitor’s book, but all those things have been withheld or are, we are told, now missing. That raises serious questions about the Post Office.

“Second Sight told me that it has looked at the contract sub-postmasters are asked to sign and that, in its view, a person would have to be an economic and legal illiterate to be willing to sign it, because it is so slanted in favour of the Post Office.

“As we know, the Horizon system is imposed on sub-postmasters by the Post Office.

“Effectively, the sub-postmasters become the fall guys – they are ultimately liable for all losses – so there is little incentive for the Post Office to ensure that the system or the support for it are robust.

“The way in which Post Office senior management have dealt with our working group of MPs has been extremely high-handed. I share my right hon. friend’s concerns: if Post Office management speak to Cabinet members and senior members of parliament in the way they do, the way they treat their sub-postmasters must be feudal …

“There are many questions to be answered, and I hope that as a result of parliamentary pressure and debates such as this, we will get the Post Office to move to a position where genuine negotiations can take place with aggrieved parties on a level playing field.

“We are some way from that yet, and I honestly think we will need a full clear-out of Post Office management before we get a change of attitude in this important public institution.”

Post Office statement

Questioned by Campaign4Change on the speech in the House of Commons about Rudkin, the Post Office issued this statement:

“There is very selective, misleading and incorrect information being put into the public domain about a number of cases but Post Office cannot and will not breach the privacy of individual applicants by discussing their cases, even though this means it cannot defend itself against unsubstantiated, baseless or malicious allegations.  To do so would lead to us being accused of breaching confidentiality and undermining the mediation process.

“Each and every allegation is being reinvestigated and to date there is no evidence of either system-wide computer faults or malicious remote tampering with Post Office branch transaction data in subpostmasters’ accounts.  Further, it is not possible for Post Office to alter that transaction data.

“Post Office has retrieved the available records for every case and these have been rigorously investigated and made available for independent review. For cases that are many years old it is not always possible to confirm, for example, every event – such as a meeting – referred to in a complaint.  However, Post Office has investigated, as far as it is able, on the information now available, including that provided by the applicants.”

Mediation Scheme – facts and figures

This is a letter written by Sir Anthony Hooper, chair of the Working Group Initial Complaint Review and Mediation Scheme, to Jo Swinson, the Post Office minister – Sir Anthony Hooper letter to PO minister Jo Swinson Dec 2014.

BBC’s The One Show

TV investigative journalist Nick Wallis has covered the Post Office Horizon IT dispute extensively. He has presented reports on the dispute for BBC’s The One Show.

Computer Weekly’s timeline of the problems since 2009.

House of Commons debate on Post Office mediation scheme 17 December 2014`

Second Sight report on Horizon

Justice for Subpostmasters Alliance