Official hearing page

16 October 2024 – Tracy Marshall and Melanie Park

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(10.03 am)

Mr Stevens: Good morning, sir. Can you see and hear us?

Sir Wyn Williams: Yes, thank you very much.

Mr Stevens: Sir, we’ll be hearing from Tracy Marshall this morning.

Sir Wyn Williams: Yes. Can Ms Marshall be sworn, and then I’ll raise a very short matter with you.

Mr Stevens: Of course.

Tracy Marshall

TRACY LOUISE MARSHALL (affirmed).

Sir Wyn Williams: Mr Stevens, the issue which I wish to raise with you relates to some questions which Mr Beer asked of Mr Read last week in respect of one or more emails going back to 2010 or 2011, which apparently were emails of which this witness will have knowledge. Let me try and put it as neutrally as possible.

My understanding, Mr Stevens, is that Mr Read (sic) did that in order to probe whether Ms Marshall was an appropriate witness to give evidence on behalf of the Post Office in respect of what I’ll call current policies and practices, and that was why he was raising issues from many years ago.

You have made me aware, quite properly, that you intend to ask some questions about events in the period – and I’m deliberately choosing a wide period so that nobody thinks it’s confined – between, say, 2010 and 2013 of this witness and, therefore, I have had to consider whether or not it is appropriate that this witness be given a direction about self-incrimination, that direction having been given to a number of witnesses who gave evidence about that period in time.

My current view is that, notwithstanding that there will be some questions about that period, it is not necessary for me to give that direction to Ms Marshall but I wanted you to have the opportunity of making any observations about that current view before you start questioning, so to speak.

So is there anything you’d like to say about that?

Mr Stevens: I agree, sir, and nothing further.

Sir Wyn Williams: Fine. Then we’ll proceed but I should make it clear, as I hope is obvious to everyone, that, in respect of something like a direction against self-incrimination, I keep that under review throughout the whole of the witness’s evidence, and so it’s open to me to change my mind, so to speak, if I think it appropriate.

Mr Stevens: Thank you, sir.

Sir Wyn Williams: Over to you, Mr Stevens.

Questioned by Mr Stevens

Mr Stevens: Please can you give your full name?

Tracy Marshall: Tracy Louise Marshall.

Mr Stevens: Thank you for attending today to give evidence and thank you for providing a written statement, to which I want to turn now. You should have a copy in front of you.

Tracy Marshall: Yes, I do.

Mr Stevens: Is that dated 22 August 2024?

Tracy Marshall: It is.

Mr Stevens: Now, before I turn to your signature, I understand there are a few minor changes to make, which I will take you through now, given they’re minor in nature. If we could have the statement on the screen, please, and page 4. In paragraph 10(a), you are discussing terms that you used throughout the statement and you will see in the third line from the bottom you say, “save for 114 Directly Managed Branches”. I understand that should read “111”?

Tracy Marshall: Correct. Thank you.

Mr Stevens: Page 12, please. If we go down to paragraph 30, please. Here you’re talking about amendments to terms of contract between the Post Office and subpostmasters, and you say, “Following the CIJ”, which is Common Issues Judgment], Post Office made the decision to amend the template NT Terms”, referring to Network Transformation terms –

Tracy Marshall: Yes.

Mr Stevens: – and I understand and after that should read “and SPSO”?

Tracy Marshall: Yes, that is correct.

Mr Stevens: That is an abbreviation, SPSO, for the Standard Subpostmaster Contract?

Tracy Marshall: That’s correct.

Mr Stevens: If we can please turn to page 47. In paragraph 108, you describe responsibility for various matters. You say:

“… however any changes to the scope of the Postmaster Contract would go through SEG and the Post Office Board for approval.”

I understand after “Postmaster contract” it should read “or associated policies”?

Tracy Marshall: Correct. Thank you.

Mr Stevens: Finally, page 60, please. If we could go right to the bottom of the page there’s a footnote, which we may need to zoom in to. Given the nature of the correction, I’ll just deal with it as a footnote, rather than the context. It says, “Reinstatement refers to the period following suspension, or post-termination decision on appeal”, and then I understand where that word “appeal” is, the words thereafter should be struck through and, in the place of those words, it should say “where the postmaster is reinstated in their role”?

Tracy Marshall: Correct. Thank you.

Mr Stevens: Thank you. The statement can come down from the screen. Thank you.

Can I ask you, please, to turn to page 78 of the statement.

Tracy Marshall: Yes.

Mr Stevens: Below paragraph 199, you should see a signature.

Tracy Marshall: Yes.

Mr Stevens: Is that your signature?

Tracy Marshall: It is, yes.

Mr Stevens: Can you confirm that the contents of the statement are true to the best of your knowledge and belief?

Tracy Marshall: They are, yes.

Mr Stevens: Thank you, Ms Marshall. That now stands as your evidence in the Inquiry. It will be published on the website shortly, the Inquiry’s website, and for the record, the URN, the unique reference number, is WITN11610100.

Now, Ms Marshall your witness statement was provided in response to two Rule 9 Requests to Post Office as a company itself, rather than addressed directly to you.

Tracy Marshall: That’s correct, yes.

Mr Stevens: For reasons I don’t need to go into now, you have been put forward as a witness to speak on behalf of Post Office on various matters in your statement?

Tracy Marshall: I have, yes.

Mr Stevens: You are currently the Retail Engagement Director with Post Office Limited?

Tracy Marshall: Yes, I am.

Mr Stevens: When did you first join the Post Office?

Tracy Marshall: I joined in 1998, so I’ve been here for just over 25 years/26 years.

Mr Stevens: What was your role upon joining?

Tracy Marshall: I joined as a graduate trainee, initially, for 18 months and then I’ve progressed through the organisation through a variety of roles.

Mr Stevens: If we pause there, as a graduate trainee, very brief summary, what sort of work did you do?

Tracy Marshall: There were three six-month secondments, one of them was working in a directly managed branch, they used to be called Crown branches; one of them was shadowing an Area Manager, I think they were called Retail Line Managers; and the third role was in Head Office, a very administrative role within the finance function, just getting knowledge of Head Office operations.

Mr Stevens: What role did you go into after being a graduate trainee?

Tracy Marshall: So I then went into being a Branch Manager in one of our Crown branches for just over two years.

Mr Stevens: What was your next role?

Tracy Marshall: After that, I did a variety of project and programme roles, predominantly for the next four or five years, I’d say, working to franchising of our directly managed branches, so converting them from Crown status to being operated by postmasters, working with a number of independent postmasters and larger corporate entities too.

Mr Stevens: What period of time are we discussing when you were doing that role?

Tracy Marshall: That would be up to 2007.

Mr Stevens: Whilst you were working with franchising and postmasters, were you working with matters such as appeals or suspensions, anything like that, during that period?

Tracy Marshall: No, nothing like that at all. This was simply working with potential applicants to take on new branches and making sure that the transition from the Crown branch being operated by a new postmaster went smoothly, so nothing at all to do with suspensions or investigations.

Mr Stevens: Then, from 2007, what role did you have?

Tracy Marshall: So from 2007, I moved to be the Programme Office Manager for a programme called Network Change. Network Change involved the closure of around 2,500 branches, from memory, and the implementation of what we now call Outreach Services, things like mobile vans across the network. That was a Government-funded programme and I effectively, for the next three years, ran a programme office effectively making sure that we were on track with budgets, that we had reporting in place to our shareholder and that all the necessary documentation went out to the right postmasters.

Mr Stevens: So that’s 2007 to 2010, roughly. Can I just check, you may have been involved with Post Office closures as part of the programme; at that stage, were you involved in any respect in the termination of subpostmasters’ contracts because of alleged breaches, such as through discrepancies and the like?

Tracy Marshall: No, I was not.

Mr Stevens: From 2010, what was your role, please?

Tracy Marshall: For the next two years, I was Agents Development Manager. I had responsibility in that role working to Kevin Gilliland for postmaster remuneration, and our postmaster contracts, which at that time were being updated in preparation for the next change programme which was Network Transformation.

Mr Stevens: Were you involved in, as part of that, termination or suspension of postmasters as a result of alleged discrepancies?

Tracy Marshall: I was not, no.

Mr Stevens: Then from 2012, what was your next role?

Tracy Marshall: From 2012 through to 2017 or ‘18, I was involved in the Network Transformation Programme. So this was the programme to ultimately convert post offices to new models, the main model and the local model.

Mr Stevens: So, again, do I take it from that, not involved in termination/suspension, those sorts of matters?

Tracy Marshall: I was not involved no.

Mr Stevens: From 2017, please?

Tracy Marshall: 2017 to now, more senior leadership roles, responsible for initially some of our network strategy, and then, more recently, stepping into more of my current accountabilities around postmaster onboarding and postmaster training and some postmaster engagement.

Mr Stevens: Your roles and responsibilities now, when did you start undertaking those roles?

Tracy Marshall: So for onboarding and training, which you’ve seen me talk about in my statement, I’d been doing that for about four years, I would say; my responsibility for the Contract Management and Deployment team, only for the last year.

Mr Stevens: Thank you. I want to look at a particular period, I think it’s when you’re Agents Development Manager –

Tracy Marshall: Yes.

Mr Stevens: – 2010 to 2012. Did you say you reported to Kevin Gilliland?

Tracy Marshall: I did.

Mr Stevens: In what team or department did you sit in that role?

Tracy Marshall: Kevin was, I want to say, Director of Network and Sales, so this was – Kevin had wider accountabilities for the network. He may have had responsibility for some of the field teams. He certainly had a team responsible for the relationship with the National Federation of SubPostmasters, and he had a team focused on sales capability in our branches, so a fairly wide remit.

Mr Stevens: Can we please bring up POL00088956. We see an email on 5 December 2010 from John Breeden, it’s to Angela van den Bogerd. If we just scroll down slightly, please, to see the email that has been forwarded, we see an email from Lynn Hobbs to John Breeden is being forwarded on.

If we can go back to the top, please, we see that Mr Breeden addresses it to Angela van den Bogerd but copies you in. We see you’re the second person on the CC line. The subject says, “Follow up” to a meeting with the department with the JFSA, and it attaches some documents regarding that.

I know you’ve seen this email and I’ll come to the contents of it shortly, but, firstly, why at this stage would John Breeden copy you in to an email like this?

Tracy Marshall: Having read the email train, I’m not completely sure why I would have been copied in. I don’t recall the email. John Breeden, I remember, had the Contracts team, he had accountability for the team of Contract Advisers in the network. From time to time, John or Lin Norbury, who may have been his boss at the time, would often copy me in on emails for information purposes but I don’t know why I would have been copied in here, specifically.

Mr Stevens: So, outside of this specific email, what was your working relationship with John Breeden – not in terms of how did you get on: what substantively did you work on together?

Tracy Marshall: So because I had accountability for, at this point, postmaster remuneration and the postmaster contracts themselves, sometimes John Breeden would reach out to myself or my team to ask for advice on the content of the contracts, for example, or advice on the structure of remuneration with postmasters.

Mr Stevens: Those issues you just referred to don’t appear to be raised in this email.

Tracy Marshall: Agreed.

Mr Stevens: To what extent, at this time, were you involved with Post Office’s response to allegations that had been raised by Justice for Subpostmasters Alliance?

Tracy Marshall: I don’t think I was involved with any of those allegations.

Mr Stevens: If we go to page 2 of the email, please. This is an email that’s extremely well known to the Inquiry. It says, “My reply to Mike and Rod”. It says:

“I have found out this week that Fujitsu can actually put an entry into a branch account remotely.”

It goes on to say how that was found. Final sentence:

“One solution, quickly discounted because of the implications around integrity, was for Fujitsu to remotely enter a value into a branch account to reintroduce the missing loss/gain. So [Post Office] can’t do this but Fujitsu can.”

Do you recall whether you read that email at the time?

Tracy Marshall: No, I don’t recall reading the email at the time. I was surprised to see it when it was disclosed to me as part of the Inquiry. It’s not something I would have been involved with, to my recollection, as part of the role that I was in at the time.

Mr Stevens: Let’s move forward a month, if we can, please. POL00294728. This is an email from you to Kevin Gilliland, who you said earlier was your line manager?

Tracy Marshall: He was, yes.

Mr Stevens: We see Angela van den Bogerd is also an addressee of this email and Helen Rose is copied in. The subject is “Horizon system issues”. It refers to conversations you’d had with Andy McLean and Dave Hulbert yesterday, you believe you made progress with the outstanding questions raised.

Does this not show that you were involved with Post Office’s response to allegations about the Horizon IT System and its integrity?

Tracy Marshall: No, I don’t think it does and, if it would help the Inquiry for me just to provide little bit of context, if that’s okay?

Mr Stevens: Yes, please.

Tracy Marshall: Okay. So, as I’ve said, during this time I worked Kevin Gilliland and my accountabilities were very specifically on postmaster remuneration and postmaster contracts. Very often, Kevin would ask members of his lead team, of which I was one of them, to go off and find information about other matters that were not relevant to the roll you were doing to assist him in whatever he was doing in his role. From what I’ve read of this email, this is clearly to me and, whilst I don’t recollect it at the time, it is clear to me that he was asking me to go off and find information out to perhaps prepare him for a meeting that he was going to with Angela shortly afterwards.

I don’t think I would have known – certainly wouldn’t have known, the ins and outs of the Horizon system, I wouldn’t have had any involvement in remote access. So my view of this email is that I have gone off, found information from the Subject Matter Experts, in this case Andy McLean and Dave Hulbert within the IT Team, and have relayed that information to Kevin Gilliland.

Mr Stevens: If we just scroll down slightly, please. You give some commentary on remote access. You say:

“[Post Office] cannot remotely access systems and make changes to specific stock units etc. Fujitsu can remotely access systems and they do this on numerous occasions to a network wide basis in order to remedy glitches in the system created as a result of new software upgrades.

“Technically, Fujitsu could access an individual branch remotely and move money around however this has never happened yet.”

You go on to refer to authority processes that are in place and say:

“If a change were made remotely and to an individual branch, it would be flagged on the business data ledgers and would appear as a ‘mismatch’ in P&BA in Chesterfield.

“So although changes can be made remotely, they would be spotted and the person making the change would be identified.”

In the last email I took you to, which referred to remote access, it referred to it not being used due to integrity concerns, but broadly speaking. Did you know why you didn’t refer to the integrity concerns that were raised in that email when you reported to Angela and Kevin in this email?

Tracy Marshall: I don’t and, you know, on reflection, I should have joined the dots and, when typing this email to Mr Gilliland, have noted the previous email, assuming of course I read it, and I’m very sorry that I didn’t do that, in hindsight. But I would, you know, say again this was an area very much outside of my expertise and comfort zone and it’s very clear to me that I wouldn’t have written this without very clear direction from experts on what to say.

Mr Stevens: So do I take it that your evidence is, effectively, what you have written down here is what you would have been told by Andy McLean and Dave Hulbert?

Tracy Marshall: Absolutely.

Mr Stevens: That document can come down.

I want to go to a slightly different issue, please. POL00119947. This is an undated letter but we see from the first page that it refers to an appeal hearing on 7 December 2010, and then correspondence on 28 February 2011, which gives us an indication. If we can just turn the page, please, and go towards the bottom, we’ll see it was sent by Craig Tuthill. At the time, so early 2011, where did Craig Tuthill sit in the organisation to you?

Tracy Marshall: Craig – I think at this time, whereas I was in a Head Office function, Craig was in a field role managing the Contract Advisers or certainly working very closely with them. He may have worked to Lynn Hobbs at this period of time.

Mr Stevens: Was there any reporting line to you on that basis?

Tracy Marshall: No, not at all.

Mr Stevens: Can we turn back to the first page, please, and go down, please. Thank you. It says:

“Throughout the appeal hearing and the written submissions you have raised doubts about the integrity of the Horizon accounting system and have offered no other reason for the losses incurred. You are adamant that neither you nor any of your staff acted dishonestly.”

It goes on to say a few lines down:

“I have also sought and received confirmation from Tracy Marshall, Post Office Limited Agents Development Manager, that [Post Office Limited] is fully satisfied that the Horizon system and accounting processes around it are robust and fit for purpose. She confirms the system is endorsed by the National Federation of SubPostmasters and has been subjected to independently assured testing processes, information security is accredited to industry standards and the system also meets all payment industry standards.”

I mean, do you recall Mr Tuthill coming to you about this appeal?

Tracy Marshall: Not specifically. Again, I saw this in my bundle. I don’t remember this specific example. It would have been quite usual for Craig and his team to come to people in the centre, in the Head Office, if you like, to ask for a view on the business’s position and, from time to time, I would, in my role here, have gone off to our Communications Team to find lines to send back out to the field teams.

Mr Stevens: So I’ll take you to a different document. It’s POL00119963, please. We see it’s an unusual format but it appears to be an email from you to Craig Tuthill on Monday, 28 February 2011. You say:

“Craig/Andy,

“This is the formal words used in external communications. I would be happy to circulate this to the contracts community if you think this is fit for purpose?”

I think your evidence earlier was that you would check with the Communications Team about what the business position was; is that effectively what this is showing?

Tracy Marshall: I believe so, yes. I believe this is an example of when I’ve been asked a question, I’ve conferred with our Communications Team in the Head Office and this form of words here would have been standard – the standard position lines used in external communications that I’ve been provided with, via the Comms Team.

Mr Stevens: Did you have any role in or did you take any steps to satisfy yourself that what was said there was accurate?

Tracy Marshall: I don’t think I would have done, no. I think I was relying on the information being provided to me by more senior leaders within the organisation.

Mr Stevens: Thank you. That document can come down.

Aside from that type of matter there, where an Appeals Manager is coming to you for a business position on Horizon and you’re giving an external communication, during that period of time in 2010 to 2012, were you involved in inputting or assisting Appeals Managers with making decisions on termination or, indeed, Contract Managers on making decisions on termination of subpostmasters?

Tracy Marshall: No, I was not.

Mr Stevens: As we said earlier, you have been put forward as a corporate witness. You know that Fujitsu’s ability to access branch accounts remotely and Post Office’s knowledge of that ability is being considered by this Inquiry?

Tracy Marshall: I do.

Mr Stevens: From the emails we looked at, would you accept that you were involved, to a certain extent, in the distribution of knowledge on remote access within Post Office?

Tracy Marshall: I would accept here that there are emails where I’ve relayed information to people that concern remote access, the very core issue to the purpose of this Inquiry. But I wouldn’t say that I was involved or implicit in anything involving remote access.

Mr Stevens: To whatever extent you were involved, do you think that you’re an appropriate person to give evidence on behalf of the Post Office because of that even limited extent of involvement?

Tracy Marshall: I think I am, and my role, particularly over the last three or four years, has focused on delivering improvements and changes for postmasters on a number of core areas, including training and onboarding, et cetera. So I do think I am best placed in the organisation to be able to talk to those improvements and about what the current position is.

Mr Stevens: Can I ask, the matters we’ve just discussed now, why were they not referred to in your witness statement?

Tracy Marshall: My witness statement was in response to specific Rule 9 Requests, two of them, and that is the basis, ultimately, of my witness statement that I’ve prepared.

Mr Stevens: One further point before we move on to matters in your statement, please could we have POL00448411. It’s a letter that’s been seen by the Inquiry before, to various people, including, sir, to you and to Mr Beer. It’s 28 May 2024, and it says:

“We are writing to you as a group of highly disenfranchised [Post Office] employees …”

Have you read this letter before?

Tracy Marshall: Only when it was provided to me as part of my bundle.

Mr Stevens: If we can go to the bottom of this page, please, it says at the bottom paragraph:

“I am sure you have been made aware that we have at least 120 employees who have been in long-term roles who have conflicts of interest, ie they were operating in roles which to a greater or lesser degree were involved in the wrongful prosecution of SPMs. Read has known yet refuses to address the latter situation proactively, despite being asked to. He reacts only to the specific individuals after their names are called out in public. For instance Angela van den Bogerd mentioned in her statement the role of Tracy Marshall; the latter played a prominent role in 2010/15 in the unlawful convictions of subpostmasters.”

Pausing there, what do you have to say to that point?

Tracy Marshall: I think – I’m disappointed to see that there are disenfranchised employees in Post Office, firstly, who clearly have concerns about me, in my role. I think there are some confusing facts in here that aren’t quite right. I’ve never played a role, any role, in the unlawful convictions of subpostmasters. Whilst I can’t state factually, I suspect that this here is in direct response, clearly, to the emails that we’ve just gone through being shown in Mrs van den Bogerd’s evidence in Phase 5 or 6. But I’m disappointed that they feel that way about me.

Mr Stevens: It says:

“Despite this, just 3 years ago, Marshall was appointed as the Postmaster Engagement Director, much to our dismay (and no wonder the trust results plummeted). However, only within the last week, Read has remove Marshall from her role and appointed her into another obscure role.”

When did you change roles as Postmaster Engagement Director?

Tracy Marshall: So I’ve never been Postmaster Engagement Director, I think they’re referring to Retail Engagement Director, which is my current role. Following the email appearing in Mrs van den Bogerd’s evidence, I was asked to step back from some of my role, so in late May/early June this year, I stood down from the postmaster engagement element of my role, effectively, which is a very small team of two individuals, plus the Postmaster Experience Director, Mark Eldridge.

So my role hasn’t changed; I’ve just had some of my responsibilities removed from it, and my role includes now – continues to include onboarding, training and the Contract Management Team.

Mr Stevens: Do you consider yourself to be in an appropriate position to carry out those roles, given your past involvement which we’ve discussed?

Tracy Marshall: I think so, yes. I mean, for the last four years particularly, my role has been completely focused on trying to do the right thing by postmasters and making changes to our policies, procedures, processes, and listening to postmasters as much as I can, and trying to make changes. So I do still feel as though I am in a very good position to do my role.

Mr Stevens: Let’s look at some of those policies and procedures now. I want to start with the types of contracts, the basis on which Post Office contracts with subpostmasters. There was clearly a shift in Post Office’s view of what the contract meant following the Common Issues Judgment. Can we have, please, page 5, paragraph 15 of your statement on the screen. You refer to the Standard Subpostmaster Contract, which I think we see in your statement elsewhere as SPSO; is that right?

Tracy Marshall: Yes, that’s correct.

