17 December 2024
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(9.29 am)
Sir Wyn Williams: Mr Beer, curious is a word which has been much used in this Inquiry, and people may have noticed how curious I was to see people sitting in different places.
Mr Beer: Yes.
Sir Wyn Williams: Ms Greaney, I think we’re ready for you though the door hasn’t shut at the back yet, so I’ll let you know when they’ve shut the door so that you have the floor to yourself.
Closing submissions by Ms Greaney
Ms Greaney: Sir, the Inquiry has received detailed written closing submissions from Post Office in Phases 2 to 7. I do not intend to rehearse the content of those submissions orally. I propose to address some headline points which will not take up the full hour that has been allocated.
Post Office recognises that its actions, as explored by this Inquiry, have caused harm and suffering to postmasters, their families and to many others.
I would like to start by reiterating Post Office’s apology for the damage that it has caused to every person who has been affected by the Horizon IT scandal. This Inquiry has been a humbling experience, not only for those that gave evidence but for those that currently work at Post Office or used to, and who are all equally appalled by Post Office’s failures.
No one who has read and listened to the evidence during this Inquiry could come to any conclusion other than that the Horizon IT scandal is the most widespread miscarriage of justice in British legal history, and that its roots lay in fundamental structural and governance failings.
As the Inquiry will have seen from the evidence read and heard in Phase 7, Post Office today is a different organisation from the one that was in place during the failures of the past but it still has a long way to go to reset its relationship with postmasters and the public. Post Office is not perfect, and does not pretend to be, but it is firmly committed to continuing to learn lessons from this Inquiry. It will be considering the proposals for improvements made by other Core Participants in their closing statements as part of its ongoing work.
The new leadership at Post Office brings a fresh perspective and they are committed to making the changes that are necessary to restore confidence in the business and to ensure that nothing like this will or could ever happen again.
Post Office acknowledges that it will, rightly, be judged in the months and years to come by what it does, not by what it says it is going to do.
Post Office has sought to assist the Inquiry in fulfilling its terms of reference to understand and acknowledge what went wrong in relation to Horizon in order to identify what key lessons must be learnt for the future. The scale and scope of the evidence heard by the Inquiry over the last two plus years is vast. That includes evidence from postmasters, as well as from a very significant number of witnesses who were or are employees of Post Office.
The Inquiry heard from those in senior positions in Post Office, as well as those in less senior roles, dealing with day-to-day issues with postmasters.
Post Office acknowledges that the Inquiry will rightly be critical of a number of individuals, not only from Post Office. It invites the Inquiry to bear in mind the serious governance and structural failures that permitted their actions to be unchecked, resulting in failings to the detriment of postmasters.
Post Office raises this not to excuse but to explain the context in which those failures occurred. The combined testimony of the witnesses heard and the hundreds of thousands of documents disclosed by Post Office to the Inquiry has, Post Office hopes, given the Inquiry detailed insight into the workings of every relevant aspect of Post Office’s business over the last 30 years.
In the early phases, the Inquiry heard from witnesses who joined the Post Office in the ’60s and ’70s, several coming to occupy the most senior positions some 20 or 30 years later. A picture emerged of a company in the late 20th century and the early part of this century, which certainly at a senior level had little experience and understanding of the IT revolution which had already taken place in many other companies, and which it was inevitable that Post Office had to join.
It is a source of deep regret to Post Office that the reliance on Fujitsu and the belief of the reliability of Horizon, which emerged in those early days, was allowed to take root within Post Office in the decades that followed.
Post Office has referred in its written closings in earlier phases to a mindset that took hold in Post Office, to the effect that: Horizon had no bugs, errors or defects; such problems as did arise in Horizon were due to user error or dishonesty; a strong resistance to countenancing the existence of any flaws in Horizon; a mindset that saw it as an advantage not to keep postmasters informed about systems issues that were identified; a mindset that positively discouraged more widespread dissemination of information; a mindset that focused on protecting the Post Office brand and the commercial interests of the company.
This mindset was compounded by an organisational hierarchy, which meant that junior employees did not feel able to escalate issues upwards. This in turn resulted in insufficient overview being taken at senior level. Important senior roles were occupied by individuals who regrettably lacked sufficient understanding of the obligations and responsibilities attaching to those roles. They either did not have sufficient personal experience of Horizon technology, or were not sufficiently senior within the overall organisation to carry out those roles effectively.
Similar themes again emerged during the evidence heard during Phases 5 and 6. Post Office has accepted in its written submissions for those phases that there was a series of governance failings in the organisation. Key information about Horizon and prosecutions based on Horizon was not shared effectively, either horizontally or vertically, within the Post Office, and there was no clear structure to ensure that relevant knowledge was consistently and appropriately communicated throughout the organisation.
As Post Office has acknowledged in its written closing statement for Phases 5 and 6, the apparent lack of knowledge or understanding on the part of senior executives and Board members that Post Office conducted its own prosecutions against postmasters was particularly striking. When Post Office separated from Royal Mail Group in 2012, there was a failure to ensure that incoming Board members and senior executives were briefed either on the fact that Post Office was a prosecutor or on the central importance of Horizon data to those prosecutions. There was a lack of clear lines of accountability for reporting on prosecutions to the Board, which created the structural conditions for inadequate Board oversight of prosecutions.
This, in turn, severely reduced the Board’s effectiveness in holding the Executive to account. Similarly, there was a failure to share the first Clarke Advice or its substance with the Post Office Board. This appears to have arisen from a collective failure on the part of the then Post Office Legal team to appreciate its full significance and inadequate processes being in place for sharing the substance of key legal advice with the Board, rather than a deliberate attempt to prevent the advice being considered by the Board.
Consistent with the prevailing mindset that has been revealed in the evidence in Phases 3 and 4, Post Office’s response to the Second Sight Interim Report showed multiple failings on the part of the Executive. They adopted a defensive attitude from the start to Second Sight’s negative findings and, consistent with an assumption of postmaster fault, refused to entertain the possibility that Horizon or Post Office’s treatment of postmasters, including inadequate training and support, were to blame.
The evidence also shows that the Board failed properly to scrutinise either the Second Sight Interim Report or Susan Crichton’s update paper for the July 2013 Board meeting. Given the concerns raised about the existence of bugs, about Post Office’s investigation function and about the treatment of postmasters, the Board’s failure to challenge the Executive was a significant one, particularly given the concerns raised by the Board about claims for wrongful prosecution leading to a notification to insurers.
As I said at the outset, I do not intend to rehearse or seek to summarise the points that have been made in the written closing statements of Post Office for all phases. Post Office focuses the remainder of this oral statement on aspects of the work that it has done since the judgments of Mr Justice Fraser in the Common Issues and Horizon Issues trials to bring about organisational and cultural change to address the failures identified and to ensure that the wrongs of the past will not be repeated.
Since 2019 Post Office has taken steps to shift its focus to postmasters. Post Office accepts that the pace of change in the organisation has been too slow. Post Office acknowledges that it has a lot of work to do in order to address its shortcomings and rebuild the trust of postmasters that has been so severely damaged by its failures and that it is actions rather than words that count.
Post Office has implemented a number of changes since 2019 to start re-orientating the business towards the interests of postmasters, which I will deal with under the following headings: (1) listening to the views of postmasters; (2) changes to its discrepancy processes and the support it provides to postmasters; (3) Horizon improvements; (4) cultural changes; (5) governance changes; and (6) post Office’s plans for the future.
First, Post Office acknowledges that it failed to listen to and act on the concerns of postmasters about the Horizon system. Since the events which are the subject of this Inquiry, it has taken steps to bring the views of postmasters into the centre of the business. Since June 2021 Postmaster NEDs have sat on the Post Office Board, which has enabled the views of postmasters to be heard on matters of strategic and key operational importance.
Following the recent point of two new Postmaster NEDs, continuity will be ensured by one current Postmaster NED remaining in post until June 2025.
In addition to the Postmaster NEDs, in 2021, Post Office appointed a Postmaster Experience Director, who spends two days a week in Post Office Head Office liaising with the executive teams to inform them about the operational experiences and concerns of postmasters.
Furthermore, Post Office has plans to expand the mechanisms for enabling the views of postmasters to be heard and taken into account in the business. First, the Post Office panel will work with Post Office to ensure that the postmaster voice is heard at an operational level by considering and challenging key policies and processes, and communicating the work of the panel to postmasters in order to build confidence.
Secondly, the consultative council will enable Post Office to consult with postmasters on the future plans for Post Office that arise from the implementation of the Strategic Review, so as to make sure that the views of postmasters are taken into account and considered in the changes that are proposed.
Second, Post Office has changed fundamentally the way it investigates discrepancies shown on the Horizon system and the support it provides to postmasters. The Inquiry has read and heard detailed evidence from Tracy Marshall, Retail Engagement Director, and Melanie Park, Central Operations Director. The burden of proof is now on Post Office to establish that a discrepancy is a genuine loss to Post Office and the fault of the postmaster or their assistant.
This is a crucial step in addressing the imbalance of power that previously existed in Post Office’s policies, procedures and practices. In cases where the postmaster does not agree with the Post Office’s position, there is a “Dispute” button on Horizon that a postmaster can press to raise a discrepancy or dispute a transaction correction that has been issued. There is a three-tier Dispute Resolution Procedure, and the option of a referral to a Dispute Resolution Review Committee.
Post Office provides improved support to postmasters through Branch Hub, a digital platform which provides information, including manuals and training materials, to help and support postmasters and their staff on a day-to-day basis and which postmasters can also use to report IT issues. Any defects or issues relating to Horizon are set out in Knowledge Articles, which are published on Branch Hub within 48 hours of being identified. These articles serve an important role in ensuring postmasters are kept up to date and have the information they need should a discrepancy arise.
Post Office intends that these processes will be kept under review by the postmaster panel with the aim of ongoing improvement.
The Inquiry will bear in mind that Post Office no longer exercises a prosecutorial function. It does not now and has no intention in the future of conducting its own criminal investigations or prosecutions. Post Office will support law enforcement agencies in their investigations, as it plainly should.
Third, the Inquiry has heard detailed evidence from Simon Oldnall, Branch Technology Director at Post Office, and Tracy Marshall, in written and oral evidence, that Post Office has worked hard through the Horizon Improvements Programme to remediate bugs, errors and defects, including those identified by Mr Justice Fraser. It has put in place a programme to identify and fix any new bugs, errors and defects in Horizon, and carried out significant work to establish an ongoing programme of improvements to a wide range of procedures across many parts of Post Office’s operations, including training and business support.
The Inquiry has also received detailed written evidence from Mr Oldnall about the way in which Post Office now better monitors Fujitsu’s compliance with Fujitsu’s own contractual obligations to provide a secure and reliable Horizon system.
The Inquiry is aware that Post Office continues to be in ongoing discussions with Fujitsu about an extension to the Horizon contract.
Fourth, the Inquiry has heard that, from the end of 2019, Post Office has introduced initiatives intended to bring about cultural changes across the organisation. Post Office has recognised the need for fundamental cultural change. As Nick Read said in his first statement to this Inquiry, Post Office recognises the presence of oppressive behaviour and intimidating actions in the past, which led to a lack of respect and trust between Post Office and its postmasters. It acknowledges that there has been a lack of effective leadership, a lack of effective training and support and a lack of responsibility within the organisation. It accepts that it has work to do to restore trust with postmasters and with the public as a whole. Cultural changes in the Post Office are integral to the rebuilding of that trust.
To remind the Inquiry, those initiatives to reset the Post Office’s culture include the following: the introduction of new training modules, including substantial induction training which educates new employees about the Horizon IT scandal and mandatory Horizon scandal training and GLO awareness.
In June and July 2024, the Post Office launched a Behaviours Framework that applies to all those working in Post Office, which is intended to act as a guide and to instil behaviours that are seen as key to preventing a repeat of the wrongs of the past.
New complaints channels have been implemented via the postmaster survey, college engagement survey, and strategic partner survey.
These changes are not just aspirational. The new Behaviours Framework is embedded into the recruitment process and used to measure the performance of everyone at Post Office. The Board takes ultimate responsibility for ensuring that cultural change takes place but every person working at Post Office has their part to play.
Cultural change, of course, takes time. However, recognising that changes has not happened quickly enough, Post Office has put in place plans, including a Strategic People Plan, which are intended to embed cultural change from the foundation of the organisation upwards, focusing on building better relationships with postmasters, with a real emphasis on restoring trust.
A key objective of Post Office’s recent Strategic Review, which I shall come on to talk about shortly, is the commencement of a new relationship between Post Office and postmasters, in which there will be a significant increase in postmaster remuneration, improved support and the strengthening of the postmaster voice. Post Office sees this proposal as underpinning the drive towards a reset of the culture in its business.
Fifth, Post Office has acknowledged in the course of written closing statements made in respect of earlier phases, including 5 and 6, that there were serious governance failings in the organisation which played a substantial part in the injustices that occurred. Post Office commissioned Grant Thornton to review its corporate and operational governance in 2023. Post Office accepted Grant Thornton’s conclusions that it requires a unifying strategy, greater role clarity, streamlined decision-making processes, significant improvements in succession planning and a cultural shift towards accountability and long-term planning.
To address the need for a unifying purpose in group strategy, which Grant Thornton considers lies at the heart of governance dysfunction in the Post Office, Post Office has commissioned a Strategic Review. Post Office has taken action to address governance issues identified by Grant Thornton, where it has been able to, pending the outcome of the Strategic Review. It has taken steps to improve the composition and competency of the Board, the Interim General Counsel is now a standing attendee at Board meetings.
Action has also been taken to improve the quality of information on which the Board reaches decisions, and measures have been introduced to avoid the Board being overburdened with issues that ought to be dealt with at Executive level.
The Group Executive, now called the Senior Executive Group, has been restructured so as to focus discussions better and improve the speed of decision making. A wholesale review of Executive Committees is under way.
Post Office notes the proposals put forward by others for alternative governance structures, including an oversight committee as proposed by the NFSP. It also notes the view of the governance experts that responsibility and accountability should rest with the Board. Post Office considers that, at least to some extent, the NFSP’s proposals for an oversight committee will be addressed by the proposal for a Postmaster Consultative Council, which will work together with Post Office on the implementation of proposals arising from the Strategic Review.
Six, through the Strategic Review, the new team at Post Office has put forward a proposal to Government for the future of the Post Office, which will enable it better to serve the interests of postmasters and thereby the public that they serve. Post Office has been pressing for a review of Government’s policy as sole shareholder in respect of Post Office for some years.
Post Office has been loss-making since its separation from RMG in 2012 and, in the face of significant commercial and structural challenges, those losses are expected to worsen in the future.
The Government has nonetheless long held the view that Post Office should be financially self-sustaining and not rely on government subsidy. Post Office is looking forward to receiving greater clarity from ministers as to how that could or should be achieved and the policy objectives that would underpin it.
Post Office considers that the changes that it seeks to make as part of implementing its Strategic Review will be far reaching and to the benefit of postmasters first and foremost but also to the long-term future of Post Office as a whole, and the communities that are served by Post Office.
The review carried out between June and September 2024 drew on Post Office members of staff, Board members, postmasters and other stakeholders and experts. Nigel Railton, Interim Chair of Post Office, stated in his speech on 13 November 2024:
“Fundamental to the implementation of the Strategic Review is Post Office’s plan to deliver a new deal for postmasters. This will significantly increase the total annual income of postmasters through a vastly improved share of revenues and strengthen their role in the direction of the organisation. The implementation of the Strategic Review will be informed by strong postmaster engagement through the establishment of a new consultative council and a postmaster panel. The Strategic Review is also aimed at refocusing the Post Office’s operations, so that there is a streamlined central organisation which serves the interests of postmasters so that they may serve their communities via sustainable businesses.”
Nigel Railton, the Interim Chair, explained in his evidence to the Inquiry that, as a result of the Strategic Review and subject to DBT approval, Post Office proposes to reset the NBIT programme, to improve confidence in its delivery and to ensure that it provides what postmasters need. Post Office intends to work closely with postmasters to define the new programme.
Post Office acknowledges that work needs to be done to ensure that its proposal remains aligned with the work being carried out by DBT, with Grant Thornton, Boston Consulting Group and the Government Internal Audit Agency. Post Office welcomes continued involvement in DBT’s reviews. The Inquiry has also heard that the Government is planning a Green Paper on the future of Post Office, which will be published in 2025.
Post Office is now at a critical juncture. The organisation has a new and experienced Interim Chair and Interim Acting CEO, a relatively new Board, and a SEG team who are skilled in delivering transformation change of this nature and are committed to implementing the plans so critical to the Post Office’s future, as set out in the Strategic Review.
Post Office is already doing what it can to push forward its plan for transformation with structural and technological changes, whilst waiting for funding decisions. Ultimately, it is in the Government’s hands as to whether it agrees with the proposed strategy, and whether that strategy will be funded.
Post Office considers that its plan to transform the Post Office offers the best opportunity for the organisation to flourish and benefit those whom it serves, namely postmasters and the public.
Post Office recognises that, until all postmasters receive full and fair redress, there is no prospect of them achieving closure in respect of these terrible events. Post Office remains fully committed to playing its part in ensuring that postmasters receive full and fair redress as quickly as possible.
It has been the long held view of Post Office that the compensation scheme should be run independently of Post Office because the perpetrator of injustice should not administer the assessment of redress.
It is also Post Office’s view that legal advice should be offered when the 75,000 fixed sum is offered to postmasters. Simon Recaldin has informed DBT of his view that there should be consideration of extending the schemes to family members, and Post Office welcomes DBT’s consideration of this.
Post Office notes that DBT is providing an update on financial redress in its written submissions. Post Office regularly updates the HSS and the OCS web pages with the current figures. Post Office would be happen to provide further written updates to the Inquiry as to the progress of the redress schemes, if that would assist the Inquiry.
Furthermore, if the Inquiry would be assisted by receiving written updates or further information from Post Office on other matters, then Post Office will of course provide such information as may be requested.
Post Office would like to extend its thanks to postmasters who have given evidence or engaged with this Inquiry as Core Participants or by responding to the YouGov survey.
Post Office wishes to thank the Chair, Ms Eliasson-Norris, Mr Page and the Inquiry Counsel and solicitor teams for their thorough investigation and examination of the evidence. Post Office will reflect carefully on the findings in the forthcoming Inquiry report and will take the Inquiry’s recommendations extremely seriously.
Post Office must end this closing statement as it began: with an apology. Post Office repeats its sincerest apology to all who have been affected by its actions and reiterates its determination to continue with the process of learning the lessons from this Inquiry.
Post Office remains firmly committed to ensuring that nothing like this could ever happen again but acknowledges that it will rightly be judged in the months and years to come by what it does, not by what it says it is going to do.
Sir Wyn Williams: Thank you, Ms Greaney.
Ms Leek, it’s a matter for you. If you’re going to take – well, I’m addressing Ms Leek now.
If you’re going to take a full hour, or thereabouts, then I think we’ll probably take a break now, rather than ask you to break somewhere in the middle. I guess you’d prefer that, yes?
Ms Leek: I would, sir.
Sir Wyn Williams: Right so we’ll take a break now.
Ms Leek: Thank you.
Sir Wyn Williams: What’s the time now?
So we’ll break until 10.15 and then we’ll hear from Ms Leek.
