4 November 2022 – Jonathan Evans
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(10.00 am)
Mr Blake: Good morning, sir, can I call Jonathan Evans please.
Mr Jonathan Evans
MR JONATHAN EVANS (sworn).
Questioned by Mr Blake
Mr Blake: Thank you, can you give your full name, please?
Mr Jonathan Evans: Jonathan Evans.
Mr Blake: Mr Evans, you should have in front of you your witness statement?
Mr Jonathan Evans: I have.
Mr Blake: That statement is dated 16 September of this year; is that right?
Mr Jonathan Evans: It is.
Mr Blake: Could I ask you to look at page 22, that is the final page of the witness statement?
Mr Jonathan Evans: Yes.
Mr Blake: Is that your signature there?
Mr Jonathan Evans: It is.
Mr Blake: Is that statement true to the best of your knowledge and belief?
Mr Jonathan Evans: It is.
Mr Blake: For the purpose of the transcript that statement is WITN03460100.
Thank you very much for attending today, Mr Evans, and for giving that statement. That statement will now go into evidence and the exhibits as well and the questions that I will ask you today will really build on what you have already said within that statement.
Mr Jonathan Evans: Okay.
Mr Blake: I’m going to start, just by way of background, with the various roles you have held over the years. You started in 1974 as a management trainee at the Post Office; is that right?
Mr Jonathan Evans: It is.
Mr Blake: Among other things, you were in 1984 an assistant head subpostmaster in Leicester; is that right?
Mr Jonathan Evans: Assistant head postmaster, not a subpostmaster.
Mr Blake: You became subpostmaster manager at Post Office Counters headquarters?
Mr Jonathan Evans: Yes.
Mr Blake: You became, after that, the general manager in the Midlands region; is that right?
Mr Jonathan Evans: Yes.
Mr Blake: You were network director between 1995 and 1999 –
Mr Jonathan Evans: Yes.
Mr Blake: – director of shaping competitive success programme in 1999, secretary to the Post Office between 1999 and 2001 and then company secretary of Consignia and then Royal Mail Group between 2001 and 2010; is that right?
Mr Jonathan Evans: That is correct.
Mr Blake: It is those later roles that we will principally be focusing on today. I’m going to take you broadly chronologically. I’m going to start in the late 1980s/early 1990s and your role, including that of general manager. Those roles that you held at that period, presumably, were ones that involved quite a lot of contact with subpostmasters; is that right?
Mr Jonathan Evans: Yes, it is right. In fact, going back further to the time that I was at Leicester, that also had quite a close involvement with subpostmasters because I was in charge then of I think around 150 post offices in Leicestershire. So I was the – that was part of my remit to look after those. I had pretty close dealings with the subpostmasters and the Federation representatives.
Mr Blake: So over those decades, you got to know subpostmasters pretty well and the way that –
Mr Jonathan Evans: I did.
Mr Blake: – they worked?
Mr Jonathan Evans: I did. Particularly in the role of subpostmasters manager, where the whole job was around dealing with the contractual issues and remuneration issues and a whole host of other things to do with subpostmasters. So that involved a lot of contact with the Federation and subpostmasters themselves.
Mr Blake: On the subject of contractual issues, presumably you were familiar with the requirement of subpostmasters which made them contractually responsible for certain losses?
Mr Jonathan Evans: Yes.
Mr Blake: You would also, presumably, have been aware of prosecutions in those early 1990s?
Mr Jonathan Evans: Yes, and indeed before and, really, this was a point I was wanting to establish with you, that – I mean, one of my earliest recollections when I was at Leicester, not actually in connection with a subpostmaster but with a young postman who had tampered with a giro cheque and it was a clear case of fraud. And I recall vividly that the investigations people came to me and said “Look, we’ve got this chap”, as they would say, “bang to rights, we ought to prosecute him”.
I had already seen him in terms of his dismissal from the company but I took the view that, here was a 17/18 year old lad and it would be inappropriate to prosecute him. Now, the reason I raise that – and I had a similar experience, actually, when I was coming on a bit when I was in the Midland region, where we had the choice as to whether to prosecute somebody, this was a subpostmaster who had been guilty of or accused with benefits – sort of an inside job with benefit encashment fraud. But six months previously we had given him the bravery award because he had had an armed attack on his Post Office. So there was the question “Do we prosecute somebody – how would that look?” I can’t remember how that ended up.
But the point I wanted to make is that, throughout my time in line management, it was line managers who had the ultimate responsibility to decide whether to prosecute or not, not the investigation people, not the lawyers. It would come to line management to decide.
Mr Blake: Do you know what period that ended?
Mr Jonathan Evans: I can vouch for that being up until the end of my time as network director. What happened subsequently is, to me, an interesting question.
Mr Blake: So up until 1999, it was the line management that took the ultimate decision?
Mr Jonathan Evans: Yes. Clearly, they would be influenced, to an extent, by what the security people, the investigators, the lawyers were saying. But they exercised judgement in terms of what the overall picture looked like for a particular individual and what he or she was being accused of, to decide how to progress it.
Mr Blake: Was that part of the consideration of the public interest more broadly?
Mr Jonathan Evans: I think it was more what is – what seems a reasonable thing to do, based on managerial judgement, really. I will put it that way.
Mr Blake: Your experience of that, was that on the paper-based system, rather than on an electronic system?
Mr Jonathan Evans: Yes, absolutely.
Mr Blake: Did those roles – so we are talking about pre-1995 roles – give you a good overview of how the company worked?
Mr Jonathan Evans: I would say so. I mean, one of the great advantages of when I joined the Post Office when I did, it was a two-year training programme, which got you to experience all aspects at ground level of how the business worked. So I spent time as a postman, went out on a delivery round. I spent time on the counter, I served customers on the counter. I was present when people did a balance. It gave me that sort of understanding of how the business operated.
Now, there was an awful lot, of course, that I didn’t know. In those days, a counter clerk would have gone on a six-week training programme before they were let loose on the customers. But I think I had a pretty good understanding of how the business worked, yes, and particularly having experienced the business – as you can see, I went from being the personal assistant to the Post Office chairman to assistant head postmaster in Leicester, from working with the board right on the shop floor, as it were. I was very fortunate to have a pretty broad experience of what the Post Office did.
Mr Blake: When you became regional manager, did you expect management to take your concerns as regional manager seriously?
Mr Jonathan Evans: Yes, I think so.
Mr Blake: Was the role of a regional manager quite significant because they were the link to the subpostmasters?
Mr Jonathan Evans: Yes. There were seven regional managers when the Post Office Counters reorganised itself in 1993. I had led that reorganisation and ended up as one of the seven regional general managers. So in the Midland region, we had 1500 subpostmasters and we made a point, as a team, of – the team in the Midland region – of having our meetings not just always in Birmingham but we went out to different parts of the region, held meetings there and invited subpostmasters and staff to come and meet us, so that we tried to establish that link with the people that –
I mean, after all, we saw it pretty clearly that, if we wanted to give good service to our customers, which is what the business was about, we needed to make sure that the people who gave that service understood exactly what we were trying to do and we wanted to get close to.
Mr Blake: You spent some time on both sides, so as regional manager and then up the chain in senior management?
Mr Jonathan Evans: Yes.
Mr Blake: Do you think senior management took the concerns of the regional managers seriously?
Mr Jonathan Evans: I am sure they did. I mean I became network director and then had the seven regional general managers reporting to me. So I can tell you that I did take – they were not shy in coming forward with what they thought was coming on.
Mr Blake: I’m going to move onto your role as network director. So you became network director in 1995. Can you just tell us briefly what that role encompassed?
Mr Jonathan Evans: I suppose the best way to describe it, in terms of how other organisations would have called it, would have been operations director. So I was really there in charge of the day to day operation of Post Office Counters so that, as I say, the seven regional managers were reporting to me. So ultimately 19,000 post offices, however many there were at the time, I was in charge of in terms of their day to day operation. So we were looking at the quality of service they gave, their staffing arrangements, we were into different forms of contracts that we were experimenting with as well as just making sure the day-to-day operation of the business ran well.
Mr Blake: In that role, were you part of the leadership team within the Post Office?
Mr Jonathan Evans: I was a director of Post Office Counters yes.
Mr Blake: Was that a role, as network director, a role that was more involved in the day-to-day lives of subpostmasters than perhaps other people at that level within the company?
Mr Jonathan Evans: I think it would be, yes.
Mr Blake: I’m going to look at our first document. That is POL00031271. This is an August 1996 document that was written by Bob Peaple, addressing the automation change programme. Very briefly, can you tell us what the automation change programme was?
Mr Jonathan Evans: What I think it was, was a – managing a number of automation projects that were going on in the business and putting some collective weight behind them to make sure they integrated well, and so on. I think it was that. So this was 1996. It was the early days of Horizon. And there would have been some other automation issues around. I can’t describe it much better than that, than I think is in the document itself, which describes the purpose of it.
Mr Blake: Thank you. Can we look at page 6 of this document, please. Page 6 sets out the purpose of the Automation Transformation Steering Group. I will just read that purpose. That says:
“To provide leadership and direction to the transformational programme and shared ownership of the business vision which it supports. The steering group is responsible for monitoring and reviewing overall progress towards the successful completion of the automation programme and achievement of the strategic targets which have been set.”
You refer in your witness statement to the terms of reference of the Automation Transformation Steering Group. Is the terms of reference that paragraph or is it – perhaps we could scroll onto the next page and after, there is reference of outputs and inputs. What did you understand to be the terms of reference of that group?
Mr Jonathan Evans: I would say all of this, actually. We served a purpose. Inputs and outputs would have described what the programme was about.
Mr Blake: Can we look at page 9 which sets out the membership. Looking at the names there, it seems to be quite a significant role in that you have Bob Peaple there and you are mentioned there, Roger Tabor is there. Did you see it as a significant role at the time?
Mr Jonathan Evans: To be perfectly honest I can’t think now what I thought at the time. It clearly was an important collection – an important grouping of people and the role they were doing was important because automation and the automation transformation was significant for the business. So I think it was right that I was connected with it. But there you have got the personnel director, the strategy director, the finance director, myself, Paul Rich, who I think you have seen is the development director, and some IT people, I believe. So, yes, it was a significant –
Mr Blake: Would it be fair to say that you were involved at quite a high level in the automation project at that early stage?
Mr Jonathan Evans: Yes.
Mr Blake: Presumably as network director you could feed into how that might impact on the ground?
Mr Jonathan Evans: Yes, I suppose I would. Again I have zero recollection now of actually how that worked or examples of it but I would guess that was what I was there for, yes.
Mr Blake: Bob Peaple, we have seen, is on that membership. He was also on the evaluation board in 1996. Were you aware either in broad terms or in specifics of what was happening at that procurement stage?
Mr Jonathan Evans: I was aware from the point of view of – Bob was a colleague and colleagues talk but I wasn’t involved, myself, in the actual selection process.
Mr Blake: We have heard, for example, that Pathway wasn’t the most technically attractive option, was that something that you would have been aware of in 1996?
Mr Jonathan Evans: Well, this is where it is – where the memory can play tricks. I’m certainly aware of that now. Whether I was aware of it at the time I’m less sure.
Mr Blake: Would you have been aware, for example, that one of the reasons Pathway succeeded was they were carrying a greater risk, in particular, relating to fraud. Was that something you remember?
Mr Jonathan Evans: I remember it said a different way, that because the – there was the need for whoever the supplier was going to be to be compliant with the PFI arrangements, which therefore involved a significant transfer of risk, that ICL tick that box more than the other applicants did: I was aware of that.
Mr Blake: We have seen in a document, I don’t need to bring the document up, but discussion of a need for a proactive management stance towards Pathway because of certain concerns at that procurement stage. Were you aware of that need?
Mr Jonathan Evans: I can’t say that I was. I mean again it is one of those points that I now am aware of, but what I was aware of 20 years ago, I can’t be certain of.
Mr Blake: I think perhaps in broad terms would you have been aware that they weren’t necessarily the best provider on some aspects and needed to be carefully managed?
Mr Jonathan Evans: I don’t think I would even go that far actually in terms of what I was aware of at the time. I don’t think – I can’t recollect thinking that, if you see what I mean.
Mr Blake: We have heard from witnesses – some witnesses who say that Pathway underestimated difficulties with rollout. We have heard the counter view from Mr Todd and a paper that was produced that said that Post Office Counters Limited couldn’t have reasonably believed that the Post Offices were fit for automation.
What was your view, at that time, of the physical condition of branches and whether they had been sufficiently taken account of at the procurement stage?
Mr Jonathan Evans: Well, knowing the range of premises that sub post offices were in, ranging from bright, shining, Crown post offices to small, rural offices that were in somebody’s front room or in a church hall or, in one case in the Midlands, would you believe, a converted pigsty. It was no surprise that there would be difficulties with installing the equipment in all of those.
Now whether the estimate as to what would be required to do that was miscalculated, I don’t know. I don’t know who was assuming what in terms of what that commitment would be.
Mr Blake: Because you were not party to that part of the business?
Mr Jonathan Evans: I was not party to that.
Mr Blake: Are you aware of Pathway having been given an opportunity to investigate individual branches or, perhaps, not being given an opportunity to investigate branches?
Mr Jonathan Evans: I have no recollection of that. I feel it would be unlikely that we would have prevented them from investigating. All sub post offices are open to anybody to get a good look, okay you can’t get behind the scenes but you can get a good impression of what sub post offices and all post offices are like by visiting them and there is no bar to that.
Mr Blake: How clear would it have been during your period, for example, as network director, that many branches would have been, for example, without a computer or relying on a telephone line?
Mr Jonathan Evans: Sorry sir, you mean pre-Horizon how many –
Mr Blake: How obvious would it have been to either an IT professional or a member of the public?
Mr Jonathan Evans: That there was no computer in the office?
Mr Blake: That there were many branches, for example, without computers or who relied on telephone lines?
Mr Jonathan Evans: All would have been without computers, unless the subpostmaster, him or herself, had one for their own purposes. I would be very surprised if there were no telephone lines because we needed to access them and they needed to call us. Does that answer the question? I’m not too sure.
Mr Blake: I suppose you spent every day as network director, getting information about the network, but how obvious would it have been to somebody outside of your role as to the state of post offices and their technological state.
Mr Jonathan Evans: I think the general view would have been that it was fairly minimal, actually. I can think of some subpostmasters who did have their own minor EPOSS system – I forget the name of it – Michael Jackson system, or something like that, that some subpostmasters were getting –
Mr Blake: Maybe Edward Jackson or something?
Mr Jonathan Evans: Whoever it was.
Mr Blake: Unlikely to be Michael Jackson, perhaps!
Mr Jonathan Evans: Yes, sorry. But other than that, pre-Horizon, computers were not much in evidence at post offices, if that answers the question.
Mr Blake: What was your view, as network director, of how realistic the project was at that stage?
