Official hearing page

20 October 2022 – Anthony Roberts and Paul Rich

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(10.15 am)

Sir Wyn Williams: There are less people here than when I last attended.

Mr Blake: I won’t take it personally.

Sir, we’re going to begin this morning with Mr Roberts.

Anthony Roberts

ANTHONY JOHN ROBERTS (affirmed).

Questioned by Mr Blake

Mr Blake: Can you give your full name, please?

Anthony Roberts: Anthony John Roberts.

Mr Blake: Mr Roberts, you should have in front of you a witness statement –

Anthony Roberts: Indeed.

Mr Blake: – that is dated 7 September of this year.

Anthony Roberts: Yes.

Mr Blake: On page 18 is that your signature at the end?

Anthony Roberts: Yes, it is.

Mr Blake: Is that statement true to the best of your knowledge and belief?

Anthony Roberts: Yes, it is.

Mr Blake: Mr Roberts, that witness statement and the exhibits all will go into evidence today, so I’m not going to take you through line by line of that witness statement. I’m going to ask you some questions that the Chair would like us to consider and that Core Participants would also like us to consider.

I’m going to start with your background. You joined the Post Office in 1967 via the Civil Service fast track scheme; is that right?

Anthony Roberts: That’s correct.

Mr Blake: You worked for the Post Office for the whole of your professional career –

Anthony Roberts: I did.

Mr Blake: – retiring in 2002?

Anthony Roberts: Yes.

Mr Blake: Between 1985 and 1993, you were managing director of counter services?

Anthony Roberts: Yes.

Mr Blake: Towards the end of your time in that position, there was a development towards the automation of post office counters; is that right?

Anthony Roberts: Yes, indeed.

Mr Blake: You say in your statement that you didn’t have an IT background and your role at that stage was on monitoring and deciding on issues such as resource provision; is that right?

Anthony Roberts: That’s correct.

Mr Blake: In 1993 and to 1995 you were managing director of group services?

Anthony Roberts: Yes.

Mr Blake: In 1995 you became Chief Executive of the Post Office Group?

Anthony Roberts: Yes.

Mr Blake: That is Royal Mail, Parcelforce and Post Office Counters Limited?

Anthony Roberts: Yes.

Mr Blake: Pausing there, as you are the first witness from the Post Office, can you tell us what Post Office Counters Limited was and how that fell into the overall structure of the group?

Anthony Roberts: The structure of the group, starting with the board, Post Office corporation was a public sector body owned by the government; the government was a shareholder. The government appointed members of the Post Office Board who were the Chairman, group strategy director, chief finance director, chief executive and a number of non-executives.

Below us, there were three main businesses as you’ve said: Royal Mail, which was letters; Parcelforce, which was parcels; and Post Office Counters, which dealt with the 20,000-odd retail post offices up and down the country, including Northern Ireland.

Each of those businesses was headed by a managing director, who was not on the board but attended the board and those roles were appointed by the board. So, in other words, I would be involved in the appointment of the managing director. The managing directors were basically the heads of those businesses reporting through me to the board.

They were, as I’d been, as you said in the ’80s to the early ’90s, really in charge of those businesses. The board would be in charge of strategy for the whole of the corporation, including those businesses, but then, having set the strategy with the managing director (let’s say POCL involved) they, as managing directors, would be tasked with the idea of delivering that strategy through the various directors and then the members of that particular business.

Mr Blake: You have said that the board were appointed by government. How were they appointed?

Anthony Roberts: I think that’s a very good question. It would normally be a decision taken by the Secretary of State, in that case for the Department of Trade and Industry, having, if necessary, gone out to headhunters, having produced a series of names. Those names would normally have been run across the chairman of the corporation at that time, if they were members of the board, and then, in that discussion and, in the case of the Chairman, a discussion with the Prime Minister or Number 10, the Secretary of State would then decide that person X was to be appointed to the board – very much done by government.

Mr Blake: Did any members, so far as you are aware, of the board have IT expertise at the time?

Anthony Roberts: None of them, I would say, were trained in IT. A number of them, particularly one of them who’d been involved in running parts of the rail system would doubtless have come across IT or had IT in their business but I think, at that level, in the late or the mid-1990s, finding people – apart from the banking industry and one or two others – who they could say were IT experts at that kind of board level was very, very unusual.

Mr Blake: Was it common for board members to have followed the path like you and have spent their life within the organisation, their professional life within the organisation?

Anthony Roberts: In those days it was. Our non-executive board members, of whom there were between four and five during my time as CEO, were people who, in one case, had come up through the accounting industry. Two, I would say, were general managers from the retail area, and you could see that they would have moved around. But, certainly, the person from the accounting industry, I think, probably stayed with the same company for a lot of her career.

Mr Blake: In your case, having risen up throughout the Post Office Group. Managing directors would all report to you and you would report to the board.

Anthony Roberts: Yes.

Mr Blake: Would you say significant matters at Post Office Counters Limited were raised to the board through you?

Anthony Roberts: Yes, very much so. I would have a fair amount of contact with the managing director. There would be a formal – well, informal, more likely, one to one meeting with me every month. There would be conversations on the phone. Particularly in a big issue such as Horizon, there would have been a lot of information flowing backwards and forwards but information that we tried to keep at the right kind of level, depending where it was going.

Mr Blake: Where did Stuart Sweetman fit into that?

Anthony Roberts: Stuart Sweetman was the managing director for Post Office Counters and, therefore, he was the direct report to me for that business.

Mr Blake: Many of the minutes that we’ll be looking at are minutes of the board. Were there separate meetings of the Post Office Counters Limited?

Anthony Roberts: Yes. There would be – the Post Office Counters Limited internally would have what we call a Counters Executive Committee. That would be chaired by Stuart Sweetman and it would include the various directors of different parts of the counters business.

Mr Blake: I’m going to bring up a document on the screen. That’s POL00090836.

Anthony Roberts: Yes.

Mr Blake: These are minutes of the Post Office Counters Limited board. Did that board meet regularly?

Anthony Roberts: No. What had happened was that, in the 1980s, the chairman of the day had thought there would be value in trying to create a separate counters business, as opposed to the two mails businesses, and, for a brief time, we had a board with a couple of non-executives purely for Counters. It became clear, after a little while, and probably with a change of chairman, that he didn’t think that this was helping. It was becoming a bit of an intrusion in the day-to-day activities of the counters business; he wanted a much clearer setup in the way that I’ve described to one of your earlier questions.

We decided at the time that we would keep this, having set up the company, and every year we sent to Companies House a very brief, less than two-page statement of the company’s performance in that year. It was not run, other than probably a one-hour meeting once a year, other than to keep that company clear with Companies House.

It did, around about 2002, just as I was leaving, become changed to Post Office Limited because, by then, we had known that governments of different persuasions were very keen to try and privatise Royal Mail – it took rather a long time but they were keen to privatise Royal Mail – and it had always been clear that, if that happened, Post Office Counters would not be part of the privatisation, mainly because of the way it was structured and because of the role of subpostmasters.

So that was a company that didn’t – this one on the screen, didn’t really take place or didn’t become part of the management structure but it was moving in that direction from about 2002 onwards.

Mr Blake: So a typical meeting of Post Office Counters Limited of the board, would that be John Roberts, Jonathan Evans – so yourself, Jonathan Evans and Stuart Sweetman?

Anthony Roberts: It would have been but it would probably have been for no more than about an hour and really to sign off the two documents to go to Companies House. The rest of the time, Post Office Counters would have been run by the managing director and his executive committee.

Mr Blake: How independent was Post Office Counters Limited to the Post Office Board, sitting as a board?

Anthony Roberts: Post Office Counters Limited, as an entity, was really, if I can put it this way, a non-event. The issue was the accountability line was from the group board through to the managing director, through to his executive committee and the people who sat on it, and that was the way the business was managed from really about 1989/90, right the way through until I finished in 2002.

Mr Blake: I am going to bring up another document, that’s POL00028611. Can we go to the second page. The second page should be a letter to the Secretary of State, talking about signing off heads of agreement.

If we look at the first paragraph there, it says:

“In the light of your letter today expressing the Government’s with for the Post Office to sign the Heads of Agreement with ICL, The Post Office Board met tonight. With the exception of one non-executive, all members were involved.

“We considered your proposal”, et cetera.

Later down it says:

“… we would be prepared to sign the heads of agreement …”

I’m going to look at one more document. So that’s a letter saying that the board have considered the matter. If we look at POL00028690. This is the ultimate heads of agreement that were signed.

Anthony Roberts: Yes.

Mr Blake: That’s the first page. Can we look at page – well, at the top is the agreement itself is between Post Office Counters Limited. If we look at page 9, the signatures have been redacted but, at the bottom, I think you can take it from me that it’s Stuart Sweetman, on behalf of Post Office Counters Limited that actually, ultimately signed that.

Anthony Roberts: Yes.

Mr Blake: So is that the way that it operated, that essentially Post Office Counters Limited followed the direction of the board?

Anthony Roberts: Very much so. On the two letters you just put up, the first letter to the Secretary of State would have been the board, along with Stuart Sweetman attending as part of – as the head of the business. The board would have agreed, given the state of the issue, the size of the issue, importance of the issue, what should be done. Stuart Sweetman would be part of that discussion.

At the end of the discussion, when something had been decided, he would be tasked to take that away, with my help if that’s necessary, to take the thing further and to take things the further with ICL and develop, in that case, a new set of heads of agreement.

Mr Blake: I’m going to move on to the commercial context of Horizon. Why was Horizon important for the Post Office’s business?

Anthony Roberts: In the 1980s, we’d gone through a Monopoly and Mergers Inquiry, which had come up with the beautiful term that end that Post Office Counters should be “managed for decline”. It was something that we rejected. But we also knew that you couldn’t go on with a paper-based system forever and ever because that would lead to decline. The discussion had always been, as you looked that banks and you looked at other organisations, that with the kind of network we had, it needed to be automated.

We couldn’t see a long-term commercial solution without automation. It was particularly important to the Department of Social Security because they accounted for, probably, 25 per cent, if not more, of the turnover for Post Office Counters. This was all the pensions work that was done at post offices.

We also knew, even then, two things: one, they felt we were very expensive, which I always rejected, but that’s what they said; and, secondly, that they wanted to move towards Automated Credit Transfer where you didn’t have to use the network at all and, if they had been left to their own devices, that’s where they would have gone and they would have gone quickly to it.

For all those reasons, automating what we did at post offices became vital to us and it became the main strategy for the business as you went through the ’90s and then into the 2000s.

Mr Blake: I’m going to take you to another document. It’s POL00031128. Now, these are some minutes that I’m going to go back to shortly but can we just look at page 2 and it’s point 6 on page 2.

Would it be possible just to scroll down to (vi) and highlight that. Thank you very much.

About three-quarters of the way down that paragraph it says:

“The commercial aspect which ‘united’ POCL and Pathway was not an issue for the BA [that’s the Benefits Agency] who actually had the means to pursue different options, without infringing contract obligations.”

Can you tell us what was the commercial aspect that you considered united POCL and Pathway?

Anthony Roberts: The contract that we eventually had with ICL opened the door, we thought, to look at new products. The initial ones, after the Horizon project had been fully implemented, was to look at government issues, like Government Gateway, which now provides the link into most of the government services, many of which we were handling individually at Post Office Counters.

It was also a move into banking because, if we had the IT system which could well have been provided beyond Horizon by ICL, then that would give us a greater opportunity to get into more sensible banking and one of the things that had always concerned us was what was, in those days, called (probably still is) the “unbanked”. That meant that if they, as we thought, would over time become the “banked”, we’d rather they retained a link with Post Office Counters, which had some kind of bank, than go anywhere else.

I think it led, in the end, to a very close relationship, after my time, with the Bank of Ireland who were providing services via the counter. ICL’s interest in that was being able to provide further IT services beyond Horizon, which would enable us to do those things.

Mr Blake: I’m going to take you to a presentation. It’s at POL00028570. It’s a presentation from February 1998. It has your name on the front. Would you have given that presentation?

Anthony Roberts: I would have been part of it with Stuart Sweetman. I would probably have introduced it, left him to do the fair amount of the detail and would have probably closed it before any discussion.

Mr Blake: Do you recall who the presentation was to?

Anthony Roberts: I’ve got a feeling it was to ministers trying to set out, partly as a communication exercise, exactly what we had in mind what we were trying to get out of the automation programme.

Mr Blake: Can we turn to page 7, please. I’m going to read those two paragraphs for the purpose of the record. It talks Horizon benefits. It says:

“Once rolled out, Horizon provides a new, powerful national electronic network, sited in a nationwide network of post offices that gives local and person service. This is also backed by powerful new card management and payment authorisation systems on a scale greater than, for example, Visa. This capability will meet the current range of government services, but is also flexible enough to accommodate new services emerging in the future. That is what we mean by a ‘future proofed platform’ being established as part of the national infrastructure.

“Examples of services that could arise from new ideas or policies are ‘social banking’ or ‘learning accounts’ as part of Government’s drive to reform welfare and education respectively.”

Moving on to page 9 of that document, for POCL it says it’s:

“central to commercial future/viability.”

Is that your recollection, that it was really a central plank of your future viability?

Anthony Roberts: Absolutely.

Mr Blake: Do you recall a term “golden cloud” that appears in some documents?

Anthony Roberts: No. I don’t think so and, if I do, I wouldn’t be able to explain to you what it was.

Mr Blake: I don’t think it’s actually as complicated as it sounds. I’ll take you to a document very quickly just to have a look and see if it jogs any memory. That’s BEIS0000366. This isn’t a document you would have seen, this is a ministerial submission but I’m going to look at paragraph 2 of that, please. It’s the fourth line down.

Anthony Roberts: Yes.

Mr Blake: So:

“… a revised version of ‘golden cloud’ (the ICL/POCL partnership for exploiting the commercial potential of the Horizon infrastructure).”

It may not have been a term that you used –

Anthony Roberts: I was just about to say I’m rather more boring than that. I would have probably called it a partnership for exploiting the commercial potential of the Horizon infrastructure; I’m not sure I would have gone around saying it was a “golden cloud”.

Mr Blake: I’m going to take you chronologically from 1996, so the year of your appointment as chief executive. Starting in April 1996, I’m going to look at the Major Projects Expenditure Committee. Can you tell us what was the Major Projects Expenditure Committee?

Anthony Roberts: It was a committee that covered the whole of the Post Office, whole of Post Office Group, and the aim was that any of the managing directors who had a major project, major project normally defined in financial terms, would have to put that project to the committee, which normally consisted, I thought – I may well be wrong – I thought of the group director finance in the chair, but I think for the one you’re talking about I was in the chair but that could have been –

Mr Blake: Shall I bring it up on screen so we can have a look at it? It’s POL00028451.

Anthony Roberts: That’s right. That one is one where I would have thought that was the standard setup with the finance – group finance director, Mr Close, as chair, group strategy director and myself there, the project sponsors for the various projects listed underneath and at least two of those, one was managing director Royal Mail and Mr Sweetman was manager director Counters.

They would have been putting forward a paper on the project that they had in mind. It would have been developed to a reasonable stage by then and, normally, if it was an internal project only, we would have been looking at the net present value of that project, we would be looking at the way their numbers would have been put together and we would have been looking at how they intended to run it.

So it was a hurdle that they had to go through before that project was signed off.

Mr Blake: Can we look at the first substantive paragraph that begins “the submission”. There were three suppliers shortlisted at that stage for the automation project. They were described as “Tom”, “Dick” and “Harry”. Do you remember that?

Anthony Roberts: Yes.

Mr Blake: If we look at paragraph (xx) – that’s on page 3 – it’s about halfway down. It says:

“‘Harry’ was … the most expensive and least compliant …”

I think that was Cardlink?

Anthony Roberts: Yes.

Mr Blake: So once “Harry” was eliminated that left IBM and Pathway; is that right?

Anthony Roberts: Yes.

Mr Blake: Looking at, on page 3, (xxiii) so talking about “Dick” there, which is Pathway, they provided the best overall money solution?

Anthony Roberts: Yes.

Mr Blake: Then, over the page to (xxvi) – can we highlight that paragraph which is an important paragraph – it says:

“… as a technical solution, ‘Dick’ was the least preferred bidder providing a higher risk to delivering the programme.”

Is that your recollection?

Anthony Roberts: Yes, it is.

Mr Blake: Paragraph (xxx) identifies risks:

“the risks associated with ‘Dick’ were both short-term: liable to be late; pressure to accept incomplete functionality; premature roll-out could prove unreliable; and long-term: fragile software system; difficult to enhance; if ‘Dick’ lost money it would be difficult to do future changes …”

If we go to the paragraph down, it says that the risks were manageable and could be mitigated and the reasons why it could be mitigated are set out there:

“stronger technical assurance that this had previously been envisaged, resourced by POCL or outside contractors;

“[developers] must not go in a direction counter to POCL requirements;

“rigorous user and system testing prior to roll-out to be built into the contract;

“evidence of a supplier contingency plan in the event of delays;

“careful review of supplier contingency plans as to how they would resource to resolve problems …”

Can we go down to the paragraph below that, that’s (xxxii):

“[The] Committee considered that the additional risks associated with ‘Dick’s’ technical solution needed to be fully understood and documented, but that the risk was only relative, if it was capable of delivery without ‘falling over’ …”

Now, that term “falling over”, is that a technical term or was that a joke?

Anthony Roberts: I think it was vaguely a technical term; in other words, it meant falling over in the sense of not working.

Mr Blake: Can we go to the top of the next page:

“Committee supported the selection of ‘Dick’ subject to having the backup material which demonstrated that all conditions had been met for the selection process …”

Now, as a core member of that committee, those were the kinds of things that you would have been aware of, as early as 1996, that there were at least some technical concerns about Pathway’s –

Anthony Roberts: Yes, indeed, but, if I may, Mr Blake, just to make it clear that this wasn’t the first time that somebody had been going through this project. The committee – this is outside my direct knowledge but I remember it – the committee that selected Pathway had been made up of people who had been working, I think, since about ‘94 on the bids, reducing the bidders to the three that you have mentioned (IBM and ICL amongst them), deciding – and this was a group that included Her Majesty’s Treasury, the DSS and a number of people – deciding that this was the one they wanted to put forward, both in government and to the Post Office.

So we were then getting, at this committee, something that had been trawled over, from memory I believe Coopers & Lybrand had been involved in going through everything. So this had been done before we got to that stage.

Mr Blake: Did you think, at that stage, that the risks that were presented were manageable?

Anthony Roberts: I think we thought, at that stage, that the risks that they’d outlined you could have applied to almost any bidder who had been through the process and had been accepted. The issue for me, certainly in the mid-’90s, was that I think – this is almost difficult 25 years later to think about it. I mean, we were all pretty basic in terms of IT and, having gone through this with government involvement, government sponsorship, we all felt that these were capable of being handled, assuming that you picked the right partner who was then going to deliver, because they were the experts in IT, not us, in general, who were the general managers, who were saying “Should we spend the money on this, which is central to the strategy that we want to follow”.

Mr Blake: Who within your organisation would you have relied on at that time to provide reassurance in terms of the technical abilities?

Anthony Roberts: There was an IT department within the Post Office, which looked across all three businesses. We would also have been fairly dependent on consultancy help from people in the IT industry who were consultants and they would have been brought in to try and look at – I think a lot of that had been done before the proposal came forward both to us and, I assume, up the government chain as well.

Mr Blake: Was there any particular individual within Post Office who stood out for you as somebody who you trusted to give you that kind of information?

Anthony Roberts: We had a head of the IT department in those days, I think, called Dr Duncan Hine who had spent most of his life in IT and was seen as a sort of internal guru on IT and would definitely have been consulted, or one of his senior people would have been, in looking at this and putting this paper together.

Mr Blake: You sat at quite a high level. Was there somebody below you that you would rely on or would you have conversations with Dr Hine directly?

Anthony Roberts: I would have left it, in general, to the managing directors and I would have been asking if they had done that, talked to people got additional reassurance and, given that the next stage, if I remember it right, was that this would have been gone to the Post Office Board, I would, by the time we got to that, have been looking at the board paper with the managing director to make sure that, when it went to the board, he and I were not going to be caught out by, you know, very difficult questions about “Well, why are you putting this forward?”

We had to convince the board then at that stage that this was the best way forward.

Mr Blake: We can, I think, look at the board minutes that you have mentioned. If we go to RMG00000011, is this the board meeting that you had in mind?

Anthony Roberts: I’m sure it is, yes.

Mr Blake: That’s 7 May.

Anthony Roberts: Sorry, may I just go back. Having seen that list of people who were there, you asked whether people would have had IT experience. Seeing Sir Christopher Harding’s name there, I think Sir Christopher, at the time, was chairman of the nuclear power industry and I’m pretty sure that he would have had rather more IT experience than we had. So there is a little bit more than perhaps I gave you the impression of earlier on.

Mr Blake: The names mentioned there from POCL, so the names that are down there for “Also Present”, you’re not aware of any particular IT expertise amongst those names?

Anthony Roberts: No.

Mr Blake: Can we look at page 6 of that document. It’s the final page. This is where the board granted the authority to Post Office Counters Limited to enter contracts with the Benefits Agency and Pathway, subject to the resolution of a funding issue affecting the Social Security Agency in Northern Ireland.

Can we go back to page 2 of that document, which is where the discussions begin. If you look on the left-hand side, a little bit further down, it mentions Benefits Agency, POCL, automation, and it refers to a paper from yourself. Would you have been the principal person who addressed the board on the automation project on that occasion?

Anthony Roberts: Yes, it would have been a combination of me starting and then with the managing director filling in probably more detail than I did.

Mr Blake: Do you recall on that occasion bringing those kinds of technical concerns to the board’s attention at all?

Anthony Roberts: I think we would have brought to the board’s attention exactly what had been brought to our attention at the earlier MaPEC meeting. What then would have happened is that the board would have been told that there had been that discussion at MaPEC and what the conclusion of that discussion was.

What we wouldn’t have done was to try and fudge the fact that there were risks to do with this. One of the things that I always tried to do with the board was to set out what the risks were, why we thought, in any context, you could then handle those risks and, after that, make a recommendation for what should happen.