(10.00 am)
(A short break)
(10.15 am)
Sir Wyn Williams: All right, I think we’re about to start again. I’m glad there’s some self-discipline going on by people in the audience telling other people to be quiet because they won’t listen to me!
Right, Ms Leek. Over to you, Ms Leek.
Closing submissions by Ms Leek
Ms Leek: Thank you, sir. Sir, in our written submissions we have sought to analyse carefully and forensically the chronology of what Ms Vennells did and did not know about various key matters and what she did and did not do with that knowledge. That document has now been published by the Inquiry. We submit that it is only by looking forensically at all of the documentation that a fair picture of Ms Vennells’ actions can be seen.
In the time we have allotted to us today, I shall highlight a number of points from our written submissions which go to information provided to Ms Vennells which was incomplete or incorrect, or which she was not given at all.
In our written paper, we have made submissions of general application on several topics. I do not propose to repeat them here save to make one point: when witnesses have given recent evidence of matters relevant to Ms Vennells, without there being supporting contemporaneous documents, this evidence should be approached cautiously. It is inevitable, having regard to the very human desire for self-preservation, that witnesses will now seek to distance themselves from Ms Vennells.
Just two examples, if I may. First, Jo Swinson said in her oral evidence that Ms Vennells knew about the Clarke Advice. When I asked her questions about this, Ms Swinson conceded that this assertion was based on a single email, which she had not seen at the time. That email does not withstand the weight which Ms Swinson now seeks to load upon it. She did not have any personal knowledge on the issue but clearly, and in retrospect, wanted to assume the worst of Ms Vennells and sought to point the finger at her.
In his oral evidence, Alan Cook, the Managing Director of Post Office between March 2006 and early 2010, stated that Ms Vennells probably authorised in 2006 substantial legal costs for Post Office’s claim against Mr Castleton. This could not be correct. In fact, Ms Vennells did not join Post Office until January 2007.
Sir, I now turn to the chronology of Ms Vennells’ involvement, which cannot, for obvious reasons, be a complete chronology. Even in 140 pages of written submissions, we could not set out a complete chronology with a reference to every relevant document.
Ms Vennells was CEO of a newly separated, highly complex business with more than 11,000 branches. Her role as CEO and, before that, as Network Director, stretched far more broadly than Horizon, to financial management, stakeholder engagement, strategic planning and decision making, regulatory matters and the financial success of the company.
Sir, I do not raise that to downplay in any way the importance of Horizon, simply to highlight the huge demand of competing priorities on the CEO of a business of this size and nature.
Sir, I now turn to bugs, errors, defects and remote access before Ms Vennells became CEO.
Paragraph 88 of Mr Stein’s submission suggest, and I quote:
“It is simply not credible for Ms Vennells to have uncritically adopted the mantra that she put forward in a letter to Lord Arbuthnot on 9 January 2012. She said:
“‘There has been no evidence to support any of the allegations and we have no reason to doubt the integrity of the system, which we remain confident is robust and fit for purpose’.”
He relies on this assertion to suggest that the organisation was corrupt from the top. Sir, it is easy to make assertions such as this with hindsight, knowing what we know now about what has been found regarding bugs, errors and defects but, from a close analysis of the contemporaneous documentation, it can be seen exactly why it was reasonable for Ms Vennells to make this statement, and it was not out of a corrupt motive. So far as Ms Vennells was aware, she had a competent Head of IT and a competent General Counsel on whom she believed she was entitled to rely.
Taking over the helm of Post Office at the time of separation from RMG, as we have heard, was a gargantuan task. It was simply not possible to delve personally into each matter raised nor realistic that she would have the expertise in all disciplines to do so. Why should she not have been entitled to trust Ms Crichton, Mr Young and Ms Sewell to give her the unvarnished position?
Ms Vennells had no background in IT and was never employed by Post Office in an IT role. Post Office had an IT Department, which included IT technical specialists and Senior Managers, for example Mr Young and later Ms Sewell, whose role was to keep the Board and the Executive Team informed of important matters.
Ms Vennells relied, and submits that she was entitled to rely, on Post Office’s IT function to provide accurate information to her, to the Board and to the Executive Team in relation to matters of Horizon integrity.
Sir, until March 2012 when he left Post Office, Mike Young was the most Senior Manager with responsibility for IT in the business. He reported directly to the Managing Director, first Alan Cook, then to Dave Smith and then to Ms Vennells. Mr Young confirmed in his evidence that it was his responsibility to ensure that IT related issues were resolved, and to ensure that the Board was notified of IT issues which required its input or oversight.
Mr Young said that he was only ever aware of two bugs, errors or defects, otherwise known as BEDs, in Legacy Horizon: blue screen and ISDN errors.
The only BEDs he was aware of in relation to HNG-X were BEDs which affected the Oracle database during the test and the pilot rollout. He said he had no knowledge of any BEDs that would have caused transaction or reconciliation errors in branch accounts and the only occasion mentioned in his witness statement or indeed seen in the documentation on which he escalated concerns about Horizon integrity to the Board or the Executive Team, was when he alerted Mr Cook and the Executive Team about the Computer Weekly article in May 2009.
Mr Young repeatedly made and supported comments to Ms Vennells and the Board which asserted that Horizon was reliable. He approved the approach and wording of a draft letter sent in Ms Vennells’ name to Mike Weir MP in November 2011 which described Horizon as “rigorously tested”, and said that there was no evidence at all that Horizon has in some way been at fault.
Mr Young’s evidence is that he first became aware about the integrity of Horizon becoming an issue when he was contacted by Computer Weekly shortly before the publication of its article in May 2009. He told Computer Weekly this:
“Horizon is an extremely robust system which operates over our entire Post Office Network and successfully records millions of transactions every day. There is no evidence that points to any fault with the technology. We would always look into and investigate any issues raised by subpostmasters.”
It was around the same time that Ms Vennells first became aware of concerns by way of the Network Functional Report for April 2009. That report recorded this unambiguous statement:
“Legal advice is that we have no reason to doubt the system’s integrity and this has been tested in the courts.”
Ms Vennells was given assurances from experts that there was nothing wrong with the system. The clear message being given by both Legal and IT was that there was nothing to worry about.
Sir, the receipts and payments mismatch bug in HNG-X was discovered in September 2010. It was discovered to have affected up to 62 branches, with two branches being impacted twice.
Fujitsu prepared a paper dated 29 September 2010 for a meeting with POL to discuss the bug. They noted that the bug was impacting around 40 branches. Mr Young accepted that he was informed of the bug in February 2011, several months after its discovery. Ms Sewell was aware of the bug by 4 March 2011. Ms Vennells was not made aware of the bug until May 2013. The Inquiry has heard no evidence to the contrary.
Mr Young and Ms Sewell both accepted that they did not escalate their knowledge of the bug to Ms Vennells when they first became aware of it. The evidence is clear that Mr Young did not escalate his knowledge of the bug before he left POL in 2012 and that Ms Sewell did not escalate her knowledge at any point prior to May 2013.
Sir, coming to remote access between 2007 and 2011. The evidence before the Inquiry establishes that, between 2008 and 2010, a number of POL managers, including Andrew Winn, Rod Ismay and Angela van den Bogerd, then a Senior Network Manager, were made aware that Fujitsu had the power or a potential power to change branch accounts remotely, without the authority or knowledge of the affected subpostmasters. This information was not passed on to the Board or to Ms Vennells.
On the contrary, the message given internally to POL’s Executive Team was that it was not possible to make changes to branch accounts without the knowledge or consent of the relevant subpostmaster.
Ms van den Bogerd and Mr Ismay knew, at the latest in early 2011, that Fujitsu could, in certain circumstances, alter branch data remotely without subpostmasters’ knowledge. They were two of a substantial number of POL managers who had been made aware of this by 5 January 2011. There is no evidence that any of these managers escalated their knowledge to the Board or the Executive Team.
It is clear from the oral evidence of two of the most Senior Managers involved, Mr Ismay and Ms van den Bogerd, that they did nothing to escalate their knowledge. Ms Vennells still does not understand why they would not have done so. The knowledge with which Mr Ismay is fixed runs directly contrary to what he had written in the Ismay Report, as to there being no backdoors in Horizon. He did not return to his report and seek to correct anything. When asked why this was the case, he offered no explanation for his failure to do so, other than he could not recall receiving the message as to remote access being possible.
Turning to the 2010/2011 Ernst & Young audit. The EY audit of the control environment at Fujitsu for the financial year ended 27 March 2011 included the reporting of weaknesses in the IT Governance and Control Framework, particularly in relation to Fujitsu and Horizon, and made recommendations for improvements. EY’s detailed observations included, on page 33 of the manager letter, that:
“There are inappropriate system privileges assigned to the APPSUP role.”
The risk associated with that is weakness was, I quote:
“Unrestricted access to privileged IT functions increases the risk of inappropriate/unauthorised access which may lead to the processing of unauthorised or erroneous transactions.”
Ms Vennells was briefed on this audit report by means of a document which appears to have been prepared by Fujitsu in April 2011, with input from Ms Sewell. Ms Vennells has no reason to think she did not see this briefing. Sir, this very issue was considered at the Post Office Board meeting on 29 May 2011 at which the Board discussed the steps being taken to implement EY’s recommendations.
What Ms Vennells did not know, though, was the significance of the finding which EY had made. She did not know this because she was not told that the existence of the APPSUP role created this risk to the integrity of the accounting data held in the system. Ms Vennells gave oral evidence that it is unlikely that she would have understood at the time, without advice from an IT expert, that EY’s comments about the APPSUP role showed that Fujitsu could make changes to branch accounts without the authorisation of subpostmasters.
Sir, the Inquiry can be confident that Ms Vennells is right that she was not told that the APPSUP role could potentially be used to make unauthorised changes to branch accounts: first, there is no evidence that she was told; and, second, the reason why she was not told is obvious from Mr Young’s evidence. He knew that, as with most IT systems, it was possible to gain access to the system remotely, and that Fujitsu could make changes to branch accounts with subpostmasters’ consent. However, he, Head of IT, had in his words:
“… no belief, understanding or even inkling that Fujitsu made changes to branch accounts without the authorisation of subpostmasters.”
Ms Vennells was not told that there was a risk that Fujitsu could use it’s APPSUP privileges to tamper with branch data because Mr Young did not himself appreciate that this was a real risk.
In the meantime, in a report to the Royal Mail Group ARC in September 2011 Chris Day, the CFO, together with Lesley Sewell and Rod Ismay, stated, and I quote:
“As a result of the process and controls in place, POL is fully confident in the Horizon computer system operating in its branches. This accounting system and the processes around it enable our branches to maintain accurate and reliable accounts.”
The text of this report, sir, was run past Mr Young and Ms Crichton for comment. The report also stated, with regard to prosecutions, that:
“POL remains satisfied that this money was missing due to theft in the branch. Due to the controls set out above, POL does not believe the account balances against which the audits were conducted were corrupt.”
This is the very same message that Ms Vennells was receiving from Finance, from IT, and from Legal.
Sir, moving on chronologically to the instigation of the Second Sight review. We see other clear examples of Ms Vennells receiving incomplete or incorrect information from trusted colleagues in the information and briefing documents she received from meetings with MPs on 17 May and 18 June 2012. Ms Vennells’ straightforward submission in this regard is that she was entitled to rely on an unequivocal statement to the Board by the General Counsel for its factual accuracy. Ms Crichton had said at the Board meeting in January 2012:
“The business has also won every criminal prosecution in which it has used evidence based on the Horizon system’s integrity.”
Ms Vennells had no reason to question this. This information was then transposed directly into what Ms Vennells said to James Arbuthnot on 18 June 2012:
“Every case taken to prosecution has found in favour of the Post Office.”
Ms Vennells now knows and accepts that that was false. She still does not understand why Ms Crichton failed to give her accurate information, but would not have considered that she needed to verify what she was being told by her General Counsel.
As for the conduct of the Second Sight review, between mid-2012 and July 2013, Second Sight and POL investigated the cases referred to Second Sight by MPs and the JFSA. Ms Vennells was not involved in the investigation. It required subject matter expertise. Post Office established a working group to consider the evidence presented by Second Sight and to formulate POL’s response. Its membership drew together knowledge and expertise in IT, accounting, security and network operations.
In addition, a group of managers, including Mr Baker, an IT specialist, and Ms van den Bogerd, a Senior Network Manager, were tasked with liaising directly with Second Sight. Ms Vennells did not attend meetings of the working group. She had no role in directing or deciding what information Post Office would provide to Second Sight and she was not involved in or consulted about Post Office’s substantive responses to the cases.
These were operational matters which required the specialist know-how of the teams dealing with Second Sight. The evidence shows that Ms Vennells received oral and written updates, mainly from Ms Lyons and Ms Crichton, to report on the progress of the review, and to prepare her for meetings with stakeholders.
Sir, one matter on which Ms Vennells did need visibility was whether Second Sight or the Post Office teams engaged in the project had identified problems with the Horizon IT system. The information she received during the review was that neither Second Sight nor Post Office had identified any system-wide problems with the IT system, being briefed in those terms in an email from Ms Crichton on 19 March 2013, and for the call with Lord Arbuthnot on 23 May 2013, the key message in that briefing being:
“We are concerned that the investigation is overrunning, that the findings will not be definitive and there will be no satisfactory outcome to the Horizon question.”
The message at 2.6 was:
“The investigation has been running for a year and, to date, no evidence of systemic failures has been found.”
At 5.3:
“Post Office is not saying Horizon is free from defects. Systems of this nature occasionally encounter problems. We are confident, though, that no subpostmaster has been wrongly convicted or suspended due to Horizon defects.”
In addition, she was briefed for the Board call on 1 July 2013 as follows:
“Notes for Board update on Second Sight Investigation.”
She was told:
“Second Sight due to present initial findings at a meeting with James Arbuthnot, MPs and JFSA next Monday. Report will focus on four best cases in detail, following an initial review of nearly 50 cases overall. Key point to emphasise is that we understand Second Sight have not identified any systemic issues with Horizon itself. However, the report still presents significant reputational risks for Post Office. SS nervous about perceptions of a whitewash, and so may draw attention to two points …”
The two points being:
“… (a) issues with Post Office’s wider support, and (b) the fact that we have disclosed two previous anomalies with the Horizon system, which they may suggest means we cannot be confident that there are not more widespread problems with the system.”
Sir, this is what Ms Vennells is told specifically about this point. This is a red herring, she is told:
“In both cases the errors were picked up and have either been or are in the process of being addressed with the affected subpostmasters. A comprehensive audit has been performed to check that there weren’t further cases we weren’t aware of and new procedures are being put in place to ensure such anomalies are spotted at an early stage in the future.”
What was she to take from this? It was a red herring. The bugs had been dealt with. There’s been an audit to check whether there were other cases POL wasn’t aware of. Sir, she is also then told:
“We also have other concerns around Second Sight’s handling of the investigation. They haven’t yet reviewed all the evidence we have given them and, hence, may not be in a position to set out definitive conclusions on all four cases.”
She is also told:
“It appears that they are not focusing on empirical evidence in the way we would expect forensic accountants to.”
Sir, on the back of that last briefing note, Ms Vennells briefed the Board on 1 July 2013. Ms Vennells shared with the Board no more and no less than she herself knew about the likely contents of the Second Sight Interim Report as of 1 July 2013. It was correct, based on what Ms Vennells had been told, that the investigation to date had found no systemic issues.
Ms Vennells, in briefing the Board, noted:
“Horizon, like any large computer system, would occasionally have anomalies and two were known of over recent years.”
Ms Vennells described these anomalies, which she now recognises should have been called “bugs”, at the same time as stating that there were no systemic issues. That understanding of the belief of her colleagues and the findings of Second Sight was based directly on information she had been given by the Working Group. Two days later, a briefing note on the Second Sight Interim Report was sent to Ms Vennells by Chief of Staff Martin Edwards, with input from Susan Crichton, Alwen Lyons and others. Ms Perkins was copied in. This was produced before Second Sight had begun to circulate drafts of the Second Sight Interim Report and was therefore based on the work that Post Office had carried out during the review, and what they had been told by Second Sight.
This repeated that Post Office believed that Second Sight had not found evidence of systemic problems within the Horizon IT system. The Interim Report at paragraph 8.2(a) clearly stated:
“We have found no evidence of system-wide systemic problems with the Horizon software.”
Second Sight were not required to include this conclusion in their Interim Report, they chose to include it and a person reading the Interim Report was entitled to assume that it represented Second Sight’s full, professional opinion on that issue. A reasonable reader of the Interim Report as a whole would not have understood that the conclusion in 8.2(a) was based solely on the four spot reviews, as opposed to the totality of the investigatory work carried out by Second Sight, which they described in section 2 of the Interim Report.
Further, the written briefing prepared for Ms Vennells stated that Post Office understood that Second Sight had not identified any systemic issues in the four spot reviews to be attached to the Second Sight Interim Report, nor in the other six spot reviews sent to Post Office, nor otherwise during its investigation.
In short, Ms Vennells was told, both by Second Sight and POL’s internal team of specialists, that no systemic issues had been found during the investigation. Ms Vennells submits that she was entitled to rely on what she was told.
Sir, turning to Ms Vennells’ understanding of the bugs that she was made aware of in 2013. Ms Vennells was not an IT specialist and, as I’ve said, she relied on POL’s IT specialists for information about the bugs and their implications for the reliability of the system.
Two IT specialists reported to Ms Vennells at the relevant time: Ms Sewell and Mr Baker. Ms Vennells said that she relied on and was reassured by what she was told about the bugs. She submits that she relied on the Post Office IT Team through Mr Baker and Ms Sewell, in four main respects: first, to obtain and inform her of facts in relation to the bugs; second, to provide their opinion on the significance of the bugs to the reliability of the Horizon IT system; third, to inform her of any other bugs or defects which they were aware had impacted permits; and, fourth, to inform her if, in their opinion, Post Office should carry out investigations into whether there were or could be other problems.
As to these four issues, Ms Vennells was told that the bugs had been detected by Post Office Limited processes, that the underlying technical problems had been diagnosed and fixed, that Post Office had been transparent with the affected subpostmasters and that no subpostmaster had been left out of pocket.
Ms Vennells was told that the bugs were normal occurrences in a system the size of Horizon and did not indicate other or wider problems. What was important was how Post Office had dealt with the bugs.
The 3 July 2013 briefing note to Ms Vennells on the interim report gave the impression that the two bugs in HNG-X and the Falkirk bug were the only bugs which impacted subpostmaster accounts of which Post Office was aware. It dealt with the two bugs in Horizon Online and introduced the Falkirk bug by stating:
“We are also aware of a further anomaly in Horizon. Post Office IT did not recommend a further investigation of possible defects in the system.”
Similarly unambiguous information was given to Ms Vennells by Ms Sewell in July 2013 in respect of Michael Rudkin’s assertion that he had met an individual in the basement at Fujitsu who demonstrated an ability to pass transactions directly into the Horizon system and, in doing so, alter in realtime or overnight, the recording holdings of foreign currency in Post Office branch offices.
Ms Sewell said this to Ms Vennells, in an email on 7 July:
“Rudkin. We and Fujitsu have provided evidence to Second Sight that there was only testing systems in the basement in 2008. The equipment (hardware) and the testing system were located in the basement. This has been a constant challenge with Second Sight, as they contest that Rudkin has signed an affidavit and therefore there is a conflict of evidence. There appears to be a lack of willingness to accept the detail we have provided. We have also had the tester, who Rudkin believes took him to the basement, complete a witness statement. He has confirmed that there was only a testing system in the basement. This has been a constant challenge with Second Sight and I’m not sure how this will get resolved.”
