Agenda with Page Numbers
POL Board Meeting
The Board meeting will take place in ‘Alder’ and ‘Pine’ (the linked meeting rooms
at 100 Wood Street).
31/10/2023 09:00 AM - 05:00 PM
Agenda Topic
Agenda with Page Numbers
Agenda with Attendees and Time Slots
1.
2.
Welcome and Conflicts of Interest, Inquiry Undertakings
Minutes and Matters Arising
2.1 Minutes from 26 September 2023
2.2 Action Log
Committee reports (verbal)
CEO Report
Finance
5.1 Financial Performance Report
5.2 ARA and funding update (verbal)
Transforming Technology
6.1 SPMP Review
Rebuilding Trust
71 RU Update
7.2 OC Pecuniary Principles
7.3 Application of Conflicts Policy update (verbal)
7.4 PFA Triage — case of Malam
7.5 PPR Compensation
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10.
11.
12.
7.6 — Inquiry Update
Procurement
8.1 Procurement Requests
8.2 Procurement Strategic Pipeline
Requests with Presentation
9.1 Disclosure of Evidence to Support Police Investigations
Noting Items with Presentation
10.1 Health & Safety Report
10.2 Post Office Brand
10.3 Technology Sub-Committee Dashboard
10.4 Retail Dashboard
10.5 Christmas operational readiness
Governance Items
11.1 Board Evaluation — update on progress
11.2 Sealings Report
11.3 Future Meeting Dates
11.4 Forward Agenda
Any Other Business
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Agenda with Attendees and Time Slots
Post Office Limited
Meeting of the Board of Directors
Agenda
POL00458015
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ha 31 October 2023
a =e =
100 Wood Street, London
EC2V 7ER
* Henry Staunton
(Chairman)
* Nick Read (CEO)
Rachel Scarrabelotti (Company
Secretary)
* John Bartlett (Head of Assurance &
Complex Investigations)
© Ben Tidswell (SID)
© Simon Jeffreys (NED)
Kathryn Sherratt (Interim CFO)
(Observer) (for duration)
* Simon Recaldin (Remediation Unit
Director)
« Saf Ismail (NED)
Elliot Jacobs (NED)
‘Owen Woodley (Deputy CEO)
(Observer) (for duration)
* Diane Wills (Inquiry Director)
* Lorna Gratton (NED)
Amanda Burton (NED)
Martin Roberts (Group Chief
Retail Director)
* Tim Mclnnes (Strategy and
Transformation Director)
© Brian Gaunt (NED)
* Andrew Darfoor
(NED)
Chris Brocklesby (Chief
Transformation Officer)
* Dionne Harvey (Head of IT
Procurement)*
‘Apologies: Al Cameron
Ben Foat (Group General
Counsel)
* Martin Hopcroft (Director of
Health & Safety)
Asha Patel (FP&A Director)
‘Sarah Gray (Group Legal Director)
Mel Parks (Central Operations
Director)
Laura Joseph (Customer
Experience, Marketing & Digital
Director)
Richard Taylor (Group
* Simon Marshall (Head of Brand)
Corporate Affairs, Brand and
Communications Director)
© Chris Rawlings (Managing
Director, Accenture Strategy)*
‘© Rebecca Greig (Managing Director,
Accenture Technology Strategy &
Advisory)*
NB: All Board Members and Attendees listed above have Confidentiality Undertakings accepted by the Inquiry in place, save
those marked with an *. Should the need to discuss confidential information in respest of the Inquiry arise, individuals without
a Confidentiality Undertaking in place will need to be excused for the duration of the discussion.
1 Welcome and Conflicts of Interest Noting Chairman
Inquiry Undertakings Noting 9:00) 9:05 hrs
2. Minutes Chairman/
26 September 2023 Approval CoSec 9:05 -— 9:10 hrs
Matters Ari Noting
3. Committee reports (verbal) Noting
* Remediation Committee Chairman/
© Audit, Risk and Compliance Committee Committee 9:10-9:40 hrs
" . Chairs
* Remuneration Committee
© Nominations Committee
Investment Committee
4. CEO Report Noting & Input N Read 9:40 - 10:20 hrs
Finance
© Financial Performance Report Noting & Input K Sherratt /A 10:20 - 11:00 hrs
* ARAand funding update (verbal) Noting & Input Patel/
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6. Transforming Technology Noting & Input CBrocklesby/T I 11:00 - 12:00 hrs
@ SPMP Review McInnes/ R
Greig/C
Rawlings
7. Rebuilding Trust S Recaldin/ B 12:00 — 13:00 hrs
* RU Update Noting Foat
© OC Pecuniary Principles a
© Application of Conflicts Policy update (verbal) hgprewl
© PFA Triage — case of Malam Approval
© PPR Compensation Noting
© Inquiry Update Dwills
Break 13:00 — 13:15 hrs
8. Procurement D Harvey 13:15 — 13:30 hrs
e Requests Approval
© Strategic Pipeline Approval
9. Requests with Presentation
© Disclosure of Evidence to Support Police Approval B Foat/S Gray/J I 13:30- 13:50 hrs
Investigations Bartlett
10. Noting Items with Presentation
e Health & Safety Report Noting & Discussion M Hopcroft 13:50 — 14:10 hrs
© Post Office Brand Noting & Discussion RTaylor/S 14:10 - 14:30 hrs
Marshall
Technology Sub-Committee Dashboard Noting C Brocklesby 14:30 - 14:40 hrs
Retail Dashboard Noting & Discussion M Roberts/ T 14:40 - 15:00 hrs
Marshall/ M
Parks
© Christmas operational readiness Noting & Discussion M Parks/L 15:00 - 15:30 hrs
Joseph
11. Governance Items 15:30- 15:450 hrs.
© Board Evaluation — update on progress Noting & Discussion CoSec
© Sealings Report Approval CoSec
© Future Meeting Dates None ee
¢ Forward Agenda 8 ‘ahi
12. Any Other Business
¢ Feedback on papers Noting
15:450 — 16:00 hi
2B. Date of next scheduled meeting: Noting Chairman rs
28 November 2023 11:00 - 17:30
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Tab 2.1 Minutes from 2¢
POST OFFICE LIMITED BOARD MEETING
Strictly Confidential
MINUTES OF A MEETING OF THE BOARD OF DIRECTORS OF POST OFFICE LIMITED HELD ON TUESDAY 26
SEPTEMBER 2023 AT 100 WOOD STREET, LONDON, EC2V 7ER AT 11:00 AM
Present: Henry Staunton Chairman (Chairman)
Lorna Gratton Non-Executive Director (LG)
Saf Ismail Non-Executive Director (SI)
Elliot Jacobs Non-Executive Director (EJ)
Ben Tidswell Senior Independent Director (BT)
Brian Gaunt Non-Executive Director (BG)
Simon Jeffreys Non-Executive Director (SJ)
Amanda Burton Non-Executive Director (AB)
Andrew Darfoor Non-Executive Director (AD)
Nick Read Group Chief Executive Officer (NR)
In attendance: Rachel Scarrabelotti Company Secretary (RS)
Owen Woodley Deputy CEO (Observer) (OW)
Kathryn Sherratt Interim CFO (Observer) (KS)
Asha Patel Financial Planning and Analysis Director (AP)
Tim McInnes Strategy and Transformation Director (TM)
Tom Lee Group Financial Controller (TL)
Christian Spelzini Head of Legal - Corporate, Banking and Financial Services
(cs)
Chris Brocklesby Chief Transformation Officer (CB)
Ben Foat Group General Counsel (BF)
Diane Wills Public Inquiry Director (DW)
Gemma Ludgate Inquiry Operations Director (GL)
Simon Recaldin Remediation Unit Director (SR)
Liam Carroll Procurement Director (LC)
Zdravko Mladenov Group Chief Digital and Information Officer (ZM)
Apologies: Alisdair Cameron Group Chief Finance Officer (AC)
Action
1. Welcome and Conflicts of Interest, Inquiry Undertakings
Welcome and Conflicts of Interest
A quorum being present, the Chairman opened the meeting. The Chairman called for the
Directors to disclose any conflicts of interest. The Directors declared that they had no
conflicts of interest in the matters to be considered at the meeting in accordance with the
requirements of section 177 of the Companies Act 2006 and the Company’s Articles of
Association.
The Board acknowledged the attendance of OW and KS as observers at the meeting. AS
observers, the Board was aware that all contributions made by OW and KS to the meeting
were observations only, and did not constitute advice, recommendations, directors or
instructions. The Board confirmed that it would take due care not to be unduly influenced
solely by a contribution made by OW or KS and that it would reach its conclusions based
on a balanced and diligent assessment of all the facts available to it.
Inquiry Confidentiality Undertakings
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3.2
ptember 202
POST OFFICE LIMITED BOARD MEETING
Strictly Confidential
The Board noted that TL and LC did not have confidentiality undertakings accepted by the
Inquiry in place, and that these individuals would need to be excused from the meeting
should the need to discuss information confidential to the Inquiry arise.
Minutes and Matters Arising
TABLED and NOTED were draft Minutes from the Board Meetings of 5 July 2023, 11 July
2023, 11 July 2023 (Strategy Away Day 1), 12 July 2023 (Strategy Away Day 2) and 17
August 2023. The Board RESOLVED that the Minutes of the Meetings held on 5 July 2023,
11 July 2023, 11 July 2023 (Strategy Away Day 1), 12 July 2023 (Strategy Away Day 2) and
17 August 2023 be APPROVED as a correct record of the Meetings and be signed by the
Chair.
The Board NOTED the action log and status of the actions shown.
Committee Reports (verbal)
Remediation Committee
BT advised as follows:
© The Secretary of State had announced the provision of additional funding to the
Company to make an up-front offer of £600,000 in full and final settlement to
Postmasters who had had their Horizon related convictions overturned. BT
outlined the percentage of potential claimants who might accept;
¢ Inrelation to Criminal cases there were 5 appeals referred by the CCRC in the
Crown Court 2 of which the Board had decided to concede and 3 of which awaited
a decision on stance. BT shared his view that there may be more of these cases
and that the Board would need to consider compensation;
© Disclosure issues in relation to criminal appeals in Scotland were of concern;
¢ Anappeals case had arisen that was not a Horizon case, however counsel were still
advising that
T advised that it was unclear
whether this was an isolated aberrant case; the case would be brought to the
October Board meeting for the Board to determine the approach. In response to
SJ’s queries BT outlined the PFA Triage exercise that was being undertaken.
Discussion followed in relation to ensuring the Company’s policies and processes in
relation to Postmasters were fit for purpose, with NR detailing the work undertaken in this
respect post the Cl. KS spoke to the challenge around branch discrepancies and
addressing these sensitively, advising of the loss provisioned each month for these. OW
advised that M Roberts was currently working through options as to how to commence
path clearing activities ahead of SPM rollout including the conduct of branch assurance
visits.
There was discussion as to how the Inquiry was progressing. NR noted ongoing disclosure
issues, that the Inquiry team remained under intense pressure, and the ongoing
attendance at the Inquiry by senior members of the business. ACTION SI requested that
the Inquiry hearing timetable be circulated to Board members so Board members could
similarly attend.
Audit, Risk and Compliance Committee
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SJ advised as follows:
The papers submitted to ARC indicated a potential deterioration in the first line
management of risk. A question had been raised in this regard with management.
The Company was outside of risk appetite and tolerance, and it appeared that
mitigations were reducing;
Insurance renewal levels for the Company had been approved. It was encouraging
to see Lockton’s providing assurance that the proposed levels of cover were
appropriate;
A response was still awaited from HMRC in respect of the IR35 matter;
In relation to the external audit process, a very tight timetable was being worked
to and an additional ARC meeting was likely to be scheduled for the end of
October/ beginning of November with the ARA provisionally to be signed 11
December. SJ noted the observance by the Company of the UK Corporate
Governance Code requirements and the need for an appropriate level of
transparency;
A recommendation to the Board had been agreed that PwC be e-appointed as the
Company’s external auditors FY23/24.
A discussion followed, initiated by the Chairman, in relation to the potential
deterioration of the first line in relation to risk management, whether controls
were sufficiently robust and whether adequate managerial capabilities were in
place. OW advised that he was newly appointed as acting Chair of the RCC and
agreed that improved risk reporting was required in respect of detailing significant
risks and that there was confusion in the business as to the roles of the first,
second and third lines of defence. OW noted the prevailing culture and the impact
of this on employees’ approach to risk. At the Chairman’s request, OW agreed to
attend ARC as an observer going forward.
There was discussion in respect of the timing for payments under the FY22/23 STIP
scheme with AB and OW noting the impacts and sentiments on employees of the
delay. Given the external audit process had not been concluded, however, no
payments would be made at this time.
3.3 Remuneration Committee
AB advised as follows:
The Remuneration Committee meeting from earlier in the day had focused on
governance matters including progress against the Simmons & Simmons
recommendations and the recommendations contained in the A Burton report.
The Remuneration Committee’s Terms of Reference had been revised to take into
account recommendations in the reports, and these would be returned to the
Board for consideration. A remuneration authorities table had been prepared,
which would be published to Diligent to assist Remuneration Committee members
and management;
Correspondence had been prepared for issue to the Shareholder seeking approval
in relation to outstanding schemes and matters; and
The metrics for the LTIP 23/26 had been considered and the shareholder was due
to be consulted on shareholder value, so elements could be reflected in the LTIP
23/26.
3.4 Nominations Committee
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The Chairman advised that the Committee had met earlier in the day and the principal
item of business had been considering the recruitment process and timings for the
incoming Postmaster Non-Executive Directors. The Chairman noted the importance of
maintaining a level of continuity on the Board given the number of new Directors who had
recently joined, however advised that this needed to be balanced against the expectations
of Postmasters. The Chairman advised that the Nominations Committee had taken a
decision that one Postmaster Non-Executive Director would step down from the Board in
June 2024 and that the other Postmaster Non-Executive Director, subject to Shareholder
approval, would step down in June 2025. The process in relation to the recruitment of the
Postmaster Non-Executive Directors needed to be returned to the Nominations
Committee for consideration. EJ queried the criteria for which Postmaster Non-Executive
Director would stay on; the Chairman replied that this was being examined. AB noted the
knowledge the Postmaster Non-Executive Directors had built up and queried opportunities
for the Postmaster Non-Executive Director who stepped down from the Board in June
2024 to continue to contribute. The Chairman advised that K McEwan had raised the
provision of mentoring.
CEO Report
TABLED and NOTED was the CEO report. Key discussion points were as follows:
© NR spoke of the need to establish operational stability given the difficulties over
the summer;
¢ NRadvised that trading remained solid and that he was hopeful of strong
Christmas trading, especially in light of the level of operational preparedness.
Consumer confidence had improved; the relationship that customers had with
their local Post Offices as opposed to the Company continued to endure;
¢ NRnoted the increase in employee sickness and absence and advised that stress
related absence was an issue;
© NR spoke to the number of employees who could be required to give evidence in
some form to the Inquiry and detailed the work being undertaken in relation to
Project Phoenix;
¢ NRadvised that commercially it was a very significant time for the business with
the fulfilment of the mails strategy being worked through, the establishment of a
number of banking hubs and shortly entering into negotiations in respect of
Banking Framework Agreement 4. ACTION NR noted that Monzo had recently
joined the current Banking Framework. EJ saw this as very positive and queried
when Monzo would go live in branch. OW undertook to find out; ow
¢ NRspoke to changes to the Group Executive and the appointment of the Chief of
Staff who was looking at the Company's operating model, governance fora and
RACI.
ACTION AB noted the impact of the Inquiry on employees and queried whether other
organisations who had been through statutory inquiries could be contacted to share their
learnings of the support they had provided to their employees. NR took the point however
advised that most statutory inquiries were not in operational businesses, however NR NR
would look to this approach and any learnings that could be extracted.
ACTION In relation to the operation of banking hubs, SI referenced the current process of
approaching Postmasters local to the intended banking hub first to establish if they were
interested in running the banking hub. Sl queried, if the local Postmasters were not
interested, what was the approach after that on offering the opportunity to other
‘ . M M Robert:
Postmasters. NR advised he would ask M Roberts to respond on this point. joberts
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SI shared his experience of receiving correspondence that a Drop and Collect was opening
0.5 miles away from one of his branches and advised that he had not received a courtesy
call ahead of this. SI shared his view that the process did not feel collaborative. NR took
SI’s point in relation to Postmaster engagement.
Sl queried whether an approach had been settled in relation to the counterfeit Scottish
notes. NR advised that he was due to meet with RBS shortly however in the meantime the
only kit we had for this was located at the cash centres. ACTION EJ queried how a M Roberts
Postmaster would know that they had accepted a counterfeit note. KS advised that she
would pass this query to M Roberts.
ACTION SI noted the RMG failed collections from Christmas 2 years ago and queried
contingency planning for this ahead of Christmas trading. NR advised his expectation that
this would be part of the Christmas operational planning and that he would take this up
with M Roberts.
M Roberts
EJ queried whether analysis had been completed in respect of the impact of the Drop and
Collect rollout on local branches. EJ referenced the Evri rollout and whilst he was very
supportive, was concerned about potential volumes ahead of Christmas. OW advised that
approximately 300 — 350 branches had been identified as potentially becoming inundated;
if this occurred services could be switched off. EJ replied that he would like to look at this
the other way and how the demand could be fulfilled. That’s said, EJ shared his concern
that Evri were not completing on their SLA currently.
ACTION EJ noted that the ATM rollout was behind budget as it was behind schedule. EJ
queried whether the rollout was likely to exceed budget. NR advised that he would check
on this.
© Woodley
ACTION In relation to PUDO, SI! advised that it remained difficult to differentiate between O Woodley
acceptance and collection and stickers could assist with this.
SJ noted that there was a lot of positive news in relation to the Company however queried
what more could be done to get this into the public domain. SJ further queried whether
the right support was in place. NR replied that it was difficult as the press wished
predominately to speak to us about the Inquiry, compensation and remediation. Our
trade press was quite good however and NR was not uncomfortable about the level of
support provided. BT queried whether internally and externally we needed to remind
people of the positive work that was undertaken, for example, in relation to restorative
justice and that this was a different Post Office, particularly as against the prosecutions
phase of the Inquiry. NR agreed and advised that he had spoken to R Taylor about this.
AD noted the recent graduates who had joined and queried what steps were being taken
to develop diverse talent so as to ensure a diverse talent pipeline was established. NR.
advised that OW would speak to this.
SI asked about ongoing work to identify individuals who remained in the business who had
worked previously on matters that were now under remediation. NR spoke to this; if any
allegations of misconduct were made then investigations would be undertaken. OW
advised that a panel had been convened of OW and K McEwan to look at these cases.
5. Finance
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ptember 2023
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Financial Performance Report
TABLED and NOTED was the PS Financial Performance Overview.
TM and AP joined the meeting at 12:46. Key discussion points were as follows:
AP outlined PS financial results including the level of Postmaster remuneration and
spoke through reasons influencing performance;
AD noted the strong performance year to date however queried what was driving
higher costs which could potentially erode trading profit. AP replied that many of
the cost challenges were timing differences and expected in the second half of the
year; there was a risk that some of these would not be achieved so the budget
may not be met. Currently the Company was within the annual budget, however.
KS outlined the establishment of a new Group Executive Sub-Committee, the Opex
Committee that would assist management to sight proposed cost increases that
were not in the budget;
Following a query from EJ, the reasons for performance in relation to Western
Union were discussed as well as the anticipated trajectory for Travel;
LG noted the change in forecast for the potential security headroom breach and
queried what had driven the change in forecast. AP replied, referencing reduced
spending on SPM. Discussion followed as to the need for a security headroom
waiver still to be in place for December;
The Board provided positive feedback on the revised form of reporting.
AP left the meeting at 13:09.
Funding and Going Concern Update
TABLED and NOTED were the following papers:
(i)
(ii
‘DBT Funding Update’; and
‘Linklaters Advice’.
Key discussion points were as follows:
TM outlined the process and progress of the funding submission, noting the split in
the funding request for interim funding for SPM and the Inquiry, the briefing
sessions held with the Shareholder, and the due diligence undertaken with
Interpath. AD queried the quantum of the increase in Inquiry and Remediation
Unit spend. TM replied. A second funding application in relation to SPM was
anticipated for early 2024 following the outcome of the Accenture review.
ACTION Discussion followed in relation to providing the Shareholder with a
demonstration of R2. TM advised that he would take this point away;
BT queried whether the accounts could be approved on a going concern basis
when only part of the funding required would be receipted for SPM. KS replied
that the interim funding request would cover costs up until March 2024 and that a
high-quality letter of support would be required from the Shareholder. BT queried
further that the going concern period was up until the end of March 2025 however
and not all the current funding requests for SPM went up to this period. TM
replied, advising that the interim funding request would cover SPM costs until
March 2024 with contingency for up until June 2024 as well as costs to meet
contractual obligations. KS advised that all of these factors would be captured in
the disclosures;
™
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6.1
ptember 2023
POST OFFICE LIMITED BOARD MEETING
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© Following discussion, the Board reached the conclusion the Company was not
wrongfully trading.
Increase in Working Capital Facility Usage
TABLED and NOTED was a paper, ‘Working Capital Facility Increase for peak trading period
FY23/24’.
KS spoke to the paper. BT queried whether the length of period for the temporary increase
was longer than previously sought. KS advised that it was the same period as applied for
previously. LG questioned the potential wider utilisation purposes of the Working Capital
Facility. TM advised that the potential wider utilisation was more about alignment with
the security headroom waiver, as opposed to use of the buffer.
The Board RESOLVED to APPROVE temporary increases in the utilisation level of the £950m
DBT Working Capital Facility from £750m to £850m for the period 1 November 2022 through
to 31 March 2024.
