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Briefing: Chairman and Chief Executive, Post Office Limited
MEETING WITH JAMES ARBUTHNOT, MPS, JFSA AND SECOND SIGHT
24" MARCH, 5.45PM
ROOM T — PORTCULLIS HOUSE
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Following on from the meeting you had with James Arbuthnot MP, 20" January 2013, he
has organised a meeting to update MPs on how the Initial Complaint Review and
Mediation Scheme and business improvements are progressing.
The Post Office contacted all MPs that received an invitation from James Arbuthnot.
MPs Priti Patel, Karen Lumley and Jonathan Djanogly have said their researchers will
attend the meeting on their behalf (no other MPs responded to the Post Office email).
Mark Davies spoke to Janet in James’ office who has confirmed that they will not be
proactively seeking media attention. However, JFSA could contact the media.
You have spoken to James who has acknowledged that in light of concerns Second
Sight and we have raised about maintaining confidentiality and the integrity of the
Scheme he plans to cut down the amount of time Second Sight and JFSA have to speak.
However, his office is keen that you explain about how you will engage with individual
MPs who wish to discuss their cases with the Post Office.
The meeting is a chance for the Post Office to:
0° talk about the extent of the ambition for change ‘Securing the Future: Strategy
2020'
© explain the positive work already underway in relation to improving training
and support for subpostmasters
0. manage the expectations of MPs, Second Sight and JFSA.
For context the last meeting that James Arbuthnot organised for MPs was attended by 4
MPs and 4 researchers (9" July 2013):
o MPs - Oliver Letwin, Tessa Munt , Andrew Bridgen and Mike Wood.
o Researchers for Jonathan Djangoly, Jonathan Lord, John Woodcock and
Mark Prisk
Agenda
Welcome and introduction, James Arbuthnot MP — 5 mins
Update on progress with mediation scheme and business improvement programme,
Paula -15 mins
Second Sight update — 5 mins Likely to be reduced to 5 minutes
JFSA update — 5 mins Likely to be reduced to 5 minutes
Q&A, All — 20 mins
\t 3
James Arbuthnot’s office has received acceptances from the offices of:
Simon Burns
Stephen Crabb
Jonathan Djanogly
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Andrew George
James Gray
Oliver Heald
Oliver Letwin
Karen Lumley
David Willetts
n addition they anticipate that Mike Wood and Andrew Bridgen will also attend.
Introduction
e Thank you James.
e I would like to start by thanking James for organising this meeting and the support he
has given to all of us in raising the concerns of constituents about our systems and
processes so that they can be properly dealt with.
e Can I stress at the outset that the Mediation Scheme we set up last year, and which I
hope you are all familiar with, is now in progress and I am grateful to Sir Anthony
Hooper, the independent Chair of the Working Group overseeing the Scheme, and JFSA
and Second Sight, as members of the Working Group for their work (overseeing the
Scheme).
e lam sure you will understand that it would be inappropriate to discuss individual cases—
both to protect the privacy of individual applicants but also to avoid compromising the
mediation process in any way.
¢ Having established the Working Group, and appointed an independent Chair, I am sure
you appreciate that the administration of the Scheme is a matter for the Group and it is
important that none of us says anything to undermine the role of the Working Group or
the independence of the Chair. I know that lan and Ron from Second Sight have
expressed similar views. Having established the Working Group to oversee the Scheme
we now need to give it space to do that.
¢ I also know that some MPs want to meet Post Office on an individual basis. We are
happy to do that. However, even on an individual basis we will not be able to discuss the
detail of anything that is currently in the process of being investigated. It would be
inappropriate and could undermine individual mediation discussions.
° Today I'd like to say a little bit about the Scheme, (subject to the constraints I have
already mentioned), and I will invite Chris Aujard, Post Office General Counsel and a
member of the Working group to do that in a moment, and also tell you about the
changes to the way we provide support and assistance to subpostmasters. Angela is
here to set that out in more detail.
e But! am the Chief Executive of Post Office and I hope you'll understand that I want to
just say a few words, before I pass over to Angela and Chris, to put the work they will
talk about in context.
Our Business is changing
+ As you know we became an independent business in 2012. We are now transforming
the business in every way, from the post offices you see in your constituency to the way
we run our business. I hope you have seen evidence of the former in your areas.
+ We recognise that if we are to succeed commercially, we need to change the way we
work. In short, we need to engage more effectively with everyone who has a stake in the
business.
* That means becoming a more “listening” organisation. It means greater involvement by
the people who run the business, at all levels, in the way we change: how we develop
and deliver products.
