5 November 2024 – Simon Recaldin and Sarah Munby
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(10.00 am)
Simon Recaldin
SIMON DOMINIC RECALDIN (continued).
Questioned by Mr Blake (continued)
Mr Blake: Good morning, sir.
Sir Wyn Williams: Morning.
Mr Blake: Mr Recaldin, I think you did a bit of homework overnight. Are you able to assist us with the product of that research?
Simon Recaldin: I hope to help the Inquiry, yes. So Sir Wyn queried whether it is correct to say that 111 claimants is the closed number for the OC process and, quite rightly, Sir Wyn pointed out that the PNC population would now expand that – potentially expand that number.
But I’ve got a bit more colour on that. So 111 is the number of claimants in the OC process who have had their convictions overturned by the courts, we knew that. As such, based on the current picture in the criminal courts, it’s considered closed. However, the OC process also includes PNCs –
Mr Blake: That’s prosecuted but not convicted?
Simon Recaldin: – prosecuted but not convicted – and other appeals that are excluded from the legislation. So I’ve been reminded that the course that the legislation went through, it covered England, Wales, Scotland and Northern Ireland and I think the CPS, but it did not cover the Department for Work and Pensions and RMGs who were also prosecutors. So if they – if cases came forward – cases from them could come forward through the courts and therefore that number could expand further because of that.
But also, the Chair asked whether cautions were included in the OC process, so we are in ongoing discussions with Government about the non-postmaster PNC cohort, eg assistants and managers, and have sought clarification on whether all cautions would fall into the definition of PNC – prosecuted not convictions – such that would be eligible for OC and therefore covered by the Government funding. We recognise that the PNC category is covered by Government funding.
This is and always has been the working assumption based on conversations with Government officials to date but, currently, no formal agreement has been reached on that basis.
Mr Blake: So there is discussion currently ongoing –
Simon Recaldin: Yeah.
Mr Blake: – about whether cautions are considered prosecuted but not convicted?
Simon Recaldin: Yeah, within that cohort. Correct.
Mr Blake: Are any of those cautions being dealt with or being referred to other schemes, as far as you’re aware?
Simon Recaldin: I think there is – this is my recollection. I think there has been one case that has gone through the HSS scheme and the caution has been recognised and redressed.
Mr Blake: Has that matter concluded, as far as you’re aware?
Simon Recaldin: Yes, as far as I’m aware it has, yes. There was also a question – if I can go on?
Mr Blake: Yes.
Simon Recaldin: There was also a question both numbers of pecuniary and non-pecuniary settlements in the OC space and I can confirm there are – as of 31 October, there are 81 non-pecuniary claims that have been settled and 61 pecuniary claims have been settled, and, as advised yesterday, there have been 61 full and final settlements. So put another way, there are 61 full and final settlements; in addition to that, there are a further 20 non-pecuniary claims settled.
Mr Blake: Thank you. Were there any other matters arising from yesterday that you wanted to clarify?
Simon Recaldin: I think that was my homework. Thank you.
Mr Blake: Thank you. We left off yesterday on the overturned convictions process. I have a few more questions on that. We will then go through very quickly the other schemes just to cover those off, and then we’ll move on to a separate topic.
So sticking with overturned convictions. The stage we reached, we went through the non-pecuniary, the pecuniary, we’re now at the independent assessment panel stage. If agreement can’t be reached between the parties, there is an independent panel. It’s a three-person panel that’s chaired by Sir Gary Hickinbottom, is that correct?
Simon Recaldin: Correct.
Mr Blake: I think Sir Gary was nominated by Hudgells Solicitors and the Post Office jointly; is that correct?
Simon Recaldin: Proposed by Hudgells Solicitors and appointed accordingly, yeah.
Mr Blake: Thank you. That hasn’t yet considered any appeals?
Simon Recaldin: No.
Mr Blake: We spoke yesterday about Lord Dyson and three cases that the Post Office wanted to be referred to Lord Dyson and that hadn’t been agreed between the parties. Can you assist us with why those cases haven’t, in fact, gone to the independent assessment panel stage?
Simon Recaldin: Because Lord Dyson is non-pecuniary and Sir Gary is pecuniary.
Mr Blake: So the independent assessment panel only deals with pecuniary cases?
Simon Recaldin: Correct.
Mr Blake: Thank you. In terms of legal costs, I think you’ve said in your witness statement that only one of the 111 claimants is not legally represented –
Simon Recaldin: Yes.
Mr Blake: – and reasonable legal costs are paid when a claimant seeks the full assessment of their claim?
Simon Recaldin: Yes.
Mr Blake: In respect of the Government offer that we spoke about yesterday, there is effectively a fixed fee: it’s £20,000 of legal costs or I think, if they pre-dated the announcement of the £600,000, it is reasonable costs plus costs incurred prior to that date, is it?
Simon Recaldin: Correct.
Mr Blake: Thank you. Tax issues. On 16 March 2023, the Post Office Horizon and Infected Blood Compensation Payment Scheme regulations came into force, which effectively solved the tax issues for those living in the United Kingdom; is that correct?
Simon Recaldin: Yes.
Mr Blake: You’ve said in your witness statement that there are two applicants living outside of the United Kingdom. Have those matters been resolved or where are they at?
Simon Recaldin: I don’t know whether they’ve been resolved but I know we’re working with Government to find a solution for those.
Mr Blake: Thank you. We can then move on to the Group Litigation Order scheme, the GLO scheme, not run by the Post Office. Could we please turn to BEIS0000641. Thank you.
If we could start on page 4, please. This is an email chain from 20 February 2023. It’s an email from you, we see your name there, and it’s the highlighted passage that I’d just like to ask you about. You say:
“There is also a more delicate issue of ensuring the GLO is consistent with the HSS …”
That’s something you spoke about yesterday, trying to ensure consistency between the schemes:
“… and the risks associated if it is not – the inclusion of [I think that’s Lord Arbuthnot] etc could be building in risks to consistencies. I will be guided if to raise such an issue and if so how. Whatever the case we should mention that there is a risk of having to reopen cases and the Inquiry oversight if the GLO does not generate similar outcomes to Post Office.”
Can you assist us with what you were saying there and what you meant by that?
Simon Recaldin: Hopefully that’s quite clear. It’s a risk. That’s what I do: I articulate risks. And the risk was that if the GLO scheme was inconsistent with the HSS scheme – and that might be correct but, if it was inconsistent, then the risk is we would have to reopen up the HSS in order to correct that.
Mr Blake: Why is it that the inclusion of somebody like Lord Arbuthnot could build in those risks?
Simon Recaldin: I – forgive me, I don’t know why Lord Arbuthnot’s name is in there. I don’t know the context of why that’s there.
Mr Blake: Can you recall any specific concerns you had as at February 2023 regarding the scheme?
Simon Recaldin: About the GLO scheme?
Mr Blake: Well, if we see there, the subject is “OHC Remediation – Engagement with Parliament”. Does that assist you at all with knowing what your concern was?
Simon Recaldin: I think, from recollection, this was a meeting that I was being invited to with interested MPs and postmaster campaigners, including Lord Arbuthnot and others. And the debate was whether I should be invited or not be invited, et cetera, and it was a critical time at the Inquiry as well. I think the next compensation hearing was imminent and this was about the – what were the risks around me attending that meeting prior to coming here for the redress hearings. And that’s what – and that’s why Lord Arbuthnot might have crept into that paragraph.
Mr Blake: Thank you. One more email on the Group Litigation Order scheme. It’s BEIS0000656. This is a note of a meeting with Minister Hollinrake on 25 May 2023.
Simon Recaldin: Yeah.
Mr Blake: So on a few months from the last email that we saw. If we scroll down the page we can see there that you attended a meeting. There’s a GLO update over the page, please, page 2. That says:
“[Minister Hollinrake] said he’d seen that Alan Bates had been critical of the slow pace of the [GLO] scheme and pointed towards disclosure as the issue.
“SR [I think that’s you] said the issue is not the slowness of disclosure at present ([the Post Office] has committed to 32 weeks as an end-to-end process). The issue is that they are waiting for cases to come in, as the process of disclosure can only properly start once cases are received. SR [I think you] said in the meantime, his team are collecting the base data that they know they will need. SR said his team are working at risk as [the Post Office] hasn’t received payment for the work yet.”
Just pausing there, that was a phrase we spoke about yesterday.
Simon Recaldin: Mm.
Mr Blake: So, as at May 2023, had the Government not committed funding to the Post Office’s work on the GLO scheme?
Simon Recaldin: So this is – as I said yesterday and in my statement, this is a regular occurrence, and I want to be clear to the Inquiry on this. You know, Government commit to the funding verbally and in emails, et cetera, et cetera, and, clearly, that commitment is well meaning and, of course, Government will pay but, from a legal entity perspective, that has to be crystallised by formalisation. And therefore, working at risk is we know we’re going to be paid, we know it’s all going to be sorted out, but the formal documentation has yet to be in place.
Now, optically, I can’t cross my arms and say, “Well, until that formal documentation is in place I’m not going to do anything”, because that will be slowing down redress, wouldn’t it? So I can’t do that and I won’t do that. But I have to explain that to the Board to say – and get permission from the Board, to say, “Look, I’m making a commitment here that we’re working a risk here, on the assumption that the Government will pay us”. And, of course, they will pay us but it’s getting those formalities and, indeed, legal advisers more comfortable with that. But I want to be clear: working at risk is not slowing down redress.
Mr Blake: “CC [I think Mr Creswell] said [the Post Office] received the contract in January; the delay has been on due to going back and forth on specifics. But he understand [the Post Office] is currently operating at risk.”
Simon Recaldin: Sorry, there’s the acceptance from Government, they accept that we’re working at risk and they sort of say, “Don’t worry, the money’s on its way”.
Mr Blake: Thank you.
“[Minister Hollinrake] said he feels we need to be getting on the front foot here comms-wise. If the issue is that cases aren’t coming through, then we should say this. SR [you] said he would take this on board, as how Alan Bates described the situation is slightly misleading.”
Can you assist us with what you meant there?
Simon Recaldin: Well, I think it’s the first bullet isn’t it, where Mr Bates had been critical of the slow pace of the scheme and pointed towards disclosure as the issue. Disclosure was not the issue because we weren’t being asked for disclosure.
Mr Blake: Thank you. Finally on this scheme, what is your current view of the progress of the scheme, as at today’s date?
Simon Recaldin: Of the GLO?
Mr Blake: Yes.
Simon Recaldin: I don’t operate it. All I can say is what I heard at the Select Committee in February when I found it very, very interesting and, hopefully, Post Office has helped in that the challenges that the GLO scheme were very similar to the challenges of the OC and HSS schemes, in terms of getting cases in, and then lessons can be learnt from that, in terms of the numbers that have come in weren’t as expected, at the pace expected.
Mr Blake: Let’s move on, then, to the Horizon Compensation Review Scheme. Do you have anything to say on that: any updates as far as you’re aware? We’ll be hearing from Mr Creswell and others in due course but is there anything you’re aware of that you think is of note for the Inquiry?
Simon Recaldin: Apart from the fact that it’s an absolutely excellent initiative, in terms of clearing this mess up, in terms of the initiative and the impact it’s made. It’s been absolutely fantastic.
Mr Blake: I’d like to move on to a slightly different topic to compensation and that is the Past Roles Review. Can we please turn to POL00448307. This is the document of 30 October 2023, and it lists you as the Chair of the Past Roles Review panel; is that correct? Were you chair or are you chair of that panel?
Simon Recaldin: I am indeed.
Mr Blake: Please can we turn to POL00458391. When were you first appointed chair, approximately?
Simon Recaldin: It would have been about the time but that is a draft and some of those names are not on that committee but it would have been around that time, yeah.
Mr Blake: Thank you. So around October 2023.
Simon Recaldin: Yeah, yeah.
Mr Blake: This is an email chain from December 2023. If we scroll down, please, we can see a number of different names on this email chain. We see, for example, towards the bottom there, on the left-hand side, Caroline Richards.
Simon Recaldin: Mm-hm.
Mr Blake: She’s someone who the Inquiry has heard visited a postmaster with Stephen Bradshaw, the Investigator.
If we scroll down, please, we see at the bottom of the second page the name Melanie Corfield – these are all in alphabetical order, I think. Thank you very much. Melanie Corfield was a member of the Communications Team. She was involved in liaising with press regarding issues relating to Paula Vennells, Panorama. The Inquiry has seen an email from her describing the remote access issue as “totally loony”.
If we scroll over the page, please, we see, about halfway down, Rodric Williams well known to the Inquiry, a witness in the Inquiry: he received the Clarke Advice; Project Zebra; he was involved in notifying the insurers about issues relating to Gareth Jenkins; he was involved in briefing Paula Vennells on issues relating to bugs, errors and defects.
We saw yesterday that email from Mark Underwood regarding fees and criteria to be imposed in the compensation schemes and he was a recipient of that email.
If we scroll down, please, we see on the bottom of page 7, it’s an email from you, and it’s relating to the Remediation Unit. You say:
“Yesterday marked a significant milestone in the [Remediation Unit’s] journey – providing compensation to postmasters and postmistresses all across our remediation programmes.”
You say:
“Yesterday we issued the last HSS offer from the original cohort. This is a significant milestone and one [to be] recognised.”
You say a bit further down:
“It also calls for me to recognise all of you for a job superbly executed …”
Now, at that time, those names that I’ve just read out, were they involved in matters relating to the Remediation Unit?
Simon Recaldin: So testing my dates, yeah. So to – Mel Corfield in particular doesn’t work in the Remediation Unit; she’s works in comms. So that distribution list would have been an all RU and related because, again, Mel doesn’t work for RU. So that would have been a mailing list that would have been used for anybody sort of involved or helped in RU. And at the time, I certainly know that Rod Williams wasn’t in the business, and I know certainly Caroline Richards now is not in the business. But they would have been on that circulation list.
At the time, I don’t know where – certainly Rod would have been out; Caroline, I don’t know whether she was still in the business or not at the time. I think she would have been in the business at that time still. But Mel is communication; she’s not within RU.
Mr Blake: Around that time, though, late 2023, did you have concerns regarding people working in the Remediation Unit who had those kinds of past roles and past involvements in matters that the Inquiry is investigating?
Simon Recaldin: Yes.
Mr Blake: We see at the beginning of that chain – sorry, if we go to the first page, we can see that it’s forwarded to Nick Read and Lorna Gratton. Were you aware at that time of any concerns that Nick Read, for example, had about those kinds of individuals working within the Remediation Unit?
Simon Recaldin: Yes.
Mr Blake: Did you see it as a high priority to address?
Simon Recaldin: Yes.
Mr Blake: If we could please turn to POL00448864. This is a Group Executive meeting from 13 March 2024. So we’re moving on a few months. It’s page 3 that I’d like to look at. If we scroll down, please, to the section on “Past Roles”. I think you attended this meeting and spoke to the issue of Past Roles; is that correct?
Simon Recaldin: Correct.
Mr Blake: So “SR” is you; “NM” is Ms Marriott:
“[Simon Recaldin and Nicola Marriott] spoke to the paper which set out a recommendation on the approach to be taken in relation to the Past Roles Review and staffing at the [Remediation Unit] in the light of the change in operational context and political environment.”
We know that by then there had been the ITV drama. Was that the operational context and political environment, or was it something else?
Simon Recaldin: It was absolutely the TV drama but, also, it was clear that the Advisory Board were very uncomfortable.
Mr Blake: Thank you:
“As a reminder, the Past Roles Review had been commissioned to look at the roles and activities of current employees who may have previously undertaken a role related to the subject of [the Inquiry], to examine whether any conflicts, or perception of conflict, arose.”
How long had that been going on by then? I mean, this is March 2024.
Simon Recaldin: So the issue about Past Roles first came to my attention and the Inquiry had a role to play in that – I’m grateful to the Inquiry for that – in an individual called Brian Trotter came and gave evidence to the Inquiry, and I think that was March 2023. So that’s when the issue first came to my attention.
I was concerned about that background and that Past Roles risk that that raised, and I escalated that straight to the Chief Executive, who then mandated the then Chief People Officer to conduct whatever needed to be conducted in terms of the review of the issue and the risk and how we were going to mitigate that risk.
Mr Blake: We’re now here a year after that concern arose. Do you think it was acting quickly enough?
Simon Recaldin: Absolutely not.
Mr Blake: What do you feel was the hold-up?
Simon Recaldin: Inactivity. This is a very delicate area and the first thing was to do the review – and I was very much involved in that review, I actually chaired the forum – and to identify the individuals who might be of concern in terms of – not the activity. Again, to be clear, there’s no allegations here at all, that’s separate.
This is nothing to do with Phoenix. This is – there are no allegations against these people. There is no wrongdoing, and we’ve got to make that really, really clear. There is no evidence of any wrongdoing of these individuals.
And therefore, the first thing we had to do is – so if these people were around at the time of interest for the Inquiry, what roles were they performing? So we then, we started that exercise by looking at roles. So what roles at the time would the Inquiry be interested in? And we came up with a list of Investigators, Contract Managers, et cetera, et cetera, that we knew the Inquiry was interested in and where there could be potential conflict. So we said, right, here are the roles and are any of those people – did they occupy those roles at the time?
Mr Blake: Why does it take an Inquiry to realise that people who worked as Investigators, for example, might be people that you don’t want in the team that’s deciding compensation and redress?
Simon Recaldin: I think that’s an excellent question, and one that certainly wasn’t addressed at the time. So when that team was built, I don’t think that was taken formally into consideration. Now, in my work – after Brian Trotter’s evidence, in my work that I did, I did look for conflicts policies, and there were conflicts policies, and they were mainly about you can’t work for two employers at the same time. That sort of conflict policies.
But I did discover there were conflict policies agreed between team members that, if there was a case that they had previously been involved in or previously knew any information about, they then would pass it to somebody else who didn’t have any background knowledge of those. I was concerned about the lack of formality around that conflict policy and I escalated that as well.
So my regret is – and it is a genuine regret – is that when I came in, in January 2022, that I didn’t do that conflicts check – check back on my inherited team – and challenge that. And that I absolutely apologise for because I think that’s something that should have been done.
As I said yesterday, that team was sort of leaderless for about eight months, whilst I was being recruited, and I think there was an assumption by the business that that conflict check would have happened at the time that team was being built, but it clearly hadn’t been.
Mr Blake: Who built up that team, do you know?
Simon Recaldin: I think it was my predecessor.
Mr Blake: Who was that.
Simon Recaldin: I can’t remember the gentleman’s name now.
Mr Blake: If we look at the bottom two bullet points, we have description about the red category:
“Colleagues were rated ‘RED’, however, if they were identified as giving rise to a perceived risk in terms of undermining the integrity and independence of remediation and redress work being done and in those cases, redeployment had been recommended.
“Since the review had been undertaken, there had been a significant increase in late applications and [the Remediation Unit] work driven by current external scrutiny and the heightened awareness that was generating, organisational design delays had meant an increase in colleagues who were deemed as ‘RED’ and there no clarity yet on the Government’s role in relation to redress going forward and associate processes and procedures.
“[Simon Recaldin and Nicola Marriott] noted the implications arising from a reduction in headcount and the risks posed to redress claim processing times.”
So you were concerned at this point about – you had two problems: one was people were live to the issue of those working in past roles in the Remediation Unit, but you also have an increased amount of work for the Remediation Unit to deal with; is that a fair summary?
Simon Recaldin: Yeah, and I think, if – to help the Inquiry, the background here, which I think in Karen’s evidence as well was that these people were originally recruited in this space because of their knowledge: their system knowledge. And I talked yesterday about the SFA, shortfall analysis, and their technical expertise and experience required to do that in a professional and appropriate way.
So they were there for good reasons and because of their skill base. But as I did explain yesterday, as well, we knew the volumes were dropping off and we also had this issue where, through this process that we did in identifying roles, I think the numbers have been well articulated, there were 27 individuals who were around at the time who were occupying what we deemed as “red” roles who were still in the business. And, therefore, a proposal was that you could potentially redeploy those individuals to mitigate that risk, that perceived risk.
Again, to be clear, you know, we’ve got unemployment law and all of the rest of it. Now, a counter to that would be, well, don’t forget at the same time we’re now getting increasing volumes in because of the Bates Post Office drama and, therefore, what we can’t afford to do is slow down redress. So if we redeploy those people, is there a risk we’ll slow down redress?
Mr Blake: The decision as at March 2024, as shown here, was that there would be what’s referred to as a “many-to-few” approach, which is effectively getting rid of those individuals, is it?
Simon Recaldin: Or redeploying, yeah, redeploying those individuals. But many-to-few is you would actually backfill, so you would recruit people and these individuals would help train the new individuals, and then move off. So you would effectively ring-fence them.
Mr Blake: Okay. Moving on to April 2024, can we please look at POL00448649. We then have a Board meeting. It’s a note of a Board meeting that we’ve seen before, so I’ll take it pretty quickly but, if we go to the second page, it sets out there, if we scroll down slightly, the three categories: one is employees due to give evidence; the second is the Past Roles people; and the third is those who are in the Project Phoenix category.
If we go over the page there’s discussion, page 3, about halfway down. Were you involved in Phoenix at all?
Simon Recaldin: No. Well, if I can clarify that: I think as the evidence of Mr Read said, during restorative justice meetings, that myself and other Post Office Executives attended, if there was any allegation of wrongdoing by an individual member of staff current or indeed past, then we would log that and that will be referred to Project Phoenix. That’s my only involvement.
Mr Blake: It says there, slightly further down, at the top:
“The Chair asked NM [Ms Marriott] to provide an overview of category two [the Past Roles category]. [She] spoke through the category outlining the work that had been undertaken to assess from conflicts arising from roles associated with the activity covered by the Inquiry in current roles and detailed the employee population that this work had identified. NM noted proposed restructuring however this had not been actioned due to the need to retain the workforce given the high number of new applications to HSS …”
So this is a month later, after the many-to-few approach had been determined. Am I right to understand from this that, in fact, that slowed down, to some extent, because of the new applications to the Historic Shortfall Scheme?
Simon Recaldin: I think you can.
Mr Blake: Did you have any concerns about that?
Simon Recaldin: Apologies, can you remind me of the date of this Board meeting.
Mr Blake: This one is April.
Simon Recaldin: 20?
Mr Blake: It’s 29 April 2024.
Simon Recaldin: I think I had concerns about the pace of the activity and I was extremely aware of the optics and the concern that I was receiving from the Advisory Board.
Mr Blake: Was there anything you were able to do about that?
Simon Recaldin: I was part of the working party. I was engaged in working this – the solution. So, and as previously advised, I was actually chairing the forum that determined whether a role was red or not, and therefore we went through, you know, religiously and in very fine detail about the individuals that were occupying those roles at the time, and therefore what category they were to be determined.
It’s a very, very sensitive area because you are also – you’re on the edge of employment legislation and all sorts of things. It’s a very, very delicate thing and, you know, these people have done nothing wrong.
Mr Blake: There were suggestions, especially from the Subpostmaster Non-Executive Directors, that a suspend first policy should have been approached. What’s your view on that?
Simon Recaldin: I’m aware of that approach. And, look, this was treated as seriously as it should be, and these were Board decisions.
Mr Blake: Would you support a “suspend first” approach or not; did you support a suspend first approach or not?
Simon Recaldin: These were Board decisions and the Board made those decisions. I personally would not support – you know, whilst investigations were going on, a suspension no, I personally wouldn’t. That would have not been one of my recommendations for the paper.
Mr Blake: Thank you. If we scroll over, we can see:
“NM detailed the proposed approaches in relation to the different employee populations within category 2 noting the benefits and risk involved. For the 23 ‘red’ employees it was proposed that a preferencing exercise was run to understand the appetite for voluntary redundancy or redeployment. If neither of these options were taken a forced change in employment would be affected or as a last resort the employee would be dismissed.”
It all seems to be dragging on a little bit at this stage, doesn’t it?
Simon Recaldin: I agree.
Mr Blake: Who do you say is responsible for that?
Simon Recaldin: I think the Grant Thornton report actually articulated it better than I could possibly do. Is – there is some serious challenges in Post Office around decision making and making very, very tough decisions and, therefore, not wanting to make decisions, and therefore potentially elongating processes. And, for lack of better words – and this is not appropriate wording – but kicking things into the long grass for a decision later, for a decision later.
And I think that, combined with some pretty serious cultural issues in this space, I think it was a cauldron of indecisiveness about of what to do, including, you know, proper legal advice about employment law, et cetera, et cetera, of what can be done on optics. These conflicts – this is optical because there is no evidence here that – these people are not involved in decision making, they’re just involved in the process and, therefore, it is – I keep on saying it’s a sensitive area and it is, so there’s a delegate path here to travel.
In the meantime, the political environment and what I call the Man on the Clapham Omnibus, the public opinion, optically, the message is clear.
Mr Blake: I can take you to an email chain specifically on the topic of Brian Trotter, who is somebody you have already mentioned. If we look at BEIS0000851 and start on page 2, please. On the bottom of page 2, you can see an email from Mr Brightwell from the Department for Business and Trade to yourself. He says:
“This from Richard Moorhead:
“An SPM approached me worried that two staff involved in Horizon matters pre-Bates are, have been, or may be involved in redress. Brian Trotter and Mervyn Jones.