The message that was communicated to Ms Vennells in the contemporaneous documents was that Mr Rudkin’s allegations had been investigated and that Post Office was satisfied that they had no substance.
Sir, turning to advice on prosecutions. Ms Vennells stated in a letter to the BEIS Select Committee on 24 June 2020 that she had discussed prosecutions with Ms Crichton shortly after she became CEO. She was told that POL approached POL’s prosecutions with the same rigour as the CPS, applying the Police and Criminal Evidence Act 1984 and the Code for Crown Prosecutors. The documentary evidence that Ms Vennells has seen since she wrote to the Committee in June 2020 supports her recollection that she was given assurances that Post Office conducted prosecutions responsibly through a structured and professional legal process.
This is consistent with the speaking note prepared for Ms Vennells to use in May 2012 when speaking to Lord Arbuthnot. That note describes the role of Post Office as prosecutors and explains how internal and external lawyers would apply the same checks and balances as would be applied by the CPS. On 3 July 2013, Ms Crichton sent an email to Mr Edwards and Mr Flemington, discussing what would go into a speaking note for Ms Vennells and Ms Perkins to use at a meeting with Lord Arbuthnot. Ms Crichton wrote in the email:
“Nothing has emerged from the interim findings given to us by Second Sight which would point to specific convictions being unsafe. Cases have been through the judicial process and the court considers all relevant evidence, not just that relating to the Horizon computer system.”
That was 3 July 2013. Sir, these words made their way verbatim into the speaking note. Again, this is characteristic of the clear messaging that Ms Vennells had been receiving, and continued to receive, from her General Counsel and upon which she was entitled to rely.
Turning to the Clarke Advice and the prosecution case review. Simon Clarke sent his expert evidence advice to Post Office on 17 July 2013, the day after the 16 July Board meeting. Its circulation appears to have been limited to Ms Crichton, Mr Williams, Mr Flemington, and Mr Parsons of Bond Dickinson. Ms Crichton confirmed that the document was not sent to the Board.
Ms Crichton did not set out in writing anywhere a complete or accurate summary of the substance of Mr Clarke’s advice. It was her job to do so. Nor did her successor, Mr Aujard. Indeed, while Mr Aujard received a copy of the advice in a briefing pack from Cartwright King, he claimed not to recall whether he had read it in detail.
He suggested that his view at the time was that it was a historic detail that was being dealt with through the case review process. This might go some way to explaining the messaging received by Ms Vennells.
Parts of Mr Clarke’s advice were communicated to Ms Vennells between July and October 2013, though in a way that was piecemeal, unstructured and incomplete. First, Cartwright King’s advice that Post Office was obliged to review past prosecutions was summarised in Ms Crichton’s update paper for the Board meeting of 16 July 2013. Second, this paper did not mention Mr Jenkins nor the fact that Cartwright King had advised Post Office that it was obliged to disclose the two bugs in HNG-X and the Helen Rose Report.
Third, it also did not mention that Mr Jenkins and Post Office had breached their duties as an expert witness and prosecutor respectively. The reason for this admission is that, as he said in his evidence, Mr Clarke did not reach a conclusion that Mr Jenkins and Post Office had breached their duties until shortly before he completed the Clarke expert evidence advice.
As I mentioned, that was not sent to Post Office until 17 July, after the July Board meeting.
Fourth, Ms Vennells says that she was never told about Mr Jenkins’ and Post Office’s breaches of duty. She was also never told about the disclosure issues relating to the Helen Rose Report.
Fifth, Post Office obtained three pieces of written advice from Brian Altman, King’s Counsel, between August and October 2013, an interim review of Cartwright King’s process for reviewing criminal cases for disclosure on 2 August 2013, a general review of the prosecution case review on 15 October 2013, and a forward-looking review of Post Office’s role as prosecutor.
Each of these documents discussed the issue with Mr Jenkins; none of them was provided to the Board. They were each summarised for the Board by the General Counsel in a way that gave the impression that Mr Altman had not identified any significant issues with Cartwright King’s conduct of the disclosure review, or Post Office’s conduct of past prosecutions.
For example, Ms Crichton emailed Ms Vennells after a conference with Mr Altman on 9 August 2013, stating:
“Overall, his opinion in conference was that the work that had already been completed was fine and along the right lines, taking into account Post Office’s prosecutorial duties to disclose evidence/information to the defence.”
Sixth, Ms Vennells has a recollection of receiving two pieces of information by word of mouth after July 2013. First, she says that she was told by Lesley Sewell that Post Office had stood down a Fujitsu expert witness because he had not revealed bugs during the prosecution of Mrs Misra. Second, she was told by Ms Crichton that POL was required to review the cases in which the expert had given evidence.
Seventh, when Ms Vennells was informed, most likely in October 2013, that Post Office had used an unsafe witness from Fujitsu, she informed Ms Perkins, copying in the CFO, Mr Day, and directed Ms Perkins to contact Mr Edwards if she needed more information about this issue. We submit that the inference to be drawn is that the information in the email was given to Ms Vennells by a Post Office lawyer.
Sir, Ms Vennells was neither wilfully blind, as suggested by Core Participants, nor did she purposefully close her eyes. She trusted her General Counsel. She was advised by Ms Crichton that the right legal response to the disclosure issues was to conduct a review of past cases to ensure that Post Office complied with its disclosure duties. She was told that this review was in the hands of experienced external criminal lawyers, and that their approach was being checked by Brian Altman, King’s Counsel, a senior and experienced criminal barrister.
She was also advised that Mr Altman agreed with the approach of the external lawyers and had not found any fault in their work.
Sir, Ms Vennells made no attempt to influence or direct that process, save that she asked why the review should not extend further back in time to look at more cases. It was entirely for the lawyers to determine the steps that Post Office needed to take to comply with its legal duties, including what materials should be disclosed, and to whom.
Ms Vennells was given the impression by successive GCs that the case review exercise was being carried out competently and professionally and, fundamentally, that the exercise was what Post Office should be doing as a matter of law to address the disclosure issues. As a non-lawyer, Ms Vennells could not be expected to have understood the significance of an unsafe witness, and was entitled to rely on her General Counsel, Cartwright King and Brian Altman, King’s Counsel, to ensure that Post Office was responding in an appropriate manner.
Ms Vennells was not responsible for Post Office’s failure to give disclosure of the fact that Mr Jenkins had withheld information about his knowledge of bugs in Horizon in his expert evidence.
Mr Altman, King’s Counsel, stated in his evidence that it did not occur to him at the time that this fact should have been considered for disclosure, and disclosed in appropriate cases, although he accepted with hindsight that it should have done.
The evidence before the Inquiry has shown that this was not the only misjudgement or mistake made by the lawyers.
First, Mr Altman, King’s Counsel, did not consider the procedure by which Mr Jenkins had been instructed as an expert witness because no one at Post Office told him that Mr Jenkins had not been properly instructed. He stated, however, that, looking back, this was something that he should have queried. Mr Altman agreed that, if he had been informed that Mr Jenkins may not have been properly instructed or properly informed about his duties as an expert witness, this may have led to inquiries into broader failings by Cartwright King as prosecuting lawyers, and whether Cartwright King had a conflict of interest in advising Post Office on past prosecutions in which they had acted as prosecuting lawyers.
Second, Mr Clarke accepted in his oral evidence that there was a view that Cartwright King’s review of past prosecutions, and I quote, “probably wasn’t as independent as it ought to have been”, and that Cartwright King’s review may have become less rigorous and less observant of potential trends or themes in the cases as the review progressed.
When he was asked whether Cartwright King may have become case hardened during the review he said:
“That’s exactly what I’m referring to. That’s the point I’m making, that because you become slightly cynical, jaded, as inevitably is going to be the case, then you do miss things. Yes, I accept that.”
Third, Mr Clarke accepted that he was wrong not to have recommended disclosure following his review of Mrs Misra’s case. Ms Vennells was not to know any of this. As Mr Moloney, King’s Counsel, said yesterday:
“Regulated legal professionals might be expected to provide requisite independence.”
Ms Perkins made the point in her evidence that the summaries of the external legal advice presented to the Board were inadequate. They failed to alert the Board to, amongst other matters: (i) the conclusions of the clerk expert evidence advice; (ii) the existence and significance of the Helen Rose Report; (iii) Mr Altman’s view in his October 2013 General Advice that Mr Jenkins was tainted and that his future role as a witness was untenable; (iv) the statement in Mr Altman’s general advice that he was left unclear about whether POL had challenged Mr Jenkins about his non-disclosures; (v) Mr Altman’s criticisms of the disorder of POL’s prosecution policies and past prosecutions; and (vi) the possibility that Cartwright King were conflicted due to their role in past prosecutions, including those in which Mr Jenkins had given evidence.
Ms Vennells and the Board, at this time, assumed, and were entitled to assume, that the General Counsel were complying with their core responsibilities to alert the Board to legal risks and to provide accurate and complete summaries of external legal advice. That was their role.
Ms Perkins shared that belief. That is the only way to understand her evidence that the omissions from the summaries were shocking and extraordinary.
When, therefore, Mr Aujard presented his papers to the Audit and Risk Committee at the meeting in November 2013, and subsequently in writing in February 2014, setting out the options for Post Office’s future prosecutions policy, he was doing so with the ARC proceeding on materially incomplete information, and he knew or ought to have known that this was the case, since it was he and his predecessor who had failed to provide the ARC with that information.
There was no suggestion, for example, in Mr Aujard’s paper that Post Office should discontinue prosecutions because of there being any reason to suspect that its past conduct of prosecutions had been inadequate or inappropriate.
The starting point of Mr Aujard’s analysis was that Mr Altman had not identified anything during his review of POL’s prosecutorial role to suggest that POL’s approach to prosecutions had been anything other than well organised, structured and efficient. That was not an accurate summary of what Mr Altman had said, nor did it sit happily with Mr Clarke’s expert evidence advice, or the Helen Rose Report. The Post Office Board was entitled to assume that he was competent and that he would provide accurate summaries of the advice being provided to Post Office.
Sir, throughout her role as CEO, Ms Vennells and the Board made use of highly reputable external advisors, including Deloitte, Linklaters, Bond Dickinson, Cartwright King and leading counsel. As a non-lawyer, Ms Vennells did not seek to reach her own conclusions on legal advice but preferred, as she ought to do, to take advice from experts. That can be seen, for example, in Ms Vennells speaking directly with David Cavender, King’s Counsel, about the tone of Post Office’s case ahead of the Common Issues trial and subsequently ensuring that the Board was briefed on the proceedings by the external Legal Team the week before proceedings commenced.
Matters such as the tone of POL’s voice were matters on which Ms Vennells, as a non-lawyer, could properly involve herself in the detail of decisions being taken. In contrast, a CEO could and should not be expected to add value in relation to questions of law on which, quite properly, the General Counsel took the lead with Ms Vennells and the Board receiving appropriate briefings.
As for the Mediation Scheme, this process for seeking resolution of cases was recommended by Ms Crichton, following discussions with Bond Dickinson. On 19 July 2013 Bond Dickinson prepared a mediation proposal paper which contained, under the heading “Workflow”, what is clearly an outline of what became the Mediation Scheme.
The statement that there were no grounds for a blanket compensation scheme appears to have come from advice set out in the Bond Dickinson mediation proposal paper that:
“At present, there is insufficient evidence to justify a blanket compensation scheme for subpostmasters. Each case needs to be considered on its individual merits.”
As the mediation continued, Ms Vennells received assurance that the investigation of the cases had not revealed any faults with Horizon through a paper prepared by Chris Aujard on 17 September 2014 to update the Board on the progress of the Mediation Scheme, and in briefing notes prepared by Mr Bourke in October 2014 and November 2014.
Ms Vennells was also led to understand that the cases in the Mediation Scheme had been reviewed by external criminal lawyers who had concluded that there was no evidence of unsafe convictions within the Mediation Scheme caseload. Again, Ms Vennells submits that she was entitled to rely on statements made by the General Counsel and Mr Bourke, a qualified solicitor, for their accuracy. She was also entitled to believe and did believe that these statements were an honest and professional review, based on the evidence reviewed by the Post Office.
Ms Vennells was aware that Bond Dickinson had been engaged by Post Office as its primary legal advisor in relation to the review and that Post Office’s investigation work included reviewing transaction data sourced from Fujitsu. At the time, Ms Vennells had no basis to second-guess what she was told about Post Office’s view of the outcome of the investigation.
Even contemporaneously, there is evidence in the documents that the Post Office senior team and its lawyers recognised that on occasion, Ms Vennells had not been given correct or incomplete information. When Ms Vennells gave evidence to the BEIS Select Committee on 3 February 2015, she was not aware that Second Sight had requested access to Post Office prosecution files. Two days later, she wrote to Mr Richardson of Bond Dickinson on 5 February 2015 stating:
“It was tough but I felt that, other than the issue of withholding prosecution files, which caught us completely by surprise, we did as you said.”
Further, an email from Ms Crowe to Mr Cameron Mr Davies, Ms MacLeod and Mr Aujard on 27 February, which was copied to Ms Vennells, states that:
“A clear, major breakdown in communications between Legal and the CEO surfaced at the Select Committee on access to legal files.”
Sir, Ms Vennells played no material role in decisions regarding disclosure or statements of factual witnesses and experts in the GLO proceedings. She does not recall being asked to be involved in any decisions about disclosure and no questions were put to her in oral evidence on this topic.
Ms MacLeod, as General Counsel, took the view, set out in her witness statement for this Inquiry, that, in respect of whether or not to call somebody like Mr Jenkins as a witness:
“… my expectation was that this would have been decided by the Legal Team.”
The Inquiry may in fact have been surprised if it had heard evidence that Ms Vennells had personally made decisions regarding disclosure and witness evidence. That is far from the role of the CEO.
Sir, the protection of POL’s reputation. Ms Vennells submits that the protection of a company’s reputation is a legitimate objective of a CEO. It is clear from the documents that Ms Vennells saw no conflict between the protection of Post Office’s reputation and positive engagement with the Second Sight Interim Report. As she informed the Board in an email on 4 July 2013:
“To summarise very briefly, we have taken the view that the best way to minimise the reputational risks associated with the review and to do the right thing for the business and the people is to welcome the broad thrust of the report and commit to acting on its key findings in relation to the need for improvements in our support and training processes.”
This is entirely consistent, she said, with the broader imperative for cultural change across the organisation which the Board has discussed in recent months.
Ms Vennells saw the implementation of the Interim Report’s recommendations on support and training as the primary means of preserving Post Office’s reputation. In circumstances where Ms Vennells was being told that the IT Horizon system was reliable but that there were areas for improvement in training, support and culture, it is understandable why she took the approach that she did: to emphasise Post Office’s confidence in the IT system, while accepting that it should proactively identify and improve culture, training, and support.
She was aware that Post Office served vulnerable individuals in thousands of Post Office’s nationwide and it was of great importance to her that those people did not lose their confidence in the Post Office and continued to feel able to collect benefits and pensions and carry out other important transactions.
Sir, in conclusion, Ms Vennells understands the strength of feeling about her, that of subpostmasters, those directly affected by the wrongful convictions, and that of the public. She heard what Mr Moloney said yesterday about apologies being difficult to hear, and she understands that position. She knows that any apology will offer little comfortable to those affected. She cannot and does not try to hide from the fact that, whilst CEO, she did not manage to uncover the truth about the extent of the bugs, errors and defects in Horizon, as found by Mr Justice Fraser. This is a matter of deep and constant regret to Ms Vennells, as is the fact that the convictions of the subpostmasters were not overturned sooner.
Sir, Ms Vennells simply did not receive the information which she ought to have been given by her senior team, whom she trusted and to whom she delegated responsible roles.
As she said herself, in her evidence to you:
“I am very sorry that I was not able to find out what the Inquiry has found out. I don’t know today how much wasn’t told to me. I do know information that I didn’t get, and I don’t know in some cases why it didn’t reach me.”
Ms Vennells still does not know why key information was not passed on to her and explained. She believed her senior team and General Counsel to be working hard, and doing their best to investigate the subpostmasters’ complaints in good faith. She had faith in them and, as far as she was concerned, had good working relationships with them. She is devastated by the fact that information was not shared with her. She has no desire to point the finger at others nor to speculate as to why information was not shared. She trusts that you, sir, together with your panel, will establish the true extent of the information that was not shared and perhaps why it was not shared.
Throughout Ms Vennells’ written and oral evidence, and borne out throughout the documents and evidence of others which have been adduced during the Inquiry, we submit that there has been nothing to show that Ms Vennells acted in bad faith. Ms Vennells wanted to do right by the subpostmasters.
Sir, notwithstanding that the evidence phase of this Inquiry has now concluded, Ms Vennells will continue to assist your investigation in any way she can.
Sir Wyn Williams: Thank you, Ms Leek.
So we’ll break off now until 11.25, when we will hear from Mr Whittam.
(11.11 am)
(A short break)
(11.25 am)
Sir Wyn Williams: Mr Whittam.
Closing submissions by Mr Whittam
Mr Whittam: Sir, Fujitsu thanks you for the opportunity to make this short oral closing statement to supplement Fujitsu’s written closing submissions to the Inquiry.
As you know, Fujitsu has made careful evidence-based written closing statements for Phases 2, 3, 4, and collectively 5, 6 and 7. I do not repeat the content of those closing submissions.
Fujitsu has reflected carefully upon the evidence given to the Inquiry. In Phase 1, the Inquiry heard clear, detailed and profoundly affecting evidence of the human impact of hostile investigations and wrongful and civil and criminal proceedings commenced by Post Office against subpostmasters and their employees. Phases 2 to 7 of the Inquiry have exposed in detail the failings which brought about those appalling miscarriages of justice. The Human Impact phase of the Inquiry reinforced the devastating impact of those events described by the subpostmasters and the impact it had on their lives.
As it has done previously, Fujitsu apologises for its role in the suffering of affected subpostmasters, employees and their families.
Fujitsu’s written closing submissions for each of the phases of this Inquiry have accepted, clearly and candidly, where it’s own systems, processes and people have gone wrong. Nothing I say in this oral submission is intended to detract from those acceptances.
The evidence received by the Inquiry has demonstrated that the issues which have arisen are not exclusively or even primarily IT issues. The miscarriages of justice with which this Inquiry is concerned were not caused by technical failures alone but are the product of serious human and organisational failures in conduct, ethics, governance and culture.
Fujitsu’s commitments to helping the Inquiry understand what happened is reflected in the extent of its cooperation with the Inquiry. Fujitsu responded to the Inquiry’s Rule 9 requests as fully and comprehensively as possible. At the start of the Inquiry, warehouses were searched, databases were processed and electronic documents from approximately 120 Fujitsu individuals were collected. More than 30 million records, electronic and hard copy, going back more than 25 years have been collected. Throughout, Fujitsu has remained fully committed to supporting the important work of this Inquiry, having produced over 240,000 evidential documents, assisted more than 30 witnesses in the provision of written and oral evidence, and produced five detailed corporate statements.
From the outset of this Inquiry, Fujitsu has been clear about the technical matters that have now been the subject of substantial and careful examination.
