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Mike Granville
From: Mike Granville
Sent: 26 November 2010 14:46
To: Paula Vennells; Mike Moores; Mike Young; Susan Crichton; Kevin Gilliland; Sue Huggins;
Rod Ismay
Subject: Update on JFSA and Horizon issues and urgent respinse needed for BIS - in strictest
confidence
Attachments: JFSA response issues for BIS2.doc
I'm sending this note around to provide an update on the issues related to JFSA and to ensure
concurrence with the line that I am taking back to BIS.
Background;
You will all be aware of the allegations that the JFSA has been making about the integrity of the Horizon
system and the associated processes that POL uses in terminating contracts. There have also been
various legal cases relating to individual subpostmasters being prosecuted for theft / false accounting
where the JFSA have had some kind of involvement (the most recent being Ms Misra, West Byfleet,
where the ex-subpostmaster was recently found guilty of theft). As you are aware Channel 4 were also
looking at the subject in the summer — although nothing has yet come of this.
Our approach throughout has been to robustly defend the integrity of the Horizon system.
However BIS continue to be interested in this issue. They have had a succession of MP's writing into the
Minister on behalf of constituent subpostmasters referencing the JFSA’S allegations and the JFSA have
also written directly to the Minister on several occasions. As a result of this pressure, back in September,
Ed Davey agreed to a meeting with the JFSA and whilst at the meeting the Minister listened and didn’t
commit to any actions, BIS thereby maintain an ‘involvement’ in this issue..
As a result of this and to follow up the BIS meeting with JFSA, Mike Whitehead recently met with Rod
Ismay, Lynn Hobbs and myself and went through some of the points that JFSA raised at the meeting with
BIS plus a few of the more recent MP letters that have been received on the subject.
We are at the stage where we need to go back to Mike on some of the points that were raised. I have
been preparing a draft to do this, but we have had to await a few points to be checked out
In the meantime, further events have intervened. JFSA have put a submission to the Postal Services Bill
Committee (which hasn't been picked up on to date — but is another indication of the ongoing pressure
that they are exerting).
Response;
I'm attaching a copy of the material that I am sending over to BIS to cover both the individual cases and
the more general points raised. (this document also includes a copy of the JFSA submission to the Bill
Committee)
However, the key point I'd like to draw to everyone's attention is that BIS are looking for general lines to
go back to the JFSA (and to MP's whose correspondence that is quoting them). BIS accept POL’s
assurances about the integrity of the system and don't want to intervene in that area but they do have
some concerns about some of the ways in which our ‘disciplinary processes’ might be being perceived.
To take this issue forward, a suggested approach is to be robust on our current system and procedures —
but also to seek to make reference to some of the work being already undertaken in the contracts team
looking at our process approaches on ‘discipline matters’ in certain cases going forward. We need to
make clear that this is ongoing review type work, it is unrelated to the JFSA allegations, rather it is
conducted with the NFSP as the representative of subpostmasters and is a natural thing, normal practice
we would be doing — and particularly as we look to take forward our contracts in the light of the
Government's recent policy statement around the Post Office.
In the attached document the relevant extract looks like this;
29/11/2010
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5. Next Steps within POL
The Horizon system and accompanying contractual processes remain fully robust. Their
integrity and sound basis have been demonstrated over many years, and they have
underpinned the provision of effective and sustainable service to Post Office customers. POL
refutes the unsubstantiated allegations made by the JFSA.
POL maintains a legal contractual relationship with subpostmasters which is based on values
of trust and mutual respect. In cases where there are reasons why this relationship cannot
continue, there are full processes of internal appeals and the parties can have full subsequent
recourse to the UK legal system. As a matter of course, and on an ongoing basis, POL works
with the National Federation of Subpostmasters (a recognised representative body for
subpostmasters) on the development of contractual and associated process matters.
Looking forward, as part of its future strategy consistent with the Policy Statement outlined by
Government in November 2010, Post Office Ltd will be seeking to further review its contracts
and accompanying processes to meet the changing needs of its customers. This approach will
continue to ensure that the contractual basis and associated procedures between Post Office
Ltd and individual subpostmasters remains sound, fair, commercial and equitable.
