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POST OFFICE LIMITED - BOARD PAPER
Project Sparrow Update
1. Purpose
The purpose of this paper is to provide the Board with an update on Project Sparrow.
2. Background
2.11n the last (October) CEO report to the Board, an update was given on the then
current status of Project Sparrow. The purpose of this paper is to provide a high level
summary of the project as it now stands, focussing on developments since the last
Board meeting.
3. Current Situation
3.1 Project Sparrow as initially conceived comprised two main initiatives, both of which
were launched in response to the Second Sight Report released in July 2013. The
first, and most time-critical of these initiatives was concerned with establishing a
mediation scheme (and related activities), whilst the second focussed both on
developing a business improvement program (BIP), aimed at assisting sub-
postmasters in their business dealings with Post Office, and on implementing
improvements to the overall control framework.
3.2 Until relatively recently these two initiatives were, for governance purposes, treated
as one project and were both being overseen by the Project Sparrow Steering
Group. The Steering Group has, however, recently agreed that the Post Office’s
interests would be better served, and greater focus would be achieved, by separating
these activities into two distinct projects with Belinda Crowe being appointed as
Programme Director for the first (the mediation scheme) and Angela Van Den
Bogerd acting as Programme Director for the second (the BIP).
3.3As at the date of the last CEO report the mediation scheme had received 64
applications from sub-postmasters. As of 18 November 2013 (the date on which the
scheme officially closed) some 140 applications had been received of which 82 have
been approved to proceed to the next stage (ie the stage at which the applicant
submits a “Case Questionnaire” setting out the details of his/her claim) and 9
applications had been rejected. The remaining 49 have been held over for
consideration at the next meeting of the “Working Group” scheduled for 22
November 2013.
3.4 As previously trailed, the Working Group that has been established to oversee the
operation of the scheme is chaired by Sir Anthony Hooper. It meets weekly by
telephone to discuss individual applications and holds face-to-face meetings once a
month for more detailed discussions, including discussions as to the overall efficacy
and operation of the scheme.
3.5 The scheme has received more applications than originally anticipated (140 as
against an initial planning estimate of 75) and, given this fact and the complexity of
some of the applications, additional resources have now been allocated to the
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project, principally aimed at ensuring that each application is investigated thoroughly
and professionally. It is expected that the full team will be in place by 6 December
2013,
3.6 The increased number of applications will also increase the overall costs of the
scheme, much of which will be incurred on a “per case” basis. Thus, an initial budget
of £1.3m (ex vat) based on 75 applications has been increased to £2.2m (ex vat) for
130 cases proceeding all the way through to a concluded mediation. This does not
include the costs of any financial compensation which may be offered to facilitate
resolution of individual cases (as to which, see para’s 3.8 and 3.9 below).
3.7 Notwithstanding this increase in resources, it is currently anticipated that the time
required to process all applications through the scheme will now extend into the Q2
2014. This will also extend Second Sight’s involvement in the Scheme given its role
of recommending whether a case is suitable for mediation after it has considered the
results of our investigations. This role was ascribed to Second Sight to add a level of
independence, and therefore creditability, to the scheme. The Working Group (and
the Chair in particular) remains tasked with ensuring that applications are efficiently
progressed through each stage of the scheme.
3.8 On 19 November 2013, ExCo considered a draft policy prepared by the project team
with a view to ensuring that our approach to resolving individual applications was
consistent across the piste. In developing this policy, however, it did become clear
that certain applicants are expecting significant financial settlements, and certainly
ones larger than those envisaged by our policy. Accordingly, work is now being
undertaken to see what sensibly can be done to bridge this “expectations gap”.
3.9 The project team will also continue to refine this policy as the applications progress
through the scheme into actual “mediations’”.
3.10 The first phase of the BIP (looking at improvements to our sub-postmaster
training and support processes) was launched in November, informed in part by the
new Branch User Forum, the inaugural meeting of which took place on 19 November
2013. The meeting was well represented by subpostmasters and Crown employees,
who fully supported the Forum's purpose and objectives. Forum meetings will inform
the wider plans for reforms to our organisational structure and culture over the next
6-12 months.
As foreshadowed in the last CEO report, a paper reviewing our overall policy for
investigating and prosecuting future (criminal) cases was presented to the ARC on
18 November 2013 and a verbal update on that matter will be given at the Board
meeting.
4. Recommendations
The Board is asked to note the update set out above.
Chris Aujard
21 November 2013
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21 November 2013