Mr Blake: Moving on to 1997, we know the Go Live project started in September 1996 but the timetable shifted after that and there was a no-fault replan. Do you remember that at all?

Anthony Roberts: I remember the timetable shifting because ICL had not met one of the original dates. I think there had been an aim to try and start roll-out in 1997, which was clear that that wasn’t going to happen or it was going to be delayed. So I remember that happening, yes.

Mr Blake: Let’s move to June 1997, and we’ll look at a document. It’s POL00028593. Can we start at the last page and that’s page 11. On 16 June 1997, you wrote to Stuart Sweetman saying that you would like to further your understanding of the lessons learnt during the live trials and page 2 of that document is the response that was actually provided from Paul Rich on 15 July. Can we have a look at page 2?

This is the response from Paul Rich and, actually, if we go to the page before that, page 1 – these are in reverse order in this particular bundle of documents – he then circulates the document to the wider group on 24 July emphasising that you wanted to ensure that lessons were learnt (that’s paragraph 2) and he also annotated it with his suggestions it seems for who was accountable for taking forward certain things. Do you remember that?

Anthony Roberts: Yes, I do.

Mr Blake: Can we look at page 3, please. At the top of each page it says “Horizon – PO Board Follow Up”. What do you understand that to mean?

Anthony Roberts: That would have been questions that had come out of, probably, the board discussion. They would then have led me probably to write the kind of note that you’ve just shown, asking for a report on where we were. I can’t remember a particular Post Office Board meeting but that process would have been the one that would normally have been followed.

Mr Blake: So is this an example of you staying on top of matters that were raised at board level?

Anthony Roberts: I think it’s probably a result of me trying to stay on top of matters that were raised at board level.

Mr Blake: On this particular page, page 3, we see some positives on the left hand. So:

“Original 10 post offices in Stroud area work well.

“Three new ICL releases tested and accepted.

“Barcoding of order books now available in over 150 post offices …”

Can we move to page 7, please. On the left-hand side, it says:

“‘we needed a better idea of connections to our other new systems’

“there was no adequate programme management in place in POCL to understand the integration and migration issues of [Post Office’s] other automation projects with Horizon

“there was a risk because end-to-end operational procedure mapping had not been undertaken to test whether Horizon’s new processes were replacing them adequately

“end-to-end programme technical assurance and impact analysis/change control processes within POCL were not in place systematically

“a process for accepting releases and that within POCL is not systematically in place.”

Did you understand the term “end-to-end”?

Anthony Roberts: Yes, I did.

Mr Blake: Did that mean looking at all of the systems and looking at the Post Office’s systems and knowing that they all definitely worked together; is that a fair description?

Anthony Roberts: Yes, that’s a very fair description. I think it was very easy to get hooked purely into the Horizon project and one of the things that we were starting to learn, maybe belatedly, was that it wasn’t just having the Horizon project, there were going to be connections with other parts of IT in the Post Office corporation and that’s what had to be looked at.

Mr Blake: The concern being raised there is that there weren’t proper systems in place, at least at that particular time?

Anthony Roberts: Yes, and I think that the point of this document and asking for it was – I think we were all, both on the ICL side and on our side, starting to learn that perhaps we’d been naive in expecting this to be as simple as maybe it seemed a year or so before that. The other point too, which I think starts to come out maybe later, Mr Blake, is that there was a thing called the Project Development Agency, PDA, which was basically the joint organisation, government, ICL and POCL, which, at that stage, was probably the most overlapping organisation for making sure that the project was working. That’s where everybody got together and I think it became clear soon after this that that wasn’t working.

Both the government, government departments, us and ICL were learning a heck of a lot in a short time about why this was going to be a more complicated project than perhaps we thought when people were appointed.

Mr Blake: If we look on the right-hand side of that page, those are actions to be taken. Can we look at the final two of those. It says:

“end-to-end testing procedures will need to be transferred from the PDA, and supplemented as release planning migrates back to [Post Office Counters Limited] after the system is accepted

“a process for live trial acceptance is being devised to ensure collective ownership across POCL functions.”

Does this mean that, once the PDA was wound up and, even after the Post Office had accepted the Horizon System, POCL itself would need good systems in place to address things like end-to-end testing?

Anthony Roberts: I think it meant it before that. There would have been end-to-end testing on Horizon and then, as you say, there would have to be links with any other systems that were being developed within the business. It was a lot simpler once it became a project which was effectively between ICL and POCL. That then meant that you could deal directly with the people responsible for the technology, whereas this is also about the management side of the technology and making sure that the whole thing was joined up.

Mr Blake: Is the impression given there that at least some of it will come back to the Post Office to take responsibility for?

Anthony Roberts: Yes.

Mr Blake: The last bullet point there is that live trial testing of the system was being devised at that stage?

Anthony Roberts: Yes.

Mr Blake: I can deal with this with other witnesses but it says Paul on the right-hand side. Do you think that was Paul Rich?

Anthony Roberts: Yes.

Mr Blake: It says lead CEC member. What’s the CEC?

Anthony Roberts: The CEC was the Counters Executive Committee. This was the group of directors who, with the managing director, effectively ran the Counters business.

Mr Blake: Those are specific issues that I’ve highlighted to take forward within Post Office Counters Limited but there were also issues with ICL that were addressed in this particular document. Can we go to page 8, please. Can we look at the left-hand side of that page, halfway down. It says:

“ICL Pathway’s own organisation appeared stretched managerially and technically.”

It says:

“the end-to-end overall programme processes and outputs sometimes lack clarity in responsibility and prioritisation.”

Over to page 9, “Key Issues Outstanding”, the very first issue we see “Robustness of ICL Pathway Programme”, and it says there, on the right-hand side, the final bullet point under that heading:

“Collective nerve needed to ensure no compromised on quality for sake of speed and to retain the programme focus.”

Then it says “All!” so that means everybody is responsible for ensuring that quality is not compromised.

Anthony Roberts: Yes.

Mr Blake: So that’s the summer of 1997. Concerns have been raised at board level and this is the report back to you chasing that up and it tells us, amongst other things, that you, POCL, need to take some ownership of end-to-end testing, that ICL is managerially and technically stretched, that a key issue is the robustness of the ICL Pathway programme, and we all need to make sure that quality isn’t compromised for the sake of speed. That’s a fair summary of the things that we’ve just seen.

Anthony Roberts: Yes, it is and the last point was one that we kept emphasising at the board. This wasn’t about a race: it was about getting it right because it was absolutely central to the strategy we wanted to follow for POCL.

Mr Blake: I know that you’ve said at the beginning of your evidence that you weren’t involved in the technical detail and the technical problems but this is at least you getting involved in some degree of the technical issues because you’ve requested quite a detailed paper addressing the technical problems at that stage.

Anthony Roberts: I think that it was partly technical. A lot of it was managerial. The issues on the ICL side were as much about the numbers of staff and experts that they were putting into the project. If you go back to where you were on page 1 – not necessarily – don’t need to turn it up, from my point of view – what we were seeing there was, in spite of this, the offices in Stroud, or wherever it was, were working well, there were three releases of software that had worked well. So it’s not as though nothing was happening.

I think this kind of review, which was what I wanted, was a warts and all review and there were some really fundamental points in it, both on POCL’s side, Post Office side and on the ICL side and what pleased me, I think, as we went further beyond that – which you may want to go – was that this kind of report, which would have been discussed too with ICL, was starting to make changes, both on our side and theirs, to try and sort out the issues there.

All the manuscript sidelinings were effectively allocating work to the members of the Counters Executive Committee to make sure that those things were solved or dealt with.

Mr Blake: You described it as warts and all. Some of those warts were quite technical warts that they were bringing to your attention such as end-to-end issues?

Anthony Roberts: Yes.

Mr Blake: Can we go over the page to page 10, please. DSS political issues. That’s the Department for Social Security. Somebody has highlighted there on the right-hand side:

“We understand other policy options ([for example] termination) may be being considered in DSS as contingency options. We need to confront this early politically.”

It’s got there “Stuart (with AJR?)”. Are you the “AJR”?

Anthony Roberts: I’m afraid so.

Mr Blake: Meanwhile, as early as the summer of 1997, there were political movements, which are beginning to appear, which are of some concern; is that fair to say?

Anthony Roberts: Yes, and they go back a long way. Even in my time as managing director, Counters, the most difficult relationship was always with the DSS, mainly because there was an enormous negotiation every so often about a rather huge sum of money.

We felt, right the way through this, that there was a fairly large proportion of people in DSS, not necessarily at the top, who really felt that they shouldn’t be going down this route, they should be going to Automated Credit Transfer straightaway.

Just going back a little bit, in the early 1990s ministers had tried to go down that sort of route and it had led to a fairly large explosion from the National Federation of SubPostmasters. There may even have been marching down Whitehall. There was one famous occasion when they did, which rather took the wind out of ministers’ sails, but that had always been something in the background and, although, at this stage, I think, all the people that my people were dealing with with DSS were working sensibly to try and do this.

This theme of “We don’t really want to be here, we’d rather be doing Automated Credit Transfer as soon as possible”, is one that you’ll see as it goes through the years, until we reach a point where there was a formal statement of what’s going to happen about ACT. But for a long time there wasn’t.

Mr Blake: The very final bullet point right-hand side at the bottom, it says:

“Commercial freedom exploitation critically depends on automation for [Post Office Counters Limited].”

That’s really a repetition of what we saw in your earlier slide deck?

Anthony Roberts: Yes, very much so.

Mr Blake: So, presumably, termination by DSS was a significant threat to automation?

Anthony Roberts: It was a significant threat to automation and it was a significant threat to the size of the Post Office network; in other words, if that had happened and we had lost, over time, a fairly short time, the revenue that we had from DSS, there weren’t many options that you had open to you, other than to say “Well, we’re going to reduce the size of the network”, which would have meant closing a number of both Crown offices and sub post offices.

Mr Blake: That would presumably dramatically affect the financial benefits as well that you had envisaged being provided by the Horizon project?

Anthony Roberts: Yes, it would. I mean, the commercial exploitation would have been almost impossible, I think, because we would have still been using a paper-based system at Post Office Counters while the world was moving on to automation.

Mr Blake: At that particular stage, preventing that from happening, the impression that’s given on the papers – and we’ll come to them – seems to be a very important issue for you personally?

Anthony Roberts: Very much so.

Mr Blake: Still in July 1997, we’re going to look at the Counter Automation Steering Group. That might be the final issue I deal with before we take a short morning break. Can we go to POL00031128, please. These are the minutes I touched on earlier, I took you to one particular passage, but now we can just spend bit of time on this first page.

Can you tell us about the Counter Automation Steering Group. You were the chairman of that group.

Anthony Roberts: Yes. It was something that I asked to be set up pretty early on in the process, once we knew we were going down the Horizon route. In one sense, it was a governance issue for me. I wanted to make sure that there was something where, periodically, I would have a detailed look with the team at what was happening.

The idea was, I think, that the steering group would meet probably every couple of months, bearing in mind that I was having meetings with managing director in between and there would probably a report to the board meeting every month, that this would be a slightly more detailed meeting that we would hold and, again, I was accompanied by the group managing director, strategy, Jerry Cope, and two of us would then meet with the key people, including Stuart Sweetman, at these meetings and would go through where we were in slightly more detail than we probably would have put to the Post Office Board.

But it was another way of getting me and everybody up to the same point and, after that, there would have been the usual monthly report to the board on how Horizon was going.

Mr Blake: Can we look at page 2 of that document, please, and point (iv). There are some concerns being raised here:

“ICL had taken steps to reassure POCL about their ability to deliver the programme and had drafted in additional senior resource to work on technical issues. A number of interim project milestones had also been created against which progress could be monitored …”

Can we look further down at (vi), and this is actually the paragraph that I took you to before, but we’ll have a look at that in a bit more detail:

“notwithstanding the work ICL had carried out on improving project control, it was probably an opportune moment for John Roberts, in his capacity as Chief Executive, to meet the Chief Executive of ICL, to reassure himself, on behalf of the Post Office … that ICL could actually deliver all that was being promised. A presentation by ICL would hopefully provide this reassurance and give both parties the opportunity to demonstrate the commercial importance and significance of Horizon. The commercial aspect which ‘united’ POCL and Pathway was not an issue for the [Benefits Agency] who actually had the means to pursue different options, without infringing contract obligations. Given this it was important that the meeting with Pathway was not perceived by them or the BA as being in any way conspiratorial …”

So you were, at that point, liaising with your counterpart at ICL to ensure that they could deliver on the project; is that –

Anthony Roberts: I think you’ve got to go down to the next item, Mr Blake, (vii), and see what the conclusion was. I was liaising probably for the first time with the chief executive because what had happened, going back to the note that Paul Rich had written, with all the sidelines and all the actions, that had also pulled out the fact that ICL needed to up its game. This is a later document showing that they were in the process of at least upping their game or upping the numbers, and the idea was that it was now perhaps sensible if the chief executive of ICL and I met.

I don’t think we ever created a presentation but I think it was later in the year, towards the end of the year, that he and I met and it was very much along the lines of me and him talking about “Are you able to handle this, are you able to do this, is it working with the new people that you put in?” It would have been that kind of discussion and almost for both of us looking each other in the eye and saying “Is this going to work?”

So that was the sort of genesis of that kind of meeting. But my relation is it wasn’t a presentation, it was just a one-to-one meeting.

Mr Blake: Can you explain at the end that conspiratorial comment about the Benefits Agency?

Anthony Roberts: Yes. One of the things throughout this, as I said a few minutes ago, is that the relationship with the Benefits Agency was always quite difficult. If we had been seen sort of clandestinely to be having meetings with the bosses in ICL, they would have, I think, thought this was not right.

At the same time, it was becoming clear that the main thrust of all this was going to be, not through the Benefits Agency, it was going to be ICL and POCL and, therefore, it was just making sure that they would know that this kind of meeting was happening and that if they said “Oh, we want to come”, I would have probably said no and I would have explained why.

But we were sensitive to the fact that while the relationship between us and ICL seemed to be growing, and growing better, it was slightly different with BA and that’s what we were concerned about.

Mr Blake: That was the summer of 1997. Was the principal purpose of that meeting to keep the show on the road, as it were?

Anthony Roberts: I think that’s probably going a bit too far. It was certainly – I don’t know – to “oil the wheels” perhaps is a better way of putting it. The two of us chief executives, me and of ICL, to have had this kind of conversation probably without a record to say, “Look, you know where are we really? Come on. What is the issue here? What’s happening? Are you happening with what the Post Office is doing? Am I happy with what ICL is doing?” It was that kind of meeting where both of us would have, if necessary, gone back to our people and then said, “Look, we need to do this or we need to do that”.

Mr Blake: Would you have been meeting him in the absence of the Benefits Agency because of your concerns about the Benefits Agency’s reluctance to engage in the programme and you wanted to see effectively what ICL could do to just make it happen?

Anthony Roberts: Yes, and also there were just the signs, I think, at this stage – I may have got the timing wrong but I think it was at this stage – that ICL were starting to worry about the Benefits Agency.

Now, I can’t explain that much further because I don’t know really what the worries were but it was something that then became much clearer later that they felt – and this was probably a year down the line – that there was no point in going on with the project as we’d originally conceived it because they didn’t feel that the Benefits Agency would ever sign up to it. But that’s down the line.

This was much more just a sort of feeling that the discussion would have been quite different if there’d been somebody from the Benefits Agency there as well. I wanted to get a very clear picture, if I could, of exactly where ICL were and what they thought they were doing and whether they felt they were now meeting some of the issues that were set out in that earlier note from Paul Rich.

Mr Blake: Sir, I think that’s probably an appropriate time to take a short morning break.

Sir Wyn Williams: What do you mean by “short”, Mr Blake?

Mr Blake: Could we come back at half past? Or is that too short?

Sir Wyn Williams: No, no, that’s fine. I’ll go by that clock and I’ll do whatever old-fashioned judges used to do: march in, even if half the room isn’t ready.

(11.17 am)

(A short break)

(11.30 am)

Mr Blake: Mr Roberts before the break we were up to the summer 1997. I’m now going to move on to March 1998. Can we bring on to screen POL00069096, please.

Now this is a document that you received, I think your name is on the recipients, and it says, “I attach some notes the last CASG meeting.”

Can we go on to page 3 please. In fact, if we go over the page, page 2 we’ll see that it’s the meeting of the Counter Automation Steering Group on 27 March 1998 and you’re there as Chairman of that meeting?

Anthony Roberts: Yes.

Mr Blake: Can we go to page 3 and look at the top two paragraphs. Thank you. About three quarters of the way down that first paragraph it says:

“POCL would not seek to delay Pathway’s April 1999 roll-out date, but before accepting the system would want to be certain that it was working correctly; work on EPOS [that’s electronic point of sale] was continuing and Pathway had indicated that whilst it could provide a system which met the contract, its lack of robustness could generate high level of errors within POCL. This was being investigated although it was difficult to quantify how the system would work until after it had been installed and was operational.”

Now, EPOSS, electronic point of sale service, that was crucially important to the Post Office, wasn’t it?

Anthony Roberts: Yes, it was because that was the basis on the whole of the strategy for the future.

Mr Blake: Its reliability would have been essential to enable the accurate reconciliation between physical cash and stock held in branch with the transactions that were performed by the subpostmaster; is that right?

Anthony Roberts: I don’t know whether it was the EPOS system itself or whether it was a separate one but your point is absolutely right, Mr Blake, yes.

Mr Blake: This is a year after the board follow-up report that we looked at earlier this morning and there are certainly echoes of that report in terms of, “Concerns over robustness, “Could generate a high level of errors, “Difficult to quantify until it’s up and returning”. Would you accept that?

Anthony Roberts: Yes, I would bearing in mind that the process of developing Horizon was changing month by month so that the first report would have been in relation to what had happened up to that date. I think at that stage probably EPOSS hadn’t even started, they hadn’t started work on it. This would be another year I guess further on and it was showing that for EPOSS there were the sorts of errors. To be fair, I think that continued for quite some time, that when there was a new element of Horizon that came forward, when it first came forward it was creaky and that had been to be worked on. I think that is a theme that goes all the way through until we reached – not at the end but until the period when we did say, “Yes, it’s now okay”.

Mr Blake: I mean, you’ll remember the board document that we saw earlier talking about a lack of robustness about a year earlier, again concerns about lack of robustness as you say this time in terms of EPOSS. As chair of that committee, would you have been concerned about that at that stage?

Anthony Roberts: Oh, yes oh, yes.

Mr Blake: And would those concerns have been raised at board level as well as in that group?

Anthony Roberts: They would probably have been reported to the board in the sort of monthly statements that came. It would depend a bit on what we expected or what we thought ICL were doing about them. What we wouldn’t have done was keep saying to the board, “It’s not robust, it’s not robust, it’s not robust”. We would have been explaining where we were at any particular time. The robustness part, for me, would have been saying to the team, “That’s got to be sorted out, are you sorting that out with ICL now? Is that happening?” and they would have then explained hopefully that it was, in which case I may have mentioned it to board, I may not. I think that would depend a bit on what else we were saying at the time.

Mr Blake: Would you have considered that that paragraph about the lack of robustness to have been sufficiently serious to have raised at higher levels?

Anthony Roberts: I can’t answer that because I can’t judge that without seeing what else there was around at the time and if there was anything else within those minutes. We would have normally given the board an overview of where we were. Certainly I think robustness, that would have come up and I think I made the point in my own evidence that throughout this we were concerned about robustness. Normally it was robustness for another piece of the jigsaw that they had been working on.

But the board would have been under no – it was put in no surprise to the board that we were concerned about robustness. That would have been a theme that we would have used as we’d gone through this and the board would have made the point, if you remember, going back to the issue about – this wasn’t about time, this was about getting it right and, therefore, if it wasn’t right we would certainly have reported that to the board.

Sir Wyn Williams: Mr Roberts, can I just ask you about the language on there because I’m not making the point in my head. Just reading “work on EPOSS was continuing and Pathway had indicated that whilst it could provide a system which met the contract, its lack of robustness”, et cetera. So this is Pathway themselves telling you it’s lacking in robustness. Have I got that correct?

Anthony Roberts: Yes, it is.

Sir Wyn Williams: Yes, fine.

Mr Blake: You have talked about a jigsaw. I mean EPOSS is a pretty crucial piece of that jigsaw.

Anthony Roberts: Yes, it is. I mean, actually all the pieces were crucial for that jigsaw. We wanted all of the pieces of the jigsaw to work if the whole Horizon approach was going to work.

Mr Blake: At that time POCL hadn’t accepted the system. Did you think that the acceptance process and the acceptance criteria were therefore important at that stage?

Anthony Roberts: Yes, they were. They were important at any stage and they were going to be crucial to the decisions we took at the end to accept the system.

Mr Blake: Let’s go on to May 1998. Can we look at RMG00000027, please. That is a meeting of the board on 12 May 1998.

Can we look at page 2 at the bottom of that please and a bit further down we see, on the left-hand side chief executive’s report, John Roberts, and this – over the page, the next page is a discussion about Horizon.

Can we look at the bottom of that page, it provides an update on the Horizon project and in (i) it says:

“Taking fully into account:

“the latest project slippage

“the likely consequences for ICL

“the absence, at this stage, of an alternative POCL strategy …”

Can we go over the page:

“the unequivocal legal advice to defer any action until the Treasury Review was complete.

“The Board unanimously confirmed its view that The Post Office should not join with DSS in issuing a 13 week Cure Notice against ICL.”

The reference, on the top of that page, to the absence at this stage of an alternative POCL strategy, is it fair to say that POCL was, at that stage, focusing on how to make Horizon work rather than alternative options to Horizon?

Anthony Roberts: Very much so.

Mr Blake: We’ll go back to that presentation. So that’s POL00028570. This is the presentation we saw this morning. Can we look at page 7. Those were the benefits we went over and page 9, “central to commercial future/viability”. So again, it was important at that stage to stick with the Horizon programme?

Anthony Roberts: Yes.

Mr Blake: Page 16 of that document shows probable impact of termination:

“Over 25 per cent of POCL income lost.