Mr Jonathan Evans: I think I saw it as daunting, just on the sheer scale of it and I knew that there were a number of subpostmasters, particularly those – although not necessarily – those who were older, that were looking at it with a bit of trepidation. The thought of having to deal with computers, I mean – but bear in mind this is, what, 20-odd years ago, when computers and use of technology was far less prevalent than it is now. There were some people who were concerned about it.
So I think I saw, yes, there were the physical problems and, as we got into the live trial, the Federation certainly represented those to us, there were problems with subpostmasters not being able to put the kit in and what are we going to do about moving the furniture around, and all that sort of thing. But I think I was equally concerned that some subpostmasters would just not buy into – or just feel unable to cope with what they were being asked to cope with.
And I know some did leave, some decided “Okay, this is the point at which I’m going to leave the – I’m going to sell my business”. We tried to encourage them not to do that but there was a bit of that about.
Mr Blake: At that stage, did you think the project was achievable?
Mr Jonathan Evans: I am of an optimistic tendency, so I feel sure that I would have felt that, even though I recognised that it was not going to be a walk in the park.
Mr Blake: Do you remember the views of others at that stage in senior management?
Mr Jonathan Evans: I think senior management were in a very positive frame of mind. I mean, the thing to remember here is gaining the government’s commitment to automating the Post Office network, and even more so to gaining the future business from the Benefits Agency, which was a third of the income, was a colossal prize, not just for the business but for subpostmasters themselves, who had invested – I think it was at 1 billion collectively into their offices.
So to get the assurance that here was the government wanting to make sure that the Post Office was computerised and locking in Benefits Agency business for a number of years, was a colossal prize. So, of course, we were wanting to maximise the positive on that and, therefore, doubts at the time as to whether this was achievable were, I think, subsumed, if you like, in the euphoria of actually getting this agreement in.
Mr Blake: I’m going to move on to the summer of 1997, a period when you were still network director. Can we look at NFSP00000279, please. This is an NFSP meeting of 28 May 1997, addressing automation. Is this something that you remember at all?
Mr Jonathan Evans: Well, it is interesting this, I think I put in my witness statement that I don’t remember it. In fact, I would even go so far as to say I do not think I was there but I do stand to be corrected on that. Because it is not clear who was there because, if you look to the end of the document, you will see a list of people mentioned and it couldn’t conceivably have been all of those who were at the meeting.
Mr Blake: Absolutely. Perhaps we can turn to page 5 of the document. There is an ID key there and you are certainly on the ID key.
Mr Jonathan Evans: Yes.
Mr Blake: So you are named, even if you are not present.
Mr Jonathan Evans: I mean, all of the Counters executive committee and regional managers, I fell pretty sure that they were not all present at this meeting, but they were given – I mean, I’m willing to be corrected and say that I was there, I don’t know, but I have no recollection of it.
But I think the really important thing is this was typical of meetings that were taking place between ourselves and the Federation and, in this case, with Pathway, and this gives you the flavour of the issues that were around that needed addressing.
Mr Blake: Can we look at page 2, please. It may be that you are not able to help but I want to try and understand those first three bullet points, if we can. It says there:
“Expert support – outlet focused ‘case notes’.
“Collating information generated by all parties involved.
“Keeping outlets informed and up to date.
“Who owns this Communication process?”
Are you able to assist us with what that might mean?
Mr Jonathan Evans: I don’t think I can say much more than the words say themselves, really. It seems to be centred on harnessing the information that was coming from individual trial offices. I think this was the point at which this meeting would have taken place and what it refers to. Perhaps it is saying “How can we share information that is coming from them all and who is owning the communication to make sure that that happens?” I suspect that’s what it is about.
Mr Blake: Second bullet point:
“Robustness of communication network for systems.”
Third:
“Subpostmasters not reporting all system errors – distorting error rate figures.”
That seems to speak for itself.
Mr Jonathan Evans: Yes.
Mr Blake: Were you aware of that, at that stage?
Mr Jonathan Evans: No. I have no memory of being aware of it.
Mr Blake: It says “Action By”, that’s the PDA, the Programme Delivery Authority.
Mr Jonathan Evans: Yes.
Mr Blake: Do you recall any steps taken at that stage to address those kinds of problems such as underreporting?
Mr Jonathan Evans: I’m afraid I don’t remember any specific actions in that respect, no.
Mr Blake: Can we turn over the page to page 3, please. Now, it is halfway down the page:
“Urgent need for guidance of kit specifications, counter layouts to enable new Subpostmasters/those who want to modernise outlet prior to automation …”
In the action column, it’s got “PR/JE”. Now, we know from the key that is Paul Rich and yourself. Is that something you remember at all?
Mr Jonathan Evans: I think I do have a vague recollection of this. Not in connection with this meeting. But this was effectively subpostmasters saying, proactively, that “If my office needs a bit of adjustment in order to get the Horizon kit in, let me take the opportunity to modernise it more widely than that. So let me know the specification of what’s going to come into it, so I can build that into a refurbishment to my office”. I think that’s what that was about.
Mr Blake: At that period, so 1997, were there concerns being raised about the fitness of the infrastructure that existed in branches?
Mr Jonathan Evans: I think the concerns were coming from individual subpostmasters. How widespread that was, I don’t know. But I can certainly – as I think I have said before, I can recall instances where people were unsure about how the kit would actually fit in their perhaps cramped premises.
Mr Blake: You described some quite basic post offices. You gave one particular example.
Mr Jonathan Evans: Yes.
Mr Blake: Were you receiving concerns in 1997 that post offices might not be ready for automation?
Mr Jonathan Evans: I’m not sure whether they wouldn’t be ready, but that they would require some modification. I was certainly aware of that.
Mr Blake: Given the size of the network, would that be quite a large number required modification?
Mr Jonathan Evans: I couldn’t say that. My impression now, I think, would have been that it would not have been a significantly large number.
Mr Blake: Still in the summer of 1997 can we look at POL00039675, please. This is a note or a letter of 2 July 1997. Now, it says from Don Grey. Is that regional manager of the North East?
Mr Jonathan Evans: Yes.
Mr Blake: So that’s the equivalent to what you were in the Midlands, at one stage?
Mr Jonathan Evans: Yes.
Mr Blake: You already said that the views of the regional manager is taken seriously by management.
Mr Jonathan Evans: Yes.
Mr Blake: The date is on the second page. We don’t need to turn to that yet. Can we look at that first substantive paragraph. If we could scroll down slightly, point 1, entitled “Live Trial Review”. It seems as though what is being emphasised there is the importance of a live trial of the system; is that a fair summary?
Mr Jonathan Evans: Yes.
Mr Blake: It says there:
“Some of this review will be embedded in the work commissioned by Jonathan after the CEC Awayday in May.”
Are you the “Jonathan” there?
Mr Jonathan Evans: Yes.
Mr Blake: Do you remember that?
Mr Jonathan Evans: No, unfortunately. I remember when you sent me – this document to me fairly recently, it was as if I was reading it for the first time.
Mr Blake: It says:
“I understand you have recently asked trial region [managers] to provide comment on experience to date. How does that fit with other activities and how are we ensuring a coordinated and comprehensive review of all elements of the live trial?”
That’s number 1 on the list there. I know you don’t remember reading this but do you think it would be fair to say that was seen as the most important issue at that time?
Mr Jonathan Evans: It was an important thing to be do doing, yes, absolutely. The RLMs, incidentally, were regional liaison managers. I think they were set up – I may be wrong on this but they were set up to be in the trial regions, of which I think there were two, you know, to be the main conduits for information coming from the live trial. I think that was their role.
Mr Blake: So that paragraph is really talking about the importance of the live trial and obtaining subpostmaster feedback through regional liaison managers?
Mr Jonathan Evans: Yes.
Mr Blake: If we could keep on scrolling over the page, it seems as though Mr Grey is also concerned about ensuring a fitness for purpose specification. Do you remember that?
Mr Jonathan Evans: Let me have a read of this.
Mr Blake: I can read it out for the record:
“Pathway Work Quality
“What measurement systems are we putting in place to verify the standard and sufficiency implementation? This is particularly pertinent in the context of the WTL and sub contractors where we stand to incur additional costs if we do not exercise proper control. Have we any plans to establish a clear defined fitness for purpose specification nationally, which satisfies not only Horizon implementation but also supports our business requirements in the longer term?”
Is that something you remember at all?
Mr Jonathan Evans: I’m afraid I don’t. I think what he is getting at is to do with the hardware installation in the branches and whether we were – had established a minimum level of, well as it is saying here, a standard and sufficient implementation. How would we know to judge what Pathway had done, met a requirement? And I think this is Don asking the question, “What is the answer to that”?
Mr Blake: So is a fair summary of that letter, that the regional manager there is emphasising the importance of live trials and also the importance of ensuring sufficient specification, essentially, so that the system works?
Mr Jonathan Evans: Well, be careful. I’m not sure whether it is about whether the system worked or whether the hardware could be satisfactorily installed. I think that was mainly the focus on this.
Mr Blake: I’m going to move to 1998. You were still network director. Can we look at POL00089931 please. This is a document that we have recently provided you with. It is a very long document. I don’t need to take you to any real specific page of that document. Can you just tell us what it is?
Mr Jonathan Evans: What it seems to be – because it says “Foreword” – a sort of call to arms to people to understand what Horizon is going to mean in terms of operating instructions and please comply with what this document sets out.
Mr Blake: Perhaps we could scroll down the page because it’s got your name at the bottom of the foreword?
Mr Jonathan Evans: Yes.
Mr Blake: Then if we keep on scrolling, it is some sort of instruction manual or manual for subpostmasters?
Mr Jonathan Evans: I think it is more for managers of subpostmasters. It may include subpostmasters as well.
Mr Blake: Was it part of your job as well at that stage to get the network ready for Horizon?
Mr Jonathan Evans: I think that was more the Horizon team’s role. Clearly we were working together on it but that was – I think this document was produced by then. Incidentally I have again – I’m sorry about this – but even though this looks like a significant document I do not have a recollection of it.
Mr Blake: Do you know why you might have been writing the foreword, was that because you had responsibility for the overall network?
Mr Jonathan Evans: Yes, I think it would have been that and what the contents were really – who was this – who were the recipients of this were people who would have been ultimately in regions, therefore under the network director’s control.
Mr Blake: At this stage, were you having conversations directly with ICL about how ready they were?
Mr Jonathan Evans: Me personally? No.
Mr Blake: Was there a reason for that?
Mr Jonathan Evans: The reason was that others were doing that. It was not my role to engage with them on those issues.
Mr Blake: Do you think it would have been helpful for them to have discussed, for example, the fitness of the individual branches with the network manager – network director?
Mr Jonathan Evans: I can’t think it would have been unhelpful but I would like to think that they were getting as much information as they could from their main contacts without needing to do that and I am sure if they felt under-provided with information, I think they could have asked for it.
Mr Blake: Were you providing that information up the chain? Who, in Post Office, would you have been providing updates about the state of individual branches?
Mr Jonathan Evans: Oh gosh, I don’t think it quite worked like that. There was no – I do not think there was any sort of database of the state of post offices if you like and how that was changing.
Mr Blake: But in broad terms, who would you have been updating about the state of readiness of the network?
Mr Jonathan Evans: I do not think I would have been updating anybody actually, whether that was going on within PDA, with their dealings of ICL, I don’t know.
Mr Blake: So where would management have been getting their information about how ready post offices were for this automation project?
Mr Jonathan Evans: I don’t recall and, you know, there may have been a process in place to, in some way, consolidate that information as to what needed to be doing in group’s offices and aggregating all that up. I can’t remember it if there was. There could have been.
Mr Blake: You can see how it is quite important that you were one of the people who had a close liaison with subpostmasters, that management find out about what’s going on in individual branches, was that somebody else’s role to inform management of that kind of information?
Mr Jonathan Evans: I’m not sure I’m quite on the same wave-length as you on this. I think the – whether a particular branch was capable of easily receiving the Horizon kit was an almost individual, case by case basis.
So the thought of aggregating – you know, what is the overall status of the network to receive Horizon? Would have meant adding a lot of apples and pears together to come up with an answer and I’m not sure that that was either done or necessary to be done. I think the key thing was, on the ground, office by office, how difficult would it have been or how easy would it have been to install the equipment? I don’t recall any – again I stand to be corrected – but I don’t recall any system for recording or whatever.
Mr Blake: Do you think it is unlikely that the message would have been received by senior management about the state of readiness overall of the Post Office network?
Mr Jonathan Evans: Unlikely that it wouldn’t have been received? I think it is unlikely that it would have been received. All the directors had their ears pretty close to the ground and, if this had been seen to be a major issue, “Boy, we’ve got this Horizon system in but we can’t fit it in anywhere”, that would have registered, of course it would. But I do not think it was on that scale.
Mr Blake: You sat on the Treasury Working Group. Why, as network director, were you on the Treasury Working Group?
Mr Jonathan Evans: It is an interesting question. The answer might be best given in one of the documents you have. It is the minutes from the Treasury Working Group. Do you want me to give you the number?
Mr Blake: Certainly, if you have it.
Mr Jonathan Evans: It is POL00028090.
Mr Blake: We will be coming to that document shortly.
Mr Jonathan Evans: Okay.
Mr Blake: Perhaps you can just say, in very broad terms, why you thought, as network director, you were the representative?
Mr Jonathan Evans: Well, you will see from those minutes that, in the meeting before I attended, there was a discussion at that meeting as to would it be a good idea to have somebody from Post Office Counters as part of the group. Again, you will see from those minutes that it was commented it would be very helpful for presentational purposes, I think it was put, and also that it should be somebody who did not have a connection with the negotiations then underway with ICL and also because there would be some analysis that needed doing in terms of the impact of Horizon ceasing or being altered on the size of the network.
So I think, from a combination of all those things, the fickle finger of fate pointed in my direction.
Mr Blake: So, on the one hand, it is because, although you were from the Post Office, you were independent of the discussions with ICL?
Mr Jonathan Evans: Yes.
Mr Blake: But, on the other hand, it is also because, as network director, you knew about the potential impact on the network of cancellation?
Mr Jonathan Evans: Yes. People in my team, in head office, got some modeling ability just to work out what those consequences might be.
Mr Blake: We have heard about issues with the Benefits Agency in 1998. I’m going to look at the minutes that you have just been talking about. First, we will look at POL00028642. This is a discussion paper that you wrote for the Treasury. Now, in your statement at paragraph 18, you refer to three options in play at that time. The three options were: continue as planned; continue without the benefits card; or cancel Horizon.
This document that you – over the page is about Option 3, ie cancellation of Horizon. Can we look at paragraph 2 and below, please:
“Option 3 envisages the immediate cancellation of the entire Horizon project …”
You set out there some of the implications, the first one being:
“confidence will be lost in [Post Office Counters Limited] – from the moment of announcement of Horizon’s cancellation, the commercial sub-office market would discount the asset value of post offices, thereby triggering the initial stages of a spiral of network decline.”