“Helpful to know where these stand, please.”
If we scroll up, you say:
“[Brian Trotter] exited (by me) mid-2023 – he gave evidence at the Inquiry late 2022. Previously he had been a Contract Manager – hence why he was called as a witness – but after leaving Post Office he came back as a contractor in [the Remediation Unit] but not in a role with any influence/decision making – purely admin.”
As you said, Mr Trotter was a witness in the Inquiry, he was an Area Manager, he was a Contracts Manager. We saw him involved in, for example, an email chain in the context of Callendar Square; emails from Anne Chambers of Fujitsu; he was involved in the suspension of subpostmasters; he was, I think, criticised by Mr Justice Fraser. What do you say was his purely administrative role and do you recognise that, even in that role, there is a problem if somebody like that is employed in the Remediation Unit?
Simon Recaldin: It doesn’t matter what role he was employed in as a Contract Manager. It’s a problem, it should never have happened. It’s outrageous that that was allowed to happen. It’s a blatant conflict of interest. It should have never happened.
Mr Blake: Can you assist us with what kind of a role within your unit he was performing?
Simon Recaldin: I am reliably advised it was a purely admin role, there wasn’t any influencing in terms of what he was doing but what I would add – not that you’ve asked me, but what I would add, and I’ve been very clear to the entire Executive of Post Office, and I think, you know, it’s a reflection on probably the cultural environment that we’re dealing with here, is that sentence there, “BT exited (by me) mid-2023”, that was one of the most difficult things I’ve had to do in Post Office, in terms of working the system in order to exit Mr Trotter when his fixed-term contract simply expired at mid-2023.
It was one of the most difficult things I had to go through in terms of engagement with the right people and the appropriate action to be taken.
Mr Blake: You spoke about the Grant Thornton report and the indecisiveness. Did you experience any of that in relation to Mr Trotter?
Simon Recaldin: In spades.
Mr Blake: Where was that coming from?
Simon Recaldin: A lot of it by – an example was fortuitously, or by accident, I actually met his line manager, who was required to deliver the message because – as line manager, and she was clearly very, very uncomfortable with being able to do it and advised me that it might have implications on other people, and nobody has done anything wrong, et cetera, et cetera, and therefore – it was clear from her body language and everything that she was very, very uncomfortable with it.
And I said, “Look, you’re uncomfortable, I don’t want to put you in a position where you’re going to be too uncomfortable, that’s fine, and do you want to take the opportunity for somebody else delivering the message?” And she took that opportunity. So I escalated that up and somebody else had to deliver it. But the whole process of getting Mr Trotter into that position, appropriate position, was torturous.
Mr Blake: In light of the time and in light of your evidence I won’t take you to it, I have that whole series of correspondence that you will have seen in your bundle around this time: there’s the letter to Professor Hodges; that BEIS0000843; there is an email chain involving Professor Moorhead, Lord Arbuthnot, that’s BEIS0000846, that’s July 2024; there’s also BEIS0000848; an email from Professor Moorhead to Chris Hodges and others, that’s BEIS0000849, that’s August 2024.
You’ll have seen those chains in your bundle. Do you think that you personally had a sufficient grasp of the risks involved, irrespective of whether those individuals were working in your unit, were involved in specific allegations of wrongdoing, do you think that you understood and were doing enough about the potential risks that were posed by them working within the unit?
Simon Recaldin: I absolutely understood the risks and the potential risks. And, as a number of Board members will confirm, in terms of making my views clear about what could be done, what we should do about it, I’ve been very, very clear.
Mr Blake: Final topic from me today is Project Alder and I want to deal with this very briefly. Could we please bring up on to screen POL00448907. This is a report that we’ve seen before from John Bartlett. It outlines various investigations that were ongoing within the business. If we could please turn to page 12 and onwards, it makes clear that outside agencies have been involved in these investigations and, therefore, we don’t need to deal with them in depth. But just to outline, Project Alder, there are two slides there. It says:
“The principal allegation is that the senior contractors in the [Remediation Unit] caused the handling of compensation claims to go slow in order to extend their well-paid tenure at [Post Office].”
“DLA Piper was engaged to conduct an independent investigation.”
If we scroll over, there’s an outline of the current situation:
“A large number of interviews have been conducted [including with you].
“No evidence to date [about a gravy train].”
It does say here that:
“There is considerable evidence gathered so far which shows that some delays could have been avoided and that a contributing factor was the dysfunctional relationship within [the Remediation Unit] between the [Post Office] staff and contractors. There are two or three key interviews remaining but this looks like an established position.
“There is also evidence of a failure of leadership at several levels in the [Remediation Unit] and that decisions made within the [Remediation Unit] were very focused on value for money rather than best outcome for [postmasters], to the detriment of some [postmasters].”
Can you assist us with what the current position is in relation to Project Alder? Any findings, if you could just summarise those for us, that would be very helpful.
Simon Recaldin: Of course I can. The two – the two most significant allegations – well, as advised there – were that – it’s interesting in there the word “deliberate” is not in there but the allegations were – well, the word “deliberate” is in the allegation – is that RU senior members of staff deliberately delayed redress in a non-Horizon – by the way, a non-Horizon compensation scheme, suspension remuneration: they deliberately delayed redress.
And the second allegation was, actually – I think it was a named individual deliberately dragged their feet in order to get their contract renewed. Those are the two most significant allegations in there.
And I’m – you asked me yesterday about whether I had enough time to deal with all the things I had to do and whether I had an appropriate resource. It says in that report I was interviewed four times. I was interviewed for over 11.5 hours by DLA on this issue.
So you ask me what – to summarise what the outcome was, which I’ll get to straightaway. Those two serious allegations – and you cannot make this up, Mr Blake – those two serious allegations were actually withdrawn during the investigation by the individual who made the allegations. In addition, the report concluded that there were no findings about whether redress – it said that redress was not delayed at all and the individual named did not deliberately drag their feet in order to have their contract.
So there were no findings at all but those allegations were actually withdrawn and the report in the management summary, paragraph 3.2, makes it absolutely crystal clear that the reason why the report was commissioned in the first place was because of these allegations, and the author recognised that the withdrawal of those allegations made the report superfluous.
As you say – as you can see, I’m quite passionate about this because this was a direct poor reflection on my team, which was totally inappropriate and uncalled for.
Mr Blake: I don’t know if you’ve heard the evidence in the Inquiry when we heard from the Subpostmaster Non-Executive Directors. There was a suggestion of an over-investigations culture within the Post Office. Is that something that you agree with, that you share, or what are your views on that?
Simon Recaldin: Mr Blake, I share with a passion.
Mr Blake: Who do you hold responsible for that?
Simon Recaldin: I’ve been here before with you, Mr Blake: it’s a cultural thing. I truly believe it’s a cultural thing. And it’s interesting the new Senior Management Team in have already mentioned it to me about a culture of raising, you know – and absolutely within the rules – you know, raising grievances and raising a whistleblowing on a number of issues because it’s there. And it is, you know, it’s – we’re in a very sensitive environment. I mean, Post Office is shot to pieces, okay. It absolutely – and, therefore, everybody is extremely sensitive. Nobody wants to make a decision, okay, and every decision, they worry about the consequences of making a decision.
And it’s been in this environment, quite understandably, because of the bad place that Post Office has been in. And by the way, you know, it’s all true.
So it’s such a bad place but there’s a culture, it’s absolutely – you know, that I experienced, and I have to caveat that, is that only the bit that I experienced, that I have seen culture within Post Office elsewhere, you know, in the retail business, in many – in Procurement, et cetera, and many other areas, Communications, where the culture is clearly not like this. The area that I work in, the culture is very, very challenging and, to answer your question, is there is this environment.
You know, I feel very strongly about this. I have worked for 35 years – 38 years now I’ve worked, and for the best part of 35 years I’ve worked for NatWest Royal Bank of Scotland, going through a number of different management levels. And for 25 years of those, I’ve managed people either from one team up to over 1,000. During those 25 years of managing people, I’ve never ever had a grievance against me. I’ve never had an investigation about me about anything.
And this is very personal, Mr Blake, and I hope you don’t mind me sharing it, and I feel very strongly about this. And in those 25 years, never an investigation, never a grievance, nothing. In fact, I’m happy to share, you know, 360 feedback on a consistent basis, done annually has been outstanding.
I’ve worked for three years in Post Office and I’ve been investigated five times, Mr Blake. You’ve asked me “Who do you blame?” I don’t blame an individual and I don’t blame anybody. I point to the culture that I face. And I think it’s really unfair, really, really unfair, to say that culture is across Post Office because it’s not. You know, Post Office keep over 11,500 branches open every single day. It’s amazing what they do and how they do it. Cash centres, distribution networks, motivating postmasters, remuneration schemes. You know, I genuinely don’t know how. It’s a very sophisticated business and it’s amazing how they do it and, you know, the culture in there is absolutely appropriate.
I’m only talking about the culture that I have experienced in the last three years.
Mr Blake: Thank you. Mr Recaldin, I don’t have any further questions.
There are questions from Core Participants.
Sir, do you have any questions before we –
Questioned by Sir Wyn Williams
Sir Wyn Williams: Yes, just one or two. I want to be clear about that last long answer, Mr Recaldin, which included the phrase “Post Office is shot to pieces”. All right?
At one level, that could be taken as a description of the whole of the organisation and, if that is accurate, obviously, it is extremely concerning. But you seem to have qualified it, in effect, to that part of the Post Office with which you are most concerned, which I take to be activities around the Remediation Unit.
So could you actually, as clearly as possible, try to define whether you are making a general criticism of the Post Office as an organisation or whether you are making a specific criticism about a specific part of it?
Simon Recaldin: I think – thank you, Sir Wyn, for the opportunity for clarification.
As I’ve said, I have caveated it and, in terms of – there are – yeah, almost the entire Post Office I do not experience and therefore I cannot comment on the culture in the other areas. I am restricting it to me. But I look at the challenges – putting my leadership hat on of Post Office, I look at the challenges around governance and the issues that have been raised by the Inquiry in terms of the Board and dysfunctional behaviour at that level as well. And so when I say “shot”, I mean a number of issues during my tenure at Post Office have been raised that, you know, in terms of challenges of professionalism, of how you run a business.
And so I think it’s a good challenge back, and thank you for the opportunity of clarification, Sir Wyn, in I have to say it’s my challenge – I don’t see it as a criticism – my cultural challenge is very much in the space that I occupy, and that I am – you know, I am frustrated by a number of aspects of it in terms of all I want to do, all I want to do, is pay redress as much as I possibly can to postmasters.
Sir Wyn Williams: But are you telling me – and I’m sorry to put you on the spot – in terms that the culture related to the persons who are leading and determining compensation in the Remediation Unit is such that it is having a really serious, damaging effect on the ability to pay compensation fully, fairly and promptly?
Simon Recaldin: Sir Wyn, I’m not going to go that far because, if it – if I was facing that situation, Sir Wyn, I would not be here. I would not tolerate that; I would not be here. But is it one of my many challenges? Yes.
Sir Wyn Williams: So if I modified it to say that the culture, as you describe it, is a significant contributing factor to some of the difficulties which have occurring in paying compensation fully, fairly and promptly, would you agree with that?
Simon Recaldin: I don’t think it has impacted on fully, fairly and as timely as possible. I don’t think it has impacted on that. But it is another issue to be dealt with, and has impacted, in terms of my time, other people’s time, in dealing with those challenges. So for example, dealing with the past roles issue, has been extremely time consuming.
Sir Wyn Williams: Right. So it’s a constant challenge – it’s a constant challenge?
Simon Recaldin: It’s a con– and, therefore, taking my bandwidth, Sir Wyn, does that mean I’m not making decisions on redress? Potentially. Do I feel that has delayed redress or curtailed redress? No, I don’t because I just work harder.
Sir Wyn Williams: Right. On Past Roles, just so I’m clear, have you now completed any work you needed to do in relation to Past Roles?
Simon Recaldin: Yes, and a plan is now in place around those 27 individuals and that plan is in the course of being executed as we speak, Sir Wyn.
Sir Wyn Williams: Right. Well, that, in effect, is confirmation, I think, of what Ms McEwan told me –
Simon Recaldin: Correct.
Sir Wyn Williams: – that this was very close to the end of the process.
Simon Recaldin: Correct.
Sir Wyn Williams: So that’s where we are, yes?
Simon Recaldin: Yes.
Sir Wyn Williams: Right. Then, finally, just trying to pinpoint who your predecessor may have been, can I mention a name and you tell me if I’ve got the right person.
Simon Recaldin: Of course you can, Sir Wyn.
Sir Wyn Williams: Mr Salter.
Simon Recaldin: Declan Salter. Thank you very much.
Sir Wyn Williams: Right. As I understand it, there was a gap of about eight months between –
Simon Recaldin: That’s right.
Sir Wyn Williams: – Mr Salter departing and you arriving?
Simon Recaldin: Yes, Sir Wyn.
Sir Wyn Williams: All right. Those are my questions. Over to the Core Participants.
Mr Blake: Thank you very much. I think it’s going to be Mr Jacobs first.
Questioned by Mr Jacobs
Mr Jacobs: Thank you, sir.
Mr Recaldin, good morning. I want to ask you about restorative justice.
Simon Recaldin: Oh, right.
Mr Jacobs: You deal with restorative justice meetings at paragraph 35 of your sixth witness statement. These are meetings where postmasters meet – meet you and Mr Read and other senior executives – and relay their experiences and concerns in relation to of the scandal; that’s right, isn’t it?
Simon Recaldin: It is.
Mr Jacobs: You may or may not know but Howe+Co, who instruct me, raised this issue with the Inquiry on 13 October 2022, and since 22 June 2023, there have been 20 days of restorative justice meetings that you have held. I think you have been to every single meeting, haven’t you?
Simon Recaldin: I have.
Mr Jacobs: 57 of our clients, along with at least one supporting family member attended those meetings and over 114 individuals and victims have met you and other directors; is that right?
Simon Recaldin: That’s right.
Mr Jacobs: Here today are Maureen McKelvey, who sits next to me, Heather Earley, and behind me Fiona Elliott and Katherine McAlerney. They are three rows behind me, there wasn’t enough room on the row for them. They were present at the first meeting with you in Belfast in June 2023; is that right?
Simon Recaldin: Yes.
Mr Jacobs: They’re still awaiting for their compensation claims to conclude and I know that you’re going to meet them next month, aren’t you, to discuss –
Simon Recaldin: Yes.
Mr Jacobs: – their –
Simon Recaldin: I was hoping to meet them today.
Mr Jacobs: You were indeed. Other matters have intervened.
So very generally – I don’t want to discuss their individual cases, obviously you’re going to be meeting with them to talk about these cases – where these meetings take place and you or Post Office directors give assurances that everything is being done to deal with things very quickly in terms of compensation, perhaps assurances are given that matters will be looked at within months, what can you do to make good on those assurances now, now that we’re in 2024, coming into 2025, if claims are still ongoing?
Simon Recaldin: What can I do? And I am grateful because the four lovely ladies that you referred to, they do approach me directly. You know, “We’ve had this meeting with you, you know, can you help me with where is my case?” And I’m very comfortable, by the way, with those sort of approaches.
Again, we can’t talk about individual cases.
Mr Jacobs: Of course.
Simon Recaldin: But they are split across – to Mr Blake’s point yesterday, they are split across the Post Office and the Government schemes. And in terms of if the case is in the Government space, I am limited in terms of what I can do about that, but I will escalate within the Government in terms of using my contacts within the Government to say I’ve had a concerning email and approach about the speed, or whatever it is, can you help? And I understand that they do proactively reach out to people to say, “This is where your case and we have this SLA of working within X days, et cetera, et cetera”.
In terms of the cases that are in my schemes – and it’s interesting I call them my schemes, isn’t it – is I escalate within my teams to say “So why are we waiting so long on this? What’s going on on that case? Why haven’t we received the medical report on that?” So I will escalate accordingly.
So your question is what can I do? I’m conscious that I’m talking too fast, sorry. What I can do is I can escalate and intervene to try and help.
Mr Jacobs: Okay. Thank you. The feedback from our clients who have attended these meetings have been generally very positive. People say, “I’m glad” – I’m reading a quote from a client now:
“They listened to our experiences and I felt they were appalled by our stories. Nick and Simon were very engaged with the impact the Post Office had on our lives …”
I’m assuming that’s Nick Read, who sits behind me as well.
You say in your statement that these meetings help you to understand the wide-reaching and long-lasting effects of the scandal on each person and their families. What messages have you felt that it is important to pass on from these meetings?
Simon Recaldin: Where do you want me to start?
Mr Jacobs: Well, what are the main take-home points? For example, Ms McKelvey was acquitted in 2007 and there was no inquiry, no publication of her trial, and other cases where the Post Office secured convictions, they were crowing from the rooftops. That sort of thing –
Simon Recaldin: Yeah.
Mr Jacobs: – these stark issues.
Simon Recaldin: So to be clear, Nick and I mandated ourselves – especially coming back from Belfast. It made a huge impression. And we mandated ourselves that people needed to – you know, people in Post Office needed to hear these stories and that’s exactly what we did. And we started from the top. We started at Board meetings. I can remember when we came back from restorative justice, we mandated ourselves to communicate down, cascade down, these horrific stories, okay?
And “stories” – you use the word “stories”, if it is made up. This isn’t made up; this is real life. And they’re absolutely horrific. And my apologies again for the experiences that you have – you ladies have been through.
It’s unforgivable. And Nick and I made ourselves to ensure that those messages got through. Indeed, as a result of that, there is a sort of training programme, a governance training programme that is now in place, that actually tells some of these stories in – I think they take snippets from the Panorama programme and snippets from the Inquiry when people were giving their witness statements, in terms of cascading those messages back how serious this actually was.
And, you know, this is a bit of a wake-up call. This is the place we’ve come from and we must ensure this never ever happens again.
This is not – of course, it’s about the shortfall. Of course, it’s about the Horizon system. But you know what this is really about? This is about the journey that Post Office took people through, and that’s the issue. Of course, it’s the IT issue. Of course, it’s the technology thing and the alleged potential cover-up et cetera, et cetera.
But it actually is the way that Post Office spoke to people and dealt with these issues. It’s absolutely disgraceful.
Mr Jacobs: You talk about cascading back and, in your witness statement, you say at paragraph 38 that, following the meetings, you ensure each of the victims’ experiences is shared with the Executive Team.
Simon Recaldin: Yes.
Mr Jacobs: Which members of the Executive Team in particular do you share this with; how does that work?
Simon Recaldin: So I usually post a restorative justice meeting. It’s usually a SEG meeting, which was GE and now it’s SEG, and I have the opportunity to download, more often with the senior executive who was with me at the time, so we do a bit of a joint approach. So it will be the Executive Team.
Mr Jacobs: Part of our clients’ concerns are that there has been a churn in the Executive Team, people move on, and these experiences need to be shared throughout the whole company; do you agree?
Simon Recaldin: I agree.
Mr Jacobs: Do you accept that the culture at the Post Office is still very much a work in progress?
Simon Recaldin: Yes.
Mr Jacobs: You’ve heard the evidence of Mr Ismail and Mr Jacobs in that regard?
Simon Recaldin: Yes.
Mr Jacobs: So what proposals do you have to ensure that the experiences of people like my clients, who are with me today, are communicated throughout the whole of the Post Office, not just the executives who may move on in a couple of years?
Simon Recaldin: Yeah, and there are executives who have attended these who have not moved on or who are not moving on, so there are some there already who will not – Karen is a great example, Karen has done couple of restorative justice meetings and she is very proactive in communicating the message down. And part of the – part of one of our many workstreams is to understand and help build a – whatever a legacy means, ie something permanent that ensures that these stories are never ever forgotten about.
Mr Jacobs: Will these stories be dealt with within the strategic review that the Post Office is conducting?
Simon Recaldin: Not necessarily. It’s yet to be determined about how they are. I’ll give you an example of, at a higher level, in terms of in the Post Office Head Office at Wood Street there is a timeline of where Post Office came from, all the way from wagon and horses, et cetera, all the way thorough. And in there, if you visit it, there is a recognition of the Horizon scandal. So it’s formally on the timeline. It’s formally embedded in history.
Now it’s important that these journeys that many postmasters experienced, these awful journeys, that they’re embroiled and embedded in the understanding of Post Office, and to ensure it never happens again.
Mr Jacobs: I want to ask you about wider restorative justice and this was something that was raised in correspondence back in 2022 with the Inquiry. The proposals that those instructing me have put forward are for a number of measures that go beyond simple payments of compensation. It’s not an exhaustive list but I’m just going to tell you what they are and ask you questions about them.
So the first proposal is for ongoing psychiatric and counselling support for subpostmasters and their families.
Simon Recaldin: Mm-hm.
Mr Jacobs: Second is bursaries to assist with the retraining of postmasters and for the education of their children whose education was disrupted by the scandal. Then a tangible memorial scheme to mark this as the largest miscarriage of justice in British legal history, that sympathetically records the experiences of the subpostmasters and how profoundly they and their communities were affected.
Then steps to restore reputations within local communities, engagement with the local press.
What steps have Post Office taken to bring these sort of schemes about?
Simon Recaldin: So a number of those opportunities have already been taken. So in a restorative justice meeting, we do offer how can we – is there anything we can do to help you?
Now, we also recognise, you know, money is not going to fix this. These ladies know that: money ain’t going to fix this. So it is what else can you do? And it’s about – there’s a journey here. And if those restorative justice meetings mean they can move one millimetre towards a better place on that journey, then that’s a success.
And many what appear innocuous requests, actually we can do it, and we have done: articles in local press about complete exoneration because of the stigma in the particular area. Done those sort of things. Offering references, simple things like that.
One lady I met wanted to have the exoneration signed by Nick Read that her conviction had been overturned because she wanted to put it in her toilet next to the conviction that she’d had.
These are – but to your point, sorry, to your point, all those other things you’ve mentioned are all being considered in terms of so what legacy are we going to leave here to reflect this?
Mr Jacobs: The point I’m making is that this isn’t really something for individuals to ask for. There will be many people who are affected by the scandal who feel too traumatised to even meet with Post Office. Is there a plan for a wider restorative justice scheme, for example to include straight-up compensation for the family members who might not form part of the existing schemes; is there any provision that’s being planned for a wider scheme, statement of principles, as to what Post Office will do rather than just individual offers?
Simon Recaldin: So there is a working party that is pulling together proposed ideas of what legacy we should leave and bursary, extra, in terms of the legacy, something to be referred to, something to be used in the future. You specifically talked about friends and immediate relatives. We have had an approach from a group representing the children of victims, and we are meeting them shortly, to listen to their story.
Now, they’ve already met, I understand they’ve already met with Fujitsu and their request is not necessarily to talk about compensation, they just want to tell the story and, absolutely, we should listen to their story.
Mr Jacobs: What about Fujitsu? Paul Patterson has been recalled to give evidence on 11 November. Has he contacted you or has anyone in Fujitsu contacted you about restorative justice proposals?
Simon Recaldin: Not to me, no. Not me personally.
Mr Jacobs: We’ll hear what he says about this next week but my question for you is: do you think it would be appropriate for Post Office to speak to them about these issues, to speak to Fujitsu?
Simon Recaldin: I think all options should be explored.
Mr Jacobs: When do you think these restorative justice proposals that you’ve outlined will be implemented?
Simon Recaldin: If they’re implemented – and, you know, the thorny issue of funding, as ever, will have to come up, outrageous as it does seem to be – then it will certainly – I would suggest, you know, it would have to be in the next year, they would have to establish something. I don’t know is the answer but I’m trying not to put a timescale on it but it’s recognised that something that should be done.
Mr Jacobs: I need to ask if I have any further questions to ask.
Mr Stein: Sir, just give me one moment to speak to my junior.
Sir Wyn Williams: Hang on, I can’t quite hear.
Mr Stein: Sir, that was my interruption. I just need to speak for one moment to Mr Jacobs about one matter of further questioning for Mr Recaldin.
Sir Wyn Williams: Yes. (Pause)
Mr Jacobs: Thank you. I’ve got one question to ask you, a very good point that Mr Stein has asked me to raise.
This Inquiry is going to finish at the end of this year, isn’t it?
Simon Recaldin: Yes.
Mr Jacobs: The hearings. How can there be any clarity and oversight by the Inquiry in relation to restorative justice if the Post Office won’t commit to a programme between now and the end of this year?
Simon Recaldin: Well, I can absolutely give you assurance it is an issue that is live, and that is being discussed as we speak in terms of what – I had a meeting about it literally last week. So I can give you that commitment that this issue is not going away, this opportunity is not going away. I mean, I am sure Sir Wyn will make his own mind up around how that’s incorporated into the Inquiry.
But you have my assurance that this is absolutely a work in progress. I don’t know what more I can give there. Apologies.
Mr Jacobs: Will you commit to providing a report in relation to proposals and progress before the final report of this Inquiry, so that this is something that will be considered and subpostmasters will know what the proposals are and it will be part of the Inquiry process?
Simon Recaldin: I think that’s absolutely reasonable.
Mr Jacobs: So you will commit to do that?