Mr Stevens: You say it’s the oldest contract, first introduced between 1991 and 1994.

Tracy Marshall: Yes, I believe so.

Mr Stevens: Since that was introduced, is it fair to say the majority of postmasters who originally signed on to that contract have been transferred onto a different Network Transformation contract?

Tracy Marshall: That’s correct.

Mr Stevens: How many subpostmasters – or postmasters, sorry – remain on the Standard Subpostmaster Contract?

Tracy Marshall: I don’t have the specific figures to hand, I’m afraid, so I can’t really comment on that. I think it might be around a thousand but I couldn’t be sure.

Mr Stevens: Does Post Office issue the Standard Subpostmaster Contract to any new applicants or new subpostmasters that it onboards?

Tracy Marshall: Yes, it does, from time to time. There are still some branches who are on an SPSO contract, who continue to have the ability, if they wanted to, to sell their branch and premises to a new postmaster on those terms. It doesn’t happen that often. I recall a couple of hundred cases that I’m aware of over the last few years, but, yes, it does happen.

Sir Wyn Williams: Can I understand that: do you mean that a postmaster on the Standard Subpostmaster Contract will sell the branch to a new subpostmaster and then they will still be on the old – when I say “the old” – on the Standard Subpostmaster Contract?

Tracy Marshall: That’s correct, sir, yes.

Sir Wyn Williams: Yes, fine. I understand, yes.

Mr Stevens: I want to look at what steps Post Office have taken to clarify the written terms to subpostmasters of the contracts following Common Issues. Can we turn to page 12, please, paragraph 30. You say:

“Following the [Common Issues Judgment], Post Office made the decision to amend the template NT Terms”, and it should say “and SPSO terms” –

Tracy Marshall: It should, yes.

Mr Stevens: – “being issued to new postmasters to reflect the court’s determination (as set out in the Contract Restatement Guide) and to focus on making operational improvements and positive changes to the way it works with postmasters, before making widespread changes to its standard contractual terms.”

I understand from your evidence what the Post Office did was to send out a contract restatement document to explain the effect of Common Issues?

Tracy Marshall: Yes, it did.

Mr Stevens: Can we look at that, please. It’s POL00037518. Is this the document to which we were referring, the contract restatement?

Tracy Marshall: It is, yes.

Mr Stevens: How was this sent to postmasters in the network?

Tracy Marshall: So from what I can understand, it was sent out to postmasters electronically, via a channel known as the One Communications Channel, this was a tool used by our Communications Team quite regularly to send out messages to postmasters so this was sent electronically.

Mr Stevens: Why wasn’t it sent in hard copy as well?

Tracy Marshall: I honestly do not know. I wasn’t involved at the time but I believe it should have been sent out in hard copy. All I can say is that, when we make any changes now to our contract terms, we always make sure that hard copies are sent out to postmasters, first and foremost so that we have a record that it’s been delivered and received by the postmaster via Special Delivery. I can’t comment on why that wasn’t the case here, I’m afraid.

Mr Stevens: In your statement you say that Post Office did not have a system for ensuring that subpostmasters had read the Contractual Restatement Guide.

Tracy Marshall: Yes.

Mr Stevens: Why not?

Tracy Marshall: I don’t know. I don’t know and the business should have done. When this – what should have happened, in my view, here is that this document was sent out in hard copy to every postmaster by Special Delivery, so that we had a record of it being received, first and foremost, and it should have been followed up, in my opinion, with check-ins from our field members to make sure the postmasters had understood the terms and had received them. I can’t comment on why that didn’t happen, I’m afraid.

Mr Stevens: Is there any plan in Post Office at the moment to correct this issue by taking the steps you’ve just suggested now?

Tracy Marshall: So there are two things that we’re doing. First of all, it’s making sure that this document here is available for all postmasters to view again. That won’t be hard copy, for reasons I’ll come on to, but it will be made available and is on our Branch Hub tool.

The second thing that we are doing is looking at what we call the Contract Reform Project. So we are underway, with making some other changes to our contract, suggested changes.

Mr Stevens: If I can pause you there, that’s changes to a contract.

Tracy Marshall: Yes.

Mr Stevens: I’m interested in what Post Office is doing to explain the contractual terms as they are at the moment. You said in your evidence that wasn’t a plan to issue this in hard copy: why?

Tracy Marshall: It’s a very good question, something I think we need to think again about as a business. All postmasters should have access to this.

Mr Stevens: Earlier in your evidence, you said previously it should have been sent out in hard copy?

Tracy Marshall: Yeah.

Mr Stevens: Is there any good reason why it’s not sent in hard copy now?

Tracy Marshall: No, absolutely none.

Mr Stevens: Are you in a position to say the Post Office will at least consider it?

Tracy Marshall: We will absolutely consider, and I think we should make sure that all postmasters have hard copies of this document.

Mr Stevens: If we look at what the document says, please. If we go to page 2, it refers to the judgment, the Common Issues trial, and then says:

“The judgment changes the meaning of the contracts …”

Do you know who came up with that wording “changes the meaning of the contracts”?

Tracy Marshall: I don’t, I’m afraid.

Mr Stevens: Do you agree with that?

Tracy Marshall: I think, from what I know of the implied terms that have been added into the contracts, I do think it changes the meaning of the contracts, in that it’s moved them – it’s certainly added more obligations on Post Office and I think it is a fairer contract, particularly in the areas of losses and shortfalls, for example. I’m not sure if it specifically changes the meaning of the contracts, however.

Mr Stevens: Well, as you’ve noted there, it says:

“It implies (adds) some new terms to the contracts.”

Has Post Office ever communicated to subpostmasters that the terms that were found to be implied into the contract in Common Issues Judgment applied before the judgment was issued and not after it as well; so Post Office was bound by them before the judgment?

Tracy Marshall: I’ve not seen anything to suggest that, no.

Mr Stevens: That can come down, thank you.

It has been suggested by some postmasters that it is confusing to have a contract and then a separate guide explaining it, such as this; what do you say to that?

Tracy Marshall: I would agree. I think it’s very important that every postmaster out there has a contract with those new terms added in to that contract. Again, I can’t comment why, at the time, steps weren’t taken to amend the contracts and send new contracts out and why it was simply done via a contract restatement guide.

Mr Stevens: That wasn’t within your purview?

Tracy Marshall: No, it wasn’t, no.

Mr Stevens: Do you know who made those decisions?

Tracy Marshall: I can’t recall who would have been responsible for contract change at that time. Obviously, our Legal Team would have been very involved with it. It would have, I think, sat within the remit of Julie Thomas, who was one of the Operations Directors within the business but I can’t be sure.

Mr Stevens: Just another point on this and how it was communicated. Can we please look at page 45 of your statement, paragraph 107. For context, in the main body of the paragraph, you refer to postmaster contracts and the key policies and guidance relating to contractual liability for postmasters. You then refer to the Contract Restatement Guide; is that the document we were just referring to on the screen?

Tracy Marshall: It is, yes.

Mr Stevens: You say:

“This document was published on the One Communication channel on 29 July 2020”, which you just said in your evidence.

Tracy Marshall: (The witness nodded)

Mr Stevens: “As part of this exercise and responding to the Rule 9 Requests, the Retail Team have been advised that, due to an archiving exercise, the document is no longer held on Branch Hub and the Retail Team have arranged to reinstate it so that it can be readily accessed by postmasters …”

Is that document now back on the One Communication channel.

Tracy Marshall: It’s back on Branch Hub, yes.

Mr Stevens: Branch Hub, sorry, yes. The Rule 9 Request to which this statement was provided – well, there were two, sorry: one was 12 June 2024 and one was 2 July 2024. Do you know when it was realised that the document wasn’t on Branch Hub?

Tracy Marshall: Not specifically but it would have been around the time of those Rule 9 Requests coming in and me preparing my witness statement.

Mr Stevens: When you say it was taken down as part of an archiving exercise, when did that archiving exercise take place?

Tracy Marshall: I don’t know, I’m afraid.

Mr Stevens: Is that something that the Post Office can tell the Inquiry in due course?

Tracy Marshall: Quite possibly, yes.

Mr Stevens: Was there any other document which a postmaster could turn to that explained the effect of common issues, other than that contract restatement document?

Tracy Marshall: No other document specifically on – that would explain the Common Issues Judgment impact. There are obviously a number of other contractual documents, such as the Operations Manual, which was updated around that time but that didn’t specifically address CIJ impact.

Mr Stevens: Do you know why, as part of an archiving exercise, such an important document was taken down from Branch Hub?

Tracy Marshall: I don’t, I’m afraid, no.

Mr Stevens: Can we look, please, at POL00448241. This is a Standard Subpostmaster Contract. If we turn to page 5, please and to the bottom, to paragraph 20, please, it says:

“Each party shall:

“at all times in the performance of its obligations and exercise of its rights under this contract act in good faith …”

So it looks like this is an amended contract following, or making changes as a result of, Common Issues; is –

Tracy Marshall: I agree. I think it is, and it’s dated August 2020 in the footer of there.

Mr Stevens: Yes, you say that. In your exhibit list to your statement at number 4, we don’t need to bring it up, the document description is “SPSO Individual Contract v3 December 2023”.

Tracy Marshall: Okay.

Mr Stevens: Are you able to assist with when the changes were made to the subpostmaster contract to reflect what was said in Common Issues?

Tracy Marshall: So changes were made to the SPSO contract and the two Network Transformation contracts after the Common Issues Judgment was handed down, to the best of my knowledge in 2020. There might have been some small iterations/ changes to it since then but, fundamentally, the new implied terms were added in in 2020.

Mr Stevens: Just so we’re clear, that applies, does it, to new subpostmasters joining the network. These are the contractual terms they’re given upon joining?

Tracy Marshall: New postmasters joining the contract would get this, yes.

Mr Stevens: Thank you. That document can come down, thank you.

Could we look, please, at your statement, page 12, paragraph 31 and 32. That’s great, thank you. If you just go down a bit further to have 31 at the top.

You give an example of changes made to various policies in the summer of 2020 and it sets out the range of support available to postmasters and their staff. Then, if we go further down, thank you:

“The Postmaster Support Guide is updated annually to take account of any changes … The Postmaster Support Guide contains the following key areas …”

We see: general support; training; managing cash; branch balancing; accounting dispute resolution. So quite serious material issues for a subpostmaster, yes?

Tracy Marshall: Yes, issues that they would absolutely need advice and support on in running their branch.

Mr Stevens: Aside from this being written down as policies, what steps have been taken to ensure that there is appropriate resourcing to implement these policies properly?

Tracy Marshall: Okay, so just to clarify, the Postmaster Support Guide isn’t a policy, as such. That’s an overarching document providing advice and support to postmasters. In the back of the Postmaster Support Guide there is an overview of the 12 postmaster policies that we have put in place across all areas of the postmaster lifecycle, to assist internal colleagues and make sure that processes are followed correctly. Part of my role as being accountable for those postmaster policies is to make sure that the various teams can deliver them in their respective teams and, to do that, clearly they do need resource to be able to do that effectively.

Resourcing is a challenge, in some areas, if I’m honest. I’m very aware of the broader business issues that we have: we’re funded by Government; there are cost challenges. I’m confident we do have resources in place to deliver against the policies. We could always do with a little bit more resource though, in some areas.

Mr Stevens: Firstly, the 12 policies you refer to, I think you use the word “internal” – you do in your statement, I think – subpostmasters don’t have access to those 12 policies, do they?

Tracy Marshall: Not at the moment, no. They don’t have access to the full policies but what this is a guide to the postmaster policies, which is a shortened version of each one, effectively, that postmasters can view, which is on Branch Hub.

Mr Stevens: Why are they not given full access to the full policy?

Tracy Marshall: It’s a question that I’ve debated quite a lot over recent years with various colleagues and our data protection legal teams, et cetera. The policies themselves, which are internally facing, have quite detailed information in them around our Control Framework, our risk appetite as a business and risks, and it wasn’t felt appropriate to disclose that information externally, rightly or wrongly, and that was the very clear steer that I had.

If it helps the Inquiry, though, we are in the process actually, right now, of putting each one of our 12 policies onto a new template. That template is being developed by colleagues in Data Protection, the Legal teams and the Assurance teams, and those policies will be made available shortly to postmasters, following agreement, obviously, by our Audit and Risk Committee, and GE.

Mr Stevens: The last point on these policies: with the change in the policies, as they’ve changed and developed since Common Issues, has that placed more or greater obligations on Post Office than it did before the changes? So is there more to do, effectively, more work to do, to fulfil those policies than before?

Tracy Marshall: I think that’s very true, yes, they have.

Mr Stevens: Has there been any increase in resources to meet those policies?

Tracy Marshall: There’s been some increase in resources, in my own team, for example, who manage the policies. We do now have more people to make sure we are getting them annually reviewed by the right people, that we have group assurance as well in place now, checking our policies, checking our Control Framework and that we have actions in place to mitigate any of the key risks. So yes, resource has been put in place.

Mr Stevens: Can we look, please, at your statement page 17, paragraph 36. Thank you. This is coming back to something I cut you off on earlier. You’re referring here:

“In July 2024 the Retail Engagement Team presented a proposal for the Contract Reform Project to the Strategic Executive Group …”

Why has this Contract Reform Project been started; what’s its purpose?

Tracy Marshall: As a business, we’ve been talking about doing a more widescale update of our contracts and getting new copies out to everybody for some time.

Mr Stevens: Okay, pausing there, when you say “some time”, from roughly –

Tracy Marshall: I’d say a few years and, for whatever reason, the business decision has been taken not to do that activity at that particular point in time. To give an example, at one point, obviously, we were anticipating the rollout of our New Branch IT System into branches, and so it was considered that we should perhaps delay some of this work until that system was in and there may be changes that are needed as part of the introduction of that system. For a few years we’ve been talking about it.

The Retail Team have been pushing quite strongly, as have our Legal team, to make sure that we do this activity. I feel this is very important for the reasons I said earlier. I think it’s important to get contracts out to every postmaster, new contracts that do have the implied terms in them, from the Common Issues Judgment.

We are now doing that. So we are – we’ve already made some proposed – and I stress the word “proposed” – changes to the contracts with external Legal, and our next stage, which will we’ll be doing later in October or November, is to go to our Strategic Executive Group and take them through them, and the next step will be then to engage with the postmasters; the NFSP, obviously will need to be consulted with as part of that process; look at what we’re proposing to do; and then, hopefully, we can get in a position where we send contracts out.

Mr Stevens: It might be said that a reason for not bringing these contract proposals sooner and enacting them more quickly, is to avoid the proposals being scrutinised by this Inquiry; what would you say to that?

Tracy Marshall: I don’t think that’s the case.

Mr Stevens: Paragraph 36(b). You refer to “removing specific rights”. What right, at the moment, in the proposals, are being envisaged to be removed?

Tracy Marshall: I can’t think of any specific rights, if I’m honest. I can give some examples of other outdated terms and references that might be removed, if that would be helpful?

Mr Stevens: Are there any rights, obligations or terms that could be perceived to be beneficial to a subpostmaster that are being proposed to be removed?

Tracy Marshall: I don’t believe so, no. In fact, I think the changes are much more favourable to postmasters and more obligations on Post Office.

Mr Stevens: Thank you. That can come down.

Sir, that’s probably a good time to take our morning break.

Sir Wyn Williams: All right. So –

Mr Stevens: If we could say 11.15? Thank you.

(11.05 am)

(A short break)

(11.25 am)

Mr Stevens: Sir, can you see and hear us?

Sir Wyn Williams: Yes, thank you.

Mr Stevens: Firstly, I’ll apologise to the transcriber for initial only undercooking our 15-minute break and then, sir, I apologise to you for overcompensating by giving a 20-minute one.

Sir Wyn Williams: Mr Stevens, I did wonder about your 11.15 but, by the time I thought I would revisit that with you, my connection had been broken. So one way or another we got ourselves an extra five minutes. That’s what it boils down to.

Mr Stevens: Thank you, sir.

Right, I want to move on to training, please, and, as Retail Engagement Director, you are accountable to the Post Office Board for the design and implementation of postmaster training?

Tracy Marshall: That’s correct.

Mr Stevens: You are supported in that role by the Head of Training?

Tracy Marshall: I am.

Mr Stevens: I want to look at the job description, please, for Head of Training. It’s POL00448046.

So, job title, Head of Training. The Head of Training obviously involves training for postmasters. Are there any other types of worker – I don’t use that in the technical sense – for whom the Head of Training is responsible for their training?

Tracy Marshall: No, it’s the development and delivery of training for postmasters and those operating our branches. So it would also be those working in our DMBs, for example.

Mr Stevens: If we look, please, at page 3, and we’ve got the “Knowledge, Experience and Skills”: the leadership first; second, experience or background of training; third, knowledge of training related models; various other matters including a good understanding of business strategy, policies and operations.

There doesn’t appear to be any need for knowledge or experience of IT or Horizon; is that fair?

Tracy Marshall: That is fair, yes.

Mr Stevens: Why is that?

Tracy Marshall: So I think, as the Head of the Training Team, the individual’s job is to provide leadership and make sure that a good quality of training is being delivered. Those working into the Head of Training and who are delivering classroom training, for example, do absolutely have to have a good knowledge about the Horizon system, but I don’t believe it’s essential for this particular role, providing leadership to that team.

Mr Stevens: So who is responsible for the content of the training on Horizon itself?

Tracy Marshall: So ultimately, that would be me being accountable and the Head of Training being responsible for the production of all the content.

Mr Stevens: To whom can you turn for advice on whether the aspects of training relating to Horizon are appropriate or sufficient for subpostmasters?

Tracy Marshall: When we’re developing our training content, be it classroom courses or e-learning modules or Work Aids, we are reliant on discussions with the various Subject Matter Experts within the business. So, for example, if there’s something around cash and stock management, for argument’s sake, we would go to our Cash and Stock Management Team. If there’s something there around discrepancies, we would confer with Mel Parks team.

Mr Stevens: Many of the policy documents on training say that Post Office is committed to providing comprehensive training to postmasters.

Tracy Marshall: Yes.

Mr Stevens: What, if any, funding is there for postmasters to engage in training?

Tracy Marshall: So there’s no particular funding provided to postmasters or anybody operating our branches, to go to training. So we don’t, for example, pay for postmasters or their assistants to go to a training course. Over the last few years, many of our training has moved to being more digital in format and that’s as a result of postmaster feedback and, of course, that collateral, which is on Branch Hub or our Learning Management System, is freely available to anybody working in a branch to access, free of charge.

Mr Stevens: It still requires them to commit hours to it?

Tracy Marshall: It does.

Mr Stevens: The hours they’re committing to the training is hours they’re not committing to their profitable business?

Tracy Marshall: That’s true. It does require commitment, yes.

Mr Stevens: Presumably, for assistants, the hours that they have to commit to training, the postmaster has to pay them while they’re doing that training?

Tracy Marshall: They would have to, yes.

Mr Stevens: Can we look, please, at your statement, page 22, paragraph 47. You say these some of the training courses that have been introduced since the Common Issues Judgment, and at (d) you refer to “Investigating discrepancies”, and that’s a half-day classroom course and Work Aid. That sounds like quite a significant or important piece of training that is available to postmasters; do you agree?

Tracy Marshall: It’s proved to be very useful for postmasters, yes. And many of them who have attended it have said that it’s been, you know, very positive, well received, with good levels of confidence, shall we say, after attending, yes.

Mr Stevens: Because it’s a half-day classroom, that requires a postmaster or assistant to be out of the post office for at least half a day, yes?

Tracy Marshall: It does, yes.

Mr Stevens: Do you think the fact that postmasters aren’t paid or remunerated for doing that course is a significant barrier preventing them from engaging with it?

Tracy Marshall: It could be. I’ve got no evidence to suggest that it is a barrier to them attending but it could be.

Mr Stevens: Do you have any data to understand how many people want to attend that course against, in fact, how many people in fact attended?

Tracy Marshall: No, I don’t, we only have statistics on how many people do attend the course.

Mr Stevens: Is it fair to say that one of the purposes of training on matters like investigating discrepancies is to reduce discrepancies overall or at least reduce the need for Post Office to investigate them?

Tracy Marshall: I agree that there is – the requirement for training on investigating discrepancies is ultimately to get to the root cause of the issue and prevent discrepancies from taking place in the first place. So the concept of investigating discrepancies is something that’s very important. This classroom course here, the half-day classroom course, is just one aspect of that but, in addition, there’s a variety of other material that has been developed and is available digitally, which will assist postmasters or members of their team, in helping them to investigate those discrepancies.

The digital format of training is something that we as a business, and I, want to explore more of. From what I hear from postmasters, you know, they’re busy people running retail businesses as well, alongside their post office, and for many the preference is not to have to travel to a classroom, irrespective of costs. It is to be able to do training in the comfort of their own premises, their own home, perhaps in the evening as well. So that’s something that we want to explore more of.

Mr Stevens: Is there any plan within the Post Office to consider or assess the impact of any proposals to fund subpostmasters or their assistants to do training?

Tracy Marshall: There’s no proposals at the moment but, obviously, that’s something that I can absolutely take back and consider in the wider business.

Mr Stevens: I want to look to at some of the training guides and – we don’t need to bring it up – in your statement you refer to, at paragraph 77, the Operational Training Guide being a fundamental tool for both new and existing postmasters?

Tracy Marshall: Yes.

Mr Stevens: Who is responsible for keeping that material up to date?

Tracy Marshall: That’s the Training Team.

Mr Stevens: Could we look, please, at POL00448131. This is about monthly accounting for trading period balance; is this taken from the Operational Training Guide?

Tracy Marshall: Yes, it is.

Mr Stevens: It covers, as I say, monthly accounting and balancing. Please could we go to page 3.

You’ve got “Settling discrepancies”, and these are options that are given to postmasters when there’s a discrepancy prior to rolling into the next trading period. One is “Review Dispute CALL [Business Support Centre]”; another is “Make good cash”.

I’ll be exploring that in more detail with a different witness but I want to look at the content of this document with you. Under “Make good cash”, it says:

“This is optional if you would like to settle the discrepancy without disputing it. You can select this option, then physically add or remove cash to balance without a discrepancy.”