Can we move on to page 5 and can we look at paragraph 14, please. Paragraph 14 is “POCL response – cost reduction whilst maintaining network stability”:
“The cancellation of Horizon, the impact of ACT and the subsequent income/footfall loss all have the potential to damage POCL’s finances and network. These effects would be offset in part by the pace and manner in which ACT is introduced, the speed at which alternative technology could be brought in, and the consequent capacity of POCL to offer banking and other products. Unmanaged network change itself would undermine the capability to develop new income streams and, if it is to be avoided, action would need to be taken to protect the network from collapsing between the timing it of the Horizon announcement and the period at which replacement technology and new business income streams could kick in.”
Can we go over the page, please, to the “Conclusion”? That’s paragraph 19. That says:
“In its basic format option 3 [so that’s the cancellation] leads to a smaller business, with a much reduced and still unstable network, and POCL still making a considerable loss. If POCL responded as outlined in this paper, it could potentially hold onto the network but would result in being a heavily subsidised business. This is because ACT eats into POCL’s income and footfall before alternative technology can deliver sufficient replacement customers and income. Offices would need to be subsidised to keep them viable but too many customers would have been lost for the POCL fight back to do more than level off and start marginally to reduce the subsidy. There also remains the very real risk that the subsidy would not achieve network stability – particularly if any announced package is not seen as credible.”
Consistent with other evidence we have heard, this paints a pretty bleak picture of cancellation; do you agree with that?
Mr Jonathan Evans: It does.
Mr Blake: Was it your intention, at that time, to make clear to government the bleak picture?
Mr Jonathan Evans: It was undoubtedly that was the intention. It might have been called at the time – well, if it was done now, “Project Fear”, I suppose. But it was painting a – this is not fanciful, this is what easily could happen.
Mr Blake: And the message that’s being communicated is that there is a need for speedy automation?
Mr Jonathan Evans: Yes, and I think the important thing is managing the confidence levels of subpostmasters. That’s what really this was getting at, particularly the risk of what we called there “unmanaged closures”. This is subpostmasters of their own will deciding “I have had enough, I’m pulling out before the value of my business sinks even further”, and that would have been a real risk because then we would have had – we obviously like to keep post offices well spaced out between each other, that would have potentially resulted in a – not a very good network, and that’s what we were aiming to avoid.
Mr Blake: The message that’s communicated isn’t about individual post offices closing though, it is about the impact on the network and then the impact, no doubt, for Post Office Counters Limited as a viable company?
Mr Jonathan Evans: Yes, but the impact on the network is the impact on subpostmasters. “Network” means the number of sub post offices and if individual subpostmasters are going to decide we no longer wanted to be part of this, that would have been the result.
Mr Blake: Would you agree that the message that’s being communicated there, it is not focusing on the impact for the individual subpostmasters, it is focusing on the impact for the company?
Mr Jonathan Evans: Well, I would suggest it is actually focusing on both because this does talk about the confidence in the subpostmaster’s market, higher up in the document. It’s doing both. Yes, it would mean that POCL would get into a heavy loss-making position and that the impact on the network, ie subpostmasters, would be considerable.
Mr Blake: When we look at the conclusion and it talks about the heavily subsidised business, would the subsidy be going to the company or to the individual subpostmasters?
Mr Jonathan Evans: I think the implication here was that, to keep subpostmasters in business, we would need to artificially maintain their remuneration levels, which would require the company to have a subsidy. So, effectively, the company would be being subsidised by government, in order to subsidise subpostmasters.
Mr Blake: Can we look over the page to page 8, please, to annex 1. Annex 1 sets out the products and services that Post Office Counters Limited would develop on Horizon. I don’t need to read the whole page. Perhaps we can do a slow scroll through that page as well. It talks about, for example, the Government Gateway. That itself, presumably, would have been very financially significant to the company?
Mr Jonathan Evans: Yes. These are ideas that we are working up with the help from McKinseys. I think there was a McKinseys person with us at this meeting with Harry Bush (?), thinking through what is the future strategy for Post Office Counters to be? We focused on these three critical markets: financial services, banking transactions – this big idea of post offices being, as we called it, a Government Gateway where people would be able to do a lot of government business within – in a sort of synchronised way. So, instead of having to, if you moved house, to tell DVLA and other government organisations what your new address was, you could go into a Post Office and do it once and it would spread out.
That was the sort of big idea. It proved more difficult to do than the idea sounds, in the end. But we were certainly focusing, and with a lot of government support, on making the Post Office Network be that Government Gateway. And, obviously, also the third part: remembering that we are still part of Royal Mail and Royal Mail and Parcelforce were major sources of business.
Mr Blake: Can we look at the paragraph that’s just at the bottom of the screen now, beginning “It is important”. It says:
“It is important to note that the time frame for POCL to achieve the full potential identified in these markets is c10-15 years and much has to be done to reposition POCL to face up to these markets successfully.”
Is the message that’s being communicated in annex 1 that there is a long-term project that will benefit both Post Office and government?
Mr Jonathan Evans: Yes. That is what we were trying to say.
Mr Blake: And all of that would rely on Horizon?
Mr Jonathan Evans: It would rely on Horizon and it would rely on no shocks to the network that would throw it into instability. So what we were basically saying is, in a nutshell, “We are still reliant on Benefits Agency business, don’t switch that source off too quickly, it will need time to get these other revenue streams in and, if we are able to do it that way then that is a practical solution to the position we are in”.
Mr Blake: It is certainly saying “Let’s keep the Benefits Agency part”, but also quite a significant part of this is “We need Horizon, come what may”; would you agree with that?
Mr Jonathan Evans: It is certainly saying “We need automation, come what may”.
Mr Blake: Can we go to POL00028090, please. This is September 1998. These are the beginning of the minutes that we just talked about.
Mr Jonathan Evans: Yes.
Mr Blake: Page 1 shows that it is from the Treasury. This is papers for the second meeting of 25 September. So 25 September, we will come to it, but that’s I think when you attended for the first time, and these papers include the minutes from the first meeting?
Mr Jonathan Evans: Yes.
Mr Blake: Perhaps we can look at page 3. Included in the papers for the second meeting is a list of who attended the Horizon Working Group and you are there listed as the sole representative of the Post Office, for reasons that you have explained.
Can we go over the page, please, to page 4 and this is the minutes of the first meeting. So that’s a meeting that you weren’t at.
Can we go over the page to page 5, please, to paragraph 2. So this is “The purpose of the Working Group and membership”. I’m just going to read, for the record, part of the second paragraph:
“Membership of the group was discussed. Sarah Graham …”
Who was Sarah Graham?
Mr Jonathan Evans: Sarah Graham was a senior official in the Department of Social Security.
Mr Blake: “… suggested that both the [Benefits Agency] and [Post Office Counters Limited] should be represented on the group. On the one hand it was important to keep the negotiation separate from the work of the group, and this might be difficult if they were included. On the other hand there was presentational value, not to mention advantages in terms of speed (since they would need to be closely involved in the work on fallback options), with having them represented. It was important to overcome POCL’s view that they were separate from government.”
Was that how the government saw it at the time?
Mr Jonathan Evans: Depends who you mean by “the government”. I think there was a view, I suspect, amongst officials that, because of the stance that Post Office Counters had been taking on some legal issues connected with how the Horizon contract could be terminated, that they – and I think the next meeting came onto this as well – that POCL at one stage could be blocking ministers’ wishes because they had an implicit veto in terms of whether the Horizon contract could be cancelled or not. I think that’s what this was getting at.
Mr Blake: Was it, in any way, an attempt to rein you in as an independent company?
Mr Jonathan Evans: That might have been in Sarah Graham’s mind, in saying all this.
Mr Blake: What was your feeling at the time?
Mr Jonathan Evans: My feeling at the time was, actually, that I was there – if you go on to read the next bit – the BA and POCL would be included in the working group but on the understanding that there may need to be some meetings without them present.
So I think I was feeling – I was part of the B team on this. There was the A team, who were the government officials, who could have their – as I think it says later on, do their brokering between individual government parties. I think I was there – perhaps I’m looking at this now a bit more cynically than I did at the time – but for presentational value, so they could say “We have involved Post Office Counters in this”, and also that the bit about separate from government could be explored with a representative who was there.
Mr Blake: Did you feel political pressure at that time?
Mr Jonathan Evans: I didn’t feel political pressure, no. I think the debates we had, having said everything I have just said, were pretty good. There was a lot of open discussion around what could happen but it was pretty clear, nonetheless, where individual members of the group were coming from.
Mr Blake: Did you feel, as somebody who wasn’t, say, the chief executive or the chairman at this meeting, that you were chosen, in any way, because you were less senior?
Mr Jonathan Evans: I do not think I felt that, apart from seeing how the POCL representative was being positioned in this paragraph 2, which itself was effectively saying, “We really only want somebody to join this group who isn’t connected with the negotiations and who” – well, all the rest of it – “who is there, in a way, only when we want that person to be there”, because the big negotiations will go on between government officials and ministers without both Benefits Agency and Post Office Counters people there.
Mr Blake: Did you feel comfortable being part of that group at the time?
Mr Jonathan Evans: It was pretty challenging, whether it was comfortable? As I say, my recollection is that the tenor of the meetings was very business like and constructive. So, I think I played a part.
Mr Blake: Let’s look at the minutes from the second meeting, that is POL00028091, please. This is the 25 September meeting. You can see there at the bottom “Minutes of 2nd meeting follow”. Can we turn over the page to page 3, please, which is where the minutes appear. If we can scroll down we can see, on that occasion, you were attending. So that, I think, was your first meeting.
Mr Jonathan Evans: Yes.
Mr Blake: Would you agree with that?
Mr Jonathan Evans: Yes, I think that is right.
Mr Blake: Can we turn to page 5, please. Can we look at paragraphs 10 and 11. Paragraph 10 is talking about the “Viability of Option 2, using Horizon without a Benefit Card”:
“This concerns the technical and commercial viability of Option 2, asking the question ‘If there is no BPC, would Horizon be a sensible solution for POCL in technical and commercial terms?’ This issue is being addressed by KPMG. George McCorkell noted that this work should take account of where the Post Office itself wanted to go.”
It moves on to what you have said:
“Jonathan Evans explained that if the BPC was cancelled, POCL would wish to review its options and requirements and retender. AS …”
Who is “AS”?
Mr Jonathan Evans: Adam Sharples, the Treasury chair.
Mr Blake: “[He] suggested that if the Horizon system was worth pursuing, it would be surprising if taking out one component would require starting again from scratch. Restarting would delay by several years, so to continue without the BPC must be a serious contender for a fallback option.”
You are saying there that you might look again and even carry out a re-tendering exercise. You have already described today what you called “Project Fear”. Was the approach at that meeting to effectively provide a negotiation tactic and to scare them into POCL potentially pulling out? Was that a serious –
Mr Jonathan Evans: Yeah. I think in an ideal world that is what we would have wanted to do. Because bear in mind, here we are, this is in 1998, probably three years on after the initial tenders were sought for the system, by which time technology had moved on a lot and we had the Horizon system was built with the BPC in mind. If we were just going a simple EPOSS system we might have wanted to have done something different, simpler, perhaps less expensive.
I think that is the point I was making. Whether it was – I mean, Adam Sharples was immediately, if you like, “Close it down” and there was a clear view that I do remember getting from these series of meetings that, if you like, ICL needed to be kept in the ring.
Mr Blake: Was it a seriously held option by Post Office Counters Limited though or was it more of a negotiation tactic?
Mr Jonathan Evans: I wouldn’t like to in any way demean it by saying it is a negotiation tactic. I think it was a genuine view at the time but I think we realised as time went on that the cost of cancelling Horizon completely, which this is what would have entailed, even though we could have invited ICL to re-tender, were really insuperable and as I say, the sort of prevailing wind that we were seeing was that ICL needed to be, perhaps for cost reasons and perhaps for other reasons, needed to be kept in the ring.
Mr Blake: Thank you.
Sir, that brings me to an end of one particular topic. It might be a good opportunity to take a short break.
Sir Wyn Williams: 15 minutes?
Mr Blake: Thank you.
(11.08 am)
(A short break)
(11.23 am)
Mr Blake: Thank you very much, sir.
We were in 1998. I’m going to go towards the end of 1998 now. There were contractual discussions taking place and we are going to look at some of that paperwork. Can we look at POL00031119, please.
This is a letter from Hamish Sandison at Bird & Bird to yourself and others. Is that part of the Treasury Review group, those recipients?
Mr Jonathan Evans: Some of them are. I don’t recognise Marilynne Morgan and – I mean Jeff Triggs, a solicitor from Slaughters, was not a member of the working group and neither was Paul Rich actually. I do not think this is necessarily connected with the Treasury working group, I may be wrong. It depends what’s beneath it.
Mr Blake: Can we look at the next page?
Mr Jonathan Evans: Yes.
Mr Blake: Do you remember receiving this kind of correspondence?
Mr Jonathan Evans: I remember receiving this kind of correspondence yes.
Mr Blake: Do you remember this one in particular?
Mr Jonathan Evans: Not explicitly, no.
Mr Blake: You certainly received it –
Mr Jonathan Evans: Yeah, I’m not doubting that but it is not one that’s stuck in my memory.
Mr Blake: Can we look at page 12, please. The document is all about ICL proposals from the 9 November and it is renegotiation discussions. On page 12 it is Mr Sandison and Hazel Grant from Bird & Bird and they are assessing the potential change in contract.
Paragraph 29 addresses fraud risk. It appears there that ICL wanted to carry less fraud risk; is that something you remember?
Mr Jonathan Evans: Again, I’m aware of that but, whether I was aware of it at the time or whether it’s gone into my mind since, I couldn’t say. But I am aware of that issue, yes.
Mr Blake: You said this morning that you were aware that one of the reasons why ICL was awarded the contract in the first place was because they took on a greater fraud risk?
Mr Jonathan Evans: Yes.
Mr Blake: Do you remember discussions during this period about taking on less fraud risk?
Mr Jonathan Evans: Again I don’t remember the discussions but I certainly – it is certainly in my mind that they – that that was an issue and therefore discussion must have taken place but I don’t ever remember being party to discussions on that. I may have been but it is not within my knowledge now.
Mr Blake: Perhaps if we can scroll down to acceptance. It says there:
“Pathway propose wide changes to the acceptance procedures. Broadly, this would result in final acceptance occurring before live trial.”
Perhaps if we could scroll down to 32 and 33. 32, the second half of that paragraph says:
“As a result of certain changes, the public sector parties would find it almost impossible to terminate due to failure to achieve acceptance once the live trial had been completed. This is because it would be almost impossible to prove that failure to achieve acceptance was due to the exclusive default of Pathway.”