Simon Recaldin: I will commit to a proposal of what we should do in – absolutely, yes.
Mr Jacobs: I have no further questions. Thank you. I’m grateful.
Mr Blake: Thank you. Sir, if we could take our morning break now, and then we have questions from two further Core Participants, I believe.
Sir Wyn Williams: Fine. So what time shall we resume?
Mr Blake: 11.30?
Sir Wyn Williams: 11.30? Thank you.
Mr Blake: Yes, thank you.
(11.15 am)
(A short break)
(11.30 am)
Mr Blake: Thank you, sir. We’re going to hear from Ms Page and then Mr Moloney.
Sir Wyn Williams: Yes.
Questioned by Ms Page
Ms Page: Mr Recaldin, do you take responsibility for the mess that the Post Office compensation schemes are in?
Simon Recaldin: I feel very accountable for the state that the compensation schemes are in. I make myself accountable for them.
Ms Page: Should you have resigned by now?
Simon Recaldin: That’s a good question. I think there is a very, very strong argument that maybe I should have done.
Ms Page: Do you think your mistake was to accept the job, even though you knew that the Post Office should not be running the compensation schemes itself?
Simon Recaldin: No, absolutely not.
Ms Page: Is that why they’re not working, though?
Simon Recaldin: I wouldn’t say they’re not working. Nobody has said to me they’re not working.
Ms Page: You tell us, no doubt sincerely, that the schemes you run are not bureaucratic, that they are sympathetic. You say you don’t recognise the idea that they were set up to deter applicants through tough eligibility criteria, evidential requirements, and yet our clients tell us the opposite and the fact is nowhere near enough of their claims have been resolved after all this time. Do you not accept that the problem is the very one that you identified in your interview: too many of the people administering the scheme are not independent?
Simon Recaldin: No, I don’t accept that. I don’t accept that too many people are not independent enough. I think – no, I don’t accept that.
Ms Page: In one of the emails, and I’ll just give the reference rather than bring it up, BEIS0000849, that’s the email chain with Professor Moorhead from the Horizon Compensation Board, and in it you tell him that 73 people –
Simon Recaldin: That’s right.
Ms Page: – who worked for the Post Office over the 20-year period that the Inquiry is looking at, 73 of those people were found to be working in the Remediation Unit.
Now, those are people who worked in the Post Office when it maintained a fortress mentality towards subpostmasters. So whatever they say to you and whatever they say to themselves, they are effectively the old guard, aren’t they?
Simon Recaldin: I don’t know what “old guard” means. I recognise the number – I think that note was to Chris Hodges, the Chair of the Advisory Board and that number is a number of how many people were working in Post Office at the time who were currently in RU at the time – were in RU.
Ms Page: Yes.
Simon Recaldin: That’s not where they used to occupy roles that the Inquiry – is of interest to the Inquiry. That’s a completely different number. That number is the 27 number that has been articulated here. So I was asking the specific question that the Advisory Board were asking me about how many were working at the time, and many of these were counter clerks –
Ms Page: Yes.
Simon Recaldin: – ie roles which were of not interest to the Inquiry.
Ms Page: But, nevertheless, they grew up in a Post Office which encouraged them to think of postmasters, subpostmasters, as the enemy, and that’s why your unit has a culture which gives claimants a hard time, no?
Simon Recaldin: I don’t agree with that statement.
Ms Page: They are asked to provide documents from many years ago, sometimes documents which the Post Office would have sent to them in the first place, or surely should have kept on file; they are asked to provide further and further update medical records, as we’ve already heard about Ms Skinner’s case, but she’s not alone in this. This is the sort of conduct where postmasters are made to prove every point. Do you not recognise that?
Simon Recaldin: No.
Ms Page: You’ve told this Inquiry that you are or were outraged that Brian Trotter was still in the unit but you have described how hard it was to get rid of him and how, even at the end of his fixed-term contract, his line manager, ie a member of your unit, would not deal with it, felt that it would impact badly on others, felt that he’d done nothing wrong. That shows the rot in your unit, doesn’t it, Mr Recaldin?
Simon Recaldin: I think I’ve been clear with the Inquiry in the last session about the culture that I face. And forgive me, I’ve never used the term “get rid”. That’s disrespectful. I’ve never used that term.
Ms Page: No, but the term is not the point; it’s the people around –
Simon Recaldin: It is the point because it’s about respect. It’s about the respect of individuals.
Ms Page: It’s the people around Mr Trotter not just Mr Trotter himself that’s the issue. Everyone in the unit affects the people around them. And you’ve described how his line manager was unable to see the point, was unable to see why he should be exited. I think that’s the term you like. She couldn’t see the point, could she? “He’s done nothing wrong”, she said.
Simon Recaldin: I didn’t say that, I said – and hopefully the script will help me – I think I said she was clearly uncomfortable with delivering the message, and I asked her “Are you uncomfortable in doing this?” And she said, “Yes”. I said, “Would you like somebody else to deliver it?” And she said, “Yes, I would”. So I took her up on that option.
Ms Page: Here’s an example of how having these people in your unit can play out. Mr Shiju, one of our clients, applied to the HSS, and Caroline Richards attended a good faith meeting in his case – Caroline Richards, who Mr Blake pointed out to you had been an Investigator. She attended that good faith meeting to explain the frankly risible £2,000-odd offer that was being made to Mr Shiju. Following that meeting, she was the main point of contact for Mr Shiju and Mr Marshall, his lawyer, and it then transpired that she had been an Investigator, which had never been disclosed.
Mr Marshall wrote to the Post Office asking about her role and there was no reply from April 2024, all the way through until September 2024, when Post Office explained who she was, and that she had worked as “Dispute Manager” from May 2022 to April 2024, so in other words nearly two years.
Now, is it a coincidence that she was removed from being the Disputes Manager in the same month that Mr Marshall wrote about it or is it another case, like Mr Trotter, of somebody only being exited once they had been caught?
Simon Recaldin: I don’t know whether that’s a coincidence or not. I can’t talk about individual cases, and apologies for that. What I do know is that Caroline Richards is no longer working in the Remediation Unit.
Ms Page: Why did it take so long to admit what had been going on?
Simon Recaldin: I’m not quite sure what “going on” is.
Ms Page: Well, two years of her working as Disputes Manager and then many months before that was confirmed, why did it take so long to admit that she was in that role when she plainly shouldn’t have been?
Simon Recaldin: I don’t think there’s any – so these individuals are not – they’re not decision makers around that. They are in roles which do not require decisions so –
Ms Page: She attended a good faith meeting.
Simon Recaldin: Yes, she did.
Ms Page: Do you not see the problem?
Simon Recaldin: Good faith meetings are not decision making meetings. I recognise the optic, of course I do. I recognise the optic of that –
Ms Page: Is it about the optic or is it about the reality that she should not have been in that role?
Simon Recaldin: And the fact that that individual has been moved out is a recognition of that. And I am aware of the case. It is – look, it’s really difficult to talk about individual cases but I’m – you know, absolutely from my understanding of the case and in terms of the individual, I apologise that that risk has become apparent and I believe that Post Office have dealt with that risk.
Ms Page: These claimants are not difficult people, are they, Mr Recaldin. They want to settle and move on but your schemes are failing to deliver, aren’t they?
Simon Recaldin: These people are wonderful people.
Ms Page: In the circumstances of significant delays, interim payments are crucial, aren’t they, because it’s what makes the difference for people who are sometimes very desperate, between being able to carry on to get full and fair compensation and giving up, isn’t it –
Simon Recaldin: Yes.
Ms Page: – that interim payment can be that difference?
Simon Recaldin: Yes.
Ms Page: Yet you told us yesterday that the Department had prevailed upon you not to offer interim payments and countermanded interims that had been authorised?
Simon Recaldin: I did.
Ms Page: You also told us that in the HSS scheme, if an offer is made but not accepted, people will receive the offer as an interim payment if they ask. Why make them ask, Mr Recaldin?
Simon Recaldin: I don’t think I said that. If I do, I apologise. I think I said that, if they dispute their offer – if we make an offer and they say, “No, we dispute it”, we – in that letter, we offer them 100 per cent interim payments.
Ms Page: Why not just send them the money?
Simon Recaldin: They have to accept it. So we have to – they have to sign something to say, “We accept that interim payment”. So it’s just an administration thing but the offer of that payment is in that dispute letter.
Ms Page: Well, then there’s HSF.
Simon Recaldin: Yes.
Ms Page: You’ve been told directly by our clients, Ms Felstead and Ms Skinner, that HSF press every advantage on behalf of their client, the Post Office, just as they did when settling the GLO. Alan Watts, lead partner for Post Office compensation, also responsible for negotiating the 2019 GLO settlement. Catherine Emanuel, the recipient of a highly contentious email from Rodric Williams, has conduct of much of the compensation arrangements. It was an obvious problem, it was an obvious problem from the start, and yet there’s HSF, one of the most expensive firms in the country, still there, no doubt getting paid faster than the SPMs. Why?
Simon Recaldin: Sorry, the question is why are HSF still there?
Ms Page: Why are they still there?
Simon Recaldin: Because they are still instructed by Post Office on certain cases. As you know, they operate the back office, the working environment, the operational engine of the HSS and they still advise Post Office on the OC claims.
Much, much more of that OC process is – over the time of my tenure, is now with Post Office. But there is the independent panel, and that’s the key thing about the OC, is that Sir Gary is there now to provide that independence for anything. And it is – and Mr Blake mentioned it earlier, that Sir Gary’s services in terms of opining on those cases has yet to be utilised. I would encourage, absolutely encourage, for the usage of Sir Gary.
Ms Page: There’s another structural problem, I would suggest, with the HSS scheme. You’ve told us that it’s built on the principle that redress can only be paid to the person or legal entity that the Post Office contracts with.
Simon Recaldin: Mm.
Ms Page: That might have worked perfectly well as a principle, were it not for the history, because, as we’ve learned, at no stage over the 20-year period that we’re looking at did the Post Office make sure that every branch had a clear and well-understood contract in place. Have you taken that on board: are there any processes to ensure that both the Post Office and the applicant agree that the claim is actually based on the correct contract?
Simon Recaldin: I don’t know how to answer that question. I go back to the scheme, in terms of the scheme is there to deal with any entity who has a contract with Post Office or had or has a contract with Post Office.
Ms Page: Well, here’s the difficulty – and I’ll give you two examples, but they will by no means be the only people, I’m sure, in this situation – applicants who didn’t necessarily have the contract are being rejected, even though it’s clear that there is no eligible person left to claim.
So, first of all, I’ll talk about Mr Colin Savage. He worked in partnership with his father at a branch. When his father became unwell he was treated as if he was the postmaster. Importantly, he was reported to the Procurator Fiscal as if he was the postmaster. He was interviewed about the shortfalls, criminally, as if he was the postmaster. His father has passed away, the partnership no longer exists and his claim has been rejected: Post Office say he has no contractual relationship.
This is essentially the same problem faced by Gowri Jayakanthan – who I’m sure you’ve already heard about, the tragic case of the husband who took his life after the Post Office goons came for him – and her claim was rejected on the basis that the company who he operated through has been dissolved. These are people who are the obvious only person who could claim because there is no other person or legal entity in existence that could claim and yet they are being rejected; do you see the problem?
Simon Recaldin: I do. I absolutely do see the problem and, in terms of the – you know we’re in engagement on the – I can’t talk about individual cases. I really apologise.
Ms Page: The principle is the point.
Simon Recaldin: I understand that and, in that first case, I do not – I recognise the second case, I do not recognise that first case but you mentioned partnership there. If you’d like to give me further details outside this, I’m more than happy to look at that but I don’t recognise it.
Ms Page: Well, we can certainly give you details –
Sir Wyn Williams: Can I just interrupt a moment because I don’t want to be too bogged down in the individual case, but I am interested in the process, Mr Recaldin, that should follow when, for example, an applicant is rejected on the basis, shall we say, that they were not the contracting party. Now, if that is disputed, what should be the next step and how quickly should it happen?
Simon Recaldin: So the – if – for an eligibility issue, it sounds as though this is an eligibility issue –
Sir Wyn Williams: Yes.
Simon Recaldin: – then they can absolutely have the right to challenge that rejection of eligibility and that would come into my governance and then we would say – well, we would look at it to say, well, is there any more information we need to clear up this eligibility challenge?
Sir Wyn Williams: Right.
Simon Recaldin: I think in my evidence when I talked to Mr Blake, he asked me how many of those cases there were, and I think there were a handful of those cases.
Sir Wyn Williams: Sure but –
Simon Recaldin: There is a process.
Sir Wyn Williams: So the process is to go back to Post Office. What about going to someone independent, at what stage does that happen? If there’s an impasse, both sides are acting in good faith, they simply can’t agree, all right?
Simon Recaldin: Yeah.
Sir Wyn Williams: At what point does an independent panel or person cut the knot, so to speak, and make a decision?
Simon Recaldin: Well, then we can escalate it and I think we have escalated similar issues into the panel, into the independent panel, to make that call.
Sir Wyn Williams: Right, so in the overturned conviction process, that will go to Sir Gary and his panel?
Simon Recaldin: Yes, in an overturned conviction, yes, that world be an opportunity, yes, correct.
Sir Wyn Williams: In HSS, it would go through the various stages which ultimately would lead to a mediation or arbitration. At the moment there’s no appeal process that you can use?
Simon Recaldin: No, I’m suggesting, actually, that if it’s an eligibility issue, that can go to the independent panel, for them to opine on.
Sir Wyn Williams: Okay, the same panel that decides the compensation?
Simon Recaldin: Yes.
Sir Wyn Williams: That would be non-binding, would it not, because they don’t bind anybody, but the Post Office always, so far, has accepted what they’ve said?
Simon Recaldin: Thank you, Sir Wyn. Correct.
Sir Wyn Williams: Okay, fine. So I’ve got the process.
Simon Recaldin: Yes.
Sir Wyn Williams: Thank you, Ms Page. I think we have to leave it with the process, if we may.
Ms Page: Thank you, sir.
Just then two final bones of contention, if I may.
Firstly, for many subpostmasters who were prosecuted, they gave the Post Office the money which was said to be the Horizon shortfall, either as compensation or confiscation.
Simon Recaldin: That’s right.
Ms Page: Those who have had their convictions overturned obviously should receive that back with compound interest, agreed?
Simon Recaldin: Mm-hm.
Ms Page: Why hasn’t that been carried out proactively? Mr Kalia, who sits at the end of the bench here, had his conviction overturned in 2021. He borrowed £22,000 from his late mother and he still hasn’t had that money back. Why hasn’t this been done proactively; why does it wait for the claimant to ask?
Simon Recaldin: I don’t know, and I understand that others have been done proactively. So it’s a good shout. Thank you. I’ll look at that because I don’t know why because others, I know, have been.
Ms Page: Well, thank you. No doubt Mr Kalia will look forward to that and, no doubt, others too.
Then finally this, and this is a tricky one I acknowledge, but many subpostmasters have described how they spent weeks, months, sometimes even years covering shortfalls from their own money before running out or running out of people they could borrow from, and obviously those figures won’t show in Horizon. What effort has been made to try to think about how to compensate people for that?
Simon Recaldin: Compensate them for the monies they’ve put into –
Ms Page: Yes.
Simon Recaldin: So if they’ve had a shortfall and the used their savings to make good –
Ms Page: Yes.
Simon Recaldin: – to balance the books, then I might have missed the point and I apologise if I have, is that not an HSS claim?
Ms Page: Well, as I understand it, the HSS claim only works if the shortfall shows on Horizon but, if they’ve been covering the loss, as many of them did, before they started to say, “I just can’t do this any more”, Horizon won’t tell you how much they’ve done, have they?
Simon Recaldin: The scheme activates when the shortfall has been settled. So we can see the cash coming in, and so, you know, the scheme is activated by a shortfall and it’s settlement.
Ms Page: I see.
Simon Recaldin: And, therefore, that would be an HSS claim.
Ms Page: So –
Simon Recaldin: I might have misinterpreted that and I apologise if I have.
Ms Page: No, it may well be that I’m thinking about it from the perspective of those who have had their convictions overturned.
Simon Recaldin: Yeah, okay, understood.
Ms Page: Under those circumstances, does that mean that they should apply to the HSS?
Simon Recaldin: No, no. They should get that redress. They should get it through the OC process.
Ms Page: Is that something that you can take forward because, again, we have clients who have not had that sort to compensation repaid?
Simon Recaldin: Well, I need to know about that then because, if that is the case, they should have been and I apologise if they haven’t been. But that’s the process. The process is wrapped up in that. So I’d be very interested in hearing about those cases, please.
Sir Wyn Williams: But in relation to that, Mr Recaldin, it surely is inherent in the fact that they were convicted, that there was, at the time, alleged to be a loss –
Simon Recaldin: Correct.
Sir Wyn Williams: – which has now been shown to be wrong and so the figure simply needs to be accepted, does it not?
Simon Recaldin: Correct, correct.
Ms Page: I’m looking at two slightly different losses, sir. I apologise if I’m not making myself clear but there’s obviously the loss which showed, and they were –
Sir Wyn Williams: I see –
Ms Page: – prosecuted –
Sir Wyn Williams: But on other occasions when they put money in –
Ms Page: Yes.
Sir Wyn Williams: – which was not the subject of a charge; that’s what you’re talking about, is it?
Ms Page: Exactly, so previous to whatever shortfall they were prosecuted over. So that’s the bit that I was asking about but I think we’re all clear now and you’re saying that they should be recompensed for that?
Simon Recaldin: Okay.
Ms Page: Thank you.
Sir Wyn Williams: Yes, fine. Thank you, Ms Page.
Mr Moloney?
Questioned by Mr Moloney
Mr Moloney: Thank you, sir.
Mr Recaldin, I’d just like to ask you some questions about aspects of the working of the schemes. The first matter I’d like to ask you about is the £600,000 offer in the OC context, if I can use that abbreviation, the overturned convictions.
The £600,000 offer is not a floor for contribution, is it? You’re not guaranteed £600,000 within the OC process?
Simon Recaldin: Correct.
Mr Moloney: Yes.
Simon Recaldin: Well, sorry. You are if you accept it as full and final settlement.
Mr Moloney: I’ll ask you a few more questions and then that will elucidate essentially what I think you’re able to say.
During the OC scheme, a schedule of loss is submitted by the claimant, or can be – and this was always the case before the £600,000 offer – schedule of loss is submitted, and there might be disagreement between the claimant and Post Office about the appropriate quantum for the different heads of loss.
As an example, and no more, it’s possible that a postmaster might submit a claim for, let’s say, £650,000, and Post Office might come back and say, “Well, actually, we only think it’s worth 550”.
Once a postmaster has submitted a schedule of loss, after the implementation of the £600,000 offer, once a postmaster has submitted a schedule of loss, the £600,000 offer is no longer available to them, is it?
Simon Recaldin: Correct.
Mr Moloney: Yes. Would you agree that some postmasters who have claims which are more than, but relatively close to, £600,000, might feel pressure, in those circumstances, to accept the offer of the £600,000 rather than risk months of delay in negotiation, perhaps even ending with an offer of less than £600,000 that they have to fight on to the independent panel?
Simon Recaldin: Mr Moloney, you know my views. My views were articulated in the email which has been shared with the Inquiry. So I do agree with you: that is a risk.
Mr Moloney: Yes. Can I just give one more illustration –
Simon Recaldin: Of course.
Mr Moloney: – of how, in particular, that might occur within the OC process, that many of the claims involve heads of damage associated with loss of opportunity.
Simon Recaldin: Yes.
Mr Moloney: Yes. For example, a classic loss of opportunity is a plan to take on another branch that didn’t come to fruition because all plans were interrupted by shortfall, termination, prosecution, conviction, and so on, yes? So there was that loss of opportunity. Inevitably, such claims involve a degree of estimation –
Simon Recaldin: Yes.
Mr Moloney: – of losses over many years, don’t they?
Simon Recaldin: Yes.
Mr Moloney: So there’s a potential for significant difference between the parties –
Simon Recaldin: Yes.
Mr Moloney: – in the estimation of those losses?
Simon Recaldin: Yes.
Mr Moloney: Again, just to use an example, it might be that a claim for £800,000, just to move it well beyond the 600, might be assessed as worth only 450 in response.
Simon Recaldin: Mm-hm.
Mr Moloney: Again, that’s a classic situation where that pressure might be felt by the postmaster to essentially resolve the claim, rather than face stress upon stress of pursuing negotiations around that figure and going to the independent panel.
Did you always understand that the 600,000 was not a floor when it came in?
Simon Recaldin: I think to be fair, yes. So – and, again, that email which the Inquiry has kindly circulated in the bundle, I think, you know, that was me clarifying that because, if it is a minimum payment, then I’ve got 60 cases here that I can quickly top up to 600,000, and they made it clear, no, it’s not. This is not a minimum payment. And I think the Government have been quite clear on that, in terms of the 600,000 was designed to get to settlement.
Mr Moloney: Yes.
Simon Recaldin: The – I call it the risk, I’ve shared the – the risk of that is, as you have beautifully, if I might say, articulated in those two examples, of does the postmaster therefore feel under pressure to accept that because it’s too much hassle to fight for your 800 – you know what, because what happens if it does come out as 450, I’m only going to get 450, as opposed to I could take 600 now. So why take the risk?
And is that pressure? You know, and I understand that. And also the ones on the cusp, where the legal advisers are saying, “You know what, it looks about 650/625, but you could settle for 600”. Is that pressure; is that fair?
Mr Moloney: You know, of course, don’t you, Mr Recaldin, that postmasters making applications are often, even now, very vulnerable, aren’t they?
Simon Recaldin: Absolutely.
Mr Moloney: They face financial pressures, no matter the interim payments because the interim payments are often having to be used for debts that have been built up over many years, as a result of what happened with the conviction. So they are vulnerable in terms of those pressures, aren’t they?
Simon Recaldin: They’ve been waiting too long, Mr Moloney.
Mr Moloney: Can I now move on to ask you some questions about the HSS, the Horizon Shortfall Scheme, and, first of all, about the relationship between – if we can describe it as a relationship – as it were, legal representation, the potential for increased determinations of compensation offers following a panel assessment.
Simon Recaldin: Yes.
Mr Moloney: Lawyers for claimants are not involved – just to reiterate – lawyers for claimants are not involved until after the first offer, are they?
Simon Recaldin: Correct.
Mr Moloney: Yes.
Simon Recaldin: Oh, sorry –
Mr Moloney: To put it another way –
Simon Recaldin: – they can be involved –
Mr Moloney: – there is no funding available for lawyers in –
Simon Recaldin: Thank you.
Mr Moloney: But, of course, looking at it realistically, most postmasters are in the position where they can’t afford –
Simon Recaldin: I agree, I agree.
Mr Moloney: – to instruct lawyers at that stage, can they?
Simon Recaldin: No objections.
Mr Moloney: Post Office, you said yesterday, wanted the process to be legally light. You accept, of course, though that it’s not so light on Post Office side, is it, because there are solicitors who have been instructed to, as it were, deal with the initial application and assess it before it goes to the panel?
Simon Recaldin: (The witness nodded)
Mr Moloney: That’s a nod, Mr Recaldin, but I believe you might be in trouble for not saying the word “Yes”.
Simon Recaldin: I agree.
Mr Moloney: I’ve just seen that you would have been in trouble. Thank you for saying “Yes”, Mr Recaldin.
Simon Recaldin: It was a nod, yes.
Mr Moloney: Yes. Now, obviously, I can’t speak for all claimants but we’ve seen from the correspondence between Hudgells Solicitors and you, that there have been substantially increased offers in relation to cases where they’ve had the benefit of legal advice and there’s been a redetermination of their claim. Could we please put up HUJ00000007, please, that Mr Blakey took you to yesterday, Mr Recaldin, and he identified four examples of those increases.
Simon Recaldin: That’s right, yeah.
Mr Moloney: There’s one example I want to take you to in it, in a moment, and thank you. If we could stay on that page and go down towards the bottom. Just to, as it were, examine why these figures may be so substantially increased, it is sometimes, isn’t it, because of the identification of additional heads of loss?
There is a nod again there, Mr Recaldin. I’m sorry but if you could put “Yes”, as I believe is the indication.
Indeed, you know that was something we alighted on in our compensation submissions as long ago as 10 June 2022, for the Inquiry’s compensation hearing in July 2022, that concern about missing heads of loss.
Simon Recaldin: I do recall that, yes.
Mr Moloney: Back in 2022, a number of small HSS claims had been settled, and it was thought that the more complex claims were the ones that were outstanding and would take a long time to be dealt with. Can we just have a look at number 4 on this page, Mr Recaldin, please. It’s one of those that Mr Blake took you to yesterday. It’s just 4,500 to close to 134.
Now, would you agree, on the basis of that – and I don’t suggest this applies to all small settlements – that it’s not safe to assume that all small claims have been properly settled?
Simon Recaldin: So are you suggesting – sorry, can you repeat that question again?
Mr Moloney: We see £4,000 is a relatively small claim?
Simon Recaldin: Yeah.
Mr Moloney: Back in 2022, there was a degree to confidence that a lot of the small claims had been properly settled –
Simon Recaldin: Yeah.