Transforming Technology
SPMP Review - Update and Observations (Verbal)
CB joined the meeting at 13:50. Key discussion points were as follows:
* CBnoted the progress that had been made on SPMP from a technological
perspective and advised that RTP had been combined with NBIT and together they
were now SPMP. SPMP was being run as a business change programme not just
an IT programme; this gave CB some comfort that the programme would deliver
for Postmasters;
© CBnoted the approach taken to NBIT was based on modern methodologies as
opposed to the approach taken historically of outsourcing; this represented a
significant change in approach;
¢ Employees and contractors on the programme had been through some difficult
times in the past weeks with different team members leaving given revised
resourcing plans. More Company employees on the programme were required and
it was imperative to make sure that the team were motivated and understood
what needed to be achieved and how. Given previous issues the culture was very
risk adverse; it was very difficult however to run a programme of the size of SPMP
if every decision was pushed up. Skills gaps and the ability to attract new
employees onto the SPMP was considered;
¢ The progress and possible outcome of the Accenture review was discussed;
* BT queried CB’s assessment as to the suitability of the build to match business
requirements and noted the concern that had been raised that aspects of the
current system were becoming replicated on the new, and it was not always clear
why. CB noted the significant amount of time that had been spent with
Postmasters to check the requirements prior to and during build, shared his view
that the overall scope was clear, and advised that opportunities to improve the
efficiency of the flow of transactions were being taken when identified;
© CB advised that a new SPMP sub-committee of the Group Executive had been
formed, chaired by OW, meeting fortnightly. Programme fora beneath this was
being reviewed to ensure coherent governance;
© CBnoted a communications plan was being reviewed in relation to SPMP and
emphasised the importance of engendering an open sense of communication.
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SPMP Funding Request
TABLED and NOTED were the following papers:
(i)
(ii)
‘Strategic Platform Modernisation Programme (SPMP) Funding Request’; and
‘Appendix 1 - Shareholder and Board Briefing Summary’.
Key discussion points were as follows:
TM spoke to the paper advising that the funding request was reflective of the
reduction in SPMP spend, with costs to be reduced across all areas, however still
achieving the milestone of R2 in 5 branches by March 2024, which would set up a
trajectory to extend R2 into 50 locations by the end of 2025;
EJ queried the number of counters referenced in the paper, which was less than
the current level. TM replied that even if the number of branches did not change,
the under-utilised counters would be removed;
Attracting talent onto the SPMP was discussed; CB shared his view that the right
talent existed within the market, and we had partners so it could be a multi-
pronged approach;
LG queried whether there were any elements of spend between now and March
2024 that could wait. CB replied, outlining the support required for the 2-5
branches where R2 would be live and retention costs to retain knowledge. TM
advised that there would also be training costs for the Postmasters and their staff
in branch in respect of R2;
AB queried the proposal to pause on the development of Drop and Collect. TM
advised that the scope of SPMP had been refocused however there was still some
proposed work to invest in Drop and Collect. AB queried the impact on revenue if
further investment in Drop and Collect was not progressed at this time. TM
replied that forecast income was predicated on the current Drop and Collect
proposition. SI queried what an enhanced Drop and Collect would compose. TM
replied that this would contain an enhanced mail proposition;
EJ referenced contractual commitments for hardware and noted that some
hardware had already been delivered. CB advised that the team were undertaking
analysis to establish if any of the kit could be used now. EJ queried whether three
was a risk that the kit may not be fresh and up to date when SPMP was deployed.
CB replied that there was a risk, however we could resell if we needed to;
AD queried the status of the service contracts with Fujitsu. CB advised that it was
intended to come to the October Board seeking approval for both contracts to be
extended out until March 2025.
The Board RESOLVED that:
(i)
(ii)
Funding in the amount of £26.6m for the continuation of SPMP for the period
from 27 September 2023 up until 31 March 2024 be and is hereby APPROVED;
and
Authority be delegated to the Group Executive, who in turn delegated to the
Investment and Approvals Delivery Group, to authorise the drawdown of the
funds mentioned in (i) be and is hereby APPROVED.
TM and CB left the meeting at 14:37.
7. Ethos Programme
TABLED and NOTED was a paper, ‘Ethos Programme’.
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Key discussion points were as follow:
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OW spoke to the paper noting:
- the criticisms made in the ClJ in relation to the culture of the Company;
- how with the Inquiry there was a level of paralysis in relation to decision
making;
- there were concerns that under performance was not addressed and
conversely that we were not able to provide reward in order to hold onto our
best people;
- _ issues around whether we had become short termist;
- _ the use of consultants and contractors and whether we had become too
reliant on third party assistance;
- a significant amount of progress had been achieved since the Cl and Hid
however perhaps not cohesively, and with too much of a view to the Inquiry;
rather than the Inquiry being a beneficiary;
- culture had been owned by the People team not the executive and the
executive needed to own culture. 5 work streams were being set up, one of
which was focused on the executive. One of the other work streams was on
governance and ethical decision making;
BT expressed support for the programme however queried whether OW was
adequately resourced. OW replied, advising that there were no plans to build a
large team for the programme and noted the role of T Perkins. BT suggested that
firm like KPMG could provide a secondee perhaps if one was needed, or there
were small boutique firms that could provide support;
OW noted that the programme may identify employees who did not meet the
benchmarks and the Board needed to be ready for this;
AD shared his perspective that it was very difficult to have a scorecard in place to
measure organisational culture and queried what would need to be seen in order
to demonstrate change. OW advised that this was an area where third party
assistance may be required;
LG queried how support would be provided to employees to make behavioural
changes. OW advised that external support was being considered for this and the
running of leadership programmes to embed cultural changes.
Rebuilding Trust
Inquiry Update
SR, GL and DW joined the meeting at 14:54.
TABLED and NOTED were the following papers:
(i)
(ii)
‘Post Office Horizon IT Inquiry: Update’; and
‘Post Office Horizon IT Inquiry — Appendices’.
Key discussion points were as follows:
DW outlined the current position in relation to disclosure and the status of the
response to the current disclosure request, where a further extension may need to
be applied for. DW spoke to the risks at play. A further hearing in January 2025 on
disclosure was anticipated. DW outlined the materials emanating from the back-
up tapes and advised that the team had notified the Inquiry. At the opening of the
Inquiry hearings earlier in the day Sir Wyn had considered adjourning for 3 months
and sharing all the Company’s correspondence on disclosure with core
participants. Sir Wyn had decided not to, however. There were circa 5 million
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documents to be reviewed. SJ queried whether were we making full use of
technology. DW replied that we wereI
BT queried how the Inquiry was processing all the disclosed documents. DW
advised that she was not clear on this however spoke to a possible adjournment of
the commencement of Phase 5 of the Inquiry;
© LG queried whether the back-up tapes could have been reviewed earlier if
additional investment had been made. DW replied that she did not think so as the
material was vast; the team had kept the Inquiry informed throughout the
process;
© DWreferenced the next Agenda item and advised that funding was sought for
disclosure remediation costs. The current focus was to keep all disclosure
providers working however no invoices were being approved for payment without
DW and GL signing off;
© SJ queried the level of resource within the team. DW replied that it was a very
difficult working environment however there were some good people who had
joined the Inquiry team;
BF joined the meeting at 15:10.
Inquiry Funding Request
TABLED and NOTED were the following papers:
(i) Post Office Horizon IT (POHIT) Inquiry Funding Paper’; and
(ii) ‘Inquiry Financial Spend — Supporting Pack’.
GL spoke to the paper. Discussion followed in relation to the risks and assumptions, and
the main cost drivers. AB queried whether the Company's ownership structure was in part
influencing the approach of the Inquiry; if the Company were privately owned it would not
be able to sustain these costs. AB further queried the reasonableness of requests. DW
advised that it was apparent that counsel to the Inquiry had a mean understanding of how
major disclosure exercises operated._BSFf wereI
NR queried
whether there was there an opportunity for the Shareholder as sponsor to raise this. BT
suggested that the Inquiry be advised as to the costs so far of participating in the Inquiry
and agreed with comments of other Board members that there was no optionality in the
funding request; the most important thing was that we fully participated in order for the
Inquiry to be proceeded with and concluded.
The Board RESOLVED that:
(i) Additional funding in the amount of £30m taking FY23/24 costs to £74.2m for
the continuation of the Inquiry programme for the activities set out in the
paper for the period from 1 October 2023 up until 31 March 2024 be and is
hereby APPROVED; and
(ii) Authority be delegated to the Group Executive, who in turn delegated to the
Historical Matters Funding Meeting, to authorise the drawdown of the funds
mentioned in (i) be and is hereby APPROVED.
RU Update
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TABLED and NOTED were the following papers:
(i)
(ii)
‘Remediation Unit Programme Update’; and
‘RU Finance Update’.
Key discussion points were as follows:
SR spoke to the Secretary of State’s announcement in relation to the up-front offer
of £600,000 in full and final settlement to Postmasters who had had their Horizon
related convictions overturned and the operationalising of this. SR advised of
issues that were emerging in relation to the offer, including challenges from
claimants’ lawyers as to the lack of consultation and alleged breach of privacy. SJ
queried the distribution of potential overturned conviction claims. SR advised that
50% of claimants may be within the £600,000 settlement vicinity. LG outlined the
potential reduction in the amount of the offer over time to account for anticipated
legal costs;
SR advised that there were 4 offers remaining to be made on HSS and 2 were due
to be issued by the end of the week, with the remaining 2 offers to be issued in
October. Discussions had gone quiet with the Shareholder as to whether a HSS
appeals process would be established; SR advised that the Advisory Board would
likely prompt on this, as well as SR.
RU Scope and funding request
TABLED and NOTED was a paper, ‘Remediation Unit Scope and Funding Request’.
Following discussion, the Board RESOLVED:
(i)
(ii)
(iii)
Additional funding in the amount of £4.5m taking FY23/24 costs to £38m for
the continuation of the Remediation Unit for the activities set out in the paper
for the period from 1 October 2023 up until 31 March 2024 be and is hereby
APPROVED;
Authority be delegated to the Group Executive, who in turn delegated to the
Historical Matters Funding Meeting, to authorise the drawdown of the funds
mentioned in (i) be and is hereby APPROVED;
To NOTE additional funding of £6.8m is forecast for FY24/25 as a result of an
increase in scope and extension of costs across several Remediation Unit
projects.
GLO Disclosure Contract
TABLED and NOTED was a paper, ‘GLO Disclosure Contract’.
SR spoke to the paper, outlining the form of contract. ACTION KS requested that L Carroll
be sighted on the contract.
DW and BF left the meeting at 15:39.
Procurement Requests
LC joined the meeting at 15:40 with D Harvey.
TABLED and NOTED were the following papers:
(i)
(ii)
‘Procurement Report’;
‘Legal Risk Note — HSF Legal Services’;
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(iii) ‘Legal Risk Note — PwC Extension’; and
(iv) ‘Legal Risk Note — CODE RAPP Contract’.
HSF
LC spoke to the paper, outlining the engagement history, and advising that the legal
market was not overly litigious, so it was thought that the possibility of challenge was low.
AD queried implications if the proposal was not approved. GL replied.
The Board RESOLVED:
(i) The continuation in respect of a contract with HSF for a further period of 2
years from 27 September 2023 for the provision of legal services in respect of
the Remediation Unit for the activities as set out in the paper up toa
maximum total contract value of £12m be and is hereby APPROVED;
(i) The continuation in respect of a contract with HSF for a further period of 2
years from 27 September 2023 for the provision of legal services in respect of
the Inquiry for the activities as set out in the paper up to a maximum total
contract value of £27m be and is hereby APPROVED; and
(iii) Any authorised signatory of the Company be authorised to sign the resulting
contracts and any ancillary documents in relation to (i) and (ii) above.
GL and SR left the meeting at 15:45.
PwC
LC spoke to the paper noting the decision ARC had taken to recommend to the Board the
re-appointment of PwC as the Company’s external auditors FY23/24.
The Board RESOLVED:
(i) The reappointment of PwC as the Company’s external auditors for FY23/24
with a maximum cost of £1.125m be and is hereby APPROVED; and
(ii) The existing contract in place between the Company and PwC be otherwise
modified on the basis as set out in the paper; and
(iii) Any authorised signatory of the Company be authorised to sign the resulting
contracts and any ancillary documents in relation to (i) and (ii) above.
CODE
LC spoke to the paper advising that the proposed cost increase was not committed,
however would place head room into the contract should it be required.
The Board RESOLVED:
(i) An increase in the CODE contract value of £1.8m over the contract term taking
the maximum contract value from £4.86m to £6.66m be and is hereby
APPROVED; and
(i) Any authorised signatory of the Company be authorised to sign the resulting
contract variation and any ancillary documents in relation to (i) above.
ID Services
LC spoke to the paper. The Board RESOLVED that the sourcing strategy for the
procurement of an identity services supplier on the basis set out in the paper be and is
hereby APPROVED.
LC left the meeting at 15:48.
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10. Requests with Presentation
10.1 Copper Stop Sell
TABLED and NOTED were the following papers:
(i) “Copper Stop Sell’; and
(ii) ‘Copper to Fibre Presentation’.
ZM joined the meeting at 15:50. Key discussion points were as follows:
* ZMreminded the Board of the content of the paper that came on this issue in July,
seeking additional funding to account for increased cabling costs. The request for
additional funding had been revised down to £3.8m and the cost of telephones
was now proposed to be at the Company's expense;
AD queried whether there were likely to be issues with taking access. ZM advised
that the contractors were only paid when the work was completed;
LG queried the timing for the programme to be completed. ZM replied December
2025. LG further queried how the programme could be sequenced if branches
were closed ahead of conversion to fibre. ZM advised that there was full flexibility
on the sequencing;
¢ —ZMadvised that the programme was part of a wider community plan with
Postmasters. In terms of communication details for branches, SI advised that a
complete data set was required for projects going forward. ZM agreed and
advised that data from this programme would feed into an overall operational
excellence programme;
¢ ACTION SI queried whether the Wi-Fi which would accompany the conversion to
five would he made walleble tothe Postmaster, ZMireplind Geeta decteton had Seeker
, Teplice ms ZMladenov
not been taken on this as yet however would revert with timing for the decision;
© EJ provided feedback that he thought the pre-call to Postmasters in relation to the
programme was very good and that this would contribute to the programme being
better executed and improved engagement with Postmasters over the course of
the programme.
ZM left the meeting at 16:02.
10.2 Payzone Loan Agreement
TABLED and NOTED were the following papers:
(i) ‘Payzone Credit Facilities Agreement - Report’;
(ii) ‘Payzone Credit Facilities Agreement — Legal Risk Note’;
(iii) ‘Project Apollo Report and Appendices’; and
(iv) ‘Payzone Integration Exploration Report’.
TL and CS joined the meeting at 16:02. KS spoke to the paper. BT queried the 2% interest
rate which did not reflect a commercial rate. TL advised that the interest rate had been
set using the rate from DBT of 1.2% then building this up to 2%.
The Board RESOLVED:
(i) Entry into a Credit Facilities Agreement between the Company and Payzone
Bill Payments for an amount not exceeding £21m (Facility A) and not
exceeding £4m (Facility B) up until 31 March 2027 be and is hereby
APPROVED;
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11.
111
12.
12.1
12.2
12.3
13.
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(ii) The delegation of authority to the Group CEO and the Interim CFO to finalise
the terms of the Credit Facilities Agreement, in line with the parameters as set
out in the paper, be and is hereby APPROVED;
(iii) Any authorised signatory of the Company be authorised to sign the resulting
Credit Facilities Agreement and any ancillary documents.
Noting Items with Presentation
Board Strategy Away Day — Next Steps
TABLED and NOTED were the following papers:
(i) “Board Strategy Away Day — Next Steps’;
(ii) ‘London Economics — The Economic and Social Value of Post Office’;
(iii) ‘DBT Strategic Review - Policy Options Analysis - Part 1’;
(iv) ‘DBT Strategic Review - Policy Options Analysis - Part 2’;
(v) ‘Project Blueprint - 2019 McKinsey Organisational Design Analysis’; and
(vi) ‘Supporting Commercial and Network Reading Materials’.
TM joined the meeting at 16:03 and outlined how actions arising from the Board Strategy
Away Days would be reported back to the Board over the next 6 months. TM drew Board
members attention to the London Economics report and the McKinsey paper, although the
McKinsey paper had been prepared pre-pandemic.
TM left the meeting at 16:09.
Noting Items with no Presentation
Health & Safety Report
TABLED and NOTED was a paper, ‘Health & Safety Monthly Report’. ACTION The
Chairman raised a concern around in branch robberies given increases in cash banking. EJ
highlighted the increased risk of abuse to Postmasters and their staff and noted other
retailers were working on additional safety measures for their staff. KS advised that she
would take these points away. ks/M
Hopcroft
OPEX Reductions Programme
TABLED and NOTED was a paper, ‘Opex Reduction Programme’.
Project Starling
TABLED and NOTED were the following papers:
(i) ‘Project Starling - Postmaster Status Report’; and
(ii) ‘Project Starling — Appendices’.
Governance Items
Establishment of Investment Committee
TABLED and NOTED were the following papers:
(i) ‘Investment Committee Report’;
(ii) ‘Investment Committee Terms of References’; and
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13.3
13.4
13.5
14.
15.
POST OFFICE LIMITED BOARD MEETING
Strictly Confidential
(iii) ‘Post Office Limited Matters Reserved to the Board’.
The Board RESOLVED:
(i) The establishment of the Investment Committee as a standing sub-committee
of the Board be and is hereby APPROVED;
(ii) The Investment Committee’s Terms of reference in the form tabled be and are
hereby APPROVED;
(iii) The appointment of A Darfoor as Chair of the Investment Committee and L
Gratton and E Jacobs as members of the Investment Committee effective 26
September 2023 be and are hereby APPROVED; and
(iv) Consequential amendments to the Matters Reserved to the Board in the form
tabled be and are hereby APPROVED.
SID Role
TABLED and NOTED was a paper, ‘Senior Independent Director role’.
Sealings Report
The Board APPROVED the affixingof the Common Seal of the Company to the documents
set out against itemsnumbered 2201 — 2222 in the Register of Sealings.
Future Meeting Dates
The future meeting dates were NOTED.
Forward Agenda
The Forward Agenda was NOTED. ACTION EJ requested that an update Christmas
operational preparedness be added to the October Agenda.
Any Other Business
Feedback on papers
LG requested that the Board papers be released slightly earlier, even if this meant issuing
them piecemeal.
There being no other business the Chairman declared the meeting closed at approximately
16:45.
Date of next scheduled meeting
31 October 2023 9:00 - 17:00.
Chairman Date
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Post Office Limited Board Actions as at 20.10.2023
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t
MINUTE REFERENCE
5.1 Financial Performance
Report
b)
5.4 Spending Permissions
ACTION
[Individual product profitability report] AC
advised that last time this report was run it had
shown that every product was profitable
however margins varied considerably. ACTION
‘AC advised that management had been
refreshing this report and would bring this report
back to the Board in July.
ACTION In respect of any potential waiver
regarding security headroom, RA requested that
the mechanics of this be reviewed, so everyone
was clear on sequencing.
ACTION OWNER
Al Cameron/ Asha
Patel/ Kathryn SherrattI
Rachel Scarrabelotti/
Al Cameron/ Tim
Mcinnes/ Tom Lee
DUE DATE
September 2023
October 2023
February 2024
July 2023
STATUS
30/06/2022: Product profitability
‘outcomes are being reviewed by the CEO
and GE and will be circulated to the
Board. Al will provide a brief, verbal
summary on 12" July.
21/10/2022: The team will need to come
back to this in the New Year. The
priorities around the 3YP is the key focus
for now.
17/03/2023: We will update the product
profitability position in April for 2022-23
draft actuals and 2023-24 budgets and
share them at June Board.
10/05/2023: Added to the Forward
Planner for July 2023.
06/06/2023 Board Meeting: KS advised
that she would consider item 1 and
requested that this item be re-assigned to
KS in AC’s absence. LG advised that she
had understood action item 1 had been
raised in the context of NBIT, to see what
products would remain profitable over
what time.
47/03/2023 Will be submitted tetune
Board.
10/05/2023: Added to the Forward
PlannerforJuly2023.
31/07/2023: Discussions with DBT and
UKGI on the waiver process are active and}
ongoing, including on the mechanics of
OPEN/CLOSED
‘Open
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3.1 Committee Reports
(verbal): Historical
Remediation Committee
ACTION In respect of the pecuniary principles, AC
requested that the Board be engaged on these
ahead of final consideration.
Simon Recaldin/ Neil
McDaid
July 2023
attend October Board and can discuss
further, if required
20/10/2023: A full response on POL
accessing discounts for security related
equipment (e.g. body cameras) and the
challenges POL faces, will be provided on
31* October 2023.
To close
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Post Office Limited Board Actions as at 20.10.2023
4, CEO Report
a)
ACTION AB queried whether the Board had
considered changing the brand, to separate from
the past but also to represent what we wanted toI
become. EJ contributed that the brand colours
were an issue and contributed to an association
with RMG. AB noted that whilst changing the
brand was an enormous undertaking, questioned
whether the brand stood for what the Board
wanted to build. The Chair requested that an
action be assigned, and this matter be returned
to Board later in the year;
Richard Taylor/ Simon
Marshall
31 October 2023
22/06/2023: Yes, desktop exercise
completed on opportunity to change
brand, e.g. build new one for platform
products; as well as risks and
opportunities with greater distinction
from Royal Mail. Full analysis and
recommendations to be prepared for
Board discussion for 26 September / 31
October Board meeting.
11/10/2023: On the Monthly GE agenda
for 11" October 2023 and Board agenda
for 31* October 2023.
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8.1 Inquiry Update
a)
ACTION AB queried the contents of the terms of
reference for Grant Thornton. DW advised that
these could be circulated to the Board.
Diane Wills/Joyee
Abai/ Rachel
Scarrabelotti/
Chrysanthy Pispinis
30/06/2023: The ToRs for Grant Thornton
are not yet finalised, although we hope
they will be fairly soon. Once completed,
a copy of the final version will be
circulated to Board.
14/06/2023: Inquiry SteerCo has
approved a pause to Grant Thornton’s
(GT) appointment as POL’s independent
governance expert, and the conduct of
GT's governance review,I
To close
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2 Action Log
Post Office Limited Board Actions as at 20.10.2023
2. Speak-Up
°)
BT agreed that the approach could be a review of.
the NBIT allegations to work out which parts
were conduct and warranted further
investigation. ACTION BF]
JB agreed with this
also and advised that he would commence
preparing a Terms of Reference.
Ben Foat/ John BartlettI
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12/09/2023: This issue is returning to the
Inquiry Steerco w/c 18th September for a
decision on the way forward, so Diane will
be able to provide an update at the next
Board meeting.
19/10/2023: The Grant Thornton TORs
have been uploaded to the Reading
Room.