There were certain contractual discussions taking place there about acceptance. Do you remember emphasis being taken off live trial prior to acceptance?
Mr Jonathan Evans: I must put that in the same category as before. I’m certainly now aware that that was an issue but whether I was aware of it at the time, I don’t know.
Mr Blake: We looked this morning at documents from 1997 such as Don Grey’s memo which placed importance on live trials. Do you remember that at some period in late 1998, for example, ICL were trying to decrease the emphasis on live trials?
Mr Jonathan Evans: Again I don’t recall that and back to what we were saying before about my involvement in the Treasury working group was because I was not involved in negotiations with ICL. Even though this document was copied to me, and I accept that, the negotiations with ICL and the implications of what’s in here, I was not involved in.
I willingly accept that I may have been, at the time, aware of what was going on, but it was not in my ambit to deal with it.
Mr Blake: This particular memo was only sent to you and Paul Rich in terms of the Post Office Counters recipients?
Mr Jonathan Evans: Yes.
Mr Blake: Do you remember why you and Paul Rich may have been the only Post Office recipients of that kind of information?
Mr Jonathan Evans: Certainly Paul would have been in the forefront of this. Perhaps I was sent it because of my – alongside my involvement in the Treasury Working Group, I had become a sort of conduit between Post Office Counters and the DTI.
I had a pretty close – a semi-formal, informal relationship with David Sibbick at the DTI and was therefore able to gauge what was going on. So it may well have been because I was perceived in that role that I was copied into it.
Mr Blake: Do you remember Bird & Bird acting as programme lawyers? It was the BA POCL automation programme?
Mr Jonathan Evans: Yes, I do.
Mr Blake: Do you remember being part of that core group?
Mr Jonathan Evans: No.
Mr Blake: Can we look at POL00039895, please. Again, this is another document. This is 13 November 1998. Again, similar contractual discussions taking place. Could we scroll down on that page. Again, ICL discussing an ICL proposal. Can we look at page 3 please which is a memo, again from Hamish Sandison and Hazel Grant at Bird & Bird. This document at page – can we go to page 13, please, and scroll down to paragraph 29 and below. Thank you.
Again, very similar to the earlier one, it addresses fraud risk and says Pathway proposes significant changes to the provisions for fraud risk, effectively departing from the tendering position.
Then it goes on to talk about acceptance and again it talks about acceptance before live trial. It says:
“Broadly they envisage final acceptance (and loss of termination rights) occurring before live trial.”
Is this a document that you recall at all?
Mr Jonathan Evans: It is the same as the previous one. I acknowledge that I was sent it but as I was not directly involved with the negotiations with ICL, it was not something that I picked up and ran with at all. That was for, certainly Jeff Triggs, the lawyer, Paul Rich, I think, and others in the commercial arena in POCL who were dealing with that issue.
Mr Blake: Looking at this document, it looks as though there is a movement away from what was envisaged at the procurement stage, those kind of discussions that you said you had with Bob Peaple, early in the procurement stage. Was that something that you recall at all?
Mr Jonathan Evans: I again put that in the category, I’m certainly aware of it, it is in my mind except, what I knew at the time – another question. I think I probably did because this was in a way the move away from PFI basis and therefore I was conscious that that was happening I’m pretty sure. You know, in essence that’s what was going on and I think I would be aware of that, yes.
Mr Blake: Do you think that the mindset changed at the Post Office to effectively try and accept what was on offer in order to salvage the situation even if it was not what was originally procured?
Mr Jonathan Evans: I think it was a bit of that, yes. But, conditioned by the financial consequences of not following that route and also, as I think I alluded to earlier, there was a certain sense coming from government that, as I say, ICL needed to be kept in the ring.
Mr Blake: Yes. I want to stay with 1998 and look at one discreet issue and it relates to Bird & Bird. Can we look at POL00028686, please. This is a letter of 11 November 1998. Can we go straight to page 5.
It is a letter from Slaughter and May, from Jeff Triggs at Slaughter and May. You are one of the recipients at the top of the copy list. Do you see your name there?
Mr Jonathan Evans: Yes.
Mr Blake: Do you remember this kind of correspondence from Slaughter and May?
Mr Jonathan Evans: In fact, I can say that I remember this letter.
Mr Blake: So this letter is talking about Hamish, who we have seen was the Bird & Bird lawyer. Can we scroll down slightly. It says:
“The conflict issue seems to me entirely clear and simple. The fact is that in certain areas we would like Hamish to do one thing and DSS would like him to do another.”
Can you tell us about this issue, please?
Mr Jonathan Evans: Well, what was going on here, Hamish – who I don’t think I ever met, actually – but he was the lawyer for the programme, ie the joint BA/Post Office programme. Therefore, he wasn’t a Post Office lawyer and he wasn’t a BA lawyer. I think what was going on here was – I mean, Jeff Triggs had a wonderful way of getting to the grips of it and feeling like the little boy staring at the Emperor’s new clothes – makes you sit up and think – and what he was getting at here was, effectively, the DSS appeared to have commissioned Bird & Bird, ie Hamish, to conduct some work for them, which was not really programme commissioned. So he was, in Jeff’s view here – he was actually in conflict and, therefore, shouldn’t have done that.
Mr Blake: Can we look at another document, POL00039880, and can we go over the page, please. Thank you very much. Sorry, the page before that, page 2.
This is actually from you to Robert Ricks at HMT and it is the second paragraph there I wanted to take you to:
“We understand that a submission is being prepared by Hamish Sandison on behalf of DSS. We should point out he has not been instructed to do this in his capacity as a programme lawyer.”
Is it fair to say that, in late 1998, there were tensions with Hamish Sandison and Bird & Bird and the direction that they were going?
Mr Jonathan Evans: I think that’s fair, yes.
Mr Blake: Can we look at POL00039933, please. This is a letter to you from the DSS. It is from Sarah Graham, who was a civil servant at the DSS. Can we look at paragraph 2, please, it is 30 November 1998. She says there:
“I am sorry that there appear still to be issues that concern you around the provision of advice by the Joint Programme Lawyer. Given the need to get something sorted out in time for us to put forward our respective submissions to the Treasury this evening, we did not have the opportunity to discuss what the continuing concerns are. But I would be glad if you could take me through them before too long, so that we can resolve them once and for all.
“In the meantime, you suggested that a way through for this particular work would be for DSS/BA to commission work independently from Hamish. I agreed to this, but pointing out that the basis for seeking his advice is of course that he is the Joint Programme Lawyer with the expertise that goes with that, and it is in that capacity that we are seeking such advice.”
Can you explain that at all?
Mr Jonathan Evans: I don’t think I can. It seems to be somewhat contradictory.
Mr Blake: Why is this correspondence taking place with you in particular?
Mr Jonathan Evans: I think I was the – I don’t know – I think I was in a position where I was being used as a sort of front person, in a way, for Post Office Counters for issuing letters like this.
Mr Blake: You received a lot of legal advice as part – it is the Treasury board – where it says “Joint Programme Lawyer”, is that linked, presumably, to the Treasury board?
Mr Jonathan Evans: No. The joint programme lawyer is the PDA. The BA/POCL programme, he was the lawyer for that, separate from the Treasury Review.
Mr Blake: We have seen a lot of legal correspondence in November and December 1998. I’m not going to take you to those documents but, just for the record and so that they are in evidence, they include POL00039924, POL00039902 POL00039928.
At some point, it seems Bird & Bird were separately commissioned by the DSS to carry out some work. Do you remember what that work was?
Mr Jonathan Evans: In my mind, although I do not think I ever saw it, was the – who were they, Project Mentors – report?
Mr Blake: Perhaps we can go to POL00038829. This is the December 1998 Project Mentors report and I think we have seen “Dave” there was Dave Miller.
Can we go over the page to page 3, please. So you are not a recipient of this particular document. We know, I think, the page has Mena Rego’s name on it as well. Do you remember seeing this at all?
Mr Jonathan Evans: I don’t.
Mr Blake: You don’t?
Mr Jonathan Evans: I don’t, no.
Mr Blake: Can we go to page 5, please. Again, it is consistent, certainly with the kinds of correspondence you were receiving at the time, because it is from Hamish Sandison at Bird & Bird, but at this period you are not copied in. Did something happen in November/December for you to no longer be a recipient of this kind of correspondence?
Mr Jonathan Evans: Well, this is moving towards when I was moving off the role of network director. I’m not sure that had happened though in December 1998. Am I right in thinking that in the – if you scroll up – this was such a confidential document that it was not to be shared with anybody else? Did it say that?
Mr Blake: It certainly says, if we go to page 3, paragraph 3, it is “legally privileged” and has been communicated:
“… to us as the Joint Programme Lawyers. Accordingly it should be given the most limited possible circulation on a need to know basis.”
Mr Jonathan Evans: I probably didn’t need to know.
Mr Blake: Can we look at page 5, please. I don’t know if you have been watching the Inquiry and seen this document brought up on screen before. It is in your bundle, so you probably have considered it since. There is a quote from the Project Mentors team, and they say they are:
“… deeply concerned that their findings show a serious problem with the way in which ICL Pathway have developed the system. The impact of this is likely to be that there will be failures to meet central user requirements, causing the need for extensive before the system can be accepted and, potentially, operational problems if the system is rolled out.”
Then, can we look at the report itself which is at page 8., and over to page 11, please, which is where the report begins. At the bottom of that page we have “Scope”, paragraph 1.3. It says, at the very bottom of this page:
“We have to date considered only the BPS system. Further work has recently started to perform a similar assessment of the approach adopted for other elements of the system, such as EPOSS. Nevertheless our findings are, in our view, sufficiently serious to bring into question the whole of Pathway’s design process.”
I’ll only take you to a couple more brief extracts from this report. Page 14, please, 2.3.4. It says there they have:
“… grave concerns that the same lack of professional analysis will be apparent in other areas as [they] come to review them.”
The final paragraph expresses concerns in the EPOSS system. Over the page, to paragraph 2.4:
“Our experience of systems where requirements have not been analysed satisfactorily is that the system fails to meet the users’ needs. An effective acceptance test will identify many such failings necessitating considerable rework.”
I know you say you didn’t see this or don’t recall seeing this document. Were you aware of those concerns at that time?
Mr Jonathan Evans: I must admit, I don’t recall – and they are pretty explicit and, you know, serious criticisms and I feel sure, had I known about them, I would have remembered them.
But I must admit I do not remember seeing this report, and the extent of what this is saying in this report, I do not recall that sort of registering with me, as I feel it would have done had I seen it.
Mr Blake: You have given evidence about the dispute with the instruction of Hamish Sandison and those concerns that you had. In what way, if any, did they feed into the seriousness with which this kind of report would have been taken?
Mr Jonathan Evans: I can’t answer that. I think you would need to ask that question of those to whom this report was addressed.
Mr Blake: We have heard evidence that suggested that it wasn’t thought to be an impartial report, that it was, in many ways, supporting the Benefits Agency perspective.
Were you aware, at that stage, of those kinds of allegations being made about independence?
Mr Jonathan Evans: As we said, I was aware of the correspondence with Jeff Triggs questioning whether Hamish Sandison actually had a conflict of interest in this. I was certainly aware of that which I suppose therefore would have cast doubt on the work that he had been commissioned to do, in terms of its independence and, if you like, bipartisanship. But as I say, I was not aware until I read this recently, of the extent to which the Project Mentors’ report was criticising him. So whether that was, in a way – had an element of discounting against it because of the way it had been commissioned, may have been the case but I can’t really comment on that.
Mr Blake: Given your involvement to date and the involvement we have seen this morning, do you think that that should have been shared with you?
Mr Jonathan Evans: Well, I had confidence in those who were dealing with these issues and I’m not sure that I would have had anything new to contribute to it.
Mr Blake: It expresses some significant concerns about the Horizon system?
Mr Jonathan Evans: Yes.
Mr Blake: Who should have known about these concerns?
Mr Jonathan Evans: Well, who is this report sent to?
Mr Blake: Perhaps we can look back again at page 5. Page 5 is the original distribution list, so that is Paul Rich from POCL. But then if we go to page 3 it seems to have made its way –
Mr Jonathan Evans: – to the same people.
Mr Blake: – to the same people but then page 1 we have the message from Mena Rego to Dave Miller?
Mr Jonathan Evans: Yes.
Mr Blake: Do you think that was raising it sufficiently high within the company?
Mr Jonathan Evans: Well, I think you have hit on a point that may have influenced whether people were seeing this as an objective independent view. Whether that incorrectly resulted in the comments that had been made in the report, not being surfaced, I don’t know. Given that there may have been the assumption that this was a slanted report, rightly or wrongly, was that therefore discounted too quickly? I don’t know.
Looking at it now, of course, I would have wanted to have explored, a bit more, exactly what they were saying. I doubt that we had the time at the moment, when all this was happening, to do that. But I can only agree that it does raise some important questions.
Mr Blake: Knowing what you know now about what ultimately happened, do you think that there was certainly some substance in Project Mentors’ concerns?
Mr Jonathan Evans: It would be hard to say no to that, wouldn’t it?
Mr Blake: As at that period, so 1998, were you aware of those kinds of concerns about how the system had been developed?
Mr Jonathan Evans: I don’t think I was, other than in general, if you like, unease about how ICL was performing.
Mr Blake: There are comments in that report about meeting users’ needs and the need for testing. Those, in many ways, echo what Don Grey was saying back in 1997 and this is a year later.
Do you think that the Post Office, at that stage, was placing sufficient emphasis on the need for live testing and meeting users’ needs?
Mr Jonathan Evans: You know I think you can only answer a question like that with the benefit of hindsight. At the time, were the right views and weight being given to issues? I have no reason to query that but, as I say, with hindsight you may come to a different view.
Mr Blake: At this stage was the Post Office management’s focus more on securing automation than on those kinds of issues?
Mr Jonathan Evans: I think that would be probably true. That was the big – as I said earlier – prize which we were not wanting to let go.
Mr Blake: I’m going to move to January 1999. Can we look at POL00031230, please. This is what we know as the Tabor review. Mr Tabor, he was on your steering group we saw at the beginning of today?
Mr Jonathan Evans: He is the finance director of Post Office Counters.
Mr Blake: Do you remember reading this report at the time?
Mr Jonathan Evans: I must admit I don’t but I think I almost certainly would have done. But until you sent it to me in the papers, I didn’t have a recollection.
Mr Blake: When did you become – take over as leading Shaping for Competitive Success. This is January 1999?
Mr Jonathan Evans: I have been asking myself that question. I think it would have been around March time, something like that. I took that – I first of all joined the Shaping for Competitive Success team then took over from the director of it, Vanessa Leeson, who was there at the time – because she went off into hospital for a prolonged spell – and that would certainly have seen me into September. So I think I was there from March to September 1999.