It is this combination of;
- the current robustness and integrity of Horizon,
- clear internal processes with appeal systems with the ultimate backstop of the UK legal
system (should cases be referred to it),
- ongoing liaison with the NFSP as the recognised group representing subpostmasters and
-a forward looking approach to the further development of contracts and associated policies in
line with developing strategy and Government policy
that provides assurance to BIS that the approach taken by Post Office Ltd continues to be fair
and equitable.
This positioning is important — hence circulating this note to yourselves — as BIS are putting pressure on for a
way forward and are looking for a generic ‘statement’ from us they can use The risk is, in the absence of our
providing something like the lines above, that BIS say something off their own bat which could lead to more
difficulties.
As you all have had an involvement in this particular issue — I’m looking to see if I can gain concurrence to this
particular statement — or to check the process whereby concurrence can be quickly achieved.
Postscript - I have just had Mike Whitehead on to me saying that Edward Davey is coming under ‘extreme
pressure’ to respond on the cases that he has received. I will send to Mike the extract of the information in the
attached document on the three specific cases referred to us by BIS but ! know he will come back to us
asking for something like the ‘way forward’ statement I’ve outlined above.
I'd therefore like be able to get the full document over to them on Monday. Please can I therefore ask if I can
gain views by then.
Thanks
Mike
Mike Granville
Head of Regulation Strategy
29/11/2010
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Post Office Ltd
[21 1st Floor, Banner Street Wing, 148 Old Street, LONDON EC1V 9H1Q
i)
29/11/2010
In Strictest Confidence
JFSA response issues - paper for BIS
Issues covered in this note;
. Suspension and contract termination numbers
. Update on cases referred by BIS
Follow up items from 4 November meeting between BIS and POL
. JFSA submission to Postal Services Bill Committee and prospective POL
Tesponse
5. Next Steps within POL
PWN
1. Suspension and Contract Termination Numbers
Jesse Norman MP (Hereford and South Herefordshire) (Con): /s my hon. Friend as
concerned as I am about the back-door closure of post offices, which I raised in a
debate last week? I am enormously grateful to the Minister for recognising the
problem. He may be interested to know that, of the 2.406 audits that were done in
2009, 265 suspensions were held, and there were only two reinstatements after
appeal. That very much reinforces the picture that suspensions are being used as a
means of closing post offices, which I am sure is something that we would all
deprecate.
It is worthwhile seeing some more background to these figures - which related to
the period 1 January to 31 October 2009.
In that period there were 2406 audits and there were 265 suspensions as
identified in the Parliamentary quote.
Of those 265 suspensions, 64 were subsequently reinstated following the initial
investigations. A further 67 resigned to avoid termination. There were subsequently
131 summary terminations, 1 termination at 3 months notice and 2 reinstated
following appeal.
Therefore of the suspensions in the Jan-Oct 2009 period, 25% were reinstated,
25% resigned themselves and 50% had their contracts terminated by POL.
If we consider more up to date figures for January to September 2010, we see 166
suspensions. Of these 29 have been reinstated, 37 have resigned to avoid
termination, 30 cases still being considered. There have been 62 terminations of
contract, 1 reinstatement following appeal and 7 cases currently at the appeal
stage.
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Therefore of the suspensions in the Jan-Sept 2010 period, 22% cases are still in
progress, 18% have been reinstated, 22% have resigned to avoid termination and
37% have had contracts terminated.
A final point with respect to Jesse Norman's comments - where there is a
termination, it does not necessarily mean that the Post Office will close. Typically
we will be seeking to appoint a new subpostmaster to take over the Business -
either at that location or very nearby. Termination of contract refers to the
subpostmasters individual contract; it does not mean that we are seeking to close
the Post Office facilities in that location. Another subpostmaster will be typically
sought and be appointed to run services at the location concerned.