12/09/2023: External lawyers have
peer authority to proceed
and can then seek funds (c£163k) from
the OpEx committee.
11/10/2023: On 11/10/2023, we
submitted a bid for c£183k plus VAT to
OpEx to fund a 12-week external
investigation in to two heads of concerns
relating to issues within the NBIT project
team. This has Owen’s and Ben F's
support.
Awaiting OpEx’s decision. Externals are on
stand-by.
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Horizon Replacement
Update
b)
estimated for cash counts in branch at the time
of NBIT migration were and what analysis had
Mel
been undertaken. ZM advised that further
12/10/2023: This action remains in
progress. It’s worth reflecting that the
cash count process is being pushed out
4.3 Remuneration ACTION The metrics for the LTIP 23-26 remained IBoard Members ‘Amanda Burton has discussed some Open
Committee to be finalised. AB requested that over the options with Nick and Nick will consider
course of the Board Strategy Days that the Board some recommendations
consider activities that could be incentivised for
the 23-26 period
9. 6. Financial Performance I ACTION Si queried the opportunity to re- Nick Read/ Martin 31/08/2023: No decision has been taken I To close
Report distribute the proceeds from the online Roberts on redistribution. The soft launch of the
a) aggregator and to work with Postmasters on this, aggregator is underway ~still premature
so that Postmasters embraced the online to have a conversation about profit share.
aggregator. NR advised that a conversation on 19/10/2023: We have committed publicly
this would need to be had with the Board and theI to share the “majority” of profits from theI
Shareholder. online platform with postmasters.
Proposals on the distribution mechanism
for this profit share will be finalised in
March, taking into account the size of the
overall year 1 profits and how many
branches are directly participating in
acceptance of parcels from the online
platform.
10. —_I7. Transforming Technology:I ACTION LG noted that staying on Horizon for IZdravko Mladenov —_I October 2023 I 14/09/2023: An updated position and _I To close
Horizon Replacement longer would push out the payback period for greater detail will be provided in the
Update NBIT and requested details of the delta; October Board as part of the wider NBIT
a) discussion.
12/10/2023: This action will be covered as)
part of the NBIT discussion in the October
Board and informed by the Accenture
diagnostic. Subject to the question being
satisfactorily answered in October,
propose to close prior to the November
Board.
11. I7. Transforming Technology:I ACTION BT queried how accurate the costs Zdravko Mladenov/ I danuary 2024 I 14/09/2023: This action is in progress. I Open
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analysis could be undertaken; 12+ months under the new timelines,
thus giving a lot more time to respond to
this query. Given that, changing the due
date to just ‘2024’ might make sense
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Supported on a mobile “second device”
and whether this represents an
alternative to the NBIT counter position
or an additional “value add” for out of
hours transactions eg: prepaid utilities,
simple mails.
13. I7. Transforming Technology:I EJ noted that stamps could be printed on SSKs at IZdravko Mladenov I December 2023 I 14/09/2023: Similarly, to the above ‘Open
Horizon Replacement present and shared his view that some sort of {action 7. Transforming Technology:
Update automation for selling stamps by way of the Horizon Replacement Update
d) Postmaster printing these as required would be ¢), as part of the next NBIT scope
the way forward. ZM thought this could be discussion with the Board, the team will
achieved subject to contractual arrangements offer options to the stamp stock
and undertook to come back on this point with management.
options. 12/10/2023: This action remains in
progress.
14. I7. Transforming Technology:I ACTION The Chair asked that ZM meet with EJ December 2023 I 14/09/2023: The NBIT team plans to haveI Open
Horizon Replacement and SI to assess whether there were any other _I Kelly Goodwin 2024 the engagement with EJ and SI on this,
Update items within the NBIT proposed product mix that, topic in late October/early November,
e) could potentially be removed after the NBIT Diagnostic is completed.
The results will be reported to the Board
in December 2023/January 2024.
12/10/2023: Propose to move this action
to Kelly Goodwin. It’s worth reflecting
that the timeline for developing other
products has moved out indefinitely, thus
giving a lot more time to respond to this
query. Given that, changing the due date
to just ‘2024’ might make sense.
15. I7. Transforming Technology:I ACTION ZM undertook to come back with a plan January 2024 I 14/09/2023: This action is in progress. I Open
Horizon Replacement in relation to this option. NR asked that this _IJeff Smyth 12/10/2023: This action remains in
Update process be tested in Q4. progress. Propose to move this action to.
f) Jeff Smyth as it relates to the viability of
the insourcing Horizon option.
16. [11.3 RMU Update ACTION the RMU were reviewing issues of Simon Recaldin 20/10/2023: Consideration being given toI Open
a)
strategic importance ahead of Phase 5 of the
Inquiry and SR would report back to the Board on!
the requirements on RU for Phase 5 and
will be having detailed conversations with
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the proposed approach. the Inquiry team in due course. Meeting
held between RU Governance Team and
BSFF on 18th October to discuss disclosure}
requirements and access to a number of
Sharepoint sites and repositories has
been granted to them to enable them to
consider the best approach to Phase 5.
17. 11.3 RMU Update ACTION restorative justice meetings continued, I Simon Recaldin 20/10/2023: Paper on next steps and Open
b) and SR would be returning to Board to request 'unding request being presented to HMC
additional funding for a wider restorative justice ‘on 24th October for current RJ process and
program. ider program plan being considered.
18. 2. Transforming Technology: I ACTION LG requested that there be pre- Tim McInnes 11/10/2023: This can be closed. We have I To close
RTP Funding Request engagement with UKGI in respect of the RTP been engaging frequently with UKGI on
funding drawdown that was anticipated to be the SPMP funding drawdown (RTP is
brought to the September Board meeting. folded into SPMP).
19. 3.1 HSS Fatality Claims — ACTION AB advised that Postmasters were an Nick Read 18/09/2023: I have recently written to Open
Case Assessment Principles I integral part of the brand so far as local Minister Hollinrake on restorative justice
‘and Guidance communities were concerned so thought that we. more broadly and on establishing the
b) needed to consider this issue through the lens of equivalent of a ‘hardship fund’ so that we
caring for the brand and brand issues. The can meet specific small financial needs.
Chairman commented that he thought We have suggested an average cost of
employees would be very supportive of approximately £3000 for postmaster
additional support for Postmasters and asked NR victims and their wider families - we are
to look at this. awaiting a response.
20. I3.2 Application of Conflicts I ACTION AB queried the proposed approach to ISimon Recaldin/ Nick I 31 October 2023) 14/09/2023: RU are progressing the Open
Policy employees who had served historically in certain IRead/ Evelyn Hocking agreed actions in respect of the Conflicts
areas of the business and were employed Policy. A small working group has been
currently in the remediation unit. NR advised established to track progress, recognising
that he would speak to SR on this. the extremely sensitive nature of this
subject, and conversations are beginning
with relevant colleagues in line with
People and Legal guidelines. The RU
Director has arranged a meeting with the
Group Reward Director to ensure visibility
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and consistency across POL. Board will be
further updated in October.
20/10/2023: Meeting with Group Reward
Director held, with ongoing discussions
being held with RU colleagues. Update to
be presented to GE on 08"" November.
21. I3.1 Remediation Committee I ACTION SI requested that the Inquiry hearing —_I Rachel Scarrabelotti ‘An email was circulated to Board To close
timetable be circulated to Board members so Members on Thursday 28" September.
Board members could similarly attend. with details of the Inquiry’s Phase 4
hearing timetable. Please send your
availability/requested dates to attend to:
inquiryhearings "” }
22. I4. CEO Report ACTION NR noted that Monzo had recently Owen Woodley 19/10/2023: Monzo have confirmed they I To close
a) joined the current Banking Framework. EJ saw plan to join the framework — we are
this as very positive and queried when Monzo waiting for their signature on the contract
would go live in branch. OW undertook to find which is expected very soon.
out They have commenced the integration
work to connect to our systems and the
expected go-live will be early next year —
potentially Feb 2024. This will be
confirmed once all integration work is
scheduled.
23. I4. CEO Report ACTION AB noted the impact of the Inquiry on I Nick Read Open
b) employees and queried whether other
organisations who had been through statutory
inquiries could be contacted to share their
learnings of the support they had provided to
their employees. NR took the point however
advised that most statutory inquiries were not in
operational businesses, however NR would look
to this approach and any learnings that could be
extracted.
24. I4. CEO Report ACTION In relation to the operation of banking I Martin Roberts 19/10/2023: That is correct, we have nowI To close
°) hubs, SI referenced the current process of adapted the selection process so that in
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approaching Postmasters local to the intended the first instance the closest 3
banking hub first to establish if they were Postmasters can apply. Ifnone apply or
interested in running the banking hub. SI are successful, we then advertise the
queried, if the local Postmasters were not opportunity to all Postmasters. The
interested, what was the approach after that on opportunity is advertised on the Request
offering the opportunity to other Postmasters. a Post Office website and all Postmasters
NR advised he would ask M Roberts to respond who has pre-registered interest in running)
‘on this point. a hub are written to about the
opportunity.
We go through the same shortlisting
process to assess applications and on the
same basis as local Postmasters — the bar
is set consistently for all Postmasters
25. 4. CEO Report ACTION EJ queried how a Postmaster would Martin Roberts 19/10/2023: For those branches that have] To close
d) know that they had accepted a counterfeit note. a note counter or other counterfeit
KS advised that she would pass this query to M detection they should be able to pick this
Roberts. up in branch.
For those that don't and those that are
more sophisticated forgeries, then they'll
be picked up on return to our cash
centres and the Postmaster/ Branch is
then notified.
26. 4. CEO Report ACTION SI noted the RMG failed collections from I Martin Roberts 19/10/2023: Post Office and Royal Mail I To close
e) Christmas 2 years ago and queried contingency (RM) are currently running volume
planning for this ahead of Christmas trading. NR forecasts and will assign additional visits
advised his expectation that this would be part of based on these forecasts and resource
the Christmas operational planning and that he availability. These plans will be shared
would take this up with M Roberts. with the Network mid-November and
exceptions agreed. It should be noted
that the last 3 years have been heavily
impacted by Covid and Industrial Action
and whilst RM are flagging a risk of Xmas
resource availability, we expect a
significant improvement in service level.
‘The BAU escalation process will remain in
place supported by weekly peak Ops calls
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31. [10.1 Copper Stop Sell ACTION SI queried whether the Wi-Fi which Chris Brocklesby/ December 2023 I 12/10/2023: This action is in progress and] Open
would accompany the conversion to fibre would IZdravko Mladenov/ targeting a Board update before the end
be made available to the Postmaster. ZM replied I Paula Jenner of the calendar year. Given that, changing
that a decision had not been taken on this as yet the due date to December 2023 might
however would revert with timing for the make sense. Please assign the action to
decision, Zdravko Mladenov / Paula Jenner.
32. I 12.4 Health & Safety Report I ACTION The Chairman raised a concern around inI Kathryn Sherratt / 20/10/2023: Trend for robberies and To close
branch robberies given increases in cash banking. I Martin Hopcroft associated injuries continues downward.
£) highlighted the increased risk of abuse to MH will provide an update in the H&S
Postmaster and their staff and noted other report with discussion at Board on 31st
retailers were working on additional safety Oct.
measures for their staff. KS advised that she Reported incidents of abuse and
would take these points away. aggression show a slight reduction on last
year (171 YTD vs 177 at the same point)
and are currently reporting below
average. New self-help guidance and
support is held on the Branch Hub site
together with a tool to report low level
incidents of abuse. There is a focus on
Abuse, Aggression & Violence guidance as
part of the Darker Nights Campaign: Don’tI
leave Security out in the cold. We
continue to work closely with the industry
to benchmark good practice, including
use of technology, which we will share
with Postmasters via Branch Hub and
Area Managers.
This action will be closed following the
discussion at Board on 31% October 2023.
33. ‘I 13.5 Forward Agenda ACTION EJ requested that an update Christmas I Martin Roberts Christmas operational readiness is on the I To close
operational preparedness be added to the Board agenda for 31 October 2023.
October Agenda.
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POST OFFICE LIMITED
BOARD REPORT
Chief Executive's Report Meeting Date: I 31% October 2023
Author: Nick Read, Group CEO Sponsor: N/A
CEO Narrative
Since September Board, we have maintained positive momentum despite
turbulent market conditions. In H1 we were ahead of budget from both a
revenue and income perspective. While we expect this outperformance to
continue throughout H2, we will closely monitor costs as the revenue mix skews
towards less profitable products.
More widely, consumer confidence, a key driver of retail performance, remains
volatile as the cost-of-living crisis exerts pressure for many consumers. The
rising costs of heating homes and fuel, surging mortgage and rents, alongside a
slowing job market and the uncertainties posed by the Middle East and Ukraine
conflicts further contribute to this unease.
This is resulting in a reduction in discretionary spending, particularly in
categories that are important to our Mails business such as clothing and
footwear. At the same time, we can see a return to dependence on cash, albeit
that smaller amounts are being withdrawn in our branches.
As a result, UK retail footfall weakened in September as shoppers limited spend
ahead of Christmas and we are seeing this reflected in our customer sessions,
which stand at 9.6 million on average per week in the year-to-date (YTD), -1%
YoY. We are keeping a close eye on these trends, which will likely impact Post
Office performance as we lead into the Christmas Peak.
In many ways, this wider turbulence reflects the uncertainty we are currently
navigating within the business too as we continue to progress conversations with
our Shareholder regarding our funding position. Working closely with DBT and
HMT officials, business cases for Remediation Matters and Inquiry funding, as
well as interim funding cover for SPMP, have now been submitted and are
progressing through various approval processes within HM Government.
Of critical importance in the next few weeks while these approvals are secured is
the need to align on an appropriate Letter of Support from HM Government, as
well as supporting documents such as extensions to funding letters for
Remediation Matters, in order to enable us to sign and file our Annual Report and
Accounts for FY22/23 before the end of the calendar year.
While the filing of our ARA will mark an important milestone in the funding
process, it will not mark the end. With the Accenture review of SPMP now
drawing to a close under our new Chief Transformation Officer, Chris Brocklesby,
we will soon need to turn our attention to securing alignment with both DBT and
HMT about the longer-term trajectory of SPMP, ahead of submitting a fuller
business case for funding in the New Year.
The funding process is also surfacing a number of strategic questions for the
business that will stretch well beyond the next 12 months. With this in mind, I
attended both the Conservative and Labour Party conferences in October,
supported by the Public Affairs team, where we were able to engage a range of
Ministers, Shadow Ministers and Parliamentarians branches.
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As expectation builds around the next General Election, particularly after recent
by-election results, I am mindful of the need to engage with Shadow
Departments about Post Office in order to set up meaningful dialogue about the
business, the challenges we are facing today, and where we are likely headed
tomorrow - a programme of work that will be increasingly important.
REPORT
F
‘inance
Financial Performance
1.
At the top line, in month P6 revenue of £63m was £1m above budget (+3%
vs. last year). This included an additional £1m profit share in Home
Insurance, offset by a £0.9m revenue adjustment to bring pricing over the
last 6 months in line with new Evri, DPD and Amazon contracts. Excluding
this adjustment, Mails trading was in line with budget.
Robust YTD trading has generated total revenues of £417m, £11m ahead of
budget and 1% growth on prior year. This outperformance is expected to
continue throughout the second half of the year, however with the shift in
mix skewing towards higher Postmaster Remuneration products (e.g.
Special Delivery) and increased costs relating to generating this revenue,
this will not necessarily translate proportionately to trading profit.
Stronger performance in high Postmaster Remuneration generating
products, as well as implementation of higher banking rates, have benefited
variable remuneration with £174m generated in H1. This is £2m above
budget and £8m above prior year, accounting for 51% of variable revenue
-a+2% on prior year. Fixed remuneration payments in H1 of £23m were -
£2m vs. budget, though this is likely a timing difference that is caught up in
Q4.
Staff Costs were slightly under budget in month and -£3m vs budget YTD,
largely driven by savings from not implementing externally benchmarked
pay increases in CIO. Whilst P6 headcount is 64 FTE below budget, these
savings have been partially offset by increases in overtime and contractor
costs, highlighting the challenge of recruiting permanent staff. Non-staff
Costs were+ £2m on budget in month largely due to a one-off Lottery exit
scratch card provision being recognised, although YTD non-staff costs are -
£2m vs budget.
Overall, this has translated to a trading loss of (£5.6m) in the month,
£1.1m better than budget; and year-to-date a trading loss of (£3.4m),
£19.4m ahead of budget. Whilst this is a positive result in H1, latest
forecasts suggest these gains are expected to reverse in H2 through unmet
cost saving challenges and unbudgeted cost increases. Achieving the cost
saving challenge continues to be a focus of the GE and OpEx sub-
committee.
Security Headroom of £67m at the end of P6 was £12m lower than
forecast, largely due to lower banking client payables which are being
adversely impacted by limits on cash deposits. Our latest forecast pushes
back the initial breach from December 2023 to March 2024, predominantly
due to the deferred change particularly on NBIT programmes; however,
Security Headroom in December currently stands at just £19m and is
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vulnerable to working capital swings around Christmas- re-emphasising the
need to secure a waiver.
Although there are upcoming challenges to manage, especially with RM
price rises and meeting the agreed cost savings, overall this has been an
encouraging performance in H1.
Annual Report and Accounts (ARA)
8.
10.
Progress continues against the timetable shared with Board and ARC to
facilitate signing mid-December with the major dependency being
resolution of the funding/letter of support. Meanwhile, PwC has commenced
the second stage of their audit and received a draft ARA to commence their
review, while Deloitte has commenced their work, working with section
owners of the ARA to verify the evidence supporting the figurework in the
first half.
GE received the ARA for their first review and discussed the report on 11
October and are due to discuss the ARA again on 1 November. UKGI has
also received the draft ARA and are reviewing. DBT and UKGI will receive
an updated ARA in early November to review.
It has been made clear to DBT that we require a finalised form of words for
the letter of support by 27 October, such that the letter can accompany the
version of the ARA to be circulated to GE for their second review on 1
November and for submission and discussion at Audit Committee on 7
November.
[ Commercial
Mails and Parcels
11.
12.
13.
14.
15)
P6 income was on budget, with an over-performance by Special Delivery
and Stamps offsetting the poorer performance in labels. Overall Royal Mail
income was down £0.7m, offset by non-Royal Mail income, up by £0.8m
YoY for the first time.
Special Delivery volume was +57% to budget and +8% YoY, better than
the +0.1% trend due to the delay in the launch of in-branch sales of
Tracked 24/48 to Q4. We are exploring opportunities to re-balance our
commercials with Royal Mail due to the risk of cannibalisation of more
profitable products. Meanwhile, Stamps income was +23% to budget and
+25% YoY, as customers bought forward stamps before the October tariff
increases. Despite Second Class prices not increasing, buy-forward was
equal across First Class and Second Class, which is expected to dampen
performance in P7 and P8.
The domestic online acceptance ratio continues to grow and stood at 27.8%
at the end of P6, up 0.5 percentage points on P5, boosted by Tracked
24/48 acceptance and the Royal Mail online pricing differential.
International volume remains muted, down 8% on budget in P6, and down
30% YoY. Income was -7% to budget and -1% YoY due to higher pricing
and ICDC additional income. We are working to mitigate the risk of longer
processing times during peak from ICDC transactions with a Digital/App
solution.
Non-Royal Mail PUDO volume growth continued, running at c.445k
items/week at the end of P6, driven by further branch rollouts. Amazon
Returns is now in 6.3k branches; DPD collection, returns and acceptance in
3
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16.
17.
c.4k branches; and Evri collection, returns and acceptance in 940 branches.
The Evri contract is now signed and the DPD contract is expected to be
signed ahead of peak to enable the launch of Evri and DPD buy-in branch
on Horizon before peak.
Parcels Online is seeing growth, although sales remain relatively small as
expected. We are ramping up our digital marketing programme to optimise
and improve site visibility, carrier choice and network reach to increase
sales. We are also assessing options to offer RM Tracked services on our
Parcels Online platform.
Ofcom has announced a new review of the Universal Service Obligation
(USO) due to significant shifts in postal demand and the “growing public
debate” about the sustainability of the USO. We plan to engage with the
consultation to ensure the impact of potential options on the network is
modelled and understood.
Cash and Banking
18.
19.
20.
21.
22.
Banking revenue was +£0.3m vs. budget in P6, delivering £18.3m in-
period. Withdrawals came in on budget and deposits were +£0.1m, with a
further £0.2m of over-performance driven by our Banking Hub activities.
YoY Banking revenue was +£6.2m and +£0.9m YTD against budget.
Average deposit values have continued to edge downwards month-on-
month (c.5-10% by value over the last year), impacted by a mix of deposit
limits and the cost-of-living crisis. Against this complex backdrop, we are
forecasting that deposit growth will be slower through H2, despite over 600
bank closures so far this year. We are taking action through our Retail team
to inform customers about our cash services in-branch to deliver budget.
This will be bolstered with the launch of our Trussell Trust campaign in
November.
Two temporary Banking Hubs went live, bringing the total to 10 so far.
Further hub announcements were made by LINK and we are on track to
exceed 100 announcements by Christmas. Meanwhile, our Enhanced
Banking Office (EBO) pilots have received very positive feedback from Cash
Access UK. We have now signed a contract to further develop the concept
and have a pipeline of 40 further branches to review.
We are on target to install 100 Teller Cash Recyclers (TCRs) into our
busiest branches by October, with 90 TCRs implemented to date.
Postmaster feedback is excellent. We are over halfway through the
replacement of our 1400 ATMs with new devices and the programme is
scheduled to complete in June 2024.
Banking Framework 4 (BF4) kick-off held with the CEOs of the six largest
financial institutions with (non-commercial) negotiations commencing in
November. We plan to present to Board on BF4 in November and January.
Financial Services, International Money and Payments
23.
P6 revenue was £1.5m, +11% vs. budget, with good trading in Travel
(Money and Insurance) and additional profit share in Home Insurance. P6
Trading Profit was +21% vs. budget to £10.3m. FRES profit share was also
+£0.4m vs. budget. YTD Financial services trading profit is 10%, or +£5m
vs. budget, but -2.5% (£1.5m) YoY.
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24.