Do you think that is a satisfactory description of when subpostmasters – or the guidance for subpostmasters in using the “Make good cash”?

Tracy Marshall: I do not think it’s satisfactory.

Mr Stevens: Why isn’t it satisfactory?

Tracy Marshall: I don’t think that that is clear enough that, if any postmaster or officer in charge chooses to put cash in from their own pocket, effectively, they should do so only if they are absolutely sure that it’s due to something that has happened in branch that is an error of some sort, not with the system, but where you might have, for example, given the customer £20 more, et cetera.

We are in the process, actually, of updating this section of the Operational Training Guide and any other documentation that refers to something similar, to make that message very clear.

Mr Stevens: Just pausing there: you say “in the process”, the date on this document is July 2023 –

Tracy Marshall: Yes.

Mr Stevens: – why has it taken so long to make what appears to be a clear position of Post Office evident in the training guide?

Tracy Marshall: And that’s a very good point. I think whilst people within Post Office, myself, our teams, are very aware ourselves of what should happen, ie you should only put cash in if you’re absolutely certain that it’s something that’s been done in the branch, not related to an issue with Horizon or something that needs to be investigated further, it’s one thing for us to think that. I don’t think we’ve quite got that message across to postmasters. There’s no excuse. It should have been done quicker but I’m comforted by the fact that we’re now doing it and taking the opportunity to review all of our operational training materials.

Mr Stevens: When will this be corrected?

Tracy Marshall: I think if it’s not out there already now, it’s imminent by the end of October.

Mr Stevens: Further down, it says, “How to dispute a discrepancy” – we don’t need to worry about Strategic Partner branches – it says:

“All other branches: Whichever option you use to settle a discrepancy at the end of the trading period, you can still dispute the discrepancy with Post Office. To do this contract the Branch Support Centre.

“If you can demonstrate the reason for the discrepancy or if you firmly believe the discrepancy will be resolved through a Transaction Correction, please call the Branch Support Centre with all the details you have.”

Is that not putting the burden on the postmaster to show that the discrepancy is not the postmaster’s fault, rather than the investigative obligation being on the Post Office?

Tracy Marshall: Reading it back now, it could give that impression, yes. And, again, that’s something we should look at.

Mr Stevens: Pausing there, you say “we should look at”; is this currently not proposed to be amended as part of the changes you were describing before?

Tracy Marshall: Not currently, to the best of my knowledge. However, I will absolutely make this away to be amended and looked at. But you’re right: the onus is on Post Office to investigate any discrepancies, should the postmaster wish us to.

Mr Stevens: Over the page, please, page 4. There’s more guidance, it says at the top, “Guidance on disputing a discrepancy or Transaction Correction”. So “What happens at the end of the investigation?”, and the second paragraph:

“If a discrepancy amount has been investigated by Post Office, or agreed by the Postmaster, and is found to be a genuine loss to Post Office, the discrepancy will be passed to the Postmaster Account Support Team to support you through the options regarding settling the amount.”

Should that also say, “and is found to be a genuine also to the Post Office and caused by your negligence, carelessness or error”?

Tracy Marshall: Perhaps, yes, as that would be more aligned to the wording in our contracts.

Mr Stevens: Do you know if this wording is being considered to be changed as part of the review?

Tracy Marshall: I don’t think so but, again, very happy to take that away and make sure it’s implemented quickly.

Mr Stevens: It might be said that this guidance isn’t clear in the training because Post Office are seeking to downplay their investigative obligations or when the “Make good with cash” button should be used; what would you say to that?

Tracy Marshall: I don’t think that’s true at all. I accept the fact that the wording could be better but Post Office, to the best of my knowledge and from my work with other teams, are absolutely not trying to downplay two fundamental issues here: the first of which is that it is upon Post Office to work with the postmasters, support them, in thoroughly investigating any discrepancies; and the second point, as you’ve mentioned, is we’re very clear that postmasters should only put their hand in their purse and put money in the till if they are absolutely sure that it is a genuine mistake that’s been made in branch, that they can recall. So I’m very clear on that.

Mr Stevens: What we saw there in the Operational Training Guide, does that reflect what’s taught in classrooms and on the various online resources?

Tracy Marshall: The wording in that guide that you’ve just showed me, I’m sure would be consistent with the other materials used, you know, very – the team do take steps to make sure that wording across all of our learning materials is consistent for good reason. So when I’m going back and making some changes to those documents, I will need to look at the wider training collateral there, which will include classroom content too.

Mr Stevens: Please can we look at page 36 of your statement, paragraph 83. You give a description there of how members of the Training Team are trained. You say they’re trained internally. I don’t need to read the rest of that out, it can be read.

How many of the trainers working now in the Training Team were in post as Trainers before the Common Issues Judgment?

Tracy Marshall: I don’t know that number off the top of my head, I’m afraid. There is quite a high churn rate in our Training Team, so a good proportion are, you know, over the last five or six years definitely but I can’t say for sure.

Mr Stevens: We’ve heard evidence of Post Office’s previous view of the obligations on subpostmasters, in respect of settling discrepancies. What steps is Post Office taking to ensure that those who were giving training on the pre-Common Issues training course, they’re not carrying over that institutional understanding of how the contract used to work into today’s training programme?

Tracy Marshall: Sure. Well, I think, for anybody working in Post Office, not just the Training Team – and you may have heard our People Director talk about that – Chief People Officer – Karen McEwan, last week – we do have structured training in place now for all new starters, which involves, you know, understanding the Horizon issues of the past, the findings from the Common Issues Judgment, the Horizon Issues Judgment and, actually, you know, watching excerpts from this Inquiry to understand the previous issues that we had and the need to change, both culturally and operationally.

So specifically to the Trainers, they would have any – any new people joining the team would have that level of training.

Mr Stevens: Just pausing there, I’m not interested, really, in the new people –

Tracy Marshall: Okay.

Mr Stevens: – it’s the people who used to train before Common Issues?

Tracy Marshall: So for existing Trainers, who might have been in post prior to Common Issues Judgment, they will have also gone through various modules to get an understanding of what happened in the past, what needs to change. They will also, of course, have been able to view our training policy, they have to look at our training policy, and we have records annually that they’ve looked at that and understood that and been trained out on it.

And, of course, our Trainers, as well, are all quality assured, they’re observed on a regular basis by the leaders in the team to make sure that they are delivering in the very best possible way and to the standards that we expect.

So I’m confident that, if there were any – anything being trained out that wasn’t – you know, was pre-CIJ and shouldn’t be, in terms of approach to shortfalls, for example, that if that did happen, it would have been stamped out very quickly. I’m not aware of any examples of that, though.

Mr Stevens: I should also clarify, sorry, I should have said my question wasn’t aimed at new trainees, not that I’m not interested in it.

Tracy Marshall: Thank you.

Mr Stevens: Clearly, we are looking at that as well.

Tracy Marshall: Apologies.

Mr Stevens: My question wasn’t aimed at that.

We don’t need to bring it up but at page 42 of your statement, paragraph 100, you refer to a Feedback Committee being established in June 2024, to collate feedback received on training, analyse it for patterns and trends, and take any steps you deem necessary.

Tracy Marshall: Yes.

Mr Stevens: What was done with feedback prior to June 2024?

Tracy Marshall: So I think, prior to June 2024, we received feedback from postmasters or people going on training at the various stages of the learning cycle. So we’d have feedback provided after e-learning had been completed online; feedback after attendance at classroom; feedback after an onsite Trainer had been out to support postmasters; and then feedback from new postmasters after the first few months of them being in operation; as well as getting feedback from those who use our materials on our Learning Management System, et cetera.

But I think it’s fair to say that, within the respective teams, that data was being analysed and looked at, perhaps in a slightly siloed way, so what this has tried to do is bring all of those component parts together. So everybody responsible for all of those elements are meeting now regularly, looking at the data holistically and understanding what needs to be done in response to that feedback. It’s very early days, the first one was only in June, but I think it’s working well.

Mr Stevens: Could we please bring up EXPG0000007. This is the YouGov survey that was produced for the Inquiry. Have you had a chance to read this?

Tracy Marshall: Yes, I have.

Mr Stevens: Can I ask to turn, please, to page 16, and if we could go to the table at the bottom, please. We have satisfaction responses in relation to the Horizon training by length of time working as a postmaster, which obviously will be relevant to the types of training it’s engaged at. Looking at the “2 years or less” and the “3-5 years”, the levels of satisfaction and dissatisfaction, is that consistent with the feedback Post Office had been receiving through its own feedback forms?

Tracy Marshall: It’s not and it was very disappointing to see these statistics, if I’m honest.

Mr Stevens: I take it from you saying it was disappointing, your feedback you received directly from subpostmasters is better than what is shown here?

Tracy Marshall: It is, it is much better than is shown here. A short while ago I just illustrated some of the feedback we get at the various stages of the postmaster lifecycle, after e-learning, after classroom, after onsite training and then post a branch going live, and of course that’s for new postmasters coming in and their onboarding journey.

And at every one of those stages we ask the postmasters to rate how confident they are with progressing as one metric, and it’s a score out of 10, a scale of 1 to 10, and across all of those component parts of training we’ve consistently seen levels of plus 90 per cent. So that’s why I was very disappointed to see these results because there is quite a stark difference there.

Mr Stevens: Is there any proposal to investigate the cause of the difference between the feedback you receive and the feedback that’s been found in this YouGov survey?

Tracy Marshall: I think with all of the statistics and feedback in this YouGov report overall, absolutely. You know, the business are, and I am, for my areas, looking at these results and understanding what more we need to do, given this feedback. I think it’s very hard, obviously, when you don’t know, quite rightly, who these postmasters are who have experienced this, but we take this very seriously and, if people feel like this, we need to do more.

Mr Stevens: Thank you. That can come down.

I want to move on to a very brief point on branch assurance/audit.

Sir Wyn Williams: While it’s on my mind, there are two things that I’d like a bit more information about.

First of all, on surveying people’s satisfaction, so to speak, with training, in effect, you were saying that your feedback to the Post Office directly reports much higher numbers of people who are satisfied with the training they received.

In respect of your surveys, do a high proportion of the people undergoing the training actually provide feedback as well?

Tracy Marshall: It varies depend on the stage, sir. It’s a very good question. I believe that after classroom, for example, the feedback forms are provided to the delegates after the classroom. So, in person, if you like. So there’s obviously a very good response rate there. For onsite Trainers and post-Go Live, I’d have to check the details but I think it’s more on a voluntary basis, if you like, from the postmaster, so response rates might be fairly low there.

Sir Wyn Williams: Yes, that’s what’s I’m struggling with and I’m making that admission openly, about the survey information I’m getting because, obviously, the percentage of people completing the YouGov survey is comparatively low, compared with the whole number of postmasters. So I wanted to know whether the same applied to your surveys or something different, if you see what I mean.

Tracy Marshall: I see exactly what you mean, sir. It’s a very good question and, you know, completion of surveys and response rates is something that plays on not just my mind but I’m sure many of my colleagues’ minds. We would love to get more people responding to surveys generally, across the organisation. Response rates are – aside from our annual postmaster survey that we do which, you know, earlier on this year had over 1,900 responses, the surveys that we do within the respective business units, on operational issues, they’re quite low and we’d love to encourage more feedback but, sadly, that’s not materialised yet.

Sir Wyn Williams: Anyway, I think you’ve answered my question in the sense that, if I summarise it in this way: apart from those instances where people are completing a survey following a classroom exercise, the Post Office struggles to get a substantial number of its cohort answering the surveys in a similar way to the struggle that YouGov had to get people to respond; is that fair?

Tracy Marshall: That’s fair, sir. Yes.

Sir Wyn Williams: Okay. That was that.

Then I had just a point of detail. Could we go back, please, to paragraph 47 of your statement. It’s WITN11610100. That’s where you describe the training that continues to be available, if I can put it in that way, for subpostmasters.

Tracy Marshall: Yes.

Sir Wyn Williams: I wanted to focus on the subparagraph (d), “Investigating discrepancies”, all right? Two points I wanted clarification of: is investigating discrepancies part of the mandatory training that people who are newly joining as postmasters undergo, post-CIJ?

Tracy Marshall: So, in part, yes, it is, sir. In the initial classroom training, e-learning and onsite support, new postmasters and their assistants, as well, in branch, will be taken through ways in which they can help themselves in branch with operational procedures to minimise discrepancies and what steps to be taken, if there is a discrepancy, to try to get to the bottom of it. So it is in there across the various approaches.

Sir Wyn Williams: Right. So I think you describe in detail the – what I’ll call onboarding training from, I think, paragraph 50 onwards of your statement. But, anyway, there’s a whole section on the training received right at the start and I must have missed it because I couldn’t find in that specific reference to part of the training being investigating discrepancies. But you tell me that it is part of the training, yes?

Tracy Marshall: It is part at various stages, there is a lot of material and it is covered as part of our classroom and onsite too. The investigating discrepancies half-day classroom course is, you know, just by the length of time, more detailed and is available not on a mandatory basis but for anybody who wants to go along to have more training to help them in their branch.

Sir Wyn Williams: Right. That leads me to my second point of detail. In respect of that specific half-day classroom course on investigating discrepancies, do you find that you’ve got more people who want to attend it than you can supply, or what, or is there not very much of a take-up from subpostmasters or postmasters; can you give me some feel for that?

Tracy Marshall: Sure. I don’t think there’s as much take-up as I would like, sir, if I’m honest. I think over the last six months or so, I think we’ve had around 200 delegates on that particular course, although I’m not entirely sure of my facts there. I think what I find, sir, is a general lack of awareness, still, from postmasters and their teams about what training is available to us and that’s one thing, again, that we’re exploring at the moment: how we can better advocate the range of training materials that are out there, and get more postmasters to take us up on them.

Sir Wyn Williams: All right. Thank you very much.

Sorry, Mr Stevens, over to you again now.

Mr Stevens: Thank you, sir.

A brief point on branch assurance/audit. The Inquiry has heard evidence about Post Office Auditors logging onto branch terminals and making adjustments to stamps without postmasters’ knowledge. I just want to explore one element of that with you. Please can we bring up NFSP00001468. There’s an email at the bottom from Calum Greenhow to you on 10 May 2023, and it says:

“Tracy,

“It has come to my attention that [Post Office] personnel are visiting postmasters, including audits (Putney PO), where Area Managers/Auditors are entering stock values onto Horizon without either consultation or agreement with the postmaster.”

It says:

“If these facts are correct, then the NFSP would like to know who has authorised this policy within [Post Office] and why it has not been discussed with the NFSP in advance?”

It goes on to set out some various other matters.

Firstly, were you involved in investigating this issue following this email?

Tracy Marshall: I wasn’t specifically involved in investigating the issue. The reason I got the email is because, at the time, I was accountable for the relationship with the NFSP but the issue was investigated, yes.

Mr Stevens: Do you know what happened as a result of that investigation?

Tracy Marshall: I do. So, as a result of the investigation, I believe Post Office held its hands up and said, “Absolutely, this shouldn’t be happening” and, as a result of that, that practice has absolutely stopped now in branches. There was a follow-up call with Mr Greenhow and, I think, Keith Richards from the NFSP as well, a short time after this, to update them on the outcome of our investigation and assure them that that wasn’t now happening.

Mr Stevens: Are you aware of how this practice began or whether there was a policy in place?

Tracy Marshall: I’m not, I’m afraid. I mean, I’ve never had any accountability for the Branch Assurance Team and it’s certainly not something that’s in our postmaster policy.

Mr Stevens: That can come down. Thank you.

I want to turn to suspension, reinstatement and termination. You’ve given figures in your witness statement, which I’ll turn to in a moment, about the number of branches – I think it’s number of branches rather than subpostmasters – where there has been a termination, suspension or reinstatement since financial year 2017.

Tracy Marshall: Yes, that’s correct.

Mr Stevens: You say that Post Office doesn’t hold a central record of that data, so it’s likely that the record or the information you provided is incomplete.

Tracy Marshall: For prior to ‘17/’18 financial year I think, yes.

Mr Stevens: But post-‘17, is that –

Tracy Marshall: I’d just have to get up the relevant part of my witness statement, if I can.

Mr Stevens: Page 60, paragraph 143, please. You say:

“For financial years 2017/18 and 2018/19, Post Office did not keep records that identified whether the SRT was based on Horizon data.”

So that’s in relation to –

Tracy Marshall: Correct.

Mr Stevens: – 2017 and ‘18. If we go to paragraph 140, please, you say:

“Post Office does not hold a complete record of historical data in relation to postmaster suspensions, reinstatements or terminations. Prior to financial year 2017/18, the Contracts Team was managed as two separate teams … with each team holding their own data. It may be possible that some additional data from pre-2017 exists that could be derived from a manual review of individual branch files.”

So that first sentence, “Post Office does not hold a complete record of historical data in relation to postmaster suspensions”, et cetera, is that aimed at years before the financial year 2017/18?

Tracy Marshall: Yes, the way it is written in here, yes. It should be before, prior – prior to that year.

Mr Stevens: So we can be confident, can we, that if we turn the page to page 61, the figures given here are –

Tracy Marshall: The figures of the numbers of them are accurate to the best of my knowledge, absolutely.

Mr Stevens: But in the brackets, where there are asterisks?

Tracy Marshall: Yes.

Mr Stevens: Sorry, I should say brackets relate to where Horizon data was used or thought to be used?

Tracy Marshall: Exactly.

Mr Stevens: Where there are asterisks, that’s been done on, as I understand it, a look-back review of available data and that’s the best estimation of a case that’s based on Horizon data?

Tracy Marshall: Correct.

Mr Stevens: Could you expand on what you mean by where the suspension, reinstatement or termination was based on Horizon data?

Tracy Marshall: Yes. So if suspensions or terminations were based on – as a result of discrepancies or shortfalls occurring in branch, ultimately, that would be what I’m referring to here as “based on Horizon data”.

Mr Stevens: So we see financial year 2019/2020, Common Issues Judgment would have just been handed down at the start.

Tracy Marshall: Yes.

Mr Stevens: December 2019, you have Horizon Issues Judgment, and we see there there’s a drop in cases of both suspensions and terminations. Are you able to say if the drop is because of the judgments in the Group Litigation or something else?

Tracy Marshall: I think that the drop in those cases, and over subsequent years, is as a result of the findings from the Common Issues Judgment/Horizon Issues Judgment, but as well as Post Office introducing its policies, which we’ve talked about previously, which I think provide greater clarity on the circumstances in which suspension or ultimately termination should be enacted.

Mr Stevens: We see that, in the subsequent years, and noting that the 2024/25 year is only to 24 June, there are still contract suspensions and terminations based on Horizon data?

Tracy Marshall: Correct.

Mr Stevens: What is Post Office’s basis for terminating contracts using data generated by the Horizon IT system?

Tracy Marshall: So we will – our Contracts team will take a decision to suspended or terminate someone’s contract. If discrepancies are involved, which is the use of Horizon data, then we would obviously only be suspending or ultimately terminating contracts once a very thorough investigation has happened into that discrepancy. The teams in our central operations function, which are managed by Mel Park, undertake those investigations into discrepancies, and I am assured that – and we’ve heard a lot about Horizon data and the integrity of Horizon data.

As part of their investigations, they will obviously be looking to make sure and check whether Horizon could be at play, looking at any known errors, for example, but only when that determination has happened and we’re sure that the discrepancy is as a result of the negligence, carelessness or error of a postmaster, would we possibly enact a suspension or termination.

Mr Stevens: One thing we’ll come to with a different witness is Post Office’s position is it’s not pursuing civil claims for discrepancies based on Horizon data –

Tracy Marshall: That’s my understanding, yes.

Mr Stevens: – and Post Office’s position is it only seeks repayment without going to civil enforcement where the postmaster agrees to pay?

Tracy Marshall: Correct.

Mr Stevens: In these cases, where we see terminations or suspensions, can you assist with, on the bracketed numbers, whether, within those groups, the postmaster disputed the discrepancy or suggested that Horizon was at fault?

Tracy Marshall: I’m not entirely sure whether, in each of these cases, the link to discrepancies, the postmaster would have disputed it or would have claimed that Horizon was at fault. What I can say, of course, is that each of them would have been investigated very thoroughly. Where we suspend a postmaster or terminate their contract, what we’re not doing is suspending or terminating on the basis of them having discrepancies. We are suspending or terminating based on the fact that there have been contract performance issues.

So, to give you an example, in the majority of our cases, there are discrepancies that will have been caused by operational procedures in branch not perhaps being followed. Too much excess cash is a key one. Failure to rem in cash and stock, for example, or not undertaking daily cash declarations or your monthly balancing, which have all led up to the accumulation of discrepancies.

But I’m confident that the discrepancies are investigated thoroughly.

Mr Stevens: Just on these numbers finally, I read this as the contract is terminated, in that the Post Office itself is making the decision to terminate the contract. Am I right in reading this that it doesn’t include situations where a postmaster resigns?

Tracy Marshall: That’s correct.

Mr Stevens: That can come down. Thank you.

The decision on suspension and termination is taken by Contract Advisers; do they report to you?

Tracy Marshall: No. The Contract Advisers report to their Head of Contract Performance and Deployment, and they report in to me.

Mr Stevens: You say in paragraph – we don’t need to turn it up – 150 of your statement that the Contract Advisers used to sit under the Branch Assurance Team?

Tracy Marshall: The Contract Advisers used to sit within the same function as the Branch Assurance Team, yes.

Mr Stevens: That’s been changed recently, has it?

Tracy Marshall: It was changed in August last year.

Mr Stevens: Why was that?

Tracy Marshall: Following a review of our procedures and processes by Group Assurance, who are looking at, you know, how we have delivered improvements following the Common Issues Judgment, they identified a potential conflict with the Branch Assurance Team sitting in the same time as the Contracts team and, hence, the decision was taken to move the Contracts team under me.

Mr Stevens: Please can we look at page 64 of your statement, paragraph 154. You refer to the four current Contract Advisers.

One joined Post Office in 2005. Area Manager for nine years, now acting as a Contract Adviser.

2012, another joined then, (b), worked in various roles in the business, now a Contract Adviser.

If you go down, please, (c), another joined 1981, started in the role of Contract Adviser in 2006.

(d), the fourth, is more recent.