Mr Moloney: – and that it was the more complex ones that were outstanding. Would you agree, and I don’t suggest this applies to all the small settlements, but that is an illustration of how it would be wrong to assume that all of the small cases have been safely settled in the absence of legal advice?
Simon Recaldin: I think there is a case here, that looks like a small – and I don’t know whether that’s an offer or a settlement. I would need to know more context behind this case because I think what may have happen is that the lawyers have done their usual excellent job in identifying additional heads of loss and additional information to make that significant jump. So I’m not quite sure whether you can there that into all small offers are –
Mr Moloney: Quite.
Simon Recaldin: – unsafe.
Mr Moloney: No –
Simon Recaldin: You’re not going to that far?
Mr Moloney: – I’m reversing that because I’m saying it would be wrong to assume that they all are safe?
Simon Recaldin: Correct, yes.
Mr Moloney: That, perhaps, I hope you’d agree, is an illustration of why it would be wrong to assume why they all are safe –
Simon Recaldin: Yes.
Mr Moloney: – and we see because that is a revised offer in 2024. Now, if I can just use this as an example for another potential concern, is that that 4,500, going to 134, would not be saved by the 75,000 offer, would it? So we have a situation where we have small offers and then, while the 75,000 will cover that, but that wouldn’t save that, would it?
Simon Recaldin: No.
Mr Moloney: No. Just to slightly explain that in slightly more detail, a person who had received £4,000, a postmaster in financial difficulties, might consider £75,000 to be an offer that could not be refused. It’s a very generous offer, it might be thought but, once that offer was accepted, there would be no potential for appeal of that, would there?
Simon Recaldin: That’s correct. So, again, this is the motivation behind settlement.
Mr Moloney: Yes.
Simon Recaldin: So they were keen to get settlement, so people can move on in their lives and, therefore – but in that example, absolutely, if there’s – if the 75,000 were offered on your line 4, and they accepted it, they would be walking away from their appeal rights.
Mr Moloney: Yes, and accordingly, given the process, they essentially might be in the position where they’d lost out on £58,000 by not being able to pursue that appeal?
Simon Recaldin: Correct. But I would have hoped that that would have been an informed decision.
Mr Moloney: Yes, yes. Are you able to help with this: it’s right, isn’t it, that, so far as the IAP is concerned, the independent appeals process, are you aware there’s been no consultation with postmaster legal representatives on the proposed structure of it?
Simon Recaldin: I’m pretty sure there hasn’t been. It’s very much a Government initiative at the moment, so no doubt I will suggest that might be coming. But I am not aware of any engagement so far.
Mr Moloney: Thank you. Can I just deal very briefly with one issue of evidential uncertainty?
Simon Recaldin: Yes.
Mr Moloney: You said yesterday that you believed that evidential uncertainty is always resolved in favour of the postmaster. I don’t suggest that evidential uncertainty leads to, as it were, the complete dismissal of a claim under a particular head of loss but it can reduce the level of payment if there isn’t sufficient, as it were, documentary proof, can’t it?
Simon Recaldin: You are referring to potential discounts –
Mr Moloney: Yeah.
Simon Recaldin: – to the amount being claimed because of the evidential – the evidence that has been reduced?
Mr Moloney: That’s it.
Simon Recaldin: I sort of – and I guess I would, wouldn’t I, Mr Moloney – but I might see it in a slightly different way, if I can just share that?
Mr Moloney: Of course.
Simon Recaldin: It is a different optic on it to say – let’s use an example that the claim is for £100,000 but because there’s – and it does say this in the letters, I appreciate it says this, but because of the evidential uncertainty we’re going to discount by 25 per cent and, therefore, our offer is 75,000, that’s an example that you might be using.
Mr Moloney: Precisely. All I wanted to just clear up, Mr Recaldin – and I’m not suggesting that anything that you said yesterday was wrong – but there may be, as it were, a reduction in the payment for the evidential uncertainty –
Simon Recaldin: Yes.
Mr Moloney: – it wouldn’t be a dismissal of the head –
Simon Recaldin: Correct.
Mr Moloney: – simply a reduction?
Simon Recaldin: Correct. And I think there is another opportunity here – but I would say this, wouldn’t I – is that, actually, the evidence that’s been adduced on those is not enough – is not enough – is actually zero. So the claim is for 100,000 but, on the evidence that has been adduced is zero. But because of the overall claim, the overall story and the overall approach, actually, we after going to pay 75,000 of that.
It’s a different optic, I understand that, but it is – it reflects on the evidential standards. So because the panel understand that the bar is very, very low, so it doesn’t have to get much to get to a full claim. So if there’s virtually nothing then, actually, well, we are going to go – in that example, we are going to go to 75,000 anyway, despite the fact that there’s very, very little evidence.
I do appreciate, however, that when the letter comes out, it does look like you claimed 100,000 and, because of the evidence, we are discounting you by 25 per cent. I do appreciate that.
Mr Moloney: If the Chair will forgive me, just moving from a question in relation to the HSS back to the OC scheme, just to try and help in terms of the clarification of a question Ms Page just asked, shortfalls which are not related to the shortfall that led to conviction are routinely claimed in the OC scheme?
Simon Recaldin: Yes.
Mr Moloney: Often, as Ms Page said, then there is no documentation to support those shortfalls but a similar process applies in relation to consideration of those shortfalls within the OC process, as we’ve just examined within the HSS?
Simon Recaldin: That’s my understanding.
Mr Moloney: Can I ask you about delay in HSS, and one particular aspect of it, which is raised in the correspondence –
Simon Recaldin: Of course you can.
Mr Moloney: – which is about there being significant delay with HSS, which you’ve acknowledged that there are occasions on which there is significant delay, and one of the aspects of that is cases going back to panel.
Simon Recaldin: Yes.
Mr Moloney: Is the decision at the moment about cases going back to panel being taken, essentially, by Post Office, rather than it being a joint decision between Post Office and the claimant?
Simon Recaldin: I think that’s a fair challenge, Mr Moloney. I think it has been a Post Office decision and for good reasons, in terms of consistency of outcomes, because as I’ve described, I think, yesterday, the independent panel have that moment when they opine, they recommend and then they take that step back and say, “Right, how consistent is this and how fair is this?” And if something does go back to panel it is usually supported with new information, a different take, a different – a witness statement, et cetera, et cetera. So there is more information to consider.
So to put it back into the same forum would seem logical and seem the right thing to do, to maintain the independence and to maintain the consistency and the fair overview.
However, as I articulated to Mr Hudgell the other day in my response to his – to this letter you’ve just showed – is I think, you know, Post Office should be more flexible about that now and – not as a result of delays but all the schemes maturing in a way, that that could be now a choice of the legal representative and the client around whether or not they want that to go to panel or whether they prefer to have a mediation or a face-to-face.
Mr Moloney: Because going back to panel does significantly increase legal costs, doesn’t it?
Simon Recaldin: Which are paid.
Mr Moloney: Of course.
Simon Recaldin: Yes.
Mr Moloney: But in terms of getting the money out there quickly, as it were –
Simon Recaldin: Yes, yes. I’m more concerned about the delay –
Mr Moloney: – to get people into a room, without there being additional legal costs, without there being the costs of the panel, it may actually save money –
Simon Recaldin: Correct.
Mr Moloney: – just to get people in the room and hammer out a result, rather than going back to panel?
Simon Recaldin: I have to say I’m more concerned about the time it takes to get into panel and get out of panel. But yes, you’re absolutely right, it would save legal costs.
Mr Moloney: Yes. Just one other aspect of HSS costs, if I may. It’s only recently that people have been able to secure treatment costs under HSS, isn’t it?
Simon Recaldin: Mm, yes.
Mr Moloney: That, whilst it was decided in June, was not essentially communicated until September of this year?
Simon Recaldin: I’ll take – forgive me, I don’t know but you are – you’re usually very fact based, Mr Moloney.
Mr Moloney: Thank you very much for that, Mr Recaldin.
There’s been delay on that. Have governance issues slowed that down, in terms of –
Simon Recaldin: Yes.
Mr Moloney: Yeah?
Simon Recaldin: Yes.
Mr Moloney: Is it unduly pessimistic to think that it might take another two years for all HSS decisions to work through at current rates?
Simon Recaldin: Yes. I think it is unduly –
Mr Moloney: You think it is?
Simon Recaldin: Yeah.
Mr Moloney: What do you think is a realistic time limit?
Simon Recaldin: For all the dispute cases?
Mr Moloney: I think you’ve said there are 1,300/1,400 cases left. How long do you think they’re going to take?
Simon Recaldin: Oh, for all of the –
Mr Moloney: All of the HSS cases.
Simon Recaldin: So that depends on incoming because, if you’re talking about the current cohort, but we’ve got 30 coming in every day, and with the £75,000, which is an HSS case, with that live on the system and live in terms of mailing, we are expecting that the overall number to grow significantly. Now, in terms of getting all that done – and we, you know, we are optimistic in our forecasts about how much of that will be the 75,000 and, therefore, we can automate as much as we can and be efficient around that. So it does depend on those numbers coming in, Mr Moloney, and that is an unknown. But, you know, I think – I shared with the Inquiry the projections on the provisions, and that was pretty clear that the – we are expecting to use those provisions at least up to March 2026.
So I can’t give you – I’m afraid, I can’t give you a precise answer because it depends how many come in.
Mr Moloney: So that’s 18 months, potentially, rather than two years?
Simon Recaldin: But many of those cases we will be dealing with will be new cases.
Mr Moloney: Of course. You’re getting about 30 a week in terms of new cases?
Simon Recaldin: At the moment, we’re getting about 30 a week but that’s going to ramp up significantly.
Sir Wyn Williams: Isn’t the reality, Mr Recaldin, that it’s wholly dependent on how many people take £75,000 quickly? If a lot of people decide that’s not enough, then we’re still – I think Mr Moloney may be underestimating in saying two years away from finishing?
Simon Recaldin: It – you’re right, it does depend of the take-up of the 75,000. I would say, Sir Wyn, that other efficiencies that we’re putting in place in the over 75,000 cohort will speed that up too.
Sir Wyn Williams: No, I’m sure you’re trying your best, Mr Recaldin, to be as efficient as possible but the overwhelming feeling I get from your evidence is that a reasonably quick resolution of all cases in HSS is very dependent upon many people accepting £75,000.
Simon Recaldin: Yes.
Sir Wyn Williams: Fine.
Mr Moloney: Just two very short matters to finish with, please, Mr Recaldin.
You’ve explained that joint losses aren’t available under the HSS scheme, and that’s because the HSS is based on contractual relationships.
Simon Recaldin: That’s right.
Mr Moloney: Ms Page asked you about this.
That absence of compensation for joint losses stands in contrast to all the other schemes, doesn’t it?
Simon Recaldin: Mm. I appreciate that. Correct.
Mr Moloney: Do you think that inconsistency needs to be addressed?
Simon Recaldin: I think it will be discussed. I think it needs to be discussed. I don’t know whether it will be addressed.
Mr Moloney: Finally, you’ve mentioned culture at Post Office and I just want to ask you one aspect about that. I’m not going to ask you to elaborate any further but there was a serious data breach earlier this year when the GLO settlement deed was published online and it included the personal details of those parties in the GLO, their names and addresses, and so on?
Simon Recaldin: It did.
Mr Moloney: Was that data breach a reflection of culture at Post Office in any way or not?
Simon Recaldin: No, absolutely not. That was a genuine – genuine human error. And Post Office are so sorry that it happened. It shouldn’t have happened. We put in a process of who should have been in place that would pick that up. Genuinely, it was an upgrade of the website and the link to the GLO settlement agreement had broken, which was on the website. Just the link had broken and they were refreshing that link. To refresh the link they had to go and get the original document to put it there, and they picked the wrong one, ie they picked the unredacted as opposed to the redacted. And Post Office regret that and are very, very sorry for that.
And you know we’re in discussions with legal advisers about what we need to do about that. And it will be very regrettable and absolute apologies for that. It was just – literally it was a human error, they picked the wrong document.
Mr Moloney: That’s all I ask, sir. Thank you.
Sir Wyn Williams: That’s fine. Thank you.
Further Questioned by Sir Wyn Williams
Sir Wyn Williams: There are just a few more questions from me, I’m sorry, Mr Blake. This is to make sure that I have no misunderstandings about things that are swirling around in my head and concerning me.
Let’s start with HSS. As of today, a new applicant can opt to accept £75,000, yes?
Simon Recaldin: Correct.
Sir Wyn Williams: What would I have to do, Wyn Williams, if I was an eligible applicant to HSS, to get the £75,000?
Simon Recaldin: So you would either pick up your post with all the application form in and explanatory notes, or you would go to the website and you would fill in the form and, if you believe that you want to accept the 75,000 offer, then there are – there is a shorter version, there is a short form, and you only have to fill in the first number of questions and then you don’t have to fill in anything else. You send that in and then, providing it’s proved to be an eligible case, you will get an offer of 75,000.
Sir Wyn Williams: Right.
Simon Recaldin: You sign the offer and you will be paid within ten working days.
Sir Wyn Williams: Right. If Wyn Williams had been a bit quicker off the mark and had submitted an application a month before the £75,000 offer scheme came into existence, I would have submitted different information to the Post Office, yes?
Simon Recaldin: You would have submitted the same information but more.
Sir Wyn Williams: Yes. At the point in time when the £75,000 offer came into being, would I, in those circumstances, be able to say, “Right, stop, I’m very happy to take £75,000”?
Simon Recaldin: Yes.
Sir Wyn Williams: That would be by me just writing you a letter saying that or …
Simon Recaldin: No, so if your claim with all the questions answered, if your claim is in the process today, you will actually get a letter to say, “We’ve got your claim but would you prefer to have the £75,000?” And so you will –
Sir Wyn Williams: I will say –
Simon Recaldin: – be approached, Sir Wyn.
Sir Wyn Williams: Right. Fine. In fact, I was one of the earlier people to make an application, and so I had accepted £53,000, all right?
Simon Recaldin: And you’ve settled, Sir Wyn?
Sir Wyn Williams: Yes. So I assume I get a letter saying “In due course, you’ll get another [if my maths is right] £18,000”?
Simon Recaldin: You do indeed, Sir Wyn. That’s exactly what happens.
Sir Wyn Williams: Right, and then I could accept that.
Simon Recaldin: (The witness nodded)
Sir Wyn Williams: That would be true whether it was £53,000 that I’d accepted or £2,000? I’m entitled to the difference?
Simon Recaldin: Or anything in between. Indeed.
Sir Wyn Williams: Yes, exactly. Right.
One further variation on that. I have filled in the form. I’m now back in making an application post the offer of £75,000 being announced. So I’ve filled in the form and, at that point in time, I decide £75,000 isn’t enough: I’m entitled to much more. So I fill in that part of the form. I don’t ask for the 75,000.
Simon Recaldin: Yes, so you –
Sir Wyn Williams: Can I change my mind?
Simon Recaldin: You would complete the entire form, as opposed to just part of the form and –
Sir Wyn Williams: Yes, because I think my claim is worth 150,000.
Simon Recaldin: Yes, and you would make it clear.
Sir Wyn Williams: As time is going along, I get fed up with it all. Can I change my mind?
Simon Recaldin: So, yes. So if you then get fed up, and your claim is in for 150 and is being processed, as part of the process, anyway, you will still, even though your claim is for 150, you will still get a letter from Post Office saying, “We know your you’re claiming for 150 but, actually, there is still this opportunity of 75,000, do you want to take it or not?”
Sir Wyn Williams: Yes.
Simon Recaldin: That will still be an offer to you – made available to you, even if your claim is for over 75.
Sir Wyn Williams: Does that offer to me remain open right up until you actually assess my claim?
Simon Recaldin: No, it doesn’t, because –
Sir Wyn Williams: Because –
Simon Recaldin: You have to take – again, it’s the settlement, Sir Wyn. So if you then – you’re not going to accept the 75, and the jeopardy you face is your claim goes into panel at 150, and it comes out at 50.
Sir Wyn Williams: Then that’s it?
Simon Recaldin: That’s it: you get 50.
Sir Wyn Williams: In between my decision to go for 150 and the actual offer, I can’t change my mind, in reality, can I?
Simon Recaldin: Well, unless you – again, part of the process is, “Yes, you’ve applied for 150 but here’s your opportunity to take 75, do you want to take it?”, you say, “No, I don’t”. Fine, your 150 will continue in the process.
Sir Wyn Williams: Yes, sure but I can’t say I don’t want to take £75,000 on the day I fill in the forms but, say, six months later, because I’m frustrated with the process, I say “Okay, I’ll take the 75”. That opportunity is gone?
Simon Recaldin: You can intercept that. Again, even though you’ve submitted 150, you will get a letter saying, “Yes, you’ve submitted 150 but do you want to take” – so that is in the process.
Sir Wyn Williams: Yes, but it’s –
Simon Recaldin: If you reject that, you’re right.
Sir Wyn Williams: – at the beginning of the process.
Simon Recaldin: Yes.
Sir Wyn Williams: So once I say, “No, no, I’m carrying on with it”, then that’s it?
Simon Recaldin: Yes, correct.
Sir Wyn Williams: So in that sense it’s the same as the overturned convictions process, where, once you go down the road of trying to get more than 600, you are stuck with whatever you ultimately get?
Simon Recaldin: To Mr Moloney’s point, yes.
Sir Wyn Williams: Yes, the two are the same?
Simon Recaldin: Yes.
Sir Wyn Williams: Right.
Simon Recaldin: The jeopardy is there, yes.
Sir Wyn Williams: It’s the same jeopardy in both schemes, which is what I was concerned about.
Simon Recaldin: Yes, correct.
Sir Wyn Williams: Okay, thank you very much Mr Recaldin.
Is that it, Mr Blake?
Mr Blake: It is. Yes, sir. Can we take a five-minute break before Ms Munby comes into the room?
Sir Wyn Williams: Of course I’ll can do that but, first, I’d like to thank Mr Recaldin for giving evidence over a considerable period of time about issues which are close to the heart of very many people. So thank you very much, Mr Recaldin, for your written and oral evidence to this Inquiry.
The Witness: Sir Wyn, can I just take the opportunity of saying one very short statement, please?
Sir Wyn Williams: Of course, yes.
The Witness: I’m just very, very conscious for the Inquiry that my statements, that my latest statements of 6, 7 and 8 – get that right, 6, 7 and 8 – are hugely number based and the questions I was asked was about trends. I hope I’ve helped the Inquiry with their cogitations on it, in terms of that. But I would like to say the same as I basically said to the Select Committee on Friday, and this is not contrite in any way, please, is I am very, very conscious that it’s all about numbers. How many – and I’ve been asked questions about numbers: how many; how long. Behind every number there’s a person and there’s a person whose been taken on a journey and that journey is not a great journey.
And I would like to take this opportunity again to apologise to all the postmasters and postmistresses who have had to experience that journey, not just about the event itself in terms of the shortfall but, obviously that – the journey that Post Office have taken everybody through, which is not a great journey, and it’s something that we really need to learn from because it’s not a great experience and, quite frankly, the way these people have been managed and handled is a disgrace. And we should make sure this never ever happens again.
Sir Wyn Williams: All right, thank you very much, Mr Recaldin.
We will now have a few minutes break. I won’t wander away, so to speak. I’ll just wait here, Mr Blake, and then, when you’re ready, in about five minutes we’ll reconnect. All right?
Mr Blake: Thank you very much, sir.
(12.28 pm)
(A short break)
(12.35 pm)
Mr Stevens: Good afternoon, sir. Can you see and hear me?
Sir Wyn Williams: Yes, I can. Thank you.
Mr Stevens: We will hear from Ms Munby.
Sir Wyn Williams: Yes.
Sarah Munby
SARAH ANNE MUNBY (affirmed).
Questioned by Mr Stevens
Mr Stevens: Please can you state your full name?
Sarah Munby: Sarah Anne Munby.
Mr Stevens: Ms Munby, thank you very much for attending the Inquiry today to give oral evidence and thank you for producing two written statements, to which I now would like to turn. They should be in a bundle of documents in front of you. Could I ask you, please, to turn your first witness statement up and do you see 23 September 2024?
Sarah Munby: Yes.
Mr Stevens: For the record, the first statement is reference number WITN11520100. Please can I ask you to turn to page 24 of that statement. Do you see a signature?
Sarah Munby: I do.
Mr Stevens: Is that your signature?
Sarah Munby: It is.
Mr Stevens: Now, can I ask you please to turn to your second witness statement, dated 2 October 2024. Again, for the record, the URN is WITN11520200. Please can I ask you to turn to page 35. Do you see your signature?
Sarah Munby: I do.
Mr Stevens: Are the contents of those statements true to the best of your knowledge and belief?
Sarah Munby: Yes, they are.
Mr Stevens: Thank you, Ms Munby. Those statements now stand as your evidence to this Inquiry. They will be uploaded onto the Inquiry’s website shortly. I’m going to ask you a few questions about some parts of those statements now and I’ll start with your background, please.
You joined the Department of Business, Enterprise and Regulatory Reform in July 2019?
Sarah Munby: At that time it was the Department for Business, Energy and Industrial Strategy but, yes, in principle, that’s exactly right.
Mr Stevens: Sorry, predecessor department. You’d spent 15 years at that point as a managing consultant?
Sarah Munby: That’s right.
Mr Stevens: Your first role at the Department in 2019 was as Director General?
Sarah Munby: That’s right.
Mr Stevens: What was your area of responsibility as Director General?
Sarah Munby: The job title was Director General Business Sectors and it was primarily a business facing role, looking after the major sectors of the economy that BEIS then had responsibility for, including the car industry, steel, life sciences and various others. At that time, I would say the primary focus of that role was on working with business on the issues related to EU exit and particularly the possibility of a no deal exit. That was probably the single overriding priority of the people in that Department at the time.
Mr Stevens: To what extent, when you were a Director General, were you involved in postal affairs?
Sarah Munby: Not very much. You’ll see from various of the documents that I was copied in and kept informed, so I knew what was happening but, at that point, the sort of channel of decision making and advice was primarily running through Carl Creswell, the Director, up to Alex Chisholm, who was the then Permanent Secretary.
When Alex Chisholm moved on and Sam Beckett became the acting Permanent Secretary, I stepped up my involvement to make sure that there was the right level of senior cover but, prior to that, I think it’s fair to say that Alex had been involved in it for some time, it was obviously a really serious priority issue for the Department. I was new both to the Department and the Civil Service, and so he was taking kind of primary carriage of that issue.
I was kept informed but I think you’ll see from the record that I wasn’t an active player on the scene, really, until that point that Alex left the Department.
Mr Stevens: You were appointed Permanent Secretary to the Department in July 2020?
Sarah Munby: That’s right.
Mr Stevens: You remained there until 6 February 2023, when you moved to the Department for Science, Innovation and Technology, again as Permanent Secretary?
Sarah Munby: That’s right, that was the point at which BEIS, the then Department, ceased to exist.
Mr Stevens: I want to start by looking at the Department’s oversight of Post Office. Please can we look at your second statement, page 12, paragraph 24. You say:
“Historically, I understand from the record, there had been serious inadequacies in [His Majesty’s Government’s] oversight of Post Office.”
Pausing there, what are the serious inadequacies you’re referring to in this paragraph?
Sarah Munby: Well, I think it’s, first of all, important to say that, you know, clearly a terrible, horrific miscarriage of justice had occurred and, regardless of what the arrangements had or hadn’t been at that time, I think it would be reasonable to say that there – you know, it almost sort of goes without saying that there must have been some serious inadequacies in order for that to have taken place.
But, specifically, I know there’d had been a kind of series of conversations – to which I wasn’t party, I only know this from the later record – about the extent to which UKGI were able to access senior officials within the Department, and that Carl Creswell’s team had been created as a policy team within BEIS, in order to (a) make sure, frankly, that there was, you know, broader and deeper oversight and (b) to make sure that that connection between the activities of UKGI and the Department was much stronger.
And that team was sort of in place and functioning by the time I joined the Department.
Mr Stevens: So you go on to say, immediately after that sentence, about the dedicated Post Office policy team which had been created in the Department. As you say, that was established before you joined as a Director General. How do you say that the establishment of the Policy Team assisted the Department with its oversight responsibilities of Post Office?
Sarah Munby: Well, there was a distinction between the primary role of the UKGI Shareholder Team and the Policy Team. I’d characterise it in a couple of ways. The first is that UKGI were focused on, I suppose, the issues as they relate to sort of looking at the Post Office itself: governance, quality of the Board, quality of management, financial performance, risk management, that sort of set of corporate governance issues.
And the Policy Team had a broader remit, which you might say is sort of looking outward at the issues as they related to the Post Office, including the policy framework set by Government, the relationship between Government, not just BEIS – because, of course, Post Office was providing services to many other departments as well – that relationship between the Post Office and Government. They did a lot of the work on securing financial approvals, both within the Department and more broadly within Government, from the Treasury.