Bank of Ireland negotiations are on-going. The outcome of these
discussions is the biggest opportunity for the current year results, as well
as the next five-year period. Meanwhile, International Money Transfer
continues to grow volume and optimise Western Union branch selection
alongside material contract discussions. A 12-month extension to the
Moneygram contract is in effect, in line with our legal and compliance risk
tolerance.
Retail & Lottery, Government and Identity Services
25.
26.
27.
28.
Retail & Lottery revenue was +1% vs. budget YTD driven by revenue
growth in Gift cards, offsetting reduced income and increased costs from
Lottery exit.
Government Services revenue is -2% vs. budget but +18% YOY driven by
improved DVLA incomes and strong growth in UKVI volumes, +59% YoY.
DVLA has approached PO about extending the agreement past March 2024
but has commenced a public tender for International Driving Permits (IDP).
These developments require a scope change within the NBIT programme in
order to make a bid process viable.
We have submitted commercial proposals to HMPO outlining the revised
basis of a long-term service for Passport Check and Send, however
engagement has been delayed by HMPO’s ongoing strategy review.
Identity Services revenue was +£0.4m vs. budget at £2.8m YTD. There has
been strong growth in tablet In-Branch Verification (IBV) transactions after
migration from the legacy service and switch-on of Government Digital
Service (GDS). A new identity verification tender is expected from the
Office of Public Guardians (OPG).
Postmaster & Network
Delivering our network strategy
29.
30.
31.
Network coverage remains strong with 11,723 branches trading in
September, and our 400th Drop & Collect branch opened. Our continuous
improvement programme to address loss-making branches remains on
track, with over £1m annualised benefits delivered YTD.
We are taking the first steps to exit the remaining 114 Directly Managed
Branches (DMBs): Sheffield (which was hosted in a Wilko) closed on 2
October, and Antrim is set to close on 15 November. We are supporting
nearby branches to absorb the additional business, while also advertising
for new Locals to provide additional capacity. More announcements are
planned in November.
We are accelerating work to develop new mails self-serve solutions - which
we view as critical to the long-term sustainability of our larger branches -
and will update the Board on the proposed delivery plan in November.
‘Hard to Place’ (HTP) Branches
32.
We are progressing our plans to resolve the remaining 128 HTP branches
which had opted to leave under the previous Network Transformation
Programme. In March we offered these branches two main options: either
stay in the network on their existing contracts (meaning they retain a
substantial fixed remuneration payment) or leave without waiting for a
replacement but with a lower exit payment worth 12 months’ remuneration.
5
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33:
34.
The deadline for responses was 30 September, with 84% opting to exit the
network and 16% opting to stay on their existing contract. There are seven
outstanding responses which we are chasing through the field team. We are
now working with the branches who opted to leave to agree an exit date
prior to April 2025.
The NFSP is still lobbying for higher unconditional exit payments, which we
do not believe would be appropriate or fair for other Postmasters outside of
this group. 44 Postmasters sent a templated letter requesting that we re-
negotiate their exit terms with the NFSP. We are meeting with the NFSP
again this month to clarify the legal position (which they are questioning)
and to re-state why we believe our approach is fair and balanced.
Central Operations
35.
36.
BSC call performance remained above SLA for the third period in succession
with 78% of calls answered within 60 seconds (target 70%). 97% of all
calls were answered (target 95%), with a Postmaster waiting on average
56 seconds to speak with a member of the team. Meanwhile, aged
reconciling items increased 4% on P5, with 2,437 open at period end
(target 2,400). Analysis is underway to understand root cause behind an
increase in cheque accounting items which represented the largest increase
to position.
Investigations SLA performance improved, with 73% of cases resolved
within 20 days (target 70%). New additional resource will focus on the
aged cases, while progress continues on the balance of discrepancy cases
awaiting triage, down 9% vs. P5.
Postmaster Engagement
37.
38.
39.
The Postmaster Pulse survey launched on 12 October for one month,
providing Postmasters (excluding SPs) with an opportunity to share how
supported they feel and how they view the relationship with Post Office
overall. This half-year check-in tests the overall mood of the network and
assesses whether changes made as a result of previous feedback have yet
made a difference. We aim to share early feedback with Postmasters at the
National Postmaster Conference on 21 November in Bristol.
We have almost completed the recruitment process for the new Postmaster
Experience Director role, a two-year fixed term role for a serving
Postmaster to work with us on an advisory capacity from November.
NomCo approval has also been given to recruit two new Postmaster NEDs,
following the expiry of the current three-year term for Saf and Elliot in June
2024. A further paper will be submitted to NomCo at the end of November
for approval, in advance of submission to Secretary of State.
Our onboarding and training metrics continue to trend positively overall, at
over 80% in P6. Onboarding has reduced over recent months, and now
stands at 120 days on average, with the aim to improve this further to 110
days by the end of the financial year.
Retail Field Teams
40.
During September, the field team completed 3,368 branch visits, of which
1,604 were Commercial Excellence visits focused on key Mails areas in
preparation for Peak. For Travel, branches that were previously visited
continue to perform +11% YoY vs. non visited branches, with Travel
Insurance single policies performing +5% and annual policies +2%.
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41.
Banking performance is +5% in visited branches vs. non visited. 1,266
Operational Excellence visits were completed, focused on branches with
training needs. A new package of support materials has been created to
enable more effective visits from the field team.
Our ‘Retail Peak Conference’ took place on the 28 September, bringing
together 240+ colleagues to reflect on our H1 business performance and
strategies for the upcoming Christmas peak. It was a successful event,
receiving excellent post-event survey feedback with every metric improving
vs. the same event last year. An impressive average score of 9.2/10 was
achieved for how prepared the team feels for Christmas.
Strategic Partnerships (SPs)
43.
44.
We are on target to achieve 5,700 PUDO access points in Strategic Partner
branches by the end of October, with Amazon in 80%, DPD in 60% and Evri
in almost 30% of the estate. A further 600 branches have been identified
for roll out of Evri next year.
Our improving relationship with SPs meant we supported four of their
conferences and trade shows in September. It was the first time WHS had
invited POL to its conference, and the first time a Post Office award was
presented for ‘Best Post Office Branch’ — a great recognition of the partner’s
trust and commitment to Post Office. Meanwhile, our collaboration with
Morrisons is seeing early rewards from our Mails incentive, with the highest
SD penetration rate of the year at 18.2%, +7% vs the YTD average.
We continue to see a positive impact of signing framework agreements with
partners, with Mid Counties opening two new locations this month and a
further three new locations planned this financial year. It is also planning a
further 15 Drop & Collect branches this year, having already opened 11
since March.
Supply Chain
45.
46.
Weekly average inflows were £430m a week and flat vs. P5. All available
inbound cash deposits were processed on Day A in cash centres YTD -
ahead of target; and productivity in Cash centres continues to track ahead
of target at 13.3 pouches an hour (target 12.2). CIT achieved Quality of
Service of 98% (target 95%) which is above the current run rate
(96%). Call Centre grade of service improved to 57% vs. 48% in P5.
Customer satisfaction continued to exceed target at 90% (target: 85.6%).
We have signed the Stock centre outsourcing contract and continue to
support colleagues. Performance and attendance have not slipped since the
announcement, with both pick accuracy and productivity measures ahead
of target. The Manchester CIT move to the G4S site has gone well with
excellent service offered to Postmasters.
Customer Experience
47.
48.
The redesign and migration of the postoffice.co.uk website is scheduled to
complete in December 2023. The new Post Office Travel App is in final
stages of development and testing, with launch scheduled for November
2023 to support travel peak in 2024.
Marketing activity has started for Parcels Online, across web, search, social
and email. International Money Transfer marketing activity in collaboration
with Western Union and MoneyGram has been agreed and will launch in
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early November. Lastly, the production and distribution of Christmas in-
branch merchandising is in progress, on schedule to launch on 6th
November.
I Strategy & Transformation
DBT Funding
49. POL and DBT are working on a critical path that should allow for the
FY22/23 ARA to be signed in mid-December. The RM/Inquiry funding
request has been approved by the DBT Investment Committee (IC) and (at
the time of drafting) is awaiting approval the Treasury Approval Process
(TAP). Meanwhile, the SPMP funding request has been approved by the DBT
IC, subject to DBT CFO clearance, and will be heard at the HMT TAP Panel
in mid-November. Both business cases have been referred to the Subsidy
Advice Unit (SAU) of the Competition and Markets Authority, with a
response expected in early December.
50. As part of the SPMP workstream, DBT commissioned Interpath to provide
an independent view on the SPMP forecasts. While Interpath raised some
challenges on the availability of robust forecasts, particularly on the new
SPMP monthly run-rate spend (given the speed of cuts POL has
implemented in recent weeks), it was broadly supportive of our request.
51. On 20 October, DBT laid a Written Ministerial Statement (WMS) announcing
the RM/Inquiry and SPMP funding and we expect the SAU to release short
‘transparency statements’ in late October to note receipt of these referrals.
A more comprehensive release will be published once the SAU have
reached a final position on their advice.
52. In mid-October, we welcomed Secretary of State Kemi Badenoch to the
Aldwych DMB, following a branch visit in Saffron Walden the week before.
The intention of this was to see a branch in operation and to get a better
understanding of Horizon and our plans to replace it with NBIT, ahead of
her receiving POL’s funding request at the end of the month (i.e. after the
DBT Investment Committee but before the HMT TAP Panel). She was
engaged, and importantly she appears to understand our need to replace
Horizon, and our need to maintain a functioning relationship with Fujitsu
until NBIT has been deployed.
53. Work on documentation continues in parallel and at the time of drafting we
expect a Letter of Support, Security Headroom waiver (and Working Capital
Facility purpose amendment), and necessary RM funding extension letters
to be in final form by October end.
Change Spend
54. At the end of September, our YTD change spend for active projects was
£126.7m (excl. HMU Settlement), £42.4m below our interim budget, mainly
due to reprofiling of spend on Horizon replacement and Technology
projects. P6 YTD Incremental Change benefits for active projects was
£7.8m, £1.4m above budget due to various movements in recurring costs
and revenue growth activities across the portfolios.
[ Remediation Matters Unit (RMU) ]
GLO Compensation Scheme
55. POL continues to complete the 379 DSARs that have been submitted by
Freeths in relation to their clients’ claims within the GLO. The Information
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56.
Rights team continue to keep the ICO updated on progress. Freeths and
POL have agreed that the scope of the DSAR can be reduced to meet the
agreed GLO Disclosure process, with Freeths reserving the right to reinstate
full DSARs should they believe this is required. We expect to confirm the
approach shortly. A Redaction User Guide has been created with input from
the Information Rights team and training has been delivered to both teams
to ensure consistency and quality.
With the approval of both RC and Board, POL continues to work at risk in
this area. The focus of both POL and DBT is to get the contract signed by
the end of October. A key outstanding issue is the Data Protection
indemnity on a non-mutual basis. This risk will need to be managed
through POL governance to determine whether it can be accepted.
Additionally, DBT remains reluctant to formally acknowledge additional
costs which may be required due to the work already completed on the
DSARs and the additional costs required due to the complexity of the work
being completed which was not initially fully understood. POL sought
assurance via a Letter of Comfort from DBT, however they have advised
that they do not intend to seek the required sign-off from HMT. DBT have
instead offered a form of words to provide assurance that the additional
costs would be covered. This would not be legally binding, and the
associated risks would therefore need to be accepted by RC.
Overturned Convictions (OC)
57.
58.
59.
60.
On 18 September, HMG announced measures to enable an upfront, optional
£600k offer, for Full and Final settlement of overturned convictions. The
policy decision represents a significant and positive development in POL’s
ability to swiftly settle claims, however, the announcement is just the start
of this process. Details of the initiative are still to be finalised by HMG, and
a significant amount of effort will be required to reach a final position.
Additionally, POL is also aware that certain elements are being referred by
DBT to the Advisory Board (AB) and, potentially, final HM Treasury approval
required, which may result in a longer than anticipated timeline.
In parallel with the upfront offer discussions, POL has continued to finalise
the assessed claims process (for claims in excess of £600k). Two of the Law
Firms have nominated a chair for the Independent Assessment (IA) Panel,
and POL have confirmed no objections in principle. Additionally, POL has
put forward proposals for two further panel members to the Representative
Law Firms for review and feedback. Pecuniary Principles are close to being
finalised by POL/HMG, which is anticipated to bring the internal drafting to
a conclusion. It is likely however, that IA determination will be required,
prior to final versions being agreed.
RU continues the Operational processing of submitted Non-Pecuniary and
Pecuniary claims (per report section) although, short term, the upfront
offer announcement has the potential to be a distraction for Law Firms and
Claimants, whilst details are confirmed.
A further appeals hearing was held on 27 September, resulting in five
further overturned convictions. POL offered no evidence in three cases and
two were overturned on the basis of Public Interest Only (PIO). Two cases
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were also overturned in Scotland on 29 September, bringing the total
number of overturned cases to 93.
Criminal
61. A further appeals hearing was held at the Crown Court on 27 September,
resulting in five further overturned convictions. POL offered no evidence in
three cases and two were overturned on the basis of Public Interest Only
(PIO). Two cases were also overturned in Scotland on 29 September,
bringing the total number of overturned cases to 93.
Wider Updates
62. Taxation: Progress continues on setting up the Tax Top-Up (TTU) process,
with an expectation that Governance sign off will be completed in October.
The TTU compensation funding agreement for £29m has now been
received. The Operational cost agreement for £0.86 million is not expected
to be signed until November when DBT have resolved the subsidy control
arrangements, and as such POL will be working at risk until this is
complete.
63. Postmaster Detriment: Suspension payments have remained on pause
while we investigate the options for restarting the SRR process. We now
have a proposed way forward to recommence the process which has been
through governance in early October. We are waiting final confirmation
from DBT/HMRC to make future SRR payments tax exempt so that we can
make this change before relaunching the process. The proposal is to top-up
Postmasters to who have already been paid or accepted offers in the same
way as the HSS Scheme to cover any higher rate tax liability.
64. Outstanding Balances: A presentation has been made to the senior RU
team to the proposed approach for POL Process Review (Pot B). The
proposal is based on releasing details of actual and potential areas of
detriment to Postmasters on a phased basis. The proposal also considered a
possible alternative approach to see if it is possible to shorten the delivery
period. This will be discussed at HMC shortly. Final confirmation of
Government funding is not now expected until the end of November.
65. FY23/24 Budget & 3YP: At P6 RU is £1.8m under budget YTD due mainly
to the timing of legal spend, external assurance costs and the ENE Hearing
in OC. However, a significant number of these costs are expected to
crystalise in Q3, catching up to the budgeted position. RU faces several
financial risks going into H2 FY23/24 through disclosure, late applications
and increased scope in criminal case review work. In addition, there are
further handling costs for the HSS Tax adjustments.
[ Inquiry
This section contains information which is confidential to the Inquiry. It
must not be discussed or shared with anyone who does not hold a
confidentiality undertaking accepted by the Inquiry.
Data and Disclosure
66. At the Disclosure Hearing on 5 September, Sir Wyn said a further disclosure
hearing will be held between 8 and 19 January 2024. Preparation is
underway for witness statements. Meanwhile, following the 5 September
disclosure hearing, work continues on disclosure remediation and
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assurance. There are two urgent ongoing reviews in relation to criminal
case studies and the only remaining Rule 9 request.
67. A review of the Chesterfield back-up tapes revealed a large number of new
and responsive documents relevant to witnesses in Phase 4. HSF and P&P
are using search terms to identify documents for witnesses in the order
they are due to give evidence.
68. BSFf are reviewing the disclosure process to include a full structural review
looking at the identification, preservation and collection of all potentially
relevant material with support from POL and Innovo. At the same time, the
Programme, Group Assurance and Risk are reviewing the process in place
once a Rule 9 / s.21 is received to confirm an agreed RACI, ensure POL’s
control points, and understand where risks remain for escalation.
Inquiry Phases 4 and 5
69. Phase 4 hearings re-commenced last month focussing on civil proceedings
by POL and criminal prosecution case studies. POL have been notified of
two additional weeks of Phase 4 evidence in January relating to
prosecutions in Northern Ireland and Scotland, and the role of Fujitsu in
supporting criminal prosecutions.
70. Much of the work being undertaken for Phase 5 has focused on progressing
the response to the s.21 notice issued by the Inquiry on 21 July 2023.
Meanwhile, the Inquiry have issued three Rule 9 request letters to former
employee witnesses relating to Phase 5.
Independent Governance Review
71. BSFf advised
instruction on the adjusted basis, and the contract for the governance
review was signed 12 October.
[LCG
Legal
72. Project Assurance: POL’s request for permission to make a settlement
payment to the Trustee of the RMPP is with HMT for consideration. If HMT
permission is granted mediation will take place on 29 November (delayed
from 8 Sept).
73. Managing Public Money: UKGI have recently stated that they want POL
to comply more rigidly with public sector pay and spend controls (including
expecting POL to seek HMT consents for settlement agreements where the
offer is more than statutory or contractual). This subject is on GE agenda
for 25 October.
Assurance & Complex Investigations (AC&I)
74. Willow 2 (re SPMP): Chris Brocklesby is to oversee this investigation
(total cost of c£183k plus VAT,) with Grant Thornton and Pinsents acting as
investigators and legal advisors respectively. The Willow 1 report is being
prepared and Zdravko Mladenov has been informed there is evidence
undermining the allegation and so no further action is required.
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75. Project May: Four former RMG/ POL staff were approached as potential
witnesses to comment on the document. Only one replied and he stated he
had no knowledge of the document nor of identity codes. A final report has
been produced and we are seeking to pass the report and underlying
documents to the external Monitor but there are challenges around Data
Protection to resolve. Progress with Phase 2 is anticipated now that a senior
sponsor has been found (CPO), although funding is needed (c£170k plus
VAT). Phase 2 is a follow-up piece of work to establish whether race or
other protected characteristics are evident in decisions in historic
investigations.
Compliance
76. GLO Disclosure Scheme: POL has targets on the number of disclosures
relating to individual claimants to be achieved on a weekly basis, currently
14. However, due to issues with staffing and the volume of documentation,
POL cannot currently meet those targets. There is ongoing discussion
between Freeths, DBT and POL regardin
In terms of next steps, the GLO team are undertaking several
activities to increase output, including enhanced and increased training and
assessing the efficiency of current processes.
77. Re-Indexing Project: There is an ongoing exercise to ensure that the
indexes held on archived hard copy data is fit for purpose and allows for
responsive materials to be identified. Feedback to date is positive with error
rates running at 0% on high-risk boxes and at between 0.95-3% on those
boxes unlikely to be responsive to RU needs. Progress is on track with
agreed timelines, though challenges include identifying internal employees
with sufficient knowledge of archived information to assess the
completeness of the indexes and the costs associated with moving bulk
boxes around the country. There is a risk that disclosure documents could
be discovered after the relevant phase of the Inquiry. Looking forward,
updated Indices are provided on a daily and weekly basis to legal teams
internally and externally to determine if new materials are responsive to
Inquiry/RM needs.
FOIA: A meeting has been set up with Peters & Peters to determine
Company Secretary
79. We have finalised our plan for addressing the recommendations in the DBT
Simmons & Simmons and Amanda Burton reviews. The Chairman wrote to
Minister Hollinrake on 28 September enclosing the plan and highlighting the
key steps we were taking to provide more transparent and effective
treatment of senior-level remuneration. We will review progress against the
plan at each meeting of RemCo to ensure we remain on track.
80. We have now signed the contract with Grant Thornton and agreed the
Scope of Work for the corporate governance review, which has now started.
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This will examine our corporate governance practices and procedures and
any known gaps or self-identified improvement opportunities and make
recommendations on areas for improvement. While the final report is due in
January, GT will provide an earlier draft report on our governance
structures, processes and systems in relation to remuneration.
Technology
Core Service Performance
81.
82.
83.
84.
85.
The average daily number of branches unable to trade at the start of the
business day slightly increased to 7 from 5 last period. There has been a
significant collaborative effort by our Technology partner DXC, IT Service
Desk and 2nd Line Operations to fix first time or quickly attend branches
the same day that they are reported but we were impacted by a number of
branch telephone lines being ceased which took time to re-enable.
Aged incidents (which are tickets that have been open for longer than 5
days) have reduced to an average below 200 for the first time since the
desk moved to IT Operations. For comparison, one year ago the number of
aged tickets was 2,000.
There were four Major Incidents in P6. All incidents raised impacted on
colleague services with no impact on branch trading. The longest incident
lasted 26 hours where all users of the Dynamics case management system
were unable to access or log new support request cases for branches due to
a Microsoft incident.
There were 5,666 calls to the IT Service Desk in P6, +1.5% vs. P5, with an
answer rate of 93%, while there was a decrease on abandoned calls from
9% in August to 6% in September. Overall phone wait times continue to
decrease with the average being 1 minute 16 seconds (our lowest ever wait
time). The service desk is now at full capacity and Postmaster satisfaction
remains high with a score of 4.2/5.
There were 24 new problems opened in September with 13 closed.
Problems of note included Wi-Fi issues experienced at Wood Street,
affecting business wide communications and office-based staff/GE members
from working effectively.
Cyber Security
86.
87.
88.
In P6, there were 579 cybersecurity incidents, with an average time to
close of 6 hours. These incidents were a mix of different types of cyber-
attacks and were all closed without any POL impact. There were no major
cyber incidents in this month.
The cybersecurity team continues to expand its logging and monitoring of
the growing areas within the business. This means that the team can collect
more data about the organization's IT systems and networks, which in turn
helps the team to detect and respond to cybersecurity incidents more
quickly and effectively.
The ISO 27001 audit has commenced which supports our ongoing
certification and compliance activities. The Prove Plan Phase of the Cyber
Security Maturity Programme continues at pace with initiatives progressing
well and the majority coming to a successful closure. We are also
commencing a cyber benchmarking review with our audit partners,
Deloitte, which will ensure our funding request is accurate.
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Branch Hub
89. We had a highly successful Q2 for Branch Hub 2.0, with the platform
receiving 250,000 visits, +60% YoY. Branch Hub is currently deployed on
nearly 10K Horizon counter terminals and should be live on all terminals by
the end of October.
90. Alongside rolling out Branch Hub on Horizon, Branch Hub has launched a
suite of remuneration features including a remuneration calculator and
access to remuneration booklets. We have also released a ‘Copper to Fibre’
page on Branch Hub, providing a single place for Postmasters to view the
scope of the transition for their respective branch(es), agreed / targeted
dates for engineer visits and service activation, access to FAQs and contact
details for further support. Conversations are also ongoing about the future
ownership and management of the platform.