The first of these relates to the existence, identification, communication and resolution of bugs, errors and defects in the Horizon IT system. The second relates to the existence and use of remote access by certain Fujitsu staff. I address these matters briefly in turn.
In its opening statement to the Inquiry, Fujitsu acknowledged that there have been a number of bugs, errors and defects within the Horizon system and that, in some instances, those bugs, errors and defects had the potential to, and indeed did, affect the integrity of subpostmasters’ branch accounts. Fujitsu has repeated this acknowledgement variously throughout the Inquiry process.
Fujitsu has also explained that no complex IT system will ever be completely free of bugs, errors and defects. That common-sense proposition has been accepted, repeated in evidence, by numerous Post Office witnesses working across the Inquiry’s relevant period.
Horizon is a multi-functional system encompassing points of sale services and over 100 additional services, including, amongst other things, financial services, Government services and Lottery purchases. It is a large, bespoke and highly complex system developed by Fujitsu in conjunction with Post Office for use in Post Office branches.
It interfaces with numerous different Post Office and third-party systems. Initially, Horizon was rolled out between 1999 and 2001, and remains in use in Post Office branches across the United Kingdom today. Horizon was and remains but one part of the Post Office’s IT infrastructure, supported not only by Fujitsu but various other third-party suppliers.
Both the inherent complexity of the system and the obvious potential for bugs, errors and defects necessitated that processes governing the identification, communication, escalation and resolution of bugs, errors and defects were put in place at the start and remain in place between Post Office and Fujitsu. Fujitsu has frankly accepted that, whilst these formal and informal information-sharing systems were generally effective in practice, they were not uniformly so.
The evidence heard over the course of the Inquiry nonetheless compels the conclusion that, in general, Fujitsu routinely and continually shared information concerning the existence of the impact of bugs, errors and defects with Post Office. It therefore follows that contemporaneous knowledge of bugs, errors and defects within Post Office went well beyond acknowledgement of the mere theoretical possibility of bugs, errors and defects.
Post Office has been aware for at least 25 years of a potential for, and existence of, bugs, errors and defects in the Horizon IT system, as well as the potential for those which are unknown and unresolved to exist. Post Office was also aware in 1999 of the potential for bugs, errors and defects to impact upon the integrity of branch accounts.
By way of illustration, in the annex to Fujitsu’s final written closing submissions in this Inquiry, Fujitsu has identified at least 70 individuals within Post Office and Royal Mail in relation to whom the Inquiry has received unequivocal evidence of their knowledge of bugs, errors and defects. This includes members of the Post Office Board, senior executives, in-house lawyers, as well as individuals working in Post Office’s Security and Investigations Teams. That knowledge spans the entirety of the period being examined by the Inquiry.
The sheer number of Post Office and Royal Mail personnel who were aware of the existence of bugs, errors and defects is potentially relevant to the Inquiry’s work in another way. A number of witnesses before the Inquiry could either not recall with accuracy whether, or in what circumstances, they were made aware of the existence of bugs, errors or defects, or positively denied such knowledge in circumstances which might be thought to be surprising.
In assessing that evidence, the Inquiry will be entitled to conclude that: while of course knowledge held by one person cannot unfairly be attributed to another and while Post Office’s corporate knowledge cannot be abrogated for all-purposes, the Inquiry is entitled to infer from the breadth and depth of awareness of bugs, errors and defects within Post Office, that it is likely that key institutional decision makers did, in fact, have such knowledge.
The question of why this expansive institutional knowledge was not appropriately considered by Post Office or its legal representatives in the context of proceedings against subpostmasters is a significant one, and a matter that will no doubt be the subject of careful deliberation by this Inquiry.
Further, in its opening statement to the Inquiry, Fujitsu accepted that Fujitsu staff had, and continues to have, the ability to remotely access Horizon. That access was and is possible in multiple ways, via various ingress access types, from the time of the initial rollout until now, including in both Legacy Horizon and HNG-X.
Fujitsu has reiterated this position throughout the Inquiry. Remote access was and remains a necessary part of the suite of support tools available to manage the live operation of the Horizon IT system, including the attempts to rectify bugs, errors and defects. Indeed, support staff from Fujitsu state in evidence that they could have not done their jobs or operated Horizon without it.
In its opening statement to this Inquiry, Fujitsu submitted – I’m sure you’ll recall, sir – that Post Office had been aware from an early stage of Fujitsu’s ability to remotely access the Horizon system. That submission has been borne out by the evidence given to the Inquiry and was belatedly accepted by Post Office in its final closing submissions.
Whilst abuse of remote access privileges by a malign actor cannot positively be excluded on the evidence, there is no evidence for it and no reason to suppose it occurred. Most importantly, there is no evidence to support the suggestion that remote access privileges were used for any purpose other than to provide necessary technical support to Post Office branches. In other words, there is no evidence to support any suggestion of the malign use of remote access capabilities.
It’s regrettable that, in its written closing submissions, Post Office sought to obfuscate its proper share of responsibility for the events which are the subject of this Inquiry, by seeking wrongly to deflect blame to Fujitsu and other third parties. Post Office has sought to characterise itself as the subordinate partner in the relationship with Fujitsu and as operationally and technically dependent on Fujitsu.
Perhaps tellingly, sir, you might have observed that these submissions – it’s paragraph 101 in the Post Office written closing submissions – are unsupported by any reference to the evidence before this Inquiry. That’s unsurprising because the submissions bear no resemblance to that evidence.
Sir, you’ll be aware that Post Office previously has sought to shirk liability by deflecting responsibility for it share of organisational failings in its submissions to the Court of Appeal, in March 2001, in the case of Hamilton v The Post Office. The Court of Appeal rejected that attempt, holding that:
“POL knew there were serious issues about the reliability of Horizon. If POL needed further information, it could have obtained it from Fujitsu.”
That was a finding that was omitted by the Post Office when quoting that same section of the judgment in paragraph 10 of its written closing submissions.
The evidential basis for that conclusion is even stronger on the evidence before this Inquiry and we would invite you to adopt the same course as the Court of Appeal.
To the extent that it is ever appropriate to describe one party to an extensive and sophisticated commercial contractual arrangement, like the Horizon contact, as “subordinate” it is clear beyond argument that the Post Office is not such a party. The Post Office has been, and remain, very much in the driving seat of that contractual relationship. As we saw in Phases 2 and 3, it was Post Office who specified the technical requirements by which the Horizon IT system was developed and by which it has been changed over time.
As we saw in Phase 4, it was Post Office who determined the nature and extent of the Prosecution Support which Fujitsu was required to provide, including, by way of example, stipulating the form by which the ARQ requests were made. Even in Phase 7 we see the arrangements for the end of service life of Horizon IT system continue to be sensitive to Post Office’s commercial needs, despite Fujitsu’s serious reservations.
More generally, the evidence for Post Office dependency on Fujitsu is conspicuously thin. Post Office has at all material times had its own IT function. It’s employed a number of IT specialists, including highly experienced individuals such as Lesley Sewell, who held positions of management and oversight concerning all of Post Office’s IT functions, including the Horizon IT system.
As would be expected, the business as usual operation of the Horizon IT system entails the sharing of vast quantities of information about the system, including, again entirely unsurprisingly, about technical issues and bugs, errors and defects. In the annex to our closing submissions, Fujitsu has summarised some of those key means of information sharing. Post Office has also had, at significant times throughout the life of Horizon, its own testing teams tasked with ensuring the quality of certain releases of Horizon.
Post Office relies upon what it described as repeated assurances from Fujitsu that Horizon was reliable. It does not cite even a single example of such an assurance being given. To the extent that certain Post Office witnesses similarly suggested that they’d been provided with assurances as to the integrity of the Horizon IT system by Fujitsu, there was a complete lack of evidence to support those claims.
Indeed, as Fujitsu pointed out in its Phase 3 closing submissions, those claims were either entirely vague and, confusingly, often made by individuals with no direct engagement with Fujitsu at all.
The better view of the evidence, sir, as Fujitsu submitted at the end of Phase 3, is that a message from the top within Post Office, consistently emphasised without evidence, the robustness of the system. Having said that, sir, to be absolutely clear, despite the observations that I’ve just made and also will continue to make about Post Office, I repeat: Fujitsu stands by all the matters it has accepted in its written closing statements.
Post Office investigations and prosecutions did not begin with the introduction of the Horizon IT system. Post Office had an established active investigation and prosecution function in place prior to the national rollout of the Horizon IT system in 2000. The available evidence demonstrates a significant increase in investigative and prosecutorial activity during the period of 1992 to 1998. This initial increase in investigative and prosecutorial activity occurred following the introduction of an in-house accounting system called Capture into Post Office branches in 1992, and pre-dates the rollout of the Horizon IT system.
The conduct of criminal prosecutions on behalf of Post Office fell considerably short of the important duties which apply to a private prosecutor. Hundreds of subpostmasters were wrongfully prosecuted. Indeed, the evidence now available to the Inquiry suggests that the failings in the conduct of Post Office prosecutors were considerably more fundamental than even those acknowledged in the Court of Appeal in the Hamilton v Post Office case.
In Phase 4 of the written closing submissions, Fujitsu made detailed submissions as to the wide range of serious deficiencies which undermined the integrity of Post Office prosecutions. I do not repeat those submissions today. Fujitsu nevertheless acknowledges that the Codified Agreement between Fujitsu and Post Office contained novel propositions, contractually obliging Fujitsu to provide support to Post Office in respect of prosecutions. That work was atypical for an IT service provider such as Fujitsu and was outside the normal work of Fujitsu technical staff.
It is a matter of profound regret to Fujitsu that it ever provided services to support Post Office proceedings against subpostmasters.
Fujitsu was never sighted on the full scale of Post Office’s prosecutorial conduct and misconduct and, sir, that’s plain from the fact that it did not provide evidence in all the cases. Nonetheless, Fujitsu accepts that it was inappropriately deferential to Post Office as its client and its senior management were sufficiently interventionist in their management and oversight of the Post Office Account. This led to a failure to properly challenge or scrutiny the appropriateness of requests made by Post Office and resulted in Fujitsu providing a service and Prosecution Support which fell short of its own corporate values.
In light of this, Fujitsu recognises that it failed properly to support those of its employees who engaged directly with Post Office and its lawyers in respect of Prosecution Support. This is particularly so for those who engaged in the provision of documentary and witness evidence in relation to Post Office prosecutions and civil actions, with technical employees often left to engage directly with Post Office internal and external lawyers, rather than having appropriate mechanisms by which to monitor and support those employees.
In his written closing submissions, Gareth Jenkins notes particular failings of Fujitsu in its management and oversight of the Prosecution Support which he came to be required to provide. Sir, I can make it clear that Fujitsu accepts those failings.
In the course of Phase 7 the Inquiry explored issues regarding ongoing and future criminal investigations and prosecutions involving Post Office. Post Office’s renewed interest in criminal investigation and prosecutions appears to be driven by perceived need within the Post Office for a deterrent and to recover apparent shortfalls. Despite the startling evidence heard during Phase 4 of the Inquiry, in relation to conduct of Post Office Investigators and lawyers in the context of proceedings against subpostmasters, as recently as July 2022, Post Office boasted in internal documents that its investigations unit, the first recognised investigations unit in the world, it claims, has an unblemished reputation.
A significant focus of that evidence and, regrettably, a source of some confusion in the Phase 7 evidence, was the nature of assistance, if any, which Fujitsu had provided or was willing to provide in support of such investigations. Moreover, Post Office’s engagement with ongoing law enforcement investigations raises real questions as to the extent to which lessons have been learned regarding the matters which have been the subject of this Inquiry.
Fujitsu has set out the position in detail in its final written closings to ensure that that concern is fully aired. But, in summary, it is as follows: between February and July 2024, Fujitsu was contacted by four police forces in relation to four cases. This apparent flurry of criminal investigations, each of which appeared to have been referred to the relevant police forces by Post Office, caused Paul Patterson and his colleagues at Fujitsu such concern that Mr Patterson felt it necessary to escalate the matter to Nick Read as the CEO of Post Office. Mr Patterson was particularly aggrieved by some of the language used by Post Office staff in context of these criminal investigations and the apparent inference by those members of staff in what appeared to be matters relevant to the police forces.
Fujitsu does not know why it has not been contacted by the other police forces in connection with other investigations. It’s been suggested by some Core Participants that this correspondence and Fujitsu’s correspondence with some police forces may reflect tactical positioning for the purposes of the Inquiry.
Sir, I can be completely clear on that front: inevitably, Fujitsu’s attitude to the use of data derived from the Horizon IT system in criminal investigations and prosecutions has been informed by the shocking evidence heard by this Inquiry. Fujitsu is astute to ensure that it does not repeat the mistakes of the past and to ensure that it does not lend its assistance to Post Office in repeating those mistakes.
Moreover, far from that tactical positioning, Fujitsu’s position regarding ongoing and future criminal prosecutions has remained consistent since its declared position on the 16 June 2020, in its letter to the BEIS Select Committee, that it will provide information to the police and other appropriate judicial authorities but not to Post Office-led prosecutions. To reiterate, Fujitsu has offered and will continue to offer full cooperation to any police force conducting an investigation into potential criminal wrongdoing in connection with Post Office branches. Fujitsu will cooperate with police forces in the preparation of factual witness statements to address matters relevant to those criminal investigations. Fujitsu is, however, determined not to repeat mistakes of the past which have been so starkly revealed by this Inquiry.
In this context, Fujitsu is acutely aware that it is not in a position to offer independent expert opinion from any employee regarding the operation of the Horizon IT system. Fujitsu is also aware of the need to make full and appropriate disclosure regarding its knowledge of bugs, errors and defects in the Horizon IT system, including the potential for unknown, undiscovered and unresolved bugs, errors and defects affecting the live system, particularly as it ages without further investment, and the existence of remote access.
In addition, Fujitsu is also mindful that a consistent theme of the evidence before the Inquiry was the error in producing evidence for criminal proceedings from the Horizon IT system data, of focusing overly narrowly on whether there is a specific evidence of a bug or error or defect affecting a particular branch at a particular time, as compared to the potential for bugs, errors and defects, including the unknown ones, within the network more broadly, and is eager that police forces do not repeat the same error, in other words by asking Fujitsu to provide evidence limited to a particular branch.
Relatedly, Fujitsu has become concerned by some of the correspondence it’s reviewed between the Post Office and the relevant police forces, in particular the letter sent by Post Office to the Lancashire Constabulary on 25 April this year and then provided by the Lancashire Constabulary to Fujitsu some three months later on 24 July 2024. It’s significant in a number of material respects.
Fujitsu sets auditor the severe deficiencies of the content of that letter in its written closing submissions, where, from the context of the apparent resurrection of the Post Office’s criminal enforcement activity and the quick dismissal of Fujitsu’s concern by both Mr Read and Owen Woodley, the content of that letter seemed to Fujitsu to be so egregious that Mr Patterson decided to write to Post Office two days later to cease any further correspondence on the matter.
There is no merit whatsoever in the suggestion, principally made by John Bartlett, that Fujitsu has been obstructive or uncooperative to police investigations. Fujitsu is surprised by that suggestion, which is plainly at odds with the evidence. Further, given the significant miscarriages of justice with which this Inquiry is concerned, a cautious approach in these cases is both reasonable and appropriate.
In its opening statement to the Inquiry on 4 October 2022, Post Office submitted that it embarked on an ambitious and accelerated large-scale effort to retire Horizon by 2025 and replace it with a new system.
Over the course of Phase 7, the Inquiry has received evidence concerning NBIT and the progress that has been made towards replacing the Horizon IT system. Increasingly, it’s become clear that the NBIT programme has experienced prolonged delays and technical challenges. It has also become clear that Post Office is no closer to replacing the Horizon IT system than it was at the beginning of this Inquiry when it made its opening statement.
In the interim, and something of concern, insufficient investment has been made in the Horizon IT system. The Horizon IT system is on an end of service life IT infrastructure and, due to this status and its age, there’s an increasing risk of the existing Horizon IT system infrastructure failing. That could inversely impact the delivery of services to the public.
Since 2020, Fujitsu has consistently indicated its concerns to Post Office in relation to supporting end of service life infrastructure and that it wishes to exit the Horizon contract.
Sir, as I’ve said, the core of this Inquiry are the subpostmasters and their families, who were so profoundly and tragically affected by the appalling miscarriages of justice. Fujitsu reiterates its sincere apology to the subpostmasters, employees and their families.
The Inquiry has conducted a thorough and searching investigation. The work of the Inquiry has revealed the technical, human and organisational failings which contribute to the suffering of said subpostmasters and their families. Fujitsu accepts its share of those failings and has set out in writing the detailed matters which it does accept.
That said, the relative brevity of this oral closing and the shorter-than-some written closing, should not be taken as an acquiescence to all the criticisms levelled at Fujitsu, particularly some of those I’ve touched on, by the Post Office.
As already I have submitted, prior to the commencement of this Inquiry, the appalling miscarriages of justice that have now been laid bare by the evidence received by this Inquiry, were framed as resulting primarily or inclusively as IT issues. As evidence has demonstrated, these miscarriages of justice were not caused by technological failures exclusively or even primarily but are, instead, the product of serious human and organisational failures in conduct, ethics, governance and culture.
Fujitsu hopes that, having supported the Inquiry through its work, it has gone some way to demonstrating its commitment to learning lessons from the Inquiry process and, most importantly, to ensuring that the mistakes of the past are never repeated.
Thank you, sir.
Sir Wyn Williams: Thank you, Mr Whittam.
So it’s just about 12.00. Ms Dobbin, would you like to make your submissions in one go, answer, I suspect, yes, so would you like to have an early lunch or make them now?
Ms Dobbin: Sir, I would like to make them in one go, if that’s okay.
Sir Wyn Williams: Would you prefer to make them now or shall we take an early lunch?
Ms Dobbin: Perhaps if we took an early lunch, if that was all right?
Sir Wyn Williams: Yes.
Ms Dobbin: Thank you.
Sir Wyn Williams: So we’ll begin again at – well, 1.00.
(11.58 am)
(The Short Adjournment)
(1.00 pm)
Sir Wyn Williams: Okay. I think we’re all set, Ms Dobbin.
Closing submissions by Ms Dobbin
Ms Dobbin: Thank you.
Sir, Gareth Jenkins was interviewed by the police in 2021, just after this Inquiry had started in its current incarnation, before the vast disclosure that it has afforded. He told the police in that interview that he had not been instructed as an expert by Post Office in the cases in which he had been a witness.
That might have been surprising for the police investigators to hear. That might have been confusing for them, given the Clarke Advice was premised upon Mr Jenkins’ failures of disclosure as an expert witness, given the Horizon Issues Judgment and given the Court of Appeal judgments and their focus on the Clarke Advice. Confusing, given that Post Office’s position before the Court of Appeal was that the fact that Mr Jenkins had given evidence in a case meant that Post Office did not disclose the full and accurate position regarding the reliability of Horizon – see paragraph 207 of the Hamilton judgment – in other words, that the focus was squarely on Mr Jenkins and his failures of disclosure, as an expert witness.
