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Edward Davey MP
Graham Stuart MP Our ref: 257335
House of Commons Your ref
London
SW1A OAA
August 2011
Thank you for your email of 4 August regarding your constituent, Mrs Christine
Johnson of, ‘and the Post Office Ltd
Horizon IT system.
I must start by explaining that operational matters, which include the Horizon
IT system are the responsibility of senior management at Post Office Ltd. The
Government, as shareholder, does not play a role in operational matters.
I am aware of a small number of incidents where subpostmasters’ contracts
have been terminated, and in some cases court action has subsequently been
taken, following the identification of financial discrepancies and shortages.
However, neither I, nor the Department are able to comment on, or intervene in
individual cases concerning operational and contractual matters.
Post Office Ltd continues to express full confidence in the integrity and
robustness of the Horizon system. They base this on the fact that Horizon has
been operating for 10 years and typically processes 230 million transactions a
month from over 30,000 counter positions in around 11,800 post office
branches.
The system and the processes around it offer a very high level of security and
resilience and are designed to ensure that should part of the system or
equipment fail that the integrity of the accounting records is always
maintained. The system has proved to be very robust since its introduction.
The Horizon system was fully tested at the time of the nationwide
implementation and all new software releases are also subject to rigorous
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testing prior to going live in order to assure the accuracy of the accounting
processes. For example, the testing for the latest upgrade to the system
introduced over the past year was independently assured by Wipro as being
‘best practice’ (Wipro is amongst the largest global IT services companies in
the world and recognised experts for Product Engineering and Testing).
As regards ongoing performance, the Horizon information security
management systems are accredited to industry standards and there are
extensive controls to ensure data validation and reconciliation. A transaction
log is available for every branch and full audit logs of all system and user
activity and transactions are securely sealed, backed up and retained to
provide an evidential and investigative repository.
POL also categorically states that there is no remote access to the system or
to individual branch terminals which would allow accounting records to be
manipulated in any way. In addition, I understand that all system activity,
down to the individual key stroke, is also recorded into a separate vaulted
transaction file with every record encrypted and written to the log and with
each record having a unique incrementing sequence number. This log is
retained on a separate server independent of Horizon, is retained for at least
seven years, cannot be altered in any way and all access to it is securely
controlled. This approach is consistent with that of banking systems and
provides a fully secure audit file which can show all system activity down to a
single keystroke in a particular branch. Against this background, I do not think
a further review of the Horizon system is necessary.
With particular regard to Mrs Johnson, I have been informed by Post Office Ltd
that in accordance with established procedures agreed with the National
Federation of Subpostmasters, Mrs Johnson was provided with the opportunity
to put forward any reasons or evidence to support her defence against the
termination of her contract; including the right of appeal against the initial
decision. I further understand that at that stage she did not raise concerns
about the Horizon system.
Ensuring that subpostmasters receive appropriate training to perform their
duties is vitally important. It is not in the interests of the taxpayer, the
customer, or the company for subpostmasters to be making costly and
avoidable errors as a result of a lack of training. So in response to your
specific query regarding the training of subpostmasters, Post Office Ltd has
assured me that all new subpostmasters are given extensive training, typically
including both classroom training and in branch supervision and guidance from
a Post Office Ltd manager. Post Office Ltd has told me that they provide a
telephone helpline for subpostmasters seeking advice and support, and has
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informed me that additional training can be arranged for those subpostmasters
who request it.
EDWARD DAVEY