23 September 2024 – Gavin Ellison and Sarfaraz Ismail
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(9.58 am)
Sir Wyn Williams: Good morning everybody, I’ve found my glasses, you’ll be glad to know.
Mr Blake: This morning we’re going to begin Phase 7 of the Inquiry –
Sir Wyn Williams: Yes.
Mr Blake: – and we’re going to hear from Mr Ellison of YouGov.
Gavin Ellison
GAVIN ELLISON (sworn).
Questioned by Mr Blake
Mr Blake: Thank you very much. Can you state your full name, please?
Gavin Ellison: It’s Gavin Ellison.
Mr Blake: Thank you very much. You should have in front of you two witness statements. The first is dated 17 September this year, with a URN WITN11680100. Is that statement true to the best of your knowledge and belief?
Gavin Ellison: That’s right.
Mr Blake: That statement exhibits your first report, that’s EXPG0000007. Perhaps that can be brought on to screen. It’s a report of September 2024 and it’s 100 pages in length different?
Gavin Ellison: That’s correct, yes.
Mr Blake: We’ll be looking at that in more detail shortly. You’ve produced a second witness statement, that’s WITN11680200; is that statement true to the best of your knowledge and belief?
Gavin Ellison: That’s right.
Mr Blake: Can you see your signature on both of those witness statements?
Gavin Ellison: That’s right.
Mr Blake: Thank you. That second statement exhibits an addendum report. Can we please turn up on to screen EXPG0000009. That’s entitled “Addendum to YouGov Report”, also dated September 2024 and that’s three pages long?
Gavin Ellison: That’s right.
Mr Blake: Thank you. The second addendum report was produced following questions received by a Core Participant; is that correct?
Gavin Ellison: That’s right, yes.
Mr Blake: Thank you very much. I’m going to ask for you to have both of those reports in front of you. We’ll be working on screen from a slightly different document which just has the tables that has been produced in it and that’s EXPG0000008. Perhaps that can be brought onto screen as well. Thank you very much.
This table, this document, has on it all of the tables that are produced within your core report; is that right?
Gavin Ellison: That’s right.
Mr Blake: Thank you. That can come down for a minute.
Can you briefly outline your background and your expertise, please?
Gavin Ellison: Yes. So I’m the Head of Public Sector & Not for Profit Research at YouGov, that’s a department of around 17 staff and I have 25 years’ of experience in social research world, so that includes expertise in study design methods, questionnaire design, project management, analysis and report writing.
Mr Blake: I think you worked with a team to compile these surveys and the reports?
Gavin Ellison: That’s right, yes.
Mr Blake: YouGov is a name that’s familiar to many people but very briefly can you tell us who YouGov are?
Gavin Ellison: YouGov is an international market research and social research agency, headquartered in the United Kingdom, UK-registered company, with over 1,000 staff around the globe at the moment, and we’ve been operating since the early 2000s.
Mr Blake: Before we go to the results of the surveys, I just want to ask you about methodology. You produced two questionnaires, one that went to subpostmasters and one that went to applicants to the Historic Shortfall Scheme; is that right?
Gavin Ellison: That’s right, yeah.
Mr Blake: You say at page 9 of your main report that YouGov used their experience and judgement to ensure that all questions were asked in a fair and balanced way. Typically how might you do that?
Gavin Ellison: Well, typically, for a process of questionnaire development, looking at ideas for questions and then working those up into a fair and balanced questions, where we might be looking for things like whether a question – it could be leading or not, whether the scales are balanced, such as, as an example, a satisfaction question, rather than state that – rather than the question wording being “How satisfied are you with X, Y and Z”, it should really read, “How satisfied or dissatisfied are you with X, Y and Z,” and that the satisfaction scale in that example goes – is balanced, so it has, for example, “very satisfied”, “quite satisfied”, a neutral option and then “quite dissatisfied”, “very dissatisfied”, so a five-point balanced scale.
Also in the wording of questions where you might see something like “Which of the following have happened” it should really read something like “Which of the following, if any, have happened”, so we’re not presuming that certain things have happened when they may not have happened.
So really, in that process that we went through over number of iterations of designing the questionnaires, we were looking to make sure that those questions were worded in a very neutral and inclusive way.
Mr Blake: Thank you. One Core Participant has referred to the potential for something called voluntary response bias. What do you understand by that and to what extent might that play a part in the response?
Gavin Ellison: Well, the only survey that’s compulsory is the census, so we aren’t reliant on people taking part in the survey. That element of voluntary or often called non-response bias is perhaps a sense that those who didn’t respond to the survey might have very different reviews to those that did respond.
There’s a number of things that we need to do to try to make sure that everyone has a chance to respond who can and we followed those processes and best practice, in the sense that we invited everyone that we had access to through an online email method. We repeated that through a couple of reminders. We also sent everyone on our lists a letter. So those who didn’t have an email address would have received a letter which contained a link.
So the idea is just to be as inclusive as we possibly can, when we’re inviting everyone to take part in the survey.
Mr Blake: The fieldwork period was between 18 July and 15 August of this year; is that correct?
Gavin Ellison: That’s right. Yeah.
Mr Blake: Is that a typical or reasonable period for fieldwork?
Gavin Ellison: I think allowing at least three weeks is considered to be generally good for best practice purposes, so that’s – that did allow for that to happen and we did have to factor in that we were sending people letters in addition to sending them email requests to take part.
Mr Blake: Thank you. Could we please turn to the core report, that’s EXPG0000007, and page 9. This chart does appear in our other document but I also want to take you over the page and the breakdown on the next page doesn’t appear, so we’ll use the report just to look at this first one. It’s page 9.
The chart there, halfway down the page, shows the completion rate, those who completed the questionnaire. For the current subpostmaster questionnaire, do we see there 1,015 people responded?
Gavin Ellison: That’s right.
Mr Blake: For the HSS – Historic Shortfall Scheme – applicants there were 1,483?
Gavin Ellison: That’s right.
Mr Blake: Not all of those who started the survey finished and we see there in the box to the left the numbers who didn’t totally complete the form; is that correct?
Gavin Ellison: That is correct, yeah.
Mr Blake: Do you consider the number of respondents to be statistically significant for the purposes of a survey?
Gavin Ellison: Yes. To have those two numbers, for them to be over 1,000, is very useful. The response rate to the HSS applicant survey is very strong, I would say, to get anywhere near 50 per cent of those invited is very strong.
It’s not strictly applicable to this type of survey, which was a census rather than a random probability sample, but you can use an indicative margin of error, for example, that might help in considering the results. So, for something that is approaching 1,500 responses, we’d be looking at a plus or minus of 2.5 per cent from the true population; and for the survey of current subpostmasters, that would be around plus or minus 3 per cent.
I would have liked the response rate to be higher from the subpostmasters’ side, there’s no doubt about that, but still having over 1,000 there is very helpful.
Mr Blake: Are you aware of any reasons why the HSS applicant response rate might be higher than the current subpostmasters?
Gavin Ellison: The methods that were applied are exactly the same for both. As I’ve explained, the email invites and the letter approach, and the repeating of reminders by email, that was exactly the same, so there’s nothing within the method that would suggest why that is – why it’s lower for current subpostmasters. So you’re just speculating about levels and engagement from the current subpostmasters. And then the nature of the questionnaire and the subjects that are being covered, applicants to the scheme are clearly feeling that it’s something they wanted to reply to in greater numbers, greater proportions than the current subpostmasters.
Mr Blake: Thank you. Over the page, please, we can see that you’ve broken down by various factors the responses. Looking at the current subpostmasters, it seems there that there are slightly more males than females responding, or it may simply be that there are more males than females in the subpostmaster cohort?
Gavin Ellison: There could be, yeah. I don’t think we know the full population demographics of current subpostmasters.
Mr Blake: Looking at the age, it looks as though they are larger in number towards the higher ages?
Gavin Ellison: Yes, that’s right.
Mr Blake: Slightly older?
Gavin Ellison: Yes.
Mr Blake: In terms of ethnicity, 59 per cent said that they were white, 34 per cent reported as ethnic minorities?
Gavin Ellison: Yeah, that’s correct.
Mr Blake: I think you’ve also said in the report that those from ethnic minorities tended to be younger; is that correct?
Gavin Ellison: That’s right, yes. When we’re looking at the analysis by those demographic variables, we do have to be careful sometimes that something that could look as if it is a difference that is between ethnicities could actually be driven potentially more by the age difference.
Mr Blake: So where we see certain results, that might have impacted on that?
Gavin Ellison: Yes, the report does make that clear when we believe that could be happening.
Mr Blake: We see there in terms of region, 78 per cent of respondents were from England –
Gavin Ellison: Yes.
Mr Blake: – and 87 per cent were from a single branch. So a very significant proportion were subpostmasters operating one branch only?
Gavin Ellison: Yes.
Mr Blake: If we go over the page, please, we can see the breakdown of responses from the HSS survey: very similar in terms of male to female ratios – before, we had 54 per cent male, here we have 57 per cent – 66 per cent are over the age of 60 and that was compared to 36 per cent of the current subpostmaster respondents. So the respondents to the Historic Shortfall Scheme survey tended to be older; is that right?
Gavin Ellison: That’s right.
Mr Blake: In terms of ethnicity, 68 per cent reported that they were white, 28 per cent reported as being from an ethnic minority. A slightly higher percentage of ethnic minorities in the current subpostmaster cohort compared to the Historic Shortfall Scheme survey; is that right?
Gavin Ellison: That’s right.
Mr Blake: Does that fit in with the analysis in terms of age group and perhaps the amount of time that they have been a subpostmaster for?
Gavin Ellison: Yes. That’s correct and, of course, there is – within the report, you’ll see references to the length of time at which they’ve been a subpostmaster and, of course, that is obviously correlated with their age.
Mr Blake: Thank you. Very similar proportions to current subpostmasters in terms of the regions if we scroll down slightly.
Let’s start now by looking at the subpostmaster survey. That’s covered in Chapter 4 of your report. It’s page 13 where it begins, but let’s bring up onto screen, please, EXPG0000008. We begin by looking at training, if we go on to figure 2, so over the page, please.
This is the headline “Analysis of training”. Is the headline really that we see here at the bottom, that 66 per cent plus 33 per cent, that’s 99 per cent of respondents, had received training at some point?
Gavin Ellison: Yes, the figures on the screen have been moved around.
Mr Blake: Pardon?
Gavin Ellison: The figures on the screen do not match the line-up from the chart, the original chart. The figures I’m looking at on the screen here have got decimal points –
Mr Blake: Ah, yes.
Gavin Ellison: – and the alignment of the options is not correct.
Mr Blake: So perhaps, if we turn back to EXPG0000007, maybe we’ll just work off the actual report itself. It’s page 14. I think it’s only that chart that that affects.
Gavin Ellison: Okay.
Mr Blake: If we could turn to page 14, please. So there at the bottom, we can see “Net: Any training”, nearly everybody who responded had received some sort of training at some point?
Gavin Ellison: That’s right.
Mr Blake: Is there anything else that stands out in respect of that chart?
Gavin Ellison: No, important things to remember sometimes in the questionnaire and the report are that this is what people are recalling having received, as well, so this is all recall. So there’s people remembering that they have received training.
Mr Blake: Let’s move on, please. If we go back, then, to EXPG0000008 and figure 3, so that’s page 3, we’ll then move on. Subpostmasters were then asked about the content of their training, types of training. Mostly, they could tick all of the boxes, couldn’t they, in this?
Gavin Ellison: That’s right, it’s a multiple choice response.
Mr Blake: 88 per cent received training on general transactions, for example carrying out day-to-day transactions; high numbers for balancing as well; but much smaller numbers when it came to matters such as dealing with discrepancies, use of the suspense account, dealing with technical issues?
Gavin Ellison: That’s right. So, yes, it’s useful here to remember again about this is them recalling, so it’s often, I would suspect, what’s at the top of their mind, what they remember about the training were those key ones at the top there: the general transactions and the balancing. They’re the ones that stuck in people’s minds from the training they’d received.
Mr Blake: If we turn now to figure 4, respondents were asked about their satisfaction levels in respect of the training. We see there red is net dissatisfaction, purple is net satisfaction. A much larger number of the net dissatisfied; is that right?
Gavin Ellison: That’s right, yeah.
Mr Blake: 42 per cent versus 25 per cent. 30 per cent there neither satisfied nor dissatisfied. I think you’ve said in your report that the 42 per cent net dissatisfied figure rises to 50 per cent amongst those aged between 50 and 59?
Gavin Ellison: That’s right, yes.
Mr Blake: Can we turn now to figure 5, please, and this drills down further and looks at length of service. Can you assist us with this chart?
Gavin Ellison: Yes. This is general satisfaction with the training that was received, broken down by the length of time working. The length of time working is one of those things that immediately stands out when you look in the data, in terms of the key differences in the way people are responding to the survey, and there is a very consistent pattern, whereby those with less experience, who have been working for a shorter amount of time – typically two years or less or five years or less – do tend to be generally more satisfied than those with longer experience of being a subpostmaster, and this is an indication of that.
So those with the highest levels of satisfaction with the training were those who had been in post for two years or less, and it steadily decreases for the length of time of being a subpostmaster.
Mr Blake: You obviously can’t say for sure but this might indicate, mightn’t it, that training has improved in recent years, potentially?
Gavin Ellison: It could. It could also be related to training that’s received soon after becoming a subpostmaster. I would guess that that’s more likely to have happen and therefore it might be fresher in their minds, potentially.
Mr Blake: Let’s leave training and move on to operation of the Horizon system. Can we look at figure 6, please. This looks at overall satisfaction with the Horizon system, and the question at the bottom there, we see:
“Overall, how satisfied or dissatisfied are you with the Horizon IT system?”
A lot of red in this example?
Gavin Ellison: Yes, it’s kind of similar to the previous chart but, yes, only around a quarter would say they’re satisfied with the current system operation.
Mr Blake: We have there 25 per cent are or responded that they were very dissatisfied?
Gavin Ellison: Yes, that’s right, and there is the same dynamic in terms of the length of service as well.
Mr Blake: What do you mean by that?
Gavin Ellison: Well, those who have been working for two years or less, they – 37 per cent of them are satisfied with the Horizon system, and that compares to the 25 per cent that we see for the response group as a whole, and, as the length of time being a subpostmaster is longer, the dissatisfaction levels rise.
Mr Blake: We can see that, actually, if we turn over the page to figure 7, those are the figures there. So satisfaction levels slightly improve if you look at those who have only worked for two years or less; is that correct?
Gavin Ellison: That’s right.
Mr Blake: But is it also right to say that in every age category there were more dissatisfied than there were satisfied?
Gavin Ellison: That’s true, yes, even those who have fewer than two years’ of service.
Mr Blake: Thank you. Could we turn over the page, please, to figure 8. Respondents were then asked about issues experienced on the Horizon system in the last 12 months, and this provides that analysis, does it?
Gavin Ellison: That’s right. So, again, a multiple choice of issues that have been experienced in the last year.
Mr Blake: They could tick as many boxes as they wanted?
Gavin Ellison: Yes.
Mr Blake: If we look at the top four, over half of respondents experienced at least one of screen freezes, loss of connection, issues with PIN pad and unexplained discrepancies; is that correct?
Gavin Ellison: That’s right.
Mr Blake: If we look at the bottom, we have the 6 per cent who haven’t experienced and the 2 per cent who don’t know or can’t remember.
Gavin Ellison: Yes.
Mr Blake: Could I ask you, we won’t turn it up on screen, but if you could turn to page 18 of your first report. I think you report there about subpostmasters mentioning issues within open-ended comments. Could you explain that for us, please?
Gavin Ellison: Yes. So searching through the comments to look for those who are talking about the current operation of the Horizon system, we have – can find number of comments. There is one that’s detailed there, which says:
“In my opinion, Horizon is still flawed. I regularly have unexplained discrepancies, often altering daily or manifesting at balance.”
Mr Blake: So these were boxes within the survey where people could type in any response?
Gavin Ellison: That’s right.
Mr Blake: If you continue looking at your own report, on page 19, you’ve carried out some further analysis that isn’t shown on this chart. Are you able to assist us with that, please?
Gavin Ellison: That’s right, yes. So there is a connection, of course, between the discrepancies, the issues that are being experienced and the level of current satisfaction with the system, as you might expect. So those who are experiencing particular types of issues are less likely to be satisfied with the system. So in the report it states that 81 per cent of those who are satisfied with the system still reported experiencing an issue but that these issues tended to be things like the screen freezes, the loss of connection and issues with the PIN pad, which might be more – might perhaps be considered to be less serious issues.
Those who were dissatisfied with the current operation of the system, they were much more likely than others to report issues such as unexplained discrepancies, unexplained transactions, missing transactions and double entry of transactions. So there’s a difference there between those who are experiencing the different types of issues and their resultant satisfaction with the current system.
Mr Blake: If we look on that page, page 19, towards the bottom, you also have carried out some analysis in terms of frequency.
Gavin Ellison: Mm.
Mr Blake: Is it right to say that I think 65 per cent of those who have experienced problems in the last 12 months have experienced those on a monthly basis?
Gavin Ellison: That’s right, yes. 16 per cent a few times a week, 6 per cent once a week, and then, yeah, more on – a few times a months and once a month.
Mr Blake: Thank you. So a majority of those who responded reported experiencing issues on a monthly basis?
Gavin Ellison: Well, the majority of those who responded reported issues and then two thirds of those who reported issues reported that that was happening on a monthly basis.
Mr Blake: Thank you. Moving on now to “Advice and Assistance” that’s page 21 of your report. Can you assist us with your initial findings there on page 21, before we move on to figure 9?
Gavin Ellison: Yes, so this is a section where we asked questions about the Business Support Centre and we found that nearly everyone who responded had contacted the Business Support Centre in the last 12 months, 97 per cent of those who responded had done so, and it was quite common for them to be doing so at least once a month, so 52 per cent had called at least once a month.
Mr Blake: Thank you. Let’s turn to figure 9, please, and this sets out the reasons why people have called or reported calling the helpline. Once again, they could give multiple reasons; is that correct?
Gavin Ellison: Yes, multiple choice question.
Mr Blake: If we look there we can see 76 called as a result of a technical issue; 46 per cent as a result of a balancing issue –
Gavin Ellison: That’s right.
Mr Blake: – and then smaller figures for those other responses?
Gavin Ellison: Yes.
Mr Blake: Then at page 22, just below that chart, you have given some more detail and broken that down a little more. Are you able to assist us with that, please?
Gavin Ellison: Yes, so there was a follow-up question to that because we were interested in whether they felt that the response they’d received was tailored to the issue that they’d been experiencing or whether they felt that they were being given a generic response, which resulted in quite an even split: 45 per cent felt that the advice they’d received was tailored; and 53 per cent felt that it was a very generic response they were given. And there were some differences in terms of whether they felt the advice was tailored. Some differences in terms of age and ethnicity, and in satisfaction.
So again, an interesting link with those who were currently satisfied with the system, those who felt they were given some tailored advice, 64 per cent of them were satisfied with the system’s 34 per cent of them were dissatisfied.
Mr Blake: So, in your view, you’ve set out a number of bullet points, but the one that stands out there is that those satisfied with the Horizon system, it was 64 per cent versus 34 per cent of those who were dissatisfied?
Gavin Ellison: Yes. So there’s a clear link there between – they’ve been given tailored advice, rather than generic advice and, given that nearly everyone is contacting the Business Support Centre, that’s clearly an important element.
Mr Blake: Thank you. Can we please turn to figure 10. That’s over the page. This addresses overall satisfaction with the Business Support Centre. This is, I think, possibly the first case where we have more of the purple than the red: we have 42 per cent net satisfied against 26 per cent dissatisfied; is that correct?
Gavin Ellison: That’s right.
Mr Blake: I think you’ve said at page 22 that a slightly lower percentage of those were from an ethnic minority background, that were satisfied?
Gavin Ellison: That’s correct, yes. So the score for the satisfied was 45, for those who were white background, and 37 for those from an ethnic minority background, and this further reinforces the importance of the tailored advice because 71 per cent of those who received tailored advice were satisfied with the Business Support Centre service, compared to just 17 per cent of those who felt that they’d had a generic response.
Mr Blake: Thank you very much. Moving now to transaction corrections and figure 11, please. 81 per cent reported receiving a transaction correction in the last 12 months; is that right?
Gavin Ellison: That’s correct.
Mr Blake: Yes. If we, please, turn to figure 12, it looks at those who have disputed transaction corrections. 46 per cent have disputed at least one in the last 12 months; is that correct?
Gavin Ellison: That’s right.
Mr Blake: I think you’ve analysed this at page 24 of your report, and you’ve said that younger subpostmasters and those from ethnic minority backgrounds were more likely to fall within that 46 per cent?
Gavin Ellison: That’s correct, yes. So the younger subpostmasters, aged 18 to 39, 68 per cent of them had done that disputing, and those from the ethnic minority backgrounds, 58 per cent, and those who had been a subpostmaster for two years or less, it was 63 per cent.
Mr Blake: Thank you.
If we turn over the page, please, to figure 13 and 14. 13 and 14 look at satisfaction levels with elements of the transaction corrections process. Let’s look at figure 13 first. Can you assist us with that?