If you then go down please, 155. We see the Head of Contract Management and Deployment, employed by the Post Office since 2003, took a role of Contract Adviser in 2011.

The Inquiry has heard evidence about during the period – we’re looking at 2000 to 2012 and thereafter – where the process for termination has been criticised, in particular that there was an expectation to respond to discrepancies robustly in the appeal process and the decision process. What steps has Post Office taken to ensure that the Contract Advisers who were involved in those decisions have learnt from those criticisms that have been made?

Tracy Marshall: So I think I touched on some of this when we were talking about our Training Team, as well, and people who were in post prior to the Common Issues Judgment. The – all of the Contract Advisers, whether they were in the business or since they’ve come in since, have all had training, quite structured training, delivered on the implications of the Horizon IT Inquiry, the findings from the Common Issues Judgment.

They’ve also had clearly training on the new terms that have been added to the contracts as well, the implied terms, which clearly do give a focus on our approach to suspensions and terminations and it gives a focus as well on the management of discrepancies and how we will support postmasters more.

So they have all had training on the implications and, again, they will have reviewed the policies associated with their role on an annual basis to make sure that they’re doing their job in line with those policies and procedures.

Mr Stevens: I want to look shortly at some of the review mechanisms that are in place as well but can I look at suspensions in a bit more detail briefly. It’s POL00448254. So this is the Postmaster Support Policy on contract suspension.

Tracy Marshall: Yes.

Mr Stevens: If we can turn, please, to page 17, down to the bottom of the page, it says:

“Suspension will only be applied where absolutely necessary to review the cause of a potential contractual breach identified by the Contract Adviser and where all alternative options have been considered.”

Is that the test that is to be applied, then, by Contract Advisers when considering whether or not to suspend a postmaster?

Tracy Marshall: Yes, and they are absolutely trained and given instruction that suspension should be the last resort and only when, you know, issues aren’t capable of being remedied.

Mr Stevens: We’ve heard a lot of evidence about some policies being under review. Is that test being considered for review or change or is that a settled test?

Tracy Marshall: I think we’re always up to getting feedback and changing things if we need to. These are reviewed on a very regular basis and are reviewed by RCC and ARC, our two governance forums. So at the moment that is the position, that suspension is absolutely the last resort.

Mr Stevens: I appreciate that these things are reviewed but is there any indication that that test will be lowered or weakened in future?

Tracy Marshall: No. Not in my view.

Mr Stevens: Could we please look at your statement, page 72, paragraph 176. You say that:

“The Contract Adviser can make a recommendation to the Head of Contract … and Deployment on suspension, who then makes the final decision. That decision is then reviewed at the next Postmaster Suspension Decision Governance Committee meeting.”

You set out the membership of that meeting there.

Why are there no either former postmasters or NFSP representatives on that panel?

Tracy Marshall: It’s a very good question and something that we’re looking to address because the other panel, the Termination Committee and the Decision Review Committee, do now have postmasters or postmaster representatives on those panels. I’d be very keen to have a postmaster representative on this panel; and it’s something that we are looking at.

Mr Stevens: So that’s something you’re currently –

Tracy Marshall: Currently looking at, yes.

Mr Stevens: Is it in consultation with the NFSP over that matter?

Tracy Marshall: It will absolutely need to be in consultation with the NFSP, and the NFSP do input to and approve all of our policies, actually, before they go to our Audit and Risk Committee.

Mr Stevens: At paragraph 177, just below, you say:

“To date, no decision has been overturned by the Postmaster Suspension Decision Governance Committee.”

Do you think that’s a good or a bad thing?

Tracy Marshall: I think it’s a good thing because I think it genuinely shows that we have followed the processes and procedures and been fair and transparent to postmasters when making suspension decisions.

Mr Stevens: It might be said that it shows that the Governance Committee is not properly overseeing it and challenging the decisions that were made; what would you say to that?

Tracy Marshall: It could show that. I don’t think that’s the case. I think the members of the Suspension Decision Governance Committee have all had training, they’ve all had training on the contracts, they’ve all had training on the CIJ judgment handed down, and I’m confident in the decisions that they are making, and we’ve got some good representatives there from across the business.

Mr Stevens: Has there ever been consideration for any independent review or input to ensure that the Decision Governance Committee is doing its job properly?

Tracy Marshall: So the Decision Governance Committee, as with our other committees, have been looked at by our group assurance function, who are reviewing much of what we do across the Retail function. I believe that they think it’s fit for purpose at the moment, as there have been other conversations more generally, not just about Suspension Decision Governance Committees, around the possible use of independent external organisations to further assure our work. So that, again, is something that’s ongoing.

Sir Wyn Williams: What sort of numbers are we talking about to get to the Governance Committee, of the people who are suspended? Roughly at least, can you tell me how many take the decision to the Committee?

Tracy Marshall: So this Committee here, sir, is our internal Suspension Decision Committee and every suspension decision, every one of them, is ratified by this committee.

Sir Wyn Williams: Right. I’m sorry, I misunderstood that. Fine.

Tracy Marshall: Thank you, sir.

Mr Stevens: Can we please look at POL00448206. This is the equivalent support policy but for contract termination. Could we please look at page 18, if we go down to “Repudiatory breach”, please. So we have examples here of a repudiatory breach and we see in the middle:

“Where discrepancies of a significant value have been caused by the negligence, carelessness or error of the postmaster, resulting in a loss to Post Office, and which have been fully investigated by Post Office …”

Firstly, what is significant value in this context?

Tracy Marshall: I don’t think we actually have a definition of what a significant value is. We’re certainly talking here about values over – you know, certainly over £10,000/ £20,000, I would have thought, but we don’t have a definition of a significant value.

Mr Stevens: But is it still the case, then, that it appears that, if there are discrepancies of a significant value, that the Post Office considers was caused by negligence, carelessness or error of the postmaster, that is in and of itself a ground for terminating the contract?

Tracy Marshall: That, in itself, is grounds for terminating the contract. But I would add that, of course, before we get to that point, those discrepancies, whatever their value, would have been thoroughly investigated, using the process I’ve described earlier, before we settled on the fact that they were caused by negligence, carelessness or error.

Mr Stevens: In paragraph 163 of your statement – we don’t need to turn it up – you say:

“Contract Advisers do not investigate branch discrepancies or deal with the recovery of outstanding branch accounts.”

Is it the case that they rely on another team in Post Office to do that for them?

Tracy Marshall: That’s correct.

Mr Stevens: Which team is that?

Tracy Marshall: So that would be the Central Operations Team and the Postmaster Account Support Team.

Mr Stevens: You don’t oversee that?

Tracy Marshall: I do not.

Mr Stevens: Actually, sorry, can we move to page 20, please, 4.11. It says:

“Post Office will need to consider whether different has complied with its own contractual duties in relation to matters relevant to the reason for termination.”

It goes on to say:

“If Post Office has materially failed to comply with its own contractual duties in relation to the matters relevant to the reason for termination, it is not entitled to terminate on notice.”

Are Contract Advisers giving any legal assistance to determine whether Post Office has materially failed to comply with its own contractual duties?

Tracy Marshall: Yes, they are. So the important point here is that the Contract Advisers are not lawyers, they’re not legal experts, so any proposed decision to terminate a postmaster’s contract, we would have external legal assurance on that decision. Only when that assurance has been given to us and that we’ve acted in line with the terms of the CIJ, we’ve acted, you know, under our duty of good faith, not arbitrarily, irrationally, capriciously, et cetera, would we then take that decision to the Termination Decision Governance Committee, for final ratification.

Mr Stevens: That can come down. Thank you.

If a decision to terminate has been made, there’s then the Postmaster Contract Termination Decisions Committee. Can you explain what the role of that Committee is?

Tracy Marshall: Yes. So we’ve got the – if a termination decision has been proposed by the Head of Contract Management and Deployment, we’ve got the external legal assurance advice, we then go to that committee, who, very much like the Suspension Committee that we talked about earlier, is senior leaders within the organisation, ultimately, with some legal input too, to review the rationale document, review the legal advice, and ultimately ensure that the teams have been working in line with its contract, it’s policies and its procedures.

Mr Stevens: If we look at POL00448205, page 14, please.

Tracy Marshall: Apologies, can I ask for some clarity here?

Mr Stevens: Yes.

Tracy Marshall: We’ve just talked about the Termination Decision Governance Committee, which is the internal committee, and this document is now a separate review panel.

Mr Stevens: Is this the panel?

Tracy Marshall: This is the panel if a postmaster chooses to appeal a suspension or termination.

Mr Stevens: So is that called the Postmaster Contract Termination Decisions Panel?

Tracy Marshall: This is the Postmaster Decision Review Panel.

Mr Stevens: Review Panel?

Tracy Marshall: Yes, apologies.

Mr Stevens: So this is a separate body that’s dealt with for appeals?

Tracy Marshall: Yes.

Mr Stevens: This the body that comprised of – we see two Senior Leadership Group members, one former postmaster and one non-voting panel chair –

Tracy Marshall: Correct.

Mr Stevens: Why is the panel chair non-voting, so there’s a majority in favour of the Senior Leadership Group?

Tracy Marshall: That’s a very good question, I think that the initial thoughts around the panel chair not being – voting is so that they can more effectively provide independence and effectively chair the meeting. That’s the case for a lot of our decision committees, that the Chair would be a non-voting member.

Looking at this again now, that does clearly skew, slightly, the postmasters versus senior leaders piece, so I think, again, that’s something that we should absolutely look at.

Mr Stevens: In looking at something like that, would you liaise with the NFSP?

Tracy Marshall: Absolutely. Again, this is something integral to our policy.

Mr Stevens: Thank you. That can come down.

You mentioned earlier a review about I think considering whether independent input into these decisions or reviewing them is being considered. When will that review be complete or when will there be proposals available?

Tracy Marshall: I don’t think I have any concrete dates on that but it is an outstanding action that we have following feedback from group assurance, so we will need to work on that quickly. I would very much hope to have an updated view within this financial year.

Mr Stevens: Sir, unless you have any questions on termination, I’m going to move to a different topic.

Sir Wyn Williams: That’s fine, then, Mr Stevens.

Mr Stevens: The last topic I have, it’s very brief. Can we look at POL00460000, please. This is an investigation report on Project Pineapple. I don’t need to go through all of it but can you turn to page 10, please.

In the middle, it says:

“Martin denied that there was consideration of cancelling the [postmaster] survey. He said there had been nervousness in the Executive discussions because of the Bates programme but never a discussion to cancel. However, Tracy Marshall confirmed that there had been discussion about cancelling the survey and that she and others from within the team had pushed to ensure it went ahead – which ultimately it did.”

Can you provide some background to: (1) the discussions on cancelling the survey; and why it was continued?

Tracy Marshall: So this is in relation to – normally, we do an annual postmaster survey which tends to happen January/February time of each year, and we’ve done that since 2021. Following the Mr Bates vs The Post Office programme in January of this year, clearly there was lots of external media attention, lots of, quite rightly, focus on the Post Office and the awful impact that the Horizon scandal has had on many postmasters.

There were, therefore, some discussions around the timing of the postmaster survey, which could have resulted in perhaps more negative feelings being given in that survey.

This is a survey, sir, where we’re talking about general postmaster sentiment.

So there were some discussions. I don’t think this is quite a true reflection of my conversation and my interview here. I don’t recall there being a discussion about cancelling, full stop, the survey, but there was certainly a discussion around potentially just postponing it by a month or so, before it went ahead. The survey did take place this year and I think it was March time it went ahead.

Mr Stevens: Thank you.

Sir, those are all the questions I have. Unless you have any questions now, I’ll check if there are questions from the Core Participants.

Sir Wyn Williams: Check with the Core Participants, please.

Mr Stevens: Yes, there’s two sets of questions, sir. I don’t know who wants to go first. I think Ms Page first.

Sir Wyn Williams: Fine.

Questioned by Ms Page

Ms Page: Ms Marshall, hello.

Tracy Marshall: Hi.

Ms Page: Have you downplayed your involvement in disputes with postmasters over the years?

Tracy Marshall: I really don’t think I have, and I still maintain my position that, whilst on the face of it, it looks as though I’ve – and I have sent emails which do talk about remote access, for example, I was very much passing on information from Subject Matter Experts to my bosses at the time. I’ve never had any involvement with IT, with prosecutions, with investigations, over my career history. But I do want to say I’m very sorry that it gives that opinion of me and want to assure everybody that that is absolutely not the case.

Ms Page: Let’s have another look at a different section of your email to Ms van den Bogerd and Mr Gilliland. It’s POL00294728 and, as it comes up, you’ll appreciate now, if not, you say, at the time, that this related to a dispute with the Ferndown branch. The postmaster and her husband were saying that there were integrity problems with Horizon; you appreciate that now, do you?

Tracy Marshall: I appreciate that now, yes.

Ms Page: If we could scroll down to the bit that wasn’t read out, it’s got the heading “Independent review of Horizon system integrity”:

“Post Office Limited has allowed an independent review of our Horizon system in the past, on one occasion.”

Then it refers to that occasion. It was to do with the trial of Mrs Misra. It says this about the trial:

“The case made it to court on 11 November and after reviewing all the evidence the judge exonerated Post Office Limited in full, finding the Horizon system to be robust.”

That appears to be in bold; do you see that?

Tracy Marshall: I do.

Ms Page: “During the course of the independent review, the defence legal team were provided with representatives from Fujitsu and the knowledge and experience of using the Horizon system. Fujitsu experts helped the defence team complete their investigation.”

“The jury in the case of Misra v Post Office Limited voted unanimously that she was guilty and as such, she is now serving time in prison. This has been a high profile case due to the fact that Mrs Misra is pregnant. Mr Misra has made allegations that the defence team were not allowed access to all the information they required regarding the Horizon system but the judge made no such accusation.”

If we could just go a little further down, as well. The final paragraph on the page:

“In addition to the independent review above, the robustness of the Horizon system is audited on an annual basis by Ernst & Young. Never before has the quality and accuracy of the system been doubted here.”

Now, it appears that all of that information came from conversations that you’d had with Dave Hulbert and Andy McLean the day before; is that right?

Tracy Marshall: I think the conversations with – in this email, because I don’t remember it but having read it – that certainly the issues around Horizon system remote access would have come from Dave Hulbert and Andy McLean.

I don’t think they would have been in a position, as IT people, to talked length about the particular case of Mrs Misra, here.

Ms Page: So where did you get that information from?

Tracy Marshall: Well, I can’t remember who I would have gone to, but that wouldn’t have been something that I would have known about or been involved in, so I would have been relying on, I’m guessing, some of my legal colleagues at the time, to provide me with that information. It was not something I was ever involved in.

Ms Page: Given that the trusted subpostmaster at Ferndown had raised the issue of Horizon integrity, why do you think it was that you and apparently Ms van den Bogerd and Mr Gilliland, were prepared to take these assertions from you, relayed via others, from various unknown people, rather than considering what the subpostmaster and her husband were saying?

Tracy Marshall: I honestly can’t comment on why Angela and Kevin, who I think attended the Ferndown meeting, they didn’t talk about any of the information that I relayed, I don’t think. Hindsight’s a wonderful thing, isn’t it? They should have been a little bit more upfront, I think, at that meeting and asked for the perspective of the postmaster.

I think at the time, here, in 2010/11, the business position was incorrectly and wrongly that Horizon was very much a robust system.

Ms Page: Was it part of the culture that, when there was a one word versus another word, a subpostmaster versus someone else, the someone else was always believed and the subpostmaster was not; part of the culture of believing that postmasters were incompetent or dishonest, not worthy of belief?

Tracy Marshall: I don’t recognise that in the roles that I was doing, in so far as feeling as though postmasters were incompetent and shouldn’t be relied on and that Post Office were always right. I don’t recognise that in the jobs that I was doing and, in fact, of course, at the time here, my job involved a lot of involvement with the NFSP and hearing firsthand about the issues affecting postmasters. Whether others had that view, I can’t say, but it was not something that I experienced.

Ms Page: Were others like Mr Gilliland and Mr Tuthill coming to you for this sort of activity, which you say wasn’t part of your role, because you were willing?

Tracy Marshall: No, I don’t think so. I wasn’t willing. I don’t think I was complicit in any of this at all. I think they were coming to me, particularly Mr Gilliland, being my boss – as I’ve said, he did so on numerous occasions – asking me to go outside the remit of my role to find out information for him to, you know, assist him in visiting branches or whatever that might have been.

Ms Page: Evidently, as a result of what you were told by unknown persons, you must have believed that Mrs Misra was guilty of theft at the time?

Tracy Marshall: I would have taken on face value, from what my colleagues had told me. I assume so, yes. Clearly now –

Ms Page: Do you accept that you were wrong about that?

Tracy Marshall: Absolutely.

Ms Page: When did come to accept that you were wrong?

Tracy Marshall: I think there was a widely held position in Post Office, until the handing down of the various judgments, that Post Office were not at fault and that was a message that was given consistently in our communications.

Ms Page: Can you pinpoint a time when you recognised that postmasters had been wrongly convicted?

Tracy Marshall: On the handing down of the Common Issues and Horizon Issues Judgments, yes absolutely.

Ms Page: Would you say that was about convictions? Can I just press you on that because, of course, there was a subsequent judgment about convictions. Did you connect it with convictions when the Common Issues Judgment and the Horizon Issues Judgment came out?

Tracy Marshall: I don’t think I would have done, no.

Ms Page: So when do you think you did recognise that convictions were wrongful?

Tracy Marshall: I can’t pinpoint it specifically. I mean, clearly since the Inquiry has been going on now for some years, and I have, you know, read and heard a lot of the horrific stories experienced by postmasters, I have now become very clear that those convictions were wrong but I’m sorry, I can’t pinpoint specifically when I would have been aware of that.

Ms Page: Is it possibly not until Bates vs The Post Office?

Tracy Marshall: It was absolutely before then.

Ms Page: Just returning back in time, if I may briefly. The email that you sent to Mr Gilliland and Ms van den Bogerd was part of the myth making in Post Office, we’ve seen a lot of it, using sort of wisps of truth and spinning them to support what was of the falsehood that Horizon was robust. Whether you were relying on others or not, you were part of that, part of that myth making, that chain of lies and fabrications. When did you personally stop spreading those sorts of myths?

Tracy Marshall: I can’t think of other occasions when I have spread those myths or lies. In this particular instance, I was, as you said, very heavily relying on what other experts in the business had provided me with. I don’t think I’ve ever been spreading lies or myths in the business.

Ms Page: Do you have anything to say about your failure to raise your knowledge based on these email chains over the many years where Post Office was claiming not to have any remote access into branch accounts?

Tracy Marshall: So whilst I still absolutely maintain that I wasn’t involved in the particular issues here and I’m, you know, getting the information from other people, I am incredibly sorry that I sent any emails with any relevance whatsoever to remote access or convictions and I am hugely sorry for any – for the horrific things that postmasters and their families and children and communities have gone through over the last few years.

Ms Page: Can I bring up, please, POL00416991, and this dates from 2011. If we just note that this is an email from Nigel Allen to Andrew Winn with you on copy. If we go to the first three paragraphs – before we do that, the subject “Ferndown … Loss settled by [cheque] – SPMR dispute”:

“Thanks for this.

“I have discussed this with Tracy Marshall and she has asked whether you can draft a letter to Mrs Rachel Athwal, SPMR, explaining in as simple terms as possible what happened and why it is now necessary for her to send us another cheque. Mrs Athwal is arguing that she did what the helpline told her to do and as she has already settled the shortage by cheque which has cleared from her bank account, doesn’t see now why she should send another one despite the surplus in the branch.”

Then this:

“Mrs Athwal and her husband have already challenged the integrity of the Horizon system so it needs to be explained that she has not been disadvantaged by any software problems and that POL took the necessary steps to rectify this as soon as possible.

“In view of the sensitive situation at this branch, could you please send the letter to Tracy first and cc to me.”

So you weren’t just investigating to help Mr Gilliland with his interview. You were involved in how to resolve the dispute, weren’t you?

Tracy Marshall: It would appear that from this letter, yes, but that was not part of my role at all at the time. Although, yes, that’s what it looks like from this email.

Ms Page: What this email tells us is that you were well aware that the dispute involved the integrity of Horizon and that it was seen as important to assert that the branch had not been disadvantaged by a “software problem”. You understood, presumably, what this was about. This was about the need to keep the edifice up so that SPMs and clients didn’t lose confidence in the Horizon system. You must have understood that, mustn’t you?

Tracy Marshall: As I’ve said, I should have understood that. I don’t know whether I did understand that at the time. It wasn’t something that was in my remit. But, yes, I’m – what I’m certainly doing is maintaining the business position here, that the issue with Horizon integrity should not be challenged, which, as I’ve said, was a position that was maintained for a long time, incorrectly, in Post Office.

Ms Page: You were sufficiently worried about the sensitivities that you wanted to review the letter before it went out?

Tracy Marshall: Well, that’s very unlike me in that role to have to do that, I have to say.

Sir Wyn Williams: Just a minute. Do we know that, Ms Page? This is a letter from Mr Allen, who is suggesting that it be sent to Ms Marshall. We don’t, actually – or I don’t at the moment at least – know whether it did go to her, what she did about it, et cetera.

Ms Page: This is the only email that I have about that, sir.

Sir Wyn Williams: Well, I think we ought to be careful about making five from one and one, if you see what I mean.

Ms Page: Certainly.

If we can move forward in time to 2015 and, if we could bring up, please, POL00117439. This first page makes it quite plain that there are a very large number of people on copy and, hopefully, you’ll take it from me that you’re one of them. Indeed, you may be on page 2, which I’ll ask to scroll to now. Yes, there you are actually towards the end of the long list.

This comes from Mark Davies, and he says:

“Thanks for taking part in the conference call on Horizon this week.”

He then forwards a note and we can perhaps just have a look at a little bit of the content of that note. If we go down to page 3, we can see reference there to the BBC Panorama programme, which is maybe going to go out. We can also see that there’s reference to a Parliamentary debate about the issue, ie the Horizon issue, and the talk about the fact that this may lead to further media coverage.

If we could go down to page 4, please. We can see that he’s set out various key points and messaging and, if we could go to a little further down – sorry, just a little further up from there – there’s the paragraph, second bullet point down, which has the sort of classic line, if you like:

“There is no evidence that the Horizon system does not work as it should. This is the finding of independent investigators. It has been shown to be robust and effective in dealing with six million transactions”, et cetera.