And I think the second distinction I would draw, and this is true in general, where you have UKGI and a Policy Team in the Department or, indeed, any other Department in Government, I draw a sort of distinction in personnel as well. So what you’ve got inside UKGI are typically people who are involved in multiple corporate governance situations who might be sitting on multiple boards, supported in a community that’s made up of people who do that kind of work. The Policy Team, by contrast, would be made up of what civil servants would recognise as sort of fairly kind of mainstream policy colleagues who have sort of spent most of their career thinking about how you deal with ministers, what are the Parliamentary considerations, all of the sort of set of issues like that.
And so I think that’s just the other thing to note: as well as having different areas of focus, I would characterise those two teams as having a kind of different backgrounds and skillsets. That’s not particularly commenting on the individuals involved; it’s more of a general point about the sorts of skills and capabilities that you would look for from UKGI, as a Permanent Secretary, versus those that you would look for from your departmental Policy Team.
Mr Stevens: Again, how does that split, as you’ve described it, assist with improving oversight of Post Office itself?
Sarah Munby: I think probably, in part, by addressing the weakness that I was talking about earlier, ie the extent to which UKGI colleagues, who were obviously closely involved in events at the Post Office, were able to sort of access ministers and senior officials within the Department.
And the second is, frankly, it’s a set of people who are focused on where are ministers on this; where are Parliament on this; what’s the broader context? And that isn’t directly about kind of specifically governance of the Post Office, but I do think it’s really important contextual work that you would want to have in place as part of your overall system of oversight.
Mr Stevens: Could we please look at UKGI00011874, please. You see it’s a document dated 31 October 2019, “BEIS, Partner Organisation Governance & Sponsorship: Post Office”. We don’t need to turn it up but at page 23 you are listed in the distribution list for this document. Would you have read this at the time it was issued?
Sarah Munby: Yes, I would assume so.
Mr Stevens: Could we turn, please, to page 3. We have an “Executive summary” of this document. It says, “Opinion”:
“Some improvements are required to enhance the adequacy and effectiveness of the framework of governance, risk management and control.”
Is this referring to effectively the Department’s oversight of Post Office itself?
Sarah Munby: I think that’s right, yes.
Mr Stevens: We see there a series of bullet points at the bottom, the first of which says – well, no, let’s look at the head before that:
“In the context of improving existing sponsorship and shareholder activities, we have identified the following areas for improvement for which corresponding recommendations have been made in the action plan in this report:
“[1] Improving communication links between the Post Office Policy Team …”
Pausing there, is that the team you were just describing in distinction from the UKGI team?
Sarah Munby: Yes, that would be the team led by Carl Creswell.
Mr Stevens: “… and the BEIS Partnerships Team.”
What is the BEIS Partnerships Team?
Sarah Munby: The BEIS Partnerships Team was a team that sat at the centre of the Department, responsible for looking not specifically at our relationship with the Post Office but more broadly at the structures and capabilities across BEIS for dealing with what we referred to in BEIS as partner organisations, but you would more normally see referred to as ALBs. So, in effect, it’s sort of centre of excellence for ALB management and governance.
So what they’re commenting on here is the extent to which the Post Office Policy Team is engaging with that departmental internal central team who were looking at how we look at the Post Office but, also, you know, UKRI, the Met Office, Companies House, et cetera, et cetera. There were around 40 such organisations that that central team would have been looking at.
Mr Stevens: Some of the companies you referred to there, or public corporations, were also assets that were overseen by UKGI.
Sarah Munby: Yes. Some also had UKGI involvement. Some didn’t –
Mr Stevens: Some didn’t?
Sarah Munby: – among that 40 group.
Mr Stevens: It says:
“Discussions between the Policy Team and the Partnerships Team are infrequent with no regular engagement around performance, risks, issues or concerns. This could result in risks or opportunities to share good practice being missed, negatively impacting [Post Office’s] operations or BEIS’ oversight of [Post Office].”
Do you know what, if any, steps were taken to address this point?
Sarah Munby: I don’t remember specifically but, typically, I mean this was an internal audit report, so we would have taken a series of actions around it and then tracked them through. I think it’s perhaps useful to say that although, you know, this is absolutely a point that was, you know, raised by internal audit and something that, you know, I would have wanted us to address and would assume that we did, I wouldn’t put this point on a kind of enormously serious level because what we’re discussing here isn’t, you know, for example the extent to which the Post Office Policy Team were engaged with the Post Office, or the extent to which they were engaged with UKGI.
What we’re really talking about here, I suspect, is a Post Office team who were dealing with quite a unique asset. It doesn’t have that much in common with the majority of the other ALBs that BEIS were looking after, and has its own, like, very serious and specific issues at this time.
So I can imagine it seems plausible that the Post Office Policy Team weren’t making it their top priority to engage with that central Partnerships Team within the Department and, although that would be something you would want to improve, I wouldn’t have seen that as a sort of critical failure point, and indeed, I think that’s reflected in the yellow RAG rating assigned here.
Mr Stevens: If we turn the page, please, there’s a bullet point, the first one on the screen:
“Providing greater visibility of [Post Office] risks within BEIS. The BEIS Policy Team does not have oversight of risk management activities conducted within [Post Office] and/or concerning [Post Office] by UKGI or the BEIS Partnerships Team … This could impact the Department’s ability to influence/oversee the mitigating actions in place to ensure risks are aligned to their risk appetite and the quality of risk reporting to the Permanent Secretary.”
Would you agree that seems a more significant concern?
Sarah Munby: Yes, absolutely.
Mr Stevens: What steps, if any, were taken to address that point following the issuance of this document?
Sarah Munby: I think it probably makes sense to sort of put this in context of wider work that was going on to improve risk management in the Department at the time, including then when I was Permanent Secretary. I mean, this feature that you’re seeing here of, you know, an insufficiently clear risk escalation process, which is sort of one way of describing what you’re seeing here, I don’t think was a specific Post Office issue. Actually, there was just more maturity needed around risk.
You know, later we, for example, created a new Implementation Directorate with new SCS roles, who were responsible for improving the system. It was something that, you know, I, as Permanent Secretary, worked on –
Mr Stevens: When you say “the system”, what system?
Sarah Munby: The risk reporting system, as in how do you make sure that when a risk has been identified in one place in the organisation, it is cascaded up through a Directorate level risk register to a group, ie Director General level risk register, and into the departmental risk register? If I may just make one comment: I do not think that, at this point, there was any lack of visibility of the risks around the Post Office for the Permanent Secretary.
It was one of the areas of the Department that the then Permanent Secretary was very highly personally involved in. So I think it is absolutely an important sort of process point to address in the context of the quality of risk reporting in the Department. But do I think at this time there was any danger that there was sort of invisible, unknown risks surrounding the Post Office specifically, as it related to the Permanent Secretary? I would not have been concerned about that at the time, given the frequency of interactions and the level of personal attention that was being paid to these issues.
That doesn’t mean this isn’t something that, you know, needs looking at but I would see it more as a kind of a challenge to the maturity of the risk processes, rather than a kind of danger to Post Office oversight specifically.
Mr Stevens: On that, we have seen plenty of evidence of the approach to Post Office, following the Common Issues Judgment and the involvement of the Department in overseeing matters. A lot of time was spent on it. Looking forward, one of the things the Inquiry is investigating is what systems are in place to ensure that risk is properly identified in the Post Office going forward and so are there systems in place in response to this document?
You said in your evidence then that it needs looking at. My question is: has it been looked at and what concrete steps have been put in place to ensure that Post Office risks are properly visible within the Department?
Sarah Munby: Well, if I may say so, referring to current state, that would be a question best put to the Permanent Secretary for the Department for Business and Trade. I can’t comment on current state. I can only comment on what happened during my tenure, which I’m very happy to do. I just wanted to clarify that.
Mr Stevens: Let’s limit it to by the time you left the Department.
Sarah Munby: I’m struggling to recall in detail. I’m sorry, I wasn’t particularly prepared for this line of questioning, and I’m happy to go back and look at the documents. I can’t remember exactly in detail what the kind of process forms were by which the risk process went through but, by that point, we had in place Directorate level, DG level, risk registers, we that principal risks at a departmental level, and we had a team responsible for oversight of that overall system, and I would certainly expect that the risks involving the Post Office would be kind of flowed through that.
We, of course, also had an Audit and Risk Committee within the Department. I know that they spent quite some considerable time going around arm’s-length bodies, including the Post Office. I forget the exact details but I think there were occasions where the chair of the BEIS ARAC was involved in risk discussions at the Post Office. I’d have to check the record on the detail.
So I would say it was a reasonably effective risk management framework. My experience of risk management in the Civil Service has been that, given the diversity of risks that you are dealing with, it’s quite difficult to establish what I would call a really best practice risk management framework. Just worth noting.
UKGI, of course, also has its own risk management approach, and you also see Post Office risks tracked there. I just thought that was worth mentioning.
Mr Stevens: I’ll move on to another point you raise at paragraph 24. It doesn’t need to come up on the screen, I’ll read it to you. One of the points, you say there’s been serious inadequacies in the oversight of POL, Post Office, by the time you took over:
“I do think much of this had been addressed.”
One of the points you make is:
“We had a minister leading on postal affairs spending very significant time on the Post Office who, for example, met monthly with the CEO.”
Can I just clarify that. Was there a change in the Minister’s portfolio at that time to enable the Minister to spend more time on Post Office or was it just that he or she chose to do so at the time?
Sarah Munby: I’m not completely sure about that because I think that changed – I don’t know if there was a change that sort of predated my involvement. What I can say with confidence is that for Paul Scully, who was the Minister for the majority of this period, Post Office was – just to give you some examples, when I would have a regular catch-up with him, it would always be sort of the first point on the agenda. You know, I saw from sort of the flow of submissions and responses that it was something that was getting very serious ministerial attention.
I think I have heard, but I have – I wasn’t able to kind of put together a record to demonstrate this from the papers that DBT were able to supply – I think I have heard that the portfolio had shrunk at that point. But the change clearly wasn’t really significant, otherwise you would sort of see it in the public portfolios very straightforwardly, and I couldn’t quite pick it up when I tried to check the record on this point.
So I’m not sure I could say that with confidence but I did not perceive, during my time as Permanent Secretary, that we had a problem with a lack of ministerial sort of time or energy on the Post Office. I – others, of course, may have a different view but I didn’t see that problem.
Mr Stevens: Sir, I know we’ve only just started but I am moving on to another topic, so I wonder if it’s a good time to break for lunch there?
Sir Wyn Williams: Yes, by all means. 2.00 all right?
Mr Stevens: Yes, sir. Thank you.
Sir Wyn Williams: Fine.
(1.00 pm)
(The Short Adjournment)
(2.00 pm)
Mr Stevens: Could good afternoon, sir. Can you see and hear us?
Sir Wyn Williams: Yes, thank you.
Mr Stevens: Can we please bring up the second witness statement at page 13, paragraph 26. You’re discussing governance arrangements at this point of your statement and at paragraph 26 you say:
“I think the hard part tended to be actually getting [Post Office] to do what ministers wanted. As described above, the Department did, from 2020, have a power to issue directions to [Post Office], but ministers could not routinely become involved in the nuts and bolts of operational decision making.”
At paragraph 27, you give an example of this in managing legal costs, which we’ll come back to. But if we could go over the page to the bottom of paragraph 27, you say:
“For these kinds of important but ultimately operational matters, if [Post Office] did not do as we asked we had relatively few levers with ‘teeth’ other than the ones that had other issues (like removing the Chair or pushing the organisation into financial trouble).”
Did you experience similar problems with other ALBs, namely finding it hard to get the ALB to do what the Minister wanted, whilst you were Permanent Secretary?
Sarah Munby: I’m just sort of testing my mind for examples. Yes, I think, is the right answer to that. It would be – it varies according to the structure of the arm’s-length bodies and an example like Post Office is sort of quite arm’s length, so there will be other examples like executive agencies where you might have, you know, much more explicit clearances over salaries within the organisation, for example.
But the idea that, you know, like in many situations where you’re in a supervisory or a management function over somebody or another organisation, although you may have a sort of set of formal levers at your disposal, often sort of your first port of call is influencing. You know, it’s a bit like if you’re managing an employee, you might ultimately have the ability to terminate them but that’s a really drastic step and one that you wouldn’t take until you’ve gone through talking to them about why you want them to do what you want them to do, hearing what they think about it, trying to give them some training, increase their capability.
You know, I think it’s a very common journey and I certainly saw it with other arm’s-length bodies as well. I do think it’s particularly acute in this case because the combination of being at the more extreme end – like a long arm, if that makes sense, in the context of the Post Office, combined with being so troubled and having, rightly, so much political attention on it, I think that’s a really difficult combination, whereas if you took a body –
If I compared it to something like the Ordnance Survey, just to take an example, you’d have a similar set of levers and a similar degree of arm’s lengthness, but just a much lower level of heat, at least during this period, around the organisation and its performance.
So I think that’s why it sort of comes quite acutely in the case of Post Office, because you’re combining a long arm with a very great deal of legitimate political interest.
Mr Stevens: Reflecting on matters, have you thought or can you assist us with whether there are any other levers that would assist in managing Post Office in this way?
Sarah Munby: It’s a good question. It’s maybe worth just reflecting for a minute on – you might say, if we had the ability to make directions, why isn’t that sufficient? I mean, that’s actually quite a strong lever, right? That’s effectively creating a capability for the Secretary of State to say, “Post Office, you must do X”.
I think the reason that has tended not to be that relevant is there aren’t that many decisions in a complex organisation like the Post Office that are sort of really, like, simple and binary: should I X or should I Y? It’s often much more complex. So if it comes to something isolated and specific, a sort of direction power, where you can say “You must X”, works well.
I think that direction power came about in response to the events that surrounded earlier handling of the litigation, where there were some quite specific questions, including the one about recusal of a judge – I’m not over all of the detail. But those sorts of matters, you can imagine a department being able to say to an arm’s-length body “You must X, therefore X” but something like “Reduce your legal costs”, which is the example I use in my witness statement, it’s much more of a sort of debatable point because the Post Office, not illegitimately, would want to come back and say, “Well, we need these legal costs for reasons X, Y, Z, we are going to reduce them but not until next year because the contract needs to come up for renewal”, et cetera, et cetera.
So it’s much more of a dialogue about what is and isn’t reasonable, rather than you can order people to do things.
That tends to be over simplistic for what we’re talking about here, which is why, actually, the influence, you know, presence on the Board matters, being part of the discussion, understanding the nuance and the detail. So I think I find it quite hard to answer your question with a really specific, “If only we had power X, we would be able to make everything okay”.
I don’t think it’s like that. I think it’s more like having a strong productive relationship with respect on both sides and listening to each other has got to be the right starting point and I don’t think the formal arrangements we had in this period precluded that.
Mr Stevens: I want to look at one example, please. We don’t need to bring it up, actually. You refer to the review of Tim Parker’s decision not to share the Swift Report – that’s, for the record, paragraph 18 of your statement – you describe it as a governance failure. You say:
“After learning of this and giving consideration to whether we should advise ministers to fire Mr Parker, formal censure was chosen as the appropriate course of action.”
Was a minister involved in the decision to censure Mr Parker rather than terminate his contract?
Sarah Munby: Yes. That decision would ultimately have gone to – I’m – I know for sure it went to Paul Scully, the Minister. I don’t recall specifically whether it went to Secretary of State. It may not have, it may have been a delegated decision. But that was signed off by ministers. But, as I do say – you know, just for the sake of clarity, I do say in my statement that was on our advice, and our advice was formal censure. So you might – I wouldn’t wish to put it only on ministers but, yes, of course, any decision like that would be signed off by ministers.
Mr Stevens: Can we look, please, at POL00104180. This is your letter to Tim Parker after that decision was made on 7 October 2020. In the second paragraph, please, you refer to the background to that, which is well known. Towards the end, you say:
“… we consider it was a mistake not to have ensured that the whole Board had an opportunity to see and discuss the detail of its findings and agree what any next steps should be. With hindsight, this information should have been seen by the Board and we are disappointed that it wasn’t.”
You go on to matters about sharing documents said to be legally privileged.
Firstly, why did you say “With hindsight this information should have been seen by the Board”?
Sarah Munby: I think it’s sort of felicitous drafting. I’m not sure there is any deep significance to “with hindsight”. Had we been asked the question at the time, in possession of the full data, one would have said the same thing at the time. If you or I was transported back to the moment where that decision was made, with the report in front of us, I hope we would have decided that it should have gone to the Board.
Mr Stevens: It might be said that this letter doesn’t contain a sufficient degree of criticism or disapproval to be described as a formal censure. What would you say to that?
Sarah Munby: It’s certainly one of the harshest letters, if not the harshest letter, I have ever written to a chair of an arm’s-length body I’ve been involved with, and I’ve been involved with a very great many arm’s-length bodies over some considerable period. So, you know, opinion could differ, but I would say that as a matter of fact.
It’s fair to say that, I think as I say in my witness statement, as I reflect on it now, I actually think the advice probably should have been to –
Mr Stevens: We’ll come to that in a –
Sarah Munby: – go further.
Mr Stevens: – in a moment.
Sarah Munby: So I agree, in other words, that sort of looking at it now, you wonder why we didn’t go further, and that could include either a sort of harsher drafting or, indeed, a different decision altogether.
Mr Stevens: Was Mr Parker told that dismissal had been considered as an option?
Sarah Munby: I couldn’t say for sure.
Mr Stevens: You just said there about what you say in your statement regarding whether that was the right decision. We don’t need to bring it up, sir, but, for your reference, it’s paragraph 18, page 10 of the second statement. You say:
“With the benefit of hindsight, it was perhaps the wrong decision not to take the harsher course of action and terminate Mr Parker’s appointment.”
So, again, you say “with the benefit of hindsight”, have you learnt anything since October 2020 that now makes you doubt the decision that was made?
Sarah Munby: Well, yes.
Mr Stevens: What would –
Sarah Munby: I mean, I think probably lots of things fall into that category. So, first of all, I think all of us, at least on the HMG and Post Office Management side, over time, you know, the full depth of the scandal in the first place has been sort of further elucidated. So I’m not saying it – obviously, at the time that this decision was made, we knew this had been a very serious error but, as the picture grows around it and you try to isolate, what were the moments that could have made a difference? I think now I would see that moment where the Swift Report wasn’t shared as a relatively critical one in the story.
At the time, I don’t think that was as clear to me, simply because – I mean, I’ve obviously been following the Inquiry closely and all of the events that have happened in HMG as well. That just wasn’t as clear to me at that time. I don’t think there’s one sort of particular fact I’ve learnt but as just the picture becomes deeper and clearer that looks like a critical moment.
I also think at the time, you know, it was an in the balance decision that was considered both ways, if you see what I mean, and, at the time, the advice of the SID was taken into account, and it was also kind of top of –
Mr Stevens: When you say SID, do you mean Ken McCall?
Sarah Munby: Yes, I’m sorry, the Senior Independent Director, Ken McCall. Thank you. It was also kind of the decision in the round was taken in recognition of the fact that, you know, switching people out causes instability and that there would have been all sorts of challenges with trying to get another chair at that time. And I guess that felt like a very important issue in the moment.
And now, when you look back at the picture overall, on lots of cases here I think you ask: should people have been bolder in making changes? I think, therefore, I probably see it with that perspective now.
Sir Wyn Williams: At the time, Ms Munby, were there senior people who were consulted about the issue, who actually favoured terminating the chair, or was it more or less a unanimous view that censure was appropriate?
Sarah Munby: I don’t remember anybody sort of specifically pushing, but it was certainly a decision on which many of us, myself included, felt was very much in the balance, if that makes sense. I don’t think there was a sort of a one – there wasn’t a censure side and a termination side and we were having a face off. It was more like a debated issue that we were discussing as a senior team what we thought was best. And this was where we landed.
Sir Wyn Williams: Okay. Thanks.
Mr Stevens: At the time, were you involved in any oversight or investigation of whether officials within the Department had knowledge of the Swift Review?
Sarah Munby: No, or not that I remember.
Mr Stevens: Do you think such an investigation should have been carried out?
Sarah Munby: Possibly. I don’t remember enough of the facts surrounding the case to give you a really confident answer on that, if I’m honest.
Mr Stevens: I want to turn now to look at some of the compensation schemes. I’m going to deal with it at a relatively high level because we’ve heard evidence from Simon Recaldin, and Carl Creswell will be giving evidence on the issue later this week.
In your statement, is it fair to say that a common theme that you point to as the reason for the delays in compensation is what you describe as an underestimation, initially, of the scale and depth of the challenge in providing redress to subpostmasters?
Sarah Munby: Yes.
Mr Stevens: I want to begin by looking at the effect of Managing Public Money on compensation schemes, please. Could we bring up POL00413475. This is “Managing Public Money”, the May 2021 edition. Would you agree a fair summary of this is that it sets out the main principles for dealing with financial resources in the public sector?
Sarah Munby: Yes.
Mr Stevens: During your time as Permanent Secretary, the Chief Executive of Post Office was an Accounting Officer for Post Office?
Sarah Munby: Yes, it’s a little bit more complicated than that because you have a structure where you have a Principal Accounting Officer at the departmental level and then, depending on the nature of the status of an arm’s-length body, the CEO may be an Accounting Officer in their own right. I think it might be the case in POL, specifically, that they’re more correctly described as an accountable officer, which is – I think it’s a technicality.
But it is, of course, fair to say that what’s in here would represent principles that the CEO of the Post Office should have in mind.
Mr Stevens: As Permanent Secretary and Principal Accounting Officer for the Department, your responsibility was to make sure that there were arrangements in place to satisfy yourself that Post Office had systems adequate to meet the standards required of Managing Public Money?
Sarah Munby: Yes, insofar as they applied to any particular aspect of the Post Office’s operations –
Mr Stevens: Yes.
Sarah Munby: – because, obviously, much of the money that Post Office was dealing with wasn’t quite correctly described as public money.
Mr Stevens: Could we look, please, at page 20. Paragraph 3.3.3 says:
“There are several other areas where Accounting Officers should take personal responsible …”
At points 1 and 3, we see, “regularity and propriety” and “value for money”.
In the documents that we’ll go to, it’s fair, isn’t it, that regularity and propriety, and value for money are concepts that were applied to the establishment of the various compensation schemes.
Sarah Munby: If I may, there are four core concepts that underpin any Accounting Officer test, as I would put on any new announcement that the Department was making. Those are regularity, propriety, value for money and feasibility. And any major new initiative by the Department needs to be assessed against each of those four criteria and needs to have personal sign-off from the Accounting Officer before it can be launched.
Mr Stevens: So I think, subject to you adding feasibility, the answer to my question was yes?
Sarah Munby: Yes, I mean, I guess I’m saying yes, very, very much so.
Mr Stevens: If we turn, please, to page 15, in box 2.4, just sliding down, we have a description of “Regularity”. It says:
“Regularity: compliant with the relevant legislation and wider legal principles such as subsidy control and procurement law, delegated authorities and following the guidance in this document.”
When we are considering compensation schemes, does regularity apply in the sense that the question is whether or not this legal authority to make compensation payments themselves, or does it also apply to whether any compensation payment that is made must itself be justifiable in legal terms?
Sarah Munby: I don’t think it follows from the principles of regularity that you can any compensate people to the extent of your legal obligation. And indeed, I’m sure you know that, you know, within the sort of framework for initially the HSS, the sort of core documents of the scheme were about trying to offer fair compensation, even insofar as that went above what was a strictly legal obligation. And I have certainly never understood regularity to mean that.
Where regularity has been very relevant in the context of the Post Office, where this test has been particularly live, is actually where you’re talking about payments from the Department to the Post Office and then from the Post Office to members of the GLO class, where the question of under what Parliamentary authority were we making those payments – I’m – this is probably well known to the Inquiry – was very kind of extensively explored. That would be a regularity issue: is the expenditure regular; is it properly sponsored by Parliament?
I have never made any comment, I don’t think, on regularity in the context of individual compensation payments, and the reason for that is, ultimately, the Accounting Officer requirements come second to the question of whether the policy intent of the Minister is being fulfilled. So you’re asking the question – the compensation needs to be full and fair, and then we need to find a way of making it regular. You don’t say, “I’m going to use regularity as a way of not making it full and fair”.
So if ministers think that fair goes beyond legal liability – and, ultimately, that’s the sort of question that is for ministers – then the only regularity question is whether we have a piece of Parliamentary authority that we can use to make those payments. You would never use regularity to sort of undermine that ministerial perspective.
Mr Stevens: Just out of that point, how does the value for money aspect of managing public money fit in, in the context of compensation schemes?
Sarah Munby: So basically the same point. It’s worth mentioning there’s – at least in the latest edition of Managing Public Money, there’s quite specific reference to compensation schemes, in which, in effect, it says the same processes apply in compensation schemes. They’re like any other form of public money expenditure and value for money, regularity, et cetera, et cetera, apply.
Again, value for money is always about value for money for a given ministerial objective. So it’s not like you have to justify, you know, is it value for money to deliver full and fair compensation? The requirement is to deliver full and fair compensation. The question that an Accounting Officer would be asking themselves, and I did ask myself, is: are we delivering that full and fair compensation in a value for money way? And there’s probably a few aspects that come up there.
Firstly, and very obviously, are the procedural arrangements for running the scheme good value for money? Normally you would want those costs to be as low as possible, although clearly that’s not an absolute rule because, you know, being slow also adds cost.