“Inevitable spiral of decline for POCL …

“Over 17,000 job losses estimated … “

That’s pretty dire stuff. Did those fears play a part in committing to Horizon at that stage?

Anthony Roberts: Yes, they had throughout. As we discussed earlier, one of the driving forces for automating the Counters business was that certainly I and the board at the time were finding it very difficult to see what the future would be for a 17,000 network of post offices which were paper-based. There’s probably a tiny element – I think this was a presentation to ministers – of painting this as black as it possibly could be, for obvious political reasons, but that’s a pretty good statement of what we thought would happen if we were not able to automate the business and the other consequence of this, that because pension payments would have to continue to be paid in some way, then the DSS would automatically go down an automated credit transfer route probably faster than they would have otherwise done.

Mr Blake: We can take that down, thank you.

Moving to the summer 1998, I’m going to look at another document, that’s POL00028648 and this is a letter from yourself, at page 2, to Ian McCartney. Ian McCartney was the minister in the DTI at the time?

Anthony Roberts: Yes.

Mr Blake: That’s 9 July of 1998. The second paragraph:

“Our unequivocal view is that the Horizon programme, and with it the Benefits Payment Card, should proceed.”

That paragraph goes on:

“We are in no doubt that the programme is now capable of being implemented successfully – a conclusion also reached by the expert panel.”

I think – is that the Treasury expert?

Anthony Roberts: Yes, it is.

Mr Blake: That was led by Sir Adrian Montague?

Anthony Roberts: Yes.

Mr Blake: Paragraph 3, it talks about needing sufficient time before the Benefits Agency switches to payments through banks and if we look at page 3, that’s the second page of the letter, let’s look at the final paragraph, final sentence is:

“Continuing with Horizon and the card, and in parallel developing new services, offers us the best chance of achieving that result – and will help create the modern Post Office enterprise for the next century.”

It also says in this letter that if DSS wish to abort the card, it wouldn’t necessarily follow that you would wish to continue the contract with ICL; is that right?

Anthony Roberts: Yes.

Mr Blake: So again, in this letter you are really pressing for a continuation with the Horizon project together with the benefits payment card?

Anthony Roberts: I’m also pressing for a decision. What I wanted to know – and this was the start of, I think, a period in 1998 which I think I described somewhere almost as the lost year. Where it was very important that we understood what Government wanted to do, and there was, inevitably, a tension between those in DSS who perhaps wanted to go further and faster down the Automated Credit Transfer route, and us who were saying, “Look, the best answer for us is the Benefits Payment Card” and then going beyond that to automate the business for the future in the way that you and I have been describing.

Mr Blake: An important part of that penultimate paragraph there, the final sentence:

“If DSS wish to abort the card it would not necessarily follow that we would wish, or indeed be able, to continue our contracts with ICL.”

Anthony Roberts: If we were going to lose the major customer through Post Office Counters, I think it would have thrown everything up in the air. We would have had no option but to really sit down and say, “If we’re getting 250 million pounds’ worth of income a year from this one customer and they are going to leave us, how are we going to handle that if, in fact, we then don’t have an automated system?”

I think all bets would have been off if we had reached that stage at the time of this letter.

Mr Blake: Can we go to BEIS0000421, please. Now, this is – I think it’s a Government document that you may not have seen at the time. Can we look at page 5. There are various different options there as at November 1998. Option 2 is continuing the project without the benefit card. Can we look at paragraph 17, which is a bit further down that page. It says:

“The Post Office oppose the Option 2 route if Option 1 fails. They would prefer to seek tenders for a new system. They doubt anyway whether Option 2 would be a commercially viable proposition for ICL at least without payment of significant compensation to ICL for their work on the benefit payment card … which has comprised the main element of their work to date.”

Is that an accurate summary of the Post Office’s view in late 1998?

Anthony Roberts: Yes, I think it is and I think it very much follows the kind of point I was just making to you that if we had gone to that position, we probably would have said, “All bets are off. We’ve got to have a really strong think now about what we do next”. We couldn’t have just continued without this being a lot clearer than it was with Government.

Mr Blake: So again, was there real pressure at that stage to keep the benefits card option?

Anthony Roberts: Yes, there was. I’d met Frank Field, now Lord Field, who was Minister of State at the DSS, earlier on and had quite a difficult meeting with him where I felt that the route he wanted to take – this was the cure notice – would have put the project in jeopardy and didn’t want to go down that route. So I think everything we were doing at that time was to try and convince Government that the benefit card route was the best one to take and it was certainly the best one to take for us.

Mr Blake: Was your focus at that stage very much on the political level and trying to convince the politicians and officials?

Anthony Roberts: Sadly, yes. One of the roles that came to me from all parts of the Post Office, whether it was POCL or the other businesses, was I did have to spend a large amount of my time dealing with Government in one form or another and when there was – or there were issues of this kind, it was certainly part of my role to make sure that I was there, at times on my own, at times with the Chairman, at times with the managing director of the business. It was something that took an enormous amount of time up and, while we were handling issues like this – I had a wry smile earlier on given current events today – which the top of the note you’ve shown me said, “industrial relations in the Post Office”. There was a bit of that as well.

Mr Blake: We spent some time this morning on 1997/early 1998. At that time was all of this anticipated or was it something that you hadn’t anticipated; the level of political fuss?

Anthony Roberts: It was a year in which there were a number of reviews and I just felt that the issues were swinging uncertainly. We were getting a lot of support from the Department of Industry, who I think were worried about an ultimate decision which might then effect the sub-post office network, in particular. There was just a feeling that I had, particularly after the meeting with Minister of State at DSS, that there was a stronger view that they were not keen to see this continue. It’s a feeling rather than – I can’t produce you evidence for that apart from a difficult meeting.

There’d been the Treasury panel review with Sir Adrian Montague. There had then been, later on, a facilitation exercise by Graham Corbett, to see if new heads of agreement could be reached in the light of the Treasury panel review which, in the end, could not be reached, mainly because DSS I think didn’t accept them.

So there was this feeling throughout this period that we needed a Government decision, one way or another, at the same time as we were trying to keep work going as far as we could on the basic Horizon programme.

Mr Blake: I am going to look at early 1999. Can we look at POL00028603, please.

This is an update from Stuart Sweetman, to yourself and others on 23 February 1999. He says, about halfway down:

“I believe we should really give the new option a thorough work out with the following key aims.

“1. It must be commercially acceptable – as good as previous board authority and meets agreed non-negotiables …

“2. The [Post Office’s] vision for POCL is sustained [and] accelerated

“3. Government public announcements support the above and establish among our stakeholders

“4. Key strategic risks are mitigated (customer retention, income flows, uncontrolled network changes et cetera)

“5. A revised and agreed programme plan is produced that matches POCL’s key needs – pace of installation together with a plan for service development (enabling process efficiencies as well as market-based products.”

There isn’t any mention at that stage of technical robustness as a key aim; is that fair to say?

Anthony Roberts: Yes, and I think that it was fair that there shouldn’t be. This was part of a rather long-ranging negotiation with Government. It was in the light of various other things going on, either with the Permanent Secretary at the Treasury or with ministers, around what line they might take and it wasn’t at all clear to us at that stage what line they may take, although we did know that they were looking at a slightly different option. I get confused, there were so many “B” options but there are a number of options that they were starting to look at and you have got to see this as a negotiating document. This was really setting out what we thought we needed from a decision about the way the project should go forward.

Whether the project was robust was almost a second level – at this stage – issue because until we’d got that clear, it didn’t matter whether it was robust or not, we might have not been going down the path at all. So this is very much – it had all gone up a level and this was very much about trying to get a clear statement of what Government, as our shareholder as well as responsible for DSS, were prepared to accept or wanted – what route they wanted us to go down in order to continue to automate counters.

Mr Blake: Stuart Sweetman was the managing director of Post Office Counters?

Anthony Roberts: Yes, he was.

Mr Blake: Again, was he spending quite a lot of time at that political level at that stage?

Anthony Roberts: Yes. He was doing quite a lot. At that stage I was slightly involved in trying to merge the Post Office with the Dutch Post Office, which was taking a bit of time and in the end didn’t happen. So there was a balance between us. Some of the work, particularly if it was getting more and more detailed, Stuart Sweetman would be taking on as MD. As much as we could we would go as a double act and then there were certain meetings that I would go to on my own or sometimes with the Chairman even, as this accelerated and went higher and higher.

Of course, as you have said – or as the first line says, you know, once it’s gone to Number 10, you know there’s going to be a fairly high level set of political discussions that will go on from that.

Mr Blake: So as CEO at this stage, you were heavily focused on the political side plus other duties such as an entirely separate matter of a merger and Stuart Sweetman, who was the managing director of Post Office Counters Limited, also quite heavily involved in the political matters, trying to see the project through?

Anthony Roberts: Yes.

Mr Blake: Let’s look – you have mentioned the various Bs and I haven’t got to the grips with them but let’s see what we can make of POL00028574. This is a letter to Sir Steve Robson in the Treasury, from Stuart Sweetman, copied to you. So again, this is, at this stage, the managing director of Post Office Counters Limited getting involved at the political level.

Now, that second paragraph talks about a preferred option B1 variant. Do you remember the various options – or some of the various options that were in play at that stage?

Anthony Roberts: Imperfectly I think this answer to that, yes.

Mr Blake: Is it fair to say that there are a lot of different variants –

Anthony Roberts: There were. There were a lot of different variants –

Mr Blake: – offering a lot of different options?

Anthony Roberts: – and they tended to change as the negotiations went on until we got a final set later that year.

Mr Blake: Can we look at page 8, please. Mr Sweetman says:

“I trust … these proposals help to focus [our discussions] now within Government as we have to commit to ICL soon. I will be happy to discuss these issues with you. Alternatively John Roberts has already offered a meeting with you, him, and the DSS Permanent Secretary very early next week, upon your return, which would be another way forward.”

So that’s you offering again to get very involved at the political level.

Anthony Roberts: Yes.

Mr Blake: I am going to take you to your witness statement – and it can be shown on screen WITN03390100.

It is page 17 of that statement, paragraph 31 – so the bottom paragraph. This is how you described that period:

“I have been asked by the Inquiry to comment on my understanding of the technical issues and robustness …”

Sorry, one minute. Yes, sorry:

“I have been asked by the Inquiry to comment on my understanding of the technical issues and robustness of Horizon at this time. For me, the issues at that moment, and throughout the process which ended with acceptance of new Heads of Agreement, were not the robustness of Horizon or technical problems, of which some still remained, but whether the Post Office could agree with the ministerial proposal. The negotiations were not at any time affected by views on either side, of the technology, they were solely about the overall future of the project, its cost and the Government proposal on the table. The prospect of major reductions in the Post Office network if Horizon was terminated were foremost [on] my mind.”

So that’s exactly what you were saying just now that actually it didn’t really matter about the technical issues so much if the whole project didn’t go ahead and your focus therefore was on getting the project.

Anthony Roberts: Yes, and the interesting thing was while this had slowed everything down, because there wasn’t a lot of point in spending a great deal of money on different technical approaches if we didn’t know which direction we were going in, but the work was still going on between the Post Office Counters team and ICL, but it was going on at a much slower rate, and they were using some of this time to sort through or retest some of the issues that we talked about earlier where they weren’t robust enough.

So, in one sense, there was a positive coming out of that but you couldn’t take that too far because we’d have been spending money to point in that direction where, all of a sudden, we might have got a decision taking us in that direction.

Mr Blake: Whilst these matters may have been dealt with or being dealt with, presumably your focus at that stage, though, was on the political level?

Anthony Roberts: Very much so.

Mr Blake: Correspondence with Government, for example, at this stage would have been about pushing through what was option A, the Benefits Payment Card, rather than talking about had technical issues?

Anthony Roberts: Yes, it would have been, and I’m sure everybody can understand that when it gets to this kind of level of discussions, and you get Number 10, you get the Secretary of State for Industry, you’ve probably got the Secretary of State for Welfare, we’re talking about those sorts of level of discussions with briefing papers being produced by those departments, not by us and, at that stage, we were not clear which way government was going. We could have had a decision fairly quickly that said scrap the whole thing, and we didn’t.

But then, the way that I remember it came out of Number 10, was asking the Treasury to try and develop, I think at that stage, something which included a smartcard, which we hadn’t really looked at at all because that had been ruled out or opted out at a very early stage.

So we were very much at that kind of level, where, sadly and almost inevitably, you’re sort of sitting back with your arms folded waiting for somebody to say “It’s got to be like this”. We were feeding in, as you have seen from the letter from Stuart Sweetman, views on that and I’ve got no doubt there would have been telephone conversations between officials and between, probably, Stuart Sweetman and his team, more than me at that stage, but it was very much this would have to result at some point in a ministerial decision.

Mr Blake: You mentioned a smartcard option. Let’s look at May 1999. That’s POL00028618. This was a draft paper for the board on 5 May 1999. Can we go over the page, please, and paragraphs 1 and 2 give the context:

“The purpose of this paper is to

“update the Board on the progress of negotiations on the future of the Horizon programme since the last Board meeting on 27 April 1999

“decide the Post Office’s view of the best way forward as Ministers are meeting imminently …

“The timetable for the discussions has been driven by Fujitsu’s written insistence to the Prime Minister (7 April 1999) … for new legally binding Heads of Agreement (the ‘Agreement’). The Agreement would mean that Fujitsu will provide financial support for a reshaped programme, and all historic claims [will be] settled.”

Can we look at paragraph 4, please. This is precisely what you were just saying option B was at that stage, at least about using a smartcard. Do you remember that?

Anthony Roberts: Yes, I do. Yes, that’s quite right.

Mr Blake: If we look at paragraph 10, which is the final paragraph, we there have discussions about a variant known as “Option B.1.2”. Do you remember that?

Anthony Roberts: I remember the term, yes. I remember option “B.1.2”. I hope you are not asking me to describe it.

Mr Blake: I’m not. I think the fair impression that you get around this time that lots of different options are being up in the air and the discussion is very much focused on which option at that stage?

Anthony Roberts: Yes, it is.

Mr Blake: Let’s look at POL00039916, this is an updated version of 21 May 1999, if we could look at page 2, I think it’s the same document just updated and there we’re looking in paragraph 5 at option B3. It talks about:

“… a new option (known as ‘B3’) as a way of salvaging something from ICL’s work to date as an alternative to termination.”

What did you understand or what would you have understood by that?

Anthony Roberts: I think it was the classic case of trying to both continue with something and some of the work that had been done and the money that had been spent, whilst, at the same time, moving away from the original idea of having a Benefit Payment Card because the characteristics that are set out in that paragraph changed the basis of the relationship between Post Office and ICL and also changed the basis going forward of what we were being asked to do.

At the same time, it would have met our biggest worry that there was to be no automation. There would have been some sort of automation following it. In one sense, it’s the classic middle of the road solution keeps everybody reasonably happy.

It was being driven, as I think you said earlier on when you read the part about ICL, by the fact that Fujitsu, as far as I remember, had at that point, because of pressures on their accounts and the fact they were coming up to an audit and their annual general meeting, or something like that, they wanted a clear decision by something like the end of May from the government about what was going to happen. So what we had here, I think, was the start of what became the Government’s key option – in fact, it wasn’t an option? This is what the government decided in the end they wanted to do as a solution to both the pressures from ICL and also from us, in terms of what we wanted.

There is – I have seen one document which, if I may, I just bring to your attention, which was a note from the Prime Minister’s private secretary, Sir Jeremy Heywood, saying that what the Government needed to do was to produce a policy or a decision which, on the one hand, did not produce a major bust-up with the National Federation of SubPostmasters, which, on the other hand, would be acceptable to government and would be sustainable in the context of the Public Accounts Committee then asking why they had gone down this route.

Pretty tough ask. But I think that kind of approach was behind option B3.

Mr Blake: Can we look at paragraph 15, which is page 4, to see the analysis of option B3. Paragraph 15 is the impact on the Post Office Counters Limited and it says, amongst other things, about halfway down:

“In addition, it would be contracted to having an IT infrastructure that will not be optimal as its business requirements are likely to change following the BA payment card service being stripped out from the design. POCL will be faced with a loss of confidence in its marketplace and the consequential need to reshape its network much more rapidly than envisaged. It will need to review its strategy, including facing the real prospect of managed decline.”

Now that seems to be an acknowledgement that IT infrastructure would be suboptimal if the benefit card system service was not part of it; is that right?

Anthony Roberts: Yes, it is because the whole approach, right from the period in 1994/96 when the contracts were let, was that the benefit card was central to the automation project itself and it was central partly because this was why we’re all there in the first place from the DSS benefit agency point of view: this was a solution for them.

The key thing about it was that if you spent two years, as they then had, trying to develop that kind of system, then it wasn’t true just to say, “Oh, well, you can use that but do it in a different way”. I’ve got no doubt that a lot of the work on the benefit card would have been kept and used again. I can’t justify that, for the reason I said before, that I don’t understand the technology well enough, but I’m petty sure that would have happened but there would have been a lot of work that had to be done to now handle this in a slightly different way, and that was what B3 was going to force us to do.

Mr Blake: The problem that faced the Post Office was that you will be left not only without the benefit card and all the benefits that came from that but you will be left with a system that you considered to be suboptimal?

Anthony Roberts: It would be suboptimal in the sense of the comparison with the benefit card and remember again that, at this stage, we were trying to set out a position to argue strongly for the benefit card, not for option B3, and it would have been suboptimal but when I look back now I think we perhaps overplayed that a bit because you could have worked on that. It would have certainly cost more, which it did, and it took a lot more work, which it did, but out of it came, actually, a Horizon System, which, for whatever the many and very disturbing faults that happened in the 20 years afterwards, actually survived for almost 20 years.

Mr Blake: Can we look at page 9 of that document, that’s correspondence from the chair of the Post Office at that stage, Dr Bain to Stephen Byers on 18 May 1999. Again, 18 May 1999, presumably a time of lots of frank exchanges with ministers and officials?

Anthony Roberts: Yes, because – I can’t now remember the precise date but there was this end date in Fujitsu’s mind where they had to have some kind of decision and that was about a week later than this note, I think – something like that.

Mr Blake: Can we turn to POL00039931. This was a briefing to ministers but you may not have seen this at the time –

Anthony Roberts: I’ve seen it since, yes.

Mr Blake: Can we look at paragraph 4, the summary there, as at May 1999, it says:

“POCL believe the Horizon hardware and software is probably suboptimal as the platform for providing network banking and Modern Government services, but would need several months’ work to have a clearer view. They are therefore unable to take a view on whether the Horizon hardware and software is preferable to the system they might procure following termination.”

That seems, again, to be a recognition not only that there were all the problems with robustness that we previously discussed but questions over whether the system itself would be suitable in the absence of the benefit card?

Anthony Roberts: Yes, that is quite right and what we were tackling or trying to tackle at this stage was to get across to Government that you couldn’t just switch from a benefit card to the order books – barcoding order books, which I think is part of this particular option, and just assume you put it on the same technical platform.

We weren’t clear, at this stage, exactly what they wanted to do and there was certainly not much definition behind those options, the B3 option that you read out recently and, until you knew that, then it would be very difficult to say what the technical changes would be or would be necessary. I think the word “probably” is very important in that paragraph 4. We just didn’t know, at that stage, because we just didn’t know exactly what government in the end would be asking us to do.

Mr Blake: The word “suboptimal” there, do you think that that was repeating a phrase that had been said by the Post Office? It’s similar to the language used in that previous document we looked at.

Anthony Roberts: Yes, I think it probably was. The definition of suboptimal is always difficult, isn’t it, unless somebody comes out and says “It is suboptimal because”. I think what they are really saying is what I just said, which is until we knew exactly what we had to do it was so difficult to say that what had been worked on so far would then work in the future without some major changes.

Looking at the words and, as you say, this is a second-hand, in the sense that they are quoting. This is – the ministerial briefing is quoting what somebody believes POCL have said, and probably rightly, but whether we would have defined that more clearly as far as we could.

But no, it’s certainly a word or phrase that’s been used by POCL.

Mr Blake: Still at that stage, POCL were presumably pressing still for the benefits card system?

Anthony Roberts: We pressed for the benefit card system until they told us that we’re not going to get it because we really did feel that this was the best way to go. We worried a lot about those customers at a post office counter who didn’t have technology, who didn’t have a bank account and, with the best will in the world, would find it difficult, at first at least, to cope with some new technical approach. Obviously we also wanted to retain the work from the Benefits Agency.

Mr Blake: I was going to say, presumably, in your position, the financial implications were also very significant?

Anthony Roberts: The financial implications were very, very significant, yes.

Mr Blake: We know that in late May 1999, the benefits card system was scrapped. What did you think at the time was the reason behind that?

Anthony Roberts: Can I ask you to put up on the screen the annex from – on this document, which is the note from Sir Jeremy Heywood.

Mr Blake: Yes, that’s the very final page, page 7 of that document.

Anthony Roberts: Yes. This I read for the first time very recently when I saw the document and it almost summarises the problem that the government had in taking its decision: we don’t want a huge political row with the subpostmasters; ICL was, at that time, the premier British IT company, even though it’s now owned by Fujitsu, and they don’t want to put its future at risk; and they want to be able to defend the position.

In the light of that, coming from Number 10, I think that ministers had to try and put together some kind of compromise, if that’s the right word, or some kind of decision, which they would want to take, which met those criteria and what we then had, eventually, as a government decision, was taken in the light of those three issues all of which are absolute sensible and understandable issues but it did mean, at the end, that that was driving, or must have had, some major impact in driving the eventual decisions that ministers decided to take.

Mr Blake: Can we move to June ‘99 and look at FUJ00058183. By June ‘99, a core part of the original plan, the benefit payment card, had been scrapped and this is an ICL report. I don’t think you would have seen it necessarily at the time? No.

Can we look at page 8 of that document, please. Can we look at the final two bullet points on page 8. So this is ICL reporting:

“To date POCL have refused to enter into any discussions with us about new business development plans and programmes and this is likely to be the position until we are through Codification and Acceptance.