Horizon Live Services & Fujitsu Contract
91. Fujitsu service remains stable with no major issues for live services.
Demand for Fujitsu change resources remains a challenge. However,
prioritisation of requests and delivery management processes are improving
the clarity on counter application changes. We are now starting to see an
uptick in demand for Horizon change including the upcoming next
generation SSKs activity and this will need to be carefully programmed.
92. Work is ongoing to establish the reusability of NBIT devices to supplement
stocks of Horizon counter devices. The prove plan is to be submitted to
IADG in October. Meanwhile, discussions to extend support to 2025 for
Belfast Data centres and the core network are well progressed and have
been approved for onward submission to Board.
SPMP / NBIT
93. Deployment of Release 2 to two DMBs is on track and continues to progress
to the late October go-live milestone. In order to streamline the initial
deployment, it has been rescoped to a Mails only design with Banking
functionality to be deployed later.
94. Over the last month, the programme has supported the Accenture
Diagnostic Review, delivering requested programme artefacts along with
many hours of direct interviews with key personnel across the programme.
In parallel, the SPM Programme has rapidly downsized and is in the process
of reorganising into a single programme with a narrower focus to deliver
Mails, Stamps and Banking capability to 50 branches.
[ People
Culture, Wellbeing and Engagement
95. Pulse Surveys will be completed by 22nd October. Once all results have
been gathered, a report will be provided to understand the organisational
view of colleagues in November. Early insight indicates overall engagement
has dropped slightly, though there have been increases in the sentiment
that people are held accountable for their performance and behaviours,
along with increased motivation to do the best job they can. We will provide
a Q2 update on our ‘You Said, We Did’ action plan. Planning will then
commence for the full survey in February 2024.
96. Meanwhile, ‘Leading to Serve’ is now at its final stage with Module 2 being
rolled out at a regional level in October and November. Next steps include
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conversations with potential leadership development suppliers to develop a
bespoke leadership programme. Post Office Managers programme
replicates the learning from Leading to Serve and consists of 9 x1 day
courses for Band 4 and below.
97. Acombined recognition and reward platform was launched in September,
allowing colleagues better access to discounts, wellbeing resources and
employee benefits. In the first week over 50% of colleagues used the new
platform, with over 1,000 recognition e-cards sent and over £39,000 spent
on the new discount portal.
Reward
98. Three ‘live’ incentive plans were approved at the Remuneration Committee
on 26 September. LTIP FY21/24, LTIP FY22/25 and STIP FY23/24 were all
approved for communication to in-scope colleagues. These schemes are
long-overdue so getting these communicated is now a priority. The Reward
team are working with the GE to finalise LTIP FY23/26 design, ahead of
Remco approval and launch.
99. The conclusion of this scheme would bring POL fully up to date with all
required incentive scheme approvals and communications. Attention will
turn to designing the schemes for 2024 in late October / early November,
with a view to getting approval to launch the schemes at the start of the
new financial year.
Organisational Design
100. The SPM programme has now collapsed into a single structure with one
point of accountability. The top-level SPM Target Operating Model has been
defined and work is underway to transition. This will happen in two stages,
using existing contractors and backfilling behind them with perm resources
with a higher level of capability. Our BAU Technology TOM is also now
defined, with work underway to understand the impact of delivery,
including proposed exit plan for senior resources impacted.
Talent, Diversity & Inclusion
101. In Talent Acquisition, we are focusing on diversity and inclusion in the
process and updating language accordingly. We have identified a c.40%
reduction in budgeted spend through improved use of job boards and
licences. Planning is also underway to look at sponsorships to improve
diverse candidates and increase the talent pool for Technology.
102. In terms of new talent, 15 Graduates joined the Business on 18th
September on a 20-month scheme. They are split across: Retail (x3);
Commercial (x3); Tech (x9). Placements will be 6 months and then they
will rotate within their Function. Meanwhile, following the success of the
pilot Mentoring Programme over the summer the official programme has
been launched. We have received over 40 responses and training is
scheduled for both Mentors and Mentees in November, with more to be
scheduled for early 2024.
103. For existing talent, GE-1 and GE-2 Talent & Succession Planning activity is
underway across the business. Immediate priorities for this year focus on
supporting line managers with having improved development
conversations. Work has started on a design for a career development
framework to improve career development visibility at POL. The 2024
compliance calendar has also been agreed and we are introducing a
1s
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minimum standard for all mandatory training to be completed to achieve a
‘3’ rating in PDRs.
104. Linked to this, mid-year reviews are currently taking place across the
business. To drive behavioural improvements we have introduced a
feedback tool to capture comments for SLP and GE members on of their
Ways of Working. This report will provide average ratings and will form the
basis for discussion between the line manager and senior leaders in their
mid-year review.
105. Meanwhile, in Diversity and Inclusion Grant Thornton have completed their
inclusion maturity audit. A GE workshop will be held in November to define
the ED&I ambition and support GE with their commitments moving
forwards. The audit results and roadmap will be shared with GE and
communicated in November. We continue to nominate colleagues to attend
the Diversity in Retail Female and Ethnic Future Leaders programmes.
Wider Updates & Key Issues
106. Industrial Relations: Negotiations are ongoing to modernise Collective
Engagement Framework with Unite. The first meeting for the pay review
process is due at October end.
107. HR working group: Payzone integration is ready for final sign off,
including TUPE preparation and costs, scoping of the new integrated organisation
and a People Plan.
Conclusion
In September I remarked that the business needed a period of operational
stability, for the Shareholder to stop behaving like a policeman and start acting
as a Shareholder (visible support, less interference etc) and for trading to
remain resilient. To a large extent this has occurred. There is a noticeable
change in tone and manner from the Shareholder, which is to be welcomed. The
business has shown resilience — in all channels — despite the obvious macro
headwinds and poor performance across UK Retail, especially fashion, home and
in grocery, more generally. Operationally we continue to accelerate our mails
strategy with a more formal launch of sales in branch and parcels online,
imminent. Feedback from Postmasters in our pulse surveys suggests the
relationship and overall support we provide, is strengthening. Perhaps the
biggest concern is internal morale. The senior leadership team (top 80) have
unsurprisingly struggled with the media carnage, reputational damage and lack
of clarity around reward. This remains unsettling and potentially very damaging,
not just for retention, but in their leadership, more specifically. As I said in
September this remains a challenge which the Board needs to face into.
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Tab 5.1 Financial Performance Report
Post Office Limited - Document Classification: INTERNAL
Cover Page
; , . Meeti
Ti P6 — Financial Performance Overview Date Board, 31*t October 2023
Author: pee belle Stele ye nena MEMINGE Sponsor: Kathryn Sherratt, Interim CFO
Analysis Director
Input Sought: Noting
The purpose of this slide deck is to provide details and analysis on the Period 6 financial performance.
The Board are asked to note the P6 performance.
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Executive Summary (1/3)
Total Revenue and Trading Profit
1 * PG revenue of £62.9m was £1.4m above budget with outperformance across multiple areas including a £1m additional Home Insurance profit share, offset by a (£0.9m) retrospective revenue
adjustment on new contract signing with Evri.
+ YTD, H1 revenue of £416.7m was £10.9m above budget and 1% growth on prior year. The delayed launch of Tracked 24/48 products has benefitted Special Delivery, with a partially offsetting
impact within Labels and Acceptance; Travel products have traded strongly in H1; Banking has outperformed budget through Banking Hub recharges partially offset by deposit values being
adversely impacted by deposit limit regulations.
+ This has translated to a Trading Loss of (£5.6m) in P6 and (£3.2m) YTD, £19.4m ahead of a budgeted loss but £19.8m lower than prior year. Whilst we have performed well against budget so far,
these YTD gains are currently forecast to be offset in H2 through unmet cost saving challenges and unbudgeted cost increases forecast to hit in H2 and so we must continue to remain
thoughtful on our spending decisions if we are to maintain a positive position.
Mails Revenue
2 + P6 Mails revenue of £21.3m was £0.9m under budget largely due to a (£0.9m) negative retrospective revenue adjustment on new contract signing with Evri. The continued overperformance in
Special Delivery, largely due to the delayed launch of RM Tracked products, has been fully offset by underperformance in Labels and Acceptance — the first month we have seen a complete closing
of the gap. Whilst H1 Mails revenue of £146.0m is a 5% decline year on year, it is less than expected with revenue £2.3m over budget.
* As Mails revenues continue to trade well, we expect to see a higher revenue outturn full year. However, with the shift in mix skewing towards higher PM Rem products (Special Delivery and
Stamps), this will not necessarily drop through proportionately as higher trading profit.
Banking Revenue
3 + P6 Banking revenue of £18.3m was £0.3m ahead of budget with £0.2m from additional Banking Hub recharges and £0.1m outperformance on deposits; withdrawals being on budget is an
encouraging sign following a trend of underperformance in the year so far. YTD this has translated to H1 revenues of £123.4m, £0.9m above budget and 5% growth on prior year largely driven by
additional banking hub recharges being offset by lower withdrawals and on budget performance on deposits.
* Deposit revenues continue to be impacted by deposit limits (with lower ATV’s only partially offset by higher volumes), but we are reviewing options around localised marketing to target
increasing volumes further in H2 to improve this outlook.
Platform Products (FS, INS, TM, MT)
4 + P6 Insurance revenue of £5.6m was £1.2m higher than budget due a one-off Home Insurance profit share, and higher online Travel Insurance sales. We continue to be in the top 2 position in
search engine optimisation. H1 Insurance revenue of £32.2m is £2.8m ahead of budget, and Travel Insurance continues to trend well, which might provide some further upside, but on a much
smaller Winter travel peak than seen in the Summer.
* Strong Travel performance in H1 has generated YTD £1.5m revenue outperformance within Travel money and £2.0m outperformance in FRES profit share (also boosted by FRES cost savings). We
are expecting a further c. £0.4m upside to budget in the remainder of H2.
* Our Bank of Ireland Mortgages, Savings, Loans incentive is likely to be at the lower end of our previous ranges based on the current interest rate outlook.
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Executive Summary (2/3)
5 IOther Revenue
+ P6 Government Services revenue of £2.7m was £0.1m over budget due to outperformance in UKVI (International Driving Permits). YTD, H1 revenue of £14.8m is £0.3m below budget due to lower
DVLA rates from new contract, and lower Passport volumes, being partially offset by strong UKVI trading. The H2 outlook is brighter, with an improving Passport market surfacing and UKVI volume:
performing above expectations due to an influx in working visas.
P6 Payment Services revenue was in line with budget but YTD £1.7m above budget due to re-issuing of expired energy vouchers earlier in the year. YoY revenue is down 5% in H1 due to prior year
Council Tax revenue, and we expect this decline to widen further in H2 due to EBSS revenue in prior year.
6 Postmaster Remuneration (PM Rem)
* PG Variable PM Rem of £26.8m was £0.6m higher than budget largely due to better revenue performance in higher rem generating Mails products such as Special Delivery and Stamps; YTD, this is
£174m, 51% of variable revenue; £1.8m above budget largely due outperformance on Mails and Travel Money, and £8.1m above prior year due to banking rate increases implemented. We expect
the favourable gains made from Mails and Travel in Hi to remain for the full year.
+ Hi Fixed PM Rem of £22.6m is £1.9m below budget and £12.2m under prior year due in part to the £6m one-offs and top ups in the prior year. The H1 underspend in Fixed Rem is being
forecasted to be caught up in Q4.
7 Staff costs and Headcount
P6 Staff Costs of £16.3m were £0.3m under budget; YTD Hi of £97.0m are £2.8m under budget, of which £1.4m relates to unutilised salary increase provision within IT. Savings from being 64 FTE
heads under budget for the year have been partially offset by increase in contractor and overtime costs, along with Remediation Unit GLO costs which are expected to be recharged to DBT and
higher run-rate on Banking staff than budgeted.
+ From the latest 6+6 forecast, full year staff costs are expected to be £1.8m higher than budget from a combination of unmet cost saving challenges and unbudgeted cost increases - these are
being reviewed by Opex Committee and will be reassessed as part of the next forecast update.
8 Non-staff costs
+ P6 Non-Staff Costs of £23.0m were £1.7m over budget (H1: £127.1m, £2.2m under budget) with £2m lottery scratchcard exit provision recognised in month.
* Against forecast P6 non-staff costs were £0.3m under forecast, however excluding the lottery provision, they would have been £2.1m under forecast from £0.7m underspend across Commercial
areas, £0.4m timing differences in Customer Experience, £0.4m underspend and timing in IT, £0.3m underspend in Postmaster and £0.3m from delayed Property programme spend. As part of
the 6+6 we have re-emphasized the need to Improve forecasting accuracy across the business in order to make informed decisions.
+ The favourable Hi budget variance of £2.2m Is not expected to be maintained with a combination of not meeting all of the cost saving challenges which were more backloaded in the budget
(due to needing implementation first before in-year benefit could be realised) as well as unbudgeted cost increases forecast to hit in H2. These continue to be reviewed.
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Executive Summary (3/3)
9 Performance against agreed cost savings and trading improvements
+ The latest 6+6 forecast expects £8.5m of the £15.9m agreed cost savings to be unmet including the stretch on reducing branch discrepancies, unmet benefits from DMB exits and lottery exit
provision being classified as opex. These are partially offset by £3.5m of exceeded agreed cost savings within the same categories, taking us to a forecast net £4.9m below the budget.
This said, the 6+6 has equally identified £6.9m of genuine savings/underspend from other categories outside of the £15.9m challenge. There is ongoing work in refining this view and gaining
further clarification of the fungibility of the agreed cost saving challenge.
10 Open Branch network
The network increased by 7 branches in September to finish at 11,723 branches, one of the highest counts we’re reported in over a decade.
+ With 32 closures in the month, consciously shifting away from loss making and poorly used branches, there has been a directed focus towards Drop & Collect openings (39 opening in month);
The network is forecasted to rise slightly just ahead of peak period driven by further Drop & Collect openings ahead of the peak period.
+ Whilst churn has been higher than the past two years, it is in line with pre-21/22, and lower than forecast - with a stable network expected in the outlook going forward.
11 Investment and Change Spend
+ In month P6 Change Spend of £32.6m is £6.4m lower than forecasted last month, largely due to £2m of Inquiry cost that has not materialised in period, £1m of KPMG cost timing within RTP and
£3m of smaller variances across multiple projects in Property, Supply Chain, ClO and ATMs.
+ YTD spend in H1 of £126.7m is £42.4m below budget (expected to flow through as a full-year impact) with the bulk of deferred spend across ‘Replacement of Horizon’ and ‘Other’ change
programmes — partly us trying to preserve cash and de-risk the December SH breach date (including re-baselined assumptions for NBIT programmes), partly delay to some change activity.
This is offset by Remediation & POHIT Inquiry which is YTD £7m over budget but expecting full year costs to finish c, £40m over budget.
1 2\s Security Headroom
At the end of P6 Security Headroom of £67m was £12m lower than forecast, largely due to lower banking client payables which are being adversely impacted by limits on cash deposits. In P7 we
are expecting a temporary increase in SH in P7, in line with forecast, with £57.5m of DBT funding received in early October and £29m FRES dividend to be received later in the month.
The 6+6 SH forecast shows no significant change from previous month with first breach in Mar-24 (P12); however, Dec-23 (P9) SH currently stands at just £15m and is vulnerable to working
capital swings around the Christmas holiday — re-emphasising the ongoing work in securing a waiver.
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Tab 5.1 Financial Performance Report
Post Office Limited - Document Classification: INTERNAL
3-Month — 12-Month condi
POL Scorecard - FY23/24 Period 6 Rolling Rolling emai
(Prior Year & YTD)
Average Average
Total Postmaster Rem (excl. merch commission) . e@ @ s
Total PM Rem % Revenue POL % 48%, (1pp)I @ (1pp)I 48%I
Variable PM Rem % of Variable Revenue (YTD) POL \% 51%) (pp)I 2ppI @ 51%)
Total PM Rem % Cost POL % 43%I 43% Opp) @ (3pp)) [2] 45% Cite, cocci
IChange Spend (excl. RU and SOA) POL £m 28.5 41s 31%, @ 246%I @ 23.5 1 Se
Security Headroom POL ‘ém 67 42 60%I @ -74%) e 129 si
Number of Branches POL id 11,723 11,699 o% «=O 1% 6 11,719 liens I Cavan
FTE POL # 3,426 3,490 -2%I @ 6%I @ 3,391 CC) eel
Mails Labels Volumes: Commercial I# 7,396k 8,263k -10%I e -19%) e 7,903kI 9,055kI ~“A0_~_~_
Banking Deposit Volumes Commercial I# 4,993kI 4,871kI i I % = 86@ 5,416k 5,363kI A /\/)AA
Deposit ATVs Commercial IE aaa 465 5% 10% @ 449 462I =»
Travel Money Sales Volumes Commercial I# 754k 688k) 10%I t ) 4%) ® 858k] zag
Travel Insurance Sales Volumes Commercial _I# 69kI 69k o% © 1% =6@ 104xI 7
BoE Base Rate Commercial I% 5.3% 4.0%) 13ppI @ 3.0ppI @ 5.2%) Pi aa
[cash Returned & Processed Retail em 4325 430.0 %I @ 6% @ 437.6 Si 7I aN:
(Increase)/decrease in PM discrepancy provisions Retail £k (501) (957) ~48%I Fy) 158%) ® (581)} sa
Transaction Corrections Retail # 11,700 13,065 -10%I @ 2% 12,715 pipe g II Ante
Major Incidents ir itt 3 ? “57% e -40%I e 5 6] Nyaa
Incidents iT # 4,406 4,800 “8% -15%I @ 4,497 4730I ~~ ___
Branch Down Volumes IT # 346 450 -23%I fe} -59%I @ 354 474 I ~~
Pp = percentage points
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Trading Profit
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P6 revenue of £62.9m was £1.4m ahead of budget and 3% growth on prior year. This was driven by outperformance across multiple areas including a
£1m additional Home Insurance profit share, offset by a (£0.9m) retrospective revenue adjustment on new contract signing with Evri. Overheads of
£39.3m were £1.4m adverse to budget, predominantly from bringing forward Lottery scratchcard exit provision recognised in month. Trading loss of
£5.6m was £1.1m ahead of budget. Whilst this is a strong in year performance so far, these YTD gains are expected to be offset by higher costs and
unmet cost saving challenges in future months.
Mails - RM
Mails - Non RM
Retail/Lottery & Gift Cards
Government Services
Banking Services
ATMs
Money Transfer
Travel Money
Payment Services & Payzone
Voucher Encashment
Mortgages, Savings & Loans
Credit Cards
PO Insurance
Identity Services
Supply Chain/Other
Total Revenue
Cost of Sales
Postmaster Rem Variable Costs
Postmaster Rem Fixed and Other Costs
Merchant Commission
FRES
POCA Other Income
Gross Margin
Staff Costs:
Non Staff Costs
Total Overheads
Trading Profit
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Actual
213
(0.0)
21
27
18.3
Budget
5+7 Forecast
(2.7)
(26.8)
(3.8)
(0.3)
29
0.0
(16.5)
(23.4)
(39.9)
(7.7)
Variance to Variance
toss YOY Yov%
(0.0) = (0.7) (3%)
(0.7) (0.2) (113%)
00 = (0.2) (7%)
O41 06 = 30%
O41 10 5%
(0.1) (0.0) (2%)
O41 0S 21%
o1 0.2 1%
01 (0.6) (23%)
00 = (0.1) (40%)
00 00 0%
(0.0) (0.1) (42%)
00 19 50%
00 © (0.2) (32%)
0.2 (0.2) (20%)
00 19 3%
0.6 14 (41%)
oo 8 (1.7) 7%
02 10 (21%)
O14 01 (26%)
0.6 (0.3) (8%)
00 ry 0%
15 24 8%
03 (18) 13%
03 (6.2) 37%
06 = (8.0) 26%
20 (5.6) (8,2665)
POL Board Meeting-31/10/23
(97.0)
(127.1)
(224.0)
(3.4)
39
(17)
03
(0.3)
0.9
19.4
POL-BSFF-137-0000003_0055
Tab 5.1 Financial Performance Report
Post Office Limited - Document Classification: INTERNAL
Budgeted Cost Savings and Trading Improvements
The latest 6+6 forecast expects £8.5m of the £15.9m agreed cost savings to be unmet including the stretch on reducing branch discrepancies, unmet
benefits from DMB exits and lottery exit provision being classified as opex. These are partially offset by £3.5m of exceeded agreed cost savings within the
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same categories, taking us to a forecast net £4.9m below the budget. The 6+6 has equally identified £6.9m of genuine savings/underspend from other
categories outside of the £15.9m challenge.
GE
Sponsor
Owen
Martin
Martin
Martin
Martin
Chris
Kathryn
Karen
Ben
Richard
Owen
Owen
Owen
5 FY 6+6
Forecast
Agreed Cost savings
Commercial a7
Customer Experience 0.4
Retail - DMB Exits 0.2
Retail - Branch Discrepancies Reduction -
Retail - Other 2.0
IT 3.2
Finance Hf
People 13
Legal, Compliance & Governance 0.3
Communications 0.9
Total Cost Savings 10.9
Agreed Trading Improvements
FRES 44
Insurance 3.0
Government Services os
Total Trading Improvements 82
Total Cost & Trading. 19.2
Budget
Variance
(2.1)
(2.5)
(1.0)
(2.3)
(0.0)
(0.0)
(4.9)
24
2.0
(0.2)
4.2
0.7)
Split: Exceeded
0.9
Unmet
(2.0)
(1.5)
(1.0)
(1.3)
(1.9)
(0.5)
(0.2)
(8.5)
POL Board Meeting-31/10/23
Net
(1.1)
(1.5)
(1.0)
(1.3)
(0.0)
(0.0)
(49)
Commercial - exceeded savings on mails staff costs of £0.9m,
more than offset by Lottery exit provision which has been put
back into Trading Profit.
Retail — delay in DMB exits and removal of Q4 branch
discrepancy stretch.
IT- £1.3m savings on staff costs and £0.6m on Security,
partially offset by (£0.9m) unbudgeted roles, (£0.7m) opex
investments, (£0.3m) on DXC, licences, and small change.
