BEIS0000975 - Letter from Sarah Munby to Nick Read re: Post office Budget 2021/22

Evidence on official site

BEIS0000975
BEIS0000975

OFFICIAL SENSITIVE - COMMERCIAL de

Department for
Business, Energy
& Industrial Strategy

Nick Read

Chief Executive Officer
Post Office Ltd

20 Finsbury Dials
Finsbury Street

London

EC2Y 9AQ

29 September 2021
Dear Nick,
POST OFFICE: BUDGET 2021/22

I am writing to you regarding Post Office’s 2021/22 budget which has yet to receive shareholder
approval from BEIS.

I am aware that Network Investment and Network Subsidy payments of £64m and £12.5m are due to
be paid to POL on 1 October. However, on account of the management and controls of POL’s
litigation costs not being adequate, I am unable to release the payments due until POL can demonstrate
satisfactory control Payments would be made by BEIS following a shareholder approved budget.

As you know, BEIS is fully supportive of the need to settle POPs historic liabilities as quickly and

efficiently as possible. BEIS has already provided funding ofup to £285m for settlements under the

Historic Shortfall Scheme. In addition, my officials are also seeking funding of up to a further
c.£780m for settling claims resulting from overturned criminal convictions. These amounts are in

addition to BEIS’ substantial funding of POL’s business as usual activities.

In our discussion on 2 July, we discussed my departments continuing concerns about the management
and control of Post Office's litigation costs. I understand that litigation costs (excluding settlements)
which are accounted under the Historical Matters Business Unit is forecast to cost c.62m for 2021/22
and c.£63m in total between 2022/23 to 2024/25. This follows expenditure of £52m in 2020/21. Whilst
I understand progress is being made in getting these costs under control, I remain very concerned and
would be grateful if we could meet so I may understand thecurrent status of litigation cost control and
the wider plan for budget approval.I would like to understand how you, as the accountable person for
POL, are taking steps to establish that the legal costs being incurred will representValue for Money for
POL and the taxpayer.

I trust you understand my concerns andlook forward to meeting. In the meantime, thank you for your
continued cooperation withBEIS and UKGI officials.

Yours sincerely,

Sarah Munby
Permanent Secretary for the
Department for Business, Energy and Industrial Strategy (BEIS)