It was no less shocking to Mr Jenkins, who retired in 2015, to have found himself the focus of so many criticisms and indeed singled out in the Horizon Issues Judgment, and then to find himself blamed by Post Office before the Court of Appeal for a number of miscarriages of justice. These were criticisms made of him that he had no opportunity to address. He had no chance to explain to Mr Justice Fraser, as then, that he was not correct in the way that he attributed to Mr Jenkins blame for inaccuracies in the evidence of some witnesses. He wasn’t able to explain that there had been a large number of people who had commented upon the witness statements.
Mr Jenkins wasn’t able to explain the role that he had within that team. He wasn’t able to explain that when it came to correcting the position about the use of remote access, that it was he, Mr Jenkins, who did so, despite the fact that there were members of the SSC who were involved in the civil litigation. Mr Jenkins wasn’t able to explain where he had obtained the information about the Callendar Square bug from. He wasn’t able to explain that its existence had been disclosed in Mrs Misra’s trial, contrary to the letter that Mr Justice Fraser sent to the DPP. He wasn’t able to explain the background to his communications with Ms Rose.
There were many things that he was not able to explain to Mr Justice Fraser and which would have put a very different complexion on matters. These are the things that show him not to have been the ventriloquist that my learned friend, Mr Henry, King’s Counsel, accuses him of being and which are set out in detail in his fourth witness statement.
Mr Jenkins had no opportunity to tell the Court of Appeal that he had not been instructed as an expert in Post Office cases and had provided information to Post Office that he was now being criticised for not having disclosed. He had no opportunity to tell the Court of Appeal that, in fact, Post Office knew a lot about the bugs which it was accusing him of having not disclosed.
There was no one in the Court of Appeal able to point out the hypocrisy and the inaccuracy of Post Office’s position, that the issue was not that of the single expert who had failed in his duties of disclosure, but that Post Office, as an organisation, and individual investigators and lawyers, had no concept of basic laws and ethics of prosecuting, that this incompetence extended to their use of Mr Jenkins.
Mr Jenkins, in fact, had no idea until 2021 of the existence of the Clarke Advice. He had been misled in 2013 as to why Post Office no longer needed assistance. He had been asked by Post Office to assist in the civil litigation. No one saw fit to tell Mr Jenkins why he wasn’t being called as a witness. No one told him, “The reason you’re not being called as a witness, Mr Jenkins, is that Post Office has blamed you in a series of cases for failing to disclose bugs”.
You will draw your own conclusions, sir, as to what that says about the lawyers involved.
Mr Jenkins didn’t have the opportunity to speak to Mr Clarke about his Advice. Mr Jenkins didn’t have the chance to tell Mr Clarke that his statement was a response to four questions that Mr Singh had asked him to answer. He did not have the opportunity to tell Mr Clarke that he had not been instructed as an expert when he gave this statement. He wasn’t able to explain that in cases in which that statement had been used, he had explained to lawyers what the ARQ data might show and that lawyers from Cartwright King had said no to obtaining that data.
Sir, what this Inquiry has established are four essential truths, of which neither Lord Justice Fraser nor the Court of Appeal were aware: first, that Post Office was well aware of the bugs and issues that it was accusing Mr Jenkins or Fujitsu of not having disclosed; second, that Mr Jenkins was not instructed as an expert in a single case in which he gave evidence; third, that this failure to instruct Mr Jenkins as an expert was apparent to Cartwright King and Post Office from the point of the Clarke Advice in 2013; fourth, that Post Office, as an organisation, and individual investigators and prosecutors, did not know or did not apply basic laws and rules and guidance which applied to prosecuting.
Returning to the critical point about what Mr Jenkins told the police in 2021, that he hadn’t been instructed as an expert in any case. In summary, that Post Office had put Mr Jenkins forward as an expert in criminal cases, had sought out his opinions and then to rely on them but had never actually instructed him as an expert witness, appeared extraordinary and giving rise to the question: how could that possibly have happened?
Sir, this Inquiry having disclosed in excess of 270,000 documents, confirms not just the truth of what Mr Jenkins told the police but the answer to the question how it happened that he wasn’t instructed as an expert. There are two fundamental reasons. First, quite simply, because investigators and lawyers did not know or ignored the law that they ought to have been applying. The evidence before this Inquiry demonstrates a profoundly more disturbing picture of prosecutorial incompetence than could have been imagined at its outset, disturbing for its back of regard for a very basic law and ethics which govern prosecuting, disturbing because it was being done by a private prosecutor, cloistered from the usual forms of scrutiny that applied to a public prosecutor and given all of the vested interests at stake.
The second reason why it happened was that prosecuting lawyers didn’t address the capacity in which they were relying upon Mr Jenkins to give evidence. They didn’t distinguish between Mr Jenkins as a Horizon technical expert and Mr Jenkins as an expert witness as a matter of law.
The fact alone that every single one of Mr Jenkins’ statements was an ordinary Section 9 witness statement that contained none of the content necessary to render it admissible as expert evidence demonstrates this and, ultimately, Mr Warwick Tatford’s evidence confirmed it and demonstrated in human terms how it happened. Throughout the prosecution of Mrs Misra there was, in his words, a “muddle” as to the capacity in which Mr Jenkins was being relied on.
Sir, given that Mr Jenkins gave oral evidence in Mrs Misra’s cases, without being taken through any of the steps to establish that he was giving evidence as an expert, that he was not taken through expert duties, that no steps were taken in his evidence to rectify that none of his statements complied with the requirements of expert evidence, that he wasn’t asked any questions as to why his statements didn’t comply with the requirements of expert evidence, that no one asked if he had prepared his evidence compliantly with expert duties, that this makes clear that the muddle on the part of prosecutors as to what sort of witness he was continued into his giving oral evidence.
Sir, I want to be clear at the outset of this submission that it focuses, in part, upon the failure of Post Office to instruct Mr Jenkins as an expert because the key allegation that he has always faced is that, as an expert witness, he breached expert duties by not providing disclosure of bugs, errors and defects. The fact that Mr Jenkins was not instructed as an expert is critically important because the evidence that he gave and how he provided it, was a product of the approach which Post Office took to him and, specifically, the communications which Post Office had with him as to what his evidence was to address.
The Inquiry’s evidence has proved the negative: that he wasn’t instructed as an expert in any case and so the allegations against him have shifted to generalised allegations and insinuation that he lied or was party to presenting the veneer of Horizon as though it was infallible.
There are two fundamental obstacles to this characterisation of Mr Jenkins. First, that he provided the sort of information that he is accused of withholding, notwithstanding the way he was communicated with and used by prosecutors. Indeed, Mr Jenkins openly adverted to information which it has been submitted in this Inquiry there was a campaign to keep secret.
For example, Mr Jenkins told Professor McLachlan and the prosecution in Mrs Misra’s case about the Known Error Log and told them that there were 200,000 faults in the live and test system on Horizon. This material was known to the defence because Mr Jenkins told them.
In his 2012 statement in the Wylie case, Mr Jenkins confirmed Fujitsu’s ability to use remote access. This was the first public confirmation of the position. This statement was regarded in 2015 by Post Office and Mr Parsons of Womble Bond Dickinson as going significantly beyond that which Post Office had ever confirmed about remote access. Mr Parsons described that it would be a “red rag” to Second Sight.
The second obstacle is that Mr Jenkins never sought to convey Horizon as infallible, rather, for example, he advocated an approach of obtaining the data for a given branch in order to see what may have happened.
The assessment of Mr Jenkins does not lie in generalisations. It lies in the reconstruction of how he was approached by Post Office lawyers, what evidence he was asked to provide and how he responded. It lies in the assessment of the information he did provide to Post Office prosecutors and how they treated it, and why some of that information never came to be recorded on any disclosure schedule.
Sir, he did not lie. He sought to answer the questions that Post Office lawyers asked him to address. He was demonstrably not part of any approach which sought to perpetuate Horizon as infallible.
Sir, my learned friends yesterday focused on events after the Clarke Advice and the allegations of cover-up about it. There is a very obvious irony that it was Mr Jenkins’ openness with Second Sight and his provision of information about bugs to Second Sight that meant he became subject to allegations of non-disclosure.
Mr Henderson of Second Sight contemporaneously described Mr Jenkins as having been straight as a die. When he was asked about this observation in his evidence, Mr Henderson explained:
“He wasn’t being evasive. He was happy to help. He was answering my questions. He provided promptly with follow-up material that I requested. I mean, there was no hesitation in his willingness to answer our questions and to provide assistance.
“So he was willing to discuss remote access when Post Office was not?
“Yes.”
Mr Henderson also explained:
“I saw him as a technical expert and that he approached things from a technology perspective, almost exclusively. He didn’t strike me as a company person or feeling that he had to stick to a particular party line in terms of supporting Fujitsu. He was dealing with things at a technical level as a technical expert and I find that rather refreshing.
“Was he taking the defensive position that Post Office was, which you describe in your statement?
“No.”
Sir, these points are not just important to demonstrate that Mr Jenkins had provided Post Office with information relevant to the operation of Horizon, but that there was clearly no design, no strategy on his part to withhold information. To the contrary, that he provided guilelessly in the course of criminal cases the sort of information that Post Office was claiming to have been unaware of.
Indeed, sir, it might have been thought that Mr Jenkins’ willingness to provide information to Second Sight was another good reason to speak to him in 2013, to investigate the circumstances in which he had given evidence.
So we respectfully agree with those representing the Hudgell and the Hodge Jones & Allen Core Participants, that there ought to have been an examination in 2013 of the circumstances in which Post Office had used Mr Jenkins. For, had that happened, it would have demonstrated Cartwright King’s involvement in obtaining the very witness statements which Mr Clarke was considering in his advice, an involvement which Mr Atkinson, King’s Counsel, has been so critical of in this Inquiry.
It would have demonstrated Cartwright King’s failure to instruct Mr Jenkins as an expert and perhaps, sir, most important of all, it may have revealed or begun to reveal the sorts of prosecutorial incompetence that Post Office’s use of Mr Jenkins demonstrates, and which has only been revealed here in this Inquiry.
About this Inquiry, sir. I pause at this point to reflect on Mr Moloney, King’s Counsel’s, observation about the witnesses who have come before this Inquiry and have been amnesiac until they have remembered things that have been helpful to them.
Sir, Mr Jenkins was not that sort of witness. He came and gave evidence before you for four days. He answered all questions, despite the position he was in, and he demonstrated himself to be incapable of putting a self-serving gloss upon his evidence. He stands in stark contrast to many of those who have given evidence before you.
Before addressing some specifics, I wanted to make three observations, if I may, three overarching observations. The first is this: that Mr Jenkins was an engineer in a legal world. Mr Jenkins was a computer engineer to the core. He had been one for over 30 years, before being asked by Mr Pinder of the Fujitsu Legal Support Team to help in Mr Thomas’ case. He had no legal training whatsoever, no training about being an expert witness. He was involved in designing parts of Horizon and, as part of his role as fourth line support, in identifying the root causes of problems which arose in Horizon.
He had been schooled by these decades of computer engineering to think in terms of system and logic and problem solving. As Mr Henderson said, this was a sort of exclusively technological perspective. He was at a very considerable, if not total, remove from the type of expert usually called in criminal proceedings.
It’s not simply that he wasn’t a professional expert witness, that he wasn’t giving evidence in a recognised field of expertise, that he wasn’t a member of an expert institute, that he wasn’t involved in research or bore any of the hallmarks of a professional expert, but that he was being called upon to give an opinion on the very computer system he’d spent so many years working on and continued to do so.
Some of my learned friends’ submissions proceed as though Mr Jenkins was appearing as a witness on a near consistent basis. For example, my learned friends Mr Moloney and Ms Patrick’s written submissions suggest that, time and time again, Mr Jenkins was reading expert reports or meeting with experts or signing joint reports.
Mr Jenkins was, at all times, a full-time and busy engineer on Horizon. His involvement in cases was sporadic and the nature of that involvement varied greatly. As the Inquiry has seen, his involvement in Mr Thomas’ case in 2006 was limited to the issue of zero transactions. He didn’t encounter a defence expert until his involvement in Mrs Misra’s case in 2010, which I’ll come back to in detail. But this was the high point of his involvement in any of the Post Office’s criminal cases and the only one in which he gave evidence.
In that case, Mr Jenkins and Professor McLachlan made a short joint statement but, conspicuously, it did not have an expert declaration on it. Mr Jenkins didn’t agree a document again with a defence expert until 2013, in Mr Ishaq’s case, and again, here, it’s conspicuous that this document was Ms Ibbotson’s report with some of Mr Jenkins’ narrative added. The expert declaration was Ms Ibbotson’s alone. Indeed, the document was not signed by Mr Jenkins.
After Mrs Misra’s case, Mr Jenkins only made a statement in one other case until the 2012 generic statement. The nature of the generic statement and Mr Jenkins’ subsequent involvement in the 2012 and 2013 cases was very different again to Mrs Misra’s case.
Sir, quite simply, the broad language of “time and time again” is not borne out by consideration of the detail. Rather, Mr Jenkins was an engineer navigating from time to time a legal world he was unequipped and untrained for, which alone would be concerning before considering Post Office’s purported use of him as an expert.
He was entitled to trust the lawyers that he was dealing with and to trust that they were competent and acting lawfully, indeed people like Mr Singh, who had the Post Office endorsement of being a senior lawyer, or the Head of Criminal Law. Mr Jenkins didn’t have the framework to know that what any of these lawyers were saying or doing was wrong or to challenge them. It’s important to emphasise, sir, that, in Mr Jenkins’ case, every single lawyer and investigator with whom he dealt was incompetent or acted in ways that was inconsistent with their duties.
Sir, you need only think of the case studies before you to see this. Mr Ward and Ms Matthews in Mr Thomas’ case; Mr Singh in Mrs Misra’s case; Mr Singh in relation to the generic statement; and then Mr Bowyer, Mr Smith and Mr Bolc, and the very junior paralegal, Ms Panter, in the 2012 and 2013 cases.
As Mr Smith of Cartwright King observed:
“Quite why Cartwright King thought it was appropriate to take on prosecution work, really, with hindsight, I’ve no idea because we certainly didn’t have the training for it and I was unaware of the duties on a prosecutor in relation to the instruction of an expert witness.”
Sir, the second overarching point: Mr Jenkins was never instructed as an expert. Sir, Mr Beer, King’s Counsel, asked Mr Atkinson, King’s Counsel, this:
“If it’s right that the Post Office or its agents, Cartwright King, later did not provide Mr Jenkins with written instructions that conformed to the requirements we’ve mentioned, didn’t provide Mr Jenkins with instructions as to his duties as an expert and none of the statements included the necessary elements that we’ve identified, would you be able to draw an overall conclusion that there was a fundamental failure to instruct Mr Jenkins as an expert?”
To which Mr Atkinson replied:
“Clearly, that’s ultimately a conclusion for others than me, but certainly, it’s not a conclusion from which I would dissent at all.
“With the limitation you have included, was it a persistent failure?
“Yes.”
Sir, the evidence overwhelmingly demonstrates that Post Office did not provide Mr Jenkins with written instructions that conformed to the requirements of instructions for expert evidence. Written communications with him didn’t even approximate expert instructions.
The evidence goes much further. The failures were not simply those of omission; they were failures of commission. Lawyers misstated to Mr Jenkins what his role was or what the evidence was he was to give. Post Office didn’t provide Mr Jenkins with instructions as to his duties as an expert. There isn’t a single document before this Inquiry in which Post Office provided Mr Jenkins with these instructions. Every single lawyer who has appeared before you conceded that they had not Mr Jenkins as to expert duties and, sir, I include Mr Warwick Tatford in that for reasons which I will return to. So sir, none of the statements included the necessary inclusions to make it admissible as expert evidence.
Sir, the third overarching point: the fact that Mr Jenkins was never instructed as an expert cannot be treated as irrelevant.
Sir, this third point can be made shortly: it is impossible to treat as irrelevant that Mr Jenkins was not instructed as an expert. In other words, to take an approach to Mr Jenkins which accepts that he was not instructed as an expert but which proceeds on the basis that this does not matter and that his evidence in criminal proceedings can be looked at in isolation from the manner of his instruction or how he was used by Post Office. That would not be a sustainable forensic exercise and would be unfair for these reasons: first and fundamentally, Mr Jenkins was not being treated as a witness of fact. He was being asked questions to undertake work to respond to expert reports in Mrs Misra’s case and to provide opinions. In short, he was being asked to provide evidence and being put in a position that no witness of fact would be put in.
As stated already, the evidence that he gave and how he gave it was a product of Post Office’s approach to him and, specifically, the product of communications with Post Office had with him about what his evidence was to address. It was impossible to disentangle these from each other and it applies to every single case study.
Third, it would also overlook that the evidence that Mr Jenkins gave was in the context of a series of grossly defective communications which misrepresented his role and the sort of evidence that he was to give. Again, this was a feature of every single case study.
Far from prosecutors sending the message that Mr Jenkins was to be treated as independent or, for example, his evidence as independent, they informed him, for example, “You are our Horizon expert. You’re an expert for Fujitsu”, that he rebut and disprove or discredit what the defence were alleging, that he preserve the Horizon system.
These are just examples of what lawyers told Mr Jenkins that his role was and yet, despite that, Mr Jenkins provided precisely the sort of information to Post Office that he is being accused of having withheld.
This was an approach in 2012 on the part of both Mr Singh and the Cartwright King lawyers which Mr Atkinson, King’s Counsel, described as “woefully inadequate” or the antithesis of how an expert should have been instructed.
Fourth, Mr Jenkins was also, in his purported capacity as an expert, being asked to undertake functions which were those of the prosecutor and which he should not have been asked to do. I will deal with disclosure as a separate topic but, for example, you know, sir, that he was sent the Defence Case Statement in Mrs Misra’s case and, in Mr Ishaq’s case, asked to comment on it. That should never have happened. It is the prosecutor who is charged with the statutory obligation of considering disclosure in light of a Defence Case Statement; it is not the duty of a witness. You might think, sir, that that was just another example of Post Office delegating to a witness functions that were its.
Fifth, the unfairness of this approach, that is of treating it as irrelevant that Mr Jenkins was not instructed as an expert, is that it would hold Mr Jenkins to the standards and duties of an expert witness when he was a layperson, uninstructed and uneducated in those standards and duties.
Sixth, this approach would negate the importance attached to the duties on lawyers when they instruct an expert to ensure that they understand the content of expert duties.
Sir, that is all by way of introduction, and I wanted, if I may, to deal with some specific points. But before I do, sir, to thank the Inquiry and particularly all of those whose very hard work has enabled a forensic reconstruction of how number of the case studies were prosecuted. It’s only by that process that it’s been possible to demonstrate that Post Office failures in relation to Mr Jenkins were part of a much broader canvas of prosecutorial failure.
Of these failures, the most significant which relate to Post Office’s use of Mr Jenkins is its failure to understand that the Criminal Procedure and Investigations Act applied to it as a holder of material relevant to its prosecutorial function.
In other words, sir, that Post Office elected to prosecute at scale without ever having understood that it had a statutory obligation to ensure that information it held about the operation of Horizon was retained and recorded, and potentially revealed for the purposes of the CPIA.
The second is Post Office’s failures to make properly considered and properly formulated third-party disclosure applications to Fujitsu.
The third significant failure is that investigators and prosecutors consistently did not discharge their statutory obligations under the CPIA in individual cases. In other words, that information or material that fell to be included on unused schedules was not recorded on, them, and was not disclosed to the defence.