Finance - £0.5m cut to insurance fees included in budget has
been removed from forecast as approval has not been given
by ARC. This has been offset by exceeding staff savings from
vacancies.
People - unmet People savings from FTE reduction, LinkedIn
reduction and scope reduction of leadership development,
offset by savings in Q4 from self-insure income protection.
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Investment & Change Spend
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In month P6 Change Spend of £32.6m is £6.4m lower than forecasted last month, largely due to £2m of Inquiry cost that has not materialised in period, £1m of
KPMG cost timing within RTP and £3m of smaller variances across multiple projects in Property, Supply Chain, ClO and ATMs. YTD spend in H1 of £126.7m is
£42.4m below budget with the bulk of deferred spend across ‘Replacement of Horizon’ and ‘Other’ change programmes — partly us trying to preserve cash and
de-risk the December SH breach date (including re-baselined assumptions for NBIT programmes), partly delay to some change activity. This is offset by
Remediation & POHIT Inquiry which is YTD £7m over budget but expecting full year costs to finish c. £40m over budget.
Period 06
547
Vs 547
Vs 547
Fy23/24
547
Project Groupi Actual Budget 7. (MS Blidget ‘ Actual of Budget porast
Other Change Spend
Proceeds from Sale Of Assets
Other Change Spend incl. Proceeds from Sale of Assets . , : i
Remediation [33 26 35 07 (0.2) 174 176 (18) (0.2) 335 37.9
POHIT Inquiry 87 48 108 3.9 (2.1) 33.6 35.8 89 (2.1) 39.9 74.2
Remediation & POHIT Inquiry 12.0 74 14.4 47 (23) 51.0 53.4 7a (2.3) 733 112.1
Strategic Technology Programme 18.0 13.0 7 5.0 03 64.6 64.3 (10.3) 03 151.7 88.2
Retail Transformation Programme (0.6) 05 04 (1) (1.1) 53 63 25 (1) 58 8.0
Operational Excellence - - - - - - - - - - - 39
Horizon Extension 03 23 os (2.0) (0.1) 3.2 8.0 3.3 (4.9) (0.1) 15.3 18.6
Replacement of Horizon 7.7 15.8 18.6 19 (0.9) 73.0 85.7 74.0 (12.7) (0.9) 172.9 118.6
[Total Change Spend [32.6 48.8 39.0 I (16.2) (6.4) 126.7 169.1 133.1 I (42.4) (6.4) 357.6 323.5,
Other Change Spend incl. Proceeds from Sale of Asset P6 Variance to Forecast of
+ Proceeds from Sale Of Assets (£0.4m): Sale achieved, and proceeds re
+ Other Change Spend (£2.
Technology Programme & ATM Banking activity slowing down while awaiting further funds approval.
Remediation & POHIT Inquiry P6 Variance to Forecast of (£2.3m):
month, variance is being investigated.
ainly driven from various small variances in Property Projects, phasing in Supply Chain projects, CIO Programmes variances driven by forecast error and project spend being reported under Strategic
+ Remediation Unit (£0.2m): partly due to interim payment recalculation savings and higher independent panel costs for Historical Shortfall Scheme and partly due to independent reviewer and internal resourcing underspend for
Overturned Historical Prosecutions.
* Inquiry (€2.1m): underspend due to backup tapes & file transfer costs that did not materialise in the period, costs to be rephased over next few periods.
Replacement of Horizon P6 Variance to Forecast of (£0.9m):
+ Retail Transformation Programme (E1.1.m): Outstanding KPMG costs was not able to be posted due budgetary restrictions related to committed purchase order, catch up for good receipting to correct this issue will take place in next g
period,
+ Strategic Technology Programme £0.3m: spend related to IDAM project currently under CIO projects.
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Security Headroom
No significant change in 6+6 forecast from 5+7 with breach still expected in P12, and very low headroom position forecast for P9. We are still forecasting
a breach for all of FY24/25, although this forecast does not include any additional NBIT or RMU funding which is currently in discussion.
Network Subsidy £25.0m £12.5m £12.5m £12.5m £12.5m £12.5m £12.5m £100.0m
Investment Funding - £45.0m £45.0m - £10.0m - £10.0m - £110.0m
Total Funding Assumed - £70.0m —-£57.5m £12.5m ——-£22.5m £12.5m £22.5m £12.5m £210.0m
800
600
400
SH breach
Mar-24
200
0
FP MK MH HM GK KM MK HK KW MK MH SK MH HY
200
-400
-600
6 7 BYP a
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@
POST OFFICE LIMITED
BOARD REPORT
Title: (SPM): Programme Diagnostic Meeting Date: I 31 October 2023
Strategic Platform Modernisation
Review
Author:
Helen Bussey, Programme Manager
- Strategy & Transformation
Chris Brocklesby: Chief
Sponsor: Transformation Officer
Input Sought: Noting
The Board is asked to note:
the context and background of the Strategic Platform Modernisation (‘SPM’)
Programme Diagnostic Review (‘the Review’);
the approach and methodology adopted by Accenture in completing the Review;
the Accenture findings, observations and recommendations from the Review, as set out
in the Board Pre-Read Report Summary included under Appendix 1
Executive Summary
1. A diagnostic review of SPMP was commissioned by POL’s CEO to commence in August
2023 following delays to Release 2 of the New Branch IT system, along with significant
timeline extensions and cost overruns against the original business case.
2. The Review was undertaken by Accenture and the final report has now been provided to
POL, outlining findings and observations, together with a recommendation to reset the
programme, along with thirty-two (32) key summary recommendations for consideration.
3. Verbal update provided to the Group Executive on 18th October 2023.
4. Board Investment Committee on 30" October 2023.
Report
Context and purpose of the Review:
Si
The SPMP was set up to develop and deploy a replacement to the Horizon IT system, POL’s
point-of-sale branch and back-office administration technology platform that has been
operated by Fujitsu since the late 1990s. The new system, developed internally by POL,
is known as New Branch IT (NBIT).
Whilst the SPMP has made considerable progress; delivering a live service and pilot and
progressing the Horizon replacement objectives further than any attempt prior to 2021,
considerable challenges have arisen. These challenges have led to delays to Release 2 of
NBIT, an extension of around eighteen (~18) months to the overall programme timeline
and a fourfold increase in programme cost forecasts compared to the original business
case.
Recognising these delivery and cost challenges, POL’s CEO initiated some initial
remediation activities including bringing in further IT transformation skills and leadership
and commissioning a diagnostic review of SPMP and NBIT.
The purpose of the Review was to provide internal and external comfort regarding the
quality of work undertaken to date and clarity as to the steps to be taken across all areas
1
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Tab 6.1 SPMP Review
@
of the programme to ensure SPMP and NBIT are on a trajectory to achieve POL's stated
objectives.
Approach:
9. An independently resourced Accenture team (separate to the team working on the
programme) was commissioned to undertake the Review over a seven-week period,
commencing 29 August 2023 and concluding 13 October 2023, including one week of
mobilisation activity.
10. Following the initial mobilisation week, a four-week assessment period followed,
comprising of interviews, review of artefacts and live content, along with the issue of a
survey to the newly consolidated SPMP.
11. This was followed by a two-week reporting period during which recommendations and
mitigating actions were aligned to the key observations and findings and the results
documented in the final report and shared with POL.
Assurance framework / Accenture methodology:
12. The assurance framework adopted for the Review was based on Accenture’s Programme
Diagnostic Accelerator and supported by Accenture’s Delivery Methodology as well as
industry standard maturity frameworks and quality assurance tools.
13. The Review comprised assessment of Five Level 1 capabilities or ‘Towers’: Strategy,
Governance, People, Solution and Implementation. Against each Level 1 capability, a set
of Level 2 and Level 3 capabilities were defined to guide the Review. These capabilities
are based on those required for successful programme delivery according to Accenture or
industry standard frameworks.
14. Findings and observations were documented and a Red, Amber, Green (‘RAG’) rating
applied to each level 3 capability and the key areas for intervention identified. An overall
diagnostic RAG rating for level 2 capabilities was subsequently derived based on both the
level 3 capabilities and the detailed observations documented.
15. The recommendations subsequently provided by Accenture are based on any Level 2 or
Level 3 capability requiring intervention and prioritisation suggested based on Accenture’s
anticipated impact, leading to the thirty-two (32) summary recommendations outlined.
Scope:
16. The SPMP was operating, until recently, as two separate programmes, the Strategic
Transformation Programme (STP) and the Retail Transformation Programme (RTP) and
is currently being restructured back into a single SPMP and the whole programme has
been in scope for the Review.
Interviews:
17. Accenture shared with POL a list of the key roles they would expect to see in a programme
of this size and complexity and requested that POL provide the names of the individuals
interviewed as part of the Review.
18. During the interviews, further potential interviewees were proposed by participants and,
as a result, a total of eighty-nine (89) individuals were engaged from across the business,
including GE members, programme leadership, technical delivery, product management,
2
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architecture, change management, assurance, security, retail operations and third-party
suppliers.
19. A total of one hundred and sixty-six (166) interviews were conducted.
Artefact and live content reviews:
20. In addition to interviews, Post Office provided around five hundred (500) programme and
POL artefacts for review, in response to a list of key artefacts identified by Accenture.
21. At Accenture’s request, live content within programme tools such as Confluence, Jira, and
Service Now was also captured and fed into the Review.
Survey:
22. A survey was also issued to all remaining members of the SPMP team (around 200 people),
including the former RTP and STP teams, to ensure those individuals involved in the
programme who were not interviewed had an opportunity to express their views on key
areas of the programme.
23. Ninety-one (91) individuals responded to the survey, anonymously, and the results of the
survey were incorporated into the overall findings and observations.
Next Steps & Timelines
24. POL and SPMP Leadership to review the recommendations, agree on the way forward and
develop an appropriate programme reset plan.
25. A further update will be provided to Board in November 2023.
Appendix 1
Strategic Platform Modernisation (SPM) Programme Diagnostic - Board Pre-Read Report
Summary
Confidential
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Strategic Platform
Modernisation (SPM):
Programme Diagnostic
Board Pre-Read
Report Summary
31 October 2023
Draft pending Accenture review. Not to be distributed outside of POL without agreement.
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POST
OFFICE
Executive Sumn
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EXECUTIVE SUMMARY
Post Office Limited (POL) commissioned an independent diagnostic review of its Strategic Platform Modernisation (SPM) Programme in Autumn 2023, given
significant delays and cost overruns.
The diagnostic has found that:
+ The purpose of the SPM programme (to replace the Horizon platform) is sound, removing functional and commercial dependence on an end-of-life core
system whilst providing a flexible platform to enable future retail initiatives. There is some misalignment amongst stakeholders regarding the specific scope of
the programme, which is being addressed
* The technology architecture is fit for purpose, based on modern technologies that will scale to support future products and services, however some critical
remediation activities have been identified. The technical build is well underway, with a live service (Drop & Collect) and an NBIT Pilot already delivered and
well received by both the business and Postmasters
+ However, SPM is suffering in delivery execution and, without a change in course, will fail:
— POL does not have the required internal experience to lead and deliver a large-scale IT transformation like SPM (despite assigning some capable colleagues to
the programme)
- The current delivery model is not channelling POL’s capability in a way that will deliver the programme at pace
- Delivery team morale is low - people don’t feel equipped to deliver a programme of this importance
Based on the findings of this diagnostic and Accenture’s experience we recommend resetting the programme to:
> Clarify vision and revalidate current scope - through scope guiding principles clearly linked back to the overall programme vision
> Engage an experienced IT and Change Transformation delivery support partner - to provide the external expertise to close identified gaps whilst building
POL’s internal capability
> Agree delivery method, organisation and governance - with clear business sponsorship and streamlined forums
> Re-plan and re-cost the programme to the next logical stage - including a t-shirt sized estimate based on the chosen delivery model and method
> Embed data-driven management and decisioning - from GE, through SteerCo and delegated to lower levels to allow the programme to move at pace
>
Re-energise your teams and stakeholders - cascade a consistent vision and plan, address ways of working, and maintain comms across and beyond the
programme
Vv
Implement tech remediation plan - with consistent standards across environments, security and modern engineering approaches
Embed business change and support into programme - empower teams to identify, design and deliver the right interventions for stakeholders and BAU
> @ Copyright © 2023 Accenture. All rights reserved. 3
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KEY OBSERVATIONS
THE PROGRAMME HAS SOME GOOD FOUNDATIONS BUT SIGNIFICANT CHALLENGES EXIST
>@
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Robust scope guiding principles are not in place leading to inconsistent scope translation from the vision
Post Office is playing the ‘integrator’ role internally despite limited complex IT delivery capability
Delivery methodology is not fit-for-purpose constraining ability to deliver the solution and manage business change with
confidence
Governance has been ineffective given some unclear accountabilities and inconsistent adherence to RACI
Frequent amendments to timelines and cost forecasts have led to concerns around delivery confidence
Limited data-driven reporting on programme progress has prevented the ability to detect issues early
Culture has been a key blocker for overall success impacting team morale and impeding collaboration
Tech solution has been built on a modern and stable architecture but requires some critical remediation and consistent
rollout
Change and deployment teams have been brought together but it is not yet clear how they will be embedded into delivery
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EXECUTIVE SUMMARY
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KEY RECOMMENDATIONS
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WE RECOMMEND “RESETTING” THE PROGRAMME TO ADDRESS THE KEY OBSERVATIONS
KEY OBSERVATIONS
A
Robust scope guiding principles are not in place leading to inconsistent
scope translation from the vision
Post Office is playing the ‘integrator’ role internally despite limited
complex IT delivery capability
Delivery methodology is not fit-for-purpose constraining ability to
deliver the solution and manage business change with confidence
Governance has been ineffective given some unclear accountabilities
and inconsistent adherence to RACI
Frequent amendments to timelines and cost forecasts have led to
concerns around delivery confidence
Limited data-driven reporting on programme progress has prevented
the ability to detect issues early
Culture has been a key blocker for overall success impacting team
morale and impeding collaboration
Tech solution has been built on a modern and stable architecture but
requires some critical remediation and consistent rollout
Change and deployment teams have been brought together but it is not
yet clear how they will be embedded into delivery
>@
KEY RECOMMENDATIONS
Clarify vision and revalidate current scope - through scope guiding principles clearly linked
back to the overall programme vision
the external expertise to close identified gaps whilst building POL’s internal capability
Agree delivery method, organisation and governance - with clear business sponsorship and
> I Engage an experienced IT and Change Transformation Delivery Support Partner - to provide
> I streamlined forums
Re-plan and re-cost the programme to next logical stage - including a t-shirt sized estimate
based on the chosen delivery model and method
Embed data-driven management and decisioning - from GE, through SteerCo and delegated
to lower levels to allow the programme to move at pace
Re-energise your teams and stakeholders - cascade a consistent vision and plan, address
ways of working, and maintain comms across and beyond the programme
Implement tech remediation plan - with consistent standards across environments, security
and modern engineering approaches
Embed business change and support into programme - empower teams to identify, design
and deliver the right interventions for stakeholders and BAU
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POST
OFFICE
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AI Approach &
Methodology
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SCOPE & APPROACH
OVER SEVEN WEEKS, WE HAVE INTERVIEWED A CROSS SECTION OF THE SPM POPULATION AND ASSESSED A
WIDE RANGE OF ARTEFACTS TO INFORM THIS DIAGNOSTIC REVIEW
Mobilise: 1 week Fieldwork: 4 weeks Reporting: 2 weeks
A A A
c VO NO \
+ Stakeholder Interviews (Phase 2) A _
+ Gather Artefacts + Artefact Review + Tooling Access & Data Analysis Ble eck nee TODAY
+ Confirm Stakeholders & Plan + Initial Interviews (Phase 1) + Findings & Recommendations
Consolidation * Produce Final Output
STRATEGY
GOVERNANCE
166 89 c.500 91
PEOPLE
Interviews Individuals Artefacts Survey
SOLUTION Conducted Engaged* Reviewed** Responses
IMPLEMENTATION
‘Across GE, STP/RTP leadership, business change, 3rd parties, and technical delivery. **includes artefacts provided by POL, additional interviewee material, and live content within programme tools, e.g., JIRA, Confluence and ServiceNow.
> @ Copyright © 2023 Accenture. All rights reserved. 8
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SOURCE LIST
DETAILED VIEW OF STAKEHOLDERS ENGAGED AND ARTEFACTS REVIEWED THROUGH THE DIAGNOSTIC REVIEW
89 INTERVIEWEES*
We have engaged a
broad group of + AbigailMcGeever + Emily Robinson + Martin Roberts * Ryan Jones c.500
+ Ajay Patel * Emma Jones + Matt Walton * Richard James
stakeholders of all + Amit Dandekar * Fiona Burns * Mayuresh Sane * Rob Fry ARTEFACTS
levels working * Andrew Kingham + Gareth Clark + Mel Park + Sam Jeyakumar
across the SPM * Andy McAllister * George Cross * Melissa Gribben * Samantha Swann
* Anne-Marie Hearne * Greg Lewis * Michelle Stainsby * Sarah Gray
Programme + Barry Johns + Hema Kanani + Mike Braithwaite» Shelley Genery
* Ben Marsh * lan Bilclough * Natalie Cross + Simon Pearson
nelud * Ben Owens » Jane Kidd * Natasha Gowardun + Sophie Drury
General Exeeuunes * Brian Jones * Jeff Mak * Nick Ravenscroft * Steve Hepburn
ea ee * Chris Darriet-Jones + Karen Cleary * Nicola Marriott * Steve McFarlane ae
Programme Leadership * Christo Caratossidis + Kate Kay * NikGill * Steve Young part of the
Programme Management * Claire Hurrell + Kathryn Sherratt + Nikki Savekar * Stuart Banfield agement. The
Technical Delivery + Clare Mapes + Kathryn Wearne * Nirmal Radhakrishnan+ Sue Saikia
* Colin Moore * Kelly Goodwin * Owen Woodley * Thomas Maddern
* Dan Perrin * Kelly Metcalfe * Paul Minchell * Tim McInnes
Product Management * Daniel Wood * Lauren Brogden * Pete Marsh * Vinay Swali content captured
Commercial * David Gemmell + Lee Hosford * Phil Newton * Will Jenkins within programme
Stakeholder Engagement * David Steed * Liam Carroll * Praveen Bhujade * Yogesha Ramanna uch as
hange Management * Davyd Nash + Luke Bailey + Reuan Williams * Zdravko Mladenov Confluence, Jira,
Assurance * Dipesh Chandegra + Mark Elmslie * Rob Guest and Service Now
Security * Ed Harris * Mark Nash * Rob Wilkins
Retail Operations * Ed Spencer * Marnus Marx + Ryan Allan
“interviewees based on list provided by POL, following a role-based ask from the diagnostic team. Also includes additional interviewees identified during the diagnostic review. Every effort has been made to engage the appropriate
subject-matter experts and gather insights from a representative group across all areas and levels but, due to timescales, it was not feasible to interview every stakeholder across STP/RTP within SPM.
> @ Copyright © 2023 Accenture. All rights reserved 9
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DIAGNOSTIC METHODOLOGY
AN END-TO-END REVIEW ACROSS THE FIVE MAJOR CAPABILITIES REQUIRED FOR SUCCESSFUL DELIVERY
> Using a Level 1-3 framework, detailed >
observations have been captured following
quantitative (artefact and data analysis) and
qualitative review (interviews, surveys)
STRATEGY
LEVEL 2 CAPABILITY
1.1 Strategic Intent
1.2 Business Case
Economics
1.3 Stakeholder Alignment
1.4 Scope & Requirements
1.5 Sequencing &
Prioritisation
1.6 Delivery Model
1.7 Target Operating Model
GOVERNANCE
LEVEL 2 CAPABILITY
2.1 Planning
2.2 Reporting, KPls &
Metrics
2.3 Prog Organisation,
Authorities & Forums
2.4 Change Control
2.5 Commercial & Contract
Management
2.6 Resource Management
2.7 Vendor Management
NOTE: See Appendix for further detail on the diagnostic methodology.
>@
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Each Level 3 has received a
diagnostic RAG from which an
overall Level 2 diagnostic RAG
has been derived
PEOPLE
LEVEL 2 CAPABILITY
3.1 Change Strategy
3.2 Change Execution
3.3 Stakeholder
Engagement & Comms
3.4 Culture & Behaviours
3.5 Skills & Competencies
3.6 Learning & Training
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>
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Where a capability requires intervention,
recommendations, have been captured (see
appendix) and form the basis for the summary
recommendations outlined
SOLUTION
LEVEL 2 CAPABILITY
4.1 Operations Capability
4.2 Solution Architecture
4.3 DevSecOps &
Environments
4.4 Non-Functional
Requirements
4.5 Data
4.6 Code
4.7 Infrastructure
IMPLEMENTATION
LEVEL 2 CAPABILITY
5.1 Design
5.2 Build
5.3 Testing
5.4 Release Mgmt. &
Deployment
5.5 Conversion
5.6 Post Go Live Support
5.7 Service Introduction
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SUMMARY OBSERVATIONS RAG RATING
14 “LEVEL 2” CAPABILITIES ASSESSED AS RED - WHERE SIGNIFICANT INTERVENTION IS RECOMMENDED
LEVEL 2 CAPABILITY RAG RATING
STRATEGY GOVERNANCE PEOPLE
LEVEL 2 CAPABILITY
1 ategic Intent
1.2 Business C
LEVEL 2 CAPABILITY LEVEL 2 CAPABILITY
2.1 Planning
‘eholder
ent & Comms
NOTE: See Appendix for observations per Level 1 capability and the diagnostic methodology.
SOLUTION IMPLEMENTATION
LEVEL 2 CAPABILITY
4.3 DevSecO)
Environmen
LEVEL 2 CAPABILITY
Non-Functional
> @ RAG Definitions I Significant interventions recommended I Moderate interventions recommended i Limited or no interventions recommended Copyright © 2023 Accenture. All rights reserved. 11
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B I Recommendations
Summary Detail
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RECOMMENDATIONS SUMMARY
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THE KEY RECOMMENDATIONS ARE AN AGGREGATION OF SPECIFIC ACTIVITIES
Clarify vision &
revalidate scope
Engage delivery
partner
Delivery method,
org & governance
Re-plan & re-cost
the programme
Data-driven
management &
decisioning
teams
Re-energi
& stakeholders
Implement tech
remediation plan
Embed business
change & support
into programme
o———— KEY RECOMMENDATIONS
(i9) Embed Data-
led Insights &
Reporting
0) Test & Iterate )
Assurance
Approach
21) Establish
Benefits & Cost
Management
32) Interim Prog.
