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Department for
Business, Energy
Date: 29 July 2020 & Industrial Strategy
Director General clearance: Carl Creswell
Lead Official & telephone: Eleanor Brooks:
Recipient To Note / Comment To Approve / Decide
Secretary of State x
Minister Scully
Permanent Secretary
Special Advisers
*<Ix<Ix<:
HORIZON REVIEW: PROGRESS UPDATE
Summary
1. To update you on the Chair appointment process andour approach to Minister Scullys
proposed change b the Horizon Independent Review Terms of Reference.
Timing
2. Routine — we will shortly start to approach potential Chairs
Recommendations
3. That you note: (a) our progress on the Chair appointment; and (b) the implications of the
proposed change to the terms of reference (Annex A), noting the risks on timing and cost
outlined at paragraphs5-6 below.
Chair for the Review
4. We have cleared a short list of 5 candidates for Chair with No 10 and with Cabinet Office
(annex B). No 10 has confirmed that the list does not need further clearance from
the PM. The list includes three former judges. We are aiming to approach the candidates
shortly.
Terms of Reference for the Independent Review
5. All have called foran expansion to the terms of referenceso that the reviewwill:
a) establish the facts of what happened at Rost Office and at Fujitsu and to examine the
Govemment's oversight of Post Office;
b) hold those responsible to account; and
c) make recommendations on whether the out of court settlement reached last
December was sufficientand whether Government should pay more.
All sides are also pushing strongly for the review to be changed to afull statutory inquiry
and to be headed by a judge.
6. As you know, Minister Scully and SpAds have agreed a change to the draft terms of
reference (see Annex A) to take account of (a) above following criticism in the House of
Commons, House of Lords and from the Justice for Sub-Postmasters Alliance.
7. At your request, officials have since engaged with No. 10 and the Cabinet Office team
responsible for best practice on reviewsto discuss the amendment The Cabinet Office
have advised that adding the backwards-looking element to the review will definitely
increase the time needed and cost of the review and make the review mordike a non-
statutory inquiry. They also advised that the average length of this type of review is 2
years and many have taken significantly longer (eg. the Hillsborough Independent Panel
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took 31 months, the Magnox non-statutory inquiry has taken 39 I & Industrial Strategy
months so far and the Daniel Morgan independent panel is still ongoing at 7 years
Cabinet Office numbers suggest that reviews cost around £1m per annum We will
work with finance to finalise the costs; costs this year are unfunded andcosts beyond that
will need to be factored into the Spending Review process.Both time and cost will depend
on a range of factors including: the precise terms of reference and the chairs
interpretation of these; the speed at which evidence can be collected and analysed
whether any legal challenges are triggered by the review and whether Maxwellisation is
required to share and agree a draft report with anyone criticised in it before publicationIn
appointing the chair, Ministers can make clear that they want the review to lastnonths not
years. They can also underline it mustnot interfere with the ongoing associated legal
processes by the Criminal Cases Review Commission, Court of Appeal or Director of
Public Prosecutions
8. Cabinet Office also advise that this change to the focus of the terms of reference
increases the likelihood that the review may need to be changed to a statutory review at
some point in the future if the parties do not cooperate fully. We consider Post Office Ltd
cooperation the most critical within the review although engagement by ex-Post Office
employees and Fujitsu is important We have a commitment for total cooperation from the
Post Office so this should not be an issue. We are also recommending Minister Scully
ring Fujitsu to secure their cooperation with the review. We can also consider whether to
specify procedures to be followed by the revieweg. open oral hearings.
9. Despite these risks to timing and costs, our view remains that a short, wholly future-
focussed reviewwill not satisfy those in Parliament or the affected post masters Although
this change will notprovide everything sought, it should give key answers they have been
looking for. This, coupled, hopefully, with the appointment of an ex-judge to lead the
review (see para 4) should help to bring them to support the review.
10.We recommend that you note the specificchange proposed and the risks outlined
above, as we will need to share the draft Terms of Reference with the prospective
chair. Once we have secured the chair and they have agreed the Terms of Reference we
will then need to do a formal write round. Cabinet Office have requested that we flag the
risks mentioned above in the write round.
Annexes
A. Draft Terms of Referencewith proposed change shown in bold
B. Short list of candidates
Contributors
This advice contains financialconsiderations, as agreed with Vanisha Patel.
Legal Jane Correra and Richard Watson have been consulted and agreed the content of this
advice.
This communication considerations are being considered byJessica McKay and we will
amend if needed.
Parliamentary handling has been taken intoaccount, and agreed with Carl Creswell.
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Department for
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Annex A: Draft Terms of Reference— amendment shown in bold & Industrial Strategy
The Independent Review shall:
« Understand and acknowledge what went wrong in relation to Horizon, leading to the
Group Litigation Order, by drawing on evidence from the Horizon judgments and affected
postmasters’ experiences and identify what key lessons must be learned for théuture;
« Build upon the findings of Mr Justice Fraser,including by obtaining evidence from
Post Office Ltd, Fujitsu and BEIS to establish a clear account of their actions and
conduct in relation to Horizon during the time period in question.
« Assess whether the Post Office Ltd has learned the lessons from the criticisms made by
Mr Justice Fraser in the*Common Issues’ and “Horizon Issues’ trials and those identified
by affected postmasters and has delivered or made good progress on the organisational
and cultural changes necessary to ensure a similar case does not happen in the future;
« Assess whether the commitments made by Post Office Ltd within the mediation
settlement-— including the historical shortfall scheme- have been properly delivered;
« Assess whether the processes and information provided by Post Office Ltd to postmasters
are sufficient toi) enable both parties to meet their contractual obligations; and ii) to
enable postmasters to run their businesses. This includes assessing whether Post Office
Ltd’s related processes such as recording and resolving postmaster queries, dispute
handling, suspension and termination are fit for purpose. In addition, determine whether
the quality of the service offer for postmasters andheir relationship with PostOffice Ltd
has materially improved since the conclusions by Mr Justice Fraser; and
+ Examine the governance and whistleblowing controls now in place at Post Office Ltd and
whether they are sufficient to ensure that the failings that led to the Horizon case issues
do not happen again.
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Annex B: Shortlist of Chair Candidates & Industrial Strategy
_ IRRELEVANT
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