So those were key messages sent to you amongst many other people in 2015 and this was, essentially, a script for fending off concerns about Horizon, would you accept that?

Tracy Marshall: I think it was a script for us to cascade to the wider teams, from what I can make of the email, to use, if approached by the media, if approached and asked questions by postmasters, yes, it has to be that.

Ms Page: How many times do you think you would have adhered to that sort of a script when dealing with concerns about Horizon?

Tracy Marshall: Probably – it’s hard to say. I don’t remember how many times I had those conversations. I certainly never spoke to the media about it. At the time of this – sorry, is it 2015, did you say?

Ms Page: Yes.

Tracy Marshall: At 2015, or from 2012 through – well, all the way through to my current position, I’ve been working on programmes – I was on the Network Transformation Programme at this point, so I wouldn’t have been interfacing actually directly with postmasters or the media. So I don’t know how often I would have used it but it wouldn’t have been frequently.

Ms Page: I won’t take you to it, to save time but we can also see that in 2019, reference POL00268061, you were again part of a group Mark Davies copied in following the Common Issues Judgment and how to handle the media fallout from that. There was a summary of the Common Issues Judgment attached and some tips on how to handle the media.

Do you remember receiving the Common Issues Judgment, the summary of it?

Tracy Marshall: Do you mean the media summary, the tips, as you call it?

Ms Page: Yes. Let me put it in a different way. When did you first appreciate what was said in the Common Issues Judgment?

Tracy Marshall: I only when it was – probably after it was handed down. I think when it was handed down, there was certainly shock across the Post Office that that was the outcome.

Ms Page: Can you tell us about your own personal reaction, please?

Sir Wyn Williams: Well, Ms Page, I’m sorry to sound difficult but I’m not sure that this is actually going to help me in terms of what I have to really decide on my terms of reference. I mean, it’s clear, is it not, from everything that I’ve heard already, that everybody in the Post Office expected to win but they lost, so then they had to come to terms with it.

Ms Page: What I’m trying to get at, sir, and I hope that it won’t take very long and that it, I would suggest, is relevant to this phase, is when did it really dawn on Ms Marshall that Post Office had got it wrong for all those years and there was a need to really change, and it’s the change I’m really driving at.

Sir Wyn Williams: I think you can all safely conclude that everybody in senior positions realised they needed to change once they read and digested that judgment.

Ms Page: Well, sir, that’s what I’m exploring.

Sir Wyn Williams: Yes, well, I don’t think you need to. I think I’ve got that point, whatever Ms Marshall says.

All I’m saying is it’s self-evident, is it not, Ms Page?

Ms Page: Well, I’m not sure that it is. That’s exactly my point, sir. I think that there’s reason to think that it may have taken some time before people realised the need for change.

Sir Wyn Williams: Well, that might be right as well but I have to look at it objectively, don’t I?

Anyway, sorry. Go on.

Tracy Marshall: I’m happy to answer if you want me to?

Ms Page: When did you think there was going to be a need for serious change?

Tracy Marshall: I think I was in quite a fortunate position at the time, personally, that, by the time the Common Issues Judgment was handed down, I was already very much in a role focused on postmasters and making improvements. So, whilst there was some shock at the fact that the Post Office had lost both of the trials, the Common Issues and the Horizon Issues Judgment, and there was a shock at the extent of our failings as an organisation, I was personally, I think, very quick – very quick – because I was already focusing on the things that weren’t working for postmasters and that’s kind of the role I’ve had ever since.

Ms Page: You’ve told us about the people that you work with in Contract Management who are mostly – the Contract Managers and their boss are mostly people like you, who have grown up in Post Office, if I can put it in that way: people with very long careers in Post Office?

Tracy Marshall: Some of them are, yes.

Ms Page: You’ve told us that the structured training on the Common Issues Judgment and the Inquiry, and so forth, is something that they’ve all had to go through?

Tracy Marshall: Yes.

Ms Page: Did you have conversations with people afterwards about what that meant?

Tracy Marshall: I’ve had conversations with many people across Post Office, and my wider teams, ever since 2019, about the impact of Common Issues Judgment; I’ve had many conversations with postmasters about it; I’ve had many conversations with the NFSP about it.

Ms Page: Have you spoken to them about the sort of activity we can see you were involved with, albeit you say tangentially, of spinning myths, of perpetrating myths. Have you talked to them about that and their own conduct of that sort of behaviour and how they feel about it and whether they see they need to change?

Tracy Marshall: The first I saw – I remembered of any of the details you’ve shown me today was when they were disclosed to the Inquiry. So before to that no, I hadn’t because I couldn’t recollect being involved. Since they’ve been disclosed, yes, I have had conversations with my own team and other colleagues across the business, about those emails, about my perceived role in those, and I think that certainly the emails that you’ve shown me point to, culturally, a Post Office that was very flawed in the past.

What I can say is that, you know, in the roles that I’ve been doing, and from my perception of the wider business now, we’ve got more work to do, of course, but we have significantly changed, culturally. That’s what I see. Prior to 2019, I don’t think we’ve really put postmasters at the heart of very much. Nowadays, we absolutely do, and that’s right. That’s got to be right and we’ve got to continue to do that.

Ms Page: Only today, through questioning, have you identified, for example, the need to review the guidance which puts the burden of proof on postmasters to demonstrate why they’re disputing a discrepancy. Do you think that your past and the culture that you grew up in has played a part in that failure to fully change the mindset?

Tracy Marshall: I don’t. I don’t. My focus is very much on making improvements for postmasters.

Ms Page: Has it got anything to do with why you hadn’t identified, for example, that problem before?

Tracy Marshall: No, it hasn’t.

Ms Page: Thank you, sir.

Sir Wyn Williams: Thank you, Ms Page.

Mr Stevens: Sir, sorry –

Sir Wyn Williams: I’m sorry, I can’t hear you.

Mr Stevens: Ah, can you hear me now, sir?

Sir Wyn Williams: Yes.

Mr Stevens: I think that’s the first time that question has had any actual effect!

I may be being over cautious here. I was reviewing the [draft] transcript and at LiveNote 86/18, Ms Marshall was asked about “So when do you think you did recognise that convictions were wrongful?”, and there was a long answer but it was “couldn’t pinpoint it specifically”. Then, as it’s on the page, Ms Page’s next question was:

“Is it possibly not until ‘Bates vs The Post Office?”

“Answer: It was absolutely before then.”

I just think for clarity, can I ask, when you refer to Bates vs The Post Office, were you referring to the Group Litigation or to the ITV drama, Mr Bates vs the Post Office?

Tracy Marshall: That may be a question for – I was thinking it was the drama, the ITV drama; is that correct?

Ms Page: So was I.

Mr Stevens: Yes. It’s just how it reads is slightly – months down the line.

Tracy Marshall: Understood.

Mr Stevens: We’re just checking that that was what you were answering. Thank you.

Apologies, sir.

I think Mr Jacobs has some questions.

Sir Wyn Williams: Right, fine.

Mr Jacobs: I do, sir, I’m conscious of the time. I’ll try to and be quick.

Questioned by Mr Jacobs

Mr Jacobs: Ms Marshall, Simon Oldnall gave evidence yesterday and he said that Post Office doesn’t recover losses from subpostmasters, except where a postmaster agrees the reason for the shortfall.

Tracy Marshall: I that’s my understanding at the moment, yes.

Mr Jacobs: You’ve confirmed that’s your understanding in your evidence today. Now, Mr Stevens took you in your evidence to the Contracts Termination Policy?

Tracy Marshall: Yes.

Mr Jacobs: Do you remember – we don’t need to turn it up because it’s fresh in our minds, I hope – paragraph 4.6, “Repudiatory breaches”?

Tracy Marshall: Yes.

Mr Jacobs: Do you remember that it said that, where there are discrepancies of significant value that have been caused by negligence, carelessness or error of the postmaster, that resulted in a loss to the Post Office, and have been fully investigated by the Post Office, that is grounds for suspension and grounds for termination?

Tracy Marshall: Yes.

Mr Jacobs: Do you accept that there is therefore scope within this policy for suspension based on a Horizon shortfall?

Tracy Marshall: There is, yes.

Mr Jacobs: Yes. This is my question for you: why is it that the Post Office does not recover shortfalls – recover shortfalls – unless the subpostmaster agrees but applies a different approach in relation to suspending and terminating on the basis of shortfalls?

Do you see that there’s a disconnect there, Ms Marshall?

Tracy Marshall: I do, and I can’t comment on why we don’t recover shortfalls apart from where the postmaster agrees. That’s not my area. I think, in the cases of suspensions or terminations, where there are discrepancies and where the postmaster might not agree with the reason for those discrepancies, I’d refer to my earlier point that, where we’re taking decisions to suspend or terminate contracts, the team aren’t basing those decisions on discrepancies as such.

They’re making the decisions based on that being the outcome, as in it’s due to operational performance issues in branch, such as having lots of excess cash or not doing monthly/weekly trading, et cetera.

But I appreciate there is a slight disconnect there in the language.

Mr Jacobs: I think our point, which I ought to, in fairness, put to you, is: don’t you think that the policy should reflect that, should reflect that suspensions and terminations will not be pursued in relation to Horizon generated shortfalls?

Tracy Marshall: I think we need to tighten up our wording. Of course, having a discrepancy in a branch and having shortfalls is, by definition, a reason for an investigation to happen by the Central Operations Team, but we can tighten up our wording, absolutely.

Mr Jacobs: It’s more about wording, isn’t it? Our clients tell us that they are concerned that the wording of the policies does not reflect the express intentions given by you and other witnesses from Post Office who are giving evidence in this phase; do you see that?

Tracy Marshall: I do, and I think it’s very clear to me that the position that we take in our policies should be the position that myself, others, our teams, are all adhering to. I also hope that, with the publication of these external-facing policies that I’ve talked about and on a new template, that will hopefully provide clarity to postmasters too. A key thing for me is that we do want to include postmasters much more in day-to-day operational matters such as that. So I would welcome any feedback that they have on the wording of such policies, et cetera.

Mr Jacobs: So are these policies likely to be reworded or reviewed?

Tracy Marshall: All of the policies, as I’ve said, are always reviewed on an ongoing basis. We’re putting them on externally-facing templates, which are going to be looked at by the NFSP. We’re very happy to bring other postmasters into the fold there too before they’re published.

Mr Jacobs: You’ve anticipated my next question: will subpostmasters be allowed to be or be permitted to see these policies in draft before they’re published and be consulted?

Tracy Marshall: We certainly want to include other postmasters in the consultation of those policies, and our Postmaster NED looks as those policies as well, Elliot Jacobs, and as well as Mark Eldridge, our Postmaster Experience Director.

Mr Jacobs: I have one final quick series of questions for you and this is in relation to the Fujitsu letter, are you aware of that, from Mr Patterson to Mr Read?

Tracy Marshall: I’m aware from previous evidence, yes.

Mr Jacobs: I’ll quote from it, it’s 17 May 2024:

“To be clear SFL will not support the Post Office to act against subpostmasters. We will not provide support for any enforcement actions taken by Post Office against subpostmasters, whether civil, criminal, for alleged shortfalls, fraud or false accounting.”

When did you first see this letter; when were you first made aware of it?

Tracy Marshall: Only in the Inquiry.

Mr Jacobs: Okay. The Contracts Termination Policy that we’ve talked about requires a full investigation, doesn’t it?

Tracy Marshall: Into discrepancies, yes.

Mr Jacobs: How can Post Office fully investigate discrepancies without assistance from Fujitsu; that’s a real problem, isn’t it?

Tracy Marshall: I think it is and I think I’m very confused, personally, by the letter.

Mr Jacobs: Fujitsu doesn’t consider that the Horizon system should be used to evidence shortfalls. Do you accept that the Horizon system should not be used to support suspensions of terminations based on shortfalls?

Tracy Marshall: As I’ll go back to my previous comment, I’m quite confused with the letter from Paul Patterson and why Fujitsu won’t stand behind their data. I’m not a data expert or an IT expert but it’s fascinating that they can’t stand behind the data when the data is fundamental to everything that we do in our operations, quite frankly, across our network.

Mr Jacobs: Well, you say it’s fascinating, but it’s because of what happened in the scandal, isn’t it?

Tracy Marshall: Sure.

Mr Jacobs: The effect of that letter makes many of Post Office’s policies unworkable, doesn’t it?

Tracy Marshall: I understand.

Mr Jacobs: I don’t need to ask you any more questions.

The Witness: Thank you.

Mr Jacobs: That’s all from me, thank you.

Questioned by Sir Wyn Williams

Sir Wyn Williams: In the light of those questions, can we just revisit paragraphs 143 of your witness statement, Ms Marshall – I’m sure that it’s WITN11610100 – because I want to be sure I’m fully understanding the table, all right –

Tracy Marshall: Yes. Yes, sir.

Sir Wyn Williams: – once it’s up. Just a little further on, please. It’s actually on page 61, that’s what I’m looking for. That’s it. That table.

Now, as I’ve understood it – and I’m concerned only with the most recent period, all right. So let’s start in 2021/22. So in that year, there were 25 branches where suspensions occurred, yes?

Tracy Marshall: That’s correct, sir.

Sir Wyn Williams: That may or may not mean 25 postmasters, some postmasters may have had more than one branch, so we should focus on branches, yes?

Tracy Marshall: Correct.

Sir Wyn Williams: The figure in brackets, 13, as I’ve understood what follows under figure 1, means that they were cases which relied on Horizon data?

Tracy Marshall: That’s correct, sir.

Sir Wyn Williams: Fine. So what I want to know is, was the reason for the suspension that Horizon demonstrated a shortfall or was the reason something different?

Tracy Marshall: Without knowing the specifics of each case, sir, I would say that the majority of them – in brackets, the 13 there that’s highlighted – would have been following the result of an investigation into discrepancies or shortfalls, which would have been down to Horizon data and the suspension would have been enacted as a result of that, yes.

Sir Wyn Williams: But you also seem to be saying, in parts of your evidence, that there wouldn’t be a suspension simply because Horizon showed a shortfall: there would only be a suspension if there was an established reason, after an investigation, which justified a suspension. So do I take it that what you’re telling me is that the starting point is that Horizon shows a shortfall, there is then an investigation into how that shortfall came to be caused, and it is only if that investigation demonstrates, in effect, some fault on the part of the postmaster that a suspension would follow?

Tracy Marshall: That’s correct.

Sir Wyn Williams: So that’s the process that I should understand, is it, when I interpret this table: in that year there were 25 suspensions, 13 of which, in effect, commenced by reason of Horizon showing a shortfall but they only occurred because, following an investigation, a suspension was thought to be justified because of the activities or actions of the postmaster?

Tracy Marshall: That’s correct. The figures in brackets there, the 13, would have been based on Horizon data, discrepancies or shortfalls identified, but there would have been a full and proper and thorough investigation into the cause of those shortfalls, which would have then led to the determination to suspend the contract, sir. Yes.

Sir Wyn Williams: In the years that we are talking about, 2021/22 onwards, whether or not the suspension actually occurs goes through the process that you described in evidence when Mr Stevens was asking you questions?

Tracy Marshall: Yes, sir.

Sir Wyn Williams: Fine, all right. Then that deals with that.

Then the final point I want to ask you about is the years 2021/22 and 2023/24, and the footnotes to the cases in progress, all right?

Tracy Marshall: Mm-hm, yes.

Sir Wyn Williams: There are still, from 2021/22, two cases in progress; that’s right, is it not?

Tracy Marshall: Yes. Could we go to the footnote, please, sir?

Sir Wyn Williams: Neither of which depend upon a Horizon shortfall, as I understand it.

Tracy Marshall: The footnote 18, which we’ve just looked at, relates to postmasters having been arrested and charged with offences, yes.

Sir Wyn Williams: Yes. I’ll get to 18. There’s a “0” in brackets after the “2”, you see? If we go back to the table, sorry, you see there’s two cases in progress.

Tracy Marshall: Yes.

Sir Wyn Williams: But in brackets “0”, which to me says that neither of these were dependent, even as a starting point, on Horizon showing a shortfall.

Tracy Marshall: That’s correct, sir, because these were both cases where the police had intervened and the postmaster had been charged with offences.

Sir Wyn Williams: Fine. So I needn’t bother with those, now that I’ve got that, fine.

It’s the next one, 2023/24, where there are still four cases in progress, but two cases start life, if you like, with Horizon demonstrating a shortfall.

Tracy Marshall: Yes.

Sir Wyn Williams: Now, are those two cases the two cases which are referred to in footnote 19?

Tracy Marshall: Can we scroll down to footnote 19, please? That’s correct, sir. So the two – if we look at footnote 19, we are referring here – the ones in brackets are the suspensions that have been prolonged due to issues in arranging postmaster meetings. One is now at the final stage and with external professional advisers.

Sir Wyn Williams: So that deals with the long suspension but my question was, and perhaps you don’t know, whether the two cases in brackets in the table are also the two cases where the postmasters have been arrested and charged?

Tracy Marshall: No, they’re not, sir.

Sir Wyn Williams: Right. So in none of the cases – this is the point – in the table which we’ve been looking at, are they what I’ll call Horizon cases?

Tracy Marshall: Correct.

Sir Wyn Williams: Fine. Thank you very much. I just wanted to be absolutely clear as to where we were on that.

The Witness: Thank you, sir.

Sir Wyn Williams: Right, good.

Well, thank you very much, Ms Marshall, for coming to give oral evidence today and for making your witness statement on behalf of the Post Office. I’m very grateful to you for doing that.

So what time shall we resume, Mr Stevens?

Mr Stevens: Sir, I’m in your hands. We can either do 2.00 or 2.10. I don’t think we should have problems with time to start at 2.10, if you prefer.

Sir Wyn Williams: Well, then, I do prefer.

Mr Stevens: Thank you, sir.

Sir Wyn Williams: Yes.

(1.12 pm)

(The Short Adjournment)

(2.10 pm)

Mr Stevens: Good afternoon, sir. Can you see and hear us?

Sir Wyn Williams: Yes, thank you.

Mr Stevens: We are hearing from Ms Park.

Sir Wyn Williams: Yes.

Melanie Park

MELANIE JANE PARK (affirmed).

Questioned by Mr Stevens

Mr Stevens: Please can you state your full name?

Melanie Park: Melanie Jane Park.

Mr Stevens: Ms Park, as you know, my name is Sam Stevens and I ask questions on behalf of the Inquiry. First, can I thank you for producing a written statement today and, secondly, for attending the Inquiry to give oral evidence. I want to turn first to that statement which should be in front of you in a bundle of documents. Can I ask you to turn that up, please –

Melanie Park: Mm-hm.

Mr Stevens: – and just confirm that’s your statement of 22 August 2024.

Melanie Park: Yes, it is.

Mr Stevens: Now, before we go any further, there’s one correction I understand you wish to make. That’s at paragraph 162, please, which is page 71 of the statement. That will come up on the screen, as well. I’ll just wait for it. What I’ll do is provide a summary of what I think the correction is and you can tell me if you think I’m right or wrong.

Five lines down, there’s a sentence that reads:

“The cost of a given ARQ request corresponds with the length of period being requested, for example ARQ data for a 6-month period will cost more than a request for a 3-month period.”

My understanding is that, when you signed that, you understood that to be correct on the basis of information from Subject Matter Experts. You now understand that that isn’t correct, you wish to strike it out of the statement and it is dealt with by the evidence of another Post Office witness?

Melanie Park: That’s correct, yes.

Mr Stevens: So, sir, the highlighted text should be struck out of the witness statement, effectively.

Sir Wyn Williams: Yes, thanks very much.

Mr Stevens: The statement can come down from the screen but could we please turn to page 101 of the statement; do you see a signature?

Melanie Park: I do, yes.

Mr Stevens: Is it your signature?

Melanie Park: It is.

Mr Stevens: Are the contents of that statement true to the best of your knowledge and belief?

Melanie Park: They are, yes.

Mr Stevens: Thank you, Ms Park. That statement now stands as your evidence in this Inquiry. It will be published on the Inquiry website shortly. For the record, the unique reference number is WITN11600100. I’m going to ask you some questions about it but not every aspect of what is a very detailed statement.

I’ll start with similar questions to what I did this morning. You have been chosen by Post Office to act as a witness to give evidence on its behalf in response to parts of two Rule 9 Requests sent to it; is that right?

Melanie Park: That’s correct.

Mr Stevens: You are the Central Operations Director to the Post Office?

Melanie Park: I am.

Mr Stevens: When did you join the Post Office?

Melanie Park: 17 October 2022, so two years tomorrow.

Mr Stevens: Have you had any other role at the Post Office?

Melanie Park: No, I haven’t.

Mr Stevens: Very briefly, could I just ask you to give an overview of your career before joining the Post Office?

Melanie Park: Mm-hm. I qualified as a chartered accountant in 1997 with KPMG, following which I moved to Boots the Chemist in December 1997, where I stayed for 24 years. So I started out doing various financial roles, both pure financial accounting and more business partnering latterly, and then moved into a more operational role and then was Head of Retail Operations before I left.

Mr Stevens: In terms of your reporting line, I understand you report to Neil Brocklehurst, the Interim Chief Operating Officer?

Melanie Park: I do, yes.

Mr Stevens: In broad terms, could you summarise your roles and responsibilities at the Post Office?

Melanie Park: Yes, I have a number of quite different responsibilities: the first of which is I have responsibility for the Branch Support Centre, so the team up in Chesterfield that are responsible for supporting postmasters with a number of different matters, we have a team of about 50 people up there. That’s the Branch Support Centre. I also have responsibility for the network reconciliation and support team, and they’re responsible for understanding any discrepancies, as a result of proactive comparison of third-party data and issuing transaction corrections, should they need to, once they’ve been investigated.

They also have the Network Monitoring Team as well and their role is to again proactively look for branches that might not be following operational processes as we would like, and that which may suggest they are struggling with those processes and try and intervene before those processes lead to potential discrepancies, as we’ve heard this morning.