The second thing you would usually have top of mind when you’re thinking about a scheme like this is the area of fraud and error. That’s been a really substantial problem in a lot of Government schemes. In this case, I want to be clear I’m not suggesting that there was any fraud in any claims made but you would, for example, want to be confident that you weren’t making payments to people who weren’t postmasters, would be a good example.
An error is another, like, very common characteristic. That would be particularly things like where you make the same payment twice, so you don’t have sufficiently good recordkeeping and you pay out a grant and then you make the same grant again to the same person without realising. That would be an example of error and, again, that would be – regardless of what sort of scheme you were looking at, that would be top of your mind as an Accounting Officer.
I think with compensation schemes it gets more complicated, when you get to what level of compensation is value for money? And, ultimately, the first place you look there is for what was the original policy intent and, in this case, that was for the compensation to be full and fair.
Mr Stevens: But is it fair to say that the value for money is relevant to the question of the amount of compensation that is paid: namely, when considering value for money, does one have to consider whether compensation payments made are too generous or overly generous?
Sarah Munby: It would really depend on what the ministerial steer was. So let me give you an example. In this context, at the kind of early stages of HSS and indeed for some time, this was not just a short-term thing, the sort of principle on which the payments were being made was that there should be fair compensation at an individual level, ie the amount of compensation that an individual received should relate directly to the injury and suffering that they had experienced as an individual.
Once you – once that’s your policy intent, then yes, value for money principles would suggest that you should compensate people to that point, and not further, except insofar as that was a sort of reasonable, you know, compromise in the grand scheme of things.
Whereas, you know, later, I know that the schemes have moved to much more sort of fixed offers that move away from the principle of sort of compensating according to individual level of loss. Once you’ve made that decision that that’s your intent, then you would look at value for money from a different angle.
So I guess you can’t sort of discuss value for money in the abstract without understanding the goal that you’re trying to achieve. But once you have specified that goal and once you have specified a principle like you’re compensating on kind of an individual basis, then, yes, of course you would expect value for money to be relevant, just as it is, I should say, in absolutely every other aspect of any Government money spent anywhere.
Mr Stevens: Can we look, please, at UKGI00018879. If we could go to page 2, please. We see an email from you on 30 June 2020, and it says the subject is “FOR COMMENT CLOSE … [Post Office] Convicted Postmasters Compensation Scheme”. You say:
“One point of clarification from me. Does the establishment of the compensation scheme prevent the malicious prosecution claims? (Ie can it actually close off the risk of larger sums materialising in any case).
“Is it that we expect claimants to prefer a cheaper/less risky route even if for lower benefit? If so how sure are we that will be true?”
What was the purpose of your questions at that point; why did you seek those answers?
Sarah Munby: I hope this won’t seem like a cheap answer. I mean, because I was seeking to understand. So this is very early on in my engagement with this scheme. I’ve just been given a piece of advice. I actually remember, interestingly, not getting, factually, whether it was the case that, by running a scheme, you sort close off the legal route or don’t. And that seemed to me an important point. I wasn’t pushing a particular point of view here. I was genuinely just seeking to clarify the situation and to understand better, it’s quite a large, you know – it’s a significant piece of policy work, significant money associated, and I felt I should understand what was going on.
You’ll see later I get a reply and I say “Sounds good, go ahead”. I didn’t have an agenda.
Mr Stevens: I’m going to look at that reply now, please. Could we go to the bottom of page 1. It’s an email from Tom Cooper, 1 July 2020. It says that it won’t prevent claimants from pursuing a malicious prosecution claim but goes on to say:
“The point is to provide a quicker and cheaper route to redress/compensation than having to go through the courts again. This is in the interests of all parties of course – claimants, [Post office] and [His Majesty’s Government].
“To your last point, we would always expect claimants to take some discount to the full potential value of a malicious prosecution claim because:
“[1] The outcome will be inherently uncertain as in any litigation.
“[2] It will take a very long time (particularly if there are appeals).
“[3] It will involve substantial costs which some/all claimants may have to fund externally and for which they will end up having to give up a large share of the proceeds if they win …”
Is it fair to say that, at this point, one of the policies behind the schemes was to seek to settle the claims at a value less than they may have been at trial?
Sarah Munby: Yes, although I would caveat that by saying I don’t think the sort of overriding consideration was to settle the claims at a value less than they would have received at trial. It was that settlement is – I mean, generally, I think – lawyers might disagree – but generally a better approach for all parties. So I would just – I don’t think that’s to negate what you just said but I just think it was more that context than a sort of, you know, financial minimisation, as the core motivating factor.
Mr Stevens: Can we look, please, at BEIS0000961, please. It’s an email on 8 September referring to a meeting the day before. We see there are attendees from Post Office, including Nick Read and Tim Parker. You are listed there as Perm Sec – Perm Secretary. Can we go to page 2, please, for part of the readout. It says:
“Tom noted that although Alan has taken the thinking on this quite a way, Tom is keen that BEIS/UKGI don’t get too involved in the detail of the schemes but focus more on the communication side of things.”
Pausing there, was that an accepted position within BEIS at that time in September 2020?
Sarah Munby: Hmm, I’m not sure. Sometime around this time, and I’m not sure I could put the chronology, you know, was it exactly before this meeting or after this meeting, but this was during the period where we moved from sort of thinking “This is mostly a Post Office thing” to “We really need to get across this in a very great deal of detail”. And I’m just not sure I could put exactly where this fits in that chronology, apologies.
Mr Stevens: It goes on to say:
“Carl asked whether Perm Sec [referring to you] had any views as Accounting Officer, and ensuring propriety VFM [value for money], ethical considerations on any comms statement. [Permanent Secretary] wanted to know if the wording of the statement was consistent with only mediating on the cases that would come up.”
Can you help us with what that means?
Sarah Munby: I don’t remember.
Mr Stevens: It says:
“The Permanent Secretary noted that none of the schemes are terribly attractive.”
Why did you think none of the schemes were terribly attractive?
Sarah Munby: At that point, we were discussing a range of different options, all of which were expensive, all of which were onerous for everybody involved – you know, Government and postmasters – and kind of being given a set of options to choose from about how we might approach compensation, there wasn’t one that I looked at and thought, “Yeah, you know what? That’s great”. It was choosing between, you know, sort of choosing between difficult options, none of which were perfect.
Sir Wyn Williams: I’m sorry to interrupt again but can I be clear. At this point in time I think we’re in early July, are we, 2020?
Mr Stevens: This is September 2020, sir.
Sir Wyn Williams: Right, so HSS has already launched. So presumably you’re here talking about what to do with the people who were having their convictions quashed. Is that it?
Sarah Munby: That’s right. I think there was a presentation at this meeting about various different approaches for dealing with what later became the OHC.
Sir Wyn Williams: Fine. Thanks.
Mr Stevens: It says:
“Carl said that ‘all options’ and ‘entitled to’ in the statement suggests that Government is committing to give more compensation to claimants than they would actually be receiving.
“Carl/Perm Sec noted that through mediation, some claimants would receive much less than they think they are entitled to.”
Again, can you recall what your – precisely what your concern was here?
Sarah Munby: So I’m going more by reading the text and thinking what it probably meant, rather than having an exact precise recollection. But we were looking at a draft of a public statement, which is very normal at this stage, like what are you going to announce, basically. And here this is, you know, talking about making sure that the statement doesn’t over-promise, relative to what we’re actually planning to do.
And without having the statement draft in front of me, I’m not sure I could tell you what exactly the problem with the statement was but what this looks to me like is a discussion where we’re saying, “Look, the two need to match. If we’re going to give this sort of, like, very forwarded leaning statement are we confident that what we’re proposing, this mediation driven process, are we confident that it actually delivers against it?”
Mr Stevens: Can we move on slightly in the chronology, please, to UKGI00043126. Page 5, please. If we go down slightly, please. So this is from Permanent Secretary: I assume that’s your private office email address?
Sarah Munby: That’s right, yes.
Mr Stevens: “Just had a conversation with Joshua. Sarah has some concerns with the AO assessment …”
Presumably Accounting Officer assessment?
Sarah Munby: That’s right.
Mr Stevens: “… and isn’t happy to clear yet.”
If you could go down, please.
“It has a high [value for money] risk, and we’re not sure why. What we need is an assessment of this announcement, which leaves room to design a [value for money] scheme.”
It goes on to say:
“We need a clearer answer on why we are confident this won’t lead to a regularity challenge.”
Can you recall what was driving your concerns in respect of your Accounting Officer assessment of the schemes at this time?
Sarah Munby: Yes. And with all due respect to those who wrote this particular piece of advice, what this feedback is, is me saying this advice is not good enough. So the advice I received at that time, just to take VFM as the example, had – what an Accounting Officer normally does it is take those four tests I was talking about earlier and gives a rating against each of them. And this piece of advice had a red rating against value for money.
You can’t, as Accounting Officer, just let that pass by. If it has a red rating for value for money or one of the other tests, you need to engage. And, ultimately, if you really thought it was a red rating for value for money, if that was your considered opinion after getting the best advice you could, then you would actually need to ask for a ministerial direction.
Now, I absolutely did not think that was the case here. And what I was asking for is for the team to come back with basically a more intelligent piece of advice. What they had done at the time is they’d said, “We haven’t designed all the details of this scheme yet, it’s still quite uncertain. And so it feels risky so we’re putting a ‘red’ for value for money”.
But what I was trying to point out is all we’re doing is making one step forward: we’re announcing the scheme. We’re not tying ourselves down to an exact set of details. There’s plenty of room within that to make sure that we do design a scheme that passes the Accounting Officer tests and, of course, that would be our intent, and that’s what we would do.
So I was asking them to go back and, I mean, basically create a piece of paper, that rather than saying this is all red and bad and you cannot announce it, reflect the truth, which is that: this is fine from an Accounting Officer point of view and it’s perfectly ready to be announced; which was my view.
Mr Stevens: So we take this as a criticism of a draft, rather than a substantive position on the Managing Public Money assessment?
Sarah Munby: 100 per cent.
Mr Stevens: Please can we look at BEIS0000990. This a briefing on 10 June 2021, so we’re jumping ahead again in the chronology. It’s a briefing which we will come back to. You see it’s on the ownership of criminal convictions compensation, regarding who runs that scheme.
Could we please look at page 3, and paragraph 12 – sorry, not paragraph 12, it’s just a bit further down where it says, “Efficiency”. Thank you. So this is one of the pros, it says, of the Government taking on direct ownership of compensation from Post Office:
“… in either situation, we will need to scrutinise aspects of the compensation closely from an MPM [presumably ‘Managing Public Money’] perspective.”
Sarah Munby: That’s right.
Mr Stevens: “This has caused [Post Office] some frustration in relation to the HSS scheme because of the process and conditions that we have had to mandate.”
Do you recall what Post Office’s concerns were in relation to Managing Public Money in relation to HSS?
Sarah Munby: I don’t really remember them as being specifically about Managing Public Money, but there had certainly been back and forth around governance and our involvement in the governance around HSS. I think, by this point, we had started putting pressure on around legal costs and administrative costs which had been a very kind of tense set of discussions, and that certainly was a Managing Public Money issue.
I think if I had characterised what I knew at this point, I think I would have said more that they had sort of concerns or frustration from a governance perspective, maybe, rather than it being particularly an explicit dispute about Managing Public Money. But, you know, clearly the drafting here suggests that. I just – that would just be my perspective.
Mr Stevens: That document can come down. Thank you.
It’s been suggested by some that the approach to the compensation schemes has been litigious or legalistic. Have you heard that criticism?
Sarah Munby: Yes.
Mr Stevens: Do you have sufficient knowledge of the operation of the schemes to have a view on that?
Sarah Munby: I think I do, although it’s a partial one and I’ll just sort of say it as I see it. I think there’s two aspects to this. The first comes back to what I was talking about earlier, about taking a case-by-case approach to the schemes. And, I mean, in my witness statement I talked about sort of if you went back, what might you do differently? In a way, that original decision to have a scheme that was based on individual applications and assessments of individual applications, even if, for a moment you put aside any concerns about how you do that – I’ll come to those in a second, but just putting those aside – just inherently asking people who have been through something truly awful to go back over it as part of an application process has challenges, even if you do it in the absolute best possible way.
So I think that’s sort of point one.
Point two, then, is actually, particularly through the process here, I think there have been cases – but, you know, frankly, the Inquiry would be as well placed to comment as I am – there have been places where you look back and you think, you know, an individual case was handled not as generously as would be sort of properly viewed as compatible with full and fair.
I don’t think, certainly from my perspective, I never saw ministers or officials seek to achieve that outcome, and I didn’t at the time see any evidence that the Post Office, at a sort of corporate level, was seeking to achieve that outcome. I think others are probably better placed to sort of say what happened on the ground and how it felt. But maybe a reflection would be that, you know, once you pass intent through a system, at the end you might not always sort of feel the intent you started with, especially once you’ve gone down the, you know, perhaps necessary or necessary at the time, road of assessing each case individually because, if you assess cases individually, it takes you down a path of wanting to see some level of evidence.
And you can get into, and you may well wish to, discussions about like what the bar – what the evidential bar is. But the difficulty with a system that assesses individual cases and has no bar whatsoever for evidence, if you have no requirement, is then it is 100 per cent a matter of whatever is asked for, you will pay out, without any process at all. And that is difficult, from a Managing Public Money point of view because, of course, everybody would always like to receive more money and, if you don’t ask for any evidence at all, it’s really hard to know are we compensating fairly or are we starting to get to the point of – I don’t mean sort of minor over-compensation but, you know, really serious over-compensation based on claims that aren’t right.
And that I just – I think that’s a really difficult trade-off. And I do sort of wonder, looking back, you know, how easy really is it to design a scheme that looks case by case but that doesn’t end up feeling litigious to at least some of the participants in that scheme?
Mr Stevens: If we look at your statement, I think you deal with some of those issues. It’s your second statement, please, page 25. It’s paragraph 51. You refer to other approaches and the sort of application-based approach, as it:
“… would necessarily have been much more ‘blanket’ in its nature, and probably would have meant we all had to accept paying people whose circumstances were different the same amount as each other. Likely the only way it could have proved acceptable to [subpostmasters] is if the numbers had in general been much higher overall (‘levelling up’ …). For [His Majesty’s Government] to have gone down this road officials and Ministers would have had to have given up on two quite funnel principles. First, fairness, both as to between different applicants, and to as to between [subpostmasters] and other victims of past injustices. Second, standard use of public money, as we would have had to accept making payments that could not by any normal standard of judgement be viewed as compatible with the formal guidance for spending taxpayer money ([or] Managing Public Money).”
Do we take from your evidence at the time, so putting ourselves back to September 2020 thereafter, that there wasn’t a discussion on these more blanket approaches, which we’ve seen in sort of post-2024?
Sarah Munby: I think I remember we were talking about that meeting earlier where you had the readout from it and you were asking me what things meant.
Mr Stevens: Yes.
Sarah Munby: As I remember, there were options in there that went to tranche-driven approaches, ie where you define a series of classes and then have kind of flat payments within class. I don’t specifically recall but it could have been. I don’t specifically recall a proposal which was around kind of a single very generous class, which is in effect what I’m describing here.
Mr Stevens: So the proposal you’re describing here wasn’t put forward to a minister?
Sarah Munby: It’s not – yes. I think it’s important to say it’s not that lots of people were saying that this was what we should do and I or somebody else and came out and said no, that isn’t compatible with Managing Public Money. I think it was almost perhaps taken as read that we would have a scheme that, broadly speaking, sought to provide as close as possible to full and fair to individuals. And that that might – you might have gone as far as a tranche-based approach, which obviously is not quite as precisely gradated as an individual approach, but is still gradated.
I certainly don’t remember an extensive debate. It may have come up once. I couldn’t swear to that but it certainly wasn’t extensively debated and I certainly never said, “You can’t do that because of value for money reasons”, because the question was never put to me in that anyway.
Mr Stevens: Looking back again at that time, do you think sufficient consideration was paid to all the available options?
Sarah Munby: In one sense, the answer to that has to be no because we’ve now – we’re much further down the path and you look at where the schemes are now and, knowing that that is where you’re going to land, it is just undoubtedly, irrefutably true that, if that’s where you’re going to land, you would have been much better doing it earlier, for everybody’s sake, and particularly for postmasters.
So, in that sense, you know, it was definitively wrong. However, if you go back and look at the environment that we were operating in at the time, you know, being absolutely frank, I think if the proposals, as they are now, had been put on the table at that moment in their current form, but sort of put back into the historical context, I think we would have had insurmountable difficulties with HMT, the Treasury, with Ministers, actually, and possibly, although it’s always hard to answer this, possibly with me as an Accounting Officer.
I think all of those – all of those sort of formal clearance moments would have been very, very difficult to get through. And so I don’t think that kind of radicalism was properly contemplated at the time. And so the question I asked myself is what would have to have been true to get the system as a whole to operate in a more radical mode, faster?
Mr Stevens: What changed between then and now, in the sense of you said, if we know where we are now, it wouldn’t have been possible back then? What do you think the key differences were between the two times?
Sarah Munby: I mean, ultimately, and sort of operationally, the strength of the ministerial steer to address the problem in full, sort of – and I use these words sort of appropriately but kind of at any cost.
Mr Stevens: What caused that change in position?
Sarah Munby: That – it wouldn’t be for me to answer. It happened after my involvement and I wasn’t there.
Mr Stevens: Let’s go to what you say – you talk about some of the reasons for the delay. If we could –
Sir Wyn Williams: Before we do that, Mr Stevens, just so I’m clear, what you mean by “the now” are things like having fixed offers of £600,000 for convicted people whose convictions have been quashed, or fixed payments of £75,000 for people in the HSS; that’s the sort of thing you mean in relation to “the now”, is it, Ms Munby?
Sarah Munby: Yes, that’s exactly right, Sir Wyn. I would add to that list, although it’s not a VFM issue, but the other kind of fundamental overturning of the initial principles would be the mass exoneration –
Sir Wyn Williams: Yes, well –
Sarah Munby: – which would be another example.
Sir Wyn Williams: – that’s the ultimate step, if I can put it in that way.
Sarah Munby: Yes.
Sir Wyn Williams: But the steps to it were things like, in inverted commas, what might be considered – and I choose my words carefully – as “realistic” fixed payment type options for postmasters to take up if they didn’t want to go through a process of individual assessment.
Sarah Munby: Yes, I think fixed payment and interim payment options were of course considered earlier and, indeed, at least in the case of interim payments, implemented earlier. So I think it’s the combination of being fixed and also the relative scale of them. I think that, it’s that combination that it would have been hard – I think, even if we had had an official who was pushing that agenda, I think they would have met obstacles in the system. I just want to be honest about that.
Sir Wyn Williams: Yes. So I don’t mean this in any flip sense at all but Mr Recaldin was talking about the journey that postmasters have been on. You’re almost describing a journey that civil servants and politicians have been on in terms of trying to achieve full and fair compensation?
Sarah Munby: Yes, I think that’s right although, like you, I wouldn’t compare the journeys in their, you know, challenge or emotional cost or anything else, but I think the thing I’ve reflected on is, when you get to the end, you always look back and you think, “Well, why didn’t we just do that to begin with?”, because, as I’ve said, if you know that’s the destination, it’s much better to get there quickly than more slowly. So the question really is: why not; what was it that meant that that didn’t happen?
And I think, you know, there are probably a series of reasons to do with under estimating the scale of the challenge, which you mentioned, Mr Stevens, earlier, but also a belief that the processes would go better than they actually did. A sort of – what now with hindsight is obvious was an excessively high level of faith. I don’t mean in the Post Office’s ability to run those operations, actually, because, as I said in my witness statement, I think many of the challenges might have been similar, even if they had been run by the Department or by an independent body, but a sort of confidence that the application of sensible governance and processes would lead to the correct outcomes.
And, actually, what we saw is that that application of what looked, you know, broadly speaking from my point of view at the time, like quite sensible arrangements, there were quite a lot of errors made. There were points missed, be that around impact on benefits or insolvent businesses, you know, points missed, errors made and approaches that didn’t work out in practice how they were originally envisaged.
I guess, overall, I would look back and say you’re too optimistic about how well the processes would get rolled out. And that’s partly a critique of how they were rolled out but it is in equal part a critique of the sort of optimism that can often plague us when we begin schemes of any kind. I don’t just mean compensation schemes; I mean, a sort of confidence that things will be okay, whereas, you know, perhaps a more sceptical, pessimistic approach that said, “Look, this is going to run into an absolute whole load of really specific challenges and it’s going to end up being slow and painful, we’ve got to cut to the chase quicker”.
If I could sort of put myself back in my own shoes, I think that is the message I would want to have given more.
Sir Wyn Williams: Thank you.
Sorry, Mr Stevens.
Mr Stevens: Not at all, sir. Can we please bring up page 23 of the second witness statement. You’ve got a section there “HSS and the slow beginning”, and at 47 you say:
“I add my own personal apology to the institutional apology that [Post Office] has already made for slow progress during the early part of the scheme’s operation. [Post Office] (and, in turn, [His Majesty’s Government]) had seriously underestimated the scale, complexity and cost of the problem and consequently [His Majesty’s Government] did not press [Post Office] hard enough to, and [Post Office] did not themselves, set up a sufficiently robust operation at the start.”
I think that’s part of what you were referring to there.
Could we go, please, to UKGI00013178.
Sir, just for your note, this document is the note for the meeting in September 2020 that we went to earlier, the briefing note which sets out matters which would have been discussed at that meeting. Not the minutes, I should say, sorry, the briefing note.
Sir Wyn Williams: Sorry, Mr Stevens can you repeat that?
Mr Stevens: Earlier we went to a meeting in September 2020 –
Sir Wyn Williams: Yes.
Mr Stevens: – and you asked a question about the timing of it.
Sir Wyn Williams: Can you just give me the reference to that, and then I can crossreference it in my note.
Mr Stevens: Yes, of course. It is BEIS0000961.
Sir Wyn Williams: Yes, fine. I’ve got it. Thanks.
Mr Stevens: So if we go, please, to page 10, we see what was then the “Historical Shortfall Scheme Update 20 August, (Updated Version from 25 August)”:
“Closure of Application Window: The HSS application window officially closed on 14 August …”
It says that:
“As of 25 August, 2013 claims have been received amounting to around £100 million”, being what has been claimed.
So in your statement you referred to the estimates in July 2020 as being 500 claims costing £35 million. So, already, there’s a significant increase in the scale of the claims facing Post Office by September 2020, yes?
Sarah Munby: Yes, that looks right.
Mr Stevens: It goes on to say:
“Please not that there are a few exceptions to the deadline, notably the cohort of [circa] 6,200 former postmasters who were identified late by [Post Office] and notified about the scheme in July.”
So it must have been clear by September the significance of the claims facing Post Office; would you agree?
Sarah Munby: Yes.
Mr Stevens: The Inquiry will hear evidence that it became clear that the Post Office could not afford to meet the HSS in November 2020; do you recall that?
Sarah Munby: I don’t remember the exact date but that sounds perfectly plausible.
Mr Stevens: It then took four months to resolve funding within Government to meet the HSS –
Sarah Munby: Yes.
Mr Stevens: – do you remember that? Do you recall why it took four months to resolve the funding issues?
Sarah Munby: I think this is going to be a not very attractive answer but four months is not particularly slow, in the context of resolving funding issues. Sort of in between spending reviews, going back and asking for more money for things is really difficult. So I sort of say that by way of context.
The second issue is that, at this point, this is effectively the first moment at which HMG says, “We are fully taking on the financial responsibility that comes with the” – you know, by this point, we knew, right, that this was not the only compensation scheme that we were talking about because the sort of other issues were queueing up behind.
So that was quite an important principal decision that was taking during that time. So yes, first of all it’s about getting money signed off and being able to demonstrate why it’s the correct number and, you know, going back and forth on, you know, are you sure it’s really this number? How much money do you really need? Where are we going to get it from? BEIS, can you find it from your underspends? Do you really need extra money from HMT, et cetera?
But it’s also quite a pivotal moment because it’s the moment where, in effect, HMG sort of takes – like, takes a financial liability that, you know, ultimately by this point was clear was going to be, you know, over £1 billion in aggregate, sort of takes it on to the public purse.
Now, by the way, I’m not in any way suggesting that that wasn’t 100 per cent the right thing to do but it is a swallow, and I think it took a bit of time for the system to make that swallow.
Mr Stevens: Could we look, please, at page 28 of your second statement.
Sarah Munby: Perhaps I might just add – apologies, I was just thinking while you were pulling the document up – that it’s also true to say that the kind of obligations that the Treasury likes least are open-ended, difficult to quantify ones. So that’s why it’s a difficult call, because you sort of knew that the number was going to go up. And however important, however worthy the case is, those are not numbers Treasury likes to deal with because they really make a mess of the kind of bigger picture of the financial forecasts.
So it’s just worth noting that. It’s a sort of – it’s not the just – if it was just a one-off bill and you knew exactly the size of it, sort of one picture, but a bill you don’t know the size of, that you’re going to be committed to over multiple years in an unpredictable manner that’s just particularly challenging from a public finance point of view.
Right that the Government took it on but I think that would be one of the reasons why it took a bit.