Communication
22) Identify &
Agree Programme
Ways of Working
123) Programme
Kick-off
SUMMARY RECOMMENDATIONS °
) Clarify Horizon (4) Communicate
!) Setup Reset I/2) Develop Scope Hreciacement Final Build vs. Buy
Team Guiding Principles
Scope Decision
——J a
5) Evaluate Prog. \(7) Refine Vendor
Delivery & Support I1;Onboard Delivery '/Management
(Model* {Support Partner**_i(Approach
(8) Operationalise ”) 10) Review (11) Redefine 2) Embed (13) Rationalise 4) Improve (15) Re-establish
Programme Org _ I}9) Define RACI Delivery Workforce Processes & Tools IIForums & Technology & Solution Change
Structure Methodologies ‘Strategy (Ceremonies Change Planning )\Controls
7) Re-baseline 8) Re-baseline
oi Deane Ete Programme Benefits & Future
Programme Plan
UU Delivery Costs _JITCO
.
24) Estimate & (25) Deliver 26) Establish the
Prioritise Remediation Platform Cee ae
\Remediation Plant }\Itemst \Engineering Team id PI
Refresh Change
(Strategy & Plan
(28) Consolidate *]
(29) Reset Comms
& Engagement
r
30) Design TOM
Delivery
Deployment
31) Integrate
(Support Approach,
*Delivery Model decision impacts subsequent recommendations. **if applicable. tSome of these activities are currently progressing as part of ‘Build Better’ initiative.
Vv
@ Actions Key I
I Action T8C
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RECOMMENDATIONS SUMMARY DETAIL
THE KEY RECOMMENDATIONS ARE AN AGGREGATION OF SPECIFIC ACTIVITIES
e SUMMARY RECOMMENDATIONS ~2
3) Clarify Horizon Replacement Scope: Identify and communicate ‘like- I 4) Communicate Final Build vs. Buy Decision:
2) Develop Scope Guiding Principles: Re-
establish strategic direction (incl. success
metrics) and reset scope guiding principles
Clarify vision & 1) Set up Reset Team: Formation
revalidate of programme team to own and
scope ‘embed the programme reset,
for-like’ vs. process improvement scope for horizon replacement, Agree path forward for Build vs. Buy decision and
‘ensuring clear traceability from vision to implementation (e.g., HiJ/ClJ) establish auditable documentation as necessary
6) Select & Onboard Delivery Support Partner’: Complete
selection process and onboard relevant delivery support provider.
7) Refine Vendor Management Approach: Re-establish
clear vendor management process (e.g., include contract
5) Evaluate Programme Delivery & Support Model: Agree suitability and
approach to onboarding a 3" party delivery support provider to substitute
Engagedelivery
Lita and/or expand existing capabilities. Includes designing TOM principles Ensure that they inform overall delivery approach clauses to ensure knowledge transfer)
8) Operationalise ) (— 9) Define RACI 10) Review Delivery 1H) Redefine 12) Embed Processes & 13) Rationalise Forums) (— 14) Improve 15) Re-establish
Programme Org Agree RACIand II Methodologies: Workforce Strategy: Tools: Agree, adapt and & Ceremonies: Refine II Technology &Change II Solution Change
Structure: ensure Agree programme Understand existing ‘embed appropriate forums and Planning: Revise Controls: Re-
Delivery Complete on- accountabilitie wide delivery programme processes and supporting ‘ceremonies in line integrated tech and establish
method, org & going s are adhered methodology (e.9., capability, map to tools to manage with agreed delivery change planning programme change
governance programme org toacross the version of Agile) and programme programme delivery and approach, approach (incl. clear management
structure programme how it will be adapted II requirements and solution development programme estimation, processes (e.9., TDA,
discussions and (eg. structures II forprogrammeneeds II define resource consistently and effectively II processes, org forecasting and including refinement
set up roles of escalation) &POL (e.g., waterfall) _) I_ management plan across delivery lifecycle structure and RAC dependency mapping) _) I_of low-level designs)
Re-plan & re- 16) Revise E2E Programme Plan: Revise, estimate and 17) Re-baseline Programme Delivery Costs: Re 18) Re-baseline Benefits & Future TCO: Calculate holistic benefits (e.9., efficiency
gains, CSAT etc.), link at high level to delivery stage gates and re-estimate future
total cost of ownership
cost the integrate tech and change plans across scope, timeline,
programme delivery stage gates etc.
programme costs, based on scope, E2E programme plan and
agreed delivery methodology
yaseline I
21) Establish Benefits & Cost Management: Re-establish
programme cost monitoring and extend/embed ongoing
benefits management
Data-driven 19) Embed Data-led Insights & Reporting: Agree and embed
management & proposed programme Assurance approach (e.9.,. Assurance
decisioning Universe). erate and refine as needed
20) Test & Iterate Assurance Approach: Review and update KPls &
processes to consistently track and report delivery progress in line with
programme vision
Re-energise 32) Interim Programme Communication: Communicate an 22) Identify & Agree Programme Ways of Working: Identify and agree desired top-line 23) Programme Kick-off: Kick-off programme (e.9.,
KEY RECOMMENDATIONS
teams & update to all internal stakeholders on the programme direction programme behaviours and ways of working to be embedded and enforced within through an away day) with relevant stakeholders to
jolders following the diagnostic teams e.g., to encourage transparency, collaboration and empowerment energise and motivate for programme restart
Implementtech ( 24) Estimate & Prioritise Remediation Plant: 25) Deliver Remediation Itemst: Deliver the Build Better 26) Establish the Platform Engineering Team: Setup a 27) Introduce Hardening Sprints:
pssiementt Develop a prioritised plan to address identified II remediation recommendations, plus newly identified team that creates, standardises and maintains the include ongoing effort (& budget) to
aay issues by estimating required resources, costs, recommendations, in a consistent, mandated way across all underlying platform and tooling that supports stabilise the code base at regular
pl and timeframes delivery squads engineering intervals
Embed business 28) Consolidate & Refresh Change Strategy & Plan: Validate 29) Reset Comms & Engagement Delivery: 30) Design TOM: Complete 31) Integrate Deployment Support Approach:
change & and update change strategy for the E2E programme and Re-define programme comms and development of holistic and integrated Integrate current business and tech related
supportinto ‘execute activities in line with revised tech delivery engagement strategy forall impacted BAU target operating model, including II deployment support plans and teams e.g., ROC ~
programme timelines incl. change impact, comms, learning stakeholders (in and outside the programme) Horizon transition state planning Retail Operations Centre - previously defined in RTP
*Delivery Model decision impacts subsequent recommendations. **if applicable. ‘Some of these activities are currently progressing as part of ‘Build Better’ initiative.
> @ Copyright © 2023 Accenture. All rights reserved. “4
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POST OFFICE LIMITED
BOARD REPORT
7 Remediation Unit Programme Meeting
Title: Update Date: 31 October 2023
mutes Simon Recaldin, Remediation Unit Sponsor: Simon Recaldin, Remediation Unit I
Director Director
Input Sought: Noting - Board is asked to Note:
The key strategic issues highlighted in the Executive Summary below:
e The Government announcement on an optional £600k payment in Overturned
Convictions (OC) cases,
e The progress made in standing up the Tax top-up scheme in Horizon Shortfall Scheme
(HSS),
e Progress within the Group Litigation Order (GLO) workstream and the contract
deliberations.
Executive Summary
OC (Overturned Convictions): On the 18 September, His Majesty’s Government (HMG)
announced measures to enable an upfront, optional £600k offer, for Full and Final settlement
of overturned convictions. The policy decision represents a significant and positive development
in POLs ability to swiftly settle claims, however, the announcement is the start of this process.
Details of the initiative are still to be finalised by HMG, and a significant amount of effort will
still be required to reach a final position. Additionally, POL is also aware that certain elements
are being referred by DBT to the Advisory Board (AB) and, potentially, final HM Treasury
approval required, which may result in a longer than anticipated timeline.
In parallel with the upfront offer discussions, POL has continued to finalise the assessed claims
process (for claims in excess of £600k). Two of the Law Firms have nominated a chair for the
Independent Assessment (IA) Panel, and POL have confirmed no objections in principle.
Additionally, POL has put forward proposals for two further panel members to the
Representative Law Firms for review and feedback. Pecuniary Principles are close to being
finalised by POL/HMG, which is anticipated to bring the internal drafting to a conclusion. It is
likely however, that IA determination will be required, prior to final versions being agreed.
RU continues the Operational processing of submitted Non-Pecuniary and Pecuniary claims (per
report section) although, short term, the upfront offer announcement has the potential to be a
distraction for Law Firms and Claimants, whilst details are confirmed.
Regards the appeals workstream; a further appeals hearing was held on 27 September 2023,
resulting in 5 further overturned convictions. POL offered no evidence in 3 cases and 2 were
overturned on the basis of public interest only (PIO). Two cases were also overturned in
Scotland on 29 September. This makes 93 overturned cases in total.
Taxation: Progress continues on setting up the Tax Top-Up (TTU) process, with an expectation
that Governance sign off will be completed in October. The TTU compensation funding
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agreement for £29m has now been received. The Operational cost agreement for £0.86 million
is not expected to be signed until November 2023 when DBT have resolved the subsidy control
arrangements, and as such POL will be working at risk until this is complete.
GLO Progress: POL continues to complete the 379 Data Subject Access Requests (DSARs)
that have been submitted by Freeths in relation to their clients’ claims within the GLO
Compensation Scheme. The Information Rights team continue to keep the Information
Commissioner's Office (ICO) updated on progress. A meeting was held between Freeths and
POL on 31 August, where it was agreed that the scope of the DSAR can be reduced to meet the
agreed GLO Disclosure process, with Freeths reserving the right to reinstate full DSARs should
they believe this is required. POL has put this agreement in writing to Freeths who have very
recently responded and, bar a few minor points, POL are dealing with and expect to confirm
the approach very shortly. A Redaction User Guide has been created by the GLO team with
input from the Information Rights team and bitesize training has been rolled out across both
teams to ensure consistency and quality.
With the approval of both RC and Board, POL continues to work at risk in this area. The focus
of both POL and DBT is to get the contract signed by the end of October. A key outstanding
issue is the Data Protection indemnity on a non-mutual basis. This risk will need to be managed
through POL governance to determine whether it can be accepted. Additionally, DBT remain
reluctant to formally acknowledge additional costs which may be required due to the work
already completed on the DSARs along with the additional costs required due to the complexity
of the work being completed which was not initially fully understood. POL sought assurance via
a Letter of Comfort from DBT, however this will not be provided as it would require His Majesty's
Treasury (HMT) sign off and DBT have advised that they do not intend to take this step. DBT
have instead offered a form of words from Carl Creswell to provide assurance that the additional
costs would be covered. This would not be legally binding and the associated risks would
therefore need to be accepted by RC.
Recruitment is ongoing for the Claims Review Advisor vacancies who are required to commence
work on shortfall analysis. A further 6 roles are subject to authorisation and once in place
recruitment can start to fill the final vacancies. Continuing to incur further expenses under an
as yet unsigned contract, without committed funding, or at the very least, a formal
acknowledgement of a firm intention to make such a commitment (e.g. by a comfort letter)
exposes POL to wrongful trading risks given its current financial position. This is even more
pertinent noting that the POL’s annual reports and accounts are due soon, in which POL ought
to show that it has sufficient funding/income to meet its current and contingent liabilities as
they fall due.
Criminal: POL offered no evidence in 5 appeals at the Crown Court at Southwark on Wednesday
27 September 2023. 3 were straight concede cases and 2 were conceded on the basis that it
was not in the public interest to have a retrial.
In Scotland, the Crown indicated that they intended to concede 2 of the 6 cases referred by
the Scottish Criminal Cases Review Commission (SCCRC). POL were not the prosecutors in
Scotland and therefore have played no part in this decision. English Counsel has
At a preliminary
hearing on 29 September 2023 those 2 convictions were overturned.
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Post-Master Detriment - Suspension Payments
Suspension payments have remained on pause while we investigate the options for restarting
the Suspension Renumeration Review (SRR) process. We now have a proposed way forward to
recommence the process which has been through governance in early October. We are waiting
final confirmation from DBT/HMRC to make future SRR payments tax exempt so that we can
make this change before relaunching the process. The proposal is to top-up postmasters to
who have already been paid or accepted offers in the same way as the HSS Scheme to cover
any higher rate tax liability.
Post-Master Detriment - Outstanding Balances
A presentation has been made to the senior RU team to the proposed approach for POL Process
Review (Pot B). The proposal is based on releasing details of actual and potential areas of
detriment to postmasters on a phased basis. The proposal also considered a possible alternative
approach to see if it is possible to shorten the delivery period. This will be discussed at HMC
shortly. Final confirmation of Government funding is not now expected until the end of
November.
Report
Criminal cases: Appeals in the pipeline
1. As of 29 September 2023, the total number of overturned has increased to 93; this figure
includes one CPS prosecuted case, two cases in Northern Ireland and two cases in
Scotland. Of these, 5 cases were conceded by POL on the basis that it was not in the public
interest to have a retrial.
2. There remain 2 contested appeals in the Court of Appeal.
3. There is 1 contested appeal in Northern Ireland and we are awaiting a substantive hearing
date.
4. There are currently 29 cases under review by the Criminal Cases Review Commission
(CCRC). No response to the case of R v M has been received as yet. POL Legal are
considering options to engage with them regarding referrals going forward.
Criminal: MET Police
5. The MET Police attended Wood Street on 20 September 2023 at POL's invitation to seize
material as agreed with POL Legal under production orders and the agreed waiver. POL
provided the MET with all the material previously provided in native format as requested.
There remains a small pool of family members that are outside the agreed waiver which
is being worked through in order that it can be provided lawfully.
Criminal: Potential Future Appellant(s) (PFA) Triage
6. 26 Concede letters have now been sent. In one case, the son of a deceased concede case
has indicated to POL that he does not wish to appeal his mother's conviction because he
worked in the Post Office with her and saw her taking money. Subsequently, the PM’s
daughter has indicated that she wishes to appeal on behalf of her mother and has indicated
that there is perhaps a rift between the family members.
7. Senior Counsel continue to review the “ambiguous cases”.
8. Anew type of case has been identified from the PFA Triage where Counsel has advised
ENED T)\s 1s not a Horizon shortfall case as per the
decision in Hamilton but relates to the economic duress of the postmaster’s contract with
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Overturned Convictions (OC)
Upfront £600k payment update:
9. As noted above, certain details of the recent HMG announcement of the upfront payment
option have yet to be finalised. Consequentially, this results in operational and reputational
risks regards POLs delivery of the initiative, largely stemming from the following items:
i.HMG is still considering discrete policy points in relation to withdrawal and a
reduced offer if it is not accepted within a defined period,
ii.The HMG current position is that Public Interest (PIO) cases are ineligible for the
upfront offer,
iii.Legal Fees, for assessment and advice on the upfront offer, has yet to be formally
communicated and agreed with the Claimant Law firms,
iv.HMG have stated that the upfront offer does not represent a “floor” for all claims,
and therefore does not enable further interim or “top up” payments to be made
above the current £163k.
Public Interest Only (PIO) claims:
10. The current treatment strategy regards the PIO claims continues to present challenges,
specifically:
i.The 2 recent overturns are currently ineligible for the £600k upfront offer and the
2 fully settled claims received values materially under that amount (£200k &
£250k).
ii.Previous settlement and offers have been arrived at using Mediation, incurring
significant Legal fees and extended timescales,
11. The HMG announcement is likely to bring external attention to the above matters
potentially resulting in significant adverse publicity.
Assessed claim process (claims over £600k):
12. The position on the earnings-related principles is close to being finalised by POL/HMG,
which is anticipated to bring the internal principles development to a conclusion. The
Principles as drafted may not be fully agreed by the Representative Law Firms and IA
determination is likely to be required, prior to final versions being agreed.
HSS
13. Attention remains focussed on issuing offers for the remaining 4 original HSS claims by
end October 2023, with 2 of these offers expected by end September.
14. On late applications as of 21 September 2023:
No. of Claims No. of Eligibility No. of Ineligible No. of RFIs No. of Offers
Received Checks Completed Claims Issued Issued No. of Acceptances
324 315 50 57 168 110
a. DBT has set targets for POL, the first of which is that by end December 2023, POL
will have issued outcomes in response to 228 (95%) of the 240 late applications
logged on or before 31 March 2023. As at 15 September 2023, POL is at 75%, having
issued 150 Offers and 25 ineligible letters from that particular set of 240 claims.
Strictly Confidential
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15. On the Dispute Resolution process:
No. of HSS No. of Late apps No. of Escalation
No. of Disputes ee al rs No. of GFMs No. of disputes
active disputes / I active disputes / meetings booked
received queries queries booked / held 7 held resolved
488 313 26 170 20 149
a. To date 488 cases have been disputed or queried within the Dispute Resolution Process,
of which 149 (31%) have been resolved. Of the resolved cases 51% accepted a revised
offer and 49% accepted the original HSS offer. As part of the Dispute Resolution
Process 170 Good Faith Meetings have been held or are scheduled, together with 20
Escalation Meetings. To date we have held 1 Mediation meeting, which resulted in the
PM subsequently accepting a revised offer.
GLO
16. While the contract is negotiated, our key focus is on setting up the POL GLO team to
deliver this project - a team of 57 is projected to support the gathering of claimant data,
providing analysis to support Horizon shortfall claims, data redaction and assurance. A
data sharing agreement has been put in place to enable the transfer of data between
POL and DBT.
17. Shortfall Claims have been provided by claimant reps other than Freeths. As the DSAR
scope has verbally been reduced by Freeths, resource has been reallocated and shortfall
analysis has resumed.
18. Freeths generally continue not to engage with the DBT claims process. In the few where
they are, they have instead provided only information from the original GLO claim forms,
increasing the risk of some shortfalls being overlooked.
19. Freeths have requested that PI compensation is increased in line with inflation. This has
a potential read across to HSS late applications and the HSS Dispute Resolution Process.
POL awaits DBT update on this issue.
Postmaster Detriment - Suspension Payments
20. As SRR is still on hold there has been little movement in the statistics over the past
month. A few hardship payments have been made, having been approved through HMC
Governance. We now have a proposed way forward to recommence the process which
has been through governance in early October and subject to Operational Risk and RC
approval and the tax top up issue being resolved with government we anticipate an
October restart.
Postmaster Detriment - POL Process Review (PPR)
21. As we come to the launch of PPR, we are looking at options to stop the review of potential
areas of detriment under the RU banner. We believe that this will be an ongoing process
and should migrate to BAU as a business improvement team at some point. There are
currently eight ‘new’ areas with the potential for detriment and consideration is being
given to which should be in-scope of RU.
22. Investigation is now complete on the 19 (previously 14) products / processes so far
identified which may have given rise to detriment. In summary, three areas have been
identified with Detriment, seven with Potential for Detriment* and nine with No Detriment.
Categorisation of three areas with Potential for Detriment and five with No Detriment are subject to legal review and
governance.
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Tab 7.1 RU Update
23. As part of the work to date, 65 recommendations have been raised to BAU business to
improve current processes and controls. Five of these are in areas of actual or potential
detriment, three of which are still an issue in BAU today. These recommendations are in
relation to FX BAU, Paystation and Electronic Top-Ups/Vouchers. Focus is on ensuring they
receive the appropriate attention, we have engaged with the Retail Engagement team to
get traction on them, in particular on the issues that are still live and in relation to updates
of training material. These areas need to be addressed before we can undertake any
remediation process.
Finance Update
2023/24 Budget & 3YP
24. At P6 RU is £1.8m under budget YTD due mainly to the timing of legal spend, external
assurance costs and the ENE Hearing in OC. However, a significant number of these costs
are expected to crystalise in Q3, catching up to the budgeted position. RU faces a number
of financial risks going into H2 23/24 through disclosure, late applications and increased
scope in criminal case review work. In addition to this there are further handling costs
for the HSS Tax adjustments.
25. In September, a paper was approved by POL Board for additional £4.5m in funding in
23/24 for RU to cover these risks and increases in scope, in addition to £6.8m further
spend in 24/25.
26. The latest September forecast has been included in the request to HMT from DBT for the
funding of both compensation payments and the above handling costs.
Legal Fees
27. The inclusion of Legal Fees reporting came from an Internal Audit report recommendation
based on both RU and the Inquiry where in February 2023 where there were £9.5m of
unpaid invoices, with £7.3m awaiting a PO, equating to 76%. IA recommended GE should
be sighted of outstanding amounts, including invoiced amounts without a PO.
28. At 23 September 2023 the unpaid invoices amount is down at £2.3m and all invoices have
a PO showing the significant progress and improvements made in RU around the handling
and processing of legal fees including an improved process of review and challenge.
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Overturned Convictions Pecuniary
Compensation Principles and 31 October 2023
Independent Assessment Process
Neil McDaid — Head of OC Simon Recaldin —
Nicola Munden — Head of Legal, OC Remediation Unit Director
Approval
Board is requested to approve:
i. OC Pecuniary Compensation Assessment Process (“Process”)
ii. OC Principles (“OC Principles”) Underlying Offers of Pecuniary Compensation
iii. Terms of Reference (“ToR”) for the Independent Pecuniary Compensation Assessment
Panel
iv. Referral Application Form to the Independent Pecuniary Compensation Assessment Panel
v. _ the issuance of the above to all OC claimant representatives
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Financial Impact
7.
Risk Assessment, Mitigations & Legal Implications
9.
10.
11.
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Stakeholder Implications
12.
Next Steps & Timelines
15.
Appendices:
The following documents can be found in the Reading Room:
iy ; and
ii. ; and
iii.
; and
Iv.
1N.B, The final version of the OC Principles as at 20/10/23 awaits approval by DBT’s POC, however, it is anticipated that this
approval should be in place prior to the POL Board meeting on 31/10/23.
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PFA triage: Clive Malam —
decision on stance
Nick Vamos (P&P) / Ken
Kyriacou (Head of CCRC)
31 October 2023
Simon Recaldin (RU Director)
Decision and Noting
Board is asked to:
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Report
1.