I’m also responsible for the Network Support and Resolution Team, and they are the team that help postmasters with the review of discrepancies. So should a postmaster use “Review or Dispute”, and it can’t be call into the Branch Support Centre, they will be the team that review the discrepancy and ultimately agree the resolution with the postmaster.

Mr Stevens: Presumably you received a formal induction when you joined the Post Office?

Melanie Park: Yes, I did. I had a very – I had six weeks where I wasn’t part of my role, I was travelling around the various functions within Post Office, so the commercial functions, the rest of the retail functions, to really try and understand the rest of the role that I was being brought in to do.

Mr Stevens: Was there any discussion as part of your induction on the findings by Mr Justice Fraser, as he then was, in the Group Litigation?

Melanie Park: Not formally. I think when I knew I’d taken a role at Post Office, I made it by business to start doing some research and looking into it and then I did get a number of documents, when I first came, to read through and then I’ve attended the Inquiry on a number of occasions to try and understand in a bit more detail the impact that – on postmasters, such that it would help me do my role more effectively.

Mr Stevens: I want to look at branch assurance and audits. Could we look, please, at your statement, page 14, paragraph 38. You say:

“The Inquiry has used the term ‘audits’ in relation to [a set of questions]. Post Office does not carry out audits on branches. The Branch Assurance Team attend a branch to count physical cash and stock and establish whether that agrees with what is record in Horizon.”

That process before was known as an audit in Post Office, wasn’t it?

Melanie Park: It was, yes.

Mr Stevens: Is it not effectively describing what an audit is, in any event?

Melanie Park: I don’t believe so. So, in my experience as both an external auditor and an internal auditor, particularly external audit, you’re looking at accounts trying to understand the validity of the data in those accounts. This is different – this is simply a stocktake, in effect. So what we’re doing is ensuring the physical value of the cash and stock and cash equivalents in that branch and comparing it to what the system thinks, as any other retailer would do on their annual stock takes.

Mr Stevens: So your view, this is just correcting, essentially, incorrect terminology?

Melanie Park: Yes, it’s ensuring the physical value, as it stands at that point in time.

Mr Stevens: Page 20, please, of your statement, paragraph 53. It’s a point on feedback about branch audits. You say that:

“During a visit, the Lead Assurance Advisor will give the postmaster a Branch Assurance Visit findings letter …”

You go on to say:

“The form also gives postmasters an opportunity to give feedback on the Branch Assurance Visit and their experience with the team. In July 2024, 34 Branch Assurance Visits were completed, and 14 responses were received to that feedback request. Of these 14 responses, 12 were ranked as ‘excellent’, one was ranked as ‘very good’, and one was ranked as ‘good’.”

That was July 2024. From your experience, how does that stack up to other months: is that about average for the results or better or worse?

Melanie Park: I think given that this feedback form was only introduced in June this year, I believe, I think it’s actually probably a better response than we would generally see when we –

Mr Stevens: Sorry, can I just check – it’s my fault for asking the question. When you say “better response”, do you mean the number of responses you get back to the question or whether this is satisfactory –

Melanie Park: In terms of the number of responses that we’ve had since, and we’ve had some updated figures, and they actually show a much improved response rate. So we are getting a significantly increased response rate, if we look – versus what we see in other areas. And I think it is important, because this could be quite an emotive area, if – and it’s important that we seek feedback and get feedback, and act on that feedback.

Mr Stevens: So you’ve noticed more responses. Is there any difference to the ranking? So here it’s 12 ranked as “excellent”, one as “very good”, one as “good”; is it about the same proportions or are they different?

Melanie Park: I think they’ve slightly improved. From my recollection, I think we’ve received more “excellent” and then probably one or two “good” and “very good”, but there are definitely more “excellents” than this data.

Mr Stevens: Could we look, please, at EXPG0000007. This is the YouGov survey that was commissioned by the Inquiry. Have you had the chance to review this?

Melanie Park: I have, yes.

Mr Stevens: Can we turn please to page 32. We see it says, “Branch audits”, its referring to the same thing: the Branch Assurance. Since January 2020, just over 3 in 4 postmasters surveyed said that their branch has not received an audit; 12 per cent reported that they have received an audit:

“Those who have received an audit [this is the third paragraph] since January 2020 were more likely to be satisfied than dissatisfied with how it was conducted. Over half … were satisfied compared with around one in five … who were dissatisfied.”

So there appears to be a difference here in that there are some people expressing through the YouGov survey dissatisfaction with branch assurance; would you agree?

Melanie Park: Yes.

Mr Stevens: Are there in place any plans within Post Office to investigate why there might be a difference between the results of the YouGov survey and results you’re obtaining through the feedback forms?

Melanie Park: I think we have to look at the current process. I think Ms Marshall referred earlier, without understanding the detail of the people who completed this survey, it’s really difficult to go and ask questions about historical assurance visits. I think what we have to do is take the feedback for the – again, for the assurance visits that we’re doing now and, where we see dissatisfaction, we seek to understand why those postmasters might have been dissatisfied with that visit and take appropriate actions, either across the assurance visit piece, or with the individuals that have conducted that assurance visit.

Mr Stevens: Do I take it from your evidence earlier that Post Office is seeking to increase the rate of return on those feedback forms, so the number of people returning either positive or negative feedback results?

Melanie Park: Yes, I think the latest data, I think about 35 per cent of visits conducted since June have received a feedback form, so it is higher than we would normally see across Post Office but we would always look to try to encourage postmasters to feed back following a visit.

Mr Stevens: Could we look, please, I want to look at the Branch Assurance Team, please. Could we look at POL00448256. This is a “Branch Assurance Advisor – Induction & Training”, I think policy or report. At paragraph 60 of your statement you say:

“There have been no new joiners since this was last updated.”

Is that correct?

Melanie Park: That’s my understanding, yes.

Mr Stevens: How many currently within the Branch Assurance Team were in post before the Common Issues Judgment?

Melanie Park: I’ve been advised by the head of that team that I think it’s 12 of the 18. I couldn’t be quite sure but I did ask that myself and my understanding is it’s 12, or around that number. A lot of – most of them have been in role for a significant length of time.

Mr Stevens: Could we look, please, at page 5. It’s not a particularly thrilling question about version control but it will help us understand the document. If we could go down, please, we see here the version controls for this training document and, on 1 September 2021, this version 0.1 is a draft version, and we’ve got decimal point figures to 4, then 3.1 and 4.0. At what point in this version control did this become a policy that was implemented and not just a draft policy?

Melanie Park: So this isn’t a policy; I believe this is a training guide.

Mr Stevens: Apologies, training guide?

Melanie Park: So it doesn’t sit in the policy that is the Postmaster Support Policies. In answer to your question: I’m not sure. I joined in 2022 and this team don’t line report into me, so I’m not sure when this actual training guide will have been enacted and taught through the teams that exist.

Mr Stevens: Would the people in the Branch Assurance Team who were in post before Common Issues, have been given training on their role or how the policies have been updated since Common Issues?

Melanie Park: I couldn’t say for certain. My understanding is they would all have been given training on the policy that stands and I think we’ve heard that the postmaster policies – that we have annual training on the postmaster policies with the relevant teams. I couldn’t say on that particular piece of training material. I do know that, shortly after I joined, the Branch Assurance Advisors were all taken through additional training, and of the Head of Operational Support, who they now line into, has done a lot of work with them to show that, actually, the role of the stock check, it’s just as important how you do it and how you conduct yourself and how you make the postmaster feel when doing that stock check, and that’s just as important as making sure you do an accurate count. And I know that training has been – that all of the advisors have been through that training since I joined.

Mr Stevens: Some current and former postmasters have suggested that Branch Assurance Visits should be conducted by a body independent of the Post Office. What would you say to that suggestion?

Melanie Park: I understand why they would suggest that, and I know a lot of retailers would use third parties to do those stocktakes. I think having a knowledge of the Horizon system and how you update that system, once you’ve done your stock count, is really important. And having the knowledge – we run quite a complicated business, if you look at the number of the stamps we sell, the currency, the foreign currency, having that background knowledge, will, I believe, make that stock count much more accurate than employing an outside body to come in and do that count on our behalf. But that’s my opinion rather than fact.

Mr Stevens: Can we bring up your statement, please, page 17, paragraph 47. This is looking to the future of branch assurance. You say:

“Post Office is currently reviewing the circumstances where an announced visit may not be the most appropriate cause [sic] of action.”

Should that be “course of action”?

Melanie Park: “Course”, yes, sorry.

Mr Stevens: “The intention is for there to be a three-tier process:

(i) announced visits (as is current practice); (ii)

Mr Stevens: notified visits whereby postmasters are informed that a visit will be taking place on a specified date …”

Just pausing there, is the difference between an announced visit and a notified visit that the subpostmaster agrees the date of the visit on the former but not the latter?

Melanie Park: That’s right, yes.

Mr Stevens: Then there’s:

“… unannounced visits, with a clear governance protocol as to how and when these may be required.”

If we look at paragraph 46, you say:

“In the past year there have been two unannounced visits which took place in exceptional circumstances with sign off from the Chief Executive Officer, Nick Read.”

At present, if there’s an unannounced visit, does that have to sanctioned by the Chief Executive?

Melanie Park: That is under review at the moment. I can’t remember if I wrote in my witness statement that the circumstances between these three tiers of announced, notified and unannounced has been reviewed, and I believe there’s a paper, a recommendation paper, going to the SEG at the end of next month, if not next month. But we would definitely seek approval if we wanted to do an unannounced visit.

Mr Stevens: On the current proposal, from whom will you be seeking approval to do an unannounced visit?

Melanie Park: I think, as it stands at the moment, it would be the Interim CEO.

Mr Stevens: In what circumstances is it envisaged that an unannounced visit would be used?

Melanie Park: I think where we believe there have been serious breaches of contract and we’ve failed to engage the postmaster through all of the support mechanisms that we try and intervene with those postmasters prior to this, and they’ve failed to engage in any of that and we are concerned as to the assurance of those assets in that branch, and that the notified would impact the outcome of that.

Mr Stevens: I want to look now at, I think, the most substantial topic I’ll deal with, which is investigating and resolving discrepancies. As I understand it, the dispute resolution system, as it were, has three primary teams involved: the Branch Support Centre; the Network Support and Resolution Team; and the Postmaster Agent Support Team; is that correct?

Melanie Park: The Postmaster Account Support Team.

Mr Stevens: Sorry, Account; and do they all report to you?

Melanie Park: They do, through their head of, the BSC reports through a different head of; the Network Support and Resolution reports through a different head of.

Mr Stevens: Are there systems in place to ensure that relevant knowledge of dispute resolution issues is communicated between those teams?

Melanie Park: Yes, absolutely. The case management system that we use allows a case to be created and then, as it’s handled through each of those processes, details of that, how the – the details of the case will be logged and, if it can’t be resolved at each initial stage, all of those details will be passed through to the next stage, so they will be aware of all the checks and balances that have already happened, before they start with their bit of the process.

Mr Stevens: I think, as I understand it, that’s on one particular case: someone is dealing here within one team, it gets passed over to another. I more meant are there any systems in place that the people in different teams could spot if there were themes or trends in dispute resolution issues?

Melanie Park: Yes, so the branch support centre, part of their role is to understand if there are systemic issues and particularly short-term issues that have arisen. We sometimes have IT issues with some of our third parties, and they would immediately understand that there’s a problem and raise that with the relevant functions if, indeed, those functions hadn’t already spotted it and informed the Branch Support Centre.

In terms of the transaction correction team, so I’ll take, if I – there are other investigations that we do through the Network Reconciliation Team, and we do look at themes. So, for example, we know that 80 per cent of our transaction corrections are issued due to cash pouch errors. So, again, we look at the thematics and try and understand how we stop it at source, rather than deal with it once it’s happened. A good example of that is the issuing of note counters and the operational excellence incentive.

If I come back to the network support and resolution side of things, through the monthly meetings, they also look at the root cause of the investigations that they have reviewed into discrepancies and understand the cause of those, and they are reported through.

Mr Stevens: I want to look at ways into that resolution system. Before I do, it’s probably helpful just to set out what it is. There’s a Tier 1 investigation, or support, which is handled by the Branch Support Centre; is that right?

Melanie Park: That’s right yes.

Mr Stevens: If Tier 1 can’t deal with it or resolve the matter, it goes to Tier 2, which is handled by Tier 2 analysts in the Network Support and Resolution Team?

Melanie Park: That’s right. There’s an intermediate step, which is a triage. So there is a triage case and the triage will understand if there are any initial resolutions before it goes into the full Tier 2 investigation. So there’s an intermediate stage.

Mr Stevens: Then, on top of that, there’s a Tier 3, handled by Tier 3 analysts in the same team?

Melanie Park: That’s correct, yes.

Mr Stevens: The ways into the system: one is to dispute a discrepancy at the end of a trading period –

Melanie Park: That’s right yes.

Mr Stevens: – and one is to dispute a transaction correction?

Melanie Park: That’s right yes.

Mr Stevens: You say in your statement that a postmaster can call the Branch Support Centre for assistance with a discrepancy at any stage.

Melanie Park: That’s correct, yes.

Mr Stevens: If a postmaster rings the Branch Support Centre not at the end of a trading period, so midway through, regarding a discrepancy, will the Branch Support Centre follow the Tier 1 procedure?

Melanie Park: They absolutely will. So I think you referred to them earlier today. We have a number of checks and balances that we ask postmasters to do on a daily, weekly and monthly basis and, at any point in the processes, if a postmaster experience – or any of their assistants experience a discrepancy in that balancing, they should ring the Branch Support Centre if they’re not able to identify the cause themselves.

Mr Stevens: Can we look, please, at your statement page 52, paragraph 113. I just want to clarify one point. You say:

“A postmaster wishing to dispute a branch discrepancy must await trading period end to use the [that’s ‘Review or Dispute’] function but can seek BSC support earlier than that.”

Now, just for clarity, if a postmaster raises a discrepancy with the BSC mid-month, so not at the end of the trading period, they can’t resolve it at Tier 1, does that go to Tier 2 at that point or do they have to wait for the end of the trading period?

Melanie Park: No, if they can’t resolve it, generally the Branch Support Centre will say, “If you can wait, if you can do a balancing period, so do a full balance, and if it still exists, call us back”, and they will do the checks again because it may have been a couple of days, they might have spotted that a transfer hasn’t happened correctly between counters.

I think what this I referring to is the formal – the formalisation of a discrepancy only happens at trading period end and that’s when the postmasters get the opportunity to use the Review or Dispute function. However, if the daily or weeklies don’t balance in between that, they can ring the Branch Support Centre and, if it’s significant – and I think just for context – if it’s significant and the Branch Support Centre can’t identify the cause, they do have the opportunity to push it into the Tier 2 process prior to the trading period end.

Mr Stevens: Thank you. Can we look, please, at the screens that a postmaster sees, and it’s POL00448048. I hope you can help us with some of these screenshots that you’ve provided. So we have on the first page, it says, “Screenshots of trading period end process”, it says:

“Confirm Loss/Gain, One or more declaration totals do not match the system derived figure.

“Press Continue to see a list of discrepancies for confirmation.”

So is this the screen that pops up after a balance has been attempted and Horizon is saying there’s a discrepancy, but it doesn’t say what it is yet?

Melanie Park: Yes. So for context, my understanding – and I haven’t worked in a branch but I have seen this process in operation in our model office – if you have more than one counter, you have to do a declaration of each counter and, if any of those counters has a discrepancy, it moves into an account and you then move to the next counter. Again, if that has a discrepancy, it goes into – I think we refer to it as the local suspense account because it may be, if you’ve not done the transfer correctly, you might have a surplus in one counter and then a shortfall in the other, and they match off.

If, when you come to roll your last counter and there is still a balance in your local suspense, that is in effect the start of that discrepancy process, where you will then get given a choice of how you deal with that discrepancy.

Mr Stevens: Okay, so we get this screen. On the next page, we have, “Confirm Rollover Type”:

“Do you wish to rollover into the next [trading period] or into the next [balancing period] in this [trading period]?”

I don’t think that’s relevant because it’s just whether or not you’re rolling over or into a trading period or balancing period?

Melanie Park: That is correct.

Mr Stevens: But that’s correct. Thank you.

Melanie Park: Yeah.

Mr Stevens: If we turn over then please, this says, “Outstanding Discrepancies”:

“You have outstanding discrepancies of £9.99.

“Press Continue to transfer this to local suspense and continue to rollover.

“Press Cancel to cancel the rollover.”

So at this point, is what it’s saying that you can continue and go to rollover and deal with the discrepancies or you can come out altogether and effectively do the count again or anything like that?

Melanie Park: That’s correct, yes. This is the individual stock unit rollover.

Mr Stevens: So that’s the stock unit. We then turn the page again. So is this the rollover, so once you’ve done all the stock units, you’re then asking to roll over, and it says:

“Branch Local Suspense amount is [minus] £9.99 which must be resolved prior to rollover of stock unit, AA.

“Press Settle Local Suspense to resolve this and continue to rollover.

“Press Cancel to cancel the rollover.”

Melanie Park: That’s correct, yes.

Mr Stevens: So, again, at this point, the discrepancy’s been highlighted, the postmaster can go forward to the next screen or can come out and perhaps recheck the cash or do anything like that?

Melanie Park: That’s correct, yes.

Mr Stevens: We then get the next one, which is two buttons “Make good – cash” and “Review Dispute CALL BSC”.

I want to start with the “Make good – cash”, please, and if we look at your statement at page 55, paragraph 121 –

Melanie Park: Is that going to be replaced on screen? Yeah.

Mr Stevens: Yeah, sorry. You say:

“During preparations for Phase 7 of the Inquiry, Post Office identified that before a postmaster elects to settle to cash or cheque there is currently no reminder in Horizon that the postmaster should only use this function if certain that the issue has been caused by the Postmaster’s (or the Postmaster’s assistant’s) negligence, carelessness or error. Post Office is investigating if such a reminder could be implemented in the Horizon system before completing settle to [cash] process.”

So, firstly, I take it from this that Post Office’s position is that a postmaster should only press the cash button if certain that the discrepancy has been caused by the postmaster’s negligence, carelessness or error; is that correct?

Melanie Park: It’s correct but, if I can add to that: and they’re comfortable putting their own cash in. There could be a situation where they may know the cause but it may be of a value that they can’t put that value in all at once –

Mr Stevens: Right.

Melanie Park: – in which case they have a choice to then settle it to Review or Dispute and discuss the next steps for that.

Mr Stevens: Yes, I’m not going to get involved with that but look just at the circumstances in which – because we wouldn’t even get to that if the first bit wasn’t fulfilled –

Melanie Park: No.

Mr Stevens: – so there has to be that.

Melanie Park: Yes.

Mr Stevens: Are we any further on with whether or not there will be a warning on Horizon?

Melanie Park: Yes, we are, in two ways. So my preference would be that there is a pop-up box if a postmaster chooses to select “Make good – cash” and, at that point, they get a reminder. There isn’t currently a pop-up box at that point in the trading period end process and that involves Accenture and Fujitsu. So the timescales for that are much longer. So what I’ve asked to happen is in the pop-up that you saw there, that says, “You have a balance in your local suspense, do you want to settle or cancel”, we’re going to expand that pop-up box to have that message in to say, “Only do this if you’re really clear that that discrepancy was as a result of a mistake in branch and that you are comfortable putting cash in to balance this”, and we can do that ourselves within our IT function, so it’s a lot quicker.

Mr Stevens: Just for clarity, can we go back to POL00448048. Just if we go to page 4, please, are you saying it will be at this stage the message is displayed?

Melanie Park: That’s correct, yes.

Mr Stevens: Will that have the other benefit of – because presumably at this stage, a postmaster could see the discrepancy, decide to cancel, recount the cash and then decide to put the money in at that point, without going – without actually pressing the “Make good – cash” button?

Melanie Park: Absolutely, that would have that impact.

Mr Stevens: So the warning will be sufficiently clear to postmasters that they should only correct the cash if they are certain of the circumstances, as you said?

Melanie Park: That’s correct, yes.

Mr Stevens: That can come down. Thank you.

When people do weekly balances and those sorts of matters, will there be equivalent warnings if a discrepancy is ever noticed when rolling into a balancing period or not?

Melanie Park: No, I don’t believe so because the processes that we follow, or we ask postmasters to follow as part of their daily cash declarations or weekly balance wouldn’t formalise a discrepancy. So we wouldn’t ask them to action it, other than to call the Branch Support Centre if they need support to try and resolve it before trading period end.

Mr Stevens: I want to look now, please, at the other button, which was the “Review Dispute”. Can we go to page 49 of your statement, please, paragraph 102.

It says here that, initially, what was previously termed “Settle Centrally”, it was, you say, 13 May 2021 changed to “Review Dispute”, and then in February 2023, the onscreen display was changed from “Review dispute” to “Review dispute CALL BSC”. Why was the “CALL BSC” added?

Melanie Park: The process that we ask postmasters to follow, following use of Review or Dispute is to call the Branch Support Centre because the sooner we are engaged, the sooner we can start to understand the circumstances that that discrepancy might have occurred.

What we were seeing was number of postmasters using the Review or Dispute functionality and not calling the Branch Support Centre and asking for assistance to understand and resolve that discrepancy.

Mr Stevens: Has this had an effect; did you notice more calls following the change?

Melanie Park: We did, but what we’ve done since then – and I don’t know whether you’ll come to it later in my witness statement – we, following use of Review or Dispute, we relied on the postmaster to call us, so to create the case. And we had an outbound calling process through our Postmaster Account Support Team to try and contact that postmaster to discuss the discrepancy. What we have now is an automatic case create. So we have a link between the use of Review or Dispute directly into Dynamics. So we are able to see straight away where a postmaster’s used Review or Dispute, understand if they’ve already called the Branch Support Centre, and then immediately start that outbound calling, if they haven’t. So it allows us to intervene much quicker.

Mr Stevens: Thank you. I want to look at the Network Support Resolution Team so dealing with Tier 2 And Tier 3 investigations. Can I look, please, at POL00039629.

I think this is a generic job description for Support Advisor. If we turn the page, we see the job title at the bottom “Support Advisor”. Then if we turn the page again, there’s “Principal accountabilities”, which are quite generic, and it says:

“You will also have role specific bolt-on accountabilities. These are …”

At then over the page, the “Tier 2 Resolution Support Advisor”, bolt-on. It says:

“You will be an expert in Post Office branch operations, particularly branch accounting processes, and be able to use would be data sources to support postmasters and branches to find the causes of branch discrepancies.”