Gavin Ellison: Yes. So with 13, I mean, nearly everyone who took part had the ability to respond to this question. So they were asked about their satisfaction with the review or dispute ROD function, and their level of satisfaction in terms of their access to having sufficient data to be able to review or dispute transaction corrections and, for both of those elements, they felt that they were – there was more dissatisfaction than there was satisfaction.
Mr Blake: If we look at the top one, broadly equal numbers between satisfied and dissatisfied for the review or dispute function itself?
Gavin Ellison: Yes.
Mr Blake: But then, if you look at the access to sufficient data, there is far greater dissatisfaction with the access to data?
Gavin Ellison: That’s correct, yes.
Mr Blake: Thank you. If we look now at figure 14 over the page. This just looks at those who have disputed a transaction correction in the last 12 months. First, it looks at whether respondents were satisfied with the outcome, and we have there 40 per cent net dissatisfied against 33 per cent satisfied.
Gavin Ellison: Yes. So this goes through the outcome and then the response that was received, and how long it took to respond.
Mr Blake: It looks there as though there is a higher level of dissatisfaction with the response received after raising the dispute than in respect of the outcome of the transaction. So the second one, there is a higher level of dissatisfaction compared to the first, for example?
Gavin Ellison: That’s right.
Mr Blake: There is, if we go down, even greater level of dissatisfaction with how long it took the Post Office to respond?
Gavin Ellison: Yes, that’s the element with the highest level of dissatisfaction.
Mr Blake: Turning now to the issue of discrepancies and that’s page 28 of your report. Can you assist us with some analysis that you’ve carried out at the very top of page 28, please.
Gavin Ellison: Yes. So 69 per cent of those surveyed reported that they had experienced an unexplained discrepancy since the point of January 2020. Those who had been working for longer were the most likely to have experienced something. Those who – and then, among that group, we looked into the frequency with which that was happening.
Mr Blake: Thank you. Could we bring onto screen, please, figure 15, so that’s figure 15 of EXPG0000007 and that addresses the frequency of unexplained discrepancies. Thank you. It’s figure 15 – oh, sorry, EXPG0000008. Thank you, if we scroll down.
This addresses the frequency of unexplained discrepancies. Most common in this box was a couple of times a year, followed by once every two to three months; is that right? We see there 25 per cent for a couple of times a year, 21 per cent once every two to three months?
Gavin Ellison: That’s right.
Mr Blake: But then on the left-hand side, we see there a few times a month and at least once a month so that’s 17 and 18 per cent. Adding those two together on the left-hand side, we get 35 per cent of respondents who experienced an unexplained discrepancy once a month or more than once a month; is that right?
Gavin Ellison: Yes, sorry. Yes.
Mr Blake: Thank you. Can we please turn to figure 16. This looks at those who have experienced an unexplained discrepancy and it provides the amount of a typical discrepancy that they may receive. Half of those were less than £200 or half of the typical discrepancies were less than £200; is that correct?
Gavin Ellison: Yes, that’s right.
Mr Blake: If we add, for example, the 50 per cent, the 39 per cent and the 5 per cent, we see there that 89 per cent reported that a typical discrepancy is less than £1,000. Sorry, £1,999.
Gavin Ellison: Yes, if you at the first two, the less than £200 and – so less than 1,000 would be 80 –
Mr Blake: There are some figures that would be above £2,000, although considerably smaller numbers?
Gavin Ellison: Very few, yes.
Mr Blake: We have there 1 per cent between 5,000 and 9,000 – so 5,000 and 9,999. You also have 1 per cent above 30,000?
Gavin Ellison: Yes.
Mr Blake: If you could have look at the bottom of page 28 in your report, I think you say that 98 per cent of those reporting discrepancies reported shortfalls, 34 per cent of those also reported surpluses?
Gavin Ellison: Yes, we were also interested in – obviously, it’s a multiple, so whether they were shortfalls or whether there had been any experience surpluses as well. So nearly all of them had experienced shortfalls; a third had had some surpluses, though.
Mr Blake: Thank you. Could we turn over, please, to figure 17 and this looks at how discrepancies were resolved. We see there the most significant figure is a subpostmaster resolving it themselves, or through using the branch’s own money; is that correct?
Gavin Ellison: That’s right.
Mr Blake: Does anything else stand out there for you?
Gavin Ellison: Yes, there’s some analysis of – within that. So the most likely group to be resolving it using their own – or the branch’s money was those with the 11 to 20 years of service, so slightly longer servicing – longer serving postmasters; and those who were using the Business Support Centre was also significantly linked to the length of service. So it was a much more popular route among those with a more recent – more recently become subpostmasters.
So, among those who had more recently become, 38 per cent had followed that route, compared to the 19 per cent overall, whereas that group who had been serving for 11 to 20 years, just 11 per cent of them had followed the Business Support Centre route.
Mr Blake: Thank you. Turning then to figure 18, you look at satisfaction levels regarding the resolution of discrepancies and you have significantly more net dissatisfied than you have net satisfied; is that correct?
Gavin Ellison: That’s correct, yes.
Mr Blake: I think at page 30 you’ve also broken that down and highlighted that those who served as a subpostmaster for five years or less were more likely to be satisfied?
Gavin Ellison: That’s right, yes. So it’s the same pattern that we’ve seen previously.
Mr Blake: But, again, still net dissatisfied?
Gavin Ellison: Still net dissatisfied.
Mr Blake: Moving now to suspension and termination, and that’s page 31 of your report. Can you assist us: you have some analysis at the top of page 31 that isn’t, I don’t think, addressed by the figure below?
Gavin Ellison: That’s right, so yes, 86 per cent had never been either suspended or threatened with suspension but 4 per cent reported that they had been suspended and reinstated and 8 per cent reported that they had been threatened with suspension.
Mr Blake: How about in terms of ethnic minorities?
Gavin Ellison: Yes, so that varies a little bit, so looking within the 8 per cent who had been threatened with suspension, so that figure for white respondents was 5 per cent, whereas it was 12 per cent for those from an ethnic minority background and it was, in fact, 17 per cent of those with an Asian-British ethnic minority background.
Mr Blake: Are you able to comment in any way as to whether those differences are statistically significant?
Gavin Ellison: So they would be indicatively significant, yes.
Mr Blake: Significant of what, sorry?
Gavin Ellison: So the difference between the percentages is – would be considered statistically significant, if we were following that, the path of statistical significance.
Mr Blake: Thank you. Page 31 also says that a subpostmaster from a minority ethnic background is more likely than a white subpostmaster to have been suspended and reinstated; is that correct?
Gavin Ellison: That’s correct, yes.
Mr Blake: I think the figures there were 6 per cent versus 2 per cent?
Gavin Ellison: Yes, that’s right. I mean, as a general point, things that are mentioned in the report with differences between subgroups would only be in the report if the differences between them are large enough to be considered to be statistically significant.
Mr Blake: Thank you very much. Figure 19 drills that down a little by length of service. Can you assist us with that, please?
Gavin Ellison: Yes. So this is the point at which they had been – how recent that was. So it’s a group of only just over 100 who had been either suspended or threatened with suspension, and for 5 per cent of that group of just over 100 that was within the last 12 months. The largest group there, for whom that had happened, was the 38 per cent column that you can see there and, for that group, it had happened 11 years or more ago.
Mr Blake: So there seems to be quite a jump from four years onwards in terms of length of service, as to those who reported having been suspended or threatened with suspension; is that correct?
Gavin Ellison: That’s right, yes.
Mr Blake: I think at page 31 you’ve also noted that 77 per cent of those who reported being suspended or threatened with suspension were dissatisfied with how it was handled?
Gavin Ellison: That’s correct, and 4 per cent satisfied, with the handling of it.
Mr Blake: Thank you. In your second report, you’ve addressed a specific question. Can I please take you – we don’t need to bring it up on to screen – to page 2 of your second report, and it’s the first and second questions. Taking them one by one, if we look at the first question, can you assist us with that follow-up question and your analysis?
Gavin Ellison: Yes. So we were asked whether there was sufficient data within the survey to compare those who had been suspended or threatened with suspension, with those who had experienced unexplained discrepancies. So, in our response to that question, we explained that the two subjects of the suspension and the unexplained discrepancies, they did come in separate parts of the questionnaire. They’re not linked in terms of being able to see whether the unexplained discrepancies was – led, in fact, to suspension. So we can’t do that.
We can only identify a correlation between them and certainly not causation. There were actually only eight who were surveyed who reported being suspended or threatened with suspension in the last three years and all of those had experienced unexplained discrepancy, but we have to remember that quite a lot of those responding to the survey had experienced an unexplained discrepancy since January 2020. So it’s an interesting thing to look at but we can’t see that there’s any causation going on between those two factors.
Mr Blake: The second question on that page, there was another issue that was addressed?
Gavin Ellison: Yes, so we were asked if there was anything within the open-ended comments or any additional information about whether – about what the cause of suspension could be and whether it was related to discrepancies. So looking through all of the detailed responses that were provided, there were some examples that we’ve – that we provided in that addendum of comments that related to threats of suspension or suspension, that were also connected to the issue of discrepancies, and we’ve provided three examples of those in this addendum.
Mr Blake: Thank you very much.
Let’s move to the topic of audits, and can we please look at – if you look at page 32 of your report, can you assist us there?
Gavin Ellison: Yes. So the question was asked whether, since January 2020, there had been an audit for the branch, and 78 per cent said that they had not had an audit; 12 per cent reported there had been one audit of the branch and –
Mr Blake: I think it was more likely for those who had been a subpostmaster for only two years?
Gavin Ellison: That’s correct, yeah, very clear difference there for the newer subpostmasters.
Mr Blake: So the numbers that we’re reporting are very low in terms of those who had received a branch audit?
Gavin Ellison: Yes, so 152 of those who had responded had received at least one audit since January 2020.
Mr Blake: Thank you. If we look at figure 20, please, that addresses the issue of satisfaction with how the audits have been conducted and, actually, there were 57 per cent who were net satisfied; only 21 per cent who were net dissatisfied.
Gavin Ellison: Yes, that’s right.
Mr Blake: Again, I mean, it seems to be a trend in a lot of these answers with greater satisfaction levels for those newer subpostmasters; is that a fairer –
Gavin Ellison: That’s correct, all the way through, yes.
Mr Blake: The subpostmaster contract, that’s addressed at figure 21. The questions here looked at whether subpostmasters had received their contract and also when they had received their contract. This question was, if we see at the bottom:
“Were you sent a copy of your contract … before or after beginning of your current role?”
The overwhelming majority had received a copy of their contract?
Gavin Ellison: Yes, that’s right.
Mr Blake: I think you’ve provided some more analysis at page 33.
Gavin Ellison: Yes. So the recall of having received a contract, there was a difference there with the age group. So those aged 59 to – sorry, 50 to 59, 23 per cent of them, and those aged 60 plus, 21 per cent of that group, were more likely than the younger age group to have received a copy of the contract after beginning the role.
Mr Blake: After beginning their role?
Gavin Ellison: Yes.
Mr Blake: Yes?
Gavin Ellison: After beginning their role.
Mr Blake: Could we turn now to figure 22, and this addresses the receipt of a contract after the Bates v Post Office Common Issues judgment: subpostmasters were asked if they had received a copy after that judgment, and it seems there that a far greater proportion had not received a copy after the Common Issues judgment than had received a copy.
Gavin Ellison: Yes, that’s right. In comparison, 53 per cent said that they could not recall having received that.
Mr Blake: Thank you. That’s just receiving the contract. If we look at figure 23, that addresses the receipt of guidance after the Bates judgment.
Gavin Ellison: Yes, so that’s the whole sample group again answering the question whether they’ve received guidance.
Mr Blake: A very significant proportion had not received any guidance?
Gavin Ellison: That’s right, they could not recall that.
Mr Blake: 71 per cent said they hadn’t received any guidance, only 8 per cent had received any guidance.
Gavin Ellison: Yes. Again, there’s that quite significant difference in terms of how recent they became a subpostmaster.
Mr Blake: Can you assist us with that?
Gavin Ellison: Yes. So those who had been in the role for 11 to 20 years and those who had been 21 years or more were more likely than those who had been serving for less time to report that they had not received any additional information. So one comparison there would be that 38 per cent of those who had been serving for less than two years could recall see having something, and that’s – that is obviously, in comparison, is just 8 per cent of the overall sample group.
Mr Blake: Thank you. Turning now to figure 24, and that addresses the fairness of the contract, subpostmasters were asked how fair they considered their contract to be. 32 per cent found it to be very unfair. Net unfair was significantly more than net fair, is that –
Gavin Ellison: That’s correct, yes, and the longer they had been serving the more likely they were to feel that it was unfair.
Mr Blake: Can you assist us with that analysis?
Gavin Ellison: Yes. So those who had been serving for 11 to 20 years, 62 per cent of them felt that it was unfair and 60 per cent of those who’d been serving for longer than 20 years felt it was unfair.
Mr Blake: Moving to the next topic, which was whistleblowing and complaints, that’s figure 25. This figure addresses awareness of whistleblowing and complaints mechanisms, and what does this show us?
Gavin Ellison: Yes, so a general awareness about the ability to complain was low. Just over half were not aware about the ability to raise a whistleblowing concern with the Post Office. That would be the third – the bar at the bottom, the 55 per cent group there.
Mr Blake: So we have there the red is, “I was not aware of this at all”, and the one slightly to the left of the red is, “I was aware of this, but would not know how to do it”.
Gavin Ellison: That’s right.
Mr Blake: If you add those in each of those categories, so complaining about a Business Support Manager or Area Manager or complaining about treatment by the Post Office or raising a whistleblowing issue with the Post Office, in some cases you’re getting towards 80 per cent of respondents either not being aware at all, or not being aware of how to do it.
Gavin Ellison: That’s right, yes.
Mr Blake: Thank you. Could we turn to figure 26 and this shows satisfaction levels from those who had complained. Now, as you’ve just said, not a great proportion of people actually knew how to complain so this number is quite smaller of those who were analysed; is that correct?
Gavin Ellison: Yes, this needs to be treated with a lot of caution because it’s around about 50 of the responses that relate to this question.
Mr Blake: Again, a fair amount of red there for net dissatisfaction outweighing net satisfaction?
Gavin Ellison: Yes, that’s right, yeah. More significantly in terms of the – when they had complained about the way that they had been treated by the Post Office, rather than the way that they complained about being treated by a Business Support Manager or an Area Manager.
Mr Blake: Could we next have look at the Post Office senior leadership. There are a series of questions addressing the senior leadership and management of the Post Office, and it’s figure 27. It looks at the two subpostmaster Non-Executive Directors, we’re going to be hearing from them as our next witnesses. General awareness, of the subpostmaster Non-Executive Director is high, 72 per cent; is that correct?
Gavin Ellison: Yes. Very – yes, relatively few are unaware of that.
Mr Blake: I think at page 39 you address the question of whether subpostmasters believe that they shared Board information with them?
Gavin Ellison: Yes, yes, that is right. So, yes, the majority disagreed that those who were serving on the Board have shared information with them, only around 50 – 15 per cent agreed that they have been doing that.
Mr Blake: Thank you. Turning over to figure 28, please. This looks at the overall board. Again, a fair amount of red there. Can you assist us with those results, please?
Gavin Ellison: Yes. So this is the general perceptions of what the Board and what the Post Office, in terms of the relationship, the concerns, that the views are being listened to, and it ranges from a high, in terms of agreement, in relation to a belief that the Post Office is trying to improve its relationship. There’s 30 per cent who agree with that, 51 per cent disagree, and that drops to a low of 11 per cent agreement with views being listened to at the Board level and 60 per cent disagreeing with that one.
Mr Blake: So, in terms of headlines from this figure, the most significant net disagree is that Post Office Limited understand the concerns of subpostmasters?
Gavin Ellison: That’s right yeah, and this one is a good example again about the differences between length of service. So, to give you an example, those who have less than two years’ length of service, 30 per cent of them would disagree about trying to improve the relationship with the subpostmasters. So significantly lower levels of disagreement there, with that one from the 51 per cent, whereas those with six years’ plus service are more likely than the 51 per cent to disagree. They would be 55 per cent in disagreement about improving the relationship.
Mr Blake: Thank you. Finally, in terms of the current subpostmaster survey, there were a series of questions about being a subpostmaster now. If we could turn to figure 29, what do we see there?
Gavin Ellison: So on this one, the question being “How satisfied or dissatisfied are you in your role as a subpostmaster”, now, 31 per cent were satisfied and 48 per cent dissatisfied. There’s much higher levels of dissatisfaction among men than women. That’s an interesting difference there. 53 per cent of men are dissatisfied, compared to 43 per cent of women.
Mr Blake: Thank you. You have also drilled down into satisfaction and dissatisfaction by years of service, that’s figure 30. Can you assist us with that, please?
Gavin Ellison: Yes. So this shows the split between satisfied and dissatisfied with their current role and, for those who have been most recently appointed, up to the point of five years, more are satisfied than are dissatisfied with their role, but it’s after that five-year point that those who have been a subpostmaster for longer tended to be dissatisfied rather than satisfied with their role.
Mr Blake: Thank you. If we finally look at figure 31 – sorry, there are two more.
Figure 31 looks at, “To what extent do you feel valued or undervalued by Post Office Limited?” A much higher number in terms of the red: 72 per cent net undervalued; only 14 per cent net valued.
Gavin Ellison: Yes, and, again, that difference by length of service, so those who have served for less than two years, their undervalued percentage would be 50 per cent; those with 20 plus years’ service would be 76 per cent.
Mr Blake: That 76 per cent would be significantly more undervalued or feeling undervalued.
Gavin Ellison: Feeling undervalued, yes. So the percentages here are, yes, more negative than the general satisfaction with the role.
Mr Blake: If we look at this chart in front of us, there is a considerable proportion that actually are in the very extreme category, the very undervalued, as opposed to the fairly undervalued?
Gavin Ellison: That’s right, yes.
Mr Blake: Very finally, for the subpostmaster survey, we have figure 32. Can you assist us with that, please?
Gavin Ellison: Yes, so this one placed four aspects of perceptions of the Post Office Limited, the learning lessons from the past was the one with the highest level of agreement, but still just 26 per cent compared to 55 per cent who disagreed; being a good place to work, the figure was slightly lower; being considered to be trustworthy, just 17 per cent felt that, compared to 65 per cent who disagreed; and, in terms of their perceptions of whether it is professionally managed, 15 per cent compared to 68 per cent.
Some of those big differences, again, in terms of length of service, though. So, to give one example of that, being considered trustworthy, for those who have served for less than two years, 38 per cent would agree that it was trustworthy; but still 45 per cent would have said – would have disagreed with being trustworthy.
Mr Blake: So generally slightly more positive from those who had served for less time, or at the very bottom category of time, two years or less?
Gavin Ellison: That’s correct.
Mr Blake: But still net dissatisfied or net –
Gavin Ellison: Yes, the one that was probably most positive among that newer group was it being considered as being a good place to work. So an example there would be 47 per cent of those with less than two years’ service agreed that it’s a good place to work, compared to 31 per cent who disagreed with that.
Mr Blake: Thank you. In terms of headline from the figure that we currently see on screen, the bottom one seems to be the smallest in terms of agreement and largest in terms of net disagreement, and that is that the Post Office is professionally managed?
Gavin Ellison: Yes, that’s right.
Mr Blake: Thank you.
Page 43 of your report, and over the page, and over the page again, you’ve briefly summed up some open answers or you’ve quoted from some open answers to various questions. Are you able to assist us with any themes that emerged there?
Gavin Ellison: Yes. So, at the end of the survey, we wanted to provide everyone who had taken part with a chance to say whatever they wanted to say, to talk about things that hadn’t been discussed previously, and we have done some, a simple sort of thematic analysis of those comments that were made.
The main things that we would point out were feelings of being undervalued, underrepresented, issues with – current issues with the system and insufficient training, possibly a lack of support and transparency from senior leaders, as well. Many also mentioned a feeling that the reason they felt undervalued was often because they were simply not being paid enough for the work they were doing and the hours that they were putting in, and that’s a lack of feeling valued and a lack of recognition, and so we have given, you’ll see within the report, some indicative comments that express those key themes that continue to be stated.
Mr Blake: Thank you very much. We’re going to now move on to the Horizon Shortfall Scheme survey. It might be an appropriate moment to take our first morning break.
Sir Wyn Williams: Yes, by all means.
Mr Blake: Thank you.
Sir Wyn Williams: What time shall we resume?
Mr Blake: 11.11.
Sir Wyn Williams: Right.
(11.01 am)
(A short break)
(11.13 am)
Mr Blake: Thank you.
Moving on to the Horizon Shortfall Scheme applicant survey. We have already discussed that you received 1,483 responses. You begin at page 46 of your substantive report, and there you say that there are similar numbers to those who received compensation to those who the process had not yet concluded; is that correct?
Gavin Ellison: That’s right, yes, roughly the same proportion had had the process concluded as to those who were still going in the process.
Mr Blake: If we look at page 47, there’s just one point I’d like to ask you about and it’s the second paragraph, final sentence. It says:
“70% of those who have applied to the scheme but said it had not yet concluded had applied recently post October 2022.”
So are we to understand by that that that’s looking at only approximately half of the respondents of this survey because half had already received compensation, and that, of that half, 70 per cent had applied after October 2022?
Gavin Ellison: That’s right, yes.
Mr Blake: Thank you. Can we bring back onto the screen the various figures in EXPG0000008 and we’re going to start on page 33. Figure 33 identifies where applicants had heard about the Historic Shortfall Scheme. We see there most commonly receiving a letter from Post Office Limited or from Herbert Smith Freehills.