* — It is about sharing responsibility for the turnaround we need to make — operationally and
culturally — in a way which I am happy to admit we have not necessarily done in the past
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as a business. We may in certain areas have adopted a command and control approach
which was not the right way for a business like ours.
* We have already started on this path. For example, we have set up a new Post Office
Advisory Council that had their inaugural meeting last week, on the 49" March (POAC
Member MPs are listed in ANNEX 1)
* The Post Office Advisory Council will provide a formal mechanism for customers,
employees, subpostmasters and wider stakeholder groups to engage with the Post
Office on areas such as new products, services, branches and advertising.
¢ We have also introduced new forums involving staff and subpostmasters in product
development and branch support and training and launched a new annual engagement
survey for subpostmasters.
Branch Support Programme
* This is all linked to why we are here today.
* As you will be aware, the Second Sight report produced in July last year suggested that
improvements could be made in the training and support processes provided to
subpostmasters in certain areas.
+ We welcomed that report and the opportunity it gave us, in the context of what I have
already said, to review the ways we work and change them: the Second Sight work
highlighted the need for us to make improvements in the way we support and train
subpostmasters
* So one of the actions we took from the Second Sight report was to set up the Branch
Support Programme, to review — across all aspects of our business — how we support
our network.
* I think James you should take great pride in this — it is thanks to your work and that of
other MPs that this has happened — and we are really grateful to you. We are a
responsible business and we take our responsibilities to our people very seriously. Your
focus on our work was the catalyst to what will be a cultural transformation in our ways
of working
* Pm now going to ask Angela to talk to you in more detail about the business
improvements we are making (Angela note in ANNEX 2)
Scheme Overview
* Thank you Angela.
* lam now going to ask Chris Aujard to talk about the second significant development
which led from the Second Sight report, the creation of the Mediation Scheme.
* As you know, the Second Sight report found that there were no systemic issues with the
Horizon system, which currently has around 68,000 users and processes more than six
million transactions every day.
* We provide subpostmasters with training and support and there are support processes
in place to help them successfully complete transactions - on-screen, help-desk and field
support.
* Angela’s work will look to identify further improvements we could make.
+ However as I have said we are a responsible business and given the concerns
expressed by some subpostmasters about processes we were determined to provide a
way to ensure those issues could be heard.
+ That is why we set up the mediation scheme which I will now ask Chris to provide more
detail on. (Chris note in Annex 3)
Summary
¢ Inclosing, I hope what you have heard today will reassure you that we are taking the
concerns raised by some current and former subpostmasters seriously.
e I believe that we now have improved processes in place to deal with issues as and when
they arise.
¢ The training and support we provide for our people has been strengthened and we have
learned valuable lessons from undertaking these activities.
* We have changed our ways of working and are listening a lot more.
* I wanted to just add that if you would like to know more about our wider transformation
we are holding a series of regional events in Parliament at which you will be able to find
out more about what our plans mean for your constituency.
« twill ensure you have full details sent to your offices.
¢ Thank you and I look forward to your questions.
Who is Second Sight?
Second Sight is a firm of independent forensic accountants and investigators appointed by
the Post Office to undertake a review of the Horizon system. They published a report in July
2013.
What is Second Sight's role? What are Second Sight working on?
Second Sight is a firm of independent forensic accountants appointed by the Post Office to
assist in investigating individual subpostmaster complaints. lan and Ron are also members
of the Working Group.
Are Second Sight available as an on-going MPs resource?
Second Sight are appointed by Post Office to provide independent advice to the Working
Group on complaints made under the Scheme.
What about unsafe convictions?/Are your convictions unsafe?
CHRIS TO ANSWER
To date we have seen no evidence that anyone has been wrongly convicted. That is a
matter for the courts.
We have an enduring duty to disclose information to the defence in cases we have
prosecuted where we identify new information which may be relevant to the case. That
applies not only to cases in the Scheme but to all cases we have prosecuted. Following
Second Sight’s interim report we made a number of disclosures and to date there have been
no appeals against any previous convictions
What level of compensation will you be paying? My constituent is due Millions?
This is a mediation Scheme. Mediation provides an opportunity for the two parties to come
together to discuss and, where possible, come to an agreed understanding about the issues.
It does enable the parties to explore and agree, with the assistance of a trained mediator,
how matters can be resolved in a way which reflects the realistic positions of the parties.
However, we cannot comment on individual cases.
What about a final report / Will Second Sight produce it?
The application process for the scheme closed on the 18"" November 2013; each application
is not being progressed through the Scheme, overseen by the Working Group. It is too early
to speculate about what may or may not be appropriate at the end of the Scheme.
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What is the Second Sight thematic report?
Why is it taking so long to resolve subpostmaster issues?