If we look at the Tier 3 Analyst one, as well, please. That’s POL00448081. The Tier 3 Analyst and the second paragraph, the “purpose of the role”, we see:

“This is a specialist role that requires a high level of understanding of Post Office Operations to include extensive knowledge of Horizon and branch office accounting transactions …”

Then over the page, “Knowledge, experience and skills”. If we go down, there’s:

“Excellent knowledge of Horizon, interpretation of branch logs …”

Why does the Tier 2 analyst’s job description not require expressly knowledge of or detailed knowledge of Horizon?

Melanie Park: I think the level of review that our Tier 2 investigators, the checklists that they follow, they know where to get the data that they need to get to for that particular bit of the checklist. So knowing in detail the kind of inner workings of Horizon isn’t as important than the Tier 3 team, who are reviewing much more complex cases but, also, overseeing the quality of those – all of those Tier 2 cases.

That said, many of our Tier 2 Support Advisors will come from Branch Support Centre or from internal roles, where they are taken through that Horizon training as part of that induction.

Mr Stevens: If we look at the Tier 2 role, please, if we look at POL00448229.

This is a Postmaster Support Policy for accounting dispute resolution, and can we look, please, at page 15. If we can go down to show Tier 2, please. It says:

“These investigations are fully detailed investigations after being assigned by Triage.”

The second bullet point is:

“Undertaking a check of the Horizon system information to ascertain whether Horizon was a contributory factor to the Discrepancy …”

Bearing in mind the level of expertise with Horizon you just discussed for Tier 2 analysts, what does that check actually involve?

Melanie Park: It involves a number of things. So I think we talked about the branch impacting problem process that IT own, we have knowledge articles for all of the known branch impacting problems and screenshots of how those branch impacting problems might impact a branch. So one of the first things we do is check that the discrepancy hasn’t, or the branch hasn’t exhibited any of those branch impacting problems. We look at calls into the IT support desk as well as the Branch Support Centre to understand if the branch has logged any issues with their either hardware or software from a Horizon perspective, and then we recalculate a cash flow.

So we take the opening balance from a set period and that’s the period under review for the discrepancy. We, through HORice and Credence, the databases that hold the Horizon transaction data, we look at all the input – deposits and withdrawals and all of the cash flows through that branch, and recreate almost a closing balance, and we check that that is actually the closing balance that Horizon is showing us.

So we try and recreate that balance to understand whether we’ve got missing transactions that don’t flow through to the bottom line from Horizon by taking that data out and recalculating it.

Mr Stevens: You just mentioned the branch impacting problems. I think that’s – you say it’s maintained by the IT Team within Post Office.

Melanie Park: That’s right, yes.

Mr Stevens: So is it that the IT Team draft the copy that goes into the branch impacting problem database for your team to read when doing investigations?

Melanie Park: Yes, so they create knowledge articles, and they’re the Subject Matter Experts, so they will create the knowledge articles but a member of my team will review them to make sure they can be easily understood and they reflect the actual issue before they’re published on the Knowledge Base that can be used by a number of different teams.

Mr Stevens: Is there – so there is some sort of assurance checking on that, but is there any checks to be done at Tier 3, so if Tier 2 can’t resolve a matter, it goes to Tier 3, and they say, “Well, actually, this is a known problem in the branch impacting problem”. Is there feedback to the IT Team to change the way the branch impacting problem database is worded, so that the Tier 2 team can understand it?

Melanie Park: Yes, there absolutely would be.

Mr Stevens: You say “absolutely would be”; does that mean it hasn’t happened today?

Melanie Park: It’s unusual.

Mr Stevens: Are Fujitsu involved at all in the Tier 2 process?

Melanie Park: No, they’re not, other than requesting ARC data where required.

Mr Stevens: Forgive me, sorry. I had a reference. If you could go to page 60, please. So you’re here talking about after this Tier 2 process and you say:

“If there are no suspected issues, the investigation will continue and that might lead to a conclusion that Horizon was not a contributory factor in the discrepancy. However, if the data suggests that there could be an issue, the IT Team would do further analysis.”

Is it fair to say, then, that the team, when resolving this, are – once the investigation has been done, if they haven’t found a problem or haven’t identified a problem, they are still content to rely on the data produced by Horizon to satisfy themselves that there has been a loss to Post Office?

Melanie Park: I think the data that sits from Horizon in HORice and Credence is the start of that investigation but the investigation looks at a whole raft of other things. So it looks at the operational strength of that branch; have they been doing daily cash checks; have they been doing weekly balances; it looks at outstanding transaction corrections; it may look to see if all of the transaction acknowledgements have been processed.

So it’s part of a wider review that is then used to come to a fair outcome and discuss that with the postmaster.

Mr Stevens: That can come down. Thank you.

Could we look, please, at POL00448072. The document is entitled “Escalation process” on the left. On the right, the “Process Summary” says:

“If a discrepancy has been investigated, this process shows how it can be escalated if the [postmaster] does not agree with the decision, or if the loss cannot established.”

Then if we go to page 2, please. It says:

“The Weekly Case Review will assess the case and based on the success rate value will make the decision to escalate the case to Tier 3 or clear the account.”

What is the “success rate value”?

Melanie Park: I think what that’s referring to is the fact that there is a cost, both in resource and time, to escalating and, if we believe that, actually, as a result of that escalation, it won’t change the outcome of a case, then we might choose to write that off, rather than take a postmaster through a further process that we might not get a different outcome. So we do have the opportunity, subject to value limits, and also the history of that branch and, potentially, previous write-offs, just to take that and, on that occasion, not to progress with the discrepancy but simply write it off.

Mr Stevens: Just so I am clear, if the postmaster’s disputing it and wants to go to Tier 3, is it the case that it could be refused to be escalated but not written off?

Melanie Park: I don’t believe – no, I don’t think that’s the case. I think if a postmaster is escalating it, we will always review the case. We always review all cases, from a Tier 3 perspective, to make sure that that case has been carried out consistently and transparently. Once we’ve reviewed that, we then make a decision on the next steps for that case.

Mr Stevens: So this escalation policy is, in essence, if the subpostmaster disputes it, it’s going to be escalated?

Melanie Park: Absolutely.

Mr Stevens: But this is: should it be written off, rather than be escalated?

Melanie Park: Yes, it will go for a review.

Mr Stevens: Please could we look at page 63, paragraph 140 of your statement. You say:

“If a Postmaster disagrees with the outcome of the Tier 3 review, then the postmaster can challenge the decision by email or phone call to their … Analyst who will present the case to the Dispute Resolution Committee for review …”

At 141, you say:

“If a postmaster disagrees with the outcome of the Dispute Resolution Committee, there is currently no further or independent review forum (Post Office is currently considering the use of an independent panel as part of reviewing its model for recovering shortfalls outlined in paragraphs 35 and 36 above).”

Has there been any progress with that review in terms of whether there will be an independent review of the dispute resolution process at any point?

Melanie Park: I think the review is currently underway, so a Working Group that has been established, and we are looking at all of the things that need to be true, as part of that potential recovery process. And an independent review, or a body that has independent people, maybe postmasters or former postmasters, whether that should be created to review these, yes.

Mr Stevens: We’re going to come to, in a moment, civil recoveries. At the minute, your evidence is that Post Office isn’t pursuing civil proceedings to recover discrepancies from postmasters. The inclusion of an independent review, or whether that’s – the review as to whether that’s going to happen, will that be complete before a decision is made on whether or not Post Office pursues civil litigation in future against postmasters?

Melanie Park: It has to be part of that process, I believe.

Mr Stevens: Part of the same process?

Melanie Park: Yes.

Mr Stevens: Thank you. The NFSP have suggested a three-stage test for dispute resolution. The first is to ask if the discrepancy is caused by Horizon; I may be paraphrasing slightly but the second is, is it a mistake by the postmaster or assistant; and only then, finally, ask have Post Office’s assets been used in an unintended manner?

What’s your view on that as a framework for dispute resolution?

Melanie Park: I don’t think that’s dissimilar to the framework that we operate in now. Part of the review process is to understand if Horizon has contributed, then we talk to the postmaster to understand the circumstances, and only then, with the cooperation of the postmaster, will we look to resolution of that discrepancy. So I don’t think we’re disagreeing there at all.

Mr Stevens: I just want to briefly look at another point on types of escalation, please. It’s POL00447943. This document is titled “Identifying postmaster support needs”, on the left, but the “Process Summary” says:

“During an investigation the advisor may behave [I think that should be ‘the advisor may have’] a suspicion that financial crime may have occurred. This is the process for referring any such suspicions to the Central Investigations Unit.”

So there’s a bit of a mismatch between the process and aim and what the process describes.

What instructions are there in place to an investigator, in circumstances where they suspect that there is financial crime; what instructions are there in place for what the investigator says to the postmaster before referring it to the Central Investigations Unit?

Melanie Park: So I don’t think – I think the initial triage and the data collection and analysis would provide evidence that may be in misappropriation or financial crime. At that point, the triage form would be completed and it would be referred to the A&CI team. I don’t think at that point we would have had a conversation with the postmaster, unless the postmaster has spoken to us, and suggested that one of their colleagues may have been involved in the discrepancy.

Mr Stevens: I see. So this is done purely to triage and then it’s off to another department –

Melanie Park: Absolutely.

Mr Stevens: – who will deal with it from there. That document can come down. Thank you.

Please could we look at page 61 of your statement, paragraph 133. I’m just looking at the time taken for investigations. You say that:

“The NSRT aims to complete Tier 2 investigation within 20 working days”, and go on to say that some take longer.

If we look, please, at POL00448229, page 16. Sorry, it’s the accounting disputing resolution document again. Page 16, please. If we go to the bottom, please. Here, it says that the Tier 2 investigation is to aim to investigate within ten working days.

Has this been overtaken now and it’s a 20 working day limit based on your evidence?

Melanie Park: I think, if you look at the total time, so all of Tier 2 investigations will be quality assessed by either a team manager or a Tier 3 analyst and I think that’s part of the process. So I think 20 days is the end-to-end ambition for discrepancy reviews.

Mr Stevens: Can we look, please, at POL00448231. This is a paper that you authored on 31 January 2024 for the Group Executive report. If we look at page 3, paragraph 9, please, “Network Support and Resolution Case Backlog”:

“The additional Network Support resource has made good progress in reducing the number of outstanding discrepancy cases, with period 9 ending at 588, the lowest for 12 months. The number of cases awaiting triage has also reduced to just over 1,200, the target being to have no case older than the 12 week process.”

Is there still an issue with the backlog of cases?

Melanie Park: I think – so the backlog is building again, so it’s higher than it was then. I think that’s caused by a couple of things. So the “auto case create” that I described earlier is really important in identifying those cases a lot quicker. So the cases are getting through the system into that Tier 2 world a lot quicker, and I’d like to think that postmasters are also becoming more aware of their option to review or dispute, and therefore using that button more, and asking for help. I guess what comes with that is, from a resource perspective, there’s a lag and we need to understand how we address that.

Mr Stevens: In terms of there’s a backlog, what impact is that having on the time it takes to complete investigations?

Melanie Park: The backlog was historic discrepancies when I first joined. So it wasn’t necessarily impacting the new discrepancies that we were pushing through the new process and being able to resolve where we could. These were a mixture of discrepancies that it was right to take more than 20 days. Because what we shouldn’t do is rush discrepancies, and come to an incorrect conclusion. So it’s right that some do take longer than 20 days but some were also very historic.

My ambition was to – and I asked for additional resource – to clear those, and we are getting through and resolving those, as we speak.

Mr Stevens: Were you given the resource?

Melanie Park: Yes, I was.

Mr Stevens: So now, if someone has a case come in to Tier 2, is it likely that it will be resolved within 20 working days?

Melanie Park: We’re not at the 70 per cent, which is our ambition but we are not far off. But I guess, back to my first point: it’s really important that we don’t try and chase a service level agreement at the detriment of that investigation, and the outcome for the postmaster.

Mr Stevens: Sir, that’s probably a good time to take our break. We’re making good progress, I don’t envisage any difficulty finishing.

Sir Wyn Williams: Fine. Resumption time this afternoon, Mr Stevens?

Mr Stevens: I’ll probably get it wrong again. Shall we say 3.35. I just listened to what I heard – or misheard, I should say, to my right. 3.35, please.

Sir Wyn Williams: Fine.

Mr Stevens: Thank you.

(3.18 pm)

(A short break)

(3.35 pm)

Mr Stevens: Sir, can you see and hear us?

Sir Wyn Williams: Yes, thank you.

Mr Stevens: I’ll continue.

We’ll have a look now at the postmaster accounts support team. Could we have page 48 of your statement, please, subparagraph (e). You say:

“The PAST [which is the Postmaster Account Support Team], which is responsible for initiating contact with postmasters who have escalated disputes using the [Review or Dispute] function but have not contacted the BSC and, following investigation by the BSC and/or NSRT, for arranging repayment plans and write-offs where appropriate with Postmasters.”

Just a point of clarification. Should the “and” after “BSC” be “or”? So the team is responsible for (a) contacting postmasters who haven’t escalated disputes to the BSC but use the Review or Dispute function, and separately, they are also tasked with initiating contact with people who, following an investigation, it’s been found there’s a discrepancy?

Melanie Park: No, it’s “and/or” because if, following a conversation with the BSC, we’ve been able to resolve a discrepancy at the Tier 1 stage and the postmaster then says, “Oh yes, I understand, how do I settle?”, they may then close the case and point them in the direction of the PAST team. Because they’ve resolved the discrepancy and the postmaster then wants to understand how to resolve that.

Mr Stevens: Okay, so “and/or” –

Melanie Park: “And/or” is the right one, yes.

Mr Stevens: That can come down. Thank you.

Why is it that the Postmaster Account Support Team calls the subpostmaster, if they haven’t – if the subpostmaster themselves haven’t called the BSC, rather than the BSC or Network Support Resolution Team?

Melanie Park: So the BSC doesn’t operate an outbound call facility and that is something that we are going to look at because it may be that they are better placed, given that the knowledge they have of that Tier 1 checklist to do that. So it’s part of an ongoing review. I think where we don’t – where a branch doesn’t call following use of Review and Dispute, it’s really important that we do get the details from the postmaster or their colleagues about that discrepancy and, therefore, that – currently the Postmaster Account Support Team, that take that role in trying to contact the postmasters.

Mr Stevens: Could we look, please, at POL00448322. This is described in your witness statement as a January 2023 audit report. Could we look, please, at page 3. If we go to the bottom, this is an “Executive Summary” partway through. We see this is authored by you. Back to the top, please. It says:

“The increase in the use of the Review and Dispute button by postmasters (an increase of 60% [year on year]) is affecting the work load of the teams and is having an impact on their ability to respond and resolve within the desired 10-day time frame ([year to date] at [period 8] 76% of cases are completed within 10 days).”

You then say later on:

“Whilst the Service and Support teams are adhering to the redesigned process and control framework and closing 93% of cases (not all of which are resolved), achievement of their desired 10-day investigation completion time frame and ability to recover established losses is being hindered by PM behaviour and a lack of business appetite to recover losses.”

What do you mean by “hindered by postmaster behaviour”?

Melanie Park: Can I, sorry, correct something. The “Management Comment” written by myself, the “Executive Summary” would have been the summary created from the internal Audit Team.

Mr Stevens: Right, so this isn’t your words?

Melanie Park: That’s their observations following the internal audit, yes, and then my response is underneath in the “Management Comment”.

Mr Stevens: So you’re not speaking to these? Do you not agree with that terminology?

Melanie Park: No, I think “hindered” is probably a harsh word. I think the inability to contact postmasters to discuss the circumstances that the discrepancy might have arisen in does hinder the investigation process, and that’s why we’ve looked at the auto case create and starting to talk to postmasters a lot sooner.

Mr Stevens: Can we please look at POL00448295. I don’t propose to bring up the statement on the screen but, sir, for you it’s paragraph 123(a), so page 57.

You say that:

“The PAST [the support team we were discussing] will make an outbound call to the postmaster and send them a letter and statement of their account.”

This is in circumstances where a postmaster has pressed the Review and Dispute button but not called the BSC. You say, “the call script”, and you exhibit them, the call script being here.

When we look at this document, it says:

“This script is for outbound calls for subpostmasters who have settled a negative discrepancy (or several discrepancies that result in a negative amount) at Branch Trading.”

So is this call script used for subpostmasters who haven’t contacted the BSC as well? So the postmaster presses the Review and Dispute button, they don’t call the BSC, the Postmaster Account Support Team calls them and your statement suggests this is the script that’s used; is that correct?

Melanie Park: That’s right, yes.

Mr Stevens: Right. If we look, please, at page 2, and if we go down, please, to “Main conversation”, it says “Main Conversation”:

“We need to find out if the postmaster/person in charge is aware of the reasons for the discrepancies.

“‘Do you understand the reasons for this/these discrepancy/ies [then the person’s name]?’

“1. If they need more information:

“Talk through their account entries with them, giving as much information and detail as you can.

“2. If they understand the reason for the discrepancy:

“‘I’m glad you understand what happened here [Mr So And So]. We just want to make sure that you were aware, comfortable with the reason for the discrepancy and offer our support if not.

“‘What will happen next is that we will send you a letter with a statement next week so you can see it all for yourself. Give us a call back if you have any questions when you receive it.’”

Now, do you think this is sufficient in the script in directing people for the circumstances in which a postmaster should be asked by Post Office to settle a discrepancy?

Melanie Park: I think, on review, no, and I think this needs to be included in the work we’re doing to give postmasters greater clarity on what their options are, and how we will support them with any discrepancy that they may experience as part of their trading period end or outside of that. So I think we definitely have work to do on being clearer.

Mr Stevens: So at the minute this document isn’t being reviewed for the issues we discussed before, about making it clear the circumstances in which Post Office thinks a subpostmaster should accept a discrepancy, but your evidence is that you will review this?

Melanie Park: Absolutely, yes.

Mr Stevens: And similar scripts with similar teams?

Melanie Park: Absolutely.

Mr Stevens: In the part of your statement I went to, you also referred to a letter, please, a letter that’s sent out. Can I look at that. It’s POL00448197. So I think this is an example of an initial letter that’s sent out by the team. Over the page, please. We have “Accepting the discrepancy”:

“If, however, you understand and accept the discrepancy, please contact my team on …”

It goes on from there.

Again, is this something that is being reviewed by Post Office at the moment?

Melanie Park: Absolutely. So discrepancy letter 1 and then second follow-up, I have had a complete overall, they’ve been signed off and I believe are currently with Accenture because these are auto created as part of our IT systems. So we have to go through Accenture to get them updated and changed but, yes, I appreciate that these aren’t as clear or as helpful as they should be and the new ones are much more helpful, give more information around the reasons and the different categories and also where to go for support for each of those.

Mr Stevens: I asked this question this morning: why is it that these letters and scripts aren’t explicitly clear on what Post Office expects of postmasters?

Melanie Park: So I can’t talk about historically. I think the work that myself and my team have done to date have probably focused on the bigger initiatives that will improve support to postmasters in order to try and stop discrepancies happening. I think, as part of my preparation for this Inquiry, looking at these letters, the knowledge articles, the pop-up box that we talked about earlier, it became clear to me that we don’t do a good job in talking to postmasters about the circumstances of a discrepancy and what support we have available and how we help them and, as part of that, we’re looking at all of these documents and what’s available via the training – I think Ms Marshall talked earlier – to give better clarity. It’s part of our ongoing review and continuous improvement that we should never stop doing.

Mr Stevens: I wanted to look at another part of this letter, which you yourself, in your witness statement, raise.

Sir, for you – we don’t need to go there – it’s page 81, paragraph 198, if you wish to review it. Could we look at page 3 of the document on screen. So this appears to be a statement of account. It says it’s not a demand for payment at the top, and it gives four different types of discrepancy, which I think you acknowledge in your witness statement, the classification and type of discrepancy isn’t explained to a postmaster receiving this letter.

Melanie Park: That’s right, yes.

Mr Stevens: In broad terms, an outstanding discrepancy is a discrepancy that the postmaster has previously received a letter about?

Melanie Park: That’s right.

Mr Stevens: A new discrepancy is a brand new one that’s arisen, first letter. A previously agreed discrepancy is where the subpostmaster has agreed that that is a discrepancy for which they are responsible?

Melanie Park: That’s right, yes.

Mr Stevens: And a disputed discrepancy is where there’s an ongoing investigation?

Melanie Park: Or the investigation has been completed and the postmaster has disputed it.

Mr Stevens: We see at the bottom there’s a statement total, which says £88.13. So the total doesn’t distinguish between different types of discrepancies but am I right in saying that, in Post Office’s view, the only one that it would seek for subpostmasters to pay back is the previously agreed discrepancy?

Melanie Park: That’s right, yes.

Mr Stevens: Now, in your statement, you referred that this was under review and you, just in your evidence earlier, said this is now with Accenture. Can you help us with how this has been corrected in new form of the letter?

Melanie Park: Absolutely. So the descriptions that you’ve just talked about for each of those four categories will be written at the side of those. So that will help explain what we mean by each of those. The statement total will be removed, because you’re right, it shouldn’t be on there. It bears no reference to the individual discrepancy categories and, actually, if we scroll up, so we can see the top, we’ve had feedback previously from, I believe, the NFSP, but a number of postmaster forums that, whilst we say this is not a demand for payment, when you open a letter and see “demand for payment” that is quite alarming, so what we’re also doing is removing that statement from this account.

Mr Stevens: So it will no longer say at all, “This is not a demand for payment”?

Melanie Park: And we’ll talk what it is in the front covering letters, which we’ve just talked about.

Mr Stevens: So the front covering letter, will that explain that it isn’t a demand for payment?

Melanie Park: It will absolutely explain that.

Mr Stevens: That can come down. Thank you.

I want to move to civil recovery, please. Could we look at page 9 of your witness statement, paragraph 21. You say that:

“… Post Office does not currently have a team (or any individuals) taking civil enforcement action against postmasters to recover shortfalls shown by Horizon and, for the avoidance of doubt, at present no civil enforcement action relating to any shortfalls is being carried out against [subpostmasters].”