Gavin Ellison: That’s right, yes. Again, a multiple choice list.
Mr Blake: So there may be some repetition?
Gavin Ellison: Yes.
Mr Blake: Thank you. Figure 34, please, so the next chart. This looked at:
“Which, if any, of the following do you remember receiving after making the application?”
The most significant number there, 76 per cent, recalled receiving an acknowledgement of their application; but far fewer recalled receiving information about how it would proceed, 29 per cent; or next steps, again, 29 per cent; smaller still for a copy of the terms of reference, et cetera.
Gavin Ellison: That’s right. So, again, a multiple choice question, and, yes, the three there, the information about being processed, about how it would be processed, the next steps and terms of reference were very similar responded to.
Mr Blake: Thank you. Turning to figure 35, please, this addresses the overall perceptions applying to the scheme and we see there just under half, 47 per cent, found it hard to understand the scheme and, in terms of completing the paperwork, there was 57 per cent net hard response. Much smaller numbers in terms of those respondents who found understanding the scheme or completing the paperwork to be very easy or quite easy.
Gavin Ellison: Er –
Mr Blake: Certainly very easy, sorry.
Gavin Ellison: That’s right, yes.
Mr Blake: In both of these, we see a fairly significant percentage in the middle?
Gavin Ellison: Yes. That’s correct.
Mr Blake: Moving on to the value of the claims, at page 49 of your report, you say that 39 per cent valued their own claim at less than £20,000; 14 per cent valued their claim between £20,000 and £60,000. So, adding those two together, is it right to say that a majority valued their claim at £60,000 or less?
Gavin Ellison: Yes, that’s right.
Mr Blake: Only 16 per cent valued their claim at more than £100,000?
Gavin Ellison: That’s right.
Mr Blake: The next figure, you’re going to have to help me a great deal with, that’s figure 36. Can you assist us with some broad themes from –
Gavin Ellison: Yes. So this one, we were interested in the value of their own claim, as you’ve just been – as you’ve just mentioned, and how that contrasted with the value from the Post Office Limited in response to that claim, and so we charted one against the other. So –
Mr Blake: What do we see at the top and what do we see down the side?
Gavin Ellison: Yes, so the columns are the claimant value, so the value that the claimant had placed on it, and the rows are the value that the Post Office has placed upon it. So in 73 per cent of cases, where the claimant value was less than £20,000, that was in complete agreement with the Post Office valuation. So that’s the highest percentage.
Mr Blake: That’s in bold there, in the top left –
Gavin Ellison: Yes, that’s in bold in the top left-hand corner and, if you going a kind of diagonal downwards from that top left-hand corner to the bottom right hand corner, then you can see where the claim values matched. So the 37, the 12, the 9, and then the 17. So the matching of claimant and Post Office value – the percentage where they matched fell but then it rose again for the very highest claim levels.
In the bottom right-hand corner there’s a summation of that. So, for those who had a claim of £100,000 or less, 71 per cent of those were matched by the Post Office valuation but, for those who had a claim of more than 100,000, there’s 26 per cent of those had a match with what the Post Office believed the valuation would be.
Mr Blake: So is it right to say that, at the lowest end, so the less than 20,000, it was more likely that applicants would receive the same valuation from the Post Office up to a certain point, at which point the figures change again?
Gavin Ellison: That’s right, yes.
Mr Blake: That point is, what, £100,000?
Gavin Ellison: Yes.
Mr Blake: So in between the £20,000 and the £100,000, it was perhaps, to some extent, less likely that the Post Office would agree with your valuation when –
Gavin Ellison: That’s right.
Mr Blake: – compared to less than or more than?
Gavin Ellison: Yes, that’s right, although, I mean, those who had the valuation – their own valuation of 200,000 or more, although there was a higher match than the middle valuations, it still was only 17 per cent.
Mr Blake: Thank you. Could we –
Sir Wyn Williams: Sorry, I want to make sure I understand what this is saying. If we just take the less than 20,000, first of all, all right. So am I right in thinking that if the postmaster sought £15,000, in 73 per cent of cases of the Post Office also said £15,000.
Gavin Ellison: That’s correct.
Sir Wyn Williams: But it doesn’t mean that, in 27 per cent of cases, the Post Office said nothing. They may have said £11,000 or £12,000. That’s what we’re talking about, is it?
Gavin Ellison: No, in terms of the – there are brackets there.
Sir Wyn Williams: Yes.
Gavin Ellison: So, in some cases, the Post Office valuation was higher than the –
Sir Wyn Williams: It could be higher as well. Right. Fine. So does that apply throughout? So when we take 100,000 to 200,000, say, again, in 12 per cent of cases, if the subpostmaster said 150,000, the Post Office agreed, yes?
Gavin Ellison: (The Witness nodded)
Sir Wyn Williams: The drips have come back, by the way.
You don’t understand that, but I occasionally get dripped on!
So is that right: that in 12 per cent of cases, they would say agree at 150,000?
Gavin Ellison: Um –
Sir Wyn Williams: I’m just taking 150 as an arbitrary figure now. If the postmaster said 150.
Gavin Ellison: Yes, so if the claimant value was there in that bracket between 100 and 200, then there was a matching valuation of also between –
Sir Wyn Williams: Sure –
Gavin Ellison: So it would have been 9 per cent of cases but you can see, above the 9 per cent there, it then became more common for the Post Office valuation to be lower than the claimant valuation.
Sir Wyn Williams: Sure, yes.
Gavin Ellison: We have 21 per cent above that, we have 25 per cent above that.
Sir Wyn Williams: Okay.
Mr Blake: Moving, please, to figure 37. The survey then looked at elements of the claim that were included. 78 per cent, so a very high proportion, included a claim for compensation for a Horizon discrepancy, and then it moves quite considerably down, as you go down. The second most significant was distress and inconvenience. A third is loss of earnings, and then much smaller figures for those other matters, such as personal injury.
Gavin Ellison: Yes, again a multiple choice question.
Mr Blake: Thank you. So they could tick all of those if they wanted to?
Gavin Ellison: Yes, they could have done.
Mr Blake: Moving now to legal advice. Can we please look at figure 38, and we see there the question at the bottom:
“At any point during the Scheme, did Post Office Limited …?”
Then we have the answers there. Only 33 per cent reported having been informed of their right to obtain legal advice; is that correct?
Gavin Ellison: That’s right yes.
Mr Blake: An even lower percentage, only 10 per cent, reported having been provided with information about how they could contact a legal representative?
Gavin Ellison: That’s right.
Mr Blake: Page 52 of your report, the final paragraph, it’s noted that only 12 per cent actually received legal advice during the application process?
Gavin Ellison: Yes. That’s right.
Mr Blake: That’s the application process, and we’ll look in terms of legal advice in respect of the actual offer.
Gavin Ellison: Yes, the questionnaire asked at number of different points in this journey, if you like, about whether legal advice was obtained at different points.
Mr Blake: Thank you. You were asked by a Core Participant a follow-up question and, we don’t need to turn it up, but if you could look at your addendum report, on page 3 of that report, it’s the first question on page 3, or first two questions on page 3. Can you assist us with that, please?
Gavin Ellison: Yes. So we were asked whether it was possible to differentiate the outcomes for those who were legally represented and unrepresented. Now, we have noted that not that many were – said that they were legally represented, which does limit the analysis somewhat.
In a specific question, we were asked if the data was sufficient to identify any differentiation in the value of the claim that was pursued, based upon whether there was legal advice or not. So we responded by writing that those who did not seek legal advice at the application stage were more likely to value their claim at less than 20,000. That’s 45 per cent of whom versus 9 per cent who did not. But there was not a significant difference for those 20,000 and 200,000.
About one in five of those who sought legal advice valued their claim at £200,000 or more, and that was compared to 10 per cent of those who did not seek legal advice. But it’s worth noting that those seeking legal advice were more likely to say they didn’t know or couldn’t remember the value of their claim and they were more likely to select “Prefer not to say” to that question.
Mr Blake: Thank you. Can we turn, please, to figure 39 and this addresses the sufficiency of legal support for legal advice during the application process. Ah, that one doesn’t have a value in there.
Could we please bring up on screen EXPG0000007. It’s page 53. Thank you. That’s figure 39. We see there a lot of red. 63 per cent reported as not having received financial support during the application process; is that correct?
Gavin Ellison: Yes, that’s right. So 11 per cent in this chart said that they received some financial support that they considered to be sufficient, and 7 per cent that they had some financial support, but it was not considered to be sufficient by them.
Mr Blake: Thank you. On the same page, you’ve addressed some open-ended answers. Are you able to briefly summarise those?
Gavin Ellison: Yes. So we were asked about receiving support, receiving both financial support and legal support, and why it was not – why they had not done that. The most commonly mentioned responses were a belief in financial constraints, so they didn’t believe that they could afford to do so, a lack of awareness around that, and some trust in the system. Some mentioned that they felt that they didn’t have sufficient evidence or documentation to therefore engage legal support as well.
Mr Blake: Thank you. If we turn back to EXPG0000008, and turn to figure 40. If we look at the bottom there, it says:
“How satisfied or dissatisfied are you with the legal advice you received?”
Overall, high levels of net satisfaction with the legal advice received, 65 per cent, against a net dissatisfaction of 7 per cent.
Gavin Ellison: Yes, that’s right but, again, remembering not a huge number of respondents actually received any legal advice. So that is based on 176 replies.
Mr Blake: If we turn over the page, please, to figure 41, that addresses financial support for legal advice when an offer was received. So this only applied to those who had received an offer?
Gavin Ellison: Yes, so that’s a very small group of 65 responses.
Mr Blake: Ah, this one doesn’t have a value either. Let’s work off the actual report. So let’s turn to EXPG0000007 and figure 41, that’s page 55. Thank you.
So we see there 55 per cent say, yes, they received financial support for legal advice: 32 per cent considered it to be sufficient; 23 per cent said it wasn’t sufficient?
Gavin Ellison: That’s right, yes, and 29 per cent reported no financial support at that point.
Mr Blake: So compared to the earlier figures that we saw in terms of those receiving financial support for legal advice during the application process, there’s a much higher proportion who responded that they had received financial support?
Gavin Ellison: Yes.
Mr Blake: At page 55, again, you have some open-ended responses. Can you very briefly summarise those?
Gavin Ellison: Yes, so this is at a different stage in the process but, yes, the main reasons for not doing so at this point in the process, the key theme is around cost again, but also that, having got to that point it the most felt to be quite close to the end and that many just wanted it to end at that stage and not to carry on.
Mr Blake: Thank you. Can we turn now to figure 42, so page 57. The survey then goes on to look at various payments and types of payments. You address on that page interim payments, those were payments that were introduced after August 2022 in respect of 80 per cent of a claim. Perhaps if you could turn to the top of page 57, we don’t need to scroll up, but can you just assist us with the statistics there?
Gavin Ellison: Yes. So this needs to – the introduction to assist with the charts. So the vast majority is 82 per cent of those surveyed reported that they had not made an application for an interim payment, and there were many that were not aware that such an application was available for them. We had – 14 per cent of those surveyed had applied for the interim payment.
Mr Blake: 34 per cent weren’t aware that such an application was available; is that correct?
Gavin Ellison: That’s right, yes. We also had a question about intention, which we’ll come onto –
Mr Blake: That’s just these charts that are shown now. Can you assist us with what these show, please?
Gavin Ellison: Yes, so this is intention to make an application and the first one being for the fixed sum payment, and the second one being for the interim payment as part of the claim, and the majority, in both cases, don’t have an intention to do so.
Mr Blake: Slightly more red on the interim payments than the fixed sum payments?
Gavin Ellison: Yes, that’s right: 39 compared to 23.
Mr Blake: Again, we don’t need to turn it up on to screen but, if you could look at your addendum report, please, there was a follow-up question that was related to this issue asked by a Core Participant, and that’s the further question.
Gavin Ellison: Yes, so this question is whether the data is sufficient to identify whether those in receipt of legal advice were more or less likely to have made an application for an interim payment. We found there was no differences in the proportions saying they had done so, based on the legal advice. We pointed out further, those who sought legal advice at this stage were more likely than those who did not to say that they intended to apply.
So what I’ve just talked about was whether they had applied in the past, that was the same, but the intention was different, based on whether there was legal advice or not. So the intention differed by – in the case of the fixed sum payments, the intention differed by 51 per cent of those with legal advice versus 37 per cent and, in terms of the interim payment, it was 45 per cent compared to 18 per cent.
Mr Blake: So do we summarise that: that those who had sought legal advice were more likely to intend to apply for a fixed sum payment or an interim payment, than those who hadn’t sought legal advice?
Gavin Ellison: That’s correct, yes.
Mr Blake: Figure 43 then, please, over the page to page 58. It looks at satisfaction with those two options. Quite small numbers being analysed there because those were only based on those who intended to make the application; is that correct, or had already done so, in fact?
Gavin Ellison: Yes, that’s right, yes.
Mr Blake: Can you assist us with those figures there?
Gavin Ellison: Yes. So with the interim payment process, the level of satisfaction being 14 per cent, compared to those who were – 48 per cent, who were dissatisfied. The fixed sum payment option, the level of satisfaction there was slightly higher: more satisfied than dissatisfied. There was some evidence as well of differences in terms of the more recent claimants, where the satisfaction levels were likely to be higher than those who had claimed in the past.
Mr Blake: Higher for both or higher for just one of them?
Gavin Ellison: Just picking out the fixed sum payment option.
Mr Blake: Thank you. So that fixed sum payment option, there is a greater number – percentage in the purple than interim payment, and a smaller in the red?
Gavin Ellison: Yes.
Mr Blake: Moving on to case assessors. That’s figure 44, over the page, please. Case Assessors provide an initial valuation and, if we look at that figure, figure 44, it assesses the proportion who were aware of the role and more people were not aware of the role of the Case Assessor than were aware; is that correct?
Gavin Ellison: Yes. That’s right. We’d found that 78 per cent had not had – reported not having received contact from a Case Assessor, and 10 per cent had received some contact in the past, and then that chart moves on to awareness of what the role of the Case Assessor was/is.
Mr Blake: If we look at figure 45 over the page that addresses satisfaction with the service received from a Case Assessor. That assesses quite a small number, only 151 respondents, because those were – if we scroll down slightly – those who had been contacted by a Case Assessor?
Gavin Ellison: Yes, so that relates to the 10 per cent who reported having been contacted, and then they were asked some follow-up questions with some levels of satisfaction with three aspects of the Case Assessors Service.
Mr Blake: If we look there, there was, in particular, a greater number dissatisfied with the time it took for a Case Assessor to assess their claim, compared to only 17 per cent who were net satisfied?
Gavin Ellison: Yes, the time taken was the element of least satisfaction.
Mr Blake: Moving on to the Independent Advisory Panel, that’s the panel that’s tasked with assessing and recommending a fair outcome for applicants, could we please look at figure 46. That’s over the page, thank you, if we scroll down slightly. It seems as though there’s slightly more people who were unaware of the Independent Advisory Panel than were aware; is that correct?
Gavin Ellison: Yes, that’s right, in comparison, 27 per cent being aware of it versus 32 per cent who were unaware.
Mr Blake: Over the page, please, to figure 47. This then addresses the satisfaction with the amount of information provided by the Panel and the length of time to consider the claim. This seems relatively similar to the responses to the Case Assessor satisfaction levels: more red than purple?
Gavin Ellison: That’s right, and this is based on only those who knew about the involvement of the Independent Appeals Panel (sic).
Mr Blake: The one that stands out slightly more is the bottom one, regarding the information provided to the individual about the panel process, with a net dissatisfaction of 52 per cent, set against a net satisfaction of 20 per cent?
Gavin Ellison: That’s right.
Mr Blake: We now turn to the offer from the Historic Shortfall Scheme. Can we please turn over to figure 48. There is a lot of information in your report at the top of page 63 that isn’t addressed by that particular figure. Can you assist us with those statistics, please?
Gavin Ellison: Yes, this was context – contextual questions. So about half of those surveyed had been informed of the outcome that they had received, but around about half hadn’t. So rough split between those who knew and those who didn’t yet know about it, and there is some information there about the likelihood of people who applied at different points in time, about whether they had reached the end, which I think would just reflect what you would logically expect.
Mr Blake: So the lowest number, 19 per cent had applied post October 2022?
Gavin Ellison: That’s right, yes, they had not yet reached the end of the process.
Mr Blake: I think you also saw some differences in age; is that correct?
Gavin Ellison: Yes, so those older claimants were less likely to have applied recently. They were obviously then, therefore, more likely to have had an outcome by this point than younger claimants, who had not reached the end of the process.
Mr Blake: So a higher percentage reported reaching an outcome who were aged 60 and above?
Gavin Ellison: Yes, that’s right.
Mr Blake: If we look at figure 48, that addresses the satisfaction with the amount of information provided. Can you assist us with that, please?
Gavin Ellison: Yes. So this chart shows only those who had had an outcome, and they were asked about three elements of the outcome that had been received, so the time it had taken, the amount and the amount of information provided about how the outcome was determined.
Mr Blake: There’s a lot of red there, in particular, in this particular chart, a large number in the “very dissatisfied” category; is that correct?
Gavin Ellison: Yes, so the one with the highest degree of very dissatisfied was the offer amount, and then relatively similar in terms of the time that it was taken to get to an outcome, and the amount of information provided about how the outcome was determined.
Mr Blake: Thank you. We don’t need to turn to it but, if you could look at page 64, you provide some further information. You drill down a little bit further into those figures; can you assist us with some themes there?
Gavin Ellison: Yes. So the subgroup analysis of these elements of the outcome, they showed some particular differences in terms of ethnicity. So those from an ethnic minority background were more likely to say that they were dissatisfied with the offer amount, that is a comparison between 77 per cent and 53 per cent, and there was a suggestion of higher levels of dissatisfaction among a younger age groups compared to older subpostmasters – sorry, claimants.
There was also higher levels of dissatisfaction among ethnic minority applicants in terms of the time it took and the amount of information that was provided. Some quite large differences there, for example in the time it took to reach an outcome, 71 per cent of ethnic minority applicants were dissatisfied, compared to 46 per cent of white respondents.
Mr Blake: I think you also say 92 per cent of those with an offer accepted it either in full or in part?
Gavin Ellison: Yes. That’s right and only 8 per cent said that they rejected the offer.
Mr Blake: Those aged 60 plus were more likely to have accepted –
Gavin Ellison: Yeah.
Mr Blake: – as those in Scotland when compared to England.
Gavin Ellison: Yes, that’s right, yeah.
Mr Blake: Can we please turn – in fact, we don’t need to bring it up on screen, but if you could look at your addendum report on page 3, there’s a final question at the bottom of that page that was posed by a Core Participant. Can you assist us with that, please?
Gavin Ellison: Yes, so this, again, asked us to look at those who had legal advice and those who didn’t. Was there any difference in the proportion of those who were dissatisfied with the outcome, based on whether they had legal advice or not? So those who received legal advice at any stage of the process, in order to create this, we added them up because respondents were asked at different stages whether they had received legal advice.
So we added them all together to create a group of people who had received legal advice and at whatever stage it was. Those who had received legal advice were more likely than those who did not to be dissatisfied, so they were more likely to be dissatisfied with the offer amount, 77 per cent versus 56 per cent. They were more likely to be dissatisfied with the time it took, 71 per cent versus 50 per cent. But, again, as we pointed out earlier, this is a case of – possibly this a correlation between those factors. We can’t say that one was caused by the other, necessarily.
Mr Blake: Thank you. If we could please turn back to EXPG0000007, page 65, and we have figure 49. It looks at the reasons why applicants accepted the offer in part or in full; what do we see there?
Gavin Ellison: Again a multiple choice question, we’re looking at only those people who had accepted the offer in part or in full, and we see there that the most common reason that they gave was that they wanted the process to finish, over 51 per cent say that. There were some interesting differences on the basis of age group with this, so those who had said that their financial circumstances led them to want the process to finish, it was more likely, you know – those in a younger age group said that it was more likely that they wanted the process to end because of financial circumstances, so that was 48 per cent versus 29.
Those who were satisfied with the offer, as we just heard on the previous question, the older age groups were more likely to be satisfied with the offer than the younger age groups.
Mr Blake: Overall, in terms of satisfaction, though, it’s only 15 per cent who reported being satisfied with the offer?
Gavin Ellison: That’s right.
Mr Blake: Thank you. Over the page, we don’t need to turn to it but, if you could please have a look at page 66, you address briefly there dispute resolution. I think it only applies to very small numbers?
Gavin Ellison: Yes, only a very small number of people went down that path. So, in the report, we detailed that there were only 30 observations of those who were surveyed in dispute resolution; 25 of them said that their claim did not go to the small claims court or arbitration. More were dissatisfied than satisfied with the process: 16 versus 4 for that.
Mr Blake: Thank you. Very finally, there is a chart, figure 50, over the page, with overall perceptions of the Historic Shortfall Scheme. Overall dissatisfied was 49% versus 12 who were satisfied. Can you assist us with what we see here?