2. Update on correspondence referred from BIS
Jonathan Djanogly MP (letter to Ed Davey 22 October 2010)
on behalf of Mrs Jenny O'Dell, ex subpostmaster Great Staughton Post Office
In November 2009 Mrs O'Dell contacted the internal helpline (NBSC) advising that
her branch had seen monthly losses of £1000 since May and the figure stood at
£7,000. Mrs O'Dell stated that she had carried out checks and had not received
any transaction corrections. She believed the Horizon system to be at fault so
refused to make good any losses.
Checks undertaken by the contracts team with the Chesterfield accounting team
confirmed they were not aware of any issues at the branch; no problems with
cheques/cash or ATM and that no losses had been settled centrally. There were no
losses within the last three trading periods so this raised the possibility that the
cash figure may have been inflated to cover losses.
On 9 December 2009 the contracts team wrote to Mrs O'Dell asked her to supply
any evidence to support Horizon was at fault. Mrs O'Dell referred to a shortage of
16 December 2009 of £8,506 and subsequent gains on 17 & 21 December of
£5,000 and £7,000 but could not provide any evidence to support Horizon was at
fault.
An intervention visit took place on 6 January 2010 to try and ascertain the cause
and extent of the losses and whether there was any fault with the system or
In Strictest Confidence
incorrect accounting. Following an audit Mrs O'Dell was suspended as a number of
discrepancies were found. Some examples are; multiple cash declarations added
together to hide tosses; three cash declarations on the system totalling £21,000
but less than £8,000 actually on hand; no losses in balance over 12 months but
one misbalance settled centrally; the branch trading statement of 30 December did
not show any Christmas stamps but there were 9,032 on hand. The total shortage
at audit was £9,616.66.
Following her suspension Mrs O'Dell was invited to a meeting on 8 February 2010
to put forward her reasons why her contract should not be terminated. The charge
was loss at audit and falsification of accounts. During the interview Mrs O'Dell was
accompanied by NFSP representatives. Mrs O'Dell admitted to inflating cash
figures in the Post Office accounts. Neither Mrs O'Dell nor the NFSP could provide
any evidence to suggest that the losses had been occurring over a period of time.
Mrs O'Dell was advised on 19 February 2010 that her contact was summarily
terminated and that she was required to make good the outstanding loss. She took
up the right of appeal, which was held on 30 April 2010. Mrs O'Dell was advised in
a letter dated 21 May 2010 that the decision to terminate her contract was upheld.
A separate case was also raised by Post Office Security to follow up the audit
findings. The registered staff at the branch was Mrs O'Dell and her son Daniel
O'Dell. Both were interviewed under caution. Mrs O'Dell admitted to inflating the
official cash on hand to cover up shortages in the Post Office account and falsifying
branch trading statements. Despite Post Office Ltd being able to prove that more
than one cash declaration was being made, Mrs O'Dell maintained the system was
at fault. An official caution was administered under Section 1 of the Fraud Act
2006, which Mrs O'Dell refused to accept. The outstanding debt is currently being
pursued via our Civil Litigation team.
Neither Mrs O'Dell nor her son provided any evidence of or identified any specific
transactions which contributed to the losses. Post Office remains fully satisfied that
the Horizon system is robust and fit for purpose.
Jonathan Lord MP - Letter to Edward Davey 25 October re Mrs S Misra - West
Byfleet
In the case of Mrs Misra the case has now been before the Courts, and Mrs Misra
was found guilty after a full jury trial. She has subsequently been sentenced to 15
months by the Judge taking all due regard to Judicial guidelines.
Background information is provided below
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Brief on Mrs Misra is below:
Mrs Misra was the subpostmaster at West Byfieet.
An audit was carried out on 14 January 2008 and Mrs Misra was suspended the
same day
Audit was £77,643.87 short, which included a loss settled centrally of £3,034.03
Audit report: cash & stock left in counter drawers over night which included date
stamps and MVL's
Mrs Misra told the audit team that the account would be £50-£60K short and that
this had been going on for about a year prior to the audit. She said staff had taken
£89k and that she had not informed anyone in the Post Office as she was worried
she would lose the branch. She stated she had made good some of the losses and
was looking at ways to make the rest good. She admitted she had been adjusting
the branch trading to make it balance. There was an amount in the suspense
account £27K + £3k; Mrs Misra showed the auditors the grey pouches & rem slips
but there was no money in the pouches.