“Although we are now some six weeks into the new contract arrangements POCL continue to remain negative and critical towards the programme and have not yet got over their bitterness on the way they have been treated within the public sector, for which unfortunately they continue to hold us partially to blame. We have to work at this as we make progress with the commercial, financial and programme matters in order to find a more positive and long-term relationship.”

Is your recollection that business development plans had been put on hold at that stage?

Anthony Roberts: Yes, because I think we did not have a view yet about whether we would want to continue to work with ICL after they’d completed the contract and the contract, I think, ran through to about 2005. I don’t agree with the second paragraph quite so much. I’d seen this word “bitterness” used somewhere else. As a board, we were fair heavily hacked off about the way that this had been handled but it was a business decision. I don’t think bitterness really covers it, certainly in our terms. Whether that was from some of the people who had been up to their ears in dealing with all this in the programme, maybe so.

What I think we were thinking at the time was “Let’s get this done”. We did have views we started to develop in more detail about how we would use the system after it had been accepted and after it had been put in fully. At that stage, I can well understand why ICL wanted to know about this because they liked to be first in the frame for any development beyond that that might occur, whether that’s in banking or whether it’s in Government Gateway or whatever.

Our view, at that stage, was, not surprisingly after everything that had happened, we weren’t yet prepared to talk to them about future possibilities beyond delivering the contract. I think it’s fair, afterwards, to say that this eased and as we got further and nearer to the time when the system was accepted I think there were then more discussions starting. So I think this was very much at a point in time where we’d had to go down this revised route that Government wanted and there was doubtless something that was flowing over to that into the relationship with ICL.

Mr Blake: By that stage, by the benefits card system not being brought forward, presumably one of the reasons for that was significant delays in the project.

Anthony Roberts: Yes. I think in the minds of DSS it was and I can understand it from their point of view. Their view was they were paying more than they should have done, a view we didn’t accept, but that was their view – “We’re paying more than we should have done for transactions at post offices” – and that had been a view which had gone for many, many years.

The route that we’d taken with, at the start, their agreement was the benefit card. This is – my view and perception of the time is that this was a good reason, a sensible reason, from their point of view, not to continue with that card and one of the things that we didn’t know at the time that this was being discussed was whether that would have meant an immediate move to Automated Credit Transfer and, therefore, a pretty immediate loss of business, or whether that would come later. That was clarified a bit later on.

But I do think that it was more to do with the fact that they saw, for obvious reasons, a way out of this project and not going down the benefit card route.

Mr Blake: Do you not think that there was at least some damage at that time to the relationship with ICL?

Anthony Roberts: Yes, there would have been, in a strange sort of way, because what had sparked all this off had been the fact that ICL, I think, were – they were having to deal with something in their accounts which was around £250,000, some problem, and, therefore – and quite rightly in my view – they were saying “This has got to be sorted other by this date”.

The sorting out ended up with a decision by government which we had great difficulty in accepting but then, in the end, decided to accept and, of course, for a short period, maybe for a longer period at different levels, this would have meant “You guys have put us in a position”, ICL, “where this has brought this to a head in a way we’re not happy with”.

I don’t think that lasted too long – I really don’t – because, at the end of the day, it was two businesses trying to sort something out, both of us stood to lose even more if the relationship between us had not been good and I really do think that, as this progressed, that got out of the way and they really got down, both sides, to trying to make this work in the new form.

Mr Blake: Staying on this document, could we just look at page 10 and towards the bottom of the page. It’s at the bottom of the page here, it says “moral” but it means “morale”:

“The [morale] and motivation within the team is not the best I have encountered during the past three years. Following on from the initial shock caused by the withdrawal of BPS, the staff are very uncertain as to their future and that of ICL Pathway. We will need to work very hard during the next few months if we are not to experience a large exodus of key people.”

I know that you weren’t based at ICL but did you experience any lowering of the morale or any issues with ICL’s approach to the work at that time?

Anthony Roberts: No. The interesting thing – I think I put it in my own witness statement – was that while all this was going on at sort of my level, ministerial level, all of that, the two teams were still working, and I think it may be that the bitterness was on both sides that they put enormous amounts of time in. Some of these people were working incredibly long hours to try and handle all of this and then, all of a sudden, somebody says, “We’ve shifted the goal posts and it’s now over here”.

I think you don’t get the exodus quite so much in the public sector as you would in the private sector but all of these people, we were saying earlier on, were experts in an area where there were not too many experts and I think that that was what was causing the problems. Once they got back into trying to work out – because we were still at this stage having to work out what the Government decision meant. I think we were given three months to actually look at what this means and try and develop new heads of agreement. Once they got stuck into that, I think it worked a heck of a lot better.

Mr Blake: I’m going to move to July 1999 and we’re going to look at some board minutes and it’s probably – we’ll probably stay on that topic possibly until lunchtime.

Can we look at POL00000352, please. This is 20 July 1999. It is a meeting held in a manor. Was this an away day or away period?

Anthony Roberts: Yes.

Mr Blake: Horizon is addressed at page 8 and page 9 as well. Can we, for our purposes, look at page 10. At the very top of page 10:

“In particular the discussion had identified four workstreams to be progressed:

“Influencing the timing of ACT.

“Getting the most out of Horizon.

“Reviewing channel strategy across The Post Office.

“Defining options for the Counters network including subsidy issues.”

Then at (ii):

“The Board had to decide by 31 July 1999 whether it wanted to terminate or sign the revised contract with ICL …”

Now, I want to spend a bit of time on the next page but I think I’m going to first just take you back to your witness statement about this, if that’s okay. Can we return –

Is it possible to have two side-by-side or is that – yes? Excellent.

WITN03390100 and it’s paragraph 36 of that witness statement. I can tell you which page that is: 21. I’m going to read you a little bit from your witness statement. It says:

“I have been asked by the Inquiry to comment on my understanding of any technical issues and the robustness of Horizon at this time. I have also been asked to comment on my knowledge of any problems experienced by subpostmasters, any concerns I raised and why the decision to sign the contract with ICL was remitted to the Chairman and Chief Executive. The Board were assured by the Horizon Project Director in the meeting that the system was robust and fit for service. The only issue reported was that some subpostmasters were having trouble balancing their accounts which was seen at the time as a training issue, not a system issue.”

So that was your evidence in your witness statement –

Anthony Roberts: Yes.

Mr Blake: – which is that the only issue reported was that some subpostmasters had trouble balancing their account.

Back to the minutes – we don’t need to keep up the witness statement – page 11 of those minutes, I think exactly where we are, in fact – could that be blown up, thank you – (v):

“System roll-out was scheduled for 23 August 1999 with acceptance needed by 18 August. There were three categories of acceptance each with a threshold which would determine whether or not roll-out could proceed: high, medium and low.

“One incident within the high category, or more than 20 incidents within the medium category, would result in the system not being accepted. Currently there were 270 incidents of which 1 was high and 29 were medium. Of greatest concern was the inadequate training of employees although a new package had been produced and work on the other incidents was underway. At this stage it was expected that there would be no reason for not accepting the system by 18 August.

“It was noted that

“Excluding the concerns over training, David Miller considered the system robust and fit for service.”

Down one:

“A number of subpostmasters were experiencing difficulties operating the system and in particular with balancing. To help overcome this and, in addition to the new training package, additional resources (300 managers) had been allocated to ‘hand hold’ staff as offices came on line. This was a considerable but necessary investment to ensure the human/technology interface worked correctly. It was likely that a small number of subpostmasters would continue to experience difficulties.”

Now, the news from David Miller that the system was robust and fit for service, that sounds positive. Do you remember that message being communicated to you?

Anthony Roberts: Yes, I do. It was a very important message and I think also explained what was being done to look at the key area of balancing where, at that point, they were saying that they didn’t think this was a system, it was more – they didn’t say this but it was more human nature. We would have accepted that because the range of sub post offices were from, at one end, a lady in her front room operating a sub post office almost as a social service, up to the other end, which was a highly professional retail outlet, big private business, Post Office on the side.

I could well understand – and I don’t know how it spread – but I could well understand the need for a number of subpostmasters to need additional training and additional help.

So we felt the point at paragraph (vi) there was very important, that was coming from the project director and, secondly, we felt that the issues set out in paragraph (vii) were then being handled properly by allocating a lot more staff, given that – remember this is all over the UK and including Northern Ireland – this would be through the local retail network managers to help those subpostmasters who were having trouble with operating the system, assuming throughout this that it was a training problem, not a system problem.

Mr Blake: Can you just tell us a little bit about David Miller and your relationship with him? Did you see him as the expert in terms of IT matters?

Anthony Roberts: Yes, he was the project director. My relationship with David would not have been particularly close because he was operating and reporting directly to Stuart Sweetman and my relationship was much more with the managing director than it was with the project director.

But, obviously, as we got closer and closer to the end – what we thought was going to be the end of the project, it was important for the board to hear directly from the project director his view of exactly where we were. So he would have accompanied Stuart Sweetman in this particular meeting and, between them, they would have given an update on what was happening, where they were, what the risks were as they saw them.

Mr Blake: How much faith did you have in what you were being told?

Anthony Roberts: I think we had complete faith in that. He and Stuart Sweetman had been working on this from the beginning. I can’t think of any reason, in the context of the atmosphere that we tried to create within Post Office, where someone would come and lie to the board. I can’t think of any instance where somebody would come to the board and mislead the board.

In either case, there would have been consequences because these things tend to come out and, therefore, when the project director comes to you and says, “I consider the system robust and fit for service”, you accept that.

Mr Blake: Can we just go up slightly on that page so that it includes paragraph (v) as well as (vi) and (vii). Thank you very much.

You said in your statement that the only issue reported was that some subpostmasters were having trouble balancing. Looking at those paragraphs as a whole, that wasn’t the only issue, was it?

Anthony Roberts: No, it wasn’t the only issue but the only issue reported in detail was that subpostmasters were having trouble with balancing.

Mr Blake: So it’s “reported in detail” rather than “reported”?

Anthony Roberts: Yes.

Mr Blake: Because there were 270 incidents, of which one was high and 29 were medium, at that stage?

Anthony Roberts: Again, this is where my lack of knowledge doesn’t help me but, from reading some of the papers since then, I needed – I would need now to understand the definition of an “incident” and it did strike me that, in some cases, these were tiny things which were on the system, something had happened, something had gone wrong. I can remember at the time that we thought that the way in which they were handling this was very sensible, splitting them into high, medium and low.

I can’t answer the question I’m about to pose but I suppose what we should have said at the time were “Explain to us in more detail what 270 incidents were”. But you do have to get to a point where you accept that the people who have been working on this all the time are the ones who are going to deal with things and if they say “Those kind of incidents we’re going to get rid of” – and, in fact, later on in a further report to the board as we got closer to the end, it was getting quite specific about what the incidents were, down to about three or four major ones.

At the same time, I think we were beginning to understand very clearly that ICL didn’t always accept the definition of what was an “incident” but they did, in fact, agree that more time should be taken to resolve it, and I think that was happening.

So I think, really, between us – and you may have this from ICL, deciding and describing what an incident is would probably help in looking at that paragraph again.

Mr Blake: You have mentioned in your evidence about the training issue. If we look at paragraph (vii) there, it doesn’t definitively say there that it is a training problem, I don’t think. It says a number of subpostmasters were experiencing difficulties operating the system and, in particular, with balancing, and the solution that’s been developed is to provide a new training package. Would you agree with that?

Anthony Roberts: Well, it does say to help overcome this.

Mr Blake: Yes.

Anthony Roberts: I mean, the whole idea was, as I understood it, understand it still, is that subpostmasters were experiencing these difficulties. We had produced a new training package and a lot more human resource to then go and help those who were having a difficulty – and it’s not every subpostmaster, which is why I made the point earlier on about size and scope – and the idea was, as they describe later in that paragraph, that they would have time to be with a subpostmaster or his or her staff to actually take them through what was going on.

So I think I would say I think that is a sensible solution to what the problem was as defined.

Mr Blake: So is it that the presentation to the board, effectively the board’s understanding at that time, was that the issue was one of training?

Anthony Roberts: Yes.

Mr Blake: It says at the end of that paragraph:

“It was likely that a small number of subpostmasters would continue to experience difficulties.”

So even if Mr Miller was right about it being robust and fit for service, you were aware that there would be continuing problems, a small number of problems, for some subpostmasters.

Anthony Roberts: Yes, and can I just explain that? During my time, both as managing director of Counters and then, later on, as CEO, I tried as much as I could to get out to visit post offices and the difference in capability of subpostmasters was quite large, in the same way as the – I tried to describe it a few minutes ago – the sort of businesses that they were running were very different.

We were trying to put these terminals into every sub post office and that meant that the range of people’s capabilities would be quite large.

I’m sure if I’d been a subpostmaster and I’d been asking to do this, I would have had somebody holding my hand as well because it’s a new system. It’s putting technology into these post offices where, before that, the till had probably been the highest bit of technology some of them would have had.

Therefore, I do think that what we were talking about here, and it would have been a reasonable point of it, was that you were dealing with such a range of people, capabilities and, in the main, they were good capabilities but some people, quite rightly, with technology would have needed more help than others.

Mr Blake: In terms of that final sentence, that it was likely that a small number of subpostmasters would continue to experience difficulties, when it came to prosecuting people based on Horizon data, do you think that information would have been relevant or was relevant?

Anthony Roberts: I don’t know because I was never involved in any of the prosecution cases at any time. What I do think was important was that we were doing all the things we should have done to help people understand the technology and, again, if I may just for a second read back to you:

“[The] necessary investment to ensure the human/technology interface worked correctly. It was likely that a small number of …”

The whole of that paragraph, to me, is about the people issues.

Mr Blake: Who do you think framed it as a people issue at that meeting?

Anthony Roberts: I think that would have been framed by the report from the project team, which presumably, at that stage, would be faced by either Stuart or David Miller.

Mr Blake: Can we look at paragraph (xii), that’s over the page:

“Members were concerned that a number of technical issues remained unresolved and that the BA contract position was still unclear. These were two critical issues and needed to be progressed further before the Board would be content for the contract with ICL to be signed. An update on the negotiating position with BA would be provided to Members who were content that the final decision on whether or not to sign the contract be remitted to the Chairman and Chief Executive.”

Having been told that there were some quite technical Acceptance Incidences, for example, were you content for that final decision to be delegated to you?

Anthony Roberts: Yes. Let me explain that. I think that’s not the way I remember it at all. I think this issue was – you’ve got to go back to a meeting we haven’t discussed, which was when the board agreed to accept the proposal set out by the Secretary of State for Industry for the future of Horizon, it had been a full board meeting and all of the board members had agreed. The follow-up from that was getting to this point where we agreed to sign the contract. What I think this minute was saying, or what I remember, is the board as a whole did not mean – did not need to meet to review that contract and the process of deciding that was remitted to me and the chief executive, and it would have been with Stuart Sweetman as well, managing director.

So it was more about that kind of process than anything else. When I wrote my own evidence, I said it was unusual and I thought that it meant that they expected us to go through sort of line by line the contract. I’ve thought about it since then and I’ve reread this a number of times and I don’t think it was that.

I mean, there was a discussion, obviously, about that contract but I think it’s much more about a process from the board saying, “Look, at some point you will need to decide. You don’t need to come back to all of us”. Given that the basis of the contract was the Secretary of State – basically the Secretary of State’s letter setting out what the Government was prepared to accept, that they were prepared then for us (“us” being the Chairman, chief executive and the managing director) to decide if that could then go ahead.

Mr Blake: Given that you knew about various technical issues at that time, did you feel that you had the expertise to make that call?

Anthony Roberts: The issues had come down to about three or four in the end and one of the things we had learnt – I can’t remember from who, probably from our director of IT – is that it was very unusual in any project, and it’s still the same today (not very far away from the legal profession, I gather, from IT systems going wrong), it was very unusual for any project to be 100 per cent perfect when it was finished. And what we were being told, I think rightly, was that there were still issues that needed to be solved and this would be technically – and presumably software and presumably code writing and everything else – but they, in the views of our people and ICL and others, should not hold up us accepting, and therefore accepting the contract, accepting it and that these would be worked on.

I think somewhere it talked about working on them between about September and December. So I think again, you know, going back 20 years, this would not be unusual in any scheme, any big IT scheme, and the judgment had to be made by those who understood it about whether these were fundamental flaws in the IT system or whether they were issues that, yes, had been recognised, were being worked on, and, in the views of the experts, were soluble.

Mr Blake: So would a fair summary of that be that you knew at that time that the system wouldn’t be perfect but that work on the system would continue after it had been accepted?

Anthony Roberts: Yes, and we’d already I think decided that there would be a pause in the roll-out of the system until about January 2000.

Mr Blake: Yes. If you look at paragraph 10 or (x) on page 11, that in fact makes that point.

Anthony Roberts: Yes.

Mr Blake: “roll-out to offices would be suspended for a 4 to 6 week period over Christmas 1999, at which point a review of the process would be conducted.”

Anthony Roberts: Yes.

Mr Blake: The revised contract was signed at the end of July with an acceptance date of 15 September 1999.

Anthony Roberts: That’s quite correct.

Mr Blake: And then roll-out proceeded after –

Anthony Roberts: With that pause, yes.

Mr Blake: Sir, I know I said that that would be the last topic before lunch. I think I can squeeze in one more topic before lunch.

Sir Wyn Williams: Certainly, Mr Blake.

Mr Blake: So let’s move to September 1999. That’s POL0000353. This is a board meeting of 14 September 1999. Can we go to the bottom of page 2, please. There we have the chief executive’s report, so that was your report to the board, and can we look at page 3 and it’s point (iii): Horizon. I’m going to read a little bit out there:

“When the board … met in July, POCL’s Horizon programme director had been confident that system acceptance would occur as planned on 18 August. Unfortunately, three high priority acceptance incidents around training, stability of the system (lock-ups and screen freezes) and quality of accounting data, remained unresolved and whilst ICL did not accept the categorisation of those incidents, they had nevertheless resulted in acceptance being deferred until 24 September.

“A decision on national roll-out had also been deferred, although POCL had agreed to continue with live trials with the number of offices operating the system extended to 900.

“Progress on training had gone well and the incident had now been downgraded to medium priority. However, system stability and accounting was still being analysed and rectification was not expected before December.

“Under the terms of the revised contract, signed at the end of July, the final acceptance date was 15 November 1999 and it remained uncertain whether the plans that were current in place would enable [the] deadline to be met.”

Can we look at slightly down the note below, so that’s (vii):

“It was noted that the continued roll-out of the system to a limited number of offices was at no cost to Counters who would make any payments to ICL until the system had been accepted. However, the logic behind this approach was questioned as serious doubts over the reliability of the software remained. It was also felt that by continuing unchecked, it might also be harder ultimately to refuse to accept the system.”

At that stage – that is September 1999 – there were three high priority acceptance incidents around training, stability of the system, and quality of accounting data; there was system stability and accounting was still being analysed; serious doubts about the software; a risk that it’s getting too late to refuse. Things weren’t looking too good by that time, were they?

Anthony Roberts: No, I don’t accept that. Remember where we’ve come from. In other words, we’ve gone through all of this, we’ve put in a new system since the Government’s decisions, or we’d made all the alterations or the teams have, and to get it down to that I think was pretty good.

Now, knowing what we know now the accounting system obviously was an issue, or would prove to be an issue. At the time, we agreed that they would not accept – I can’t remember the dates now but we would not accept the system in August which is with the original date. It was going to be delayed and we knew we had until the end of November to take that decision.

In the end, there was in the view of the project team, and I guess ICL, enough progress made by the end of September, or whenever the final decision was taken, for us to say, “Okay, we’re prepared to accept this” knowing that work would at least go on until December to rectify those faults.

Now, I can’t remember how much discussion there was about what needed to be done to rectify them but I am pretty sure that the impression we had was that they were rectifiable and that they ought to be able to do that by December. One of the reasons I think that is because if you go beyond the time quite soon after the time when the whole project had been accepted, we were starting as a board to look at how to use it. How do we make a pitch for Government Gateway work or other work? And I cannot believe that we, as a board, would have been doing that if we’d felt that somehow there were some major glitches in the way this system was operating.

Mr Blake: I mean, that late on, issues with the reliability of the accounting system, that was pretty fundamental to the system, wasn’t it?

Anthony Roberts: Well, it depends what it was. I can’t tell you exactly what that was but the impression we got was that that was fixable. What I haven’t got, what maybe we all need to see, is exactly what was that that was then causing the problem? Is it something that affected every office? That, to me, would have been a major fundamental flaw in whatever we were trying to put in. So I think before I’d agree with you, I’d want to be clearer than I am now in my mind about the scale of or the complexity of the issue that that meant.

Certainly at the time we would have felt that this was, as I say, something which was handle-able, something which was going to be put right, and that’s why we took the line that we did.

Mr Blake: A reliability of the accounting system, even if that affected only some post offices, that would be serious, wouldn’t it?

Anthony Roberts: Yes, it would be but it would be handle-able, wouldn’t it? I mean, we’re talking 17,000 post offices. If it was 17,000 post offices, I’d be saying to you yeah, there’s a fundamental flaw in this. If it’s affecting some things and it’s a particular error, then we need to know exactly why that error is being caused in those offices, and the impression we had when we took this line was that it was small enough to be handled and rectified by December because that was what we were being told.

Mr Blake: Do you think “fundamental flaw” was too high a threshold for these problems to have to meet?

Anthony Roberts: I’m not quite sure that I understand the question.

Mr Blake: Well, a fundamental flaw makes it sound as though the system would be unworkable rather than it having, for example, bugs, errors and defects.

Anthony Roberts: Yes.

Mr Blake: Do you think there should perhaps have been more focus at this time on the smaller problems rather than the fundamental ability of the system?

Anthony Roberts: Well, I’m sure there were but I don’t think that’s the role for the board. If we did that, you would have been consistent and you would have spent a lot of time in the board looking at fundamental errors.

The governance of the system which we put in at times I thought was almost over-governed, but the way it was done was that you had to rely on the people who were working on this day after day after day and you had to rely on the views of ICL and the consultants, who both sides were using, to tell you whether this was a big issue or one that could be handled. Certainly the advice we were getting was this could be handled and it could be handled by – I mean, quite specifically, people would say it would take to December until we get this right and, of course, there was then the pause into January anyway before this would hit people for real.