Gavin Ellison: Yes, so we have six elements of the overall process and asked about those as a group. One of those patterns that keeps coming up in this data is that difference between younger and older age groups, so those in a younger age group were the most likely group to be dissatisfied in these element. Those older claimants were less likely to be dissatisfied. Satisfaction levels were higher among those who had received compensation, which I suspect is a logical conclusion. So their overall satisfaction was 19 per cent compared to 5 per cent of those who had not yet received an outcome but, still, 19 per cent being satisfied isn’t especially high, of course.
Then, yeah, we have six elements of the process as a whole: the amount of compensation; the time that it took; having enough information; being easy to understand; being fully informed throughout the process.
Mr Blake: Again, we have considerable amounts of red there, not very much purple.
Gavin Ellison: That’s right, yes, and some, again, interesting differences in terms of ethnicity that are pointed out in the report. So the one to draw attention to perhaps around the scheme being easy to understand and navigate, we have 46 per cent of white respondents being dissatisfied with that, compared to 57 per cent of those from an ethnic minority background.
Mr Blake: Thank you very much. Then, finally, over the page and over the page again, you’ve set out some open-ended answers. Can you assist us with any trends that you saw there?
Gavin Ellison: Yes, so, again, similarly to survey 1, we wanted to provide everyone with an opportunity to say anything else they wanted to report back. We did have a couple of different boxes, though, we tried to have a box which was encouraging if there was anything constructive or positive that they had to said about the scheme, to prompt around that. That was interesting. It was revealing because some then wrote that they appreciated the scheme, largely because it’s acknowledged that the Post Office was at fault, that the scheme was bringing issues to light and the scheme was, of course, a pathway to receiving some compensation.
So there were some positive elements there. Some people found the scheme process easier to navigate than others, and they wrote about their experiences there, and there was that connection I mentioned earlier with more recent applicants finding it slightly easier.
But then later boxes, the more negativity came through about the scheme. So later opportunities to make some comments. The thematic analysis of that, there was generally felt to be a lack of clarity, the time taken and inadequacy of the compensation amounts were themes that came through.
So themes of speed and efficiency, communication transparency, fairness in compensation, and, again, similarly to survey number 1, we’ve provided examples of comments that were made that fit those themes.
Mr Blake: Thank you very much, Mr Ellison. I don’t have any questions.
I’ll just check if the Chair has any questions.
Sir Wyn Williams: No thank you, no.
Mr Blake: Thank you very much.
Sir Wyn Williams: Mr Ellison, I’m very grateful for all the work you’ve done and I’m also grateful that you’ve come here today to give oral evidence. Thank you.
Mr Blake: Sir, if we take our second morning break now –
Sir Wyn Williams: Yes.
Mr Blake: – and if we come back at 12.10. Thank you.
Sir Wyn Williams: Fine.
(11.52 am)
(A short break)
(12.10 pm)
Sir Wyn Williams: Yes, Mr Blake.
Mr Blake: Yes, sir, this afternoon, and possibly into tomorrow morning, we’re going to hear from Mr Ismail.
Sir Wyn Williams: Yes.
Sarfaraz Ismail
SARFARAZ GULAM ISMAIL (sworn).
Questioned by Mr Blake
Mr Blake: Thank you can you give your full name, please?
Sarfaraz Ismail: Sarfaraz Gulam Ismail.
Mr Blake: Thank you. Mr Ismail, you should have in front of you a witness statement dated 4 September this year; is that correct?
Sarfaraz Ismail: That’s correct.
Mr Blake: Can I ask you please to turn to the final substantive page, which is page 144; can you confirm that that is your signature?
Sarfaraz Ismail: Yes.
Mr Blake: Can you confirm that that statement is true to the best of your knowledge and belief?
Sarfaraz Ismail: Yes, that’s correct.
Mr Blake: Thank you. By way of background, you are a current subpostmaster; is that right?
Sarfaraz Ismail: That’s correct.
Mr Blake: Your first branch was in Preston in January 2010?
Sarfaraz Ismail: Yes, that’s correct.
Mr Blake: I think you’ve said in your witness statement that you worked on the counters using Horizon for about six days a week, originally?
Sarfaraz Ismail: Yes.
Mr Blake: I think your business has grown and you currently oversee seven branches and a banking hub?
Sarfaraz Ismail: Yes, that’s correct.
Mr Blake: I think you still work on the counter in branches on occasion?
Sarfaraz Ismail: Yes.
Mr Blake: You’re also a director of number of different companies, covering not just the Post Office but also property and retail businesses; is that right?
Sarfaraz Ismail: Yes.
Mr Blake: Relevant for today’s purpose, you were appointed a Non-Executive Director of Post Office Limited on 3 June 2021; is that right?
Sarfaraz Ismail: That’s correct.
Mr Blake: Sometimes referred to as a Subpostmaster Non-Executive Director, or SPM NED?
Sarfaraz Ismail: Correct.
Mr Blake: There are two subpostmaster Non-Executive Directors, the other is Elliot Jacobs, who we’re going to be hearing from tomorrow.
Sarfaraz Ismail: Correct.
Mr Blake: One issue that we have to deal with is that you are subject to a current investigation by the Post Office, which is not related to Horizon or discrepancies; is that right?
Sarfaraz Ismail: Correct.
Mr Blake: We won’t go into detail but that means that, for the time, being you’ve stepped back from the Board whilst an investigation is taking place?
Sarfaraz Ismail: Correct.
Mr Blake: Thank you. I’m going to start with your appointment as a Subpostmaster Non-Executive Director. You describe in your witness statement standing for election and I would just like you to take us briefly through that process. To start with, can any subpostmaster stand for election?
Sarfaraz Ismail: Yes. So, initially, a criteria was set by the Post Office and applications were invited and, once postmasters who met the criteria submitted their applications, the Post Office then narrowed down who fit the bill. Then once that was – then it went to an organisation to Green Park, who narrowed it down further, and there was interviews taking place with a panel, an independent panel. From 12, they whittled down to six and, once it got to the point where there was six, it was producing material for election purposes from your fellow postmasters, who would then vote for whom they thought would represent them the best within the organisation.
So, throughout that election process, I gained the most number of votes and Elliot Jacobs got the second number of votes, and us two were both appointed to the Post Office Board.
Mr Blake: Thank you. Is it all current subpostmasters who are allowed to vote?
Sarfaraz Ismail: Yes.
Mr Blake: Your appointments, were they both on the same date, 3 June 2021?
Sarfaraz Ismail: Yes.
Mr Blake: How long is the term of appointment?
Sarfaraz Ismail: It was three years, initially, but that has been extended recently due to issues with the existing recruitment of postmaster NEDs.
Mr Blake: What are those issues very briefly?
Sarfaraz Ismail: The timescale wasn’t met, unfortunately. So just to give the business some cover with postmasters on the Board, the business thought it would be worthwhile extending myself and Mr Jacobs.
Mr Blake: Thank you. How many days a month do you spend on your Non-Executive Director work?
Sarfaraz Ismail: On average, ten days a work, and the advertisement, initially, was for two days a month. It’s very intense.
Mr Blake: In your view, is that extra time commitment as a result of what’s currently going on in the Post Office in terms of the Inquiry and in terms of redress, or is it, in your view, more time consuming than two days, in any event?
Sarfaraz Ismail: I – from my observations being on the Board, I feel it’s probably a bit of both. This organisation is so bureaucratic to get anything done, it just takes a very long time. So that’s part of the problem but, also, with how much going on, there’s so many fires at the moment within this organisation that need putting out and, in order to deal with that, obviously time is needed, hence why it does take a lot longer.
Mr Blake: Thank you. I’m going to ask you some introductory questions about the Board but we’re going to drill down into a lot more detail in due course.
In general, do you consider that the role of Subpostmaster Non-Executive Director was something that was welcomed by the board when you joined?
Sarfaraz Ismail: The Board – the NEDs on the Board were welcoming and were hospitable. However, the wider Executive made it difficult and, within my witness statement, I have clearly provided evidence of situations when we didn’t feel as welcomed by the wider Executive.
Mr Blake: Was that specific individuals or more broadly the executive?
Sarfaraz Ismail: More broadly, from what I observed. There was times – so for example, in February ‘24, when I was told by an individual on the wider Executive that “We don’t want to particularly deal with you and Mr Jacobs because we feel really uncomfortable with what’s been happening, you’ve been going to the press”. That was difficult to hear but that – those were the conversations that were happening. What was also disappointing was when I had conversations from January – throughout January ‘23 up to March ‘23 with the former Chief People Officer, Jane Davies, and she categorically said to me how the CEO was not happy with the postmasters being on the Board because we were too awkward, too challenging and that he wanted that to be reversed.
Mr Blake: That was Mr Read?
Sarfaraz Ismail: Yeah, Mr Read.
Mr Blake: At paragraph 49 of your witness statement, you talk about the balance of executives to non-executives on the Board and you highlight that there were two Executive members and eight Non-Executive Directors. What in your view is the overall balance of the Board in –
Sarfaraz Ismail: Can I have that on the screen, sorry?
Mr Blake: Absolutely. So if we could bring up onto screen WITN11170100. It’s page 18. It’s in no way a memory test about your witness statement. The point being made there is that there are two executive members, and there are eight directors, being Non-Executive Directors. Can you assist us with your view as to the balance between those two?
Sarfaraz Ismail: I feel it’s an imbalance, and the reason I say that is, firstly, the eight Non-Executive Directors, they are not operationally savvy. They are not necessarily aware of what is happening in the business on a day-to-day basis, the headwinds postmasters are facing, they’re not necessarily understanding postmaster economics and, from my observations whilst being on the Board, the two Executive members who would produce information that would be disseminated to the Board was from the wider Executive’s lens.
So, on a number of occasions, when we would receive reports, myself and Mr Jacobs would provide criticism and maybe that’s why we were thought to be awkward.
We would give the document a sanity check in terms of what’s actually going on, on the front line. So, for me, the imbalance is quite clear and unfortunately decisions aren’t made through selected information that’s provided to the Board by the Executive that are on the Board.
Mr Blake: Thank you. One of the roles that you’ve given an example of is the Chief People Officer and you’ve suggested that it might be helpful to have the Chief People Officer on the wider Board. Can you assist us with why that might be?
Sarfaraz Ismail: Yes. I feel, as an organisation, culturally, we’ve got a long way to go. I heard Paula Vennells in her testimony say how she started cultural change or she tried in 2012. I don’t feel we’ve even got off the ground and, for me, if we want to own that, and fix that, surely the Chief People Officer should be a permanent fixture on the Board.
Mr Blake: Another issue you’ve highlighted, and we don’t need to turn it up, is you say the Board is required to authorise any spend over £5 million and that, in your view, the Board is seen as a cash machine; can you expand upon that briefly?
Sarfaraz Ismail: Yes, so any time any authorisation for any specific spend over 5 million is required, that comes to the Board and, again, the Board makes a decision based on information provided by the wider Executive. Now sometimes the decisions are correct and sometimes they are incorrect. But the business sees the Board in a way to get their authorisations done. Anything below 5 million, there’s very limited visibility for the Board.
Mr Blake: At paragraph 56 – again we don’t really need to turn it up – you’ve described the Board as “too deferential to the Executive”, and I think you’ve given an example in respect of recruitment and I think you’ve said that the Executive has overridden a decision of the Board, or something along those lines. Can you assist us with what you have explained there?
Sarfaraz Ismail: Yes, so there’s been occasions when Board members have been invited to conduct interviews for very senior roles, highly paid senior roles within the organisation, and the Board members who are part of the panel, this is their skillset, they know what they are looking for. And when the interviews have been conducted, the Board members made it very, very clear that it should be candidate A, out of A, B, C, D, for example. However, the wider Executive has then totally ignored that advice, providing no reasoning whatsoever, and then gone and recruited candidate B.
Mr Blake: Is that in respect of one particular role, several roles?
Sarfaraz Ismail: A few roles. That’s my observation while I have been there.
Mr Blake: Do any stand out in particular?
Sarfaraz Ismail: There was – on the Chief Retail Officer, that one stands out in particular. There was on the mail side, on that side, yeah.
Mr Blake: Thank you. Another issue in respect of the Board that you’ve raised is in respect of information sharing.
Sarfaraz Ismail: Mm-hm.
Mr Blake: That’s paragraph 84. You raise a concern that the Board isn’t given appropriate levels of information. If we start with the Board as a whole, rather than just the Subpostmaster Non-Executive Directors, what are your concerns about the level of information that the Board as a whole are provided with?
Sarfaraz Ismail: So we receive some Board packs with too much information, too much noise, we then receive other Board packs or other bits of information, where it’s not the right information, unfortunately, to make key decisions, and it’s resulted in some wrong decisions, unfortunately. And, again, that’s based on what the Executive has provided.
So to give you an example, we’ve got information in September ‘21 on a certain project – I’m not sure if I can mention the project name – but there was information provided to the Board where this subservience circled to lawyers that exists within this organisation and, from my time on the Board, this was the first time that was broken and that was because of myself and Mr Jacobs resisting, and that resistance, in, turn, resulted in the business saving £5 million. That was the first time and that was totally against the legal advice and Tim Parker, at the time, the Chair, supported what we were saying. That was one example.
Mr Blake: Are there particular parts within the business that you feel are not providing of the Board with sufficient information?
Sarfaraz Ismail: Yes, I feel procurement is particularly poor, legal is extremely poor, from a – on a commercial perspective. It depends who is dealing with which area from a commercial side because this business has got so many different avenues to it. It varies from who you’re getting, and the individual that’s dealing with the issue at that time, and their capabilities.
Mr Blake: That’s the Board as a whole.
Sarfaraz Ismail: Mm-hm.
Mr Blake: Now, looking at just the Subpostmaster Non-Executive Directors, is there a difference in the level of information that you were provided with?
Sarfaraz Ismail: 100 per cent.
Mr Blake: Can you assist us with some examples of that?
Sarfaraz Ismail: Yes. So, up until recently, we were not provided access to any of the other committee documents that we were not on. So, for myself, I was on the Nominations Committee. I only had access to Nominations Committee papers and the Board papers. For Elliot, he was on ARC, so he had – for Audit and Risk Committee and for the Board and for the Investment Committee.
There was times when, again, when I spoke to the previous Chair, Henry, and to Jane Davies, they particularly mentioned how the wider Executive ensured myself and Mr Jacobs were blocked out of meetings that involved talking about bonuses and salaries. We were actively excluded from their meetings.
Mr Blake: Was a reason ever given to you for that?
Sarfaraz Ismail: No.
Mr Blake: Who are you aware or who do you believe excluded you from those meetings?
Sarfaraz Ismail: The wider Executive.
Mr Blake: Anybody in particular?
Sarfaraz Ismail: There was – Henry mentioned Nick, Nick Read specifically mentioned to him he doesn’t want us involved in any kind of information regarding salaries and bonuses.
Mr Blake: On a separate topic, I think you’ve also mentioned in your evidence being provided with information such as exit interviews. Can you briefly tell us about that issue?
Sarfaraz Ismail: So, for me, as part of my Non-Executive Director role, and to keep on top of governance and understanding how this organisation can be better and has got to be better, I wanted to be cited on exit interviews on previous NEDs to hopefully not make the same mistakes, be a proactive learner. Unfortunately, the business didn’t provide me any access to that.
Mr Blake: Were any reasons given to you for that?
Sarfaraz Ismail: No.
Mr Blake: Today we’re going to be spending quite a lot of time on three particular topics, the first is known as the Past Roles Project, the second is known as Project Phoenix, and the third is known as Project Pineapple. I’m going to start with Project Phoenix and the Past Roles Project.
Can we please start by looking at POL00448308, please. This is the terms of reference for what is known as the Past Roles Project. I’m going to read to you briefly from this document. It says:
“Context
“After the Inquiry Compensation Hearing in December 2022, it became apparent that [the Post Office] had recruited into its Remediation Unite team (RU Team) employees who had previously worked for [Post Office] in the auditing, investigation, suspension or termination of postmasters connected to historic Horizon shortfall cases.”
Just pausing there, do you know why it was only after the Inquiry’s compensation hearing that that link seems to have been drawn between the two?
Sarfaraz Ismail: No.
Mr Blake: It says:
“This risked undermining of the integrity of, or the public or postmaster confidence in, the work being done by the [Remediation Unit]. It also puts employees ‘at risk’. The [Remediation Unit] took a ‘conflicts paper’ to the [Group Executive] on 7 July 2023 and a further paper … ‘past roles paper’ recommending work to identify [those employees within that unit who were] potentially problematic historical roles with a view to redeploying them and extending this thinking into the wider business.”
So the Past Roles Project, just to understand it correctly, is about identifying people from the Remediation Unit, who were working on issues such as compensation and redress, appeals against conviction, assisting the Inquiry and, if they worked in a role that, I think it says there, was problematic, a potentially problematic historical role, they would be redeployed within the business; is that right?
Sarfaraz Ismail: Yes.
Mr Blake: Yes. The aim there:
“The aim of this project is to:
“[First] Review the past roles conducted by colleagues currently employed within the [Remediation Unit] and the Inquiry teams, to identify any that could be (for want of a better word) potentially problematic …
“[Second] Identify where else in the business (other than [the Remediation Unit] and Inquiry) such roles might also pose a similar risk.
“[Third] Identify the employees who have those potentially problematic backgrounds and who are working in roles in which that creates an identified risk.
“[Fourth] Mitigate the risks, including by internal and external comms, provided employee with appropriate support … training and education, and exploring redeployment.”
If we scroll down, please, it sets out there the “Problematic past roles”:
“Roles that were involved in the auditing, investigation, suspension or termination of postmasters and [Post Office] employees.”
So there were some individuals who held roles in auditing, investigating and suspending or terminating postmasters, who were, at that point in time, employed within the Remediation Team; is that right?
Sarfaraz Ismail: Yes.
Mr Blake: If we scroll down, please, over the page, “The risks that could emerge”, it says:
“For example: (i) Criticism of employees (say on social media); (ii) Undermining the integrity of the work being performed … (iii) Undermining postmaster of the public sector confidence in the work being performed by [Post Office Limited], or the specific team.”
If that is in order of priority, do you agree with that prioritisation, that the first risk is criticism of employees, say on social media?
Sarfaraz Ismail: No.
Mr Blake: What do you see as the most significant risk of those individuals being employed within the Remediation Unit?
Sarfaraz Ismail: It’s morally wrong.
Mr Blake: Why do you say that?
Sarfaraz Ismail: The number of conversations that postmasters have had with me and Mr Jacobs criticising how individuals are still in that unit, it’s incredible, and some of the examples are probably not for this forum, but those are some of the examples that have been given of things – criminals have done in the past, not necessarily them giving their own compensation out. This is how postmasters are feeling and, for me, I don’t think the focus was right on this project and, to be clear, from my observations at the time, there was no particular appetite to deal with this issue.
The only point when some kind of urgency – it wasn’t even urgency – awareness occurred, was at the March ‘23 Board meeting. So myself and Mr Jacobs were encouraged by the business to attend the Inquiry and we did, and we saw Brian Trotter – we heard Brian Trotter give evidence and, for myself and Mr Jacobs, some of the evidence was uncomfortable and, the following day, I think we had a Board meeting, within a week or so we had a Board meeting, and that’s when we raised our concerns about Mr Trotter working in the Remediations Unit, and we specifically mentioned him because that’s why we came to the Inquiry.
And in that meeting, the General Counsel, Ben Foat, said he would look into it.
Mr Blake: Are you aware of what role Mr Trotter had within the Remediation Unit?
Sarfaraz Ismail: No, I wasn’t aware specifically of his role, at the time, once he was rehired. However, prior to that, his role as a Contracts Manager, yes, and conversations that I have had had with individuals in the business, probably earlier this year, regarding that specific scenario, and on past roles, was one of the reasons – and again, I’m not singling out Mr Trotter here at all – one of the reasons the organisation did remove quite a few individuals who were investigations Contracts Managers at the time, was because culturally they weren’t in the right place.
And what this specific person said to me in our private meeting was he was deeply disappointed once they were rehired because he thought he’d already dealt with this.
Mr Blake: Do you know who was responsible for the rehiring?
Sarfaraz Ismail: No.
Mr Blake: Can we please turn to POL00448615. We’re moving forward now to 17 January this year, and this is an update to the Group Executive. We see there the title “Past Roles Review”, and it says, in the first paragraph:
“[The Group Executive] is asked to note the update in respect of the ‘past roles’ work being undertaken in [the Remediation Unit] and similar work being rolled out across the business, since being approved by [the Group Executive] on 7 July 2023 and clarified on 8 November 2023 and 20 December 2023.”
So, looking at the timescales there, was that after the meeting that you described?
Sarfaraz Ismail: Yes, that’s correct. This was pressure that started to be applied by myself and Mr Jacobs every few months.
Mr Blake: So, from the summer of 2023, increasing as the year went on and into January 2024?
Sarfaraz Ismail: Yes.
Mr Blake: If we look at the bottom of this page, please, it then sets out what we know as Project Phoenix, or the difference between the Past Roles Project and Project Phoenix. It says:
“For the avoidance of doubt, this work is not concerned with dealing with any colleague in respect of whom wrongdoing has been alleged. This work is about the roles employees may have performed in the past and not about how they may have performed those roles. If there are specific allegations of wrongdoing made against a colleague, they should be (and in many cases are being) picked up by the People team elsewhere.”
Was that distinction between the Past Roles Review and what we know as Project Phoenix, was that clear to you, the difference between the two?