Mrs Misra was charged by Elaine Ridge, contacts manager, on 12 March 2008 of
misuse of PO funds & false accounting
Mrs Misra attended interview and more or less repeated the statement she made
to the auditors
The decision was taken to terminate her contract for services on 1 April 2008; Mrs
Misra sent in her resignation on 7 April
She was interviewed by POID and again admitted the account had been short for a
long period and that she had been falsifying her account to cover it up. She
blamed it on staff theft.
The case has now been before the Courts, and Mrs Misra was found guilty after a
full jury trial. She has subsequently been sentenced to 15 months by the Judge
taking all due regard to Judicial guidelines. It is probably inappropriate to comment
about the detail of the trial - although it is worth pointing out that the Defence for
Mrs Misra did utilise an IT expert with regard comments on the Horizon system
and a clear decision was arrived at by the Court.
Jamail Singh, who was the RMG lawyer on the case, explains that the charges were
one of theft of £74,000 and five charges of false accounting. There was a7 day
Jury trial at Guildford Crown Court between 11 October and 21 October 2010
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where she was found guilty. The sentencing hearing took place at Guildford Crown
Court on 11 November 2010.
A hearing is being arranged for a confiscation order to seize Mrs Misra’s assets.
Please note that this was a criminal not a civil case. With a criminal case there is
higher of proof and beyond reasonable doubt - civil cases are decided on a balance
on probabilities. Issy Hogg was her criminal barrister & is closely associated with
JFSA. There were also lots of adjournments, whilst Mrs Misra’s solicitors kept
asking for more & more evidence, which was supplied.
It is probably inappropriate to comment to the MP about the detail of the trial -
although it may be worth pointing out that the Defence for Mrs Misra did utilise an
IT expert with regard comments on the Horizon system (the MP's letter suggested
that they wished to employ at IT auditor to look at the case but the costs were
prohibitive) and a clear decision was arrived at by the Court.
Wendy Buffery - Up Hatherly
Background to this case as follows;
e Chesterfield noticed a pattern of unusual cash rises on Tues, Weds &
Thursdays
e Following an audit of the branch on 11/12/08 an initial shortage of
£27,776.63 was identified. £1,500 was later found, reducing the loss to
26,256.63.
e Mrs Buffrey told the lead auditor the main stock would be £20k short
e Ather RTU interview on 21/01/09 Mrs Buffrey admitted that she had
started to inflate her cash to cover losses from May 2008 but that she had
not taken any money for her own use.
e During the period the losses occurred her husband had been taken ill with
cancer and she too had ill health
e Mrs Buffrey raised no issues around her accounting difficulties with either
POL or the NFSP
e lt appears Mrs Buffrey went to appeal and the decision to terminate her
Contract for Services was upheld in March 2009 for falsifying accounts
In Strictest Confidence
Post Office security took forward a prosecution and went to court in April
2010. A trial date was given for September 2010.
A week before the trial date, we were advised that Mrs Buffrey would be
changing her plead to guilty and produced a cheque for £26,256.63 - which
was the amount of the outstanding debt.
On 18 October 2010, Mrs Buffrey admitted to one count of fraud was
sentenced to a 12 month community order of 150 hours unpaid work.
Note: Although Mrs Buffrey stated she had not taken any money, she admitted to
falsifying accounts. No claims were made to challenge Horizon integrity. However,
security advised that Horizon was mentioned prior to her court date but after Mrs
Buffrey’s forensic accountants had gone through the reports her plea was changed
to guilty. No evidence has been provided to support that Horizon was at fault.
3. Follow up points from POL meeting with Mike Whitehead on 4 November
(subsequent to the JFSA meeting with Edward Davey).