Mr Blake: I’m going to deal briefly with this report. Can we look at the first paragraph there. He explains that he has:
“… been asked, as a member of the POCL team not closely involved with recent negotiations, to ‘stand back’ from the deal and review it (as independently as possible for a CEC member) to confirm that the chosen direction remains sensible.”
Over the page please. I’m going to just read out 2.4 to 2.6. At 2.4 it says:
“The conclusion of negotiations with a firm decision to proceed should put an end to a protracted period of uncertainty, permitting a fresh start with renewed focus not only for the Horizon project but for the POCL business. Unfortunately, many uncertainties, unanswered questions and doubts about the future remain, so that the benefits of such a fresh start seem unlikely to be obtained without a concerted, focused and single minded leadership effort by both POCL and ICL teams to emphasise the positive.”
We can see what’s there at 2.5, I think I will just read 2.6. 2.6 says:
“Several senior managers, close to the project, but not principal negotiators, whose judgment I respect, express significant reservations about the risks of proceeding. These centre on their continuing doubt about the ability of ICL to deliver a satisfactory product; the absence of transparency in the PFI contract; the risk that ICL’s financial fragility will endure throughout the project, with the possibility of repeated claims on the Post Office for extra contributions (which, by then having no alternative, it will be unable to resist); and doubts about POCL’s own ability to give it the focus essential for success. Observation of the track record so far offers reasonable foundation for such views.”
Did you know who those senior managers were, who are referred to there?
Mr Jonathan Evans: I don’t but I think I would claim to be in sympathy with what that is saying.
Mr Blake: With that expression, “senior managers close to the project but not principal negotiators”, what kind of person would that be? What would their job description be in terms of a manager? Are we talking regional managers or are we talking something higher up?
Mr Jonathan Evans: It could be regional managers. I do not think it would be anybody higher up because the only higher up from Roger would have been Stuart Sweetman, who was obviously involved in this. They would be – there were other directors of Post Office Counters who were not directly involved in the negotiations of ICL. And yes, senior people could have been regional general managers. Perhaps those like Don Grey who had been – who had got first hand experience of the live trial. I don’t know. I think he does list, doesn’t he, who he has spoken to, further down?
Mr Blake: I do not think he names the people who have said that they had those concerns.
Mr Jonathan Evans: Okay.
Mr Blake: Were you aware at that stage, January 1999, of significant reservations about the risks involved?
Mr Jonathan Evans: Yes. I mean there was – I think I put somewhere, what we were dealing with here was finding, what is the least bad deal to go with. In fact I think Roger may have put it like that. Which therefore implies there was some unease about proceeding the way that we were. Because the project had got so late – we were having to renegotiate – there was big question marks over the financial numbers and so on. So, sure, people were not gung ho saying, “This is all going to be fantastic”. There was some doubt. But, to go ahead with the deal seemed to be the best route.
Mr Blake: If we look at page 6 of this report and it’s 2.24, the “Summary” there seems to be the same as your evidence, now which is:
“In summary, there are drawbacks and uncertainties with going ahead, but they are not greater than those associated with termination. Going ahead will require very heavy, single minded commitment to Horizon and to the partnership with ICL in order to minimise the drawbacks.”
It moves on to recommendations, and the first recommendation, it says:
“It is of great importance for the credibility of The Post Office (not just POCL) that it should be seen to have judged the debate correctly and made the right decision.”
Could we go on to the next recommendation as well, 3.2:
“Furthermore, POCL’s commercial success will now depend heavily on Horizon. It will not have the funds for alternatives.”
It says at the end there:
“Shaping for Competitive Success will need to ensure that organisation boundaries facilitate effective operation of Horizon and the ICL partnership, and not make it gratuitously more difficult.”
Now, as someone responsible for Shaping for Competitive Success, are you able to explain what that means to us?
Mr Jonathan Evans: Yes. Shaping for Competitive Success was a very far-reaching reorganisation of the whole Post Office Group. Prior to SCS, the business was split into Royal Mail Letters, Parcels and Counters. What Shaping for Competitive Success was doing was, effectively, creating a series of market-facing business units and subservice delivery units. It was a model that was in vogue at the time for organising businesses, which actually resulted in, as far as POCL was concerned, the business unit that was previously called Counters being split into, I think, at least three units: Post Office Network, a market facing unit, I think and one for cash handling and distribution, something like that. I can’t remember the exact detail.
What Roger was saying here was, in the process of splitting the business up like that, let us not lose sight of the importance of making effective use of Horizon and the ICL partnership, because SCS also brought with it, inevitably, a considerable change of personnel. There was a lot of people finding new jobs. I think you have already heard Dave Miller moved onto something else and Paul Rich moved onto something else, and so on. So in the middle of all of that reorganisation activity, Roger was making a very fair point of “Let’s not drop the baton”.
Mr Blake: The thrust of those recommendations in the summary, would it be fair to describe them as pinning significant hopes on Horizon at that stage?
Mr Jonathan Evans: I think he was really saying “Look, chaps, this is now the only game in town, we’ve got to make it work. Okay we’ve all had a go at ‘We are concerned about this, we are concerned about that’, but now we’ve got to make this work and, therefore, let’s single-mindedly try and do that”.
Mr Blake: Can we look at POL00069088, please. This is 11 February 1999, so it is a month on and we are back into certain political discussions. By this stage, there is another option in play, which is the smartcard option and a benefit account. What I want to understand is the relationship between yourselves and the DTI at this stage. Perhaps we can look at the last paragraph on that page. It says:
“While we were there, David [that is David Sibbick, I think] spoke to John Bennett. The proposal had been put to ICL a fortnight ago. ICL had felt very constrained about replying because they were unable to talk to POCL; they valued the emerging strategic partnership with us, and didn’t want us to do anything to damage it. They had only replied to HMT on a factual basis of what might be possible technically. They would want protecting on all their costs sunk into the BPC if this change of tack were to be followed. The main upside they saw was getting BA out of the picture.
“David expects next steps to be some ministerial discussion possibly over the weekend/into next week. Crucial will be the view from No 10.
“PLEASE REMEMBER we are not supposed to know any of this!”
By that stage, you had told government that the cancellation would have dire implications and you had also emphasised the importance of Horizon.
Was it usual for the DTI, at this stage, to be acting as some sort of back channel between yourselves and ICL?
Mr Jonathan Evans: I think I mentioned earlier that I sort of developed into the role of being the conduit between Post Office Counters and DTI with David Sibbick.
This was an example of that, where he was very good in terms of trying to keep us in the picture about what was going on because, at this time, I think it is fair to say that the Treasury Working Group, if it was continuing – I do not think I was any longer involved in it, because I think they had now gone into the, if you like, the A team who was working on it – David was giving us just a bit of intelligence about what was going on. And he used me as that conduit. So, yes, this is an example of a communication through a back channel.
Mr Blake: Looking at this document, at that stage, was the commercial protection of both the Post Office and ICL the main focus of discussions with government?
Mr Jonathan Evans: What was the date of this?
Mr Blake: Sorry, can we go back to the first page? It is 11 February 1999.
Mr Jonathan Evans: I can’t remember what stage things are at, at that point. I mean, I think we have seen from other correspondence, that I think I noticed, the involvement of Number 10 with other government departments in formulating the way that ministers wanted the outcome to be. Where that was all at as at 11 February, I don’t know. I think you need to cross-check it with that. What you have here, though, is just the output of where David saw things currently were.
Mr Blake: Would it be fair to describe it, at February 1999, the Post Office and the Department for Trade and Industry combining their efforts to try and salvage Horizon together?
Mr Jonathan Evans: I think there is an element of that, yes. DTI recognised the threat to the Post Office Network as much as we did.
Mr Blake: We read over the page, “Crucial would be the view from No 10”. What was your understanding of that?
Mr Jonathan Evans: I think David was telling me that, really, now, because – I think you are aware, or I think I put it in my witness statement, that there had been a ministerial reshuffle and getting a clear ministerial direction was proving difficult for them and that they then involved Number 10 in trying to get guidance on what should be the way. So, I think that’s what this is referring to.
Mr Blake: As somebody who, by that stage, had spent several years building up a picture of, for example, the impact on subpostmasters and the more technical matters, did you think it was right, at that stage, for Number 10 to be having a say in something that was ultimately, technically quite complex?
Mr Jonathan Evans: I think it was inevitable that that was happening. It had become a highly political issue. The two main departments were obviously finding it difficult to agree with each other as to what should be the course of action. So what else do they do but put it up the line?
Mr Blake: Can we go to POL00028603, please. Similar theme, 23 February 1999. It says:
“Our latest intelligence is that an agreed way forward was being put to No 10 yesterday afternoon. This followed Byers agreeing the line that the parties should be given three weeks to negotiate the alternative proposal that emerged a week or so ago. His line was that if after three weeks agreement did not emerge then we reverted to option 1.”
Staying with that, at the bottom of the page here, it says:
“As an executive team we will clearly need to keep close during a period of intensive activity and to keep the non-execs fully in the picture and on side.”
That is an email from Stuart Sweetman that was sent to yourself and I think it was originally an email from Stuart Sweetman to Neville Bain, John Roberts, Richard Close and Jerry Cope.
There is one bit that I didn’t read, which is:
“We understand from DTI officials that one thing that might happen is that the Prime Minister may phone Neville or John to explain the situation!”
Would it have been unusual for the Prime Minister to be phoning the chairman or chief executive?
Mr Jonathan Evans: In my experience, it was – it would have been unprecedented.
Mr Blake: Do you know if that conversation happened at all?
Mr Jonathan Evans: I don’t know. I was not aware of it happening.
Mr Blake: What was your view, at that time, of the Prime Minister getting personally involved?
Mr Jonathan Evans: I think, as I just said, in a way it was inevitable because, in a way – my reading now is that I think the government was deadlocked as to what is the best way forward and, therefore, it needed a steer from Number 10 as to how to take it forward.
Mr Blake: Would it have been a steer from Number 10 or a direction from Number 10?
Mr Jonathan Evans: I think that is a subtle difference that I can’t quite determine.
Mr Blake: Would it have been possible to resist what Number 10 said?
Mr Jonathan Evans: You would have to ask government ministers about that, not me.
Mr Blake: I mean, looking back at your view at that time –
Mr Jonathan Evans: I think – okay, you know, if the Prime Minister of the country is going to give a view as to what should happen, I think that would carry quite a bit of weight, whether you see it as a steer or a direction.
Mr Blake: Can we look at NFSP00000187, please. This is a document I have been asked to ask you about and it is a joint ICL Post Office report. Is this a kind of document that you would have seen in May 1999?
Mr Jonathan Evans: I don’t recall seeing that at all or even one like it.
Mr Blake: I will see where we get to on this document, if anywhere, because there are certain things in that document that you may or may not have been aware of at the time. Let’s look at them.
Can we look at pages 18 and 19, please. This seems to be feedback in respect of North Wales and the North West/North East. The highlighted paragraph says:
“The weekly balancing of offices operating Live Trial NR2 systems has caused a high level of problems, with subpostmasters experiencing difficulty in achieving their balance. This has been coupled with confusion and difficulty in reaching the appropriate support desks.”
One of the solutions is:
“Additional support from both POCL & ICL Pathway has been utilised in supporting NR2 post office balancing, both centrally and in specific outlets. This has helped resolve and reduce the number of issues, however, the underlying causes must still be addressed at the volume of problems cannot be sustained.”
Over the page. South Wales and South West/Midlands, “Issues & Concerns” the second one there:
“The major operational difficulties that have been experienced relate to office balance.
“Trends”:
“The number of training related issues for the 103 live trial offices has reduced significantly from that experienced with the 204.”
That’s seen as a training issue. I know you say you didn’t see this particular document but were you aware, in that period, of operational difficulties relating to the subpostmasters’ ability to balance?
Mr Jonathan Evans: I think I must have been because, although I don’t recall seeing this report, I see it is dated May, so I think I would have gone off to Group at this stage, having done the SCS job. But I think, prior to then, I would have been aware of that there were issues in the trial offices, yes, and not just in this sort of report but also, as I think we have seen earlier, getting it from feedback from subpostmasters, the Federation, and so on. I do not think this would have been –
Mr Blake: How was that kind of information fed back to you in that period?
Mr Jonathan Evans: I can’t remember the, sort of, formal way in which it happened. It would certainly have been fed back into the Horizon team, who were dealing with all these issues. In fact, this would have been prepared by them. They would be working on it.
Mr Blake: This was before the rollout period and, in fact, before the Benefits Agency even pulled out.
Mr Jonathan Evans: About a fortnight before, wasn’t it?
Mr Blake: Yes. Given the concerns that were raised, for example, even in that 1997 note that we saw at the beginning today, about gathering subpostmasters’ views, was the impression that you got at that period that there still needed to be quite a bit more live trialling at that stage?
Mr Jonathan Evans: I couldn’t say that I had that feeling, as you’ve just described it, other than there being just a sense of unease and that recognising that there was – this is not, at this stage, a perfect system and that there were things that needed to be corrected in it. I was aware of that. Now, knowing what I do know, in terms of what has come out, particularly what was going on in ICL that I think we were unaware of, had I known that at the time, then I think I would have been more concerned than I was.
Mr Blake: The Benefits Agency then pulled out and you have said in your statement that this left you with an army tank when all you needed was a car. Is that your analogy or –
Mr Jonathan Evans: That was someone else’s analogy. In fact, I quoted two analogies, which people – I’m not exactly sure now who they were but they were close to the action, as it were. There was, on the one hand, “Well, now the Benefit Payment Card has gone, it will be easier to do with Horizon what we need it to do, because that complexity is gone”. The other view was, we were building a tank because of the Benefit Payment Card and the sheer weight of cash that needed to go through the system, and the security arrangements on it. That bit has been ripped out of it but we are still left with the, sort of, skeleton of the tank.
So which was right? There were, sort of, prevailing really differing views as to what was going on.
Mr Blake: What was your view?
Mr Jonathan Evans: I think my view was, back to the point that, even if we were left with a tank, it was better than having no vehicle at all. So it is back to the least bad option. It is like starting to build a house and you discover halfway through that part of what you’ve been designing, you no longer need. Do you make the best of where you got to with the house or do you say “Scrap that lot”, buy a new piece of land and build another house on it. We were trying to make the best of what we’d got. For the reasons, financial and political, that I mentioned, that’s where we ended up.
Mr Blake: In terms of the tank analogy, was it your view that it was too technically complex for Post Office’s needs?
Mr Jonathan Evans: I don’t know what the person who described it as a tank was actually getting at. I did hear it described probably a couple of years or so later by – I won’t name him – somebody who came into the business afresh, at a senior level, who said when he had seen what Horizon was like and what it was doing, that it was highly overspecified. But that’s not to say it couldn’t have done the job that it was needed to do.