Sarfaraz Ismail: No. The point at which we got clarity was February/March this year, when a specific – there was an email from Owen Woodley which was very helpful, and there was a briefing from Karen McEwan, which basically outlined what Past Roles was and what Project Phoenix was and, prior to that, my discussions with any NEDs was, again, they were slightly confused and it was all part and parcel of the information that was provided to the wider Executive.
Mr Blake: Do you have a view as to whether having those two different workstreams is appropriate or not?
Sarfaraz Ismail: Yes, I think, for an investigation purpose, I feel it’s appropriate to split them, so we know which is in which category, yes.
Mr Blake: If we turn to page 7, it sets out the panel there and, on this particular document, it refers to “Postmaster NED”, and it has Mark Eldridge’s name there. Can you assist us with whom Mark Eldridge is?
Sarfaraz Ismail: So Mark Eldridge is the Postmaster Director, who’s recently been appointed, probably just about a year ago.
Mr Blake: So is he a subpostmaster?
Sarfaraz Ismail: He is a subpostmaster. I’m not sure if he’s got the relevant training, expertise, to be on the panel. But he is a subpostmaster.
Mr Blake: But he’s not a Subpostmaster Non-Executive Director, or he is?
Sarfaraz Ismail: No. I’m not sure why it says, “Postmaster NED” there, no.
Mr Blake: He is there:
“To provide a postmaster’s view to the panel to support the decisions made with regards to the past roles of each individual case and how they relate to the role that the colleague currently performs for the Post Office.”
Are you aware of Elliot Jacobs being lined up for that particular role.
Sarfaraz Ismail: Yes, initially. A discussion did take place, where Elliot was told he would be on the panel but, again, nothing – nothing happened for that to be implemented, unfortunately.
Mr Blake: Do you know why?
Sarfaraz Ismail: No.
Mr Blake: If we turn, please, to page 11, we then see a comms plan, communications plan, relating to the Past Roles Project. I’d just like to react to you paragraph 3 under “Key themes for comms”, it says:
“In carrying out this work we are acutely aware of the duties we owe to our colleagues, and the views of our trade unions. We also recognise that, in the vast majority of cases, employees who have performed such roles in the past will have carried out their duties according to instructions given to them by the business at the time, and in the belief that Horizon was robust.”
Do you have any views on that paragraph?
Sarfaraz Ismail: Again, like I’ve said previously, I think the priority is not right there.
Mr Blake: So we saw before, that reference to criticism of employees being first in the list of risk.
Sarfaraz Ismail: Yeah.
Mr Blake: We now see the focus here on duties to Post Office employees; what is your concern there?
Sarfaraz Ismail: The default position within the Post Office at this moment in time is protect, and I think that’s quite clear from both documents.
Mr Blake: Thank you. Could we please move on then to POL00448309. If we could start on the final page, page 4, please. So we’re now in February 2024, so I think this is the period in which you’ve said this issue came to the fore; is that right?
Sarfaraz Ismail: We were pushing. We were pushing very hard.
Mr Blake: I’ll just read a few paragraphs. It’s from Elliot Jacobs, and he says:
“Dear Board,
“Following on from our meeting almost 2 weeks ago where I expressed in the strongest of terms my frustration and utter disbelief that the matter of Project Phoenix was still nowhere near resolved I am concerned we have not received any update on the activity since.”
So this is addressing Project Phoenix rather than Past Roles?
Sarfaraz Ismail: Right. So just to clarify, this is prior to the clarity being provided.
Mr Blake: Yes.
Sarfaraz Ismail: So we were under the impression that there was just one project, Project Phoenix, and everyone was in that specific project.
Mr Blake: Thank you. The second paragraph, he says:
“This is important and urgent …”
I’m going to read the third paragraph. He says:
“The claim that this is ‘difficult’ will simply not cut it. If it was easy someone might have done it by now; but it is the fact that it is hard that we must grasp the nettle and get it done. It is both optically and morally wrong that this has not been dealt with before. This is not a ‘witch hunt’ (as it has been verbalised previously …”
Just pausing there, do you know who referred to it as a “witch hunt”? We can ask Mr Jacobs tomorrow, so it doesn’t matter if you don’t know.
Sarfaraz Ismail: It did come to one of the Board meetings and I can’t remember but – I do remember the phrase but I don’t remember who used it.
Mr Blake: “… this is about making certain the culture and frankly the future of the business is not mired in the wrongdoing of bad people who do truly awful things some of whom – to this very day – believe they did the right thing!”
Was there anybody that you’re aware of that Mr Jacobs had in mind; was this something that was drafted between the two of you?
Sarfaraz Ismail: Yes, yes.
Mr Blake: Did you have anybody in particular in mind, in respect of that sentence that I’ve just read?
Sarfaraz Ismail: Some of the investigators that are still within the business.
Mr Blake: Those who are still investigating or not?
Sarfaraz Ismail: Their job title has been changed but –
Mr Blake: Do you have anybody in particular in mind?
Sarfaraz Ismail: So we were referring to, for example, Stephen Bradshaw at the time, because of the evidence that was provided. That was one of the examples. Again, it was not a witch hunt at all. It was a case of individuals and – and after this email, there was still further evidence from other individuals who weren’t investigators but it was also very uncomfortable listening.
Mr Blake: Listening to their evidence before the Inquiry?
Sarfaraz Ismail: Yeah.
Mr Blake: If we scroll down, he says:
“We were told the committee was due to meet last week, but I am not aware of any outcome from that meeting – I would be grateful of an update on that meeting and the decisions that came from it …”
If we scroll up, please, from page 2, you have the response from Owen Woodley and I think this was the response you were referring to before. If we scroll down, thank you. He says:
“Here is an update from the business, Elliot and Board …
“As a reminder, we have two separate programmes of activity under way which Karen is overseeing for us. One is ‘Project Phoenix’ and the other is ‘Past Roles’. These programmes are doing separate activities overseen by separate panels to determine appropriate action. The panels are not decision making fora on individual employment cases. Any actions required on individuals on the back of the panel recommendation are then managed separately as part of a relevant employment process.
“Project Phoenix is a review of all historical investigations where allegations have been made by postmasters of wrongdoing on the part of Post Office and/or Post Office employees (both current and past) as part of the public Inquiry Human Impact Hearings.”
Just pausing there, do you know why the investigation into wrongdoing by members of the investigations team did not begin until the Public Inquiry’s Human Impact Hearings?
Sarfaraz Ismail: Because there was no real urgency within the business to deal with this. Unfortunately, it’s been – some of the issues the organisation has been dealing with have been Inquiry led, and then that’s – that’s the reality. When it came to that – the email prior to this, that Mr Jacobs sent, one of the frustrations we had was we are Non-Executive Directors, yes, but we are also postmasters, and I’ve attended the Inquiry a lot, and seen people like Jo Hamilton, Seema Misra and seen how they were treated, and seeing what they went through, how are postmasters treated the way they are by this organisation and why are employees getting a better deal? That’s what it felt like.
And, again, to emphasise, this was not a witch hunt. This was just parity. The postmasters were not given enough time, were not given a chance to defend themselves. They are suspended immediately if there’s any discrepancies within their branches but, yet, nobody seems to be suspended when even investigations are still ongoing, when it came Phoenix or Past Roles. So it was very frustrating.
Mr Blake: The email continues:
“Chris represents SEG on the Phoenix panel and I’m sure he would confirm that he and the panel fully grasp the importance of what they are dealing with.
“Past Roles is a review of any current employee who may have previously undertaken a role in the past – between 1999 and 2017 – related to the subject of the Public Inquiry. This is to ensure that they create no conflict and pose no risk to either the integrity and independence of work being done now, or to postmaster/public confidence in that work.”
If we scroll up, please, to page 1. We have at the bottom a response from Karen McEwan the Group Chief People Officer. She says:
“We have Nic Marriott [and she gives some further names] all supporting Chris (on Phoenix) and Sarah Gray’s team (Past Roles). They are three of our most capable members of the People team, with significant ER experience. This is our highest priority and is, as you point out, very complex and time consuming.”
In your view, was it the highest priority?
Sarfaraz Ismail: From my observations, we were being told that it’s a priority but it didn’t feel like it was, and I remember Mr Jacobs raising a point about Chris Brocklesby being on this panel. He was brought in to look after NBIT, and Mr Jacobs said, “Well, why are we not utilising his expertise where it needs to be? Surely he’s wasted on this panel”. But it was a scenario where the business said, “We’ll look into it”.
And just to provide a little bit more context to this email, regarding Sarah Gray’s team, Sarah Gray is the Interim General Counsel, at this moment in time. They have had this project since, we saw on the previous document, December ‘22. They weren’t fully aware, from my understanding and my observations, until myself and Mr Jacobs came to the Inquiry in March ‘23, and I just don’t feel the Board have got confidence in that Legal Team.
And when it came to April ‘24, our Legal Team then went to get legal advice and what they found out and discovered was the approach they were taking for the last couple of years was actually wrong. So this was really disappointing and really frustrating for the Board. As you’ve said, our understanding was this is a high priority. How can you say it’s the highest or a very high priority but not have the correct plan in place to be fair to the employees, and a proper strategy to deal with the issue?
Mr Blake: It’s the first reference that’s been made in Phase 7 to “NBIT”. Can you previously tell us what NBIT is?
Sarfaraz Ismail: That’s the New Branch IT System.
Mr Blake: So Mr Brocklesby, who was responsible for that new system, was also spending his time on the Past Roles Project; is that right?
Sarfaraz Ismail: Yeah, which just seemed very bizarre to myself and Mr Jacobs.
Mr Blake: If we scroll up, we have the response from Mr Jacobs. We’ll be hearing from him tomorrow but can you assist us with your views on what is said here. He says:
“In case it would seem that I’m implying due process and rigour should not be applied, for the avoidance of doubt, I am not saying that.
“I do not deny the importance of that – we know this organisation has failed horrifically in doing that before!
“It does however seem odd that not a single one is suspended whilst this is ongoing? Why is that? We seem to suspend people on a regular basis when investigations are ongoing? Why not on this matter?
“And is redeploying really the only solution? How does that fix the culture challenge we have here?
“I think further Board discussion and ongoing update on this is vital.”
Were those views that you shared?
Sarfaraz Ismail: Correct.
Mr Blake: Could we please turn to POL00448649, please. We’re now in April 2024 and this is a meeting of the Board. We have Ben Tidswell, there as the Senior Independent Director but also the nominated Chair of that meeting; is that because there wasn’t, at that point, a Chair?
Sarfaraz Ismail: Correct. Henry Staunton was sacked towards the end of January, so Ben took over as chair until we found a new Chair.
Mr Blake: We have you there listed as Non-Executive Director. We have Mr Read in attendance as the Group Chief Executive Officer, and we have also possibly a relevant name for the material that we’ll be looking at, Nicola Marriott, the HR Director, as one of the attendees.
Could we please turn over the page and there’s a section on the past roles review. So was this the first opportunity when this matter was discussed after Mr Jacobs’s email, at a Board meeting?
Sarfaraz Ismail: Yes, to the best of my knowledge.
Mr Blake: So we have there “NR”, Mr Read. He introduced the matter. The second bullet point:
“[He] summarised the new categorisations and employee populations under review:
“In respect of category one, comprising 5 current employees due to give evidence at the Inquiry within Phases 5 and 6, a consistent approach was required in respect of these individuals ahead of and after the Inquiry to prevent conflicts arising;
“The second category (previously known as Past Roles) involved reviewing all current employees within the Remediation Unit prioritising those who undertook activity relating to the subject matter of the Inquiry in past roles …”
Then you have a third category which:
“… included and expanded on the scope of Project Phoenix and would focus on addressing any misconduct allegations arising against current police as a result of evidence given at the Inquiry in later Phases, in addition to evidence provided at the Human Impact Hearings.”
So it seems as though the scope of Project Phoenix, by this stage, had expanded to go beyond the evidence that was heard at the Human Impact Hearings; is that right?
Sarfaraz Ismail: Yes.
Mr Blake: “[Mr Read] outlined the population and noted that the population could increase with other current employees potentially coming within scope for investigation as a result of evidence heard in Phases 5 and 6;
“[Mr Read] emphasised the need for a consistent and fair approach as well as acting quickly. [Mr Read] also noted the value of documents disclosed to the Inquiry and that these potentially could be utilised to assist with consistency of approach …”
The next paragraph, we now get to Nicola Marriott:
“[Nicola Marriott] advised that she wished to provide the Board with an update on the current status, work undertaken to date and take the Board through the proposed next steps. [She] reiterated the 3 categories and the employee populations within these. [She] spoke through all the work undertaken in relation to Project Phoenix noting the evidence [collected]”, and she gives various figures there.
“There had been delays as the ACI team wished to engage with the postmasters who have provided evidence at the Human Impact Hearings that had led to the current employee misconduct allegations. These meetings had taken a significant amount of time to arrange, and it was not until February 2024 that the first meeting with an affected postmaster had occurred.”
We then reach the point at which you address, or are recorded as addressing, the Board. “SI” is yourself. It says you:
“… queried why [Stephen Bradshaw] had not been suspended. [You were] advised that the approach taken was to let the misconduct process and the investigation reach conclusion; to suspend otherwise was considered very high risk from an employment law perspective. [You] expressed [your] views on this approach and advised that [you were] receiving comment in from postmasters who were concerned that [Mr Bradshaw] remained in the business. [You] shared [your] view that this was a cultural issue and the Company could not move on until individuals in this category exited the business.”
Just pausing at that point, can you expand upon your views there?
Sarfaraz Ismail: I was getting several postmasters still contacting me from a business as usual perspective, saying why is Steve Bradshaw still working within the Post Office? And my response was: the business is dealing with it. And when, obviously, questioning Nicola Marriott about it, the approach was to ensure the Post Office is not exposed to any high-risk employment issues and, unfortunately, that was the approach that we had to go with because that’s what HR were doing, and they were responsible for the project.
For me, what was really important was this business moves forward and, from a cultural perspective to – from within the organisation but also to get postmasters back onside, it was really important the business moved on and, unfortunately, this business redeploys, recycles, there’s very – it’s disappointing when individuals need to be exited and they are not exited, and, again, I’m not singling Steve Bradshaw out at all, I’m talking generally on both projects.
Mr Blake: “[Ms Marriott] took the point however advised that in the ongoing investigation into [Mr Bradshaw] no evidence had been found to support the allegations and there was no evidence to date of gross misconduct. The Chair pointed out that there was the evidence the postmasters had provided in the Human Impact Hearings, so caution against the position of stating there was no evidence to support the allegations. The Chair noted that the investigations being conducted were internal and queried if there should be external assurance conducted to validate the approach taken …”
What’s your view on external assurance in relation to this project?
Sarfaraz Ismail: I was in agreement with the Chair. I think the project, from what I saw since March ‘23, it just – there was a lot of the wider Executive mentioning things are going on, “We are doings investigations”, but there was no hard facts in terms of where the investigations were leading. So, if we did go external, it probably would have been executed a lot quicker in terms of a project.
Mr Blake: It says there:
“[You] referenced the meetings with postmasters who had made allegations against [Mr Bradshaw] and queried the level of explanation provided regarding the investigation process. [Ms Marriott] noted the employer’s duty to protect an employee; in light of this the approach advised to postmasters had been more general. [You] queried whether the process could be simplified. [She] advised [you] that engagement had been had with postmasters via their legal advisers as this is how the postmasters had advised that they wished to be engaged. [You] queried whether there was a timescale for conclusion of the investigations. [She] replied that the team had not wished to push too hard given the sensitivities for postmasters in recounting events. That said, engagement with all the postmasters who had made allegations in relation to [Mr Bradshaw] were due to be completed by the end of June. The team was similarly looking to complete meetings with postmasters in relation to other cases.”
Broadly, were you satisfied with that explanation?
Sarfaraz Ismail: No. However, there was no other choice. It was one of them situations where, unfortunately, we had to let the process do what it has to do with the right people dealing with it, for example in this case Nicola Marriott, and we had to let the process happen. There was no way of us getting it done any quicker.
Mr Blake: Moving on to the Past Roles Project, it says there:
“The Chair asked [Ms Marriott] to provide an overview of category two. [She] spoke through the category outlining the work that had been undertaken to assess for conflicts arising from the roles associated with the activity covered by the Inquiry and current roles and detailed the employee population that this work had identified. [She] noted proposed restructuring however this had not been actioned due to the need to retain the workforce given the high number of new applications to the [Historic Shortfall Scheme].”
So it seems there that some individuals weren’t redeployed who had been involved in investigations or audits, et cetera, because of the work that needed to be covered for the Historic Shortfall Scheme; is that right?
Sarfaraz Ismail: That’s correct.
Mr Blake: What’s your view on that?
Sarfaraz Ismail: Disappointing, and we did express, myself and Mr Jacobs, disappointment because, like I said previously, for the organisation to move on, we both believed decisions needed to be made on these individuals who were in Phoenix and Past Roles.
Mr Blake: Thank you. If we turn over the page I’m just going to read a few more passages from these minutes.
The first bullet point there:
“[Ms Marriott] detailed the proposed approaches in relation to the different employee populations within category 2, noting the benefits and risks involved. For the 23 ‘red’ employees, it was proposed that a referencing exercise was run to understand the appetite for voluntary redundancy or redeployment.”
Can you assist us with who the “red” employees were?
Sarfaraz Ismail: They were the high-risk –
Mr Blake: Not their names, just –
Sarfaraz Ismail: No, they were the high-risk employees.
Mr Blake: Thank you. If we scroll down, we have there, we can see on the right-hand side, about halfway down, it involves you again:
“SI queried whether redeployment was appropriate for ‘red’ individuals within this population as opposed to exiting these individuals from the bid. [Mr Jacobs] agree with [you] that redeployment was not appropriate for individuals classified as ‘red’. There was discussion regarding how the proposed approach would be executed with [Mr Jacobs] querying whether the exercise could be conducted one time and once and the Chair querying the continuation of this population in the business during the consultation period. [Ms Marriott] reminded the Board that there were no allegations of wrongdoing in respect of the ‘red’ population within the Remediation Unit and that this group were ‘red’ only because they undertook roles historically linked to the subject of the Inquiry.”
What is your view as to the redeployment of those red individuals?
Sarfaraz Ismail: I wasn’t happy, hence why I ensured I told the Board of my view.
Mr Blake: Why do you hold that view?
Sarfaraz Ismail: Because I just don’t feel it’s appropriate for the individuals who were in the “red” category to be, firstly, within the business, and I feel it’s an insult that they were in the Remediations Unit.
Mr Blake: That unit in particular?
Sarfaraz Ismail: Yes.
Mr Blake: Because of the work that they do with subpostmasters and –
Sarfaraz Ismail: Correct. So a postmaster who was potentially terminated, wrongly prosecuted, has then got an individual who potentially has done all that damage to them and their life, then giving them the compensation. That just does not sit well with me.
Mr Blake: Sir, I see time is running on.
Sir Wyn Williams: Yes.
Mr Blake: I think we can return to this document after lunch. So perhaps we’ll take the lunch break now.
Sir Wyn Williams: Fine. What time shall we resume?
Mr Blake: If we come back at 2.10.
Sir Wyn Williams: Fine.
(1.09 pm)
(The Short Adjournment)
(2.10 pm)
Mr Blake: Thank you.
If we return to that document that we were on before the lunch break and page 4, thank you very much. This is the Board minutes of 29 April this year. Can we scroll down to the bottom, please. Halfway down that final bullet point, we have Lorna Gratton sharing her preference that employees who were within the wider business who were found to be “red” be offered voluntary redundancy.
You agreed, and the Chair confirmed that there were no objections to that approach.
If we scroll over the page, please, to the second bullet point, it says there:
“Information arising from the Inquiry in respect of T Marshall and M Corfield was discussed.”
This is, again, a reference to you sharing:
“… the concerns expressed by postmasters of T Marshall remaining in her current post. The Chair shared his expectation that these employees would come out of the business at this time, if the material warranted that. [You] agreed with this as did OW [Owen Woodley] and it was confirmed … that T Marshall coming out of the business was presently being considered. [Mr Woodley] confirmed that if there were issues employees would be taken out of the business until the end of the Inquiry …”
Can you assist us there with your views as expressed there?
Sarfaraz Ismail: So firstly, regarding Tracy Marshall, she wasn’t actually taken out of the business. She was only taken out from the postmaster engagement aspect of her job role and, for me, I think the notes, the minutes are quite clear. We had, for myself and Elliot, both of us were getting a lot of communication and text messages, various conversations with postmasters sharing concerns regarding some of the previous revelations throughout the Inquiry, and what we did at this specific Board meeting was express them concerns.
Mr Blake: Are you concerned about any matters there in terms of those individuals in particular?
Sarfaraz Ismail: In what respect, sorry?
Mr Blake: Was action subsequently taken in that respect; are you aware of any action being taken?
Sarfaraz Ismail: Not to the level that postmasters were expecting, and I don’t feel, from what I observed, and still seen whilst being on the Board, that it was to the level the Board were expecting, and I’ve not been given any further information on Ms Corfield. Regarding Tracy, a postmaster, even after this, contacted me, advising me that she had been visiting his branch.
So, again, I’m not sure how this has been executed because clearly there’s been some miscommunication at some point.
Mr Blake: Thank you. If we scroll down, we can see the Board resolved to take number of different actions. First was:
“The proposed approach as set out in the paper in relation to category 1 employees”, that was approved.