Points discussed at the meeting
Whether the contract has changed since 1994 to reflect Horizon- The
Contract has had a series of amendments and associated operational
instructions which mean that it remains a proper legal and commercial
document with respect to the operation of a Post Office. There has been no
legal challenge to the appropriate nature of POL’s agency contracts
Lack of audit trail for subpostmasters - subpostmasters can pull off a
transaction log every day and declare their cash at the end of the day. The
facilities are there for subpostmasters to track their own transactions should
they wish
POL can access the system remotely and make changes to it-. The system
is based on a user log in, and all actions have to be endorsed by the user.
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POL cannot remotely control a branches system. Any technical changes by
Fujitsu that impact the system have to go through clearance processes
which would prevent any amendment to existing data. The independent
audit file is in place and can show all the system activity in a particular
branch. den be ah tess habe
Frequency of software updates - these are normal operational updates such
as those that occur in any system. They do not indicate in any way any
faults or unreliability in the system
Equipment moved from one branch to another. lf any equipment is moved
from one branch to another there is no potential for past transactions in
any way to impact the system. Transactions are not held on or tagged to
the equipment in the branch - they are recorded against the branch code.
As previously advised - every transaction undertaken on the system is
independently recorded and maintained in a separate tamper proof audit
log. There is always therefore the capability to track back transactions
related to the branch independent of the equipment on which it was
undertaken.
No regular audit systems ~ our audit systems are based on random choice
and on risk factors. Audits from the central team are not needed for the
subpostmaster to operate the system or to know where they are with their
own account. Subpostmasters can obtain a full transaction log, make daily
cash declarations and can regularly balance their account. They have access
to phone help and personal visit in any cases of difficulty.
Subpostmasters having to agree to a loss or cant open the office the next
day - this is not the case. If there is a discrepancy in an account when it is
balanced, the subpostmaster has the option for ‘settle centrally.’ - this
means that they can roll the system over whilst the issue is being looked
into. It is a standard process which does not imply acceptance or otherwise
of the discrepancy by the subpostmaster. It is a standard part of the
process.
Processes for suspension and afterwards - The Post Office processes cover
the situation whereby the subpostmaster is made clear of the situation, has
the opportunity for interview, can be accompanied at that interview - and
there are clear rights of appeal once the decision is made (the attached
document summarises the situation). In cases where the Post Office
Investigation Branch is involved, the procedures followed within their
investigation and interviews are fully compliant with the relevant UK
legislation. The attached note explains further the credentials of Post Office
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Investigators (who would always be involved in a case that involved
prosecution).
4. JFSA submission to Postal Services Bill Committee
Memorandum submitted hy Justice For Subpostmasters Alliance UFSA)
(PS 14)
The submission comprises of:-
0 Introduction - who we are and why we came into existence
0 Aim - the objectives of the Alliance
o Background Examples - offers a brief insight into subpostmaster
problems retating to:-
o The Subpostmaster Contract
o Audits
o Suspensions
o Recommendations
Introduction
Justice For Subpostmasters Alliance FSA) was established during
November 2009. It is an entirely voluntary self-help group comprising of
mainly ex-subpostmasters, a smaller group of serving subpostmasters and
a number of professionals who are able to assist with their expertise. Since
the introduction of Post Office Ltd.'s (POL) Horizon system during the late
1990's, many individual subpostmasters in isolation have endeavoured to
stand up to POL. Inevitably they have been crushed under the weight of
their power and their endless funds underwritten by a Labour Government
that allowed them to act with such impunity. This, when combined with the
flat refusal to confront POL over the failures of its Horizon system by the
50 called representative body for subpostmasters, the National Federation
of Subpostmasters (NFSP) is the reason why JFSA has been formed. We
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are still a small group with over a hundred active cases and roughly twice
that number of serving subpostmasters who are following our
developments. Yet our numbers continue to grow weekly as people
discover JFSA and many more subpostmasters fall victim to the vindictive
and punitive actions of POL. There is little doubt that when the true extent
of the antics of POL are finally exposed the victims will number in the
thousands.
Aim
Our aim is to bring to the attention of those in power the abusive and
destructive manner in which POL have, and are still treating
subpostmasters, and to seek to redress the many injustices that we have
been subjected to by POL. We intend to highlight the miscarriages of
Justice that have been inflicted on subpostmasters by an organization that
abuses its licensing power to criminally prosecute without providing
evidence in cases of a civil matter.