Remember too, if I may, that this was a roll-out process. It wasn’t affecting every sub-post office at that time because they weren’t rolled out there. The roll-out was taking time and, therefore, they were seeing it in a number of offices, they weren’t seeing it everywhere, and that would mean that it would be easier when we did fix it to then say, “Right, as we continue to roll out we’re rolling out something where that error”, we thought, “had been sorted out”.

Mr Blake: Thank you very much. I think that’s perfect timing for lunch.

Sir Wyn Williams: 2.00.

Mr Blake: Mr Roberts knows this but the usual warnings apply at lunch.

Sir Wyn Williams: Yes. Talk about anything except your evidence.

Anthony Roberts: Yes, sir.

Mr Blake: Thank you very much.

(1.01 pm)

(Luncheon Adjournment)

(1.58 pm)

Sir Wyn Williams: Yes, Mr Blake.

Mr Blake: Mr Roberts, I think where we left things were that you knew that there were issues but that they would be monitored and presumably close scrutiny of the acceptance process was therefore important during that period; is that right?

Anthony Roberts: Yes.

Mr Blake: Moving to October 1999, can we look at POL00000354 please. Thank you very much. Those are the board meeting minutes of 26 October 1999. Can we look at page 3, please. It’s on page 3 that Horizon is briefly mentioned in the minutes at number (vi):

“Following remedial work around two issues that had previously prevented acceptance … the system had now been accepted with implementation proceeding at a rate of 200 offices per week. Rollout would continue until 8 November at which point it would cease until January thereby allowing a period of analysis and assessment of implementation to date to be undertaken. When implementation recommenced it would be at a rate of 300 offices per week.”

I think that’s something that we spoke about before the break, about the brief break in order to monitor the progress.

Anthony Roberts: Yes.

Mr Blake: January 2000, can we look at POL00000336, please. That is another meeting of the board on 11 January 2000. Can we look at page 10, please. It’s at the bottom of page 10 that we have an update on the Horizon programme and that goes into page 11. Let’s just have a quick look at that:

“The rollout of Horizon was due to recommence on 24 January. A great deal of work had been undertaken to rectify difficulties identified in three areas:

“system stability;

“accounting integrity; and

“the provision of support to offices.

“Although as yet uncertain, it was anticipated that these issues would not prevent roll-out recommencing.”

You say at paragraph 42 of your witness statement that accounting integrity was seen as a training issue still at that time?

Anthony Roberts: Yes.

Mr Blake: Would you agree with that?

Anthony Roberts: Yes.

Mr Blake: Where did you get that from or that impression from?

Anthony Roberts: Well, it would have been the impression I had at the time, which I then remembered because we were down to these three issues, which was much easier to remember at a time when we were about to implement it. So it would have been something I recalled, as opposed to anything I’d read in a particular document.

There was nothing that I’d seen that suggested that the accounting issue was anything other than the training exercise that had been – not training exercise, the training issue which had been reported to the board.

Mr Blake: Did your information about that come from ICL Pathway or from the Post Office?

Anthony Roberts: I can’t recall that. I can’t recall where it would have come from at the time.

Mr Blake: Was there a financial incentive for ICL to place emphasis on the training, rather than software issues?

Anthony Roberts: No, not as far as I’m aware.

Mr Blake: Training sounds like something that’s easier to overcome as a difficulty than a software bug; would you agree with that?

Anthony Roberts: Yes.

Mr Blake: Then we look down to number (iii) on the next page:

“Given the programme was expected to recommence rollout, it would be helpful for the Board to understand what marketing opportunities were now being considered.”

So the focus at that stage had then shifted – I think you said this before – to marketing opportunities by early 2000?

Anthony Roberts: Yes, and I think that was entirely sensible. We had reached a point where we knew, or we thought we knew, that the system was acceptable, because we’d accepted it, that it was working, because it had been rolled out, and I was not getting any information either via the team or via the unions or via the National Federation of SubPostmasters that in general this was not working out and rolling out properly and sensibly.

I just want to make the point, if I may, that nothing was coming up to the board or to me, which was saying we have problems with this. There may have been issues and they may have been sorted out, maybe it’s training, maybe it is, I don’t know, and I haven’t seen anything that said it was software, but whatever the issues were they are obviously being sorted out because that rollout was not generating, at least as far as I was aware, massive protests about this isn’t working, or whatever.

So it was right that the board strategically should start saying, “Fine, we’ve always said that the purpose of this Horizon project was to get Counters to a point where, first of all, they’d got more opportunity to handle work for DSS”, which they had, because part of the deal was they wouldn’t move to ACT until 2003 – sorry, yes, they wouldn’t move to ACT before 2003 and now we wanted to say “Well, the business knows that that will be leaving – a lot of it will leave them in 2003. It’s sensible now that we look at what the marketing opportunities are” – this was around 2000 – “so that when that happens we’ve started to build up a different pattern of work which will then sustain the kind of network that we had”.

Mr Blake: So you’ll remember from this morning that presentation that you gave in the early days and the commercial benefits of Horizon. Do you think the board’s minds then turned to those opportunities or were starting to turn to those opportunities?

Anthony Roberts: I think some of the opportunities, I can’t remember how many years back we’re going, Mr Blake, but I think what we said then would inevitably have been changed by the marketplace. Remember when we were doing that kind of presentation, we probably still thought that the whole project was going to be over within the next 12 months.

Some of the things would have been current still, banking would have been the key one in there, particularly if DSS moved to Automated Credit Transfer, there would be a lot of people, as we said earlier this morning, who wouldn’t have bank accounts and one of the things we would have looked at would have been can you do a simple bank account at the Post Office so that those people didn’t necessarily have to go into full banking, they could do something different. There was a lot of work, again as I said this morning, on Government Gateway, access to government services in the way that we can all now do through the internet.

We would also have been looking at whether there were wider applications in the banking world, not just a simple account, that we could actually take on, given that it was a network by then, we hoped, that would be an automated network and that would be much easier to used than having the paper-based system that we had for donkey’s years.

Mr Blake: So marketing opportunities in that context was an increase in the business?

Anthony Roberts: Yes. Yes, what’s the strategy for the future? If you’re looking, as we normally did, about five years ahead, what would you want to do with this system that we now thought was going to give us a real opportunity to have different products in a post office and how could you best use those to generate the kind of income we thought we would lose in that same five-year period.

Mr Blake: Can we look at FUJ00118186, please. This is only a week later, after that board meeting and this is the third supplemental agreement with ICL Pathway. Is this a document you are familiar with or were familiar with at the time?

Anthony Roberts: I would have seen this at the time. I can’t say I’ve been familiar with it ever since that.

Mr Blake: Presumably this is a document that would have been being drafted at the time of that board meeting or in the process of discussion?

Anthony Roberts: It would have been the outcome after we’d said, “Right, we’re prepared to accept the system”.

Mr Blake: Can we look at page 2, please. This sets out the history of issues between the parties. So, for example, (A) talks about the codified agreement of 28 July 1999 between POCL and ICL. That sets out the history.

2. talks about 20 August ‘99, first supplemental agreement, and I think that was because CSR or Core System Release acceptance hadn’t been achieved in time. Is that something that you recall?

Anthony Roberts: I can recall that one – that that hadn’t been – one thing hadn’t been achieved in time and ICL were warned about the fact that they would have been breaching the agreement if we’d taken it that far. Is that the one – that’s probably the best of my recollection.

Mr Blake: At (C), 24 September 1999, the second supplemental agreement, CSR acceptance, would be deemed to have been achieved and ICL would remedy outstanding faults.

Then (D) POCL had a right to postpone rollout if the criteria hadn’t been met.

5. at least one of those criteria hadn’t been met.

6. in relation to the Helpdesk, further testing had been carried out.

7. this third supplemental agreement addresses issues of the suspension of the rollout.

Can we look at page 3, please. Paragraph 2.1, there POCL agrees not to suspend the rollout.

2.2 there’s some further agreement regarding the Helpdesk.

2.3 ICL and POCL were agreeing to work together to address, among other things, issues concerning accounting integrity and end-to-end management of reference data. Can you see that there, 2.3.2 refers to “to improve the end-to-end management of Reference Data”?

Anthony Roberts: Yes.

Mr Blake: Can we go over to 5.2. Thank you very much. 5.2 is an agreement to deploy software to prevent the recurrence of cash account discrepancies. Is that something you remember?

Anthony Roberts: I haven’t actually found it on the screen yet, sorry.

Mr Blake: I think my screen moves a little faster than everybody else’s, I apologise.

Anthony Roberts: I’ve got 5.2 but I can’t see where it mentions –

Mr Blake: If we go down –

Anthony Roberts: That’s – sorry, I still haven’t found where you’re quoting from but I understand the point that you’re making.

Mr Blake: Let’s move to 5.3.

Anthony Roberts: Right.

Mr Blake: It says:

“The Contractor shall from the date of this Agreement until the end of the TIP Integrity Checking Period make available to POCL promptly upon request appropriate experts to explain to POCL the Contractor’s analysis of all root causes of Cash Account Discrepancies and the measures which the Contractor shall have implemented in order to prevent the recurrence of any Cash Account Discrepancies which would not have been detected by the Accounting Integrity Control Release.”

Do you understand what that says there?

Anthony Roberts: No, in the sense that the detail of this is not something that – I’m sure that, at the time, I would have read this document and I would have talked to either Stuart Sweetman or David Miller about it. It’s not a document that I’m surprised is there because, after we’d gone to the point where we’d accepted the Horizon System, there was still to be this agreement which would set out in legal terms exactly what was happening from there onwards. So, in that sense, I’m not surprised to see that there, and that picks up what we were saying before, that this work had to be done and this has obviously codified what the work is and set out in quite considerable detail what the contractor now has to do to make sure that those problems are completely rectified.

Mr Blake: This particular bit of detail is quite important because if we have a read of that very final bit it says that there is going to be an accounting integrity control release but ICL also have to notify the Post Office of any cash account discrepancies that wouldn’t have been detected by the accounting integrity control release. Is that something you can help us with? Is that something you were aware of at the time?

Anthony Roberts: I wouldn’t have been involved at the time in that degree of detail. I mean, these agreements obviously will have been gone through legally. The precise definition of what that meant, in terms of both ICL and the Post Office, would not have come near me, nor should it have done. I would have wanted to know that the agreement had been signed. I would have wanted to know that the agreement had been agreed with our lawyers. I would have wanted to know whether, in fact, the agreement covered those remaining issues which we knew were around when we accepted the Horizon System but I would not have got into the kind of detail that those paragraphs were set out.

What I would have expected to be told was that the people who should have looked through that did look through that, got either consultancy or legal, or whatever it was, backing for those words and that we were being advised by the professional advisers that we should accept that as a document.

Mr Blake: If you had been told that there were cash account discrepancies which couldn’t be detected by a certain software release, is that something that you would have been concerned about?

Anthony Roberts: Yes. It goes back to the conversation we had this morning. Please tell me the scale or the type of those discrepancies. We had cash account discrepancies every time people put in cash accounts. Some of them were tiny. Some of them were errors where something had been transposed from one line to another in the cash account. So, yes, I would have been worried but I would also have been expected – well, to be fair, I wouldn’t have expected to be told. I would have expected the managing director to have been told if necessary that this is what the discrepancy was, this is the kind of thing that this was not picking up.

I think the previous system was not perfect by any means, the paper-based system. This one was expected to be and, if there were issues like that, then the scale and the magnitude of those issues would have been very important. What I find very difficult to understand – and this may be me – is that, if you’ve got a software, part of the software is dealing with things like the cash account, are these discrepancies which are being caused by the human interface? Are they discrepancies which are coming up frequently, extensively, fundamentally something wrong with the software, or are they discrepancies which are strange and odd things that are happening?

That would need an IT expert to explain it to me. But those are the kind of questions I would have asked if, in fact, somebody was saying to me “We’ve got a big problem with cash account discrepancies” and, to be fair, it would have to be a big problem really to have reached by desk. It’s, again, something which was within the business and I would certainly have expected, if it was a big problem, for the managing director to have been looking at that and seeing what needed to be done.

Mr Blake: So this looks like a software issue rather than a training issue and it leads to cash account discrepancies. Have I understood you right that it would have been the managing director who should have been aware of that kind of an issue?

Anthony Roberts: If these – the line upwards, if I can put it that way, is this would have come presumably to the project director’s attention, the POCL project director. We’d said right at the beginning that the Counters’ executive board were the next stage in controlling the project. So it would have then gone either to them or to the managing director.

If the scale of this was of such magnitude that it was going to affect the business in a big way, it would doubtless have come to me. If not, I would have been expecting either the project leader and/or the managing director – in other words, those within POCL business – to be handling this.

Sir Wyn Williams: Reading that clause at least suggests to me, whatever your understanding was earlier in the chronology, by this stage, it’s clear that it’s more than just training; is that fair?

Anthony Roberts: Yes, I think that’s fair.

Sir Wyn Williams: Fine.

Mr Blake: Given that those kinds of issues were still occurring, do you think that it was appropriate for the board to have moved on at that stage to marketing opportunities?

Anthony Roberts: Yes, I do. I don’t think it was the role of the board to run a project and I don’t think you would find any business – remember, that this is an £8 billion business. It has 190,000 people employed by it, of which 17,000 are in sub post offices. The scale of issues that the board tackles, rightly or wrongly, is at a level where they’ve tried to work out what is the best devolution so that the people best equipped to handle them at the practical level are there, where the board’s role especially – particularly as a public sector board with all the stuff we’ve talking about with politicians and the government, their role is to set the strategy for the business and it’s a big business and it was also becoming an international business. So there’s a whole raft of things there.

We’ve seen and we’ve talked about the way in which this project, which was very important for Counters, came up to the board from time to time and there was certainly a governance role for the board in being appraised of what was going on. I wouldn’t have expected the board, or even me for most of this, to really be into the kind of detail that we’re talking about now.

I would have expected there to be a proper line of control, which led down to the business where the business could then account for issues like this if they were reaching a level where they came up. That, for me, having been a managing director, was within the business, not within the corporate centre.

Mr Blake: Can we look at the board minutes for 14 March 2000, that’s POL00021469. So these are the board minutes for 14 March. Can we look at page 7, please. So the first mention of Horizon in these minutes is page 7, the bottom left-hand corner “Commercial Development of the Horizon Platform”, number (i):

“For the past seven months all milestones had been met in the rollout of Horizon. By the end of March, 4,000 post offices would have Horizon installed.”

Just pausing there, that’s not actually right, is it, that all milestones had been met by that stage because we’ve just seen in the third supplemental agreement that there are a number of milestones along the process that hadn’t been met?

Anthony Roberts: No, it says “For past seven months all milestones have been met in the rollout of Horizon”; in other words, the targets that we set for rollout have been met, ie the 300 a week, or whatever it was.

Mr Blake: So that’s talking about numbers of branches?

Anthony Roberts: Yes, yes.

Mr Blake: The next point:

“The commercial use of the platform was under active consideration by the Performance and Innovation Unit team looking at the future of the Post Office Network.”

The impression you get from there, and it’s exactly consistent with what you have already said, is that the board at that stage has moved on to the commercial opportunities from Horizon.

Anthony Roberts: Yes, and the performance and innovation unit wasn’t a Post Office activity, it was a government activity. So they were looking at it as well.

Mr Blake: That’s March 2000. Can we look at POL00029222, please. This is a monthly management summary of incidents from ICL. It’s provided to us by the Post Office, so the Post Office have received it at some stage. Is it a document that you personally would have received or are familiar with at all?

Anthony Roberts: No.

Mr Blake: You may not be able to help me then but I’m going to to take you very briefly through this document just so that you are aware of certain things that were going on at ICL at that particular period. It’s an incident review from March 2000, so the same month as those minutes from the Post Office that we’ve just gone to. Can we look at page 13, please. So this is a “Management Summary”:

“In March Pathway Management Support Unit received 434 incidents, as compared to 267 in February, thus showing an increase of 38.48%.”

So it seems as though the number of incidents are rising during that period:

“The most numerous incidents were for the Non-polled incident class, accounting for 245 incidents received or 56.5%. This was followed by ‘receipts and payments’ (migration) comprising 140 of all incidents received …”

Then the final point:

“Report 3.4 shows the closure status of incidents, whereby in March 114 were Pathway fault 165 No Fault in Pathway. Of the 165 which were No Fault in Pathway, the majority of these incidents occurred due to ‘receipts and payments’ (migration).”

Now, am I right in saying that level of detail was not the kind of detail that would have reached you?

Anthony Roberts: No, not at all. I’m not even sure how it would have reached anybody else, unless Pathway were discussing it with the Post Office because, just reading it, it looks to me like an internal ICL report. So I must say I can’t help you because I don’t know whether it even came to the Post Office.

I take your point entirely that it looks as though it did at one point, if they’ve provided the document. But, no, it certainly would not have come anywhere near me and I go back to the point I made before that, when you get into this kind of detail as a report, that would have gone into the business somewhere, into POCL, and then what they decided to do with it would depend on probably having a lot more background knowledge to that note than I have.

Mr Blake: Would you have been aware during that period that there were an increasing number of incidents?

Anthony Roberts: Only if – we’re back to – I’m not really quibbling on words but we’re back to what a definition of an “incident” is. I don’t know whether these were minor incidents, whether they were major incidents. If, for example, given what happened later, 434 incidents meant that people couldn’t balance, yes, I would have expected to know about that because it’s pretty fundamental. But I just can’t judge it from here.

It would have to be of a level that the managing director felt that the board had to be told that this was a big issue.

Mr Blake: Receipts and payments issues: were those seen as big issues or were you aware of issues with receipts and payments at that time?

Anthony Roberts: I certainly wasn’t aware of issues and, again, I’d have to be told what the receipts and payments issue was. If it meant money paid in to post offices, it could have come for any number of customers and I mean customers like DSS, the driver and vehicle licensing people the Ministry of Defence even.

So whether it’s something to do with that, it was a particular product that was causing a problem, whether it was a basic balancing issue, before I understood it, I’d need to have a lot more definition behind it and, again, the scale of it would be something that would have brought it up through the organisation.

Mr Blake: If the scale was significant, would you have expected to have been told about it?

Anthony Roberts: Yes, I would, yes.

Mr Blake: Who would have been telling you about it?

Anthony Roberts: The managing director.

Mr Blake: That –

Anthony Roberts: That would have come up through that chain. What I didn’t do, and I’ve had it done to me in the past and didn’t like it and I didn’t do it myself, which is going round the managing director and going in at a lower level because I wanted to pick up some particular piece of information. It doesn’t work. I would have – normally, if there was an issue, I’d have called in the managing director and said, “What’s this issue?” I would have expected him to explain it.

If it was a really difficult technical issue that I needed to know, he would have brought with him who his technical expert was and that, for me, was key to management. You’ve got to trust the people you appoint, you have to try and work with them, you’d have to try and advise them when it’s necessary, you have to try and be tough with them when it’s necessary but what you need is a personal relationship there that works for the company.

Mr Blake: Let’s look at April 2000 and the Post Office board minutes. That’s POL00021470. Those are the minutes of the Post Office Board of 3 and 4 April 2000. The chief executive’s report begins at the bottom of this page, and can we go over the page to page 2. Horizon is addressed very brief in these minutes. It says:

“Roll-out continued with over 4,500 offices installed with the equipment. The Post Office was involved with ICL in a tender to provide electronic Government services – me.gov – in which the automated Post Office network would play a leading role.”

So again, entirely consistent with what you have already said which is, the focus of the board, by that point, was about the commercial opportunities that were available.

Anthony Roberts: Yes.

Mr Blake: In fact, the Post Office – by that time there’s tendering for more work.

Anthony Roberts: Yes.

Mr Blake: Can we look at POL00029221. Now, we’re probably going to come up with exactly the same issue as before because this isn’t a document that you saw at the time. It’s a document that’s been highlighted by a Core Participant, so I’m asking you about it but do say if something is unclear to you.

Anthony Roberts: Thank you.

Mr Blake: Can we look at page 6, please. This is a management summary, the same kind of summary as we had for the previous reports and this is November 2000:

“During November the number of incidents received by MSU increased to 109 … “

So again, it seems to go up and down but there seemed to be an increase from October at least and it says:

“The most frequently occurring incidents in November were both types of Receipts and Payments Incidents (Migration and Post Migration), with 31 incidents per category.”

Can we go to page 19 of this document, please. Again, this is going into some detail which you wouldn’t have seen at the time but these are the lists of incidents and can you see, there is a “date received” on the left-hand corner and a “class description” in the fourth box and there are a number of incidents allocated to each date which are described as, “Receipts and Payments do not balance”; do you see that?

Anthony Roberts: Yes, I do.

Mr Blake: Can we go over the page to page 20. So we see, for example, there’s one of £7,100 about halfway down the page, on 10 November. The numbers continue. Can we look at page 23. So we’ve got one for £8,167.41. At page 30 – we’re actually going back in time as we go along so page 30 is 19 October. The penultimate figure on that page – I think it’s slightly further down – £36,042.02.

You’ve talked about numbers before and it depended on how much of a Receipts and Payments not balancing was occurring. Are these kinds of figures of concern to you at all?

Anthony Roberts: I think – have I got it right that the heading of the final right-hand column was date by which things were cleared?

Mr Blake: Yes, that’s correct.

Anthony Roberts: So, a number of them, and certainly the last one that we were both looking at, were cleared on the same day that they were received; in other words that must have been easy to sort out. I wouldn’t be particularly worried at the scale of the number £5,000 whatever it was because we would have had examples of that in the non-automated system and it was normally because somebody had just got something relatively simple wrong.

More difficult to do, I accept in here, but yes, I would be worried about the scale of the numbers. I would be less worried if somebody had come to me with this saying, “but we’re sorting all these out on the day”. So understanding what that last column means, I think is quite important in this because if it’s cleared on the day and it’s a simple miscalculation, somebody putting a number in a wrong line, because this is a new system and they’re getting used to it, I’d be less worried.

