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14 December 2022
Sarah Munby
Permanent Under-Secretary of State
Department of Business, Energy and Industrial Strategy
1 Victoria Street
LONDON
SW1H OET
Dear Permanent Secretary
Strategic Priorities 2022/23
Thank you for letter congratulating me on my appointment as Chair of Post Office Limited. I appreciate deeply the
importance of the post office network to communities across the United Kingdom and the essentialservices that we
provide. As Chair I hope to secure a commercially sustainable future for this national asset.
Post Office is making good progress with the Strategic Priorities for 2022/23 in very challenging market conditions.
The network has consistently been above 11,500 branches throughout the yearand to date we remain ahead of
budget thanks to the strong return of our travel business. However, ourcore service of mails is experiencing
significant stress including industrial action affecting Royal Mail; and headwinds are also affecting banking, notably
the impact of regulation on cash deposits. Our revenue performance over Christmas and in the fourth quarter will
determine whether we meet our budget or not. For postmasters, even with the additional remuneration announced
in August, their returns are likely to be flat year-on-year taking into account inflation.
You have asked me to focus on three particular issues:
1. Post Office will seek to maximise our revenues and manage costs tightly to ensure medium term viability.
Legal costs are challenged regularly and all options explored to secure best value whilst ensuring good
quality external support for delivery of the historical compensation schemes and support forthe Horizon IT
Inquiry. In the long term, further support with legal costs will be required in the three year plan if we are to
meet our obligations to postmasters affected and the Inquiry effectively.
2. Post Office continues to make good progress with organisational and cultural reform to ensure that there is
sufficient capacity, capability and resilience at all levels of the business including the top team For
example, this year we strengthened support for postmasters across the nations and regions; and are
implementing our Leading to Serve programme to all colleagues that report to a Group Executive member
and other high performers. The priority is to ensure we are able to recruit and retain IT professionals in a
very competitive market to complete our exit from Horizon by the end of March 2025. The scrutiny of the
Horizon IT Inquiry in parallel to the rollout of New Branch Information Technology (NBIT) makes this harder
and potentially more expensive.
Post Office Limited is registered in England and Wales. Registered No. 2154540.
Registered Office: Finsbury Dials, 20 Finsbury Street, London EC2¥ 9AQ. -
Post Office and the Post Office logo are registered trade marks of Post Office Limited, postoffice.co.uk
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3. Post Office is cooperating fully with the Inquiry and is implementing the necessary change including the
recommendations from the Common Issues Judgment and the Horizon Issues Judgment as well as any
matters arising from the hearings. We are making very good progress with compensation. The Historical
Shortfall Scheme has already met its target of 95% of offers made by the end of December this year. Two
full settlements have been finalised for overturned historical convictions with a further 22 cases agreeing
‘non-pecuniary’ compensation so far this year. The Strategic Platform Modernisation Programme (SPMP)
has implemented the first release of NBIT in two branches enabling daily live transactions separate from
Horizon. The successful implementation of NBIT is critical to the future of Post Office. As the Board
finalises our three year plan in the New Year, I will confirm to you the request for sufficient funding to
enable its effective completion by March 2025.
I look forward to meeting you at the earliest opportunity and working with you to resolve the past and ensure the
Post Office is set up for a commercially sustainable future that meets the policy direction of its shareholder.
Yours sincerely
Henry Staunton
Chair, Post Office Limited
Post Office Limited is registered in England and Wales. Registered No. 2154540.
Registered Office: Finsbury Dials, 20 Finsbury Street, London EC2¥ 9AQ. -
Post Office and the Post Office logo are registered trade marks of Post Office Limited, postoffice.co.uk