The systemic faults of POL and its Horizon system are too numerous and
too complicated to deal with in this brief submission. Though in order to
offer some insight into the points and recommendations that appear at the
end of this document, a brief outline of the background to some of these
issues has been included.
Background Examples
The Subpostmaster Contract
The Performance and Innovation Unit report of 2000, “Counter Revolution:
Modernising The Post Office Network" identified "The majority of sub-
postmasters still work under a contract which can be traced back a
hundred years’: POL uses this contract, emanating from the Victorian era,
to pursue subpostmasters through the courts in order to recover POL's
losses from their flawed Horizon system. Even with the introduction of the
latest technology POL still rely on clauses such as ‘a Subpostmaster is
responsible for all losses’, originating from a contract from a time when
the lighting was by oil lamp and the ledger was completed hy quill and ink.
They use such Clauses to extract money from a subpostmaster, either from
their salary or through the courts, should their flawed Horizon system
decides it is owed. System errors are never considered (POL states it
handles 2.4 billion transactions a year and this is without a single error),
only the contract is used to recover any shortage. Yet the IT part of that
system can be accessed and manipulated over a network without a
subpostmasters’ knowledge or agreement, but it is only the subpostmaster
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who is made financially liable.
The few hundred Crown Post Offices left that are directly run by POL, they
also use this Horizon system and during the financial year 2007/8 these
offices lost £2.2m using this system, and whilst their staff are not treated
as guilty until proven innocent, a subpostmaster is.
Audits
POL refers to it as an audit when they descend upon a subpostoffice, but
the reality is, it is little more than a stock take. The POL staff that carry out
these audits’ can be anybody though we have yet to find a member of
Institute of Internal Auditors or any other professionally recognized body in
attendance. What makes them qualified to carry out an audit’ of a
subpostoffice? After all they hold a subpostmasters’ future in their hands
and the least you should expect is a suitably qualified professional person
to be involved, but they are not, and a subpostmaster is not allowed to
bring in his own professional auditor to check the findings.
Then there is the matter of POL and their total failure to undertake routine
audits’ of subpostoffices. There are subpostmasters who have never had
an audit’ in eight years and post offices which turn over £5m every year
that have never had an audit’ for over 5 years, and they have to use
Horizon, a system they are unable to gain full access to in order to check
all the information they have entered into the system. Yet they are being
held responsible for the accuracy of everything during this period.
A question often asked is why does POL not audit’ all subpostoffices on a
regular basis? Many people believe that they are well aware of all the
faults in Horizon and the more post offices they audit’ the more these
faults will become apparent. After all, from the POL standpoint they dont
have to undertake audits’ as they can rely on using the contract to pursue
subpostmasters through the courts or deduct money from their wage
packets to recover any shortfall due to whatever reason.
Suspension
Should a subpostmaster begin to have problems and then find themselves
suspended, they soon discover they have nowhere to turn to for support.
Their salary is stopped instantly and they are treated as being guilty from
the outset by POL. There is no independent adjudicator you can apply to,
POL act as judge, jury and executioner in all matters. The National
Federation of Subpostmasters, the so called representative of the
subpostmaster have taken the decision that Horizon faults do not exist as
POL has decided it has to be that way. When POL requests the
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subpostmaster to attend an informal interview they are not even permitted
to take a solicitor, partner or anyone with them other than a Federation
representative who is then not allowed to say anything.
The few examples given above really only scratch the surface of the
problems facing subpostmasters trying to offer a service to their
community. Through JFSA we will continue to raise these and many other
points.
Recommendations
Regardless of the direction which lays ahead for the Post Office, there are,
at the very minimum, a number of issues which should be addressed and
included in any way forward.