If this is a fundamental problem – I keep using the word fundamental – a big problem where the same piece of software, for example, is not recording things correctly, yes I would be worried about it. But, again, as you said kindly at the beginning, I would not have seen this and I would only have seen it, not because of the scale of numbers necessarily but because of the scale of problem and the problem would depend – for me, if I saw this, I’d want to know, “how was this cleared, was this a simple thing? Was it cleared because somebody suddenly realised that they’d input something wrong?” So it would be all of those kind of questions if somebody had actually stuck this on my desk and was saying, “this is part of a big, big number that we can’t resolve”.

Mr Blake: Big number cumulatively, yes?

Anthony Roberts: Sorry yes cumulatively.

Mr Blake: Are you aware of anybody during this kind of period, so late on in 2000, raising issues with you concerning receipts and payments not balancing?

Anthony Roberts: No, I’m not and one of the things that I would have been concerned about if they had was whether we could have gone on talking, as we have, about marketing the system if somebody was coming to me and saying there was a fundamental problem in it, because I don’t see how we could have gone out and attempted to get banks involved or to deal with the tender for the Government activities if we, the board, or even the marketing side of Post Office Counters, felt that there was a glitch in the system somewhere.

So the answer to your question is, “no” and I think you can also take from the board perspective the fact that if we’d felt that the system was not working properly we would not have been pursuing marketing opportunities in exactly the way that we were.

Mr Blake: I’m going to move on to prosecutions, and I know you have said that’s not your area of expertise but let’s see where we get to on it.

Are you aware that part of the contract with ICL required that the system be capable of producing admissible evidence for court proceedings?

Anthony Roberts: No.

Mr Blake: During your involvement with Horizon, who was responsible for prosecutions?

Anthony Roberts: It would be the internal solicitor’s department at the Post Office.

Mr Blake: I think it may have been Royal Mail at one stage as well?

Anthony Roberts: Well, it was corporate. It was – the solicitor’s function was a corporate function. So they would have handled anything to do with stealing, you know, theft in the mail and problems with accountancy, putting a hand in a till somewhere, whether that was in a Crown Office or sub post office if that happened.

Mr Blake: During this period that we’ve covered today, during all of those incidents, did prosecutions play any role in your thinking in your negotiations with Pathway, for example?

Anthony Roberts: Going right back to the beginning, one of the issues for DSS was fraud at the counter to do with benefit payment books. So that was one of the issues that they were keen to see in the system that was eventually set up. That was always sort of understood all the way through and it was almost a sort of, you know, sine qua non, you wanted a system that was as fraud-proof as you could make it, whatever you ended up with.

So, certainly, that would have been there from almost the very first set of specifications that would have gone to the three tenderers right at the beginning in 1994, or whenever it was.

Mr Blake: Did the link between issues with the system’s robustness and prosecutions ever take place, as far as you were aware of, for example, while you were discussing – while you were negotiating, did you ever think about the potential impact on prosecutions?

Anthony Roberts: No, not at all and it might be worth very briefly saying that – if you worked in the Post Office for as many years as I did, the one thing that you had drummed into you was that you were dealing with public money and one of the things that was clear to anybody who was employed was that the money wasn’t yours, it was government money, it was taxpayers’ money, or whatever.

The system that we had for prosecutions never came near senior management, in the sense that once a prosecution was initiated, it was normally done on the basis of either the Post Office investigation department had picked something up, in terms of in the mail service, or that either the auditors or the local retail manager had picked something up in a particular suboffice. They would then decide with the auditors that there was a case to answer, it wasn’t some sort of small change, it looked as though it was intentional. That would then have gone to the internal solicitors who would then have decided whether there was a prosecution.

So the one thing that managers didn’t get involved in was that sort of process. It was done by a combination of the local manager – I’m sorry, I should have said “senior managers”. The one thing we wanted to avoid was any suggestion that we had got involved in that process and, therefore, might have altered the process. Once somebody found evidence, as they thought, of something, that evidence was followed through and then there was the decision made whether it was something which really then ought to go to the solicitors.

Quite often, in suboffices the local subpostmaster would talk to the local regional manager and say “I’ve got a deficit”, or whatever – normally deficit. He would then sort it out and, more often than not, it was sorted out and it was some local putting the figure in the wrong place, let’s put as simply as that.

If the local manager was not satisfied with that or it happened twice then he’d start to wonder whether that was something more than that and then that process I’ve just described would take place.

Mr Blake: During the human impact hearings in this Inquiry we heard, from among other people, Nichola Arch and Tracy Felstead, who were being prosecuted in 2001 and 2002 based on Horizon shortfalls. Nichola Arch was suspended some six weeks after Horizon was installed. Were you aware of those kinds of actions being based on Horizon shortfalls at that time?

Anthony Roberts: No, not at all.

Sir Wyn Williams: Can I ask you, not about individual cases at all but there obviously must have come a point in time when data in Horizon was going to be used in prosecutions of people if the persons making those decisions thought that justified. So what, if any, discussion at senior management level or board level took place about appropriate uses of Horizon data, in the general sense, in prosecuting people?

Anthony Roberts: I would say, Chair, none.

Sir Wyn Williams: Right, thank you.

Mr Blake: Is it right to say that, in terms of oversight by senior management and the board over prosecutions, individual prosecutions or over the broader issue, that there wasn’t any?

Anthony Roberts: No, and I think that was right. I keep going back to this. If you think that you’re looking at 17,000 post offices, spread over the whole of the UK and Northern Ireland, if you had 10 to 12 cases in a year, they would be spread over the whole of that area. We had a local manager setup, regional manager setup at one stage, then a local manager setup, who were the retail network managers.

They would know the offices, they would know the individuals, they would be able to judge what was happening and, out of the number of transactions in those offices over the case of a period of time – leaving aside for a moment things that go wrong and the impact on the individuals – ten transactions going wrong, or ten cases, would have been absolutely tiny. Very important for the individual, I absolutely accept that but, in terms of us looking at statistics that affected the running of the business, it wouldn’t – for the reasons I’ve described before about not getting involved in the process – it would not have hit our desk at all.

You are talking about a £1 billion business where a number of these things would have happened. I fully expected it at local manager, regional manager level to be understood and to be dealt with but if you did this all the time with a board then you would just do nothing else. So it’s looking at the degree of information at whatever level. The people at regional or retail manager level were capable, were, in fact, encouraged to take the kind of decisions that we’ve just been talking about.

As I said to the Chairman, we had no discussion, I think, about the use of the data because the use of the data would have been agreed lower down. It would certainly have been within the business – I don’t know what level in the business – but once the system was working I think it would have been assumed that people would use the data in the cases like the ones we’ve been talking about.

But it really is an issue of: at what point do you say that these kinds of figures have to be dealt with by managers at a different level, doing a different job and, if it all comes up to the board, is that what the board’s role should be? I think that it would have been – I don’t really want to say this because it was after my time – but if, in fact, we were seeing numbers growing very fast, somehow or other I would have expected – and I suppose this is with hindsight – I would have expected to see there was some – you know, going further and further up the organisation.

But while there were a sort of relatively small number of things like that then it needs something that explodes it to really push it up higher.

Mr Blake: So there was a central investigations team and a central prosecutions team?

Anthony Roberts: Yes.

Mr Blake: Do you think the responsibility was on them to spot those patterns?

Anthony Roberts: I think it’s probably the only place where all these numbers would have come together but, as I said before, one of the things that I guess we were probably concerned about was that if you suddenly then started to say, “Well, these are the numbers, that’s fine”, it’s very easy to send the wrong messages, and you start sending a message saying, “Well, the numbers are too high”, at which point down the line that’s interpreted as “They want us to cut the numbers down”, and if you’re not careful the next thing is “Oh, well, these cases haven’t been reported because the board is worried about the numbers”.

It’s this sort of idea that you get these wrong consequences from a statement like that. We would also have not wanted to be seen to interfere in a process like that, that was going through an investigation and then a possible legal process. Again, the danger is you say, “Well, there’s a case of X, Y and Z and it’s Mr Bloggs”. The last thing you want is then to be anywhere near that case because that’s got to be dealt, as people here will know far better than me, on a basis where there can be no suggestion that somebody senior had influenced it in any way at all.

Mr Blake: I’m going to to move on to a few short topics before I finish. The first is the NFSP and the unions. In your statement, you talked about your role as managing director of counter services in the 1980s and the early 1990s and, I think, were you involved in discussions about the funding of the postmaster unions or federations?

Anthony Roberts: I was very much involved in pay negotiations with them but not the funding of them as unions.

Mr Blake: Did you ever have concerns about the way in which, for example, the NFSP was funded by the Post Office?

Anthony Roberts: No, I don’t think I did, no. I’m not even quite sure when you talk about the Post Office funding the NFSP.

Mr Blake: I think a question that’s been proposed is whether the Post Office was involved in limiting their ability to comment on the operation of the Post Office in some way. Did you experience that at all?

Anthony Roberts: No. I normally found that they were extremely forward in wanting to criticise or comment on the Post Office and, certainly, in all my negotiations with the managing director, they were never backward at wanting to have a go at me or the team in a very constructive way and they were, in a strange way, some of the most – I was going to say “pleasant negotiations”, I don’t really mean that. They were some of the most enjoyable negotiations but they were tough. But I don’t think I was ever in meetings with the Federation, certainly in those days, where the two or more senior people on the committee were holding back on what they either wanted from the Post Office or what they thought of us as managers or what they thought of what was going on at the time.

It was one of these relationships between management and unions which was very good but it didn’t mean that one side was soft or the other side was soft. They were pretty tough negotiations and this was in the late ’80s and early ’90s, and the Federation there – and I used to go and speak at their main conference, where I normally got booed – that you went there and you had the opportunity to talk not only to the main Federation people but to the local committees or whoever, and none of them would hold back in terms of telling you exactly where you were doing it wrong, or whatever. No, it was not something I ever thought about.

Mr Blake: I think you said earlier in your evidence that you would have expected the NFSP, or perhaps the CWU or other unions, to have brought issues that subpostmasters were experiencing to your attention?

Anthony Roberts: I think I said that it was open to them to do that. I did know them all quite well and I had a reasonable amount of contact with them until I became chief executive, where the contact became much more with the head of the business. What I did say, and occasionally happened with the CWU, not so much with the NFSP, was that it was open to any of them to write to me or ring me or to talk to me about something that they wanted to raise.

More often than not, if it happened – it was normally, as I say, with the CWU – I would bounce it downwards because, of course, from the unions’ point of view, the more they can get in the higher up, the better. I quite understand that.

But it was very much open to them to do that but I think it was much more a contact by then with the managing directors, the heads of each business, than with me.

Mr Blake: Your departure: you retired in 2002. How did you pass on the knowledge that you had gained during the history of those Horizon discussions on your departure?

Anthony Roberts: Well, it was difficult because there was a brief period – I’d announced at the annual general meeting in July that I was intending to retire that year and the original aim was that I would retire pretty soon after the AGM.

The search for a new chief executive had not been completed by then, so I stayed on for about another five months until it had. In fact, at that time I said, “Look, that’s really it. I really must go, I want to go”. After that, it was about a month or so after I’d left before, in fact, two people were then put forward for – they became, sorry, joint chief executives.

The answer to your question is that, at the beginning of 2001, before I left, we’d recruited a new managing director for POCL, who came from the banking world, and that, of course, fitted with the way we’d been talking about forward strategy for POCL. He would have picked up from where Stuart and Paul Rich left off, and David Miller, by then, I think, was the head of Network. So a lot of the work briefing would have been done by him.

Sadly, there wasn’t much briefing done by me because I wasn’t there by then, but there was a fair amount of history within POCL and a lot of the people who had worked all the way through on Horizon were still there, and I guess, and it is a guess, that the new managing director would have picked it up through them or through my board group colleagues, group managing director, strategy, or the group managing director, finance, who was still there and they would have had some background in this as well.

Mr Blake: I’m going to ask you one quick question relating to government. Can I ask for BEIS0000421, please, to be brought onto the screen. This is a government document, we’ve already looked at this particular document. Can we look at paragraph 9 on page 4, please.

This describes a meeting that took place in November 1998 between Keith Todd and Alastair Macdonald. Who was Alastair Macdonald?

Anthony Roberts: Alastair Macdonald was the deputy secretary in the Department of Industry. So he was probably the most senior official who had part of his brief for the Post Office.

Mr Blake: Thank you. Paragraph 9, so the last part of the paragraph, at the top of the page:

“The future of the project now lay between ICL and POCL, but at a meeting the previous evening, John Roberts had made it clear that he had been told by Government that he had no authority to negotiate further with ICL. Ministers should now empower John Roberts to negotiate a deal.”

Now, this takes us back in time to things we were discussing a long time ago but, just to assist us, did you see it as necessary for the Government to give you authority to negotiate?

Anthony Roberts: Yes. As far as I can tell – I’m just reading the top of paragraph 10 – this was obviously around the time that the Chairman of Fujitsu had become involved and was talking to the Government, and he was talking to the Government both at Number 10 level and I assume with Alastair Macdonald at DTI. I did not have the authority to negotiate a deal with them while that kind of meeting was going on. In other words, by that stage, the meetings were very much directly between the Government and Mr Naruto and it was pretty clear that we had nobody to deal with.

It’s not as though I could have got hold of the Keith Todd or whoever it was then and said, “Look let’s sort this out”, because it was being sorted out by ministers directly with the head of Fujitsu. So that’s why I had no power to negotiate.

I don’t ever recall that ministers did give me the power to negotiate a deal because, as we’ve seen from the other papers, effectively, after this point – or from this point onwards – ministers were dealing directly through Number 10 with what they wanted to have happen next.

Mr Blake: Finally, can we just look at your witness statement. It’s WITN03390100. Can we look at paragraph 5, at the bottom of paragraph 5.

I think we went over this particular paragraph and you emphasise there that your role as managing director in the early 1990s was on resourcing and business matters rather than IT; is that right?

Anthony Roberts: Yes.

Mr Blake: Then paragraph 8. You talk there about your involvement with Post Office Counters Limited between 1995 and 2001 and say it was mainly development of Horizon, not in any technical sense, but in relation to government negotiations?

Anthony Roberts: Yes.

Mr Blake: Paragraph 25, bottom of page 13. You say at the bottom there:

“My recollection of this period is that I was very much involved the Government discussions but not in what the teams might be doing as until we were clear that Horizon would go ahead there was little point in pressing them on their progress.”

27, you say there, about halfway down:

“As far as I can recall, I was not … briefed in detail about what the software problems were, mainly because I … could add nothing to their possible solution …”

At 28, you say in the second sentence there:

“I did not get involved in the detail of this nor [do] I offer advice on what might be done as I did not have the knowledge to do so”, talking about technical matters.

Paragraph 28, at the bottom, you say, effectively:

“… only when the project reached its final development stages later in 1999 were [you] and the Board discussing specifically the last remaining software issues …”

That’s, I think, the evidence that you gave today as well.

Anthony Roberts: Yes.

Mr Blake: Paragraph 31:

“For me, the issues at that moment, and throughout the process which ended with acceptance of new Heads of Agreement, were not the robustness of Horizon or technical problems, of which some remained, but whether the Post Office could agree … the ministerial proposal.”

So that, again, is your focus being on the politics sides that we’ve discussed.

Anthony Roberts: Yes.

Mr Blake: Further on – yes, sorry, if we stay with that paragraph:

“The prospect of major reductions in the Post Office network if Horizon was terminated [was] foremost in [your] mind.”

Looking back, do you think you were too focused on driving the project through, rather than the technical detail?

Anthony Roberts: No. Because I didn’t feel that I could add much at all to the technical details. I’d been in the position, as a managing director, where I’d had to deal with detail, not necessarily technical detail but detail of running the business. As the CEO, across whole of the corporation, at home and internationally, I didn’t believe it was my job, even if I had been a technical person, to get down to the level of detail that we’ve talking about today.

The structure of the Post Office and my role, as defined partly by the Chairman, partly by the Government, was not about getting into the – if I can put it this way – the really basic details of something like that, it was about creating a situation in which those people had the best opportunity to develop an IT system, which we knew was going to be difficult and we knew, by then, was going to take longer than we expected; an IT system which had been effectively signed off by the various reviews that had taken place.

It was important that I saw, as I did, the people who led those reviews not to talk about the software but to talk about was this the right direction for the organisation to be going in, was this the right strategy? Would we have enough money if they found that, as they did, it was going to take much longer?

So my role, as I saw it, was almost to create the situation where people could work. It was to create the situation where they were not dealing with the politicians or the civil servants all the time and they focused on working with the technicians, whoever that is, within ICL, up to and including managing director on my side, managing director on their side, to do the sorts of things that have been specified.

The moment I got down to the kind of detail that we’ve talked a bit about, I might as well have gone back to being managing director because that, in my view, was the role of that person and their committee. They were doing it – at times, 24 hours a day. They were doing it all the time.

I was going from this to Royal Mail issues, to Parcelforce issues, to Civil Service issues, to ministerial issues and it was more me then to try and create with the board, and the board asking me to create, a situation within which those people could then deliver that project because that project in Counters would have been only one of quite a number of projects across the whole of the group that would have been dealt with in one sense or another with those sorts of issues going on.

A very simple example, a very quick example: a lot of industrial relation problems in Liverpool with the Post Office, and we had to sort out how we might handle that and it involved me having quite long discussions with the Minister of State at DTI. That was the sort of issue that I get clawed into. If I’d been then saying “Oh, right, I will go away and negotiate in Liverpool”, that’s the equivalent, in my terms, of me saying, “I will go away and talk to them about software applications within counter automation”.

That was the difference and the reason that the structure was like that was to create at the top, as the corporate board and those who were members of it, the ability to set the direction for the Post Office and make sure it happened; at the next level down, for those people to run the business, run the businesses; and, below them, the people who would do the necessary work, including technical work or technical work in terms of Post Office activities, to make sure that the thing happened. My role, apart from the one I’ve just described, is holding them accountable, helping them to account for what they did.

Mr Blake: One of the things we saw at the very beginning of today, in the early days of Horizon, was you asking them to follow up on particular matters and that board follow up was produced, and that was quite technical in some of its detail.

Anthony Roberts: Was it? I would say it was quite basic. A lot of it was to do with problems of the electricity supply going to different post offices. It didn’t so much comment on the technical detail because it said that those three releases had actually been implemented without too much trouble.

For me, that was a practical report around the issues that Paul Rich and his team had discovered about how to implement some of this in post offices. It talking about the physical layout of some post offices and the difficulties of getting the kit into it. It talked about some of them where the scenes were not right. It was all that sort of thing. It was “technical Post Office”, if I can put it that way. I didn’t think it was so much technical ICL.

Mr Blake: It was quite detailed.

Anthony Roberts: It was detailed.

Mr Blake: It went into things like end-to-end testing, et cetera.

Anthony Roberts: Yes.

Mr Blake: Do you think that there came a time where your attention turned too much to the political side, so that you didn’t have enough time to focus on that kind of approach?

Anthony Roberts: It’s very difficult to say to a politician “I haven’t got time to come and see you”; in other words, that they were my bosses, in some ways, because they were the shareholder. No, I don’t think so, but if I can just contrast what you’ve been saying about that first report and then the question you’ve just asked, one of the techniques I did like on something new like that, and it was the other reason that I set up the account automation steering group, was to, at an early stage, probably go into more detail than any other time I would because I wanted to know that it was being set up in the right direction.

On this particular project, having the Counter Automation Steering Group meant that I dipped into it every couple of months, possibly in a bit more detail than I otherwise would have done, but that was about “Are you meeting there deadlines? Do we still have the money? Do we have the people?” That kind of thing.

What I wouldn’t have done is to – I couldn’t have done was to say “Oh, well, I’m sorry, I need too much time of the politics”. That was almost out of my hands. If I was asked to go and see a Minister of State or senior civil servant, it’s very difficult then to say, “Well, I can’t do that”. Quite frankly, at the time we’ve discussed, it was very, very important that I did it because, as I think I described in my evidence, we almost lost a year while the government was deciding how it wanted to go forward and I think, at least, I might have helped a bit in that or maybe hindered a bit in that by trying to push hard on what the Post Office wanted out of Horizon.

Mr Blake: Do you think that there was too much of a separation between the strategic and the technical levels in the Post Office?

Anthony Roberts: I think that’s difficult to answer. You’ve got to add to that. Do you think that in the late 1990s there was too much of a difference between the strategic and the technical because, compared to now, the answer would probably have been yes. I think my answer then would have been – it would have been difficult to make it closer while so many of us had had a background that wasn’t technical.

If you started working in the 1960s, as I did, and the whole of your background was in management from 1960 to 2000, technology hit you about 1995, and I think that – I was reading the evidence from your technical adviser and I think he said he had been in the IT business for 30 years. I don’t know when his start point was but, if you go backwards, he would have been even in it for five years, if he had started in the 1990s.

Therefore, I think the ability to make that link in the way you are suggesting, which probably happens much more easily now, was much tougher then because you would always ask yourself the question that I did – I can remember saying “The problems with IT is you’re not sure what questions to ask”. If somebody talks to me about a personnel issue or an operational issue, I know what questions to ask. Therefore, you have to be – and it’s an uncomfortable feeling at times – far more dependent on those who are your experts, that the experts are then giving you what is correct in terms that you can then understand.

Mr Blake: Thank you very much, Mr Roberts.

Chair we have a small number of questions from some of the Core Participants. It would be good if we are able to go straight to them rather than take a break now if possible are you happy to do that?

Sir Wyn Williams: I’m happy. Are you still comfortable, Mr Roberts?

Anthony Roberts: Yes.

Sir Wyn Williams: I think it would be preferable for Mr Roberts to complete his evidence before a break. I’m reliably informed that Mr Blake wasn’t underestimating your questions when he confined it to a small-ish – I put-ish, but we will see where we go.

Mr Stein: I will turn this mic on. Do you object if I remain sitting down? The reason for that is this screen is quite low down.

Sir Wyn Williams: No, no, no, please. Can I say to everyone stand or sit as you prefer.

Questioned by Mr Stein

Mr Stein: As a bit of a test, as long as everybody can hear, including of course Mr Roberts.