Mr Stevens: So do we take it from your evidence that it took four months because, firstly, it was a big decision; secondly it was a difficult decision for the Treasury; and, thirdly, four months, in the grand scheme of things for the Government, isn’t a long time for a funding decision?
Sarah Munby: Yes, I’m not sure I would say it was a difficult decision exactly because I don’t really think there was any sort of meaningful – it’s not like there was a cohort of people who were saying, “We shouldn’t pay this”, it was more just like, okay, really getting to grips with it, and sort of, as you always do with these things, kind of hoping that maybe the first number is too big. You know, when people come to you and this is true in any element of public finance, whether you’re the Treasury dealing with the Department, or the Department dealing with an arm’s-length body, or Director General dealing with the Directorate, people come to you and say they want X, and the first thing you sort of do is go back and say “Are you sure? Is that really the number? Are you sure it’s not X minus a bit?”
Those sorts of negotiations, sort of trying to make the problem be less of a problem from a finance point of view, you would expect that same kind of approach here. Even though, arguably, it’s completely inappropriate here, I think that muscle is just like so deeply ingrained that that will have been going on as well.
Mr Stevens: If we could look, please, at paragraph 59, thank you. You refer to an email from Carl Creswell to you, on 26 April 2021, “Update on the … compensation next steps”, and you highlight:
“It looks increasingly likely to me that we should consider taking on responsibility for the design and delivery of the compensation scheme within BEIS, though that would have large resource implications.”
Sorry, 58, just to orientate us, you’re talking about the question of ownership of OHCS. If we then go to paragraph 60, please, over the page, you say:
“I agreed with Mr Creswell that this was an issue …”
What was your position on whether the Department should take ownership of the design and running of the scheme?
Sarah Munby: I don’t think at that point in the chronology of sort of receiving Carl’s email I would necessarily have immediately jumped to a position but I completely agreed with Carl that we needed to look at it seriously and it was a really important question and it was one we were going to have to face into and address. That’s what I mean by “I agreed with Mr Creswell that this was an issue”.
Mr Stevens: If we look at the briefing that follows please, we’ve looked at it already, it’s BEIS0000990. Have you had a chance to review this briefing recently?
Sarah Munby: Yes, I’ve seen this document recently.
Mr Stevens: Did you contribute to its drafting?
Sarah Munby: I couldn’t tell you. I wouldn’t imagine terribly substantially. It wouldn’t be usual for me to be involved in the detail of a piece of drafting like this but I may have commented on it.
Mr Stevens: We see it’s for the Secretary of State to approve/decide, Post Office ownership of criminal convictions. If we look, please, at page 3, paragraph 12, which I erroneously tried to go to earlier, it says at the end:
“Whether or not to take on direct responsibility is a delicate decision, so we would welcome your views, in light of the following analysis.”
Is it fair to say that, in this briefing, there wasn’t a suggested course offered for the Secretary of State?
Sarah Munby: That’s right.
Mr Stevens: That can come down. Thank you.
Outside of this written briefing, did you advise the Secretary of State on a position to take at any point in respect of whether the Department should take over the running of the scheme?
Sarah Munby: Not that I recall.
Mr Stevens: We know that, in your documents, it refers to the fact that the Secretary of State made a decision. Were you involved in the decision-making process, in the sense of advising him on that?
Sarah Munby: Not that I recall, although I couldn’t absolutely swear to it. I mean, what I do know is that, at the time, you know, perhaps you say this is sort of typical, but this was another one which I thought was pretty finely balanced. So I didn’t have a kind of – I wasn’t pushing a particular perspective because I think if I had felt very strongly that one answer was correct, then I would have pushed for the advice to offer ministers a much kind of clearer perspective.
But, ultimately, I think we all thought that this was a – quite a difficult call and one that ministers should make.
Mr Stevens: So from your perspective the decision to keep it with Post Office was a ministerial decision without significant steer from the Civil Service?
Sarah Munby: With advice around sort of the pros and cons, but not – I don’t think we pushed ministers into one option or the other.
Mr Stevens: Could we look, please, at your statement again, page 31 – second statement, sorry. At the bottom, please, paragraph 64, you refer to the GLO scheme. You say:
“Even at the beginning of my tenure, it was obvious that the GLO settlement had (while being legally sound) caught a deep natural injustice, as those involved received so little money in their pockets are legal bills were settled and the litigation funders received their slice …”
You refer to the scheme being announced.
If we go over the page, please:
“This was, in the early part, probably due to a conceptual assumption by officials and Ministers that the GLO settlement had closed the book on this issue. Obviously this was legally true (the relevant postmasters had no further legal claim against [Post Office]) but it was not morally true. But by Carl Creswell’s email of May 2021 we were clear we needed to act. This proved difficult to make happen. It took significant time to find a legal means to pay the money.”
Which I think you were referring to earlier in your evidence, when we were discussing a legal basis for making payments.
Sarah Munby: Exactly. This was a – this is a very hard constraint, in the sense that the Department literally just cannot pay out money without a legal basis. It’s not a sort of matter for opinion or judgement, we didn’t have a legal basis as we understood it. We later found one. Therefore we couldn’t make the payment until we had a legal basis.
And that’s got – just to be clear, legal basis here has nothing to do with the legal claims or anything like that. It’s a Parliamentary ability to spend. You can only spend in line with the authority that Parliament has given you.
Mr Stevens: At 66, you say:
“This problem was real (and I think BEIS and HMT officials did a good job at locating the Appropriation Act option). It does of course a raise the question why [His Majesty’s Government] didn’t just legislate to create spending authority, rather as eventually happened in 2024 under the Post Office (Horizon System) Compensation Act. I think the answer comes back to my point above about the extent of radicalism both officials and Ministers were contemplating – emergency legislation of this type is exceptionally difficult to make happen, and, speaking frankly, requires an enormous head of political steam to have built up.”
Why do you think the sufficient amount of political steam wasn’t there to push through a specific piece of legislation such as this?
Sarah Munby: I think two reasons. The first is, as indeed turned out to be true, a sense that had we really turned over every stone to make sure a spending power didn’t really exist? So it’s obviously in the situation you find yourself where you think, “Oh, I don’t have a spending power, it’s obviously much preferable to find that you actually do have one, rather than to run a very unusual, very unusual, piece of legislation designed to create a power, you know, very specifically around something like this on an emergency basis”.
That’s – you know, it’s very much out of the ordinary. That doesn’t mean it’s not good thing to do but people would always turn to “What do we have, what do we have, what do we have?”
And I think there was a – as there often is when you’re searching for something, you think you might find it in the first week, and then you think, “Oh, I’m going to find it in one more week”, and you sort of keep going looking for it and, in the end, we did find it but it took a while. How could you have shortcut that process? We could have found it faster but it was pretty obscure, or we could have just said, “Stop looking, I’m just going to legislate”. But finding Parliamentary time is really hard and so I think all throughout, not that the question particularly came up in that form, but I think Ministers would have probably said, like, “Okay, just before I go to what will be a very, like, difficult Parliamentary journey, could you just be really, really confident that you definitely haven’t got one?”
Mr Stevens: Was there sufficient consideration of the effect the delays were having on the subpostmasters who were affected by the absence of compensation payments?
Sarah Munby: Good question. I think there’s probably a bit of sort of boiled frog going on here, in the sense that you – each little individual bit of delay to look a little bit longer, to avoid having to pass legislation, probably didn’t seem that bad. You know, you always think, “Oh, it’s worth looking a little bit more, it’s worth looking a little bit more, it’s worth looking a little bit more”. Each marginal extra bit of time makes sense and all of those little ones are manageable from a postmaster point of view.
But when you look at how long the whole thing took in aggregate, you say, “How can you have taken so long? You should have done something completely different at the start”.
But it doesn’t – the problem doesn’t arrive at you in that form. You think – you constantly think you’re about to find something.
Mr Stevens: Sir, that’s probably a good time to take the afternoon break. If we could come back at 3.30.
Sir Wyn Williams: Yes, certainly. Fine.
Mr Stevens: Thank you, sir.
(3.17 pm)
(A short break)
(3.30 pm)
Mr Stevens: Good afternoon, sir. Can you see and hear us?
Sir Wyn Williams: Yes, thank you.
Mr Stevens: Thank you, I’ll carry on.
Please can we bring up BEIS0000975. We see this is a letter from Nick Read to you, dated 29 September 2021. At paragraph 2, we see it says:
“However, on account of the management and controls of [Post Office’s] litigation costs not being adequate, I am unable to release the payment due until [Post Office] can demonstrate satisfactory control. Payments would be made by BEIS following a shareholding approved budget.”
So what you’re referring to here is withholding the network investment and network subsidy payment because the Department’s position was that Post Office hadn’t got control of its litigation costs; is that fair?
Sarah Munby: Yes, litigation costs meaning payments to lawyers.
Mr Stevens: Would you accept this was quite a drastic step to take in terms of the levers that you can pull, withholding payments to Post Office?
Sarah Munby: Yes, and only done after, shall we say, exhausting persuasion as a tool. It is worth saying that, of course, before we did this, we did analyse whether it would actually sort of cause an immediate operational challenge to POL, and it we didn’t think it would.
Mr Stevens: Can I just pause you there. My question is: did you ever consider doing something similar to put pressure on Post Office to increase the efficiency with which it dealt with the applicants to the various schemes?
Sarah Munby: No, I don’t remember that being proposed.
Mr Stevens: Why not?
Sarah Munby: I don’t know why people didn’t propose it to me.
Mr Stevens: Why did you not consider it?
Sarah Munby: Indeed. Sorry, I just thought it was important to clarify. I don’t know. Ultimately, probably, because we never quite got to the point where there was resistance from Post Office. So I would say, on legal costs, by the point of this letter, there’d been a long period of debate around it, and certain people on the Government side, in both the Treasury and UKGI, felt really strongly about this point, and felt they were just never ever sort of breaking through and getting the right traction and Post Office’s position at the time was like sort of resistive, as in, “We have done all we can, there is no more. We are not doing more”. And so there was a kind of sufficiently clear clash to make that feel like an appropriate move.
I don’t quite remember on pace ever reaching that point where you had a sort of an ask and a resistance. It was more like ongoing pressure, ongoing movement. It got a bit better, it got a bit better, it got a bit better, and so there was probably never quite like the triggering moment where that sort of, like, specific intervention felt like the right thing to do. That’s my best answer, although, as I say, it’s always hard to say, you know, if something didn’t come up why it didn’t come up but that would be my best interpretation.
Mr Stevens: Was the reason why the Department did not run into the resistance as you’ve described, because it simply didn’t push Post Office hard enough on the compensation schemes?
Sarah Munby: I think it was probably more like, let’s say on HSS during those relatively early days, you know, the scale of the response set up in Post Office wasn’t robust enough as discussed, because they had underestimated the scale of the challenge. But, as it became clear, they were moving. It’s not like the dynamic was we were saying, “Get a move on, make this happen”, and the Post Office was saying, “We don’t agree, we don’t think it’s important. We’re not trying”.
They were saying, “Yeah, we’re scaling up the team, we’re getting going, we’re putting this in place”. So there was a sense of responsiveness. It was ongoing, you know: you push a bit more, you get a bit more; you push a bit more, you get a bit more. But I didn’t feel the Post Office was not responsive to asks. They couldn’t always enact them because sometimes you can’t kind of flick a switch and make something happen overnight. But they weren’t kind of rebutting or denying them, if that makes sense.
Mr Stevens: If we look, please, at BEIS0000967. This is a letter to you from Lisa Harrington, Chair of Post Office Remuneration Committee of 4 October 2022. We see:
“… I am writing to you to apologise for the situation we find ourselves in regarding Managing Public Money and the payment of the CEO’s Short Term Investment Plan.”
Further down, it effectively says that the CEO’s STIP payment was paid without shareholder approval; is that broadly the issue?
Sarah Munby: Yes.
Mr Stevens: That’s been raised directly with you to deal with because it’s a matter of Managing Public Money?
Sarah Munby: That’s right. So it’s come to me as Accounting Officer.
Mr Stevens: Could we look, please, at WITN11520201. This is a readout of the call you had with Lisa Harrington on this issue. The email is sent on 28 October 2022. If we go to the bottom, please, it says that:
“SM [you] noted that if we looked at this cold, without breach, the likelihood is we would’ve approved. However noted that it will be tricky navigating ministerial approval.”
It discusses issues of flight risks and then “Suggested next steps”, right at the bottom, it says:
“UKGI & BEIS to rework advice for ministers around the retrospective approval – will need careful handling.”
Do we take it from this that your position was that the Minister should be guided to retrospectively approve the STIP payment?
Sarah Munby: Yes, on the basis that it would have been approved in the first place, had it been asked about in the proper way by the Post Office, and the fact that a serious mistake was made in governance in not asking for that permission shouldn’t ultimately be a reason not to do what we would have done in the normal course of business in terms of approving a – what is ultimately really a Post Office decision about the STIP.
Mr Stevens: Did you have any similar meetings with members of the Post Office Board to test Post Office’s approach to the compensation schemes?
Sarah Munby: No, and I’d like to say why this meeting took place, because I think it’s important to understand. This wasn’t a meeting that took place because I thought, or any of my team thought that the STIP was ultimately a really important and strategic issue. It’s because failure to comply with your duties under Managing Public Money and to do what’s described here, that’s the right language, is a breach in Managing Public Money; it’s a really serious error in compliance.
Now, in this case, it’s actually not that big an error, right? I mean, in the grand scheme of the things we’re talking about this is, in my view, an insignificant matter in the big picture, but the fact that an arm’s-length body commits a breach of Managing Public Money, I can’t remember ever seeing it. And I would absolutely expect, just as a matter of course, that that would come with a letter of apology and a personal meeting in order to apologise, frankly to sort of put on record that the seriousness of the fault had been recognised and that systems had been put in place to make sure it didn’t happen again, not in relation to the STIP payment but in relation to the bigger picture of – back to the sort of regularity issues we were talking about earlier – you just can’t have public bodies ignoring or flouting kind of core rules of how public money is administered.
So, you know, the fault itself is ultimately a relatively insignificant one in the big picture but the fact that any fault of this type would take place is a really serious matter and it’s kind of a disciplinary-type affair and so you’re bringing in a particular kind of energy, which is you are meeting the Accounting Officer, this is kind of a moment of formality, I would say.
Mr Stevens: You were the Permanent Secretary during a period of time in which this Inquiry held compensation hearings; is that right?
Sarah Munby: Yes.
Mr Stevens: You were aware of various criticisms that had been made against the Post Office and the Department in the way the schemes were being funded and run?
Sarah Munby: Yes.
Mr Stevens: Why was that not of sufficient importance for you as Permanent Secretary to meet with Board members to discuss those matters in particular?
Sarah Munby: Well, I did meet with Board members. I met regularly with the Chair. So that was a normal part of the course of doing business and those were exactly the sorts of things I would discuss regularly with Tim Parker. And I met with the CEO, as well, so I was engaged in all sorts of different ways.
Mr Stevens: My question was a specific meeting, such as this, set up to discuss compensation schemes in particular?
Sarah Munby: Because the nature of this meeting was the right person, sort of the offence was an Accounting Officer offence, if you see what I mean. So I was the channel that this needed to go through. So I was the appropriate escalation point for this kind of issue. There were a whole series of different bits of governance going on around all of the various issues that came up with the Inquiry, including the Inquiry itself, very regular ministerial contact – regular contact with the Board. This was sort of quite a specific and different channel. I wouldn’t have usually felt this was a normal approach to an, you know, important issue. I would normally take an important issue to the Chair, the CEO, sort of more in the course of an ordinary series of meetings, rather than have a kind of Accounting Officer censure moment.
Mr Stevens: I want to turn to one of those meetings, please, and that’s the meeting with Henry Staunton, which is predominantly the focus of your first witness statement. You say in your first statement, we don’t need to bring it up, page 6, paragraph 17, in response to the allegation well known to the Inquiry, you say:
“I never told Mr Staunton directly or indirectly, expressly or by implication, that Post Office should stall on compensation or otherwise delay or reduce compensation payments to subpostmasters. I did not say anything that could sensibly have been understood to convey that implication.”
Sarah Munby: That’s completely correct.
Mr Stevens: Can we look, please, at BEIS0000607. This is your letter to Henry Staunton congratulating him on his appointment. If we see at paragraphs 2 and 3 you say:
“Each year, I write to the Chair to set out the keys strategic priorities that BEIS, as sole Shareholder, would like [Post Office] to focus on over the coming 12 months. Earlier this year, I wrote to Tim Parker, the outgoing Chair, setting out the strategic priorities …”
You say you attach that letter. You are, in effect, asking him to take over and continue the work that you’d set for Tim Parker; is that fair?
Sarah Munby: Yeah, with a particular focus on the three points that I specified below.
Mr Stevens: Those three points that you specified below include:
“Effective financial management and performance, including effective management of legal costs to ensure medium-term viability.”
I understand your evidence is that, when you say “legal costs” you’re referring to litigation costs, namely the costs Post Office pays to its lawyers rather than compensation payments?
Sarah Munby: Yes, that was very well understood between us and the Post Office at the time.
Mr Stevens: Could we look, please, at the letter to Mr Parker which you refer to, which is BEIS0000984. I think it’s undated on this copy but in your statement you say this was sent on 23 May 2023. If we could go to page 2, please.
Sarah Munby: It can’t have been sent in May 2023.
Mr Stevens: Sorry to intervene, it must be 2022. Sorry, that’s an error in my –
Sarah Munby: No probs.
Mr Stevens: Page 3, please. This is under the heading on the second page, “Resolving historical litigation issues”, and, if you can go further down, it says at the bottom, we will see:
“It is right that these issues receive the attention they require to ensure their swift resolution. For [financial year 22/23], POL should …”
Then there’s an indented paragraph, if we could just go down slightly. Thank you. The last entry there is:
“Challenge [Post Office] Management so their activities are reflective of our shared objectives for compensation: to see postmasters are treated with consistency and they receive swift compensation that is fair for claimants and taxpayers.”
What do you mean by fair for claimants and taxpayers?
Sarah Munby: I think this probably goes back to what we talked about earlier about value for money. I think you’ll see it in some other letters written to Tim at other times that talk about value for money and, ultimately, this is about saying we need you to pay full, fair and prompt compensation but that should be done without wasting money, without wasting money on lawyers, without wasting money through fraud and error, and compensating fairly – generously, fairly, appropriately.
But that clearly is different from a process that starts from the premise of, you know, taxpayers have no interest here whatsoever and it doesn’t matter how much you spend.
Mr Stevens: How do you read “generously” into that paragraph?
Sarah Munby: I’m sort of paraphrasing to say that we – our objectives for compensation were for it to be full, fair and prompt. It is consistent with that to care about the interests of taxpayers and to want full and fair and prompt compensation to be delivered in a way that protects value for money, ie in a way that makes sure that you’re not wasting money as you do it, just as any other Government goal. You know, if you want to build a power station, build a nuclear power station, let’s say, you should do that in a way that, you know, is fair for taxpayers but it should still be safe and it should still be operational; it should still be full and fair.
Mr Stevens: Mr Staunton evidence was that, effectively, this was, as he took it, a message to say that the Government did not want compensation to be overly generous; would you agree with that?
Sarah Munby: No.
Mr Stevens: Why not?
Sarah Munby: Well, I don’t – I’m shocked that, if that is what he thought, he never raised that with us at any point. So I don’t agree that he has that reading, although I understand that is his evidence. And that isn’t what we meant in writing it because, if we were stepping back from the ministerial objective of fulfilling full and fair and prompt compensation, we would have needed to say so. Nobody ever told us to step back from that. Nobody ever indicated we should step back from that. There wasn’t any advice provided, either to me or to ministers, that we were stepping back from that. So there was – that wasn’t our intent in writing this and I don’t believe that’s how it was read by those receiving it.
Mr Stevens: Just so I understand your evidence: is your evidence that “full, fair and prompt” also means generous compensation?
Sarah Munby: No, I don’t think I’m saying that. I’m saying that full, fair and prompt compensation should be delivered in a way that is fair for taxpayers but that doesn’t mean that it should not be full, fair and prompt. “Full, fair and prompt” is sort of the first requirement. Within that, like everything else, whatever you’re doing in Government, you want to do it in a way that is as fair as possible for taxpayers, which essential means don’t waste money while you’re doing it.
Mr Stevens: Can we look, please, at the briefing for your meeting with Henry Staunton. It’s –
Sir Wyn Williams: Before we do, Mr Stevens, the paragraph that follows that, Ms Munby, and it’s use of the word “balancing”, if you read that sentence to yourself.
Sarah Munby: Yes, I’ve looked at that and reflected on that. I’m not sure that “balancing” is a good word to use in this context and, as you can imagine, of course I signed the letter and I stand by it but I didn’t draft every line myself, and as I sort of look back on it, I think sort of “balancing” isn’t really the right way of talking about this, certainly, when it comes to fair compensation.
I do think that balancing has some role when it comes to pace and swift compensation. It gets more complicated in that case because you can go faster at greater expense, or not. And that’s something that the National Audit Office talk about in their Lessons Learned Report. When it comes to full and fair, it’s quite straightforward to say that isn’t a trade-off with value for money or with fairness to taxpayers. I think it’s in pace of delivery that you start to see that balance maybe begin to bite. And I think that’s probably – the use of “swift” here I think indicates that’s what’s running through the mind of the person drafting it.
Sir Wyn Williams: Yes, all right. It’s those two, the indented last paragraph and that paragraph, which led me to ask questions both of Mr Staunton and Mr Cameron about whether they thought that issues like value for money were being taken into account in terms of individual payments or offers, rather, to postmasters, and they both, at least as it seems to me at the moment, thought that might be happening. Now, you wouldn’t know what was happening in the actual administration of the HSS and the overturned convictions process, obviously. But do you think that those words in that letter might have contributed to that sort of thought process?
Sarah Munby: If they did, I’m sorry. That’s certainly wasn’t the intent in writing the letter. I think it’s just maybe useful to note that you’re back to Managing Public Money: it says very explicitly that value for money is always a consideration, including in compensation schemes. So, from my perspective when I was reading either this drafting or the drafting in other letters, I wouldn’t have felt there was anything particularly unusual or radical in mentioning value for money in the context of a compensation scheme. Indeed, that’s what Managing Public Money, which is sort of The Bible when it comes to managing these things, itself does. So I’m reflecting that overall point of view of Government as a whole.
I think there is a very big difference between saying, you know, looked at as a whole, you should deliver compensation in a way that is value for money and doesn’t waste money. That shouldn’t be, but I totally understand what you’re saying, Sir Wyn, that it may have been, but that shouldn’t be taken to imply that an individual claim should be settled at anything less than full and fair, which was the ministerial intent throughout.
Sir Wyn Williams: Well, that was my last question, really. Whatever may be said about those couple of sentences in that letter, so far as you’re concerned, when you were Permanent Secretary, did your political masters ever deviate from the policy objective of delivering full, fair and prompt compensation?
Sarah Munby: No, I think they and we and the Post Office could all be criticised for whether that was always, you know, implemented in full. There’s lots of debate about had about that but in terms of intent, absolutely not.
Sir Wyn Williams: All right, thank you very much.
Mr Stevens: Just one point arising from that. When you were thinking about – I think you said, “full fair and prompt”, when you refer to “fair”, by what standard would you refer an offer to or compensation to, to determine whether it was fair?
Sarah Munby: Well, I mean, ultimately, I think that’s a question that goes to ministers in what their intent was, just to be clear. It’s not for me to be sort of the arbiter of fair. You know – and indeed, I think the schemes, if you look at what HSS says, it goes so far as to say that fair may be greater than the sort of legal obligation but it doesn’t particularly give an exact, precise definition of “fair”. I think it uses – I’ll get the wrong exact expression – but I think it uses something like “fair, fully in the round, looking at everything and bringing it altogether into a rounded view”.
“Fair” certainly means at least what you’re legally entitled to, that’s probably a floor, as it were, on “fair”. But I don’t think it defines exactly what “fair” is. You would think that that would be sort of set by kind of the moment of approval of the sort of terms and arrangements of any individual scheme: you know, what did “fair” mean in that context; you know, “fair” means something different when you’re talking about overturned convictions than when you’re talking about shortfalls, for example.
Mr Stevens: Could we look, please, at BEIS0000631. This is your briefing for your introductory meeting with Henry Staunton. If we scroll down, please, we see the agenda. We have, first, the CEO pay, then NED appointments, finances, recent correspondence, and so on.
At page 4, please, if we go down, thank you, we see under 4, which was “Recent Correspondence”, we have references to the Overturned Historical Convictions and Historical Shortfall Scheme, with some briefing on that. Why was CEO pay at this stage at the forefront of your agenda in the briefing, rather than the compensation schemes?
Sarah Munby: Because Mr Staunton had just written to the Department about it.
Mr Stevens: So it was reactive, basically to –
Sarah Munby: Yeah, just this is an initial meeting with somebody. I haven’t that anything from him so far, if you see what I mean. It’s a new slate but the one interaction we have had is a letter from him to the Secretary of State asking about CEO pay. So it would be just normal to respond to that.