0A full and complete independent /T audit of POL systems and support
should be undertaken with its findings made public.
o An external independent adjudicator should be appointed to review cases
and issues between POL and subpostmasters. The adjudicator should have
the authority to demand documents from both POL and the subpostmaster
and should be assisted by a team of skilled technical staff who are able to
gain access and check any system or document that they deem necessary.
oA new subpostmaster contract should be produced to replace the
Victorian template still in use today. Above all, it should reflect the
introduction of new technology and address in detail where responsibilities,
liabilities and boundaries lay. It should ensure that there is full and easy
access to the records of transactions that a subpostmaster is being held
liable for during the full term of that liability.
o There must be a legal or a contractual requirement for POL to undertake
2 full audit of all subpostoftices at least annually and by qualified staff.
o The licence to prosecute should be removed as a tool from POL and any
prosecutions should be referred to the Crown Prosecution Service.
o Any external access to a subpostmasters Horizon terminals over the
network should be accompanied hy an automatically generated system log
entry recording the details of the event which is then made available to
that subpostmaster.
November 2010
©Parliamentary copyright Prepared 17th November 2010
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POL Comments on the JESA Memorandum to the Bill Committee
Post Office Ltd does not accept the unsubstantiated allegations that are being
made by JFSA - a smail self appointed group which, by its own admission, consists
mainly of ex-subpostmasters. The Horizon system has brought major benefits to
subpostmasters and customers and carries the full confidence of the NFSP and the
CWU who represent serving staff and subpostmasters that use the system
throughout the Business. It should be noted that all subpostmasters are able to
obtain their own transaction log from the system and conduct a daily cash
declaration - thereby being in a position to fully understand their own accounts
within the system. In addition the system also creates a separate independent audit
file of every transaction on the system.
The commercial contractual position between subpostmasters and Post Office Ltd
is well established and both its content, and the way it is applied, is compliant with,
and subject to, all relevant UK legislation. The contract is fully recognised by the
National Federation of Subpostmasters (NFSP) and any amendments or changes to
the contract will typically be discussed with that representative organisation.
Should a situation arise whereby Post Office Ltd seeks to end a subpostmasters
contract, processes are in place whereby the subpostmaster involved can put
forward their case, can be assisted in doing so by the NFSP or by a friend, and the
subpostmaster also has a subsequent right to appeal any decision made to a
separate appeals authority within the company which will look at the case afresh.
Of course, as independent business people, all subpostmasters also have access to
the UK legal system should they believe that Post Office Ltd are acting
inappropriately. The results of individual cases that have come before the Courts do
not indicate that Post Office Ltd’s systems or processes are inappropriate.
The future development of contracts and associated processes affecting
subpostmasters is a matter that would be discussed between Post Office Ltd and
the National Federation of Subpostmasters to help ensure that the interests of
subpostmasters are represented.
5. Next Steps within POL
The Horizon system and accompanying contractual processes remain fully robust.
Their integrity and sound basis have been demonstrated over many years, and they
have underpinned the provision of effective and sustainable service to Post Office
customers. POL refutes the unsubstantiated allegations made by the JFSA.
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POL maintains a legal contractual relationship with subpostmasters which is based
on values of trust and mutual respect. In cases where there are reasons why this
relationship cannot continue, there are full processes of internal appeals and the
parties can have full subsequent recourse to the UK legal system. As a matter of
course, and on an ongoing basis, POL works with the National Federation of
Subpostmasters (a recognised representative body for subpostmasters) on the
development of contractual and associated process matters.
Looking forward, as part of its future strategy consistent with the Policy Statement
outlined by Government in November 2010, Post Office Ltd will be seeking to
further review its contracts and accompanying processes to meet the changing
needs of its customers. This approach will continue to ensure that the contractual
basis and associated procedures between Post Office Ltd and individual
subpostmasters remains sound, fair, commercial and equitable.
It is this combination of;
- the current robustness and integrity of Horizon,
- clear internal processes with appeal systems with the ultimate backstop of the UK
legal system (should cases be referred to it),
- ongoing liaison with the NFSP as the recognised group representing
subpostmasters and
- a forward looking approach to the further development of contracts and
associated policies in line with developing strategy and Government policy
that provides assurance to BIS that the approach taken by Post Office Ltd
continues to be fair and equitable.
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