I think it was saying that, had we known where we ended up, that we would have gone for a less sophisticated system. I say that not really knowing what I mean by “sophisticated” but the sense was that we bought into an original system with the Benefit Payment Card in it. That was at a much higher level of security specification and other facets than would have been needed had we known we were going to end up where we did.
Mr Blake: Was that reflected, in any way, in conversations that you had with subpostmasters at that stage?
Mr Jonathan Evans: I don’t recall it. I have got some recollection though of – did we touch on earlier – I called it the “Michael Jackson” system. The whatever-it-was Jackson system.
Mr Blake: Yes.
Mr Jonathan Evans: There were some subpostmasters who were still, I think, saying “Why haven’t we gone for something simpler, we could just have had a simple thing now”. I think my response to that would have been, and probably was, “Actually, just a simple EPOS terminal on your counter, just thinking it through, this isn’t just selling different types of baked beans and you need a system just to cope with that”. This is actually dealing with how do you cope with BBC licences, how do you cope with bill payments, how do you cope with all the other range of more complicated products of what we have got.
It was not a question simply of introducing an off-the-shelf EPOS system. There was more to it than that. Whether it required what we ended up with, I don’t know.
Mr Blake: Your evidence earlier was about also commercial advantages that could be obtained by having such a complex system.
Mr Jonathan Evans: Yes, absolutely.
Mr Blake: Was that still at the forefront –
Mr Jonathan Evans: Of course, that was the way – I think I mentioned to you, the way the Post Office Counters vision was going was to certainly harness the capabilities that the automated platform would give us and which clearly a simple EPOS system that the subpostmaster perhaps had in mind wouldn’t do that.
Mr Blake: I’m going to move on to the topic of board meetings. Now, in 1999 you became secretary. Can we look at POL00000353, please. Thank you very much. This is a meeting of the Post Office board on 14 September 1999. You can see there at the bottom of the page it says:
“Jonathan Evans, secretary designate.”
So you were present at that board meeting but you weren’t yet secretary; is that right?
Mr Jonathan Evans: Yes.
Mr Blake: Now, where it says “secretary designate” it doesn’t say “company secretary designate”, were you a company secretary in the ordinary understanding?
Mr Jonathan Evans: The Post Office at that time, in 1999, was still a nationalised industry. It was a public corporation. It was not a company. Therefore the title of the role that the person would have had – had it been a company, ie company secretary – in a way for slightly quaint, historical reasons, was still called the secretary to the Post Office. A title that had existed for centuries before, although at one stage it was actually chief executive. So that was my title. Now when we incorporated and became – switched immediately to being Consignia Plc, then I became company secretary of that.
But I was doing effectively a similar-ish sort of job, although clearly, when you are company secretary of a Companies House company, then you do have different roles to play.
Mr Blake: At that stage did you consider yourself to have a role, for example, to keep the company legally compliant?
Mr Jonathan Evans: That was part of the role yes.
Mr Blake: And a governance role as well?
Mr Jonathan Evans: Yes.
Mr Blake: What would that involve typically?
Mr Jonathan Evans: It would have involved making sure that, particularly for Post Office board meetings, the directors were properly informed about the decisions they needed to take, any changes to the structure of the Post Office itself, you know, would have come under my team. But also the job was, I would say, mainly about dealing on behalf of the chairman and particularly the chief executive of, if you like, current issues.
So what I would have been doing at this time, in the lead up to incorporation, would have been working with the lawyers on, how is Consignia Plc going to work, what would it involve and so on because there was a lot of activity on that front.
Mr Blake: We have seen some minutes from the Post Office Counters Limited board. I’m going to come back to this meeting but can we look at POL00090836, please. You were a director of Post Office Counters Limited as well; is that right?
Mr Jonathan Evans: I must have been at that point yes.
Mr Blake: Do you remember when you were at all?
Mr Jonathan Evans: I became a director of Post Office Counters when I became network director, whenever that was – in 1995 and would have continued as a director until shortly after this, I think.
Mr Blake: This is, I think, effectively the dissolution of Post Office Counters Limited.
Mr Jonathan Evans: Yes.
Mr Blake: We heard from John Roberts that the POCL board met rarely and it was effectively just to sign-off the accounts. Was that your recollection?
Mr Jonathan Evans: Yes. Actually it was quite an important point if you want to pursue it just a little?
Mr Blake: Absolutely.
Mr Jonathan Evans: Post Office Counters, as a business unit, was created in the early 80s – prior to then, the thing we now call Post Office Counters was just part of the – adjunct of the Mail’s operation. It was Ron Dearing, who was chairman at the time, who saw – had clear vision that, actually, here was a retail business that really needed gouging out of the Royal Mail business and creating a unit on it’s own and that was when the Counter’s business was made.
But the creation of Post Office Counters Limited, as a company, was done for two reasons: (1) it did give a bit more focus to it being a separate business unit. But it was actually done to give Post Office Counters more powers to do more types of business because, somewhat adversely, under the terms of, I think, the Post Office Act ‘69, the Post Office itself couldn’t do types of business that Post Office Limited wanted to do, but it could as a subsidiary.
So it was created as a legal means of extending the amount of business that could be done. But it operated as a – in a way, a bit of a shell. Nobody who worked for Post Office Counters was an employee of Post Office Counters. Everybody remained an employee of the Post Office. So it went on like that and yes, there were board meetings rarely held but really for, as this one really, for sort of statutory purposes.
Mr Blake: These are the only minutes that we have been able to find. Were minutes taken of those other meetings?
Mr Jonathan Evans: Yes.
Mr Blake: Would they have been similarly brief?
Mr Jonathan Evans: Perhaps not quite as brief as this one. There would have been signing off of the accounts. Reappointment of the auditors. There probably would be not much discussion about the – what was going actually on POCL.
Mr Blake: The kinds of things that we have talked about already today, those kind of discussions about automation, about Horizon, about problems with Horizon, would those have been discussed at the board level of Post Office Counters Limited?
Mr Jonathan Evans: I do not think they would. They would have been discussed within, the whatever it was then called, the counters executive committee, which was the senior people within the business. I think the directors of Post Office Counters Limited were probably the same – I think it was whittled down here to not very many – but they would have been the same people as in the counters executive committee, plus probably John Roberts, somebody from group but there were no non-executives, there was no non-executive chairman, it didn’t play the role that it then turned into when it did have non-executives and a proper chairman and so on.
Mr Blake: We see only three names in terms of this meeting: John Roberts, yourself and Stuart Sweetman. It says:
“The chairman noted a quorum was present and … notice of the meeting had been given …”
Were there more than just the three of you or was that it?
Mr Jonathan Evans: I would have to check. It would be easy to find out. I do not remember who were the directors then. One thing I can tell you about these set of minutes, they were not prepared by us. I can tell – because of the typeface and all the rest of it and the layout of them – these were minute prepared by Slaughters who were, no doubt enacting what needed to be enacted and said, “Here’s the minutes of the meeting that needs to take place”. I’m sure we met to do it even though it was 8.00 am but it was a bit of formal business that just needed to be put on the record.
Mr Blake: Was it more usual for meetings to be informal?
Mr Jonathan Evans: I would not say they were informal. Because there were no other meetings of POCL. The meetings of the Counters Executive Committee were formal and minuted.
Mr Blake: Sorry. Were there or were there not, further minutes of Post Office Counters Limited?
Mr Jonathan Evans: There were. I mean, we had to – clearly we had to sign-off the accounts each year and they would be minuted discussions.
Mr Blake: Would you take the minutes or would somebody else take the minutes?
Mr Jonathan Evans: At the time I can’t remember who was – I know it wasn’t me who was then secretary of Post Office Counters Limited. It would have been somebody else. I was one of the directors then. But as I say, you know, the meetings were six monthly and short and formal like this.
Mr Blake: And not substantive when it came to issues such as Horizon –
Mr Jonathan Evans: No, that was all done elsewhere.
Mr Blake: Can we go back to the Post Office board minutes, that’s POL00000353, please. That is the meeting on 14 September. Can we look at page 3. This is – the chief executive has reported and this is where it addresses Horizon.
It says there:
“When the board last met in July … POCL’s Horizon Programme Director [that’s David Miller] had been confident that system acceptance would occur as planned on 18th August. Unfortunately, three high priority acceptance Incidents around training, stability of the system (lockups and screen freezes) and quality of accounting data, remained unresolved and whilst ICL did not accept the categorisation of these incidents, they had nevertheless resulted in acceptance being deferred until 24th September.”
Can we look at paragraph (v) there, it says:
“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.”
If we could scroll down a little bit. It says there, it’s paragraph 7, second half – I will read the whole of (vii):
“The continued rollout of the system to a limited number of offices was at no cost to Counters who would not 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.”
Were you aware at that stage, or perhaps prior to that meeting, about incidents around training, stability of the system and quality of accounting data? Were those familiar to you?
Mr Jonathan Evans: Do you mean me personally.
Mr Blake: Yes.
Mr Jonathan Evans: I think I probably would have been.
Mr Blake: Were they consistent with what you were being told in the past, all of those discussions we have already had this morning?
Mr Jonathan Evans: I can’t now recall how I would have known that. In the role that I was, I got to hear lots of things and that would have been in my consciousness that those issues were around.
Mr Blake: At the top of the page currently it says:
“However system and accounting were still being analysed.”
As company secretary would you be particularly focused on matters such as the accuracy of accounting?
Mr Jonathan Evans: No.
Mr Blake: Why not?
Mr Jonathan Evans: It wasn’t in my remit that was not what I was there to do.
Mr Blake: The presentation, by the company, of their accounts for example, was something you would have oversight of as company secretary or not?
Mr Jonathan Evans: I think the validity of the financial statements was the responsibility of the finance director.
Mr Blake: Did you see the role of company secretary though, having an overall governance view of concerns such as accounting issues?
Mr Jonathan Evans: I would have seen my role in that, very much as subordinate to the role of the finance director.
Mr Blake: Can we look at POL00090839, please. Can we look at the second page of this. This is before that meeting, so this is August 1999. We know that David Miller had received this. You are not a name recipient on that document. Were you informed by that September meeting about these issues with accounting integrity?
Mr Jonathan Evans: I have no recollection of being, no.
Mr Blake: If I could read the first paragraph.
“As auditors of The Post Office …”
This is a letter from Ernst & Young:
“… we have been asked by Post Office Counters Ltd to provide you with our views in respect of certain accounting integrity issues arising from tests performed by POCL on Horizon data in the live trial.”
Near the both of the current page it says:
“The following issue, as described to us by POCL gives us concern as to the ability of POCL to produce statutory accounts to a suitable degree of integrity. We understand that POCL has attributed a severity rating of ‘High’ to this matter.”
Were you aware of those issues at the time?
Mr Jonathan Evans: Not in that detail. I think this letter – it is interesting it is dated August. So the auditors would not have been auditing the accounts at that point. I think this letter is what, perhaps, politicians would call a planted question. Can you go back to the top of the page again?
Mr Blake: We could perhaps go the page before as well. It seems to be sent to Jeff Triggs at Slaughter and May in September 1999, if that assists?
Mr Jonathan Evans: Yeah, I don’t know what they’d have done with it. So Dave Miller is saying – he is passing on from Bruce McNiven and Keith Baines:
“Please ensure that these issues are fully addressed during the remaining acceptance process. Keep me in touch.”
I mean I think – well, a letter like this, if it was effectively saying to the Post Office, “Look here Post Office, you have got a real problem in the accounts that are coming up and we are likely to qualify them”. this would not have been sent to Dave Miller. It would have been sent to it the finance director if not the chief executive. In fact they would have already known about it before they sent the letter. The fact that it was sent in August, which is, as I say, a quiet time for auditing. The fact that it was sent to Dave Miller and not obviously copied to anybody else in the finance community who might have wanted to know about it, I think this was a means of using this letter to help with the discussions with ICL about getting their act together. I think. I’m supposing a bit here –
Mr Blake: You may be relieved to know that you are not the only witness who has said that.
Mr Jonathan Evans: That’s what it reeks to me of, let’s put it that way.
Mr Blake: Nevertheless, the issues raised there, however hyped up they may be, are pretty significant issues for the board, aren’t they?
Mr Jonathan Evans: They would have been, had they continued. When are we talking about here, ‘99? The proof of the pudding would be, come the accounts for 1999/2000, were they qualified and I think the answer is no. I’m 100 per cent certain they weren’t. So whatever the issue that was being described here, clearly, in the auditors minds, went away by the time that the accounts came to be completed.
Mr Blake: You, by this period – so let’s say, September 1999 – had, for a couple of years, been building up a picture of problems with Horizon that we heard about this morning. That September meeting talked about accounting still being analysed – issues with accounting. As company secretary do you think that you were sufficiently informed of those kinds of problems?
Mr Jonathan Evans: I think – I believe the board was and I don’t think I, in any way, was less informed than the board was. So I think the answer is yes.
Mr Blake: Do you recall the board being told of the contents of this letter?
Mr Jonathan Evans: No, I don’t think they would have been, if my fear is right, that it was a bit of a device.
Mr Blake: Would Ernst & Young have written it if it wasn’t true?
Mr Jonathan Evans: I am sure they wouldn’t have done. I am sure it is – they would not have signed it had it not been true.
Mr Blake: So was it not of sufficient concern do you think for somebody to have brought to the board’s attention?
Mr Jonathan Evans: Well, again, it is all in the positioning of it. It may well have been that the finance director at the time knew this was happening. In fact, I would be pretty confident that he would. A letter from the auditors saying this sort of thing, probably he had been told about this. If I am right that this letter was being used for those purposes, then there would not have been the need, unless the finance director saw the need, to raise this at board level. I’m doing a lot of supposition here. So please be aware of that but that’s how I’m seeing it.
Mr Blake: Can we look at POL00000354, please. These are minutes of the Post Office board of 26 October and is this your first meeting as secretary?
Mr Jonathan Evans: Yes.
Mr Blake: If we look at page 3, that number 6 there talks about Horizon and it talks about the system having been accepted with implementation proceeding at a rate of 200 offices per week, et cetera.
Can I just clarify, would you have taken these minutes, would these be your minutes that you wrote or was there somebody else who was actually –
Mr Jonathan Evans: There was somebody listed back then taking the notes. He would have done the first draft for me then to look at and make any amendments.
Mr Blake: Would it be fair to say then that, at this stage, certainly in the context overall of those minutes, Horizon would have been quite a small issue that the board was dealing with? Perhaps we could scroll through the document itself. There are quite a few passages that we have redacted as irrelevant and that potentially contain some sensitive information.
But ignoring the boxes, if we keep on scrolling, how long are they? They are ten pages, or so, in length and that is one paragraph on Horizon. Do you think that, by that stage, the board was sufficiently confident in Horizon, that it didn’t need to be addressing it at length?
Mr Jonathan Evans: Well, perhaps there was nothing new to address at that meeting and, really, to make that judgement, you would need to understand what on these copies is marked as irrelevant because they may have been – at the time, the Post Office was dealing with some other very difficult issues, one of which was the potential merger with the Dutch Post Office.