This was a feature of every single case study in which Mr Jenkins featured. Had that happened, had drafts of his witness statements or communications with him been listed on the unused schedule, then the picture would be a profoundly different one.
The fourth, sir, is the failure on the part of every Post Office investigator, lawyer and external lawyer in the case studies, in which Mr Jenkins featured, to discharge the obligations on a prosecutor where they seek to rely on expert evidence.
Returning to Mr Jenkins and setting him against this canvas. Well, despite his being a Fujitsu engineer, despite his lack of experience, all of that, there was no recognition on the part of any lawyer that this made it imperative that, if he was going to be relied upon as an expert, that, first, he was actually instructed as one; second, that he understood that his evidence had to be independent, that he was providing evidence to the court, not on behalf of Fujitsu or Post Office; that this made him subject to the special expert duties. What those duties were and how they applied to him and, in particular, how the duty of disclosure might apply to him and how he might go about discharging that duty.
As Mr Atkinson put it:
“Even with the professional expert witness, even if you are singing to the choir, a prosecutor instructing an expert should ensure that they understand these duties to which they are subject.”
It is just extraordinary that no lawyer ever saw any need to circumstances with Mr Jenkins the very distinct and unusual position that he was being put into.
The instruction of an expert is usually a carefully considered step in litigation, not undertaken lightly. The discipline of drafting a letter of instruction means that proper consideration is given to what the expert is being asked to address. This isn’t advanced lawyering, this is the material of everyday work.
In 2005 and 2006, the subject of expert evidence had been an intense focus on the part of the Court of Appeal. Criminal lawyers had been reminded that the Ikarian Reefer applied to criminal litigation. This in turn had been reflected in the Criminal Procedure Rules and, in March 2006, the CPS produced its own guidance specific to how experts were to discharge the duties of disclosure when they were instructed by the CPS, and that guidance, pithy though it is, encapsulated core concepts: concepts like recording, revealing and retaining; it explained what unused material was; it explained the requirement that the expert retain everything that they generated in the course of their work, for example explanations that they had been provided with.
The CPS discharged its obligations to ensure that the expert understood this by requiring them to sign a declaration of understanding. Sir, if Post Office was going to use powers of private prosecution against subpostmasters, to do so routinely and knowing that it put them at risk of conviction, of imprisonment, of financial loss, why wasn’t Post Office or its prosecutors abiding by Court of Appeal judgments, by the Criminal Procedure Rules, or promulgating this sort of guidance? What does that say about the culture and ethos of the organisation and the lawyers within it, that they saw no need to apply this law to their prosecutions?
This may go to a point I understand my learned friend Mr Moloney to make: that it is suggestive of some sort of sense of exceptionalism. But whatever you might conclude, sir, Post Office just didn’t have this kind of guidance. In fact, a series of investigators and lawyers lined up to tell you that they did not know about the duties on them when they instructed an expert.
Sir, I am going to deal, if I may swiftly, with some matters of chronology.
Sir, first of all, as regards – and I start in 2005, sorry, I should have said, with Mr Castleton’s case, and about the 2005 Bond Pearce letter. You’ll recall, sir, that this was a letter addressed to Fujitsu in November 2005 and related to Mr Castleton’s proceedings. Time doesn’t permit me to deal with that at any length but I notice that none of the Core Participants have sought to seriously contend that this letter put Mr Jenkins on notice that expert duties applied to him, still less that it would have meant that he understood the content of expert duties, how they applied to him and that he would have carried this knowledge with him in the years to come.
It is dealt with in the written submissions on his behalf but the fact alone that it was sent to Mr Jenkins when it was not in contemplation that he would be a witness may be the best indicator that it wouldn’t have seemed terribly significant to him at the time.
Sir, of course, in the Castleton litigation, it was decided that Mr Jenkins would be a witness of fact, and on that basis, Mr Dilley prepared a statement for him. Mr Jenkins refused to agree to making this statement, that there were no grounds for believing that the problems that Mr Castleton said he experienced with his computer would have caused either theoretical or real losses. As Mr Jenkins noted on the statement, this was not something he felt able to agree with, without looking more closely at what had gone on.
Sir, this is a complete answer to the allegation made by my learned friends Mr Moloney and Ms Patrick in their written submissions: that Mr Jenkins had been a party in Mr Castleton’s case to Mr Pinder’s obvious attempt to remove ambiguity or nuance from Fujitsu’s message in that case, that the problem was not theirs but the SPMs, or to avoid a close examination of the data. It was exactly that, a close examination of the data, which Mr Jenkins was advocating was needed in Mr Castleton’s case.
Sir, we have dealt with Mr Jenkins’ willingness to use the term “system failure” in Mr Thomas’ case and that the opposition to it was entirely that of Mr Ward, in written submissions, so I won’t expand on that orally. But, sir, I did wish, through Mr Thomas’ case, to make some submissions on the issue of the boilerplate paragraphs.
Sir, we invite the Inquiry to consider with care any claim that it was understood by Post Office lawyers or investigators that the boilerplate paragraphs were attesting to the integrity of the Horizon system. These paragraphs were a standard part of every statement made by Ms Lowther and Ms Thomas when they produced the ARQ data. Ms Lowther and Ms Thomas were not technicians. The idea that, by producing this ARQ data, which is understood would normally have been for limited periods, they would have understood themselves to be attesting to the integrity of the entire system seems far fetched.
So the Inquiry did not hear from Ms Lowther and Ms Thomas, so it has no direct evidence from them as to what they understood the boilerplate passages to mean and, in respect of Ms Thomas, this is particularly significant, given that she wrote the Litigation Support manuals in force at important times.
However, the evidence strongly suggests that these apology plate passages related to their production of the ARQ data. Indeed, it’s respectfully submitted, sir, this must be correct. First, for the reason just alluded to: that neither of them could possibly speak to the overall integrity of the system, and sir, I use that term cognisant of the fact that it’s not a term of art and it doesn’t have a statutory meaning.
Ms Thomas and Ms Lowther could, however, speak to the process by which they had extracted the ARQ data. The standard statements producing the data set out the processes which resulted in the data being stored in the audit server and the processes, by which the ARQ data was produced. In other words, the substantive content of the statement was consistent with the ability of them to attest to the production of the ARQ data.
The Fujitsu manuals provided for a detailed, process-driven mechanism by which the ARQ data was to be produced. The manuals did not provide at all for any other process, which needed to be gone through in order to make the boilerplate statements. It’s unthinkable that guidance intended to regulate the making of the statement for producing ARQ data would make detailed provision for that but not provide any guidance to non-technicians as to how they were supposed to attest to the overall working of the Horizon system.
You may not have heard from her but you do know that Ms Thomas’ line manager, Ms Munro’s, understanding, in her words, about the boilerplate paragraphs, was that they were in regards to the audit workstations where they retrieved the data from, rather than the integrity of the Horizon system itself, how they pulled the data off, rather than the Horizon system.
This was something that Mr Lenton, heavily involved in the civil proceedings, also said:
“My understanding is that it’s referring to the audit retrieval system.
“You didn’t understand it to be a generalised comment about the integrity of the system?
“No.”
Finally, Duncan Atkinson, King’s Counsel, agreed that the meaning of the boilerplate paragraphs was not altogether clear, at least open to interpretation Sir, if Mr Duncan Atkinson considers that they are open to interpretation it should give real pause before the conclusion that they are only capable of one meaning is arrived at.
Returning to Mr Jenkins, the boilerplate paragraphs were in the draft statement that Ms Lowther prepared for him in Thomas. As he explained in his Inquiry statement, having queried how he could include these paragraphs when he had only been provided with the spreadsheets of the zero transactions, he believes that he would have spoken to Ms Lowther and Ms Thomas about them. He sought to explain in his oral evidence what he thought these paragraphs meant in his statement in Mr Thomas’ case, and he did explain that he thought the paragraphs related to the computers involved in the production of that, so not just the typing up, but actually the extraction of the ARQ data as well.
Sir, asides the point in Mr Thomas’ case that he was only commenting on the zero transactions, Mr Jenkins was emphatic that he would not have described the Horizon system as a “computer”. It simply wouldn’t have made any sense to him.
Sir, I turn then to Mrs Misra’s case.
What emerged clearly from the evidence in Mrs Misra’s case was that Mr Jenkins was being asked to do three separate things: he was being asked to deal with Post Office’s disclosure obligations under the CPIA, but never actually told that; he was being asked to respond to Professor McLachlan’s report; and he was also being asked, in Mr Tatford’s words, to assist Professor McLachlan. Over time, those three things became conflated and confused.
For all of the reasons set out in our written submissions, insofar as Post Office sought to discharge its disclosure obligations through Mr Jenkins, this was an impermissible delegation of its statutory duties. But that aside, Post Office did not tell Mr Jenkins or Fujitsu that it was doing this. It didn’t explain to him or Fujitsu what its disclosure obligations were. It did not explain to him or to Fujitsu what might be potentially relevant.
Relatedly, prosecutors did not address the capacity in which they were using Mr Jenkins. Mr Tatford conceded this: neither he nor Mr Singh confronted what their reliance on Mr Jenkins amounted to. There was no point at which this crystallised in Mrs Misra’s case.
According to Mr Tatford, until Mr Jenkins came to provide his final statement, he was not being treated as an expert witness. This is what Mr Tatford called the “muddled thinking” about Mr Jenkins’ role, which, in his words:
“… tarnished the thought process throughout Mr Jenkins’ instruction, and I regret that. It was a mistake.”
In an important passage of his evidence, he went on to explain, when he was asked why none of the statements had the necessary content to be expert statements, he said that he thought that they should have been in all of the statements and that he thought this at the point at which the final statement was made.
He thought that the final statement should have complied properly with the CPR but it didn’t because there was only two days left before trial.
Of course, sir, that statement did omit the necessary content, and Mr Tatford’s explanation doesn’t make much sense when one has regard to the fact that he was able to make quite extensive comments on that draft statement and suggest that Mr Jenkins say – which Mr Jenkins said no to – that it was more likely that Mrs Misra had stolen the money than that the loss could be explained by computer error. Again, sir, you may reflect on what that says about Mr Jenkins.
Also important in this regard is his concession that, in seeking to change what Mr Jenkins said, that this was not consistent with the concept of Mr Jenkins as an expert evidence (sic).
Sir, you’ll have in mind what Mr Tatford finally said in his evidence: that he felt worse because it had been quite clear in the way that the evidence was properly put before him that there were many failings that he had ignored on his part, and:
“… perhaps created a rosier version in my memory that wasn’t really there.”
Sir, despite the series of defective communications with him, Mr Jenkins provided to Post Office the sort of information it purported to be seeking. Mr Jenkins provided information to prosecutors which was never explored. Neither Mr Singh nor Mr Tatford asked any questions when Mr Jenkins said he couldn’t give a clear answer to whether there were problems with Horizon. They never asked any questions about the locking problem which caused transactions to be lost, still less ensured that this was recorded on the unused schedule. Neither asked about the process about which Fujitsu checked NT events.
Mr Singh and Mr Tatford were well aware that Mr Jenkins didn’t know anything about the Callendar Square bug, but didn’t ask what records Fujitsu kept of previous issues that had affected accounts. It was Mr Jenkins who had to press and press in the face of resistance, that the ARQ data from Mrs Misra’s branch be obtained and that, for example, the full message store be provided to Professor McLachlan.
The argument that he sought to withhold information about bugs and problems in Horizon is wholly undermined by the fact that he informed Professor McLachlan about the Known Error Log and the 200,000 faults on the test and live system. Mr Jenkins also informed the prosecutors that Fujitsu might be able to provide Professor McLachlan with the information about the system changes sought in the disclosure request. By 18th August 2010, Mr Jenkins spoke to his colleagues within Fujitsu and told them what he thought this exercise would involve, including the collation of PEAKs and change proposals. In other words, Mr Jenkins put into motion the scoping exercise to provide Post Office with all of the PEAKs related to the issues which had required changes to be made to the counter.
This is precisely the sort of information which Mr Jenkins is being criticised for not having provided, yet it was there for the taking by Post Office, and the only reason why it wasn’t is because Post Office refused the defence requests for disclosure of that information in Mrs Misra’s case.
Sir, I’m going to deal, finally, with the receipts and payments mismatch bug, a bug that Mr Jenkins was accused by Post Office of not disclosing. As this Inquiry has uncovered, in fact Post Office lawyers were well aware of it and decided that it did not need to be disclosed in Mrs Misra’s case. The Court of Appeal was not told that.
Mr Jenkins was emphatic that, from his technical perspective, a bug that occurred in Horizon Online in 2010 had no logical connection with Mrs Misra’s case, that she experienced problems in Horizon in 2005 and 2006. His was the technician’s perspective. The Inquiry can now assess the position knowing that the issue wasn’t that Mr Jenkins concealed that bug from Post Office. Indeed, it was well known about and the options for remedying it within Post Office. It can assess the position known that those statutorily charged with making disclosure decisions elected not to disclose it.
The main point which appeared to be put by my learned friend Mr Henry, King’s Counsel, about the receipts and payments mismatch bug, in relation to Mrs Misra’s trial was that it wasn’t disclosed because it would have revealed the possibility of remote access.
Sir, that argument assumes that Mr Jenkins would have thought that the fact that there was remote access into Horizon meant that cases couldn’t be prosecuted or that revealing the fact of remote access would have had a significant impact upon prosecutions.
There is no evidence that Mr Jenkins ever thought this. Indeed, the fact that he made the statement in the Wylie case in 2012, confirming that there was remote access is to entirely opposite effect.
There is no evidence that he knew that remote access was ever done in a way so that the SSC left no trace of it in the audit trail. Mr Jenkins was sent a single email by Mrs Chambers in 2006 when she mentioned access at the counter. There’s no reply from him and he’s not mentioned in the subsequent PEAK, but there’s nothing in that email to suggest that access at the counter meant that the SSC obtained access and changed data but didn’t leave any trace of that in the audit trail.
In his paper, in the R&P mismatch bug, Mr Jenkins set out a proposal for the correction of the data at each branch and said:
“We need to agree a timetable with Post Office to correct the other branches and ensure that this is communicated with the branches to ensure that everyone is happy.”
Put shortly, Mr Jenkins foresaw a process of correcting the bug as one which entailed the consent of both the Post Office and the affected SPMs. His note did not refer to any ongoing prosecutions, still less any concerns about them.
Sir, I turn briefly then to 2012. Sir, there is no doubt that the generic statement conceived by Mr Bowyer of Cartwright King was part of a response to the commission of the Second Sight review and that it was poorly conceived. Mr Atkinson regarded the approach taken – in other words to formulate a general statement which could be served in any case in which Horizon was raised – as inconsistent with the duties of a prosecutor because, fundamentally, it meant that prosecutions were not being considered on a case-by-case basis.
Mr Bowyer formulated the four questions that Mr Jenkins was to answer. In order to answer these questions, Mr Jenkins was sent the Helen Rose Report and spreadsheet, in other words information that Post Office had gathered about cases it had prosecuted in which Horizon issues had been raised. It is wholly unclear why anyone thought that Mr Jenkins should be providing evidence about matters which were wholly within the provenance of Post Office, and unconnected with him. Again, you might think another attempt to delegate to him matters for which Post Office was responsible.
In terms of the email that Mr Singh sent Mr Jenkins, instructing him, so to speak, well, sir, that’s the email that you’ve already heard described as the antithesis of how any expert should be approached.
Mr Jenkins provided his answers to the questions by way of a technical Fujitsu report and sought the input of others. However, they and he clearly understood that it was to be expressed at quite a high level, reflected in its content. Mr Jenkins provided the overview sought as to how the Horizon system worked. He explained that he had no knowledge of 21 of the cases that Ms Rose referred to.
That report was in turn turned into the witness statement and subject to editing by Post Office and Cartwright King lawyers. In particular, the part of the report that explained that Mr Jenkins didn’t know about the vast majority of cases that Ms Rose alluded to was taken out.
Consistent with Mr Jenkins’s report, the statement continued to explain the Horizon system at a high level. It explained the challenges to Horizon that Mr Jenkins himself was familiar with. The evidence does demonstrate that Mr Jenkins wasn’t clear about the use to which it was going to be put. Ms Jennings’ contemporaneous email of 19 October 2012 said that she had put the statement into a Section 9 format, and that she’d been in contact with Mr Jenkins, and that he didn’t know that it related to a specific case, and that he wasn’t aware that he would be required in court.
It was after this point that Mr Jenkins was contacted by Ms Panter and told that she intended to use his statement. It was in that email that she told Mr Jenkins:
“It doesn’t matter that you haven’t mentioned a specific case in your report because there haven’t been any specific criticisms raised by any of the defendants provided in my list of cases.”
It’s important to be clear, sir, that what Mr Jenkins was being told by the prosecutors was that his generic statement would be used in cases in which no specific criticism of Horizon had been made.
Those representing the Hudgells Core Participants submit that the generic statement itself demonstrates that Mr Jenkins’s position was always to start with a set view of likely evidence but this isn’t correct, because the evidence in the Allen, Sefton and Nield and Ishaq cases show that Mr Jenkins made clear when Post Office were proposing using the generic statement, having been told that no specific criticism was made, that he pressed that ARQ data could be obtained for those branches and what it might show.
In Mr Allen’s case, he made clear to Mr Bolc that the ARQ data could demonstrate exactly what had happened. Mr Bolc understood that. He communicated to Mr Bradshaw:
“Gareth tells me that it is in fact possible for him to retrieve the actual data to see what actually occurred in the branch.”
But Mr Bolc said no to obtaining that data and, similarly in the cases of Ms Sefton and Ms Nield, Mr Jenkins suggested the issues that could be looked into but, again, Mr Bolc rejected obtaining the audit data.
In summary in these cases, despite being told that they did not raise Horizon issues, Mr Jenkins went on to explain what the ARQ data could be used for, and Mr Atkinson observed of this that what Mr Jenkins was offering to undertake would have been more in line with Post Office’s duties as a prosecutor, both in terms of reasonable lines of inquiry and disclosure, and that their refusal to do this was clearly a missed opportunity for which little justification was offered.
Sir, I don’t have time to deal with the disaster that was the prosecution of Mr Ishaq but it says everything about how Cartwright King conducted prosecutions. It suffices for my part to remind you today that Mr Jenkins was asked to turn up on the first day of that trial in order to deal with a defence expert, in circumstances where he had seen no defence expert report and hadn’t even been provided with any of the materials that the defence expert had. He spent the first day and night of the trial trying to ascertain the extent to which he agreed with Ms Ibbotson’s analysis as to how the loss figure had been calculated.
Sir, I remind you again of what Mr Atkinson KC said about this in his usual understated terms:
“Well, it’s moderately remarkable to expect any Witness, but certainly an expert witness, to deal with complex issues and to try to narrow down those complex issues with another expert, not knowing what the expert said, not knowing what material they had seen, not being able to check either anything that they had said or that they have seen. I can’t quite think how anyone thought that was a good idea.”
Sir, it’s very hard to see how Mr Jenkins could be responsible for what happened in the Ibbotson case. He came to court and he did his best to deal with the situation that confronted him.
Sir, may I end by saying this – and, sir, you’re probably smiling at me because you know that my hour is about up.
Sir Wyn Williams: I have a very reliable time piece here, Ms Dobbin.
Ms Dobbin: Maybe your reliable timekeeper will be slightly less reliable –
Sir Wyn Williams: I’ll allow you a conclusion –
Ms Dobbin: – for a couple of minutes.