When was that decision taken?

Melanie Park: My understanding is it was sometime around 2018/19 but I’ve had to rely on that fact from other people.

Mr Stevens: Could we look, please, at page 24 of your statement – sorry I have an incorrect reference there it might be paragraph 24. My apologies.

Paragraph 24, it’s page 10. You’re answering a question about the number of civil claims pursued by Post Office, and you say you’ve, I think, completed this with assistance from people from the Post Office Remediation Unit. You say:

“… I understand owing to the incompleteness of records, changes over the years to relevant team(s) involved in civil enforcement activity and the fact that many of those individuals no longer work at Post Office, those informing me have been unable to establish and assure the source(s), completeness and accuracy of this data.”

You go on to say that:

“The data that has been identified indicates that Post Office was successful in obtaining civil remedies … against postmasters in fewer than 100 instances since the Rule 9 start date.”

What degree of confidence can you put in that figure of fewer than 100?

Melanie Park: That information was given to me – provided to me by the Remediation Team, so I have no accountability for any of those existing civil remedies. So I have to take it on the authority through which it was provided to me.

Mr Stevens: Presumably, then, you’re not able to speak to why the data is in such a way that it can only be said that fewer than 100 instances have been pursued; is that correct?

Melanie Park: That’s correct.

Sir Wyn Williams: I’m sorry, can you remind me what the Rule 9 start date was, so I’ve got some idea of the period?

Mr Stevens: Yes. Just so I don’t get it wrong, I’ll just double check the Rule 9. It was defined as, “Since Post Office ceased carrying out prosecutions due to concerns with the Horizon system”.

Sir Wyn Williams: So approximately earliest 2013, maybe a little bit later?

Mr Stevens: Yes.

Sir Wyn Williams: Fine.

Mr Stevens: That can come down, thank you, for the time being.

Who would be best placed to provide that information then, if we wanted to –

Melanie Park: My understanding is there has been a witness statement to confirm that.

Mr Stevens: Can we look, please, at the future status of civil proceedings. POL00448362. This is described as loss recovery update. It’s exhibited to your statement. Can you assist for what purpose this document was created?

Melanie Park: This document was created by our interim CEO to talk to SEG about our current position on loss recovery.

Mr Stevens: So if we turn, please, to page 4, “Options and Recommendation”, we see there’s several options listed. At the top, “Maintain current [position]”. If we go down to 4, please:

“Seek recovery of established losses via a civil means/deduction from remuneration, following an agreed, defined process with an external review board that will take final recovery decision.”

The recommendation there is “Yes”.

Is that still a current recommendation?

Melanie Park: I think the recommendation was more around proceeding to understand what options we would have to seek recovery. What circumstances we would use those options and, as a result of that, we’ve set up a working group to review just that. This isn’t necessarily a carte blanche to go ahead and say, “Right, seek recovery”. This is signal of an intent that we need to do more work on.

Mr Stevens: Can we look, please, at POL00460458. This is a Strategic Executive Group report. I think earlier in your evidence you mentioned SEG; is that –

Melanie Park: Yes.

Mr Stevens: We see you are the author, 20 May 2024. The title is, “Postmaster Losses Overview/Branch Discrepancies”. Was this the proposal that’s led to the Working Group or was it a paper that led to a proposal to lead to the Working Group?

Melanie Park: This was an earlier paper. So the discussion about the extent of losses on our profit and loss account and how we addressed those losses has been ongoing since I joined, and this was a paper that I wrote to move that understanding and that discussion on. It wasn’t necessarily what drove the conversation that that paper was written for at a later SEG.

Mr Stevens: Can we go down, please, to page 2, and down to paragraph 11, please. It says:

“The table below summarises the key drivers of loss, what additional activity is required to improve prevention of the loss and also recommendations on whether [Post Office] should start recovery activity on any of these losses.”

We see “Loss Driver”, at they top, “Current [postmaster] discrepancies post-April ‘21”. It says, “Recommendations for prevention”, and then we have “Recommendations for recovery”.

Is that referring to civil recovery as in issuing civil proceedings?

Melanie Park: Not necessarily, no. It was that we have, I guess, a number of options to seek recovery from postmasters. So, again, that was looking at those options by which we would recover other than voluntarily.

Mr Stevens: So that would include attachment of earnings, would it?

Melanie Park: Yes, an auto deduction from rem, if that was one of the options that we choose to –

Mr Stevens: So it’s recovery but not necessarily civil proceedings but some form of non-voluntary recovery from the postmaster?

Melanie Park: Absolutely, and having options to do that.

Mr Stevens: If we can zoom in on that recommendation for recovery part. It says, the first bullet point, “Do not start recovery” – that doesn’t assist, I don’t think. Leave it zoomed out, please, if we can. It says:

“Do not start recovery until clarified Horizon data used in discrepancy/review process is robust.”

Could you just expand on what you meant by that?

Melanie Park: I can’t remember the timing of it and whether it was before or after the letter but, obviously, as we’ve seen the Inquiry progress, there was – and based on conversations that were ongoing with certain criminal proceedings that I think we’ve talked about. As one of the options being civil recovery, I think we’d need to assure ourselves and anybody else that was involved in that as to the reliability of the data in Horizon. So it wasn’t just an internal assurance; it was to be able to go to external bodies and go, “No, we can rely on that data, and should”.

Mr Stevens: When it says, “Clarified Horizon data used in discrepancy/review process if robust”, what sort of assurance would Post Office need on that before it commences civil recovery in future or, indeed, any non-voluntary recovery?

Melanie Park: In my opinion, and I know this has been looked at, we need to make sure we’ve got external expert assurance as to that data. Given where we’ve been, and all of the conversations we’ve had as part of the Inquiry, I think it would be important to get some external expert assurance for everyone.

Mr Stevens: Could we look, please, at POL00448520. This describes a SEG tactical meeting on 17 July 2024. Does that have any special meaning, that it’s a tactical meaning?

Melanie Park: I think it’s just the different types of Strategic Executive Group meeting. I think they had strategic ones and tactical ones, but …

Mr Stevens: So the paper we just saw before, that was dated May 2024. Was that too old to be considered at this meeting in 17 July 2024?

Melanie Park: I can’t recall but this would have been an update on that position with a view to – I think that was the – the May paper was quite a rounded paper, talking about discrepancies, how they arise, trying to get all of SEG to a level of understanding, so that they are making more informed decisions when we come with proposals and recommendations, and I think, from recollection, although I can’t recall the paper that went with this, that would have been a more detailed next steps versus a Teach-In session.

Mr Stevens: We see you’re not in the “present” line at the very top but, if we just scroll down slightly, when it comes to branch grapes, you join the meeting and, if we go please – we don’t need to read all of it but, if we go to page 2, there’s a discussion about recovering discrepancies and, towards the bottom of the page, it says:

“SEG discussed a number of other alternatives, including:

“Some form of ‘losses’ pool, to which all postmasters contributed and from which repayments would be made.”

Could you just describe what that proposal was?

Melanie Park: So that was something suggested by one of our Legal Team, and –

Mr Stevens: Do you know who in the Legal team?

Melanie Park: Neil Wallace(?). So he – I think his opinion – and again, this is something that we need to look at all options – was to, if we had a budget for losses and that budget wasn’t achieved during any one year, then however much we were short or the benefit we created from not spending all that money on losses would go back to postmasters to try to encourage postmasters to, I guess, run operationally kind of robust branches and seek support for discrepancies when they first saw them. And, as a result of that, our cost in our profit and loss account would be less, which means, ultimately, we would be able to give more remuneration to all our postmasters.

Mr Stevens: This reads like the proposal is to say postmasters contribute to a general pool to make up for losses or discrepancies in Horizon.

Melanie Park: That’s not my understanding but, again, this will form part of the Working Group conversations and look at what options and alternatives we have.

Mr Stevens: So is this losses pool a matter that is actually being still – sorry, start again. Is the losses pool suggestion under active consideration still?

Melanie Park: I couldn’t say for certain because I’ve not been involved in those working groups over the last month or so, so I don’t know.

Mr Stevens: In summary terms, can you assist at all where the Working Group has got to with next steps, in terms of civil recoveries?

Melanie Park: I can’t, no, sorry. I’ve not been involved. I will pick up my involvement again over the next couple of weeks.

Mr Stevens: Sir, that’s all the questions I have. I will look around the room.

There’s questions from Howe+Co and NFSP.

Sir Wyn Williams: Right.

Questioned by Mr Jacobs

Mr Jacobs: Hello, Ms Park, I have some questions for you.

Simon Oldnall gave evidence yesterday and Tracy Marshall this afternoon gave evidence and confirmed that it’s Post Office’s position that it does not recover losses, except where a postmaster agrees the reasons for the shortfall, and now witnesses have said that’s Post Office’s position; do you accept that?

Melanie Park: Absolutely, yes.

Mr Jacobs: At paragraph 15 of your statement you set out 12 postmaster policies, I think you call them a suite of policies, which you say set out the guidelines of how postmasters are supported, and their assistance across number of key areas by Post Office –

Melanie Park: That’s right.

Mr Jacobs: – and it sets out minimum operating standards for Post Office. Are you familiar with these policies, Ms Park?

Melanie Park: I’m familiar with all of the policies in general but more familiar with the ones that sit in my area.

Mr Jacobs: Okay, could we then go very quickly to a section of the policy that Mr Stein took Mr Read to last week, and it’s POL00448000. This is the Postmaster Account Support Policy and it’s page 8 of 25, section 2.5 “The risk”. It’s just coming up on the page now. Page 8, please. We can see the second paragraph there, and it says:

“Post Office can recover losses from a postmaster when such losses are caused through negligence, carelessness or error and Post Office has carried out a reasonable and fair investigation, as set out in the Postmaster Accounting Dispute Resolution Policy …”

Just pausing there, Mr Stevens took you to that policy earlier on this afternoon, just before 3.00 and this is the Tier 2 investigation and the Tier 3 investigation?

Melanie Park: That’s the fair – reasonable and fair investigation that that piece refers to.

Mr Jacobs: In Tier 2, one of nine actions that can be taken within an investigation is to undertake a check on the Horizon system information to ascertain whether Horizon was a contributory factor in the discrepancy; is that right?

Melanie Park: That’s right, yes.

Mr Jacobs: Tier 3 sets out five contractual thresholds, and one of those, one of those five, is that the Horizon system information has been checked to ascertain whether the Horizon system was a contributory factor to the discrepancy. So part of the investigation but there is an investigation into a shortfall?

Melanie Park: That’s correct, yes.

Mr Jacobs: So going back to the text of the policy, so Post Office can recover the losses, carry out a reasonable investigation, as set out in the other policy, the resolution policy, as to the cause and reason for the loss, and going over the page:

“… whether it was properly attributed to the postmaster. Postmasters are also responsible for losses caused by their assistants.”

So we can take that off the screen now. Thank you.

Do you accept, in principle, there is scope within the policy, this policy, for recovery based on Horizon shortfall?

Melanie Park: I think that, if we’re talking about a shortfall, it will be linked – the way a shortfall is identified is by doing a full count of cash and cash equivalents in a branch and comparing that to Horizon data. So if we are – what Horizon expects the value to be in that branch. So I think if we’re talking about shortfalls, they will all be linked back to Horizon because that’s the operating system that we check back to.

Mr Jacobs: Okay. So you do accept, I think, is your answer, that there can be recovery based on a Horizon shortfall under the policy?

Melanie Park: Yes.

Mr Jacobs: The concern that our clients have – and we represent some current subpostmasters, as well as many, many subpostmasters who were affected by the scandal and their concern is – and we put this to Ms Marshall earlier – that the Post Office’s policies do not reflect Post Office’s expressed intent and the evidence that the witnesses have given in this Inquiry. If it’s the position that Post Office does not recover Horizon shortfall losses, except for when a subpostmaster agrees to repay those losses and starts to repay, why doesn’t the policy say that? The policy seems to say something completely different and opposite.

Melanie Park: I think my understanding is that the policies, as well as the contract, should include the opportunity, such that, if the circumstances are shown that the shortfall is a result of negligence, carelessness or error and we do have situations where, actually, Horizon data isn’t involved, where we’ve spoken to the postmaster and, for example, a safe has been left open, or they haven’t been doing regular cash decs and couldn’t identify – and haven’t been running their branches in an operationally, I guess, sound way, where cash has fallen into the bin.

So we should have that opportunity in our policies and contracts such that, when we’re confident that all of the support is in place and we’re doing all of the things we should be doing – we’re doing the right training the right interventions – we should have that opportunity and, therefore, I do believe it’s right to have it in there, but I understand why, at the moment, we’re not necessarily fulfilling that opportunity to its full extent.

Mr Jacobs: Of course. Yes, if someone leaves a safe open or leaves the door open and goes out for the day, perhaps that’s different.

But the position that the Post Office has accepted in this Inquiry is that post offices do not recover shortfalls unless the postmaster agrees with the reasons for the shortfalls. That’s not what is said in the policy. Do you accept that the policy should reflect Post Office’s position, the position I’ve just articulated – and you can say something about other extraneous factors, like leaving safe doors open and going out for the day, but you’re not being clear in the policy, are you?

Melanie Park: I think we could be more overt with our current position in the policy and in some of the communications that we have with postmasters during the investigation process. You’re right.

Mr Jacobs: Our position is that the policy should be reviewed; do you accept that it should be reviewed –

Melanie Park: Absolutely –

Mr Jacobs: – and changed?

Melanie Park: – and we will take that, definitely.

Mr Jacobs: Will subpostmasters be entitled to comment on the Postmaster Account Support Policy and Accounting Dispute Resolution Policies before they’re finalised?

Melanie Park: I think we referred to that – Ms Marshall referred to that earlier. So absolutely.

Mr Jacobs: Super. I’ve now got one other line of questioning for you. We asked Ms Marshall this morning about Mr Patterson’s letter to Mr Read, dated 17 May 2024. Are you familiar with that letter?

Melanie Park: I am, yes.

Mr Jacobs: It’s well known to the Inquiry now. It’s worth saying that it says in the second paragraph:

“To be clear, Fujitsu will not support the Post Office to act against subpostmasters. We will not provide support for any enforcement actions taken by Post Office against subpostmasters, whether civil, criminal, for alleged shortfalls, fraud or false accounting.”

Now, I should say at this stage, before I ask you a question, that I have looked at the fifth corporate statement of Mr Patterson, and the reference – we don’t need to call it up for the Inquiry – is WITN06650500. At paragraph 66 and 67 of that statement, Mr Patterson states that Fujitsu does continue, when contractually bound to do so, to provide ARQ data but Fujitsu has sought to put in place processes to ensure that any ARQ data it provides is not used in enforcement action against postmasters, and one of the things that Fujitsu is seeking to do is require Post Office to confirm, when requesting ARQ data, whether it is to be used for redress of subpostmasters or investigation into or actions against a postmaster or member of a branch staff.

So with that caveat, it’s right, isn’t it, that Fujitsu are not going to cooperate by assisting or do not intend to cooperate to assist Post Office in taking any sort of enforcement action against postmasters; do you accept that?

Melanie Park: I accept that that’s the letter, but –

Sir Wyn Williams: Well –

Mr Jacobs: Sir, I see that you’re –

Sir Wyn Williams: The letter speaks for itself. I think this witness is incapable of giving an answer other than, “The letter speaks for itself.”

Mr Jacobs: Indeed. I’ll move on. I just wanted to clarify that point with her.

My question to you is: how can Post Office fully investigate without this assistance, without this data?

Melanie Park: So, I – the data, as it exists at the moment sits in HORice and Credence, and that’s the data we used to investigate. I find it quite alarming that the provider of an EPOS operating system is not assured of the reliability of the data that is in that system. But we don’t need Fujitsu’s cooperation because the data exists in our systems and that we – we use that data as part of the investigation.

Mr Jacobs: My final question for you then is that Fujitsu doesn’t consider that the Horizon system should be used to evidence shortfalls. Do you accept that that is right: the Horizon system should not be used to support recovery action against subpostmasters?

Melanie Park: I don’t accept that but I understand we should seek to do some external assurance on that and I find it quite confusing that that data could be used for remediation but not to support a review of how a discrepancy might have arisen.

Mr Jacobs: Well, I put this to Ms Marshall. The confusion shouldn’t really be confusing, it’s because of the great scandal that’s taken place, isn’t it? It’s because of what’s happened in the past and how Post Office have used Horizon data to oppress subpostmasters; that’s why things have changed.

Melanie Park: And things have changed, so my opinion is that how we support and review discrepancies with postmasters now is not the same as what we – how we did in the past, which was awful. So I don’t see the data being called into question, because of the processes that we follow, to assure ourselves but I do understand. I think we get – that external assurance would help everyone in this conversation.

Mr Jacobs: Thank you. I’m just going to ask if I have any more questions for you. No, I haven’t.

That’s all I have, sir.

The Witness: Thank you.

Sir Wyn Williams: Yes. Ms Watt.

Questioned by Ms Watt

Ms Watt: Thank you, sir.

Good afternoon, Ms Park, we have this perennial issue of just being able to see each other. Thank you, it’s just the location of the desks.

I just want to ask you a couple of questions to check in with some of the matters you raise in your witness statement.

I’m asking questions on behalf of the NFSP. Sorry, I should have said that at the beginning.

I’m not going to call up these documents; I’m just going to make some general summaries and ask some questions. At paragraph 17 of your witness statement you say, in relation to the 12 postmaster policies:

“Prior to submission to ARC [that’s the Audit and Risk Committee] each policy is reviewed and agreed with the National Federation of SubPostmasters, NFSP, with feedback also obtained from the Postmaster Experience Director, who is a serving postmaster working within the Post Office. One of Post Office’s Postmaster Non-Executive Directors will also approve new policies as a core member of ARC.”

In his witness statement – and I’m not calling it up but for the Inquiry’s record, WITN003700100 – Calum Greenhow of the NFSP says, at paragraph 326 that the NFSP raised concerns about the audit reporting script, suggested an alternative script. He also says that the NFSP suggested a checklist for the postmaster and the officer in charge to follow, given the potential stressful situation that may be being dealt with at the time but he says these suggestions were rejected by the Post Office.

So the first question I wanted to ask you was: would you agree that the policies you’ve been referring to are, therefore, reviewed by the NFSP but are not always agreed in full by them and that changes proposed by the NFSP are not always taken on board?

Melanie Park: I couldn’t comment on that because that’s not part of the process that I’m then accountable for.

Ms Watt: Okay. It might be that the following question you can’t answer either, and that’s fine. Just say if you can’t.

But in that paragraph 17 of your witness statement, where you are setting all of this out, you list three potential sources of postmaster feedback on Post Office policies: that that’s the Postmaster Experience Director; the Postmaster Non-Executive Director; and the NFSP. So if I think about an example, you’ve got three different sources of feedback and approval. Let’s say, for example, the Postmaster Experience Director agrees with the policy that’s being brought forward but the NFSP and the Postmaster Non-Executive Directors don’t agree in full with it. Is it the case that the agreement of the Postmaster Experience Director allows the Post Office to say they’ve received postmaster feedback and approved the policy?

Melanie Park: Again, because I’m not accountable for that review process, I’m sorry, I can’t comment.

Ms Watt: Okay. I think, just picking up on that, this may also not be – you can tell me if it’s not – but would you agree that what I’ve just described actually suggests that the Post Office effectively has a number of bites at the cherry to get the answer it needs on approval?

Melanie Park: Again, I can’t comment.

Ms Watt: Okay. At paragraph 80 and 81 of your witness statement you discuss the Operational Excellence Project; is that something you are familiar with?

Melanie Park: That’s something I’m familiar with, yes.

Ms Watt: Okay. You say the objective of the policy is to review and improve the operational support provided to postmasters during each stage of their journey with the Post Office.

Melanie Park: Absolutely.

Ms Watt: You have a number of subparagraphs in that, but subparagraph 81(d) is about operational excellence incentive to encourage improvements in back office processes in sub post offices and you talk about a financial incentive for the subpostmaster meeting targets on, for example, daily cash declarations and completing monthly trading within a certain period. That financial incentive is a payment of 5 per cent of the postmaster’s total variable remuneration for the month.

Now, I wanted to ask if you were aware that the NFSP did not agree that 5 per cent of a postmaster’s total variable remuneration was sufficient?

Melanie Park: So whilst I have responsibility for the overall Operational Excellence Programme, postmaster remuneration isn’t part of my accountabilities and that sits with another member of the retail leadership team?

Ms Watt: So you’re not aware specifically of the NFSP –

Melanie Park: (The witness shook her head)

Ms Watt: However, I think you said earlier you were an accountant, if that’s correct –

Melanie Park: Yes.

Ms Watt: – so perhaps you might be able to comment on my follow-up questions.

Would you agree that it is not sufficient, ie 5 per cent of this remuneration is not sufficient, when postmasters across the UK report in the NFSP surveys and the postmaster surveys, or the Post Office surveys and the YouGov survey for this Inquiry, that low remuneration is the biggest issue they face, and that 5 per cent of not very much is, in fact, not very much?

Melanie Park: I understand the feedback about low remuneration, absolutely. With relation to the Operational Excellence Incentive, my understanding was that that 5 per cent wasn’t intended to cover the full costs of all of those back office processes, my understanding is there’s an element of the admin process fed into each of the individual rem payments for the products, and this was simply a way to encourage postmasters to complete the back office processes that we asked them to do as part of the contract in running their branches. But I understand the feedback about the rem in general, yes.

Ms Watt: Thank you. Those are my questions.

Sir Wyn Williams: Thank you, Ms Watt.

Is that it, Mr Stevens?

Mr Stevens: Yes, sir. That is it.

Sir Wyn Williams: Well, then, thank you very much, Ms Park, for making a witness statement on behalf of the Post Office which is very detailed, and thank you very much for expanding upon it in your oral evidence this afternoon. I’m grateful to you.

The Witness: Thank you, sir.

Sir Wyn Williams: Right. We’ll resume again at 10.00 tomorrow morning.

Mr Stevens: Yes, sir. Thank you.

(4.28 pm)

(The hearing adjourned until 10.00 am the following day)