I don’t know – I mean, I would have known what is behind “Irrelevant”.
Mr Blake: It looks as though there were other significant topics that were being discussed at more length, shall we say?
Mr Jonathan Evans: Yes. Can I just say one thing on this, the minutes are one thing and clearly an important record of a meeting. The papers under which the discussions took place would in my view, be even more important to see and to understand what was actually put in front of the board on which the discussions took place and, therefore, the minutes were raised.
The papers themselves, okay, you were saying the Horizon bit is down to eight lines. It would be interesting to know what in the – I think this was all in the chief executive’s report – what he was actually saying about Horizon in his report. That would give you a more rounded picture as to what was going on at the board.
Mr Blake: Absolutely. We do have some of these, I won’t take you to them today because I don’t think there is a need to. What I would like to deal with today is your recollection of the board in that period. In fact, let’s move to 11 January 2000, so even further on. It is POL00000336, please.
These are the minutes of 11 January and it is page 10 that there is a brief mention of Horizon. I appreciate everything you have said about that not necessarily being all of the picture but it certainly seems as though – and tell me if this is your recollection – that, by January 2000, the board had effectively moved onto issues of more commercial importance with Horizon and the marketing of Horizon.
I think it is over the page, actually.
Is your recollection that, in early 2000, the focus was then very much on the commercial opportunities from Horizon?
Mr Jonathan Evans: I think it would have been, yes. Again, if you just go back, you will see the reference to a paper. There, “POB(00)7x”. That’s really what you ought to look at.
Mr Blake: Can we look at POL00021476, please, this is the summer of 2001. There is a brief mention of Horizon in the minutes, page 4. Again, I absolutely get the point about the underlying documents. This is contained in the chief executive’s report. But do you remember, by the summer of 2001, essentially, the position of the board being congratulating itself on a successful rollout programme.
Mr Jonathan Evans: I think they were congratulating the Horizon programme team, rather than themselves, but I suspect the sense of your question is right. Horizon was now, I wouldn’t say ‘sorted’, but it was no longer on the watch list of the board, there were other pressing things emerging. I notice en passant – I don’t know whether you do – but the membership of the board was beginning to significantly change at this point.
Mr Blake: Can we look at page 1.
Mr Jonathan Evans: So we have a new finance director, Marisa Cassoni, and a new finance director, Allan Leighton, who both became – if you wound on to not many future board meetings, you would see they played a prominent role then in the company and I think, probably, within a year or two time, that whole dramatis personae would have changed apart from me and Marisa and Allan Leighton.
Mr Blake: Do you think that caused any issue with regards to knowledge of the history of Horizon?
Mr Jonathan Evans: Clearly, there would have been some corporate memory lost, inevitably, but whether it was crucial at that level is an interesting question. I know Allan Leighton, in particular, made himself very visible within the business and wanted to really understand what was going on and would have himself looked at the Horizon system because his background in retail, in Asda and so on, would have – he would have known what he was talking about.
They would have come at it all from a different perspective but would have acknowledged that Horizon now was what they were dealing with and it was, at this stage, it was well rolled out.
Mr Blake: The things we talked about, ‘97, ‘98 and ‘99, do you think the board was sufficiently aware of that history?
Mr Jonathan Evans: The history of?
Mr Blake: The histories of the problems with Horizon that we discussed today? The background to the accounting issues, stability issues?
Mr Jonathan Evans: I think ‘97, ‘98, ‘99, I think they would have been. I do not think anybody was as informed as they would have been had they heard what some of the evidence that’s been coming out here. But I think the evidence shows it, that they were informed of the problems that were –
Mr Blake: Sorry, you have said that there was a significant change around 2001 in the board.
Mr Jonathan Evans: Yes.
Mr Blake: Do you think the knowledge you had, for example, from those earlier days, do you think that kind of knowledge was passed on in any way to those board members?
Mr Jonathan Evans: I don’t know. I can’t answer that. I don’t know whether it was or not, in detail. Do you remember what happened in 1997? I need to tell you about that because of this, I don’t know.
Mr Blake: Do you think the instability of Horizon, for example, was something that they would have been aware of –
Mr Jonathan Evans: I think – I mean, new directors had extensive briefing with all the business units and I would be surprised if, in the middle of all that, the core system within counters was not something that they would want to spend some time looking at.
I mentioned earlier that somebody had said to me that the system had been over specified. This was actually one of the new directors of the board. So, I mean, it shows that there was an interest clearly in Horizon and its history.
Mr Blake: I’m sorry to push you on that because I know you said you wouldn’t name the individual, but I think it would help us if you felt able to name which individual on the board said that it had been overspecified?
Mr Jonathan Evans: I’m not going to because I’m not absolutely sure which one it was.
Mr Blake: Would it have been a non-executive director or one of the executives?
Mr Jonathan Evans: A non-executive.
Mr Blake: Do you remember any discussions at board level, in these early days, so from when you joined as company secretary at rollout and early stage into 2001, anything about prosecuting subpostmasters based on Horizon data?
Mr Jonathan Evans: What that issue coming up at the board?
Mr Blake: Yes.
Mr Jonathan Evans: I have no recollection of that at all.
Mr Blake: You narrowed the question to just the board, which was my question, but, outside of the board, were you aware of that?
Mr Jonathan Evans: Not connected with Horizon. Obviously, the whole focus of this Inquiry, I was not aware at all that subpostmasters were being prosecuted on the strength of Horizon data, wrongly, until I read about it in the papers a few years ago.
Sir Wyn Williams: Leave out the word “wrongly”, Mr Evans, were you aware that they were being prosecuted on the basis of data produced by Horizon?
Mr Jonathan Evans: No.
Sir Wyn Williams: No?
Mr Jonathan Evans: No.
Sir Wyn Williams: I’m sorry if I express surprise but, before 1999, inevitably, the accounting trail was a paper trail and, in most prosecutions of postmasters for fraud or theft, the paper trail would be important, I guess. So now we have Horizon. So I’m not quite sure how you would not be aware of that?
Mr Jonathan Evans: Well, okay. I was no more aware of it than I would have been of the paper trail. It would have been – I would have been thinking that there is some, if you like, business as usual activity going on, where it was not unusual for subpostmasters to be prosecuted under the old system and that would have been going on under the new system, but there was no mention that I can remember of prosecutions of subpostmasters pre-Horizon or post-Horizon actually. It wasn’t – if we talk about conversations at board level here –
Sir Wyn Williams: I think Mr Blake was asking about your personal knowledge rather than conversations at board level but, if he wasn’t, I am.
Mr Jonathan Evans: Okay. As I think I said earlier, when I was at lower levels of the organisation, I was very aware of prosecutions taking place. The higher up I went, I don’t think I was aware of individual prosecutions that were taking place.
Sir Wyn Williams: Can I ask you the direct question: did you personally consider whether prosecutions based upon a paper audit trail were likely to be different in the evidential trail, compared with prosecutions based upon a computer system?
Mr Jonathan Evans: I don’t think that thought – perhaps wrongly, but I don’t think that thought crossed my mind.
Sir Wyn Williams: All right, that’s fine. Thank you.
Mr Blake: I’m near the end. Sir, I see it is 12.55 pm.
Sir Wyn Williams: Let me take stock of who wants to ask Mr Evans questions and for how long, so we can decide how best to proceed.
Mr Stein, do you have questions?
Mr Stein: Sir, maximum of ten minutes.
Sir Wyn Williams: Ms Page?
Ms Page: No, sir, you just asked the question I had.
Sir Wyn Williams: So 10 minutes from Mr Stein, none from Mr Moloney. So could we, rather than have a traditional lunch break, have a 10-minute break, so that Mr Evans can draw breath, so to speak, and then we will complete all the questioning and pack in for the day.
Is that fair enough, Mr Blake?
Mr Blake: Yes, I can either finish before that 10-minute break in about five minutes or –
Sir Wyn Williams: No, let’s have a ten-minute break now, we’ve been going for a while and we have got to think about the transcribers as well. Then we will finish in the way I have described.
( 12.57 pm)
(A short break)
(1.07 pm)
Sir Wyn Williams: Yes, Mr Blake.
Mr Blake: Thank you very much. Can we look at POL00021485, please. Now, these are some board minutes from October 2004. So we are moving on quite a few years and I only have a couple of questions to ask about this period.
If we look at the final page of this document. There is, at the top there, discussions of human resources, and it says:
“The board agreed that in situations where fraud had been perpetrated against the company, the appropriate civil orders would be used immediately and in advance of any criminal proceedings. This would help recovery efforts by ensuring that the assets of those involved in criminal activity were quickly secured. David Miller would verify the current procedures and report back to the board.”
So, there is at least some discussion in 2004 of matters relating to criminal proceedings. You were on the board for nine years or so, and this may well be something we need to revisit later down the line, in later phases. But while you were on the board, was the link ever discussed between prosecutions and the problems with Horizon?
Mr Jonathan Evans: I have no recollection at all of that happening.
Mr Blake: Knowing the background that you have told us today and the things that you knew about, throughout the period that we have discussed, why do you think that link wasn’t made at a high level?
Mr Jonathan Evans: The link between prosecutions and Horizon, you mean?
Mr Blake: Yes.
Mr Jonathan Evans: I think it must have been because it wasn’t obvious. There was no upward reporting to suggest that.
Mr Blake: We know, that there was an article in Computer Weekly in 2009. That perhaps is towards the end of your time on the board. Do you remember that being discussed at all?
Mr Jonathan Evans: What date was that, again?
Mr Blake: 2009.
Mr Jonathan Evans: I don’t remember that. I’m aware of the Computer Weekly articles. I don’t recall it being mentioned at the board, I don’t think. Can I just say something on these minutes?
Mr Blake: Absolutely.
Mr Jonathan Evans: When I read this, when you sent it to me, I was there at the meeting and would have had these minutes passed to me, what is curious to me now is why the board took that decision – in fact, why it was brought up to them.
On the face of it, I’m sure not sure it needed a board decision because it is not a major decision to take, so I would be really curious to know the contents of POLB(0489). What was the context of this? Why had this arisen? Because just as a self-standing paragraph it just, to me now, raises more questions than it answers.
Mr Blake: No doubt we will be looking at that at some later phase. But, taking that into account, presumably it was pretty rare for issues of criminal proceedings to be raised at board level?
Mr Jonathan Evans: Well, in my – I didn’t start doing this when I became company secretary, but at some stage I introduced a company secretary report to the main board which included in it major items of issues around regulation that needed to just – made the board aware of. If there was any litigation against the Post Office, I would report that. Now, whether if in the middle of all those reports, there was something around prosecutions, there could be but I can’t remember it.
But if there was, that would be where to look.
Mr Blake: But your recollection is that the link between those prosecutions and problems with Horizon was simply not made in your –
Mr Jonathan Evans: I can’t remember that link being made, no.
Mr Blake: Finally, can we turn to POL00039876, please. The contents of this particular document don’t really matter but it is an email from yourself and what I want to draw to your attention is some advice that you gave to Sarah Mullen at Her Majesty’s Treasury, and it is in that first substantive paragraph. It says:
“All I can say is that if I were recommending a course of action to the Post Office Board, I would want to expose all the main upsides and downsides of each option as accurately as possible. I would receive no thanks for attempting to smooth over differences of view, or indeed to downplay significant facts, by means of some clever presentational fudge.”
Having heard what you have heard of the evidence, do you think that the Post Office board were sufficiently exposed to the downsides of Horizon and that that kind of advice was actually followed within the board itself?
Mr Jonathan Evans: Well, this is really getting at, if you like, the suppression of information and I must have been eating some red meat that day because that is not the sort of comments I would normally make. So there was something winding me up about how this was going on with the Treasury Review. But having said that, I do not believe that the Post Office board, as far as I was aware – there was any information deliberately withheld from it.
I mean, I can’t completely vouch for that because there was a variety of people who were putting up information to the board but I was saying here that, for me personally, if I was saying something to the board and was withholding information that I thought would be relevant, then that would be a serious offence, as far as I would be concerned.
Mr Blake: In respect of Horizon – and I only go to this because this is your way of working and your advice – do you think that there was some presentational fudge of some sort, at some period, to the board?
Mr Jonathan Evans: Not that I’m aware of. I really don’t think that happened. I think people were as – I mean, I can’t guarantee this but I would like to think that people were as honest and as open as there could be. Because, in the end, there was no mileage in trying to cover something up.
Mr Blake: Where, therefore, do you think that the problem lay? Was it not enough information going to the board, insufficient channels of communication between those on the ground and the board? I mean, you were the regional manager at some earlier stage, do you think the messages from regional managers or others were being sufficiently raised at board level, in relation to problems with Horizon?
Mr Jonathan Evans: Well, this is where hindsight, of course, comes in. At the time, I would probably have thought messages are being elevated as much as they need be, probably. Now I know what I know, then I probably wouldn’t think that. But you can only judge these things by what was the prevailing circumstances at the time.
And I don’t believe that there was any – certainly any deliberate attempt to keep from the board what they ought to have known. I mean, as I say, I can’t 100 per cent vouch for that because it is reliant on other people to play the game properly. But the culture that we were in at the time really didn’t lend itself to that sort of behaviour.
Mr Blake: The Chair has to make recommendations, in due course. What do you think went wrong then with the lack of information that was passing to the board? You said that you don’t think it was deliberate. So where do you think the problem lay?
Mr Jonathan Evans: Which problem are we talking about?
Mr Blake: The lack of information getting to the board about problems with Horizon?
Mr Jonathan Evans: I can only think that it was not seen with the degree of significance and seriousness that, in hindsight, it should have been. What other conclusion can I come to, if I don’t think it was deliberate withholding of information.
Mr Blake: Where should that message have been received from, to the board? Where would the natural line of communication have been from?
Mr Jonathan Evans: It would have gone up through the line, you know, from subpostmasters up the managerial line to the managing directors and the chief executive to the board. I mean, that is the line. And where things – I mean, clearly it was a large organisation, it is a large organisation and messages can get crowded out with other messages that are going on.
But I repeat that, with hindsight, I am sure things would have been done differently but I can’t believe that, at the time, there was some convoluted way for people to persuade themselves that they didn’t need to release information to the board.
Mr Blake: Thank you, Mr Evans. I have no further questions. I’m going to hand you over to Mr Stein.
Questioned by Mr Stein
Mr Stein: Mr Evans, I ask questions on behalf of 153 subpostmasters, mistresses and managers. I’m instructed by Howe+Co Solicitors in relation to this Inquiry. I set myself a target of no more than 10 minutes earlier. That’s normally a trap for any barrister like me but I will see how I go.
You have just been asked a series of questions by my learned friend Mr Blake and he has been asking you about questions of governance, who reports to who, how the board gets information.