Sir Wyn Williams: Don’t let’s lose time for you.
Ms Dobbin: Of course. Sir, a public inquiry isn’t a trial. The rules don’t require allegations to be put to witnesses. It’s not unusual for different theories to be put to witnesses or even inconsistent cases to be put to witnesses by different Core Participants.
But, in respect of Mr Jenkins, if the allegation is that he failed to disclose bugs or was part of an effort to convey Horizon as infallible, or that he sought to conceal that there was information available that would reveal problems in Horizon, or to conceal that there were investigations that could be carried out at a branch to investigate what may have happened, then those points are, in my respectful submission, unsustainable, having regard to his consistent approach.
Starting in March 2006 with his being entirely happy to use the language of “system error” in his statement in Mr Thomas’ case, his genuine lack of understanding as to why Mr Ward had any problem with the use of those words, it’s demonstrated by his providing an explanation of the PEAK system in his draft statement in Mr Thomas’ case, explaining quite openly:
“Fujitsu have a fault management system called the PEAK system which is used for passing faults around the team and tracking faults raised regarding the Post Office Account.”
It’s demonstrated by, in May 2006, his unwillingness to sign up to the language of Mr Dilley in Mr Castleton’s case, unless there had been an examination of the data.
It’s demonstrated in February 2010 by his absolute insistence in Mrs Misra’s case that the branch data be obtained so that he and Professor McLachlan could examine it, in the face of POL resistance that had been going on for months by that point.
It’s demonstrated again in February 2010 by his immediate answer in Mrs Misra’s case of whether there are known problems, that, yes, he could not make a clear statement because transactions could be lost due to locking issues.
It’s demonstrated in March 2010 by his suggestions at the end of his statement on 9 March about other aspects of the data that could be looked at in Mrs Misra’s case.
It’s demonstrated in July 2010 by the information which Mr Jenkins gave to Professor McLachlan and which led directly to the defence requests for the disclosure of the Known Error Log, the system change requests, the new release documentation, again by his guileless reference to the fact that there were 200,000 faults in the Horizon system.
It’s demonstrated in August 2010 by the fact that Mr Jenkins was willing to undertake and set in motion an assessment of what he thought could be provided to the defence, including every counter release applied to the live estate in the last seven years, a list of the PEAKs, the change proposals that had been addressed in that period. Again, I remind you, sir, it was Post Office who refused to disclose that.
It is demonstrated in October 2010 by his provision of the PEAK in the Callendar Square case to Professor McLachlan.
It’s demonstrated again in October 2010 by his objections to the changes that Mr Tatford had proposed to his witness statement, including that he refused to give an opinion to the effect that it was more likely that Mrs Misra had stolen money than the loss being explained by a computer error.
It is demonstrated again by the evidence he gave at Mrs Misra’s trial which was modest and which made clear its limits. It included his acceptance that there could be Horizon issues that he didn’t know about that could have affected Mrs Misra’s branch, given that he hadn’t known about Callendar Square.
His caveated response to the question whether he had seen the slightest symptomatic of a computer fault at West Byfleet, his answer: “I’ve been doing the sort of high level rough analysis of this stuff.”
His concession that he had no way of knowing whether money was lost due to theft and that he could not say that any money had been lost in Mrs Misra’s case.
It’s demonstrated in September 2012 by his mindset and approach towards Second Sight and openly discussing bugs in Horizon and remote access with them.
It’s demonstrated by what he said in the statement in Ms Wylie’s case.
It’s demonstrated by his approach in October 2012 and February 2013 by his attempts to explain that there was ARQ data that he was willing to examine and which might show what had happened at the branches in question.
Sir, Mr Jenkins was an engineer in a legal world. He was navigating it without essential tools that he ought to have been provided with by Post Office and by Fujitsu. Despite that and despite the obstacles put in his path by lawyers, he took an honest technician’s approach: providing the information that Post Office purported to want. The issue was not the lone expert. It was Post Office and its lawyers.
Sir Wyn Williams: Thank you.
Ms Dobbin: Sir, thank you.
Sir Wyn Williams: We’ll start again at 2.15 – no, 2.20. No, I think 2.15 is okay.
2.15 for Mr Chapman.
(2.06 pm)
(A short break)
(2.17 pm)
Sir Wyn Williams: Mr Chapman.
Closing submissions by Mr Chapman
Mr Chapman: Sir, I make this closing statement on behalf of the Department for Business and Trade.
The Stenographer: Your microphone is not on.
Mr Beer: Sir, might I suggest that Mr Chapman swaps seats and comes forward to the seat that Mr Moloney normally occupies?
Sir Wyn Williams: Far be it from me to think that Mr Henry has deliberately muted him!
Mr Stein: Ms Pepper, can you confirm this one is working? This one is?
Mr Chapman: Right? Is that better? Yes. Right, trying again.
Sir, I make this closing statement on behalf of the Department for Business and Trade. As the Department has stated on many occasions in the course of this Inquiry, in Parliament and elsewhere, the Horizon scandal is truly appalling. No one in this room needs reminding of the devastation to so many good people’s lives, the trashed reputations, the financial ruin, the dreams unrealised, the chances lost, the families and communities weakened and divided and, of course, innocent and good people thrown in jail and, in those especially tragic cases, driven to suicide.
The Post Office itself bears principal responsibility for this scandal but it did not act alone. Indeed, as a corporate body, the Post Office was a manifestation of its people and the culture that they inculpated and embodied. It acted in the despicable way that it did because of the choices of those people, individually and collectively.
This scandal involves a cast of characters from inside and outside the Post Office, including, but by no means limited to, the Post Office Board and Executives, staff in its Branch Support, Communications, IT and Security Investigation Teams, employees of Fujitsu, the NFSP leadership, Central Government and its agencies and, perhaps most invidiously and reprehensibly of all, lawyers.
All contributed in their own way to this scandal, for the Horizon scandal is not merely about hopelessly buggy IT software, unchecked backdoors, poor quality hardware, superficial training and a helpline that provide anything but help. Those were certainly causes but they were not the only causes, for the Horizon scandal is also a story of false assurances; of a culture of secrecy, of spin doctors; of untruths and half-truths repeated as mantra to Board members, officials, ministers, MPs and the Great British public, of institutional and individual arrogance, incompetence, dishonesty and cover-up; of misleading official advice; of false testimony; of disclosure failures; of bad lawyers.
Most of all, perhaps, it’s a story which has its origins in Post Office’s corporate attitude of contempt for the very people who were the face and the heart of the institution.
The Department does not attempt to shirk its share of responsibility for the mistakes which allowed this scandal to happen. As the Post Office’s sole shareholder, the Department recognises that it is ultimately accountable for the actions perpetrated by the Post Office. The simple and inescapable truth is that it failed to prevent this scandal from happening. And the Department is responsible for the system of oversight over the Post Office which was in place. For reasons which have been thoroughly explored by the Inquiry, and which I’ll go on to address, that system failed to provide adequate scrutiny and challenge in relation to Horizon and, ultimately, it failed to escalate and expose the right information to the right people in Government.
The Shareholder Executive, ShEx, was, until 2016, a Directorate within the Department itself and, therefore, the Department must accept direct responsibility for ShEx’s failures, whether structural or individual.
The fact that ShEx’s functions were assumed by UKGI in 2016 does not absolve the Department of responsibility for mistakes after that point. The Department recognises that it retained ultimate responsibility for overseeing the Post Office, and that it was ultimately responsible and accountable for the arrangements in place for doing so. That the Department delegated its responsibilities to UKGI, which acted essentially as its adviser and agent, does not change that fact.
Similarly, the Department recognises that a focus on the organisational niceties within Government may give the appearance of shabby internal buck passing. It’s essential, of course, for the Inquiry to consider carefully the organisational mechanics that allowed this scandal to happen so that the right lessons can be learned for the future. However, as the only Central Government Department with Core Participant status in this Inquiry, the Department wishes me to state clearly and unequivocally that wherever within this organisational structure the finger of blame may point, be that the Post Office, ShEx, UKGI or the Department itself, the Government accepts ultimate responsibility.
The Department has offered its sincere apologies for its role in this dreadful scandal. Whilst its recognition of these failures cannot change nor atone for the devastation inflicted on postmasters and their families, the Department hopes that its and the Government’s genuine commitment to learning the lessons of this tragedy will go a long way to preventing its recurrence in future.
The eight issues that I intend to address in this closing statement are, in turn: procurement development and rollout of the Horizon IT system; the organisational structures for management, governance, oversight and accountability; breaches of trust and the duty of candour; the culture of the Post Office; ShEx and UKGI’s two-hatted role and the perception of conflict; the broader legal and regulatory ecosystem; redress and cultural transformation.
I turn first and relatively briefly to the birth of Horizon, its procurement, development and rollout.
As you’ll remember, sir, several departmental and other Central Government witnesses gave written and oral evidence to the Inquiry during Phase 2 and the Department provided a detailed written closing statement at the end of that phase of the Inquiry.
From the Department’s perspective, the main headlines to emerge from that evidence were as follows: first, during the 1990s it was almost universally recognised and accepted that the development of an integrated electronic point of sale and accounting system was absolutely necessary to preserve the Post Office Network and the livelihoods of postmasters. The underlying aims and objectives of the Horizon project were readily understandable and indeed laudable. But there were serious problems from the outset in the way in which the Horizon project was organised, in large measures from failing to agree on specifications at an early enough strange. The three-way contractual relationship led to predictable difficulties with each of the contracting parties, the Post Office, the Benefits Agency and ICL Fujitsu, having different and not easily reconcilable ambitions for the system.
As Sir Adrian Montague explained when giving evidence to the Inquiry:
“The PFI contractual relationship was a poor fit for any IT procurement, especially one of this scale and complexity, and really required much more detail and specificity than was in the Horizon contract. And the fact that the requirements for Horizon changed materially during the development phase, the biggest example being the cancellation of the Benefit Payments Card functionality, was symptomatic and undermined the smooth running and delivery of the project from early on.”
But none of this meant that Horizon was irredeemable. As the expert reports commissioned by the Government at the time made clear, the project remained, to quote, “technically viable”. Sir Adrian Montague explained that this meant it was possible to develop the system so it met the specification at the point it was to be rolled out and, as Lord Mandelson stated in evidence:
“The alternative to progressing with Horizon was very unclear, technically and financially and it was accepted that cancellation would have been a significant setback to the modernisation of the Post Office.”
So, armed with this knowledge, pressing on with the project made sense at the time.
However, ministers realised the experts weren’t given what they’d described as – or what’s Stephen Byers described as a blank cheque going forward, and they did not merely leave it to the Post Office to ensure that its new IT system would work. It was for this reason that they, ministers, insisted, despite Post Office resistance, on a live trial in 300 post offices before contractual acceptance. They also set up the Horizon Working Group with the specific purpose of hearing the voice from the frontline, a forum for postmasters through the representative bodies and other stakeholders to raise technical and practical problems with Horizon directly with Government ministers.
These were sensible measures and could have had a genuinely revelatory role, and it is surprising and regrettable, to put it lightly, that the NFSP leadership chose not to alert the Government to their members’ concerns about bugs and other technical problems in the Working Group or elsewhere.
Its failure to do so defeated the whole purpose of the Working Group and actively provided real and material, but false, reassurance to the Government, and the NFSP continued to act as a vocal defender of Horizon over the years that followed.
When, in late 1999, the then Minister Alan Johnson was informed of issues with Horizon’s system ability, accounting integrity and support, he immediately intervened and had rollout paused for an extended period so that the issues could be resolved. It did not recommence until he was given assurances that these issues had been or were being resolved satisfactorily.
Sir Ian McCartney and David Sibbick both considered, with the benefit of hindsight, that on an IT project of this size and complexity, the Government should have commissioned a further independent and expert review to confirm that Horizon was indeed fit for purpose at the point of rollout.
That may well be right and, clearly, in the hindsight knowledge that Horizon was not fit for purpose at the point of rollout, a further expert report or reports may well have help expose and resolve problems at that stage.
At the same time, of course, the line needs drawing somewhere. The Inquiry will no doubt wish to evaluate whether the information available to the Government at the time should necessarily have led it to commission such further reports with the attendant further delays and uncertainty for postmasters. There was here a balance.
The procurement development and rollout of Horizon took place in the very early days of PFI Government IT projects, and it’s not the only Government IT project ever to have gone wrong. Whilst it’s clear that many lessons have been learnt along the way with many success stories, the Passport Office being a good recent example, IT procurement and development in Government remain difficult and complex.
The history of the Post Office’s project to replace Horizon, despite the shortened arm and more intensive Government scrutiny of the Post Office over these past few years, is a good illustration of things going wrong, though, of course, that’s a project managed by Post Office and not Central Government directly.
For now, the point is that the Government realises that it needs to look hard at where things have gone wrong in some of its major IT projects, including Horizon, and to think creatively as part of a nonstop effort to improve.
Pat McFadden, Chancellor of the Duchy of Lancaster, commented in his UCL speech last week about the benefits of the small scale, nimble and enterprising test and learn approach favoured by successful private tech. That may of one possible solution. The Government would welcome other ideas.
I turn next to the organisational structure, in other words the formal systems of Post Office management, governance, oversight and lines of accountability, including in relation to the management of risks. As Mr Sheldon said yesterday, the importance of this issue is difficult to overstate, though we realise not altogether exciting.
The Department set out in some detail its observations on the structure that was in place during this scandal, and I don’t intend to rehearse those observations in very great detail now. I can summarise it as follows, starting with the arm’s-length arrangement. For over half a century, the Post Office has existed at arm’s length from Government. With the passage of the Postal Services Act 2000, Parliament decided to maintain and indeed strengthen through legislation the Post Office’s operational independence free of Government interference.
The autonomy and independence given to the Post Office was and remains a specific Parliamentary objective, for which the practical and principled reasons are readily apparent: first, that ministers have neither the time nor, generally, the expertise to get involved in running large and complex commercial organisations such as the Post Office; and, second, to enable the Post Office to operate as a commercial business free of incessant Government interference.
There was almost universal consensus amongst witnesses that the arm’s-length model remains the only sensible option for the Post Office, for so long as it remains in public ownership. The Department agrees.
The arms-length legislative arrangement implied a presumptive starting point that ministers should not get involved in operational matters. The Department’s view is that, as a starting point, that was good and sensible and indeed necessary. But ShEx/UKGI officials were wrong to treat this as inflexible dogma. It was always open to ministers to scrutinise and challenge the way the Post Office was conducting its operations and to use the levers that were available to them, if they were unhappy with what they saw.
The general trust of the evidence is that ministers understood this and did get engaged whenever they thought it appropriate, based on the information available to them. As I’ll go on to explore, the operative problem was not some arid concept of strict strategic operational divide: it was that the ministers were not given the information they needed, and so did not realise there was a problem that required their attention. In fact, they were consistently managed, misled and deceived.
Ministers sat towards the top of a pyramidal structure of management, governance, oversight and accountable, typical of and necessary in any large and complex organisation.
At the bottom of that pyramid were central Post Office employees, for example, members of its Branch Support, Communications, IT and Security Investigation Teams.
They reported to and were managed through a number of increasingly senior management tiers, up to, ultimately, the Post Office Executive Team, led by the CEO; the Executive Team were overseen by the Post Office Board of Directors; the Post Office Board of Directors was, until 2012, overseen by the Royal Mail Board of Directors; the Post Office and/or Royal Mail Board of Directors was overseen by the Shareholder Team at the Government’s Corporate Governance Centre of Excellence – first ShEx and, thereafter, UKGI; ShEx UKGI reported, in relation to the Post Office, to the junior minister and in extremis to the Secretary of State; and ministers and the Secretary of State were scrutinised by and accountable to Parliament and, through Parliament, the British public.
This was not a system that lacked tiers of oversight and, in common with the witnesses who spoke about this structure, the Department believes that these arrangements were broadly appropriate with one caveat that I’ll come on to later. But there are two really critical points here. First, the Post Office Board of Directors was and remains the body with principal and direct responsibility for overseeing the activities of the Post Office. This was the clear and consistent view of the Inquiry’s own experts and of the senior UKGI witnesses.
Each additional tier of oversight, in turn ShEx/UKGI, ministers and Parliament, has an increasingly high-level role inherent in the increasingly wide range of responsibilities falling within their domain, and their job is not to redo, review or second-guess all of the work of each of the tiers below them.
As for the ministers, the evidence indicates that they are busy to an extent and with such a range of issues that is almost impossible for most of us to imagine. Their role was essentially to satisfy themselves that an appropriate structure was in place beneath them, and then to decide, based on the information available to them, where to focus their own time on the issues arising across their portfolio.
Second, any organisation depends on honest and truthful flows of information, up through the lines of management and oversight and, as part of that, it requires honest and truthful information in response to scrutiny and challenge from the tiers above.
Sir Ed Davey expressed the point as follows:
“Our system of Government is essentially built on the assumption that people in positions of trust, such as the leadership of the Post Office, tell the truth.”
The right to expect timely and accurate information should be self-evident and was emphasised time and again by the various witnesses, including senior UKGI officials, permanent secretaries, ministers and Secretaries of State, and the Inquiry’s governance experts.
Governance and oversight structures can only do so much. As Dame Sandra Dawson put the point:
“A framework cannot control the behaviour. It sets the boundaries and sets the expectations.”
Sir Alex Chisholm made the same point more directly:
“No structural solution [he said] can fully deal with the realities of the situation which depend on the quality of the people you have in there and their dealings with each other.”
I said before that there was a caveat to the Department’s view that the overall governance and oversight system was the right one. Its reservation relates to the absence at the relevant times of an internal departmental Policy Unit working in parallel with ShEx/UKGI in its devolved role as corporate governance experts and shareholder representative.
This reservation arises with hindsight. Several witnesses have observed how simply putting in place more tiers of oversight is not a panacea and, indeed, may in many cases, act as a hindrance to good governance.
Dame Sandra Dawson emphasised more than once the downsides to multiple governance and oversight tiers and the importance of the unitary Board of Directors taking proper ownership and accountability for the company.
Sir Martin Donnelly explained that: “When you have the level of complexity that we’re dealing with, you have to be able to empower people to take decisions and follow them through in a structure because, otherwise, you’re not going to get effective outcomes, and that the challenge of adding additional layers as if you do not have additional information on which to base your challenge, it can merely add bureaucracy and actually make it more difficult to get at the truth.”
But it’s also clear, in retrospect, that additional oversight of the Post Office from a departmental Policy Team may have led to greater or more astute scrutiny and challenge of the Post Office and uncovered some of the problems where ShEx/UKGI did not.
The creation in 2018 of the Policy Team within the core department has been a positive development, providing, as it does, a cadre of dedicated civil servants who work alongside UKGI to provide additional scrutiny and challenge to the Post Office.
It is common ground, then, that this system necessarily depended on individuals acting in good faith, providing honest and truthful information up the chain. The evidence heard by the Inquiry indicates that the Post Office and several of its senior people were, at best, recklessly indifferent to the truth and, at worst, culpably dishonest.
Time and again, the Post Office provided materially false, misleading, or incomplete information to Government ministers, to Parliament, to the criminal courts and to the British public at large and, frequently, especially before mid-2018, the officials from ShEx/UKGI whose job it was to scrutinise and challenge the Post Office at the tier above the Board, identify and surface risks and provide impartial, objective and well-researched information and advice to ministers, appear to have done not much more than repeat what the Post Office told them.