It’s also perhaps worth saying that that’s an agenda prepared for me by the team. You’ll note, having seen the read-outs from the meeting, that I didn’t take the agenda as a gospel of exactly what would be covered in the meeting. I just think it’s worth saying that.
Mr Stevens: Okay, let’s look at the readout then. It’s BEIS0000752. If we go to the bottom, please, this is the read-out prepared by the Department, and we’ll come to the first sections in more detail shortly. As I understand your evidence, but tell me if I’m wrong, the discussion on compensation you say is further down. If we go down, please.
Sarah Munby: Not quite, no. Actually, we didn’t talk about compensation at any great extent in this meeting.
Mr Stevens: Okay, that, I take that point and that’s your evidence on that, but where it says:
“HS mentions target ref in Inquiry hearing – wasn’t looking for apology but wider point around being synced up and acknowledging where each others roles lie. Was keen him and Sarah strategically aligned where [possible].”
Was that a discussion about compensation, something that had been said in the Inquiry hearings regarding Post Office meeting targets?
Sarah Munby: That’s right. That was – I believe it was either a BEIS or UKGI lawyer misspoke and suggested that 100 per cent was a target rather than an aspiration, and POL were upset because it made them look like they hadn’t met the target when, in fact, they had met what was the target, which was 95 per cent. So it was a relatively minor point in the grand scheme of things but Post Office felt we had, you know, unfairly represented them in front of the Inquiry and that was a fair point. It was a mistake and we apologised for it.
Mr Stevens: Just to clarify, is your evidence that that was really the extent of the discussion on compensation?
Sarah Munby: Yes.
Mr Stevens: Why did it play such a minor role in your first meeting with the Chairman?
Sarah Munby: Well, I think there’s probably two reasons for that: one is – and they sort of go one on each side, right? So the first question: why did Mr Staunton not raise it as a major issue with me? That would be a question for him but he didn’t. So it wasn’t like I was responding to any prompting around it.
Mr Stevens: My question is to you about your reading –
Sarah Munby: Understood. So why didn’t I raise it with him? It’s quite specific to the context, actually. So he had just been recently appointed and I’d been involved in the appointment process. And I was actually really at that point very pleased with this appointment because Mr Staunton had real hands-on experience, particularly I from his role at WHSmith, in helping turn around performance at a business that – of course no business is the same as Post Office but WHSmith has some quite obvious commonalities with the Post Office.
And of the various perspectives that I wanted to get from Mr Staunton particularly at this point, I was really interested in what would a serious, experienced, commercial leader, who had like sort of done a similar kind of a job before, in turning around the performance of a really challenged high street business, I really wanted to understand his take on that and, in my mind at this point, correctly or not, I imagine that Mr Staunton’s personal focus would be, in very significant part, on the commercial turnaround of the Post Office because that was his experience and that was what he was bringing to bear.
So he was very new in role. At this point, I could have asked and enquired lots of things about the compensation work but I think my perception would have been kind of he needed a bit more time on that to really come up the curve. Whereas I was, to be honest, hungry for what he was going to say about the commercial performance of the Post Office because, as you’ll see from the briefing documents that run up to this meeting as well as being concerned about compensation payments, we were acutely concerned about the strategic and financial position of the Post Office as a business, and its viability and future. And I was really worried about that and I really thought Henry himself – Mr Staunton, I’m sorry – would have a lot of value to bring to it. And that was the conversation I most wanted to have with him.
Mr Stevens: So you most wanted to have a conversation with him on commercial issues. We saw earlier in a letter, the letter to Mr Parker and the letter to Mr Staunton, that achieving settlements was a key strategic aim for the Post Office?
Sarah Munby: Yes.
Mr Stevens: Did you see, as part of your role, ensuring that the Chair took that strategic objective seriously?
Sarah Munby: Yes, I didn’t use this as a meeting to run through the strategic objectives for the Post Office. You can see there isn’t a sort of “Let me recap my letter”, that wasn’t how the meeting went. I would have assumed that he had sort of taken those points as read, they’d been formally transferred over. This was meant to be more of a – I don’t mean off the record in a formal sense but, you know, just a bit more of an informal chance to exchange views about the situation, for him to offer me some perspective and for me to offer him some advice as someone new into role.
Mr Stevens: If we look at the start of the note, please. It’s the bottom of page 1. It says that:
“SM flagged that the relationship and funding [with the Treasury] is difficult, their view will always lean towards the ‘begging bowl’ type scenario, a dynamic worsened by Horizon/Inquiry costs.”
What are you referring to by the “begging bowl”?
Sarah Munby: There had been a long goal of Government, including Treasury but Government as a whole, that Post Office should move to being self-sustaining from a financial point of view, ie that it shouldn’t be reliant on Government subsidy. We can come to discussion about whether that was a realistic or achievable goal but that was the stated position of Government. And, in that context, Treasury in particular, throughout this period, long pre-dating this conversation, Treasury in particular had a long record of basically being sceptical of Post Office’s claims that it needed Government subsidy, and believing that what Post Office should do was focus on improving their own performance, sort of getting their own house in order, strengthening their financial and strategic position, so that they wouldn’t need Government subsidy. And I think a real sense that there was a risk of essentially sort of creating easy money, and, you know, if you create a sort of path of easy money for a corporation, you lessen their incentive to improve their own performance.
That perspective, that’s what I’m getting at with the begging bowl. They were always sort of asking for more money. That was how Treasury saw Post Office when it came to asks for subsidy. They believed those subsidies should be going to zero and the Post Office should be weaning themselves off those subsidies and they were – they were sort of – “irritated” is not quite the right word. I can’t bring the right word to mind but they were frustrated by the constant asks for more and more money.
Mr Stevens: I’m going to have to stop you there, given the time. I’ve got that point.
The “dynamic worsened by Horizon/Inquiry costs”, where it says Horizon costs, is that referring there to settlement costs, namely costs associated with the fallout from the Horizon issues?
Sarah Munby: I couldn’t be 100 per cent sure. It could equally be referring to Horizon replacement costs.
Mr Stevens: It would have been likely, wouldn’t it? For those to be together, it’s more likely, would you not think, for “Horizon/Inquiry costs” to refer to (i) the costs of the Inquiry but that arises from the Horizon issues and (ii) the costs associated with the compensation that arises from the Horizon issues?
Sarah Munby: Not necessarily, because Henry had just talked about what the big financial pressures were on the Post Office and he’d talked about Horizon replacement, and he’d talked about rising Inquiry costs and he’s talked about telephony. He hadn’t mentioned compensation costs because, of course, those came from a different budget and were not really part of this dynamic that we’re discussing here.
Mr Stevens: Mr Staunton’s evidence was that effectively the message was that he could not expect significantly more money to be forthcoming from the Government, even if he thought the remediation schemes needed it; would you agree with that position?
Sarah Munby: Absolutely not. I do not believe that is a plausible thing you could take away from the conversation we had in any way.
Mr Stevens: Why are you so confident on that?
Sarah Munby: Because I don’t think that explanation makes any sense, given the conversation that we had. The conversation that we had was about my efforts to try to secure more money for the Post Office. So if you go further down in the note, we’re discussing how difficult it is, basically this scenario of HMT don’t want to give the Post Office more operational subsidy, and I’m talking about why is that difficult. You’ve got to make trade-offs within budgets, you’ve got to manage subsidy control legislation and, specifically, HMT at the time had very clear policy that they wouldn’t provide more subsidy to the Post Office in the absence of a long-term strategy. And we didn’t have a long-term strategy.
So what I was describing was a set of difficulties about securing operational subsidy, I never said anything both difficulties of securing money for paying compensation and Mr Staunton himself never mentioned any difficulties with funding for compensation. Indeed, as you rightly point out, the issue of compensation was, broadly speaking, not discussed, which you can criticise for other reasons but it is inconceivable that you could have understood me to be saying “Don’t spent money on compensation”, when what I was saying, as is recorded in the read-outs, is, “I’m going to try and get you a bit more money to deal with these really big operational and strategic challenges you’re facing but I want you to know it’s not that easy to do that because of these kind of practical difficulties of getting money over the wall”, none of which apply in the case of – like, subsidy control, for example, isn’t an issue in the case of the compensation money.
Mr Stevens: Can we look, please, at Mr Staunton’s note of the meeting. It’s BEIS0000918. If we go to the bottom, it says:
“She also referred to ‘operational’ issues colouring [the Treasury’s] thinking. (‘Trust’ in the [Post Office] Board and management has not been high). They could see this is another ‘begging bowl’ [so you see the same words used there] request from the [Post Office]. I said the funding issues revolved around poor decisions made many years ago wrt Horizon and related legal issues.”
Do you accept that’s an accurate note of the conversation that happen?
Sarah Munby: I think it’s just further saying what we were talking about there by Horizon and related legal issues. If we go back to the beginning of the conversation, Mr Staunton had laid out these three big new difficult cost pressures that the Post Office were dealing with, one which I think was sort of smaller and less relevant was the telephony issues. One was the Horizon replacement system, and one was the costs of responding to the Inquiry, ie the costs of gathering the evidence, working with the lawyers, et cetera. Those were the three points that he laid out at the very beginning of the meeting and he’s playing back two of those here towards the end.
Mr Stevens: So just so I’m clear on your evidence, your evidence is that what was discussed was, amongst other things, the cost of replacing Horizon, was that –
Sarah Munby: Yes.
Mr Stevens: Yes? The costs associated with the Inquiry?
Sarah Munby: Yes.
Mr Stevens: But your evidence is compensation itself wasn’t discussed?
Sarah Munby: Yeah, I mean, it might be worth going in to the bit in this note where those three points are laid out because it makes it clear.
Mr Stevens: We can read them out, that’s fine but just so we’re clear?
Sarah Munby: Absolutely, yes.
Mr Stevens: We have your evidence, thank you.
That document can come down. Thank you.
What are your views on Mr Staunton’s competence as Chair, while you were Permanent Secretary?
Sarah Munby: I had very little interaction. We overlapped by a very short period between his appointment late in 2022 and me moving on to the Department for Science, Innovation and Technology very early in 2023. So I think it would be a totally unfair to draw any conclusions about his performance as a chair during that period.
Mr Stevens: I want to look at a couple of points on what you say about improvements in Post Office governance. We don’t need it up but paragraph 20, page 11 of your second statement you say:
“I think Post Office’s internal governance was very much improved but still not adequate.”
I think that’s by the time you left; is that right?
Sarah Munby: Yeah.
Mr Stevens: Can we look, please, at POL00446476. This is a Post Office Limited Board Effectiveness Report, dated 19 June 2024, so you wouldn’t have seen it in your role as Permanent Secretary, but have you had a chance to review it in preparation for the Inquiry?
Sarah Munby: Yes, I’ve seen it after being provided with it by the Inquiry.
Mr Stevens: Can we look, please, at page 8. We’ve got some key findings there, including:
“Lack of clarity on the purpose of the Board, with the Shareholder relationship inhibiting the Board’s effectiveness due to perceived interference in [Post Office’s] work and limited visibility around the longer-term funding and objectives of the organisation.”
Is that a problem of which you were aware as Permanent Secretary, namely a query over the longer-term funding and objective of the organisation from the Department’s perspective?
Sarah Munby: Absolutely 100 per cent, yes.
Mr Stevens: In your view, that had been resolved by the time you finished as Permanent Secretary?
Sarah Munby: No, and, if I may, I’ll just expand very briefly on that. We had had for some time work running, following the settlement at SR2021, which was actually condition on carrying out a review of POL’s long-term – or rather HMG’s long-term strategy for POL, which is not quite the same term as POL’s long-term strategy, and we had done a bit of work on that, including getting to the point towards the end of 2022, ie briefly before that meeting with Mr Staunton, just to put it in schedule, as it were, of trying to go to right round across Government – that’s the sort of approval process by which you get Cabinet sign-off – right round to launch a formal, a more formal review of the long-term requirements of the Post Office by Government.
And ministers had declined that opportunity and said “No, now is not the right time”. So I really recognise this complaint. I was very concerned, I was talking earlier about my level of concern about the sort of financial viability of the Post Office going forward. Of course, that was like deeply associated with a lack of clarity about what the Post Office was in the long-term, there for.
And at the time – and this is reflected in what I said to Mr Staunton about the sort of we need to hobble on, we need to find a way of managing under the strategic steer we already have because, in the short-term, ministers were not ready to carry out the kind of full review of Post Office’s roles and responsibilities that was really needed in order for Government to more clearly define, you know, not just the branch footprint but the services provided, the nature of the financial relationship. All of that needed fundamental refresh, in my view, but it was difficult to get ministers to sign off, I think partly because of frankly the political toxicity around the whole issue, and the fact that we knew that any review sort of regardless of what it ended up concluding about the corporate structure of the Post Office.
And I know there have been all sorts of proposals about, you know, different kinds of mutualisation, and so on but, whatever you did, you faced quite a fundamental challenge that you probably either needed to really seriously increase the level of public subsidy to the Post Office, which had its own challenges, politically, or be prepared to say that you needed many fewer Post Office branches, which is also a really difficult thing to say politically and incredibly difficult for postmasters as well, who were, of course, under enormous challenge during this period.
And I think ministers were sort of looking at that really, really difficult choice and saying, “Now isn’t the time, let’s get through the Inquiry, let’s get through the compensation processes and let’s come back to this question in due course”.
But that did leave a period of really challenging ambiguity for Post Office and I think that’s one of the reasons why, ultimately, we did end up with, following spending review 2021, a series of what you might legitimately describe as sort of short-termist funding interventions, giving over some more money to Post Office to manage the Horizon replacement programme, to deal with the rise in Inquiry costs, et cetera. You know, sort of dealing with the problems as they arose rather than fundamentally refreshing the strategy and rebuilding the organisation towards that new strategy.
Mr Stevens: Thank you. That document can come down.
Sir, I don’t propose to ask any more questions. I’ll see if there’s any – yes.
Mr Henry and Ms Patrick have asked for five minutes each, sir.
Sir Wyn Williams: Fine. I look forward to their accuracy in estimation.
Who is going first?
Mr Henry: I’m being forced to go first by Ms Patrick, so I shall go first, sir.
Sir Wyn Williams: I’ve never known you to be forced to do anything, Mr Henry, but there’s always a first.
Questioned by Mr Henry
Mr Henry: Thank you, Ms Munby.
As Accounting Officer/Permanent Secretary until 6 February 2023, did you ever cancel an interim payment owed or even due to a subpostmaster?
Sarah Munby: Not that I remember.
Mr Henry: Did anyone do so on your behalf, cancelling an interim payment agreed with a subpostmaster?
Sarah Munby: They may have. I’m not sure what “on my behalf” means, if you see what I mean, certainly not at my request.
Mr Henry: Certainly not at your request but, obviously, under your aegis because, of course, you’re the Permanent Secretary, you’re the Accounting Officer. Do I take it from your answers that you were unaware, and I’m not suggesting necessarily that this did occur on your watch but that you – I’ll rephrase it, particularly since I’ve got very little time?
Did you ever become aware of interim payments being subject to a moratorium?
Sarah Munby: I don’t recall that.
Mr Henry: Right. You see, we’ve heard evidence yesterday and today from Mr Recaldin that such practices were occurring in your successor Department from January this year for some months. He said, among other things, and the transcript, I don’t think, is on Relativity but I’m going to read out a little bit to you so that you’re familiar with it.
I omit words but this is at page 48 of 86, beginning at line 11, page 191 in the internal numbering:
“… in OC there are many opportunities, as I explained earlier, to pay out more – further interim payments, and what the Department was saying to me was ‘No, we don’t want you to do that. That’s not the objective any more. We’d rather you hold on to those and hold out for settlement’.”
I emphasise the words “hold out”:
“I was extremely uncomfortable with that, and I think I’m making my point, articulating, of what is the right thing to do because I didn’t want to delay – it seemed to me I was getting an implication to delay redress in order to hold out for full and final settlement.”
Then I omit words and this is the facing page, line 7, 192:
“… that was the moral dilemma that I was facing and they made it clear to me, absolutely crystal clear, ‘No, Simon, the objective, it’s there. Black and white, full and final settlement’. So I then had to issue instructions internally to say those potential interim payments, the Government will not approve them now, and they didn’t approve them, because they were holding out for full and final settlement.”
Now that, coming from Mr Recaldin today and yesterday, is an extraordinary state of affairs, you would agree, in your successor Department, to cancel agreed interim payments that had been notified but would now not be approved because the Department was holding out for a full and final settlement? Notice the absence of the word “fair”. That would be an extraordinary situation developing from January this year. You must accept that?
Sarah Munby: I mean, I haven’t heard any of that until just now, so, you know, I say –
Mr Henry: So what’s your reaction?
Sarah Munby: My reaction is that doesn’t sound right, as you’ve just put it to me there. The only thing I’ve heard of that’s similar, so I think the only thing I can sort of draw on from my experience, is in the very early days of HSS, I do remember there being discussions about the merits of introducing interim payments or not. And one of the arguments that was made at the time, and probably one of the reasons why we were, in my view, too slow to introduce interim payments in the first place, was about the question of whether kind of efforts to provide interim payments would actually delay making final payments and that that would be bad for postmasters –
Mr Henry: Or would it actually, worse than that, expedite settlements at an unrealistically low level because postmasters had been starved of cash, it was as if they were in a famine with the purse strings being tightened against them to force them into precipitate and unrealistically low settlements?
Sarah Munby: I mean, the language that you just used in describing the evidence just received, it does sound closer to that than to – you know, I’m making a balance of is a smaller payment earlier or a bigger payment a bit later better.
Mr Henry: It does, doesn’t it? Now, you know how the Civil Service works. Who would have given the order to cancel interim payments, even though those, most reprehensibly, which had already been agreed?
Sarah Munby: I don’t know. It –
Mr Henry: Well, now, I must ask you to reflect very carefully on the answer you have given. You know how the Civil Service work. This is your successor department. I realise that it’s not the same department that you were Permanent Secretary of but can you help us please?
Sarah Munby: It could have come from a few different places –
Mr Henry: Such as?
Sarah Munby: It could have come from the – one of the oversight bodies. It could have come from one of the officials in the chain at, you know, a member of the senior Civil Service or the Director General or the Permanent Secretary. It could have come from a minister. I suppose, in theory, it could have come from the Treasury because they were involved in governance. I am not trying to be unhelpful at all, I just – I don’t know much about the case and I don’t know –
Mr Henry: So there’s a whole host –
Sarah Munby: – therefore where it might have begun.
Mr Henry: Right, I see. Thank you. Nothing further.
Sir Wyn Williams: Thank you, Mr Henry.
Ms Patrick.
Questioned by Ms Patrick
Ms Patrick: Thank you, sir, and thank you to Mr Henry.
Ms Munby, I have very few questions of you. I know that Mr Stevens has covered quite a lot of detail about your witness statement and your reflections on when Government can and can’t take a radical approach to solving problems. We know your witness statement covers the approach to Ukraine and the approach to Covid, for example.
I’m not going to go back over that, and I know you’ve said you can’t really comment on things that happened after you left your post as Permanent Secretary and you don’t want to comment necessarily on how the change of approach came about. But I’d like to look at a couple of your observations in your second witness statement, if that’s okay.
You don’t have to turn it up. I’ll read it for you and you can trust me that I’m reading it from the page.
Sarah Munby: I know my witness statement reasonably well.
Ms Patrick: Indeed. At paragraph 72, you say:
“In the round, looking back at events, an initial underestimation of the scale and depth of the challenge in truly delivering ‘redress’ was then followed up by a plausible and incremental set of decisions on how to deliver full and fair compensation. With those decisions focused on deliverability, fairness, appropriate use of public money, and good governance, justifying and building up the response piece by piece.”
Just stopping there, you said something a little bit like the “boiling frog” scenario.
Sarah Munby: Yes.
Ms Patrick: Yes.
“Such considerations are the mainstay of Government and we should not leave them behind hastily. However, had we begun down the path with a deeper and more complete understanding at the start of the true human impact of all that had happened previously, I wonder whether both officials and Ministers might have taken bolder, more radical decisions earlier, that would have allowed us to reach towards full and fair redress faster and with less distress for postmasters.”
I just want to ask you, did Ministers, looking back with your reflection, see this scandal, this scenario, as a ‘business as usual’ project that could be approached with ‘business as usual’ solutions, always falling back to the usual principles of Government and public restraint at the initial stages?
Sarah Munby: Broadly, yes, but ‘business as usual’ is a very, very broad tent in Government, and includes doing absolutely extraordinary things that are very unusual. So I don’t mean that they thought it was ordinary or straightforward, or very much like everything else we were doing. But the distinction I was seeking to draw in my witness statement was I have seen a few – very few, but non-zero – number of things in my roughly five years in the Civil Service where Ministers have very explicitly said, you know, from almost day one, “I want you to put precedent completely aside. I am not interested in any of your useful, practical points about governance or Managing Public Money. You know, just do it. Make it happen”, and have sort of like broken the frame.
And the two examples – sorry, I know you said, and don’t want to waste time, but the two example where I’ve seen that were at the very beginning of the Covid crisis, as it related to the survival of small businesses, and, secondly, after Russia’s invasion of Ukraine, as it related to preventing the very precipitate rise in energy bills for households and businesses across the country.
When I say “business as usual”, I mean not that, rather than sort of saying it was seen as a sort of in a box with a load of things in the kitchen sink to be dealt with in a very ordinary way.
Ms Patrick: Indeed.
What we can see – and I think, taking from your evidence – is that it was only when ministers were forced by the political pressure to face up to the realities of this scandal and its impact on the individuals concerned, the subpostmasters themselves and their families, and the impact that that was having on public consciousness, then it was seen that this was an issue which needed a truly radical solution which stepped beyond those – and I’m calling them ‘business as usual’ prospects, and the underlying principles behind them.
Sarah Munby: Yes, I think that’s a fair summary of my evidence.
Ms Patrick: Can we look just at one other section of your evidence. I just want to look at a part of your evidence on the briefing that was being provided to you. At the very earliest part of your second witness statement, you say:
“With hindsight, [you] have two … reflections. First, that the briefings were (perhaps unsurprisingly) typical Civil Service briefings, focused on the facts and next steps. I couldn’t honestly say that they brought home the ongoing human tragedies at the heart of this case, and with hindsight I think I should have personally pushed to meet with the postmasters myself. Second, I am not sure that these … emphasised sufficiently the ongoing cultural challenge at [the Post Office].”
Now, that’s reflecting on the briefing provided to you. Do you think there was a similar failing in the briefing that was being provided to Ministers?
Sarah Munby: I think that sort of probably goes almost necessarily, because there was a great deal of overlap in the briefings. I suspect, though, Ministers, more conventionally as part of their role, will have been meeting postmasters at various points in this process and, of course, you know, officials within the Department and very extensively in the Post Office – I’m sure Simon Recaldin talked about the work that he did on that front.
But I think that the straight answer to your question is: yes, I think that same criticism is likely to be true, indeed is true, of the briefings that were provided to Ministers.
Ms Patrick: No matter what subpostmasters and those who are representing them and others may have been saying about this being the biggest miscarriage of justice in modern history, and about the impact on individuals who’d lived for decades, some of them, with the stigma and the harm that resulted from the events of their prosecution, that Ministers themselves, at the outset, may not have appreciated that this was a truly unique set of circumstances that really needed a radical solution?
Sarah Munby: I think it is difficult to calibrate when something moves into that radical space. I’m trying to think of sort of sensible analogies, but very terrible, challenging things happen an awful lot in Government, you know, dealing with, you know, widespread rioting across the country or, you know, dealing with, you know, a shortage of prison places. You know, just to take some examples, say, from the last six months or so.
So the scale of what we’re talking about in terms of kind of outrage, perception, really has to be very, very, very high indeed. And I think it is true what you say, but I also just really want to emphasise that that doesn’t mean that Ministers didn’t understand that this was a terrible, horrific injustice, or think that it was a really important priority to fix. And even within what I’ve described as a kind of incrementalist approach – and I appreciate that, you know, many would criticise it but, nevertheless, it did involve committing, you know, well over £1 billion of public money, you know, even within that frame, and that was a –
Ms Patrick: Ms Munby –
Sarah Munby: – insufficient but serious response.
Ms Patrick: Thank you for your response. I was simply reflecting on your own evidence that there was a shift in perception.
Sarah Munby: Yes.
Ms Patrick: Thank you. I don’t have any further questions.
Sir Wyn Williams: Is that it, Mr Stevens?
Mr Stevens: Yes, sir. That’s it.
Sir Wyn Williams: Well, thank you very much, Ms Munby, for making two witness statements and for coming to the Inquiry to give evidence – well, it’s all been this afternoon, although I dare say you may have been here during part of the morning. Anyway, thank you very much. I’m very grateful to you for helping the Inquiry in the way that you have.
The Witness: Thank you.
Sir Wyn Williams: So we’ll resume again at 10.00 tomorrow, Mr Stevens?
Mr Stevens: Sir, I think it’s 9.30.
Sir Wyn Williams: 9.30. I’m so sorry, you’re quite right. Yes. 9.30 tomorrow morning.
Mr Stevens: Thank you, sir.
(4.37 pm)
(The hearing adjourned until 9.30 am the following day)