Now, let’s wind the clock back to just before the year 2000. Charlotte Churchard was head of litigation at that time. Who did she report to?
Mr Jonathan Evans: You haven’t quite got her name right, Catherine Churchard. She reported to me.
Mr Stein: So there was a mechanism for reporting from head of litigation, which handled prosecutions to you; is that correct?
Mr Jonathan Evans: Yes, there was, and –
Mr Stein: Were you copied in yearly reports, monthly reports, weekly reports, what were they?
Mr Jonathan Evans: I don’t recall but I did mention that we did instigate a report to the board on key items of litigation.
Mr Stein: Right. Mr Evans, you have been told by Mr Blake that there may be a need to consider potentially further questions that relate to board meetings. From our point of view, on behalf of the people I represent, we may, in fact, ask for your return later on in this Inquiry by making an application to the Chair if further disclosure provides further documents we wish to ask you about.
Mr Jonathan Evans: Okay.
Mr Stein: But that would be a matter for the Chair, Sir Wyn Williams to decide.
Let’s remain back in time, if we can, please. Can we have on the screen FUJ00000071. Thank you.
Now, Mr Evans, as you can see on the screen, it is the Post Office Counters, ICL Pathway. You see it is a codified agreement, and you will see if we can, Frankie – and when I say Frankie, she is the document handler over there, which is why I’m using her first name.
Can we go, Frankie, to page 65 of 914 on the internal pagination within the document handling system.
Page 65 of 914. That is the signature of the parties in relation to this codified agreement. Do you understand?
Mr Jonathan Evans: Yes.
Mr Stein: Now, we are looking here at about July 1999, so that is where the sort of timing of this document is.
If I can take you now to 91 of 914. So on page 91, as we have it here, is dealing with an introduction and this concerns, at this particular page:
“The policies and standards defined in this Schedule shall apply to all relevant aspects of POCL Services unless amended in accordance with Schedule A5.”
We are now going to look at a couple of the references that appear under “Policies and standards”.
Moving on now to page 97 of 914, please. If we can concentrate under “Prosecution support”, and highlight that aspect, please.
Under “Prosecution support” 4.1.8. Now, Mr Evans, I will just go through this, so that you can see what it is and so that you understand what it says. So far, we have identified this as the codified agreement. We are talking about a date in 1999. We can see this comes under “Policies and standards” within that codified agreement that has been signed by the parties. 4.1.8:
“The Contractor shall ensure that all relevant information produced by the POCL Service Infrastructure at the request of POCL shall be evidentially admissible and capable of certification in accordance with the Police and Criminal Evidence Act 1984”, and it deals with equivalent legislation in Northern Ireland and Scotland.
4.1.9:
“At the direction of POCL, audit trail and other information necessary to support live investigations and prosecutions shall be retained for the duration of the investigation and prosecution irrespective of the normal retention period of that information.”
In short, you can see that, within this codified agreement, there is direct reference to prosecution support under “Policies and standards”; do you agree?
Mr Jonathan Evans: Yes.
Mr Stein: The timing of this was going back to 1999, so we are going pre-going live of Horizon, I think, and we are talking about what is going to be required of the contractor, which is the supplier of Horizon; do you agree?
Mr Jonathan Evans: Yes.
Mr Stein: Having jogged your memory by looking at that, can you help please with these questions:
What systems of oversight were put in place to ensure that the contractor was compliant with this particular policy in relation to prosecution support?
Mr Jonathan Evans: I’m afraid I can’t answer that question.
Mr Stein: What was done to ensure that Pathway understood this particular section, in other words understood, as an example, what should be evidently admissible and capable of certification in accordance with the Police and Criminal Evidence Act, what was done to ensure the contractor was able to comply with that?
Mr Jonathan Evans: I can’t answer that either.
Mr Stein: Let’s see if you can help further. You mentioned already that Ms Churchard reported to you. Did you direct that an opinion should be sought from an experienced criminal lawyer as to what this meant?
Mr Jonathan Evans: I didn’t do that, no.
Mr Stein: Did Ms Churchard say to you it might not be a bad idea if someone actually gets an opinion from an experienced criminal lawyer as to what this means?
Mr Jonathan Evans: I don’t recall that but I don’t think that would have been necessary because –
Mr Stein: Why not?
Mr Jonathan Evans: Well, Post Office Counters was already needing to get relevant information from its existing systems in order to conduct prosecutions. So I think the need for that material to meet these requirements would already have been known.
Mr Stein: Let’s understand that, Mr Evans. Let’s work out what happened. Sir Wyn Williams has asked you some questions today about the fact that there was a movement from a paper-based system, in relation to prosecution, to a computer-based system. Yes?
So, by the time you move over to Horizon, Horizon is the prosecution game in town, isn’t it? It is the only thing that you can go to to get information to prosecute people; do you agree?
Mr Jonathan Evans: For subpostmasters – the kind of misdemeanors we are talking about, yes.
Mr Stein: Are you saying that the prosecution under the old paper system is exactly the same as the prosecutions under a Horizon computer system?
Mr Jonathan Evans: I’m not saying it is exactly the same. But I think some documentation would have been needed in prosecution cases which would have needed to satisfy the admissibility characteristics required.
Mr Stein: Yes. So was an advice sought as to how to do that, what certification was required, who should provide such certification and who is qualified to give it?
Mr Jonathan Evans: I am supposing here, because I do not have exact knowledge, but all I am saying is that because prosecutions pre-Horizon were not uncommon, and they were being dealt with in a way that I think needed to comply with these – the requirements of PACE, and so on. So I think what constitutes an evidentially admissible document, I think, would have been known.
Mr Stein: So you are guessing that somewhere within the system, someone would have had some understanding about what on earth this means and how to comply with it; is that roughly what you’re saying, Mr Evans?
Mr Jonathan Evans: I think I would be doing more than guessing. I think I’m –
Mr Stein: Who are you relying upon to get that right within the system that prosecutes? Who?
Mr Jonathan Evans: It would have been the legal community.
Mr Stein: Legal community being, within Post Office, who?
Mr Jonathan Evans: I –
Mr Stein: Ms Churchard and her team?
Mr Jonathan Evans: Yes, because they were the lawyers that we – the in-house lawyers.
Mr Stein: So do you recall, now that I have jogged your memory in relation to the timing that we have got here and who was involved, whether there were any discussions with Ms Churchard about what can be done to make sure that we are compliant, the Post Office prosecution system, with these requirements?
Mr Jonathan Evans: I have no recollection of a conversation like that.
Mr Stein: You have been asked a number of questions by Mr Blake concerning the question of what went to the board and what didn’t go to the board. Can we now please look at page 250 of 914.
Now, if you just scroll up the page a little bit, please. (Pause)
So we are seeing the bottom of page 54. You can see, looking at this – if we hold it there, please.
If we look at this particular document here, you can see that we are looking at the internal pagination on the document, which I will use in the middle of the page, 54 of 95, and this is 1.133.1., “prosecution support”:
“The Contractor shall ensure that all relevant information produced by POCL Service Infrastructure at the request of POCL shall be evidentially admissible …”
This is the same provision we just looked at?
Mr Jonathan Evans: Yes.
Mr Stein: But this is produced under “Requirements”, as you will see, bottom left-hand corner.
Mr Jonathan Evans: Yes.
Mr Stein: You can see this is 1.133, “Requirement [B29] – General – Security: Prosecution support”?
Mr Jonathan Evans: Yes.
Mr Stein: You can see there, there is a replication of the prosecution requirements that we have looked at further in the document –
Mr Jonathan Evans: Yes.
Mr Stein: – and they are the same?
Mr Jonathan Evans: Yes.
Mr Stein: If we now piece this back together again, we can see that this codified agreement has a reference under “Policies and standards” to the prosecution requirement and also it is directly a requirement in relation to this agreement. Who was in charge of ensuring requirements under these contracts in this agreement are complied with?
Mr Jonathan Evans: I don’t know.
Mr Stein: Is it a board matter?
Mr Jonathan Evans: I can’t – honestly, I can’t give you a good answer to that question.
Mr Stein: These are contractual requirements, Mr Evans?
Mr Jonathan Evans: Yes.
Mr Stein: Somebody has got to be going around saying, “Well, hang on, has Horizon actually complied with some of these contractual requirements or not?”
Mr Jonathan Evans: Yes.
Mr Stein: Who would that have been, Mr Evans?
Mr Jonathan Evans: I can’t now think, 23 years later, who was actually doing that role.
Mr Stein: Would somebody, whoever did this, have reported to the board in relation to compliance with requirements on the contract?
Mr Jonathan Evans: I don’t remember that happening but I would need to jog my memory a lot more on this than my memory currently contains.
Mr Stein: Give me one moment, please, sir.
Mr Evans, I’m very nearly finished. One last question, do you not consider that subpostmasters, mistresses and managers might be a little dismayed by your evidence which appears to provide no link between the board and what is the governance of a prosecution system that did them so much wrong?
Mr Jonathan Evans: I think it is wrong to say that there’s no link.
Mr Stein: You have not provided any evidence of a link, Mr Evans?
Mr Jonathan Evans: Well, I couldn’t provide you with hard documentation, at least I don’t think I could. I mentioned it to Mr Blake that there were reports made to the board of legal – major legal issues and I would need to review what’s in those to see the content of what was in them.
So it could – there could be something in there that answers your question, and I think that’s, at the moment, the best answer I can give you.
Mr Stein: Do you have anything to say to the subpostmasters, mistresses that have been harmed in this matter?
Mr Jonathan Evans: I have a lot to say.
Mr Stein: Do you want to say that now?
Mr Jonathan Evans: Is this the end of the questions?
Sir Wyn Williams: Not quite, I have a few, so you can say what you want to say at that point.
Have you finished?
Mr Stein: I think so, sir. I’m assured that I was roughly within time.
Questioned by Sir Wyn Williams
Sir Wyn Williams: As near as makes no odds, as they say where I come from. I would like to take you back to what you volunteered to Mr Blake right at the beginning about the ultimate decision maker in prosecutions between ‘87 and ‘99 – forget Horizon now, we haven’t got there – and you used the expression “line manager” and given that the subpostmasters were contractors, could you just be a bit – give me a bit more detail about who would fit the description of “line manager”? Say I was the subpostmaster of a branch in Cardiff, who would be my line manager for these purposes?
Mr Jonathan Evans: Okay. You would have had – let me say, from ‘92 onwards you would have someone called a retail network manager, who would have looked after, probably, a city in Wales, perhaps there was a retail network manager for Cardiff. I’m making it up.
Beneath him, there would have been people called visiting officers who typically would have looked after or helped/supported probably 20 to 30 subofficers. So the line management of subpostmasters, the retail network manager would have been the key person. There would be then a number of retail network managers in the region, who would have reported to a body called the head of retail network, and there would typically two or three of those in the region who would have reported to the general manager. That was the line.
Sir Wyn Williams: So, in that line, if I, as the subpostmaster of a branch in Cardiff was suspected of criminal behaviour, which of those persons would be the ultimate decision-maker?
Mr Jonathan Evans: I think it – I suppose it would depend on the severity of it. What would normally have happened – I say “normally”, these things were not normal – there would have been an auditing office, it would have shown a shortfall, there could then be a judgement made at that point: was this just an innocent mistake? Often – this was one of the problems, actually, with running post offices –
Sir Wyn Williams: Sorry, to cut you short. So is the answer to my question: it would probably depend upon the seriousness of what was alleged and so it could be any one of those persons within that line, depending on –
Mr Jonathan Evans: Yes, I think that is right. I can remember when I was general manager – I think I mentioned the case –
Sir Wyn Williams: All right. So what if any guidance existed for those persons to make a decision about prosecution? There is no secret why I ask this question. The criminal lawyers here will put me wrong if I got it right, but from at least 1985, the Crown Prosecution Service had a code of conduct for prosecutors – or a Prosecutor’s Code, rather – with a twofold test as to whether or not someone should be prosecuted. Was there any kind of similar written or, for that matter, oral guidance given to these decision makers about how they should approach their task?
Mr Jonathan Evans: Well, the decision that a line manager would have taken would have been informed by the legal team who were – who had been called in to take – to look at that particular case.
Sir Wyn Williams: But, as far as you were aware, if the manager had said, “Well, actually, in this case, I find it particularly tricky, do you have any published documents or policy documents or guidance that I can look at to help me”, would there have been anything?
Mr Jonathan Evans: I’m not sure, is the answer to that.
Sir Wyn Williams: That answers that.
Then just one question about 1999. You gave me the impression – this may be a wrong impression – that that decision-making process changed in 1999. Now, that may be a false impression I gained from the way you answered Mr Blake. Were you aware of any changes in 1999?
Mr Jonathan Evans: I think if I didn’t make this clear, I’m sorry. I could only really vouch for it until that point.
Sir Wyn Williams: That’s all you were saying.
Mr Jonathan Evans: Yes.
Sir Wyn Williams: Let me put it another way. When Horizon became a potential evidential tool, are you aware of any specific changes that took place to cater for that fact?
Mr Jonathan Evans: I’m not aware of any but, just to flag up that, at the same time, the major reorganisation that I was talking about, I think, as well, altered the line management arrangements within Post Office so –
Sir Wyn Williams: I will delve into that –
Mr Jonathan Evans: – there are two issues going on there.
Sir Wyn Williams: I can delve into that later in the Inquiry but I wanted a kind of base to start from. So thank you very much.
So please make the statement you wish to make now.
Mr Jonathan Evans: I was really just wanting to make the point, at the risk of understatement, that this is a huge disappointment, I am sure, to everybody here and matter of great regret that – and certainly to me personally – that the events have played out as they have, which has made this Inquiry necessary.
And, for my part, and I believe the same will be true of everybody who I worked with in the ’80s and ’90s, when we were really setting up Post Office Counters, that we were doing all we could to maintain the business’s reputation for an organisation that people could place their trust in. And this was vital for us, not just in our relationships with customers, but it was even more so in our relationship with staff and subpostmasters.
Now, as network director – and I think you heard me say this – and before that as subpostmasters manager, I got to know many of our subpostmasters and mistresses – in fact, I had a family member who was a subpostmaster – and they were all salt of the earth and the real ambassadors for the business. But we now confront the fact that over 700 of them have been put through this horrific ordeal and I can only offer my profound sympathies for what’s happened to them.
None of us in those days would have dreamt of this sort of thing happening and, if we had known whatever was leading to it, we would have wanted to have stopped it. I think it has brought great shame on the organisation that I once used to be proud to work for.
So, Chairman, if there is more – any more I can do to help, I stand ready to do so.
Sir Wyn Williams: Thank you very much.
All right. So we will adjourn until 10.00 on Tuesday.
You may be coming back, as you have heard but thank you, to date, for your written and oral evidence.
(1.40 pm)
(The Inquiry adjourned until 10.00 am on Tuesday, 8 November 2022)