The evidence is well known to the Inquiry, so I refer briefly to just a small handful of the many, many examples where ministers were provided with misleading or untruthful information.
You’ll remember Sir Ed Davey receiving a briefing from ShEx officials based on information provided by the Post Office to ShEx, which assured him that Horizon had proved robust, that there were no systemic integrity issues, that the unions had expressed confidence in Horizon, that there was proper training, that there were proper audit processes and no back doors, that there’d been regular reviews, there was an appeals process and legal representation, and that no court had ever found problems with Horizon. Much of that was, of course, untrue.
Following Sir Ed Davey’s meeting with Sir Alan Bates, he, Sir Ed, asked ShEx officials for further information on each of the issues Sir Alan raised. In response the Post Office gave ShEx definitive but false assurances, including that Horizon is fully robust, that its integrity and sound basis have been demonstrated over many years and that the JFSA’s allegations were unsubstantiated.
Each of those assurances would appear to bear the hallmarks, we suggest, of the Post Office’s Communications Team. ShEx passed these assurances on to the Minister and drafted a letter for him along the same lines. These assurances included untrue statements that there was no remote access and proper independent audit logs.
Paula Vennells gave Jo Swinson the explicit assurance, in writing and to her face, that the Post Office was compliant with its post-conviction duty of disclosure and that there was no reason to conclude any prosecutions were unsafe. There was no mention of the Clarke Advice. The assurance was false.
Baroness Neville-Rolfe was given a misleading summary of Second Sight’s conclusions and, by Tim Parker, a misleading summary of the progress of the review he had commissioned at her instigation, and a misleading summary of Jonathan Swift KC’s most damning findings. Nor did Tim Parker ever inform her or her ministerial successors, that the continuing work he’d promised as part of his review had been shelved.
More generally, ministers were never told about such crucial pieces of information as contained in, for example, Jason Coyne’s expert report in the Julie Wolstenholme prosecution, the Helen Rose Report, or the Clarke Advice, to name just a few examples.
Ministers of different political stripes were vocally critical of some of the information and advice provided to them by officials and ShEx/UKGI. Their evidence provided an unvarnished and candid insight into the inner workings of Government. Jo Swinson was at times memorably apoplectic when, during her evidence, she was shown documents that she’d never seen or been given access to during her time as Minister.
Sir Ed Davey and Margot James were more restrained but nevertheless clear, in their view, that they were not given the sort of accurate, reasonably complete and balanced information that they were entitled to expect.
While other ministers questioned and sought further information and assurances, Baroness Neville-Rolfe was in the minority in having had doubts at the time about what she was being told. She said: “By this time [August 2015], I’d lost confidence in the quality of ShEx’s advice. We were going round in circles and they were unwilling to engage with the issues in the way I felt they needed to. In my view, ShEx had lost objectivity and its officials were unable or unwilling to scrutinise POL properly, even though that was an essential part of their role. The advice they gave seemed close minded, deaf to the issues and constantly repeating the same mantra. As time went by, I felt as though they were trying to obstruct or shut down my efforts to get to grips with the issues.”
Ministers understand that one of their roles is to scrutinise and challenge but the evidence demonstrates it’s totally unrealistic to think that they can challenge more than a small fraction of the information and advice provided to them on a daily basis.
Ministers’ offices received vast quantities of correspondence from other MPs, constituents and stakeholders raising a wide variety of issues, concerns, complaints and requests for action, much of which would never be put before the minister themselves. The trickle of correspondence in relation to Horizon was a tiny proportion of the total.
So ministers are necessarily, to a very large extent, reliant on officials to highlight the correspondence and other information they need to focus on, and the inevitable result of the consistently misleading information, partial advice and false assurances given to ministers by the Post Office, via ShEx/UKGI, essentially being told, “Nothing to see here”, was that these busy ministers, by and large, focused on the issues in other areas of their portfolio which were seemingly in greater need of their attention.
All the ministers explained how their usual experience was that civil servants acted with appropriate objectivity. But the Department agrees with UKGI that there were certainly occasions on which ShEx/UKGI advice to ministers was insufficiently objective.
This is not the only public inquiry to reveal evidence of officials falling short of the expectation that they act in accordance with the Nolan Principles. We refer in our written closing statement to the Infected Blood Inquiry and the Magnox Inquiry, and there are other examples, perhaps, most obviously, Hillsborough.
It’s also obvious that the Department’s clear expectation that the Post Office would ensure that its staff too acted with candour and consistently with the Nolan Principles was misplaced. The Government realises it needs to look again at how appropriately high standards of conduct are observed at its public corporations and other arm’s-length bodies.
It will be for the Inquiry to identify the reasons why accurate and objective information was in such short supply. I will, in due course, offer some suggestions as to some of the causes, and the Department would welcome suggestions that the Inquiry has for improvements in the future.
As you know, sir, the Government has committed to putting forward legislation to introduce a new statutory duty of candour, backed up by criminal sanctions. That was one of the recommendations of Sir Brian Langstaff’s Infected Blood Inquiry report, in turn, a development of one of the recommendations of Bishop James Jones’ report into the Hillsborough disaster. The Department presently sees no reason in principle why this duty of candour should not extend to public corporations like the Post Office and, indeed, across Government.
So, what were the reasons why justifiable expectations of candour were frustrated in the course of this scandal? The starting point – as Alisdair Cameron put it, “the original sin” – was, we suggest, the Post Office’s institutional culture. It was a culture which seemingly tolerated indifference to the truth and a culture, embodied in its Postmaster Contracts which looked down on, mistrusted and exploited postmasters.
The Inquiry will form its own view of the Executive and Board level culture in the Post Office at relevant times. The evidence may suggest that it was, at least some stages, weak, arrogant, unintelligent, defensive, incurious and close minded, with far too much emphasis on internal consensus, too little space for internal challenge and firm resistance to any external scrutiny.
We suggest in our written closing statement that this was an institution which was, at Board and Executive level, badly infected by groupthink. In our written closing statement, we discuss the causes and symptoms of groupthink and draw attention to the findings and recommendations of other recent public inquiries in this respect.
It is regrettable, to say the least, that ministers were never informed of these profound cultural problems. Likewise, Jo Swinson was understandably aggrieved that the Post Office Board’s and ShEx officials’ shared concerns over Paula Vennells’ aptitude and performance as CEO were never drawn to her or any other ministers’ attention.
I’ll return to the theme of culture and cultural transformation in due course.
A second theme is the extent to which ShEx/UKGI officials saw it as their role to scrutinise and challenge the Post Office. Clearly, that was their role on behalf of the Department but it seems this was not always clearly understood and acted upon by all relevant officials.
As a responsible and self-critical public body, UKGI has clearly reflected on the reasons why that may have been the case. The Department agrees with UKGI’s observations and adds any the following:
First, we strongly agree that the starting point is that ShEx/UKGI officials were entitled to place substantial reliance on the information and assurances provided to it by the Post Office.
As Sir Stephen Lovegrove observed:
“It’s not ShEx/UKGI’s role to challenge everything they are told.”
At the same time, clearly there was a need for ShEx/UKGI officials to review the available information and ensure that the advice and information they provided to ministers was clear as to its sources. As Baroness Neville-Rolfe stated:
“If I had been my previous self as civil servant sitting in that seat, I would have gone away and I would have read the whole of the Second Sight Report and I would have gone through all of the negative findings, understanding what was right and what it was wrong. That wasn’t done. What they did was take advice from the Post Office because they felt the Post Office could give the answers, and that isn’t what you do. As a good civil servant, you bring – you look at different – you know, you look at different sources.”
Second, the evidence indicates that the two-hatted role as a NED on the one hand and as a shareholder representative on the other, may have led some ShEx/UKGI officials to perceive that there was a conflict as between their duties to the shareholder and their duties as a Companies Act director. It appears that this may have led to confusion as to the importance of independent scrutiny and challenge, and the importance of providing independent, objective, and impartial advice and information to ministers.
The Department notes that the IOD – the Institute of Directors – in its recent report, concluded that at times, the two-hatted role may have led to confusion, and suggested that the parameters of the Shareholder NED role should be reconsidered.
Third, the Inquiry heard evidence which may suggest that the confusion which flowed from this two-hatted role, if indeed it did flow from the two-hatted role, led the Shareholder NED at times to increase susceptibility to the Post Office’s own groupthink and acceptance of the Post Office’s internal norms. For example, Jo Swinson suggested that Richard Callard had gone native and Baroness Neville-Rolfe suggested that the Shareholder Team led by Mr Callard had lost objectivity.
Fourth, many ShEx/UKGI staff do not or at least did not have classic Civil Service backgrounds. Given its highly-specialist work, that’s perfectly understandable, but the evidence may have tended to suggest, as is hardly surprising, that may have meant the Nolan Principles as expressed in the Civil Service Code were not always so deeply ingrained. This was a point made by Baroness Neville-Rolfe.
In addition, the early Shareholder NEDs indicated that they were given almost no training in this inherently difficult role. The Department therefore warmly welcomes the improvements that UKGI has made to its operations in the wake of this scandal, including but certainly not limited to, improved recruitment and training and embedding with greater force the importance of the Civil Service Code.
The Department is clear in its view that a Centre of Excellence for corporate governance within Government remains essential.
The Department also recognises that, had the Department had its own Post Office Policy Team at the relevant times this would have provided an additional mechanism to scrutinise and challenge the Post Office and thereby reduce the Government ministers’ reliance on ShEx/UKGI.
In our written closing submissions, we make the point that the management, governance and oversight structures that were in place did not exist in a vacuum. In the same way, the justified expectation of, and entitlement to, honest and truthful information and advice in accordance with the Nolan Principles did not exist in a vacuum. They all formed part of a broader legal, regulatory and indeed ethical ecosystem.
That ecosystem includes not only the Financial Reporting Council Code and the Civil Service Code, but also the Companies Act, employment and disciplinary law, the criminal law and the criminal justice system and professional regulation, including, as relevant, the regulation of solicitors and barristers. In a healthy society, it also includes ordinary codes of morally acceptable behaviour.
That ecosystem serves to drive high standards of behaviour and deter inappropriate behaviour. It cumulatively failed in those objectives here with catastrophic results. The question is: why? One answer may be that the jeopardy for improper behaviour, breaches of professional codes, breaches of criminal law, was insufficiently serious. As I’ve mentioned, the Government has committed to give sharper teeth to the Nolan Principles through the new statutory duty of candour backed up by criminal sanctions.
As the Department described in its written closing statement, the role played by lawyers in this scandal was particularly deplorable. The regularity and seriousness of disclosure failings is astonishing. Ministers quite justifiably placed real weight on the assurances that the Post Office had always complied with its duties of disclosure to the criminal courts.
And the evidence of the role played by lawyers in misusing and abusing the important principle of legal professional privilege to evade external scrutiny was eye opening. But the Inquiry has also seen evidence which may suggest that the Post Office leadership set a culture which was critical of lawyers who deigned to place their professional integrity above the interests of the business.
You’ll recall Paula Vennells’ extraordinary September 2013 note. The Government has heard the submissions made by the Hudgells Core Participant group concerning the regulation of lawyers and will welcome any recommendations that the Inquiry has in that respect.
I next turn to address relatively briefly the issue of redress.
I start by restating the Department’s position that it has worked very hard and in good faith to ensure that full, fair and prompt redress is paid to the Post Office’s victims. There’s been no lack of effort. But the Department realises that this has been too slow for many postmasters and their families, and it is acutely conscious that the list of those who have tragically passed away before receiving full and fair redress continues to grow.
In its written closing statement, the Department has set out its position on redress in some detail, and I won’t repeat that now. Instead, I’ll use my time to address some of the bigger themes that emerge from the evidence in relation to redress.
The first is to pick up a point made by number of witnesses and indeed by the National Audit Office in its Government Compensation Schemes Lesson Learnt Report published in July of this year, that is that there is presently no centre of expertise within Government to provide guidance, expertise, or a framework for public bodies seeking to set up a compensation scheme. This means that each new compensation scheme involves a newly reinvented wheel or, once a compensation scheme has been launched, rebuilding the plane whilst flying it, to paraphrase Sarah Munby’s evidence.
The second point, related to that first point, is that it’s easy in hindsight to criticise an incrementalist approach to compensation scheme design and delivery because, as Sarah Munby described:
“There’s a tendency to assume that it was possible to build a perfect scheme in the first place.”
As Sarah Munby explained, the least bad option is often to get going and make changes later, rather than attempting to design the perfect scheme to start with. There’s an element here of the test-and-learn approach suggested by Pat McFadden. Of course, so much the better if the initial design, even if imperfect, were to benefit from expert input of the type proposed by the NAO.
Third, the Department has regularly, proactively and constructively engaged with the postmasters’ representatives and has regularly made improvements to the schemes in line with their suggestions. It’s set up the Horizon Compensation Advisory Board, which has played a hugely important roll. It involved the representatives of the postmasters in the design of the Group Litigation Order Scheme and the Horizon Convictions Redress Scheme from the outset, and it will continue with this process of engagement and incremental improvement in furtherance of those aims, full fair and prompt, out of the glare of this Inquiry.
Fourth, whilst Sarah Munby and Kemi Badenoch suggested a lack of creativity in the Government’s response, and we note the Hudgell Core Participant Group refer to a business as usual approach in their written closing statement, there has, in fact, at times been genuine innovation in the way the Department and the Government as a whole has approached redress. It acted to go behind the GLO settlement by creating the GLO compensation scheme and, ultimately, secured primary legislation to ensure the continuing power to pay.
It found creative solutions to speed up redress, most obviously fixed-sum offers, which were a novel and genuinely game-changing development and it promoted the controversial and ground speaking legislation, resulting in the mass exoneration of mass postmasters convicted of Horizon offences.
These were not small things and they were not well-worn solutions.
As a mark of its seriousness, the Government has set aside funding of £1.8 billion which the Treasury has publicly confirmed is not a limit, and it has so far paid out around £0.5 billion in financial redress. These are big sums and the Department is proactively looking to identify gaps in the existence schemes. The Government is pleased that Fujitsu has recognised that it must share the responsibility for meeting the costs of the scandal. The Horizon Compensation Advisory Board’s paper on the future of redress goes further than the National Audit Office’s report. As well as advocating an independent body to deliver redress, it proposes that that body should have a role in monitoring the behaviour of Government organisations through looking at both unresolved complaints and management information.
The Government would welcome the Inquiry’s view on this point.
The Department recognises that there is still much work to be done. It realises that every day that postmasters and their families continue to wait for full and fair financial redress is a day too long. It will continue to work hard to make improvements to the schemes, in the interests of ensuring full and fair compensation is paid as quickly as possible.
It publishes regular progress reports, it’s subject to ongoing Select Committee and other Parliamentary scrutiny. For example, the Minister has just today made a further statement to Parliament, a written ministerial statement.
The Department would, of course, be happy to provide further updates to the Inquiry for as long as you would find that helpful, sir, and it will welcome the Inquiry’s recommendations on how to improve the system by which Government provides redress and compensation for the future.
Finally, sir, I return to the critical matter of culture and cultural transformation at the Post Office. The evidence heard by the Inquiry has indicated that the profound cultural problems at the Post Office have existed over decades. The Department has recognised the need for a complete reset of the Post Office’s culture and a rebalancing of its corporate mission.
Together with UKGI and the Post Office Board, the Department has taken real and material steps to improve the culture: an example is the innovation of Postmaster NEDs. But cultural transformation of a large and complex organisation like the Post Office, with such deep rooted problems, takes time. Whilst the Department has seen signs that the culture is genuinely improving, serious problems have remained.
Without attempting to provide an exhaustive list, this is clear from the YouGov evidence, the evidence of Saf Ismail and Elliot Jacobs, the evidence about the untouchables, the executive bonus metrics, the history of the Horizon replacement project, and the circumstances leading to and following the dismissal of Henry Staunton.
Clearly, the Post Office has remained an institution under real stress. Changing the culture of a large and complex organisation like the Post Office is not easy and there have been and will be choppy waters to be navigated but there are reasons to be optimistic.
The Department has faith that, under Nigel Railton’s leadership as Chair, the Post Office is heading in the right direction and the Department endorses and supports his efforts towards a renewed and rebalanced Post Office. He has set a new tone at the top of the organisation, giving a clear vision of a future Post Office with postmasters at its centre. He has also started implementing the recommendations of the Grant Thornton report, in relation to Board effectiveness. The Inquiry has heard evidence that there has been a noticeable improvement in the working relationships at Board level, more streamlined governance arrangements and much better communication with Government and the Government hopes and expects that the new statutory duty of candour will help to drive improved standards across the Post Office. Mr Railton needs time, and he needs the support of the Department.
New appointments to the Board will be crucial. The Department, with UKGI’s assistance, is making progress in appointing NEDs with experience in organisational design, public sector ownership, and major IT projects. We note the IOD’s recommendations in its recent policy paper and recognise that in relation both to the Post Office and to public corporations in general, the Government needs to act with real intelligence when making Board appointments.
As the Minister Gareth Thomas and the Secretary of State Jonathan Reynolds explained in their evidence to the Inquiry, the Government wishes to facilitate a wide-ranging conversation about the future of the Post Office and its culture, which includes the perspectives of the public at large.
It recognises that profound questions about the future model of the Post Office should not be kicked down the road any further. That is why the Department has committed to publishing a Green Paper in the first half of next year, which will seek views on a range of different proposals for a future Post Office Network.
The Department urges all those with an interest in a future in which the Post Office and its postmasters can flourish to respond to that consultation.
In sum, the Government does not accept that the Post Office is not worth saving. To the contrary, it is essential that the Post Office is able, once again, to take its proper role as a trusted and trustworthy institution at the centre of our national life.
Sir, the Department remains committed to learning from the Horizon scandal in the interests of preventing anything similar happening in the future. It will continue to reflect on the evidence that has been heard throughout this Inquiry and it will look forward to receiving the Inquiry’s recommendations in due course.
Sir Wyn Williams: Thank you, Mr Chapman.
Closing remarks by The Chair
Sir Wyn Williams: At this point, in the area of South Wales from which I come and in which I live, I’d say, “Well, there we are”. Except it’s not quite “there we are” because there’s a rather important next step. Before I get to the next step, can I pay my tribute to all those who have participated in, written and articulated, the closing submissions that I have received. It goes without saying that I have already found them extremely helpful and I will continue to do so. I am grateful to you all.
I would also like to thank again all the persons who have attended this Inquiry and shown such interest in it. I would particularly like to thank those people who attend in person, as opposed to remotely, for their good humour, discipline and ability to sit through evidence and submissions, which no doubt some of them found extremely difficult to hear and take in. So thank you all for your very disciplined and good behaviour.
I thank my team often enough that it becomes almost part of every day in my life but I have had great assistance from a great team.
So what remains is the question on all your lips: but when will he report? I can hardly say I don’t remember but I will say, genuinely, I do not know, and so I make no promises other than I will report as quickly as I sensibly can once I am satisfied, and I’ll need to be satisfied, of all my crucial conclusions.
That is, without doubt, many months away but I hope it’s not much longer than that, and that’s all you’re getting from me by way of a prediction.
So thank you all again and now we will depart.
(3.18 pm)
(The hearing concluded)