Good afternoon, Mr Roberts. I’m going to take you to a document which you have looked at, I believe, and had the opportunity to consider which is a report by Mr Cipione.

Anthony Roberts: Yes.

Mr Stein: The reference to that, Frankie, if you are dealing with the system, is EXPG0000001. In theory, that will take us to the report and, Mr Roberts, you have had the opportunity, I think, of looking at this but obviously you wouldn’t be saying that you’re an expert in this report.

Anthony Roberts: Absolutely.

Mr Stein: I’m very grateful. Can we go please to page 157 of that report. Now Mr Roberts the topic that’s being discussed in this report at this stage is about the data server tree build failure which, if I’ve got it right and understand it, is essentially about whether communication within the system is working properly?

Anthony Roberts: Right.

Mr Stein: Okay. Now, here as we go down the page you’ll see that under the various headings, first of all, we’ve got the date period that we’re concerned with here which is – it’s a PEAK, do you understand, Mr Roberts, what a PEAK is?

Anthony Roberts: I’m assuming it’s when it’s most used.

Mr Stein: Well, that’s the other way of looking at it. A PEAK is a problem existing within the system that’s been noted and the theory is it’s going to be dealt with I’m sure it’s an acronym for something but we don’t need to bother to go into that right now?

Anthony Roberts: Okay.

Mr Stein: This is one that’s been looked at and you can see the date opened 16 May 2000 then closed 14 September 2000, okay?

Anthony Roberts: Yes.

Mr Stein: Right. Now, you mentioned a number of times that at the board level you wouldn’t have been engaged with the precise problems and errors and bugs within the system, okay?

Anthony Roberts: Correct.

Mr Stein: So I’m going to work on that basis and just go through what we have here. Within this page, as we go down it, you’ll see that there are extracted comments roughly in the middle of the page and as we go down you’ll see that on the third of those extracted comments there’s a mention saying, “This office” – which we interpret as being a branch office – “has had big problems with its receipts and payments. CAP 5, 6 and 7 did not match”.

Now, CAP is short for Cash Accounting Period.

Anthony Roberts: Right.

Mr Stein: Okay. So the Cash Accounting Period, Mr Roberts, you’ll understand and recall, going back to this time in 2000, is that the branch subpostmaster or mistress had to balance weekly?

Anthony Roberts: Yes.

Mr Stein: This is at the time of the weekly balancing rather than a rolling balance over weeks that happened later?

Anthony Roberts: Okay.

Mr Stein: So you are with me so far?

Anthony Roberts: I am.

Mr Stein: “This office has had big problems with its receipts and payments. CAP 5, 6 and 7 did not match.”

Then it talks about the differences and then you see at CAPs 5, 6 and 7 are set out and we think these are cash figures. 16284.72, 19296.15, and then going down, turn it the other way round, 14,526.08?

Anthony Roberts: Yes.

Mr Stein: So these are not small sums, you agree?

Anthony Roberts: Yes.

Mr Stein: If you are running a post office branch this is much more than the odd tuppence here and there and it’s causing a problem?

Anthony Roberts: I’d also want to know what the turnover was at the branch.

Mr Stein: Yes?

Anthony Roberts: To understand whether that was small or not.

Mr Stein: Well, I don’t think you’re going to be saying, Mr Roberts, that nevertheless this is chump change that can be ignored?

Anthony Roberts: No. no, certainly not.

Mr Stein: Go over the page please to page 158 and you’ll see the second of the entries at page 158, thank you very much Frankie. You see under, “F} Response”, so this is the second of the entries between the tram lines in grey-ish?

Anthony Roberts: Yes.

Mr Stein: “This problem is the same as that already resolved on PinICLs …”

PinICLs used to be name for PEAKs, so:

“This problem is the same as that already resolved on PinICLs”, and then references to the PinICL numbers that were concerned.

Then it goes on to say:

“… namely that of a DataServer not tree building & populating correctly.”

Okay?

Anthony Roberts: Yes.

Mr Stein: So this seemed to be something of a recurring problem that’s been identified that they had thought, regarding those earlier PinICLs, that they had fixed that’s come back?

Anthony Roberts: Right.

Mr Stein: So we’ve got something that seems to make a difference to cash balancing in relation to a branch subpostmaster or mistress is that correct?

Anthony Roberts: Yes, looks like it.

Mr Stein: We can’t ignore the sums of money here because they seem to be reasonable enough to be worried about?

Anthony Roberts: Yes.

Mr Stein: Help us, please, understand what, from the board perspective, you would think should be done with this information. So, as an example, do you believe that such information, that there is this problem within the system, should be sent out to the subpostmasters, “Watch out! There’s a problem with the system in this period of time, May 2000”? Do you believe that that should have happened, or did happen?

Anthony Roberts: I can’t answer the second part of that, I don’t know whether it did happen or not. Whether it should happen, I don’t think that’s for me to decide that. I think that’s for the head of the business to decide that. It wouldn’t have come to the board unless you were saying that this is so fundamental that it’s happening in a lot of places a lot of times, then I would have expected us to know about it. We would have then said to the managing director, “What are you doing about it? What is happening?”

Mr Stein: Right. So let’s work out the system. The board has got overall control of governance. It’s setting the trend if you like?

Anthony Roberts: Yes.

Mr Stein: That’s what you are saying you said to Mr Blake?

Anthony Roberts: Yes.

Mr Stein: You have got a problem that we’ve identified, looking at this data tree server building problem, that seems to come up more than once, yes? It’s got sums of money that are worrying, particularly for a subpostmaster trying to balance, yes?

Anthony Roberts: Yes.

Mr Stein: Okay. So what’s the make or break? Do you want 100 of these, 200 of these that’s causing a problem before subpostmasters are warned, or 60?

Anthony Roberts: There’s got to be a judgement but the judgement has to be made lower down the organisation.

Mr Stein: What’s your judgement, 5 or 6 or 100?

Anthony Roberts: My judgement doesn’t matter because I don’t know enough about what you’re saying to make that clear. If it was 5 or 6 I would have – I wouldn’t have seen it. If it was 5 or 6 it would have gone to the managing director. If it’s 5 or 600 I would have expected him to be reporting that to the board pretty sharpish.

Mr Stein: Did you think, fundamentally, that there should be a system of warning subpostmasters that there are bugs and errors in the system of this type?

Anthony Roberts: Yes, there should have been.

Mr Stein: Was there, from the board, a direction to the managerial level that there must be a system to warn subpostmasters and mistresses there were problems?

Anthony Roberts: No there wasn’t. I wouldn’t have expected the board to take that decision. I wouldn’t have expected a decision like that to come anywhere near the board. It was a business decision. They were the people who, every day, were running the setup. When I was managing director, I would have expected to deal with that myself and, depending what it was, I might have reported I it in my monthly report to the board – or through to the chief executive at the time to report to the board – as a matter of information because I’d dealt with the issue.

I certainly agree with you, the issue, in the way you described it, should have been dealt with – should be dealt with. Somebody ought to be warning people. That’s part of the way that you’re training subpostmasters. But certainly not at the level of the board because if you do that, I could probably give you back 50 examples of other things that people might say to me, “that’s a board issue” no, it’s not a board issue, its lower down in the business.

Mr Stein: Right. So your expectation is that there should have been some system in place to warn subpostmasters and mistresses, “Look, there are these problems existing at this particular time”?

Anthony Roberts: If the problems that we’re talking about – and I don’t know, because you’ve just shown me one – if the problem was more than that, I think it would be a perfectly reasonable thing to expect that if those problems were substantial, they should be – subpostmasters should be warned or they should be told that maybe they were doing something wrong in the way that they were balancing. Or maybe it was – I know we talked about training issues before. Maybe it was a training issue, maybe it wasn’t and if it wasn’t then of course people should have been warned. We don’t just – we shouldn’t have carried on with this going on if we knew there was an issue and it was taking, whatever it was, three months to try and resolve it.

Mr Stein: You’ve discussed with Mr Blake the question of what relates to a “fundamental”, was the word that was being used often.

Anthony Roberts: Yes.

Mr Stein: You have used the word “substantial” a moment ago. You discussed with Mr Blake whether it’s the words “fundamental” or “substantial”. There has to be a need to evaluate whether a particular problem is big or small?

Anthony Roberts: Sure.

Mr Stein: So would you have expected a rule to have been in place to try and govern, you know, the decision as to whether it’s a fundamental or substantial problem?

Anthony Roberts: No, it’s a judgement.

Mr Stein: Right. Whose judgement?

Anthony Roberts: Managing director at the business’ judgement.

Mr Stein: Managing director. At that level?

Anthony Roberts: Yes, at that level or if he felt, for some reason, that he couldn’t make that judgment he would have pushed it up the line, but I think at the same time I’d have been saying, “well why can’t you make that judgment? This is your business.”

Mr Stein: From the board level, again appreciating your evidence about not being involved in the detail, would you have expected this type of error to have been brought to the attention of anybody being prosecuted if they, the person being prosecuted, were saying, “I don’t know what’s wrong. Something wrong with the system”?

Anthony Roberts: I think it’s the same kind of answer. The answer is yes but if it was one person the answer will be no. If it was 300 people, you know, I think the answer would then be – at some point, that has got to come up to the board.

Mr Stein: So if one person being prosecuted raises it as a difficulty with the system, that doesn’t, for you, merit a disclosure of such an issue as this; is that correct?

Anthony Roberts: Not for me as a member of the board.

Mr Stein: All right. Mr Roberts, I want to be fair to you. Have you ever taken advice from an experienced criminal solicitor or barrister in relation to the way that disclosure occurs within the criminal justice system?

Anthony Roberts: No.

Mr Stein: Thank you.

Sir Wyn Williams: Ms Page?

Questioned by Ms Page

Ms Page: Mr Roberts, was opposing ACT effectively Luddite?

Anthony Roberts: I wouldn’t have described it like that. I would have said it was a way of protecting a lot of subpostmasters and a lot of sub post offices.

Ms Page: If I can just ask for Mr Roberts’ witness statement to come up again, the reference WITN03390100, and if we could go, please, to page 12, about three-quarters of the way down you have a sentence which deals with ACT, and you say:

“Later a further option of ‘controlled migration to ACT’ by which I believe was meant a slower move to … ACT was suggested.”

Suggested by whom?

Anthony Roberts: I think it was suggested by the government.

Ms Page: So you didn’t suggest that yourself?

Anthony Roberts: No, I don’t think – no, no. I think it came out of one of the earlier studies or it may have been something which came out of the Sir Adrian Montague study but, no, it’s definitely a government suggestion from one of the studies that was going on around that time.

Ms Page: So you took the view that ACT should just not happen, it should never happen.

Anthony Roberts: Yes. Not that it should never happen because we knew at some point it would but, as I said earlier today, a lot of this was in negotiation. Our position in the negotiation, if you like to put – if I put it that way, was that we wanted to put off ACT purely from the point of view of the Post Office, Post Office Counters, for as long as we could, for two reasons: one was the revenue, but the other reason was that, whenever we raised the issue of, okay, you go to an Automated Credit Transfer system, what are you going to do about those people who don’t have bank accounts, of which in mid-1990s there are a lot more than there are now, that was one of our arguments to make it a slower process than perhaps the DSS had in mind.

We also wanted it because it would have been very difficult to sustain the network that we had if they’d moved rapidly to ACT because, in those days, there was no suggestion of some kind of social subsidy for those post offices that were in rural areas, or wherever. So it was a combination of those things that we kept pushing it back.

Ms Page: Well, that’s not strictly correct, is it, because there’s a number of documents which make it clear that the Post Office did not want subsidy. That was something that was discussed and mentioned at various points. I can take you to them if you like.

Anthony Roberts: No, I take your word for it. I’m just surprised. My recollection might have been – it might have been that we wanted to try and run it commercially. But I think we moved more and more over that period to a position where we were saying probably the only answer, if ACT is going to go ahead in the way it was – remember ACT was going to come in in 2003 – that we were still trying to work out how we would then justify some of the things we wanted to spend money on without, as it were, getting payment for some of the smaller sub post offices, whose role was not going to feature very much in that, we knew that, but would still be there to handle the basic pension payments, stamps, or whatever.

Ms Page: If you knew, as you say you did, that ACT was going to come in at some point in time sure or later, leaving negotiation to one side, why was the Post Office not preparing for it?

Anthony Roberts: Well, we were preparing for it. The whole Horizon project was preparing for it, in the sense that, even if we’ve gone ahead with the original plan, we knew at some point this was going to come. It’s very interesting, I think, in 2022 we’re almost at the end of it. It’s taken a very long time and, in one sense, that’s preserved the Post Office in the way it has. So, in one sense, we knew it would happen; the issue was when.

One of the things that we did, at one stage, was we were trying to negotiate and say, “Well, it shouldn’t be before, I think, 2005” because five years, in those days, to try and prepare for it, in the end, it was 2003 when it was going to start. I don’t know now whether it did in 2003 but that was the deal that we did with the government in the end.

Ms Page: Could we perhaps bring up the next document, FUJ00003599, please. This is an ICL document so, obviously, not something you would have seen at the time and if we could go to page 5, please, if we see there on the left, it says, Sir Michael Butler, obviously a board member. It describes his position, apparently as stated in this meeting.

The second paragraph reads:

“The Government put us in a difficult position and made us live a lie. They decided in January they did not want to use the magnetic stripe payments card. Probably we could subpoena the minutes of meetings which cover this. They did not come clean about this because if they had they would have to pay all the redundant costs. John Bennett’s team had been working successfully for 4 months on a programme which they had already decided they did not need at a cost of around £50 [million] for the taxpayer.”

So that’s ICL putting a figure on the four months of continuing to work on the payments card of 50 million for the taxpayer.

Was your insistence on continuing with the payments card option in the face of all odds a waste of money, a waste of time?

Anthony Roberts: Well, I’m not quite sure which year we’re in. Sir Michael Butler was the chairman of ICL and he was an ex-diplomat. I’m not sure what point he’s making. We were pretty open with ICL about what we were doing and what we were pressing for during this period when we were trying to get a final decision out of government.

This idea that the government hasn’t come clean, I find that difficult to accept because the one thing that was clear during the whole of this period, up to the time at which we agreed with the Secretary of State for Industry’s proposal, was that there were lots or studies going on, all the stuff that we’ve talked about this morning, so I’m not quite sure which January we’re talking about. Perhaps you could help me with that?

Ms Page: Certainly. We can go back to the start of the document but I believe that he’s talking about January ‘98 but I’m potentially wrong about that, so it might be appropriate to check.

Anthony Roberts: Well, January ‘98 we hadn’t even had the Adrian Montague study, and the Adrian Montague study had been set up with had panel of the Treasury.

Ms Page: I’ll stop you there. I’ve got that wrong. It’s January ‘99. These board minutes are dated 13 May ‘99.

Anthony Roberts: Right.

Ms Page: So he’s talking about the four months in the run up to signing the new heads of agreement.

Anthony Roberts: January 1999, I still find that difficult because my understanding from the minutes that we looked at this morning was that the issue didn’t go to 10 Downing Street until February. So I find it quite hard to understand that the chairman of ICL is saying it’s all been stitched up, before it’s even gone to Number 10 because the responses from Number 10 then led to the further meetings led by the Treasury and Sir Steve Robson, which was the issues we talked about this morning, and then led to a position where there was due to be new heads of agreement but they weren’t agreed with everybody. So I just find that really hard to understand.

Ms Page: One thing that appears to have happened as a result of the new heads of agreement is the government effectively used the Post Office to sort of cover the 180 million that ICL was insisting that they needed to recoup, in terms of their sunk expenditure over the payments card; is that right?

Anthony Roberts: Yes.

Ms Page: Would you say that the government took advantage of the Post Office?

Anthony Roberts: We were put in a very difficult position. The chairman had made it clear that he didn’t like that particular deal. In fact, he felt it was not the right use of shareholder funds. Dr Bain came from the private sector and that was absolutely the right point to make. Unfortunately, the shareholder is the government and we had also got concerned that the Secretary of State could direct us to do something and we then cleared with lawyers that that probably wasn’t going to happen.

We were faced with having to take a decision within 48 hours of an ultimatum set by ICL – ICL – Fujitsu’s chairman, that he had to have a decision by that time, were we going to agree to something which would create new heads of agreement or not? The proposal from the Secretary of State for Industry Stephen Byers was very clear and it said “We are prepared to do this, we’re not prepared to do anything else”. He didn’t use those words but that, effectively, was what it was.

We as a board had to then take a view on whether, for the Post Office, it was better to have not what we would prefer but something which would still continue to automate that network, given that that had been the centre piece of our strategy for Post Office Counters for quite some time, or to say we weren’t going to do it.

If we had decided to say we weren’t going to do it and it was a long discussion, then I think two things would have happened. We’d have all been into legal situations. I’m sure that ICL would have been suing for the money that it believed it had lost. We were with government, talking about who paid. So that was quite a big issue. But the biggest one of all was getting something that we could work with to actually then try and continue to automate Counters.

So the answer to your question – sorry, it’s a long answer – but, basically, we were put at the end of a gun and it was a yes/no choice and, in the end, we said yes but I don’t think we said yes with a great deal of enthusiasm.

Ms Page: Yes, well, we can see that as it sort of played out in the formal minutes, can’t we, if we look at –

Sir Wyn Williams: Do we need to pursue this any further? I think the documents about what might be called the pressures brought to bear upon each party really speak for themselves.

Ms Page: There’s a document which perhaps put in quite graphic terms.

Sir Wyn Williams: Okay, one document then. Fine.

Ms Page: If we could look at, please, FUJ000980480, at page 21, and perhaps –

Sir Wyn Williams: This isn’t a contemporaneous document?

Ms Page: It’s not, no.

Sir Wyn Williams: It’s Mr Smith’s analysis, is it? Just so I know what it is.

Ms Page: It is.

Mr David Smith, is he someone you knew?

Anthony Roberts: Yes.

Ms Page: Perhaps you could tell us his position?

Anthony Roberts: He was, I think, the deputy to David Miller on the project team.

Ms Page: So on the screen at the moment, as sir has just said, this is not a contemporaneous document but this is his recollection –

Anthony Roberts: I was given a copy at lunchtime, so I have read this particular page.

Ms Page: So what it says is that this is a sort of a recollection of the period of time that you’re talking about and it says:

“The leaders at the POCL felt that they had been shafted by a Government/Pathway stitch up

“Whilst the Group Board signed up to the deal

(Sunday afternoon in the CEO’s kitchen!)

Ms Page: “They did so with a gun pointed at their head – ‘sign this all or the other things you want you can forget’

“POCL felt stuffed by Pathway with terms that were imposed

“Dave Miller, the MD of Post Office Network said at the time ‘I have the same feelings about Pathway as I would have for the man who had just shoved 15 inches of bayonet up my posterior’

“No statement could more adequately express the attitude of Post Office towards Pathway.”

No doubt not your words but would you agree that that statement was one which reflected how POCL felt about Pathway at that time?

Anthony Roberts: I don’t know how POCL felt about Pathway at that time but it doesn’t reflect the way the board felt about it at the time.

Ms Page: Do you remember the meeting in your kitchen?

Anthony Roberts: I do indeed. It went on for rather a long time.

Ms Page: Was POCL expressing the views that we see there in that meeting?

Anthony Roberts: POCL wasn’t at that meeting. Stuart Sweetman was at that meeting as a managing director. He was part of the discussion all the way through and, with great respect to Mr Smith, I don’t think he would know anything firsthand about the tone of that meeting, what the meeting did, how long it lasted, what the colour of my walls in the kitchen were, or anything else.

I do note that this is going to be part of a book, by the look at it, and it does seem to me that the language is probably appropriate to the book. I don’t think the language reflects – although David Miller might have done – David Miller might well feel that because he had put so much time into trying to get solutions with ICL that it would have been – I think I would probably have felt the same as him.

But as a comment on the group board and everything else, with great respect, again, to Mr Smith, he was a long way away from the group board. He would not have known any of this and particularly about whether we felt there was a gun pointed at our head. We would not have used language like that. It did not say “sign this or all the other things you want you can forget”.

It certainly said, as I’ve just described to you, “You have a yes/no choice on whether you want to sign this or not” and doubtless terms would have been difficult afterwards. But remember too that, in his response letter, the chairman of the Post Office had said he was very unhappy about the way this had been dealt with and he did want to have a meeting with the Secretary of State soon after to sort out how all that went.

We did have that meeting, we had it with the non-executives, and you carry on with it. This was a business issue. It was a government/business decision. You don’t take your bat home. This sounds as though somebody wanted to. But I really do not feel that that reflected more than maybe for a couple of days the attitude of POCL. But you may find more from that when you speak to either Stuart Sweetman or David Miller.

Ms Page: No doubt. What would you say the tone was at that meeting –

Sir Wyn Williams: I think I’ve heard enough about the politics now, Ms Page.

Ms Page: Can I then ask about this: I think we’ve seen it in another document that’s already come up earlier on, so I don’t think we need to put the document on the screen, but you referred to if the payments card was not pursued, the Post Office position was effectively that all bets were off. I think that was the word that you used and that you – that the documents showed us that the Post Office position was that it would rather go back to re-tender than continue with Horizon.

Anthony Roberts: That was an option, yes. I don’t think it said we would do that but it was certainly an option, yes.

Ms Page: Is that something that you made clear to ministers?

Anthony Roberts: Yes, I think so. I mean, there was –

Ms Page: That Post Office would have preferred to re-tender rather than continue without the payments card?

Anthony Roberts: No, we didn’t say “prefer”. What we said was it was an option. If, in fact, they took a decision not to pursue the benefit payment card, they couldn’t assume that we would want to continue with the relationship with ICL. We might – we might prefer to get rid of everything and start again. That was the line we took and we would certainly have made that clear to the Department of Industry.

Ms Page: When you were discussing the options, and the option for the payment card being the one that you were predominantly trying to take forward, you used the phrase earlier that you may have overplayed your hand; what did you mean by that?

Anthony Roberts: I don’t think I used that phrase.