The Working Group has said it wants to balance the need to progress cases through the
scheme with pace with the need to be thorough. The Post Office is a member of the Working
Group as is Second Sight, JFSA and the Chair of the Working Group is Sir Anthony Hooper.
Post Office cannot speak on behalf of the Working Group.
Will all cases go to mediation?
The Working Group will decide which cases are appropriate for mediation.
What happens if there is no agreed outcome at the end of meditation?
That depends on the approach the parties wish to take. For example it would be open to the
applicant to pursue their case through the courts
How does the Post Office decide whether to prosecute?
The Post Office treats all suspected cases of possible criminal conduct very seriously, and
will consider each case on the facts of the individual case. In deciding whether a case
should proceed to criminal prosecution the Post Office must be satisfied that it meets the two
stages of the test set out in The Code for Crown Prosecutors. The first is whether there is
sufficient evidence to justify a prosecution and the second is whether the prosecution would
be in the public interest. A criminal prosecution will only be pursued by the Post Office if both
stages are satisfied in the specific circumstances of the individual case.
Have you changed your approach to prosecutions ?/I’ve heard you’ve changed your
approach as a result of the investigation into the Horizon system?
We have reviewed our approach to prosecutions. We have taken a number of steps as a
business to ensure that we get the balance right between in the way we work with all our
people - so we are also improving processes, training and support for subpostmasters, for
instance, and providing more forums to hear the views of all those working in the business
You dropped a number of cases recently. Why is this?
As is prudent we continue to review the facts and circumstances of individual cases to
ensure they continue to satisfy the Code’s test. If at any time we consider that the ‘test’ is no
longer met we will not proceed with the case — this is something that we are required to do
and have always done.
Are criminal cases in the Scheme being handled differently?
The scheme was open to current and former subpostmasters and those that have been
prosecuted. It is for the Working group to decide how best to handle cases in the Scheme.
Annex 1 st Office Ad
In some circumstances the POAC member wanted correspondence sent to their office
address and so those MPs in blue are for the POAC members office address (this is the only
address we have for them.
First Surname MP Name
Name
Elizabeth I Armstrong
Mark Simmonds, Conservative,
Boston and Skegness
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Marcus Buck Jane Ellison, Conservative,
Battersea
Tim Coomer Claire Perry, Conservative, Devizes
Simon Crozier Charles Hendry, Wealden,
Meares Conservative
Pardeep I Duggal Edward Garnier, Harborough,
Conservative
Chris Feliciello lan Lucas, Wrexham, Labour
David Foley Julian Brazier, Canterbury,
Conservative
Rebecca I Glenapp Andy Slaughter, Hammersmith,
Labour
Farida Iqbal Mike Gapes, Ilford South, Labour
Nilesh Joshi Harriet Harman, Camberwell and
Peckham, Labour
William Keown Margaret Ritchie, South Down,
MBEJP Social Democratic and Labour Party
Marc Kidson Chuka Umunna, Streatham, Labour
Ismail Loonat Mike Wood, Batley and Spen,
Labour
Lynn Simpson Geoffrey Clifton-Brown, the
Cotswolds, Conservative
Nicholas I Stuart Albert Owen, Ynys Mén, Labour
Kevin Twynholm Mark Pawsey, Rugby, Conservative
Donna Underhill George Young, North West
Hampshire, Conservative
We take our obligation very seriously to provide our people with the training and support
they need. The overwhelming majority of our people have told us that our training and
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support fully meets their needs with latest figures showing an average 95 per cent (Agent
Engagement Survey: September 2013) satisfaction level. We constantly refresh these
processes and as part of our commitments to improving processes, we have further
enhanced our training and support programme.
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The precise training given to subpostmasters will depend on a number of factors such as
whether the subpostmaster is completely new to the role, whether he/she is taking over
an existing branch with existing staff, the size of the branch and the types of products
sold. Training includes pre-appointment training and competency testing, greater class
room and in-branch training, and follow up reviews and branch visits from trainers.
As part of our commitments to improving our training and support processes we will
continue to work with our branches to ensure our processes meet our peoples changing
needs. Enquiries made to our helplines will be constantly reviewed to ensure that follow
up training can be provided where branches need further clarification.
Further Detail (if needed)
Improvements have already been implemented with more planned for implementation in
April — June 2014.
The key areas of change are the training offered for new Subpostmasters and our
approach to Subpostmaster contract breaches.
0 Training - we have improved the training approach by:
= — introducing an introductory call to the new Subpostmaster two weeks
before they take up post.
* having earlier contact with the Subpostmaster following their initial training
and replacing the month 1 telephone call with a branch visit.