“Subject to the Board being provided with details of and being satisfied as to costs and funding, the proposed approach as set out in the paper in relation to category 2 employees be and is hereby APPROVED, save that the 23 employees with the red categorisation would in preference exit the business rather than be redeployed …”
So it looks as though one of the resolutions from this particular meeting was a change in respect of those who had been categorised in the red categorisation; is that right?
Sarfaraz Ismail: Yes.
Mr Blake: Then third:
“The proposed approach as set out in the paper in relation to category 3 employees [was] APPROVED however with any investigations conducted following the conclusion of the Inquiry.”
Thank you. That can come down.
Can you assist us with which team within the Post Office carries out these investigations?
Sarfaraz Ismail: Into employees?
Mr Blake: Yes.
Sarfaraz Ismail: So it’s the panel that the Post Office has put together, and then, beyond that, we’re not really told – I’ve not been told specifically who is doing what investigations. We get a high level overview as provided by Karen, Owen, and Nicola and that’s it. There’s never any real detail given or “An investigation hearing is happening on XY date”, we don’t really get provided with anything like that. So it’s a case of the Post Office conducting the investigation on the Post Office’s terms and then the Board basically being given that information by the wider Executive.
Mr Blake: Are there members of the Investigations Team carrying out those investigations?
Sarfaraz Ismail: I wouldn’t know. I’m not privy to that information.
Mr Blake: Do you have any concerns about the fact that those investigations are being carried out internally?
Sarfaraz Ismail: Yes.
Mr Blake: Why?
Sarfaraz Ismail: Because, for me, and as I’ve said in my statement, I believe the investigation process within the Post Office is flawed, the whistleblowing process I also believe is flawed, and then when we appointed the current Whistleblowing Champion to the board, Amanda Burton, prior to her appointment as the Whistleblowing Champion and RemCo Chair, I raised serious concerns because she had been on the Board of two previous organisations who had major governance and compliance issues.
But we still went ahead and appointed her and, for me, that was really disappointing. And when I’ve got – when I’m having discussions with female staff members regarding investigations and one female staff member approached me and said – she basically went through a sequence of events that happened to her, and I said, “well, why don’t you speak up? Put it through whistleblowing”, and she basically said to me “Saf, how can I do that?”, and I said, “What do you mean?”
And she goes, “If this organisation do what they did, to me, with the highest-ranking female, who was Jane Davies as a whistleblower, publicly exposing her in a Business and Trade Select Committee hearing, and she then loses her job, what chance have I got?”
And it was really, really difficult and, sorry, just to finish this answer, when you see the Post Office employee surveys, which have been provided to the Inquiry, and you see one in three women have received unwanted comments, it’s really disappointing that this culture persists within this organisation.
Mr Blake: Where do you see responsibility for that lying?
Sarfaraz Ismail: It starts from the top. So there’s certain responsibility for that that’s got to be taken at Board level, and I accept that, and there’s more responsibility that’s got to be taken from the wider Executive level, and culture is owned ultimately by the Executive because they are responsible for the day-to-day practices that go on within the business.
Mr Blake: Thank you. Could we please turn to POL00448298. If we look at page 3, please, we’re going slightly back in time. This was an email exchange that came just before that Board meeting, so the Board minutes were 29 April. This is an email from Mr Jacobs to members of the Board. Did you have input into this correspondence?
Sarfaraz Ismail: Yes, we did work on emails together, myself and Mr Jacobs.
Mr Blake: Thank you. It says:
“Dear Members of the Board,
“We are writing to you today with an urgent and deeply troubling concern that demands our immediate attention and action.
“This follows on the previous emails and requests [and you’ve highlighted there the number of requests] – all of which have failed to result in any outcomes beyond confirming we have 6 staff members classified as Phoenix and 127 in Past Roles.”
You then, if we scroll down, address the further revelations that have occurred at the Inquiry, including:
“… individuals responsible for postmaster engagement today knew about remote access since 2011, yet chose to remain silent …”
You say it is:
“… a damning indictment of their character and integrity.”
Further on:
“It is unacceptable that individuals within our business continue to hold positions of influence”, et cetera.
If we scroll up, we can see the response from Lorna Gratton of UKGI, she says:
“I share your concerns on this – though I thought we had time to discuss as a Board at 6.00 pm on Monday (after the GT discussion meeting)?”
There was a discussion at this Board meeting that we’ve just been seeing about it, I think it’s a Grant Thornton report; is that correct?
Sarfaraz Ismail: Yes.
Mr Blake: Was it your understanding, at the point in time in which this email was sent, that the Grant Thornton discussion was to come first in that Board meeting, or prior to the discussion about Past Roles and Phoenix?
Sarfaraz Ismail: Sorry, can you just repeat the question?
Mr Blake: Absolutely. So the question here was that the Grant Thornton discussion meeting was going to take place first –
Sarfaraz Ismail: Yes, that’s correct.
Mr Blake: – is that your recollection?
Sarfaraz Ismail: Yes.
Mr Blake: If we scroll up, we can see a response from Mr Jacobs. He says:
“The [Grant Thornton] report is about governance … this is a KEY governance issue. It worries both Saf and I that the Board can convene on a discussion on a report from an external firm but not actually get one from our own business … Perhaps this is why an external review is necessary into this entire matter?”
If we scroll up, we can see Mr Read’s response:
“Be assured we are all troubled by the appalling developments and revelations that are emerging at the Inquiry …
“… we have not been as forthright in our actions as many would have liked … this is because it is not straightforward.”
If we scroll up, Mr Tidswell says:
“It is on the agenda for Monday (and has been since you raised it last week). We will deal with it first, to make sure there is sufficient time to discuss. I think your concerns are widely shared across the Board.”
So it seems as though, following representations made by you and Mr Jacobs, that the matter was given greater prominence at Board level; is that right?
Sarfaraz Ismail: That’s correct.
Mr Blake: Do you think there was sufficient attention drawn to it by 29 April?
Sarfaraz Ismail: Not sufficient to what I would expect because I don’t think, from my time, deep with regard to – with regards to dealing with this matter, that the other independent NEDs understood how much discontent this was creating within the postmaster community.
Mr Blake: Are you satisfied with how those matters are going now, as at the present date?
Sarfaraz Ismail: No, because I still feel they should be done by an external organisation.
Mr Blake: In terms of the length of time, who do you consider is responsible for the length of time that those projects have taken?
Sarfaraz Ismail: The Legal Team, which the Board just do not have confidence in.
Mr Blake: When you say the Board: the majority of the Board, all of the Board, some of the Board?
Sarfaraz Ismail: Some of the Board. I think the individuals on the Board who were lawyers probably understand why things are taking a bit longer but for – definitely myself, Mr Jacobs and, at the time, Henry Staunton, and there was a – I can’t remember – Henry Staunton as well, yes, definitely and a few of the other NEDs have also expressed concerns as to the speed and space at which this is being executed?
Mr Blake: I’d like to look at one particular example that might assist you with the issue of redeployment within the Post Office. Could we please turn to POL00329521.
This is correspondence that the Inquiry has seen in a previous phase. If we start on the bottom of page 2, please, this is correspondence from Mr Posnett to people who were part of historic investigations, and he says – this is 21 April 2015, so sometime ago now:
“Please note the cases below and whether you were a Criminal Investigator or Financial Investigator. Can you let me know whether you have any hard copy or electronic copy documents, emails, evidence, etc, or indeed any information relating to the cases detailed.”
It sets out there a number of cases, referred to as “historic investigation cases”.
If we scroll up, please, we have Mr Thomas saying:
“Dear Mr Posnett
“I am pleased to advise you that I do still have the electronic documents relating to the Astwood Bank & Priory Road cases.”
If we scroll up, we have Mr Graham Ward, who says:
“Why are you pleased … you have breached the DPA [Data Protection Act] as you should have deleted them years ago [smiley face].”
If we scroll up, please, we have Mr Thomas’ response, and he says:
“Because I want to prove that there is FFFFiiinnn no ‘Case for the Justice Of Thieving Sub Postmasters’ and that we were the best Investigators they ever had and they were all crooks!! Oh and we never hit our [Post Office] profit targets any more as we stopped getting £XX million pounds in recoveries from bloody good financial recoveries through my good friends Ward, Harbinson, Posnett and the like!!
“End of Rant!! Hence why Scott had to get rid of us cos we is right and spoke out!!! Power To The People Wolfie Smith!!”
If we scroll slightly up, we have the response from Mr Ward:
“I will be right if I get VR [I think that’s voluntary redundancy] … I fear the 2 years currently on offer may not be there next time!”
Looking at this as an example, do you have concerns about individuals who previously worked in the Investigations Team currently working within the business, irrespective of whether there is a specific allegation or evidence of specific wrongdoing against them?
Sarfaraz Ismail: Yes.
Mr Blake: Why?
Sarfaraz Ismail: I just don’t feel it’s right, morally, that they should be in that position, and with these individuals when I was reading the bundle that was sent to me, I was stunned when I saw this email. And this is evidence that we’ve got, there’s obviously evidence – we don’t know what we don’t know – and my concerns are, for example, redeployment and VR, which has resulted in a lot of rehiring again, that it’s a gravy train. People just board it again and again when they feel like it, and that cannot happen. And that’s really disappointing.
Mr Blake: Are you aware of individuals who were in the Investigation Team? So if we scroll over to page 2, thank you, we have all of those recipients of that email. Are you aware of those – any of those individuals or those who worked closely with them still in roles within the Post Office?
Sarfaraz Ismail: The Post Office has got 3,500 employees and 7,000 postmasters. It’s very difficult for me to know who knew who on this email trail unfortunately.
Mr Blake: I think one of your concerns is that those who worked in roles that are relevant to the matters being investigated –
Sarfaraz Ismail: Yes.
Mr Blake: – by the Inquiry are still in some roles?
Sarfaraz Ismail: Yes.
Mr Blake: Do you know numbers or proportions or anything along those lines?
Sarfaraz Ismail: We’re not privy to that information. We were never given a specific breakdown, unfortunately.
Mr Blake: Thank you. On a totally different topic, it’s staying with this email, if we turn to the first page, please. On the topic that is raised in the bottom email on that page, the potential targets or potential bonuses paid to Investigators, was that ever anything that was discussed at Board level, from your recollection?
Sarfaraz Ismail: To specific Investigators? There was, I think, earlier this year, maybe January, February time, where concerns were raised after Mr Bradshaw’s evidence about where some of the funds – recovered funds had got to but never a discussion regarding bonuses paid for recovering debts from innocent postmasters.
Mr Blake: Thank you. That can come down, please.
We’re now going to move on to a new topic, although related, and that’s what we know as Project Pineapple. In your statement at paragraph 274 onwards, you’ve discussed three events that you say you considered to be of relevant wider context. The first of those is a letter sent by the CEO to the Lord Chancellor, and perhaps we can bring that up onto screen. That’s POL00448381. This is a letter dated 9 January this year from Mr Read to the then Lord Chancellor, and it begins:
“As you give urgent consideration to the [scandal] as to whether and how the process for appeals against convictions flowing from the Horizon IT Scandal can be accelerated, you should be in no doubt of today’s Post Office’s determination to ensure that proper redress is achieved for all those affected by the business’s abysmal behaviour over the relevant time period. We are, individually and collectively, working as hard and as quickly as we possibly can to get compensation to those affected, to support the Inquiry, and to provide ministers and officials in our sponsoring Department with whatever assistance they require.”
Had you seen this letter before it was sent to the Lord Chancellor?
Sarfaraz Ismail: No. Nobody on the Board had seen this letter, to my knowledge.
Mr Blake: So it hadn’t been raised at Board level officially?
Sarfaraz Ismail: No.
Mr Blake: I’ll take you to the third paragraph, and I’ll just read that paragraph. It says there:
“In an effort to fast-track the appeals process ourselves and to encourage people to come forward, we asked our external legal advisers, Peters & Peters, together with Simon Baker KC and Jacqueline Carey KC to undertake a review of all our historic prosecutions. The aim of the exercise was to identify potential appeals against convictions which, following the judgment in Hamilton, we would be highly likely to concede in Court. This has enabled us to write, proactively, to a further 30 potential appellants in addition to the 142 resolved cases and the five awaiting consideration, encouraging them to mount an appeal, have their convictions quashed, and obtain appropriate compensation.”
So the test there in that particular paragraph seems to be those that would be highly likely to be conceded in court. Was that your understanding of that particular category?
Sarfaraz Ismail: Yes.
Mr Blake: Second, it says:
“A natural corollary to this exercise has been to identify those cases in which, on the information available to us and following the judgment in Hamilton, we would be bound to oppose an appeal. Typically, these cases involve convictions obtained by reliance on evidence unrelated to the Horizon computer system. The number of such cases is very much more significant, at 369, with a further 11 still under review. There are another 132 in which we cannot determine the sufficiency of evidence without more information. This clearly raises acute political, judicial, and communications challenges against the very significant public and Parliamentary pressure for some form of acceleration or bypassing of the normal appeals process.”
So pointing out there that there is a very much more significant number of cases that don’t fall within that first category.
What is your view as to what’s written there?
Sarfaraz Ismail: For me, this entire document was very disappointing because it highlights that the culture, unfortunately, within the organisation still has not changed at all and it’s saying, again, the reason why these postmasters have not come forward is because they are guilty, and that point was raised at Board, and in a private NED-only meeting, which is not minuted, and the Board was disappointed with this lack of judgement in sending this letter out.
And from the discussions that we had as a Board, the Chair was going to speak to the CEO, Nick Read, about the letter.
Mr Blake: So this letter is 9 January.
Sarfaraz Ismail: Mm-hm.
Mr Blake: Can you assist us with approximately that Non-Executive Director-only meeting took place, was it shortly after?
Sarfaraz Ismail: It was a private meeting. It was in January before Mr Staunton was dismissed.
Mr Blake: Who was in attendance, all of the Non-Executive Directors, some of them?
Sarfaraz Ismail: It was open to all the Non-Executives, but I couldn’t tell you if someone gave their apologies but –
Mr Blake: Was Mr Staunton there?
Sarfaraz Ismail: Mr Staunton was there.
Mr Blake: The letter then says:
“We make absolutely no value judgement about what you and your colleagues determine as the right course of action, but consider it essential for you to understand the very real and sensitive complexities presented each case.”
Would you have expected a letter like this to have been considered at Board level?
Sarfaraz Ismail: Yes, 100 per cent.
Mr Blake: Can you give us an indication as to the strength of feelings that was expressed at that Non-Executive Director meeting?
Sarfaraz Ismail: I think one of the NEDs said it was careless; another individual said it was a lack of judgement. There was definitely a feeling of disappointment but, again, it felt like the Post Office of the past, which is trying to close rank and protect itself, whereas being open and honest about what’s happened and what’s going on would have been a much more helpful position to move forward.
Mr Blake: That can come down. That was the first event that is set out in your statement.
The second concerns the use of the term “untouchables”. The Inquiry can’t look into what was or wasn’t said at a Parliamentary committee, so I’m not going to address that particular aspect of it. But can you assist us with who used the term “untouchables”?
Sarfaraz Ismail: The CEO, Nick Read.
Mr Blake: When was that?
Sarfaraz Ismail: On 18 January, at a NED-only session, I think, at 2.30 in the afternoon, and also in a Board meeting towards the end of ‘22 and ‘23.
Mr Blake: What did you understand that term to mean or to have been used?
Sarfaraz Ismail: That was in relation to certain individuals within the organisation, for example the Investigators, the Legal Department, individuals within the Legal Team, the Retail Team.
Mr Blake: Why did you understand that term to have been used?
Sarfaraz Ismail: Because they’re untouchable. There’s no accountability for them. And, from what we had seen – what I had seen, what Mr Jacobs had seen – since we’d joined the Board, it was clear that it took – to me certainly, it did feel like there were, potentially – they were untouchable because there’d been complaints, there’d been various points where, for example, on the Legal Team side, on the Past Roles side, it just wasn’t moving quick enough, and there was no performance management, no accountability.
Mr Blake: Can you assist us with how that term was used? Is it saying that they have been untouchable but we’re going to be taking action or was it that they are untouchable or they should be untouchable?
Sarfaraz Ismail: They are untouchable.
Mr Blake: Was a reason given for that?
Sarfaraz Ismail: No.
Mr Blake: That’s the second event. You’ve said that there was a third event, which was discussions regarding individuals still working in the business; is that the Project Phoenix and Past Roles matter?
Sarfaraz Ismail: No, not necessarily just that. So there was concerns raised about the Retail Team, and when we appointed a Chief Retail Officer, Martin Roberts, two or three months after his appointment, the wider Executive and also the CEO, they were all saying the same thing, that “He’s not good enough for the role. It’s not the level we expect”.
And myself, Mr Jacobs and other individuals within – on the Board, we were looking at specific datasets. So when we said, “What are the Retail Team doing, they’re not engaging with the postmaster NEDs, how do we measure success?” So we looked at the postmaster surveys. There’s been plenty of time that they’ve had to implement and get things moving in the right direction, but they weren’t, and they were getting worse and worse. And the response was “Well, this and people like Martin, for example, are who are untouchable”.
And when it came to the discussions after – sorry, to finish my first point – two or three months after Martin started, there was always discussions had “We need to do something, we need to do something”, but nothing ever happened.
The lack of performance management within the Post Office is unbelievable. I’ve never seen anything like it.
Mr Blake: Thank you.
That was the third event, and that takes us now to what we know as or what we refer to as the Project Pineapple email. Can we please turn to POL00448302 and it’s page 4. This is a note from Mr Staunton to himself, which is later forwarded on to you, sent on 14 January this year, but it says, “Note of conversation with Saf and Elliot on Sunday, 10 January”.
Now, you’ve addressed this at paragraphs 277 to 279 in your statement. I think the dates are wrong in the statement because it’s clear here that the conversation took place, or seems to be clear that it took place, on 10 January; would you agree with that?
Sarfaraz Ismail: Sorry, what’s the date in the statement?
Mr Blake: I’m not sure but I think it was slightly later.
Sarfaraz Ismail: What number paragraph?
Mr Blake: 277 to 279. Yes, that says Sunday, 7 January, at 277. It’s page 113 of the statement.
Sarfaraz Ismail: Sorry?
Mr Blake: Page 113 of the witness statement, paragraph 277.
Sir Wyn Williams: Well, they both agree it was a Sunday.
Sarfaraz Ismail: Yes.
Sir Wyn Williams: It’s a question of which date is right.
Sarfaraz Ismail: Yes, the date you’ve got on here is.
Mr Blake: Thank you.
Sarfaraz Ismail: Thank you.
Mr Blake: In fact that – yes, well. I’m sure somebody can look up what date the Sunday was.
Sir Wyn Williams: Mr Page has played detective and, if you look at the top of the email, Sunday, 14 January means that it must have been 7 January, which was the Sunday.
Mr Blake: So, in fact, it looks as though this was prior to that letter from Mr Read to the Secretary of State for Justice –
Sarfaraz Ismail: Yes.
Mr Blake: – because that was the 9th?
Sarfaraz Ismail: Yes. The conversation happened the Sunday prior, the 7th. So Mr Staunton’s date –
Mr Blake: The date there is wrong?
Sarfaraz Ismail: Yeah, yeah.
Mr Blake: Thank you. First of all, although it’s not a transcript or an exact note, is it a fair summary of the matters that were discussed with Mr Staunton?
Sarfaraz Ismail: Yes.
Mr Blake: The first paragraph, we’ll go through each paragraph step by step:
“Saf said the views expressed by Richard Taylor, and previously by management and even members of the Board still persisted – that those [postmasters] who had not come forward to be exonerated were ‘guilty as charged’. It is a view deep in the culture of the organisation ([including] at Board level) including that postmasters are not to be trusted. SOMETHING NEEDS TO BE DONE.”
Can you assist us with the views expressed by Mr Taylor? What was that about?
Sarfaraz Ismail: Mr Taylor was the Director of Corporate Affairs, and his views were in the press, how he thought postmasters were on the take and dipped their hands in some of the tills and, for myself and Mr Jacobs, that was very disappointing but not surprising, because, from my time in dealing with the wider Executive, there is always a level of suspicion when dealing with postmasters. That’s not just as a Non-Executive; that is also as a postmaster.
Mr Blake: Do you have anyone in mind?
Sarfaraz Ismail: No, I think it’s just a general cultural problem.
Mr Blake: Second paragraph:
“Martin Roberts and certain members of his team were singled out. There has been no feedback on the investigation into Roberts ([including] for inappropriate behaviour and lack of integrity). He was responsible for the postage stamps debacle where changes were made to accounts by his team just like Fujitsu.”
Just pausing there, what was that issue?
Sarfaraz Ismail: That was very, very disturbing for myself and Mr Jacobs when we heard this, and you’ll hear from Mr Jacobs tomorrow, but he had firsthand experience of that happening in his branch, and when I had a meeting with Mr Roberts prior to this, so late ‘23, my words to Mr Roberts were, “Your actions are more brazen than the actions of Fujitsu, and what happened in the past, Fujitsu went through the back door and you’re going through the front door”. And Martin advised me, “Saf I’ve become aware of it and I’m looking into it”.
And then nothing – I wasn’t – neither myself nor Mr Jacobs were given any update beyond that.
Mr Blake: What exactly was it that happened with the postage stamps?