Ms Page: Well, that was the phrase that you used, I think, when you were taken to one of the documents where you were dealing with this question of the payments card being the one option, the one that Post Office really wanted.

Anthony Roberts: I don’t recall saying “overplayed our hand” this morning. I may be – I apologise if I’m wrong but I don’t recall saying that.

Ms Page: Perhaps if I take you to one of the documents which perhaps suggests that might be the case, if we could go to BEIS0000421, page 7 –

Mr Blake: Chair, I don’t want to rush Ms Page at all, we will have to take a break at some point. I’m quite eager to get on to Mr Rich as well. I don’t want to rush Ms Page. Can I just get an idea of how long you think you will be?

Ms Page: Well, perhaps 5 minutes.

Sir Wyn Williams: Right. I’ll hold you to that.

I should say – and I have sympathy with all the advocates in the room because once upon a time so was I – it’s very, very easy, almost impossible to avoid, picking up points that emerge in other people’s questioning and this isn’t the idea of allowing the CPs to ask their own questions. The idea is for you to have your own discrete little block, all right, and I would like you to stick to that, if you would, because otherwise our timetable is going to get extremely difficult to fulfil.

Ms Page: Sir, if I may just explain, I’m actually trying to do it to abbreviate my questions.

Sir Wyn Williams: You have your five minutes, despite Mr Henry’s intervention, and then we will have a break.

Ms Page: I don’t know if that reference was picked up there.

We are, page 7. Now, I think it’s at the bottom of the page. I’m sorry, perhaps if we go up again because I’m not sure that I’ve got the right page reference. I do apologise. Here we go, it’s at the top of the page, I do apologise. It runs over from the earlier page, which was – and so perhaps we should just deal with that.

The paragraph 21 is dealing with:

“POCL’s own estimates are that if they were to lose all BA work 5,000 to 13,000 post offices could close whilst with a 50% loss of BA income they estimate that 5,000 to 9,000 offices could be lost – depending on the policy towards Crown offices and the rural network. KPMG however believe these losses to be exaggerated.”

Was this sort of the negotiating tactic, if you like?

Anthony Roberts: No. I think it was the fact that, at that stage, we didn’t have a model which is good enough to predict more accurately than that. I think there’s a piece of evidence later in something I’ve read, which said 7,000 and had a comment from KPMG after it saying that POCL – and this was some time on now had quite a good model of trying to predict what the impact would be.

There were 17,000 post offices at the time. Even if you took the lowest figure, that was still a major, major political headache, apart from being a financial headache for us.

Ms Page: So just a last couple of questions, really. If we could go, please, to CBO00000059 and if we just zoom in on the middle of the page, it says here – this is a document that’s going between government ministers, I hope you have had a chance to have a look at it. It says here on the third (sic) little sort of dash that, in effect, there was a plan to:

“set in train a radical overhaul of POCL to introduce new management, and to incentivise them to maximise the returns from Horizon.”

Was that a Government plan or a Post Office plan?

Anthony Roberts: No, it was neither. That letter is from Geoff – sorry, I can’t remember the surname – who was one of the special advisers in Number 10. As you can see – Geoff Mulgan. He is putting in another document to the discussions that ministers are going have. I rather suspect that that was his own idea for them to consider. I don’t think that idea got anywhere.

Ms Page: Then, finally, this, please. If we could go to BEIS0000123, a little further down, please, it just says under the heading “Current Issues”:

“On Board appointments, correspondence on the reappointment of Richard Close”, et cetera.

Then, finally, it says, at the end of that paragraph – sorry, it’s just moved up:

“Decisions will be needed immediately after the Summer break on the reappointment of John Roberts, Chief Executive.”

Now, this document, if we go up to the top, is from – actually the date isn’t at the top but I can hopefully tell you without controversy that this document was from the year before the rollout, if you like.

Anthony Roberts: Yes.

Ms Page: So it suggests that your reappointment was in the year of rollout of the year 2000?

Anthony Roberts: It could well have been. There was – originally board members were appointed for a fixed term, something like three years. It moved, and I can’t remember when, to a one-year rolling contract and it could well be that that was just the one-year rolling contract.

Ms Page: Did you feel that you needed to deliver Horizon in order to be reappointed?

Anthony Roberts: No, no – never came into my mind. I knew that I was coming to the end. In my own mind, I’d been chief executive by then for five or six years, during a pretty intensive period and I’d already made it clear to the board at one point that I wanted to go and – this was to the non-executive board – and the non-executives said to me “Well, we think the chairman will be going next year, so you can’t”, roughly. So, no, there was no connection between that. I mean, in a funny sort of way, I find it sort of offensive if somebody suggested that there was.

My role, until I finished – and, remember, I had been in the Post Office the whole of my career – was to try and make sure that whatever it was we were doing we did and I did that until I finished, and I finished in a year with probably the worst results we’d had for a very long time but that didn’t mean I gave up.

Sir Wyn Williams: All right. I think that produces a natural break, if I may say so, Mr Roberts.

You had about seven minutes, so somewhere between Ms Page’s willingness to have five and Mr Henry’s request for ten.

Thank you for your written evidence and thank you for your oral evidence, Mr Roberts. We will take a seven-minute break, so we can start at 4.00.

Mr Blake: Thank you very much.

(3.54 pm)

(A short break)

(4.04 pm)

Paul Rich

PAUL RICH (affirmed).

Sir Wyn Williams: Mr Rich, I’m sorry you have had a bit of a wait. I’m afraid these things inevitably happen in courts or inquiries.

Paul Rich: Yes, I understand. Thank you, sir. Okay to sit?

Sir Wyn Williams: Yes, of course.

Questioned by Mr Blake

Mr Blake: Can you give your full name, please?

Paul Rich: Paul Andrew Rich.

Mr Blake: Mr Rich, do you have in front of you a copy of your witness statement?

Paul Rich: I do.

Mr Blake: Can you tell the date of that witness statement?

Paul Rich: Dated 21 September 2022.

Mr Blake: Is that signed by you at the end of the witness statement?

Paul Rich: Yes, it is.

Mr Blake: Is it true to the best of your knowledge and belief?

Paul Rich: It’s true to the best of my knowledge, belief, recollection and given in good faith.

Mr Blake: Thank you very much. I’m going to start – we’ll be about 20 minutes to half-an-hour today and we’ll no doubt go into tomorrow.

Paul Rich: Okay.

Mr Blake: I want to start just by asking you about yourself. You joined Post Office Counters Limited in 1987 in the marketing department; is that right?

Paul Rich: That is correct – March ‘87.

Mr Blake: In 1993 you became the business head of the marketing department, financial markets director?

Paul Rich: Yes, that was courtesy title, yes.

Mr Blake: In 1995 you became partnership director attending the Post Office Counters Limited Executive?

Paul Rich: That’s true, again a courtesy title.

Mr Blake: In 1996 you became a member of the Executive. So in ‘95 you were just attending the Executive but in ‘96 you became a member of the Executive –

Paul Rich: Yes.

Mr Blake: – with the title of development director?

Paul Rich: That’s right.

Mr Blake: What did the role of the development director involve?

Paul Rich: At that time, from April ‘96, it was – the focus of my role was the Horizon project, including on behalf of Post Office Counters Limited, POCL, if I may call them that from now on, day-to-day sponsorship of the programme delivery authority.

Mr Blake: What did you understand the POCL Executive to be?

Paul Rich: POCL Executive was the management committee, really, for Post Office Counters Limited. It involved – in March ‘97, I became a POCL company director but that was – the company was a limited company by guarantee and was – really didn’t have a non-executive board or anything like that. So the accounts of the Executive Committee would have been headed by the POCL managing director and that would have reported to the Post Office, as it was then, CEO.

Mr Blake: Can we bring on to the screen WITN04030101, please.

Paul Rich: Yes.

Mr Blake: So if we scroll down a little bit, that’s the announcement of your appointment as development director and can we look at the bottom of that page. There are two names there. There’s RTB Dykes, and there’s Jonathan Evans, who were they?

Paul Rich: Richard Dykes was the – I think he was then the managing director of Post Office Counters Limited prior to Stuart Sweetman. Jonathan Evans was a colleague who was the network director at that time and it’s clearly – I think he has an annotation on top of that.

Mr Blake: Perhaps we could see –

Paul Rich: It’s come from his office.

Mr Blake: Thank you. In 1997, you became a POCL company director, as you’ve just said. Can you tell us briefly how your career, in terms of job titles, et cetera, developed from there?

Paul Rich: From there on?

Mr Blake: Yes.

Paul Rich: I was with – I stayed in that development director role until March 1999. At that time, there was a Post Office group-wide reorganisation it was called Shaping for Competitor Success, SCS, as we knew it, and a number of new business units were formed at that time and I was at that point appointed managing director of a new business unit called customer management, which basically dealt with contact centres for the three Post Office businesses at the time and also a number of external contracts, notably the TV Licensing contract for the BBC, at that point.

So I formally took up that job, I think, in March/April. There’s a Post Office Board minute in April ‘99 that minutes that managing director of one of the companies within customer management.

I provided advice and – given my previous knowledge on a strategic level to the Post Office Board when asked about the future of Horizon as an input to them. I carried on with being managing director of customer management until about September 2001 – August/September 2001, when I was called in by the chief executive and said that three of the business units that had been set up in the programme I alluded to before, which would basically split up Post Office Counters Limited into three separate business units, were being reassembled into something that was going to be called Post Office Limited, and the CEO asked me to take on, in an acting capacity, the group MD role for Post Office Limited, while the government recruited a new Post Office Limited CEO from the financial services sector.

That was supposed to be for three months but took longer. So that ran through until March 2002. I think David Mills was appointed in April 2002. Then, after that, I did couple of short-term projects for the then chairman and the then CEO and three months later, as a result of another issue, I was made deputy managing director of Royal Mail, and the marketing director there until I left in 2005. I left the group in 2005.

Mr Blake: Where did you go in 2005?

Paul Rich: I stopped full-time work then and I was asked to set up for the government a new National Health Service national organisation, as an arm’s length body, as its Chairman. So I was a non-executive chairman of something called the NHS Business Services Authority. I did that for a number of years on a part-time basis and, for that, I was a non-executive director of my local water company South East Water.

Mr Blake: I want to ask about the Benefits Agency.

Paul Rich: Yes.

Mr Blake: Can you tell us about your background working with the Benefits Agency in the first half of the 1990s?

Paul Rich: Yes. Well, when I became the financial markets director as part of that organisation, the idea for that business unit was to take on all financial service or financial service-based clients and that included the Benefits Agency, and it was clear that the Benefits Agency were the largest client – we called them clients – Post Office Counters Limited had, did over 30 per cent of its income at that time and it was also, in retail terms, what was called the lead transaction for the 28 million customers a week who were coming through post offices at that time because, with the money they got issued, they then did a number of other transactions, if it was in a sub post office in the private part of that sub post office as well as at the post office and –

So if you want me to describe the relationship with Benefits Agency, at the time, coming in fresh to it, it was difficult. It was fractious.

They had a belief that we were not value for money and they had the possibility of moving towards what they saw as both cheaper and less fraud-prone ways of paying benefits.

There was a perennial and typically difficult annual contract negotiation that had always been done with them and, when I came in, I was surprised, given some of my commercial background before the Post Office – I joined when I was 30-odd, 31 when I joined, so I was in the private sector before that – that a different approach would have been needed to make this a more sustainable and longer-term contract and try to build some type of partnership that recognised and acknowledged their wishes to move to a different payment method over time.

Mr Blake: Were they seen as a customer or a partner?

Paul Rich: They were essentially a client. We had what we called a three-box model within Post Office Counters. There was the business clients, for whom we operated and paid us, and there were customers, who were users of the service, the ones who turned up at post offices nationwide. They were a client and we wanted to create more of a partnership feel rather than an adversarial feel, I think is the truth to be told.

Mr Blake: You mention in your statement a memorandum of understanding. I’m going to take you to that. I think you’ve been provided with it relatively recently, today or yesterday?

Paul Rich: Yes, it’s okay, I agree, yes.

Mr Blake: Can we look at POL00028382, please. This is the memorandum of understanding between the Benefits Agency, Post Office and Social Security Agency. It’s dated April 1995. Can we look at the next page, please, and that sets out the purpose. The purpose is – well, it says:

“This document summarises business and commercial understanding so far reached between the parties at paragraph 3 around the programme known as ‘Bringing Technology to Post Offices and Benefits Payments’ and so concerns this procurement of ‘BA/POCL Automation’ and associated issues.”

What was the relationship like at the time that this memorandum of understanding was signed or agreed?

Paul Rich: Well, just to take you back to the background, this was the result of considerable work beforehand, over the previous year or so, I would think, to try to come to an understanding of a longer term contract. This represents an eight-year type contract in outline – as an MOU not as a heads of terms at that stage – with a migration path that had various tapering floor levels between the Benefits Agency and Post Office Counters, in terms of guaranteed revenues, to allow a managed transition.

But it also was the rut of a joint feasibility study to see what could be done to mitigate some of the fraud and cost issues that Benefits Agency were – and the result of that was an automation programme which we were entering into as a joint procurement then. So this was the basis by which that procurement process could then be run.

Mr Blake: We can take that down. On the subject of PFI, can we look at POL00028450. This was a document prepared for the board. Can we look at page 2, paragraphs 8 and 9?

Paul Rich: This is from 1996, is it, Mr Blake?

Mr Blake: Yes. That’s right. Paragraphs 8 and 9 describe the PFI arrangements. Perhaps we can have a read of this. I don’t need to read those out but perhaps you can tell us why PFI was used and why it was seen as appropriate in this case?

Paul Rich: I think it was clear from the outset that the Government, who were involved, of course, in the run-up to this understanding being reached and the procurement starting, wanted this to be done under a private finance initiative. There were Treasury guidelines from memory in the late ’80s for that, and what essentially that did was two things: one, it transferred the risk of the design, build, develop and operate to the private sector supplier and they would pay – and two, they would put out the capital outlay, rather than the procurers, and then get paid as the outputs came along.

I think it’s fair to say, in this particular case, it was quite innovative in the sense of, I’m not sure how many IT contracts had been done in this way before. Often buildings and property have been done, where there were secure cash flows coming through from leases and the suchlike, but that was the way the Government wanted to take it. Anyway the 140 or 150 million that probably, I think I read in another document – I can’t remember this but I’ve seen documents – that would be a capital outlay otherwise. It probably wouldn’t have been affordable by the Post Office at that time.

Mr Blake: We see in paragraph 8 it says:

“There is a requirement to demonstrate transfer of risk from the public to the private sector.”

Paul Rich: Yes.

Mr Blake: At paragraph 33 of your witness statement you say:

“Crucially, it also enabled the risks of the project (such as the risks of benefit fraud and the risk of design, build, installation and operation of the system) to be passed on to the service provider.”

Paul Rich: Yes, thank you for reminding me of that. I should have added about the risk, that the DSS and the Benefits Agency were insistent that the transfer of the benefit fraud risk from such payments should fall to the supplier.

Mr Blake: Did you understand that to mean that Fujitsu or Pathway would be financially responsible for losses within a post office branch?

Paul Rich: No, not specifically. I hadn’t thought about that. But this was for fraudulent activity to do with benefit encashments.

Mr Blake: Was that to the subpostmasters or to the Post Office that that risk was being transferred away from?

Paul Rich: What, the benefit encashment fraud? That was transferred away from the Benefits Agency essentially. There was, I think – and I’m doing this from memory so forgive me – I think between the annual contracts there was a limit between POCL and Benefits Agency of fraud liability, if proven, on benefit encashments at a ceiling. But this took away, from the DSS point of view, I think they’d – I subsequently found this out, I don’t think I knew this at the time, that their business case to the Treasury assumed that, once the system was up running and fully rolled out, it would save them something in the region of 15 million.

Mr Blake: So the transfer of risk, as far as you understand it as part of this project, really focused on benefit fraud risk?

Paul Rich: Yes, the DSS. Hence why it was very necessary to join it up technically with the DSS’s own systems that authorised.

Mr Blake: I’m going to move to early 1996 and the project evaluation board. Can you tell us what was the project evaluation board?

Paul Rich: The Project Evaluation Board was a multi-organisation board that recommended, to what was then a joint steering committee – I think it was called – made up of senior ministers and officials, which supplier – after an OU procurement process had been completed – should be recommended. It did that on the basis of arm’s length technical, operational and commercial/contractual teams that were, again, multi-organisation and the reason they were multi-organisational, of course, because the Benefits Agency and DSS and the Post Office were jointly procuring.

Mr Blake: Can we look at POL00028275, please. This is a document that’s very hard to read?

Paul Rich: It is very hard to read. I used a magnifying glass but it didn’t help much.

Mr Blake: Can you tell us, in broad terms, what the value assessment model was?

Paul Rich: Only in the very broadest of terms because it was not something I was intimately involved with or participated in, myself. The value assessment model was, I believe, a generic procurement model that broke down various technical contract and assessment issues in order to take an objective and – weighted and scored after due consideration, evaluation of each bidder or supplier that was there.

It was generic but customised to the extent of what was relevant to the procurement and the specification of service requirements that would have gone into the invitations to tender and the processes that led up to those invitation to tender.

Mr Blake: Just returning to the Project Evaluation Board, which organisations sat on that board?

Paul Rich: It was chaired by a Post Office Counters Executive Committee member, at the time the resources director, but it also included people from Post Office Counters, people from DSS and the Benefits Agency.

Mr Blake: The chairman was Bob Peaple, I think?

Paul Rich: Yes, I was working to Bob at the time when I was a partnership development director.

Mr Blake: Thank you. We can take that document down.

Can you take us through the respective roles of the assessment team, the board and the stakeholder organisations?

Paul Rich: Can I just clarify which board, please?

Mr Blake: So the Project Evaluation Board.

Paul Rich: Thank you. So the assessment teams would have been, as I said, working independently under one – actually, it was under one director, for the purposes of that, who came from the DSS, and he had quite extensive IT knowledge. He went on to be I think a Cabinet IT Office head.

Mr Blake: Can you remember his name at all?

Paul Rich: Andrew Stott.

Mr Blake: Thank you.

Paul Rich: So he would have been – it’s a lengthy and quite exhaustive process and I think it was fundamental – as the National Audit Office report said, I think it was fundamentally a sound process. It was done with care, diligence, et cetera, with no hint of impropriety.

That assessment included various stages where risks were identified and addressed, be they of either a contractual nature, a technical nature or something about the financing of the companies or consortiums, as some of them were, to make sure that they were robust.

They would have called on a number of experts. Once that all was assembled, and it took some time to assemble, with various iterations going on between the suppliers to clarify matters and things, then the evaluation team would have reported to the Evaluation Board.

Mr Blake: The assessment team?

Paul Rich: Sorry, the assessment team – thank you – the assessment team would have reported to the project evaluation board what the outcome of those evaluations were, including if any hurdles were remaining or were to be overcome still, because we wouldn’t have accepted something if a hurdle was still there, and what the risks were with each supplier.

Therefore, the Project Evaluation Board would have ultimately and did ultimately decide what its recommendation to the joint steering committee within government and, within the joint steering committee, I assume that would have taken account to DSS and Treasury clearances but also reported up to the Post Office Board for purposes of its Finance Committee and, ultimately, you showed me a document with the Post Office Board, because it was a major contract, which would have itself included a number of financial strategic and technical concurrencies to go with it.

So alongside the evaluation team, the Post Office Group IT people were allowed access to the suppliers to question them and make sure that they thought it was acceptable.

Mr Blake: Can you tell us which boards or committees within Post Office or Post Office Counters Limited would have needed to approve the recommendations?

Paul Rich: Yes, it would have gone – within Post Office Counters Limited there was the equivalent of the Major Projects Expenditure Committee at the board level. So there was something called ComPEC, which – and that would have cleared it and that would have given some financial scrutiny, you know, from our FD and an investment appraisal team and looking at the alternatives and options, and ensuring that the models that had been used, for example, were validated by external experts, such as Coopers & Lybrand, or the financial parental guarantee-type issues were cleared by people like Charterhouse that have done that.

Once it had recommended it with the managing director of Counters’ blessing and support, that would have then gone to MaPEC, the Major Projects Expenditure Committee and then, ultimately, to the board to sanction, because of the scale of the investment and the strategic importance of it, to go ahead.

So that’s the Post Office line.

Mr Blake: So there are three levels of scrutiny.

Paul Rich: So there is scrutiny there and, indeed, as you mentioned, Bob Peaple earlier on, he would have been the person presenting the report both to ComPEC and to MaPEC with, I think, Stuart Sweetman had taken over from Richard Dykes by then as the managing director.

Mr Blake: Thank you. We don’t have very long. I’m just getting the very basics out of the way –

Paul Rich: One last point remember, though, that was one mandate within the Post Office and there was this other mandate from the project evaluation board, which went to the joint steering committee within government, as I mentioned earlier on.

Mr Blake: What about the embryonic programme delivery authority?

Paul Rich: Yes, the embryonic programme delivery authority was, again, a multi-organisation thing and it grew out of the evaluation team, the assessment team, sorry, that had been multi-organisational and we thought it was necessary to have Benefits Agency and Post Office people working closely together, given that we’d agreed to prioritise the benefit encashment service as the first one because, clearly, they were setting the business rules and testing the end-to-end security with their own systems, which were in a bit of state of flux – but we might come back to that later on – at that stage.

It then reported in principle project terms to a programme steering committee made up post contract approval of the chief executives of the Benefits Agency, the MD of POCL and the chief executive of ICL.

Mr Blake: Thank you very much. Sir, I see the time. We have been through the very basics it will get a bit more exciting tomorrow, I hope?

Paul Rich: I can hardly wait.

Sir Wyn Williams: That’s quite a good word upon which to end: excitement.

All right. 10.00 tomorrow, Mr Blake?

Mr Blake: Yes, please. The usual warnings for Mr Rich.

Sir Wyn Williams: I’m sure you understand you are not supposed to chat about your evidence to anyone. I can’t think of any reason why you would.

Paul Rich: I have been advised fully about that.

Sir Wyn Williams: Fine. Thanks very much.

(4.33 pm)

(Adjourned until 10.00 am the following day)