» reviewing the effectiveness of the balancing work-aid to help
Subpostmasters identify and hopefully resolve balancing problems earlier.
Early warning/intervention approach — There are two areas in particular - NBSC and
HORice - where we are making improvements so that we can identify at an early stage
potential performance issues with branches.
o NBSC —we have introduced an approach to assessing the calls received by
NBSC so that we can identify the root cause of the issue; identify the solution for
the branch and in doing so reduce the calls into NBSC. We also review the call
information to identify the most frequent callers into NBSC and offer pro-active
support to understand why they are ringing more times than other branches and
to resolve the issue before it becomes a problem.
o HORice — is a Fujistu data tool which will give access to real-time data to enable
earlier identification of losses and/or non-conformance issues at branches.
Having access to this information will enable us to identify anomalies in branch
behaviour quickly and take early intervention to understand what is causing the
issue and how it can be rectified. This will include being able to see if a branch is
starting to have losses, which users are having those losses and whether any
potential suspicious activity is happening to hide those losses. This information
will be used to target branches pro-actively to understand whether they need
extra help and support with understanding the correct procedures, to alert
subpostmasters to members of staff who may be hiding losses or whether a
branch is getting into difficulty with balancing. Stakeholder requirements have
been identified and we are in the process of formalising the pilot with Fujitsu with
a view to starting a six month pilot in April 2014.
Longer Term Changes: Our Branch Support Programme has 9 work streams that
capture all the touch points the Subpostmaster has with Post Office in running their
branch. These are: pre-appointment process; operational support; physical support;
performance management; training; communication; IT; early warning/intervention
approach; leavers process.
Review Mechanism - The proposed ways of working for each workstream will include an
ongoing review mechanism that ensures that continuous improvement is embedded into
business as usual.
Measuring Success - the formal measure is the Subpostmaster annual engagement and
in particular the support category of the survey. This will be supplemented with Pulse
surveys undertaken by Comms at quarterly intervals throughout the year. Reviewing the
life cycle of the subpostmaster and all touch points with the business. Each of the nine
workstreams will have performance measurements that feed into the two main KPIs.
Branch User Forum
The purpose of the Branch User Forum is to provide a way for Subpostmasters and
others to raise issues and insights around business processes, training and support
directly feeding into the organisation’s thinking at the highest level.
The forum is a forward looking mechanism to ensure the business processes and
approaches are fit for purpose for users and are in keeping with Post Office behaviours
and values.
The Forum consists of 6 subpostmasters, 2 crown members and 4 PO Senior
Managers.
The fourth meeting took place on 20th March where the improvement suggestions to the
Horizon user experience made via the Branch User Forum were discussed
Overview
The Scheme has received 150 applications. They are all at different stages in the
process, some at a very early stage and some more advanced.
Post Office has already resolved 8 cases which have withdrawn from the Scheme.
The Working Group meets weekly to oversee the progress of cases through the
Scheme, every four weeks that meeting is face to face.
We have 22 Post Office investigators trained and working on cases at the moment.
Some cases are taking longer to investigate than originally envisaged for a variety of
reasons — often because getting the information required to do a thorough investigation
can take time or the issues are complex.
Most important is that the investigation is as thorough and comprehensive as possible.
Background
* The Second Sight report into the Horizon system produced in July 2013 found no
systemic issues with the Horizon system.
However, it suggested that improvements could be made in the training and support
processes provided to subpostmasters.
We established the scheme to help resolve the concerns raised by some sub
postmasters regarding the Post Office’s Horizon computer system and supporting
processes.
The Scheme is being overseen by a Working Group comprising representatives from
Post Office, Second Sight and JFSA.
We appointed an independent Chair, Sir Anthony Hooper, a former Appeal Court Judge.
The launch of the scheme was communicated to subpostmaster and ex subpostmasters
The application process for the Scheme opened on the 27th August and closed on the
18th November 2013
Process
It is not appropriate to comment on the outcome or review of individual cases as the all
discussions are confidential between ourselves and the subpostmaster involved.
Where possible we are working with the subpostmasters to resolve issues as early as
possible
The mediation process will be run as follows:
© Mediation is being arranged through CEDR an independent organisation who will
arrange premises and appoint the independent mediator.
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Post Office will be represented by a senior manager and a lawyer from Bond
Dickinson; the applicant will be present together with their professional advisor
(who Post Office is funding).
Each party to the mediation will be provided with a copy of the application, the
completed case questionnaire response, the Post Office investigation and
Second Sight’s reports.
It is envisaged that mediation will take between half a day and a day.
Post Office will report at a high level on the outcome of the mediation to the
Working Group, likely to be limited to numbers of cases mediated and whether a
case has been resolved
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