Sarfaraz Ismail: So they’re not called “Investigators” any more; they are called “Branch Assurance Visits”. So you’ve got employees of the Post Office going into branches to input stamps on postmasters Horizon terminals to ensure the back office side of the Post Office matches to what the postmasters have got on their systems.
Now, some postmasters were aware and some were not aware, of this happening, but my duty as a postmaster NED was to ensure this was raised, and Elliot raised this also at ARC, which brought the problem to the surface but, again, as I’ve said, nothing ever – there’s been no feedback to either of us since this has happened, to say, “This has now been stopped”, only until we received the report a few days ago August. Until then, I’ve had no correspondence whatsoever on that.
So, again, we were just ignored when we put this forward.
Mr Blake: It says there “If Elliot had not been on the [Audit and Risk Committee] the controls would not have been strengthened. Roberts and his team do not want any extension to their terms of office because they believe new [postmasters] would not have the experience to challenge them.”
If we scroll down to the next paragraph, please –
Sarfaraz Ismail: Can I just go back on to one point, if you don’t mind. I think what’s quite telling on the previous point that you mentioned was the other NEDs in the room, I don’t think they quite realised the magnitude of this issue and I think this is where having that operational savviness/nous now played a massive role in terms of bringing the reality of what we were actually doing on the ground to Board level.
Mr Blake: Thank you. The next paragraph:
“Equally Saf and Elliot are FED UP WITH THE AMOUNT OF POWER FIELDED BY FOAT.”
That’s Ben Foat, the General Counsel?
Sarfaraz Ismail: Yes, but that’s regarding the entire Legal Team, so Ben Foat, Sarah Gray, their team.
Mr Blake: “He and other members of their senior team act as if [postmasters] ARE GUILTY UNTIL PROVED INNOCENT (‘as per my experience’ they both said).”
Can you assist us with that quotation?
Sarfaraz Ismail: So, for example, the way Mr Jacobs was treated throughout his investigation was exactly what it says there, which is “You are guilty until proven innocent” and, unfortunately, the way some postmasters are now dealt with, the letter initially may say, “This is a voluntary investigation and voluntary attendance”, but you’ve not got a choice technically, bar to go and defend yourself. And the overall way in which, as I’ve mentioned previously, the way in which investigations are being conducted, and how the Post Office is marking its own homework, was very, very uncomfortable for us and we were calling it out.
Mr Blake: “‘No one believes us’ is a constant refrain from [postmasters]. WHILST FOAT IS AT THE HELM, NOTHING WILL CHANGE.”
Why have you singled out Mr Foat in particular?
Sarfaraz Ismail: We didn’t. We were talking in general terms of the Legal Team, and the tone of this, just to be clear as well was Henry’s filenote. I didn’t even know what a filenote was until Henry did this, and the tone maybe should have been better. I do accept that.
Mr Blake: Does the tone reflect the conversation?
Sarfaraz Ismail: The tone does reflect the conversation, yes.
Mr Blake: “We must” –
Sarfaraz Ismail: Capital letters and – yeah.
Mr Blake: Did capital letters indicate that you felt particularly strongly about something or that you were raising your voice or what do you –
Sarfaraz Ismail: No, it’s the way that Mr Staunton has documented it, but he’s documented accurately what we discussed.
Mr Blake: “We must also part company with all those investigators who behaved so terribly with [the postmasters]. What on earth is coming if Steve Bradshaw is still with us – his performance at the Inquiry was a disgrace and reflected terribly on Post Office. Foat used his leadership of the Inquiry Team as an instrument of his power – it all has to stop. The [postmaster] ‘is not the enemy’, ‘Only [postmasters] can solve this’ and tell us how to change. JB is an ex-policeman.”
Who is that a reference to?
Sarfaraz Ismail: John Bartlett.
Mr Blake: He is the current Head of the Investigation Team?
Sarfaraz Ismail: Yes.
Mr Blake: “His behaviour has been unacceptable and he needs to move on to prove that we have changed.”
Next paragraph:
“The payment to one [postmaster] of £16 as compensation said it all.”
Did you have direct experience of that matter?
Sarfaraz Ismail: Yeah, so that was a point Mr Jacobs specifically mentioned. They had waited for so long, and they got paid £16. How disappointing is that?
Mr Blake: The next paragraph:
“There are some 48 people involved in Investigations. There are over 40 just like Bradshaw. These people need to go. Project Phoenix was allowed by Foat to go into the long grass.”
Can you assist us with what was meant there?
Sarfaraz Ismail: So, as we’ve discussed prior to the break, how the Legal Team have had this specific project and they’ve been dealing with it for nearly two years, and nothing seems to have happened. And what, regarding – sorry, regarding the previous paragraph, I did reach out to JB and to Sarah Gray at a drinks reception in October ‘23 and I specifically mentioned “Allow postmasters to work with you, let’s try and make this a better place and deal with the issues quicker”, and I never got any response.
The only response I ever received from Sarah Gray, as the Interim Head of Legal was after I submitted my statement to the Core Participants after three, four days, I got an email saying, “Can we reset the relationship?”, which I thought was a bit ironic.
In terms of Steve Bradshaw, I did mention at at least two to three Board meetings, towards the back end of ‘23 that the business needs to be prepared for what’s coming out and, again, ignored. And then once Steve Bradshaw gave testimony, the Board and the wider executive were “How is Steve still in the business? What’s going on? Why have we not dealt with this?” And that’s providing you some context in terms of where the long grass came from because we thought it should have been dealt with.
Mr Blake: Sticking with that paragraph, it says:
“Bradshaw went into one of Saf’s stores some years ago and immediately said ‘we are closing you down’.”
Is that something you recall?
Sarfaraz Ismail: Yes.
Mr Blake: “[Postmasters] tell him not much has changed since. There is a complete lack of respect for [postmasters] and that has to change.”
Next paragraph:
“As a Board, we need to send a signal to the Executive providing guidance and improving the culture significantly. The current culture was described as ‘toxic’ (references to our reaction to fake notes, ATM differences, et cetera, et cetera).”
“Toxic” is a phrase that’s mentioned by a number of people, it may mean different things; what did you mean by the reference to “toxic” there?
Sarfaraz Ismail: For me it’s got various meanings: not what’s expected, misinformation, unfortunately, there’s some disinformation, that kind of culture towards postmasters.
Mr Blake: It says:
“We discussed a suggestion that we set up a BOARD Committee on Culture with both [postmasters] on it with one or two others. It would need to have teeth. It would be outside Saf and Elliot’s [Non-Executive Director] responsibilities and would require additional rem. It would have the benefit of making us more PM centric. We need as a Board to be seen to grip the situation.”
Do you have anything to add in respect of that paragraph?
Sarfaraz Ismail: No, I think it’s pretty clear what Mr Staunton’s intentions were in trying to deal with the issue.
Mr Blake: It says:
“Both thought there ought to be [Postmaster Non-Executive Director] membership on all committees [including] RemCo.”
That was something you spoke about earlier on in your evidence today:
“It may be another [postmaster] director would be needed – but that may be difficult …it was noted that the December bonuses went down badly with [postmasters]. There were no similar bonuses for [postmasters]. Our generous Sick Leave was highlighted – there are no similar benefits to [postmasters]. How are we accepting so many people drawing sick leave payments [especially] in HR.”
If we scroll, please, to page 3, we see at the bottom of page 3, Mr Staunton sends this note to both yourself and Mr Jacobs. He says:
“I have done a file note of our conversation. Is that a fair reflection of your views. How do you feel about me sending it to [Non-Executive Directors] before the next meeting? The English does not need to be perfect. The key points are important. Are there any points I have missed?”
Who was it understood by you to potentially be receiving this file note?
Sarfaraz Ismail: The – initially, the NEDs, so we can have a discussion.
Mr Blake: Was there due to be a meeting?
Sarfaraz Ismail: Yes.
Mr Blake: If we scroll up, we see from yourself, and you say:
“This seems fine.”
If we scroll up further we can see the response from Mr Jacobs. He says:
“Yes, this is a fair reflection of our discussion.”
He then addresses a point on ATM discrepancies.
Next paragraph, he says:
“One final thing to add: ‘Pathclearing’ risks looks like a witch hunt – if we start going into branches saying ‘you’ve got losses to make good’ this will have echoes of the past …”
Very quickly, can tell us what path clearing was?
Sarfaraz Ismail: So there is a programme that still hasn’t got off the ground yet which is called RTP, retail path clearing, and this project is to get the Post Office Network ready for the new branch systems. Now, the purpose of this project is to ensure branches’ books balance before the new system is implemented. Now, the problem myself and Mr Jacobs had was the tonality and the current culture in the organisation did not give us any confidence at all to have this programme executed in the manner it should be and what was not helpful either was the individuals who are responsible for this programme, accountable, for example Martin Roberts at the October the ‘23 Board meeting. He was informing the Board about a horror story about one specific postmaster who potentially did something, which then was relayed back to the board which gave the Board the wrong kind of perception of postmasters and, unfortunately, we kept getting a few stories like this, and then we were having one-to-ones with Martin he would repeat these kinds of stories.
Now, our fear was, if he’s running that programme, it’s going to look like exactly what it is as in the echoes of the past. And there probably will be branches with shortfalls, but it’s about how we deal with them going forward, and we just did not have the confidence that the business could execute this.
Mr Blake: So the business having not significantly chased shortfalls for a number of years might – are going to reach a point at which they have to confront people’s shortfalls, is that the issue?
Sarfaraz Ismail: Yes, yes, and I’m not saying the business shouldn’t do that. Of course the business should do that. That’s the right thing to do. However, there’s a way and an approach to do this and, as we’ve seen from the correspondence, as we’ve seen from some of the conversations that myself and Elliot were having, it’s very difficult to walk into a branch with – who has a shortfall, with the cultural baggage that you have to have a neutral starting point. It’s very difficult.
Mr Blake: Thank you. The final paragraph there:
“Since we spoke we saw the VoC …”
I think that might be VoP, Voice of the Postmaster?
Sarfaraz Ismail: Yes.
Mr Blake: “… have issued a press release – it backs up everything Saf and I said to you when we spoke to you.”
Just pausing there, who are Voice of the Postmaster?
Sarfaraz Ismail: Voice of the Postmaster are an independent organisation who have more postmasters than the NFSP, active postmasters. This is a voluntary organisation and quite a few of the postmasters I speak to are very, very complimentary of the VOP, in terms of how they’ve helped them, and an example is in my statement when I was contacted by a member of the VOP regarding the Yateley Post Office –
Mr Blake: We’ll come to that shortly.
Sarfaraz Ismail: Okay.
Mr Blake: Thank you very much, and we’ll also come to the press release itself in a moment.
Sarfaraz Ismail: Okay.
Mr Blake: Let’s scroll up, please the response from Mr Staunton:
“Dear Both,
“Would you like me to copy the Independent [Non-Executive Directors] with my file note and Elliot’s clarification? Accordingly, it would not go to Nick but may help elicit a joint view from the [Non-Executive Directors].
“Nick has his hands full and is under ENORMOUS STRESS with the Select Committee and defending himself in yet another Investigation. I will brief him after the conversation with the [Non-Executive Directors].”
Were you aware of any particular stress on Mr Read at this point in time?
Sarfaraz Ismail: Yes. He’d been through a lot.
Mr Blake: If we scroll up, we can see your response. You say:
“Yes happy to send it, but it might be worth sending along with the [Voice of the Postmaster] press release too?”
If we scroll up, Mr Staunton says:
“Have just this minute sent a note to Di …”
Was Di his secretary, Diane Blanchard.
Sarfaraz Ismail: Yes, she’s our collective PA.
Mr Blake: “… forwarding the [Voice of the Postmaster] press release, Elliot’s clarification email, and my file note.”
You say:
“Thank you for your support and effort Henry it’s refreshing to see and much appreciated.”
If we scroll up above, Mr Staunton says:
“I am determined to get it right for existing [postmasters] and past wronged [postmasters]. However I nonetheless appreciated your thanks.”
What was your view of Mr Staunton’s leadership up the Post Office?
Sarfaraz Ismail: My experiences with Mr Staunton were positive. I thought he brought a commercial perspective to the business that was well needed. He was wanting to get more involved in fixing the issues that I don’t think – Tim Parker was a lot more trusting of the wider executive, whereas Henry Staunton quite quickly saw some of the issues that were occurring, especially regarding information that was and was not coming to Board. And, for him, getting justice for the postmasters that have been wronged was one of his top priorities.
Mr Blake: Thank you. That’s 15 January. There’s then a Teams meeting on 18 January. Can we please turn to POL00448503.
We see there an email to the Non-Executive Directors, from Mr Staunton.
“Ahead of our call on Thursday, please see email below and attached copy of the Voice of the Postmaster press release for January, together with a letter addressed to me.
“In addition, please see attached file note I prepared following my conversation with Saf and Elliot on Sunday – they have agreed last night that I could share with you. They were very supportive of Nick, but you will see that the [Voice of the Postmaster] have made negative statements about Nick.”
Can we please turn to POL00448537, and this is the Voice of the Postmaster press release. They say:
“We deplore the actions of the Post Office in the past and the present and we believe nothing will change and the only way for the Post Office to move forward is a complete overhaul of the organisation …”
It looks like it’s a bit of a manifesto for change; is that right?
Sarfaraz Ismail: Yes.
Mr Blake: First:
“Justice for previous postmasters and compensation paid as soon as possible.”
Then there’s a reference to the pay increase, lack of a pay increase.
Third:
“The removal of any employees from within [the Post Office] that were employed during the Horizon scandal period. The revelations this week and throughout the Inquiry are not new to postmaster or employees within [Post Office]. This is common language, and the approach will never change without a complete overhaul.”
Then they call for the removal of Mr Read as CEO and they say he has failed to provide compensation, failed with the cultural overhaul, failed to remove the CFO, failed to remove the CRO, failed to remove individuals drenched in guilt in the past, failed to reduce central costs, failed to hold to account the woeful party engagement team.
What was your view of this press release?
Sarfaraz Ismail: I agreed with the press release, maybe they went a bit too far regarding Mr Read because they wouldn’t necessarily be aware of the pressures Mr Read was under but the vast majority, from a postmaster’s perspective looking into the organisation, it’s quite clear that the business has failed on number to these points.
Mr Blake: Now, we saw that email, the covering tell that attached both this press release but also the filenote as well and Mr Jacobs’ email. That was sent to Non-Executive Directors. Were you aware that they were also circulated at some point to Mr Read?
Sarfaraz Ismail: Yes. Mr Staunton did send them to Mr Read.
Mr Blake: And –
Sarfaraz Ismail: That’s what I’ve been told.
Mr Blake: Yes.
Sarfaraz Ismail: We did ask for disclosure. My solicitors did ask. But the Post Office refused.
Mr Blake: But you weren’t aware at the time that it took place, you weren’t asked in advance as to whether that could be shared with Mr Read?
Sarfaraz Ismail: From my understanding, my understanding was that it would be shared with Mr Read.
Mr Blake: Thank you. Do you recall a conversation about that?
Sarfaraz Ismail: Yeah. I think from what I recall, the initial sequence of events was to have it discussed with the NEDs, then once that’s happened, to then escalate it to Mr Read, to then – so then he is aware of our concerns, and then hopefully have a plan of action to help solved issues.
Mr Blake: Was it your understanding that that would be on a confidential basis?
Sarfaraz Ismail: 100 per cent on a confidential basis.
Mr Blake: Moving now to the Teams meeting of 18 January, can you recall now who attended that meeting?
Sarfaraz Ismail: Yes. Lorna Gratton was not invited, and I think Ben Tidswell gave his apologies.
Mr Blake: Thank you. Was Mr Read present?
Sarfaraz Ismail: Yes, for some of the meeting, the first part.
Mr Blake: Do you know why it was only some of the meeting and not all of the meeting?
Sarfaraz Ismail: I can’t remember. Maybe it was – there’s always a point, so, for example, after Board meetings, we have a NED-only discussion as well, and Mr Read would leave the room or sign off, if it was an online meeting. So I’m assuming where we had a situation where there was just specific topics to go through, just with NEDs only, so Mr Read gave his update and then exited the meeting.
Mr Blake: There came a point, you say in your statement, that you were informed that Mr Read had sent that correspondence to Mr Foat and Mr Roberts. Can you assist us with how you were informed of that?
Sarfaraz Ismail: Yes. So what was extremely disappointing was Mr Read had already sent the email to Mr Foat, Mr Roberts and to other individuals within the organisation, who were in their team and, whilst on the call, at no point did he mention that he had done that. So we were unaware. And Mr Read then left the meeting as he would, and the discussion moved on to the rest of the agenda.
And then Amanda Burton advised the meeting that, just to make the Board aware, the remaining individuals on the call, that she had had a discussion with someone – with Ben? Or she had a discussion with someone who received this email. And my heart sunk, feeling “Wow, I’m already vulnerable, this put me in an even more compromised position”.
Mr Blake: Just pausing there, why do you say you were vulnerable?
Sarfaraz Ismail: Because I’m a postmaster.
Mr Blake: What do you mean by that?
Sarfaraz Ismail: The culture in this organisation, as it’s been documented, is you are guilty until proven innocent. If there is something potentially – postmasters are seen with suspicion, unfortunately, and being on the Board now going not necessarily up against, but that’s what it looked like, all we were doing was our duties as Directors, calling things out, trying to put this organisation in a better place, but it looked like it was myself and Mr Jacobs against the untouchables. That’s what this looked like.
So we were extremely vulnerable, extremely concerned, and the fact that Mr Read had sent the email was a horrendous breach of trust. And I sent an email at 10.00 – sorry, am I jumping the gun?
Mr Blake: No, you carry on, please.
Sarfaraz Ismail: Okay. So I then sent an email at 10.00 because, honestly, I was so disappointed, asking some serious questions of Mr Read’s judgement –
Mr Blake: I think we’ll come to that.
Sarfaraz Ismail: Okay, I’m sorry.
Mr Blake: There’s one email before that that I’d like to take you to, and that’s Mr Staunton’s email. Can we turn to POL00448387, and that’s an email from him at 6.17 pm, so the same evening. If we scroll down, he says, as follows, he says:
“Nick confirmed that he had sent the confidential note to the Independent NEDs entitled Project Pineapple to Ben and Martin amongst others. This note contained the private comments of our postmaster NED colleagues inter alia on Ben and Martin.
“I have suggested he immediately apologise to Elliot and Saf as this was a very serious incident as far as they and other [Non-Executive Directors] were concerned. Elliot and Saf were now exposed to further investigations from these two individuals particularly in view of the fact that Investigations were ‘untouchable’ (to use Nick’s words). I suggested he apologised to all of the NEDs at our private meeting before the Board, which he is happy to do.”
Just pausing there, at this time, did Mr Read apologise to you on this occasion?
Sarfaraz Ismail: No, he blamed Henry for sending him the email.
Mr Blake: It then says:
“Nick said it was an accident resulting from the huge pressures on him. There is a lot on his mind including the investigation on him. He understands it was a serious lapse and was very apologetic.”
There’s a reference there to an investigation on Mr Read. Very briefly, because we will come to it in due course, what did you understand that to be a reference to?
Sarfaraz Ismail: That was the investigation into the complaints made against Mr Read by the former Chief People Officer, Jane Davies.
Mr Blake: Thank you. After that occasion, there’s a reference there to a meeting before the Board and a potential apology. Was there a subsequent occasion on which Mr Read did apologise?
Sarfaraz Ismail: No. He – as I’ve said previously, he blamed Henry for sending him the email, which I just, I couldn’t get my head round, to be honest. And for me, as I’ve said, it was a massive breach of trust. It’s not something that I would have expected a CEO to have done. It was very, very disappointing and a very scary time.
Mr Blake: Can we please turn to POL00448383. If we could look at page 2, this is your 10.08 pm email. Second page, please, you say:
“Dear Nick,
“I am writing to address a deeply concerning and distressing matter that has recently come to my attention. As you are aware, there was a confidential meeting held between myself, Elliot, and the Chairman, where we discussed our observations and concerns regarding the operations of the Post Office and our ongoing cultural issues. Regrettably, it has come to my knowledge that the notes of this meeting, which were intended to be kept in strict confidence, have been circulated to the individuals who were the subject of our discussion.”
You set, if we scroll down, a number of different questions. So you say:
“I request that you thoroughly investigate how this breach of confidentiality occurred and address the following questions:
“1. Was this breach a result of negligence or a lack of judgement on your part?
“2. How can a mistake of this magnitude happen within this organisation, especially when dealing with sensitive matters and with all the current spotlight on us?
“3. By exposing me to such a compromising and jeopardising position, how do you expect me to continue working effectively with the individuals involved?
“Furthermore, I would like to enquire if incidents of mistakenly sending confidential information to the end user have occurred in the past?”
Did you receive a substantive response to these questions?
Sarfaraz Ismail: I still haven’t received a response to any of these – to this email.
Mr Blake: Thank you. If we scroll down slightly. There’s reference there to becoming aware of the distribution of non-disclosure agreements. Again, we’re not going to go into what was or wasn’t said before Parliament or going into legal advice in that respect but, in broad terms, what was your concern regarding non-disclosure agreements?
Sarfaraz Ismail: For me, there was organisations who could – and individuals, who could be more helpful to the Inquiry but, unfortunately, they had to abide by the NDAs and, for me, that was morally wrong.
Mr Blake: Thank you. If we scroll down, your email continues, and if we go over to the first page we see that Mr Jacobs echoes your views. We’ll be hearing from Mr Jacobs tomorrow in respect of his email.
Sir, that might be an appropriate moment to take our afternoon break. Thank you. If we could come back at 3.30.
(3.17 pm)
(A short break)
(3.30 pm)
Sir Wyn Williams: Yes, Mr Blake.
Mr Blake: Thank you, sir.
Mr Ismail was there something that arose from our previous discussions that you wanted to say?
Sarfaraz Ismail: Yes, I would just like to give clarity on one of the questions you asked me regarding the inputting of stamps onto postmasters’ Horizon terminals. I’m not sure if I was clear before. The problem myself and Mr Jacobs had with that practice in the current Post Office was that created shortfalls and those shortfalls then required postmasters to dispute. However, it was the Post Office going in, creating them shortfalls, which was problematic. I just thought I wanted to clear that up.
Mr Blake: In your view, did the postmaster have sufficient visibility of what was going on at their terminal when the Post Office was coming in to input that information?
Sarfaraz Ismail: So some postmasters were not aware. Some postmasters were aware but, either way, they had very little choice. They were told “This is what we need to do, and you need to review and dispute it, if you’ve got an issue”.
Mr Blake: In terms of those who weren’t aware, was there a notice that was subsequently sent round or information provided to those subpostmasters?
Sarfaraz Ismail: I’m not sure how they were communicated with but one of the reasons I know they weren’t aware is because they weren’t at the branch when the practice took place when they received the assurance visit.
Mr Blake: Thank you.
Moving to another document, POL00448385. There was a Board meeting on 29 January of this year, and this is a note that you prepared in advance of that Board meeting. We’ll see – I think we have at least two versions. I think this was your original draft; is that correct?
Sarfaraz Ismail: Yeah.
Mr Blake: That’s a longer list of concerns to add to those that were in the original Project Pineapple email; is that correct?
Sarfaraz Ismail: Correct.
Mr Blake: You say:
“As we prepare for the upcoming board meeting, I wish to draw your attention to several critical matters to consider and discuss further.”
Was the aim of this to send this to everybody who was going to be attending the Board?
Sarfaraz Ismail: Correct.
Mr Blake: The first issue was the confidential email on Project Pineapple. You say you’ve sent an email raising serious concerns about how and why this has happened. However, your response remains unanswered since your communication on 18 January:
“Would this lack of respect and response be the same if it was another [Non-Executive Director] or is it because I am [postmaster]?”
Second, the “Role of Legal”, you say:
“Despite ongoing investigations spanning years, over 40 employees remain employed within the organisation, whose continued presence raises serious questions about our hiring and retention policies causing embarrassment for [the Post Office].”
Are those all the issues that we have already spoken about?
Sarfaraz Ismail: Yes.
Mr Blake: If we scroll down, there is another heading of “Culture”:
“Postmaster discrimination must end immediately, this rhetoric that they are all on the ache and are the same is unacceptable. Richard Taylor comments are common within the walls of [the Post Office] and I was stunned to learn this also the business legal position as the Chairman confirmed to me after my persistent requests for clarity.”
Can you assist us with the writing in red, please?
Sarfaraz Ismail: So this was – there’s two versions of this. This version has more clarity on it and a bit more context, and this was something that I felt I needed to add on to the cultural piece, just to give it some more context, and this was after the letter that was sent to Alex Chalk.
Mr Blake: What did you mean by that paragraph?
Sarfaraz Ismail: For me, the business still has this perception that postmasters are on the take, unfortunately, and, as Richard Taylor’s comments – Richard Taylor’s comments mentioned, and also, unfortunately, the letter to Alex Chalk, for me, it’s still not the right position that this organisation should be in.
Mr Blake: So where you refer to the business legal position, that’s the letter to the Lord Chancellor?
Sarfaraz Ismail: Yes, and, even from – sorry, from an investigations perspective, the default position within Legal is not right. It’s, again, protect the Post Office at all costs and it’s not a neutral position to start from.
Mr Blake: Thank you. If we scroll down, the next part in bold, “A Comprehensive reevaluation of the Retail and Postmaster Engagement Team”, and you give a series of reasons why you consider there should be a comprehensive, at this point, re-evaluation. We’ll see the later version, I think, calls for it to be disbanded altogether.
Sarfaraz Ismail: Yeah.
Mr Blake: If we look at the first one, you say:
“First and foremost, [their] inability to adapt to the evolving needs of postmasters …”
Can you assist us very briefly with that first issue?
Sarfaraz Ismail: The simple test was looking at the postmaster survey and, for me, they had failed miserably because the results were getting worse, and what was not helpful either was when it came to the VOP, the business being told – so Henry was specifically told, and I’m assuming so were the Retail Team, from Sarah Gray, not to communicate with the VOP, which for me was very disappointing because, as an organisation, we should be communicating with anybody who represents postmasters.
Mr Blake: Is that because the formal lines of communication are with the National Federation of SubPostmasters or the Communication Workers Union, rather than this new organisation, or something else?
Sarfaraz Ismail: No, the default position within the Post Office is to communicate with the NFSP. That is the recognised body. However, as I’ve said previously, the VOP has now got more members than the Federation and, for me, even if the CWU has a few members, we should still be talking to them. We shouldn’t be trying to play one off the other. And the legal advice, which is privileged, the Post Office didn’t waive privilege on that. For me, it was disappointing seeing that response to stifle any kind of conversation that could take place for the betterment of postmasters.
Mr Blake: Thank you. If we scroll over the page, please, you then say:
“Additionally [their] track record …”
Can you assist us with that point, please?
Sarfaraz Ismail: So there was – we had strategy days in ‘21. We have them every year. There was some in July ‘21, July ‘22 and July ‘23. What was disappointing was there was specific targets set to try and get the business in the right direction, and this business, to be clear, is dealing with an unprecedented level of issues. So the strategy is really important to ensure there’s still a Post Office left after this Inquiry.
Now, what was disappointing was the Executive would cherry pick which – the wider Executive, sorry, would cherrypick the issues that they wanted to implement. Now, the example here, regarding DMBs, were when myself and Mr Jacobs had a discussion, the payback period and the planning that was done regarding DMBs was 40 years. It was so poor, in terms of the way it was planned, and this is a huge cost to the business.
So it was disappointing that there was no effective execution of strategies that had been discussed.
Mr Blake: The next example you give is in relation to the postmaster surveys. What was the issue there, briefly?
Sarfaraz Ismail: The postmaster surveys were just not a true reflection of what was going on. So, if you look at July ‘24’s Board meetings, how the sets of data was presented from the Postmaster Engagement Team and from the HR team, from Tim Perkins in the HR team, and the difference was the data was very similar, however the data presented by Tim Perkins was accurate, and had integrity, and was trying – and said, “Yeah, we’re not good enough, and these are our problems, let’s make a plan to fix”, whereas the Postmaster Team was quite happy with the 30 per cent that were happy and they didn’t look at the 70 per cent.
So, unfortunately, this manipulation of data, I found very unhelpful to mark your own homework again and, potentially, be linked to bonuses within the organisation’s culture unfortunately.
Mr Blake: The next paragraph, you say there, refers to recent incidents such as – that’s the stamps issue, I think, isn’t it?
Sarfaraz Ismail: Yeah.
Mr Blake: Then you say:
“Individuals within this team have several complaints against them …”
Very briefly, can you assist us with that?
Sarfaraz Ismail: Sorry, is it the paragraph where, “Moreover, recent incidents”, that one?
Mr Blake: “Individuals within this team”, the final highlighted paragraph.
Sarfaraz Ismail: (Pause) It’s in reference to what I’ve already mentioned. So the untouchables, the performance levels and the fact that we’re discussing this, but there’s just no performance management, and how, within the organisation, we’re told in September and October how morale is low because people are worried when they’re getting their – when they are going to be receiving their bonuses, and it just showed the huge cultural disconnect with the wider Executive and the postmasters of today.
Mr Blake: Moving on, the next part in bold is the NDA issue, which we’ve already addressed.
Sarfaraz Ismail: We’ve discussed.
Mr Blake: We then have “Establishment of a [postmaster] Oversight Committee”, and that’s, I think, the matter that we saw in your previous correspondence with Mr Staunton, that was something that was floated as a potential recommendation; is that right?
Sarfaraz Ismail: That’s correct.
Mr Blake: Thank you. Can we please turn to POL00448406, and this is the final version, or this is an updated version that was sent to Mr Staunton –
Sarfaraz Ismail: Yes.
Mr Blake: – broadly the same. I think, if we scroll down, we can see “Suspended Historic Employees”, is now a standalone topic. I think it wasn’t a standalone topic –
Sarfaraz Ismail: Just to break it down, the point of this note was we want to set this business up for success. We want it to be right. We want it to be here for generations to come and, by giving the Board an opportunity to see what’s really causing stress to postmasters and causing stress to the Postmaster NEDs and bringing it to life to produce a plan to deal with it, that’s where this note was going.
Another point to just add to this, and I’m not sure if you’re going to come to this, hence why I’m mentioning this now, once Mr Staunton was dismissed, this note never actually made it to the Board, unfortunately and myself – and Mr Jacobs will speak for himself tomorrow – I was definitely on the edge and I was ready to resign if the business could not do this because the level of resistance that we were getting constantly for what we were trying to do was bitterly disappointing.
Mr Blake: The next paragraph we see there, as discussed, it is now disbandment of the Engagement Team. If we scroll over the page, now the “Role of Legal Counsel”, and it now refers to Ben Foat specifically. Why Ben Foat in particular?
Sarfaraz Ismail: Because Ben Foat was the Head of Legal, and we had had discussions regarding whistleblowing and how that was marking its own homework within Legal and how it shouldn’t be; it should be a totally separate function. So that point was specifically to help Ben to be in a better position to manage his workload but also help the organisation getting in a better position to deal with investigations and whistleblowing.
Mr Blake: Thank you. Could we turn to POL00448384, please. Mr Staunton responds, and he says:
“Dear Both,
“Elliot, I think you were going to raise a number of these issues with Nick. His responses would help Saf finalise his note.
“How would you like me to take this forward? Options are:
“Copy your note to Nick
“Copy to Nick and all [Non-Executive Directors]
“You just present these issues at the private meeting
“Other.
“A good outcome would be making some big changes whilst maintaining your relationships [including] with Nick – quite difficult.”
Two days later, Mr Staunton was dismissed. Do you know how or were any of those options ultimately taken up?
Sarfaraz Ismail: We couldn’t. The plan for me was to go to Board and present these points to the Board and to see where the Board wants to take action and, as I said previously, resigning was going through my thought process. However, I would have been letting down the postmasters of today/yesterday, and there would be no oversight. So I just couldn’t do that.
Mr Blake: How did you hear of Mr Staunton’s dismissal?
Sarfaraz Ismail: From Sky News.
Mr Blake: Did anyone tell you why it hadn’t been notified in advance to, for example, Non-Executive Directors?
Sarfaraz Ismail: Because it’s a – there is a tiered Board system. So there’s certain individuals on the Board who know everything. Then there’s other individuals who know a little bit more, and then there’s Postmaster NEDs who know on a need-to-know basis. So there was clearly, clearly, from looking back, in hindsight, issues and discussions being had, which I was not privy to, which resulted in Mr Staunton’s dismissal.
Mr Blake: What was your understanding at the time for the reasons for his dismissal?
Sarfaraz Ismail: I wasn’t given any clear instructions and, from the conversations Mr Staunton had, for example on redress, it was unhelpful when a Government Minister advised him to put a sticky plaster approach on the Post Office to hobble on through to the next election. And that was unhelpful for all of us: for the CEO, for the Board. It was unfair.
So the explanation that we were provided after Mr Staunton was dismissed was his behaviour became erratic. I never saw that but I wouldn’t be seeing Mr Staunton every week so I wouldn’t necessarily be in his company, if you see what I mean. So, for me, I didn’t see what Mr Staunton had done wrong until later on when Mr Tidswell briefed the Board in terms of what, how, and why, ultimately. And Mr Tidswell also mentioned that there were some NEDs who were willing to resign, and it was a very vague statement, and for – from the conversations myself and Mr Jacobs had, certain individuals within this wider Executive thought it was me and Mr Jacobs, and we made it very clear to the NEDs and to the wider Executive that at no point did we imply that Mr Staunton should go or we would go. That’s just completely incorrect.
Mr Blake: Do you know if there were, in fact, other Non-Executive Directors who did threaten to resign?
Sarfaraz Ismail: I raised the question at the private NED meeting, and I wasn’t given an answer.
Mr Blake: Thank you. One final document before we finish for the day. Can we please look at POL00448514. If we could start on page 2, please. This is 31 January this year, an email from Martin Roberts, the Group Chief Retail Officer. He says as follows:
“Elliot/Saf,
“I appreciate you taking the time last evening to apologise and explain the dreadful situation I found myself in over the last few weeks.
“The allegations and comments were uncalled for and upset me a great deal and should never have happened and the detail sent to me under the title Project Pineapple was unacceptable.
“I would now ask that you please put in writing the apology and retract all the allegations and statements presented in the email that I was copied in on.
“I look forward to receiving the email reply so we can move on and continue working together.”
How did you feel on receiving this email?
Sarfaraz Ismail: So myself and Mr Jacobs had a discussion and I do sympathise with Martin. I feel he was put in an unfair position as well and, again, like you said, the way he received it, he didn’t expect either, and there’s an email after this where we –
Mr Blake: Shall we have a look at that?
Sarfaraz Ismail: Yeah.
Mr Blake: That’s on the first page. Shall we scroll over to the first page, please. You have Mr Jacobs.
Sarfaraz Ismail: Yes.
Mr Blake: Was this email discussed with you before it was sent?
Sarfaraz Ismail: Yes, we did that quite regularly.
Mr Blake: He says:
“As promised, Saf and I sat down and talked with Martin after the Board meeting yesterday. An honest and open discussion was had and we believe we had put the matter to bed.
“This evening, we received the email below from Martin asking us to retract the statements made in the document.
“Whilst we have both made clear the tone and the way it was delivered was unacceptable and should never have been circulated; the content is not something we feel is incorrect with regards to the Retail Team leadership and performance.
“When we look at the points in question, our position remains that these are both important and urgent issues which must be addressed, not ignored – regardless of how they came into his mailbox.”
Then you set out there all of the issues, and you say:
“None of the above represent issues that we believe we can or should withdraw from the record – however they were inappropriately delivered to the people who received them as a result of Henry’s actions.
“We have a call booked with Martin for our quarterly catch-up tomorrow morning (a standing call in the diary) – and we are not looking to inflame matters further, but clearly, we cannot just issue some sort of blanket withdrawal.
“As such, your guidance would be appreciated on how you think we should approach this.”
It might be suggested that all of this infighting, that the request for a written apology in response to the Project Pineapple email and, frankly, from all sides, is more like a playground than a £1 billion company. What do you say about that?
Sarfaraz Ismail: I agree with you. It’s really disappointing and, for myself and Mr Jacobs, once Henry was dismissed, as I said before the break, we were left in a very vulnerable position, and the business didn’t help us. Myself and Mr Jacobs had to clean the mess up. So we proactively organised meetings with Martin and with Ben because, for us, it was – the organisation is more important than any of us, and we had to repair our relationships. The points we made were very clear and we stuck with the points we had made because, for us, they were correct and they needed to be dealt with.
However, the business didn’t do anything to manage the relationship, or help us put it to the past and move forward and, looking back, yes, it does seem very playground style. It’s like when my children fight. It seems that kind of a scenario, unfortunately. But, again, this is the lack of taking ownership, and this is a classic example of someone senior within the business saying, “Right, let’s have an adult conversation. This needs to be nipped in the bud. Let’s move this business forward”. And, unfortunately, that just didn’t happen. It was left to me and Mr Jacobs.
Mr Blake: Sir, I said one final email. There is one more final document on this topic and can I just take that very briefly?
Sir Wyn Williams: Of course.
Mr Blake: Thank you. It is BEIS0000753. This is a note from Minister Hollinrake’s office, taken by the Private Secretary to the then Minister. It’s a meeting on 29 February 2024. We see there the attendees were Mr Read; Kathryn Sheratt, the interim CFO; the Transformation Director; Lorna Gratton from UKGI; and others.
I’m just going to read to you a very short passage from that. If we scroll down, Lorna Gratton says as follows:
“Need as much support as you can get from Ben Tidswell to try to get the Board functioning properly. We need to try and find a way through the Project Pineapple memo.”
Mr Read says:
“We’ll have a Board meeting tomorrow and see where we can get to. Postmaster NEDs may use tomorrow as an [opportunity] to criticise on funding and anti-postmaster sentiment. Need to avoid tomorrow morning being a proper road crash.”
Kathryn Sheratt says:
“Had a bit of a flavour of it on Monday, they think it did not do enough for the postmasters. Elliot mentions where the investment for the future of the business and the postmaster rem is front and centre, costs are rising, and this has been a theme of theirs for quite a while.”
Mr Read says:
“This goes back to whether the Postmaster Directors are playing a role of a director, or of a trade union rep. I don’t know where that’s going to go. They are extremely exposed as a result of Project Pineapple. Not sure how to patch this up. In a slight stand-off.”
How were your relations with Mr Read and others at this point in time?
Sarfaraz Ismail: So it was difficult once Henry had left because of the way the Board’s tier system was working, and I feel for Mr Jacobs it was difficult also because Mr Staunton did mention in a private phone call that the UKGI rep and one of the previous NEDs, whilst his investigation was going on – this was all while Pineapple was happening – they did make anti-Semitic remarks about him. So, for him, he was already feeling really – his morale was low; and for myself, as well.
And once we moved forward, once Mr Staunton had left, Mr Tidswell took the realm (sic). It was very difficult to try and be in a position of where the business understands where we are at. So there was a bit of a stand-off. And all we were trying to do is put the business in the right direction, and it clearly shows how the wider Executive, and on this occasion it’s the CEO, Nick Read, how they just couldn’t digest the critique that myself and Mr Jacobs, and the challenges that we were producing for the wider Executive. Hence, why their opinion is we were acting more like trade union reps.
And again, from my perspective, the last two budgets this organisation has done, I rejected both on the understanding it did not address what postmasters were asking for, and the business just ignored me and carried on.
Within them budgets, again, there’s plenty for the incremental increases for POL staff and their bonuses but it just does not go far enough. And these are the true realities of what’s going on but, clearly, as this note shows, the wider Executive just does not want to listen to that.
Mr Blake: Lorna Gratton continues:
“They’re not in a good place and aren’t operating in a way appropriate for the business.”
Mr Read says:
“How can they ensure their own self-interest doesn’t cut across their role in supporting [the Post Office] as a business.”
The Minister says:
“Keen to support any way we can.”
Mr Read says:
“Want to try to create an environment where we don’t create a drama.”
The Minister says:
“These are businesspeople and I think that if I felt I had a business that was in terminal decline, I’d be pretty worried as well. They are bound to look for solutions, radical ones, but what can we do to try to spread a picture to the network that there is a more positive future. The more you can indicate there is a sustainable future to this the better. We can all see with what’s happened over the last few weeks there is an appetite for change here and articulate it to your advantage, to set a new perspective.”
If we just go over the page, please, about three quarters of the way down, just below “Let’s park it now”, the Minister says:
“In terms of other messaging, the mutualisation has died down a bit.”
Mr Read says:
“Met them on Monday [Voice of the Postmaster] etc. Their main point was about the future of the Post Office and representation of postmasters. We are going to see some governance work done by Grant Thornton in a few weeks’ time.”
Lorna Gratton says:
“I don’t think postmaster oversight of the Board is worth it, I think there’s good mileage for more postmaster input in the retail part of the business.”
Were you aware of the nature of the relationship between the Executive level and either UKGI or the Department for Business, as set out here?
Sarfaraz Ismail: I did have some understanding but, from my observations being on the Board, I slowly started realising. Initially, I wasn’t – let me rephrase. The previous UKGI shareholder, Tom Cooper, I feel was more transparent and a lot more open. Now, I’ve not got any criticisms either way, but I think Lorna’s taken the role slightly differently and, once Lorna started, obviously I had already had a certain amount of experience being on the Board, and then I realised quite quickly that Lorna’s style was very, very different.
She was very, very close to the wider Executive, and she clearly, obviously, from this, raises points which are not in the business’s interests because what myself and Mr Jacobs were asking for, for the last two or three years, was automation, one example, producing a new system which is not a replacement for Horizon. That’s not good enough. We need a system that is 2030, minimum, ready for what the future looks like for this network. So this was very basic asks that myself and Mr Jacobs had.
And this meeting, this entire document, clearly shows what I said previously, which is this was – this is a tiered board, was a tiered board, and individuals are given information on a need-to-know basis, which is not the way a proper, functioning, good governance compliant board looks like, unfortunately.
Mr Blake: Thank you very much.
Sir, we will be exploring those issues further tomorrow.
Sir Wyn Williams: Thank you very much. So don’t discuss your evidence overnight, all right?
There may be some confusion about our start times. I think, on our website, it was still being suggested that we start at 9.45. I think we’ve agreed, have we not, that we’re going to start at 10.00 in this phrase, giving ourselves an extra quarter of an hour to get ready for the fray, so to speak. So just in case anybody was under any doubt about that.
See you at 10.00 tomorrow, albeit remotely.
(4.04 pm)
(The hearing adjourned until 10.00 am the following day)