23
4.
ee
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10.
? For example, Susan Rudkin
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17.
18.
19.
20.
21.
225
5
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Financial Impact
23.
24.
25.,
Risk Assessment, Mitigations & Legal Implications
26.
Stakeholder Implications
27.
Next Steps & Timelines
28.
Appendix 1 — PFA Triage Advice, Clive Malam (see document uploaded to the Reading Room
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PPR Compensation - Funding
Commitment
Nigel Clibbens, Head of
Strategy and Detriment
31 October 2023
Simon Recaldin, Remediation
Unit director
Decision
(Legally Privileged and Confidential)
The Board is asked to APPROVE:
HMC: For noting, on 17/10/2023;
RC: For noting, on 18/10/2023;
GE: For noting, on 18/10/2023.
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Financial Impact
5.
Risk Assessment, Mitigations & Legal Implications
6.
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PO
Stakeholder Implications
iit
Next Steps & Timelines
13.
14.
15.
16.
17.
18.
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Draft commitment letter
To the Board of Directors
Post Office Limited
100 Wood Street
LONDON
EC2Y 7ER
[Date] October 2023
Dear Sir/Madam
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Yours faithfully
[SIGNED BY DBT]
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Post Office Horizon IT Inquiry: Update
31 October 2023
Diane Wills: Inquiry Director
Gemma Ludgate: Inquiry Operations and Strategy Director
Noting
SUBJECT TO LEGAL PROFESSIONAL PRIVILEGE
Board is requested to note:
i. Directions issued by Sir Wyn on 15 September following the disclosure hearing held 5
September 2023.
iii. Progress on Phase 4 hearings, and preparation for Phase 5.
iv. Fujitsu corporate statement
v. Latest information on Inquiry timetable
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Further to the disclosure hearing held on 5 September 2023, Sir Wyn Williams issued a
statement and directions on 15 September stating that evidence provided on 5 September
suggested that the process failures were, primarily at least, those of KPMG and HSF albeit that
Mr Canavan and Mrs Wills accepted that Post Office must take ultimate responsibility for the
failure to disclose relevant documents in its possession or under its control. Sir Wyn directed
that a further disclosure hearing be held on a date to be fixed between 8 and 19 January 2024.
Further details from the directions were shared with Board in the briefing note dated and
circulated 21 September 2023. Please see Appendix 3 in the reading room.
The Inquiry Programme continue to meet regularly with HSF, P&P and KPMG (with the su
Report: Part I: Data and Disclosure
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Report: Part II
Phase 4
14. Phase 4 hearings re-commenced on 19 September with a focus on civil proceedings and
criminal policies. Following non-sitting weeks 23 and 30 October 2023, Phase 4 hearings
will re-commence on 7 November until 21 December 2023 and focus on criminal
prosecution case studies. We have now been notified of two additional weeks of Phase 4
evidence in January relating to i) prosecutions in Northern Ireland and Scotland; and ii)
the role of Fujitsu Services Limited in supporting criminal prosecutions.
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‘SUBJECT TO CONFIDENTIALITY UNDERTAKINGS ~ not for further circulation - This document contains information wi
fidentiality undert
Phase 5
17.
18. The Inquiry have issued three Rule 9 request letters to former employee witnesses relating
to Phase 5 matters. We understand that the Inquiry will send further Phase 5 Rule 9
requests in the next couple of weeks. BSFf is working with the POL Inquiry team to
Phases 6 and 7
19. On 10 October 2023, we received a Rule 9 request (R9(48) for a Corporate Statement
relating to Phases 6 and 7. The request relates to Phases 6 (Governance) and 7 (Current
Practice and Recommendations for the Future) of the Inquiry. More specifically the request
relates to:
« Fujitsu’s contractual obligations;
e how these changed over time;
e how POL monitored performance and enforced obligations;
e whether POL considered obligations to be met at the time;
e whether POL still considers that obligations were met; and,
e how current practice differs from historic practice
The statement is due on 21 November 2023. The Inquiry Legal Team are working with
BSFf to
Rule 9 Requests/ s21 Requests
20. At the time of writing, POL has received 47 Rule 9 requests for documents, a Rule 9
request for a corporate statement and documents and ten section 21 notices. Details on
s.21 notices and Rule 9s are set out in the reading room.
Timetable
21. Counsel to the Inquiry, Jason Beer KC has informally indicated a proposed timetable for
the Inquiry going forward. The aim is that Phase 5 will commence in February, following
a short break when Phase 4 ends in January. Phase 5 is likely to be blended with Phase
6 and will run until the end of April (with a break for Easter). Phase 7 will commence in
May, with the suggestion that this will and is currently expected to be short (only a week).
There will then be a break of a month with closing submissions to take place in June. This
information remains confidential until the timetable is published.
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It must not be discussed or shared with anyone who does not hold a confidentiality undertaking accepted b)
Confidentiality Undertakings Review
22. The POL Inquiry team are continuing its confidentiality undertaking review to assess any
undertakings which do not facilitate POL's participation in, or assistance to, the Inquiry.
This follows new guidance issued by the Inquiry which narrowed POL's previous
understanding of the position. It is likely that a number of undertakings will need to be
withdrawn for colleagues on the basis that they use the information for general business
readiness rather than anything directly linked to the Inquiry.
23. Separately, the Inquiry team is still awaiting the Inquiry’s response to the revised
Memorandum of Understanding (MoU) which was sent to it on 15 September 2023. The
MoU governs the practicalities that sit underneath the confidentiality undertakings with
the aim of simplifying, where possible, the operation of the Inquiry’s confidentiality
undertaking regime between POL and the Inquiry.
Independent Governance Review
24.
25. ISC decided to proceed with Grant Thornton’s instruction but on this adjusted basis (i.e
BAU and not for the purpose of the Inquiry, although a decision may be taken to share
the recommendations with the Inquiry.) A Scope of Work has been agreed with Grant
Thornton and the contract has now been finalised and signed. POL’s Chief of Staff and
Company Secretary are leading on this work and will report progress to GE and the Board.
Finance
26. At P5 the Inquiry was £4.2m overspent against budget YTD (June Budget) due to the
disclosure issues and subsequent remediation efforts.
27. In September, POL Board approved an additional £30m in funding in 23/24 for the Inquiry
team to
28. Including the above the latest view of the lifetime spend of the Inquiry has now risen to
an estimated £140m having previously been £103m. The current lifetime spend of the
Inquiry by end August 2023 is £75m.
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Tab 8.1 Procurement Requests
POST OFFICE LIMITED
BOARD REPORT
Title: Procurement Report Meeting Date: I 31 October 2023
Dionne Harvey, Head of IT +
Author: Procurement (on behalf of the I Sponsor: Kathryn Sherratt, Interim ‘Group
My Chief Finance Officer
Procurement Director)
Input Sought: Decision
There are six specific issues which require Board approval:
1. Horizon Data Centre Operations and Central Network Services plus HNG-X
Test Rigs — Approve a one-year extension of the Data Centre Operations (DC Ops)
and Central Network (CN) Services, plus HNG-X Test Rigs, to be co-terminus with the
contract end date of 31 March 2025. These Services are critical to ensure continuity of
service for the Horizon Application and Services used in branch.
2. Peters & Peters — Approve an increase in the value from £3.8M to £12.4M for the
direct award previously agreed by GE and Board to Peters and Peters for criminal law
advice to the Remediation Unit in respect of prosecutions, convictions and appeals and
to provide subject matter expert advice to POL's Inquiry Team.
3. eDiscovery Services - Approve an increase in value from £4.8M to £5.3M for the
KPMG eDiscovery services contract in support of the Remediation Unit and the Inquiry
and approve the sourcing strategy for a new contract to provide the required services
until the end of the Inquiry.
4. External Audit - Approve the sourcing strategy to undertake the procurement for the
provision of Externa Audit Services.
5. Commercial Vehicle Maintenance Provider - Approve the sourcing strategy to
undertake the procurement for the provision of Commercial Vehicle Maintenance and
Associated Services.
6. Strategic Procurement Pipeline - approve the Strategic Procurement Pipeline for
September 2023 — August 2024 as set out within Appendix A.
Executive Summary
Report —- Horizon Data Centre Operations and Central Network
Services plus HNG-X Test Rigs
Board is requested to approve a one-year extension of the Data Centre Operations (DC Ops)
and Central Network (CN) Services, plus HNG-X Test Rigs, to be co-terminus with the contract
end date of 31 March 2025. These Services are critical to ensure continuity of service for the
Horizon Application and Services used in branch. This approach was endorsed by GE at their
meeting on 11 October 2023.
Approval is sought on the following approach:
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« Modify the Horizon Agreement to extend DC Ops and CN Services for a further one year
(01 April 24 - 31 March 25) totalling £31.97m; the additional funding of £6.85m required
will be baked into the 24/25 Opex Budget and requested via a DC Fortification Program
Change Request to be presented to IADG.
e Extend the HNG-X Test Rig environments for a further 1 year (1 April 24 to 31 March
25) totalling £4.19m; the additional funding of £1.33m to be requested via a DC
Fortification Program Change Request to be presented to IADG.
e Provide full delegation to IADG for the remaining Capex drawdown. NB: The increased
amount has been requested within the funding paper presented to DBT.
The DC Ops and CN Services were removed from the scope of the overall extension of the
Fujitsu Services contract with POL in 2021 with the expectation that these Services would be
no longer required upon the successful completion of the Belfast Exit/Pivot to Cloud
Programme and would expire naturally on 31 March 2023. Following the decision in
November 2022 to halt work on the Belfast Exit Programme it became necessary to extend
these services to support the continued use of the Belfast Data Centres.
This contract modification is the second extension to the term of these services until 31
March 2025 (The first was executed in March 2023 under CCN1732). These Services will
subsequently terminate in line with all other Horizon Services on the 31 March 2025. Test
Rigs were previously extended under CCN1731 and approved at IADG. POL has reached
agreement with Fujitsu for the extension of the DC Ops and CN Services for a second term of
one year until 31st March 2025.
¢ This agreement is contingent on POL committing to the delivery on some additional
work packages within the existing DC Fortification Programme (Oracle Hardware
Upgrade and Test environments). These work packages further mitigate the
operational risk presented by a number of Data Centre components (hardware and
software) that are EOSL.
e The provision of the HNG-X Test Infrastructure is agreed by the parties to be extended
and such services to be coterminous with the DC Ops and CN Services.
« Discussions on the future of the Contract as a whole remain ongoing, and a further
paper will be provided to the Board advising of the risks and options beyond 2025.
Financial Impact
7. See below a financial breakdown of all associated costs which have an assumed Retail
Price Index (RPI) of 9% baked in:
« The RPI % will be finalised in January ‘24 based on the December ‘23 figure.
« The Opex figures for 24/25 are the same as 23/24, with the exception of the RPI uplift.
« The additional Capex funding will be requested of IADG via a DC Fortification Change
Request following Board approval.
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141 of 197
T Approvedin New Approval
1 year Extension: DC Ops & CN Services (Em) ieee gail leh
Opex Cost 18.36 18.36 0.00
‘Assumed Opex indexation of 9% 1.67 - 1.67
TOTAL Opex 20.03 18.36 1.67,
Capex Cost r 10.57 6.75 3.82I
Assumed Capex Indexation of 9% 0.81 > 0.81I
‘TOTAL Capex 11.38 6.75 4.63
[Total Exceptional Cost (Indexation n/a) I 0.56 I = 0.56]
[Total DC OP & CN Services Cost I 31.97I 25.12 I 6.85I
1 year Extension: Test Rigs (Em)
Capex Cost 3.85 2.85 1.00)
Assumed Capex Indexation of 9% 0.34 = 0.34
TOTAL Test Rigs Cost 4.19 2.85 1.33
ey en) I 3626] 277 I eis
Risk Assessment, Mitigations & Legal Implications
A substantial amount of the datacentre infrastructure in Belfast is end of service life and
requires significant investment to maintain until Horizon is replaced by NBIT. Steps continue to
be taken to address the risks via capital investment under the DC Fortification Programme.
These Services are being extended via a PCR 2015 Regulation 72(1)(b) compliant modification.
The legal risks associated with this modification, particularly with regard to the Public Contracts
Regulations 2015 are addressed in a separate legal Risk Note.
Stakeholder Implications
Should Board not agree to extend these Services, POL will formally enter exit for Data Centre
Service provision and will need to make alternative provision for support. Any interruption of
support presents a significant risk to continuity of service which may lead to Branches being
unable to trade as of 01 April 2024.
Board is asked to authorise any 2 Directors or any Director and the Company Secretary to
execute the contractual changes.
Report — Peters & Peters
On 28 June 2023 GE agreed the direct award of this contract to Peters and Peters (P&P) for
£3.8M which was subsequently confirmed by Board on 10 July 2023.
Following further review of the legal costs, Board is requested to approve and endorse to Board
an increase in value from £3.8M to £12.4M for the compliant direct award to P&P, for criminal
law advice to the Remediation Unit in respect of prosecutions, convictions and appeals and to
provide subject matter expert advice to POL’s Inquiry Team. This approach was endorsed by
GE at their meeting on 11 October 2023.
P&P have provided criminal law advice to both the HMU and the Inquiry on a range of matters
following the Group Litigation Order (GLO), specifically the Common Issues Trial of March 2019.
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@
A paper on the GLO Post Settlement Programme was tabled for discussion at GE in January of
2020 which included a refence to the appointment of P&P, however, there is no evidence that
PCR issues were considered, spend under this initial contract has reached some £17.8M.
To address this matter a new contract has been drawn up between POL and P&P which is
currently being finalised. The proposed procurement route is a Direct Award, relying on
Regulation 10(1)(d)(ii) of the PCR 2015, which allows a direct award for legal representation in
preparation of judicial proceedings before the courts, tribunals or public authorities.
The value of the proposed new contract with P&P has increased from £3.4M to £12.4m, (£9m
for RU and £3.4m for Inquiry), as a result of the additional requirements identified by RU since
Board's approval of the previous contract award in July 2023, the additional requirements are:
« RU - a) Scotland Disclosure (£1m), b) Met Police Disclosure (£1m), c) CCRC cases (£3m)
and d) contingency (£1.2m), which together with the original forecast of £2.8m brings
the RU total to £9m.
e Inquiry - an additional £2.4m has been added to cover an additional £1.4m to the
forecast for future spend and an additional £1m requirement largely for disclosure
remediation. Together with the previous forecast of £1m this brings the Inquiry total to
£3.4m
Financial Impact
The current spend to date with P&P is £17.8m. This new award has a forecasted spend of
£12.4m (£9m for RU and £3.4m for the Inquiry) over a 2-year term.
Risk Assessment, Mitigations & Legal Implications
POL is seeking to rely on PCR 2015 Regulation 10(1)(d)(ii) of PCR 2015 which allows a direct
award for legal representation in preparation of judicial proceedings before the courts,
tribunals, or public authorities.
A separate legal risk note was produced for the June GE meeting and has been updated.
Additionally, it is considered a low probability that other law firms would seek to challenge the
award of this contract as potential competitors will be well versed in the sensitivities of such
initiatives as the Inquiry and the Historical Shortfall Scheme and, in a reverse situation, would
expect to be able to maintain continuity without fear of challenge from the market.
Stakeholder Implications
Both the RU and the Inquiry Team consider it essential to continue with the incumbent, as it
would be disruptive to change POL’s counsel at this stage whilst the various schemes are in
flight and the actions of the Common Issues Judgement have not been completed. Not renewing
with P&P would cause significant operational and practical issues to POL including adversely
impacting POL’s ability to support the later stages of the Inquiry.
Board is asked to authorise any 2 Directors or any Director and the Company Secretary to
execute the contract.
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Report — eDiscovery Services
Board is requested to approve an increase in value from £4.8M to £5.3M for the KPMG
eDiscovery services contract in support of the Remediation Unit and the Inquiry and approve
the sourcing strategy for a new contract to provide the required services until the end of the
Inquiry. This approach was endorsed by GE at their meeting on 11 October 2023.
KPMG has provided eDiscovery services to the Remediation Unit and the Inquiry since January
2021. Due to factors outside of POL’s control, estimates on the consumption rates, and
therefore cost, of these services has been difficult to forecast. Financial headroom is currently
expected to run out by December 2023, therefore, it is proposed to compliantly modify the
contract value by £0.5m, as permitted under Regulation 72(1)(c) of PCR, to provide sufficient
time to award a new compliant contract.
In January 2021 a compliant call-off was made for KPMG’s eDiscovery service from the G-Cloud
12 Framework, valued at £3.6m over a four-year period (two years plus two optional one-year
extensions). By mid-2022 the contract expenditure was approaching £2m and it was clear that
demand was going to outstrip the contract value during 2023; also, that a PCR Regulation 72
amendment was unlikely to be sufficient to meet the business need. It was therefore agreed
to award a new contract. Final spend on this contract was £2.7M to November 2022.
In November 2022 a new compliant call-off was made from the G-Cloud 12 Framework.
valued at £4.8m over a four-year period (two years plus two optional one-year extensions).
Again, the spend against the contract to date is much higher than the contract value
anticipated; £2.8m in nine months from November 2022 and projected to exhaust the value
of the current contract by December 2023.
It should be noted that the reason overruns in the cost estimates for two successive contracts
have been almost entirely due to the change and increase in nature of information requests
flowing from the Inquiry which POL has no option but to comply with.
It is proposed therefore, firstly, to modify the current contract by £0.5m, taking the contract
value from £4.8m to £5.3m, citing Regulation 72(1)(c) of PCR 2015 which, in essence, covers
changes due to unforeseen circumstances. This is justified by the significant change in
demand that has been made as a result of requests from the Inquiry. The purpose of this
modification is to allow sufficient time for the reprocurement of the services.
No permitted contract modification would be sufficient to meet the anticipated service
requirement through to the end of the Inquiry therefore it is the procurement
recommendation that a new contract be compliantly sourced via the CCS G-Cloud 13
Framework. The value of the new contract is estimated by the business at £4.5m, to which
will be added a 50% contingency, giving a total proposed contract value of £6.75m.
Board is asked to delegate execution of the contract modification, new contract award, finalising
contract terms, to GE and authorise any 2 Directors or any Director and the Company Secretary
to execute the contract.
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Tab 8.1 Procurement Requests
The value of the contracts are/will be as follows:-
Date Value I Comments
November 2022 £4.8m Will be exceeded circa December 2023 on current projection
November 2023 £0.5m__I Reg 72 modification to allow time for new contract award
December 2023 £6.75m_I New compliant G-Cloud 13 contract award
Total £12.05m
Risk Assessment, Mitigations & Legal Implications
The current contract has been compliantly awarded and the proposed modification under
Regulation 72(1)(c) of PCR 2015 is considered justified given the unpredictable nature of
requests flowing from the Inquiry. A separate legal risk note has been produced.
The proposed new contract will also be compliantly awarded using the CCS G-Cloud 13
Framework.
Report — External Audit
Board is requested to approve the sourcing strategy for the procurement of external audit
services. POL is required to put in place a new External Audit Contract before 01 October
2024, when the current arrangement with PwC expires. This approach was endorsed by GE at
their meeting on 11 October 2023.
In 2018 POL undertook a compliant procurement exercise via a CCS framework which
resulted in a contract being awarded to PwC for the provision of external audit services. The
initial term of the contract was for four years which was compliantly extended in October
2022 for a further two years. GE and Board endorsed the reappointment of PwC as POL’s
External Auditors for 23/24 and a further modification to the value of the contract at their
meeting on 13 and 26 September 2023. To mitigate the risk from the further modification it
was agreed by GE and Board that we would commence the procurement exercise for a new
External Audit provider in October 2023.
The Post Office audit has become more complicated due to accounting complexities arising
from the Group Litigation Order, remediation, and the inquiry. Matters are further
complicated by POL’s Going Concern status, which is complex and means the level of
judgement and risk for any auditor working with us is significantly higher than usual which
may limit the number of suppliers who wish to bid for POL’s external audit services.
We propose to run an FTS Restricted Procedure as opposed to utilising a CCS framework the
main advantage of this approach is that where no tenders, no suitable tenders, no requests to
participate or no suitable requests to participate have been submitted in response to ana
Restricted Procedure, provided that the initial conditions of the contract are not substantially
altered POL will be able to make a direct award to an appropriate supplier under Regulation
32(2)(a) of the PCR 2015. The contract award will be for an initial four-year term with the
ability to extend by two further twelve-month periods with a value of £10M over the six-year
period.
Board is asked to delegate contract award, finalising contract terms to GE and authorise any 2
Directors or any Director and the Company Secretary to execute the contract.
6
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Tab 8.1 Procurement Requests
@
Financial Impact
The total contract value is forecast at £10M over the six-year term of the contract. POL will
seek a fixed price covering the first two years of the contract but due to the way audit fees
are typically structured it may prove difficult to fix anything beyond the first year. Once the
Inquiry and Remediation activities are completed it may be that the audit simplifies and
therefore pricing stabilises.
Risk Assessment, Mitigations & Legal Implications
A compliant FTS procurement will be executed and there are no known PCR2015 risks at the
outset of the procurement. There is a risk of no bids, but the strategy has been designed to
cater for that possibility.
Stakeholder Implications
Sufficient time has been allowed in order to run the exercise and appoint a supplier at a
convenient point in the audit cycle.
Report —- Commercial Vehicle Maintenance Provider
Board is requested to approve the sourcing strategy to undertake the procurement for the
provision of Commercial Vehicle Maintenance and Associated Services. The recommendation
is to carry out a Procurement via the Crown Commercial Services Framework RM6268 - Fleet
Management and enter into a contract for a 4-year term with an estimated total contract
value of £33.5m. This approach was endorsed by GE at their meeting on 11 October 2023.
Post Office operates a fleet of 260n0. Commercial Vehicles. These are made up of a
combination of Cash and Valuables in Transit (CViT) Vehicles and Mobile Post Office vehicles
(MPO). The business has a requirement for a supplier to provide maintenance to its fleet of
Commercial Vehicles and provide associated services, including, but not limited to
Management of Commercial Vehicle Conversions. This contract is required to ensure that we
are able to support Postmaster requirements, comply with our statutory and legal
requirements and manage road risk.
The previous supplier of Commercial Fleet Vehicle Maintenance services to Supply Chain were
Rivus Fleet Solutions, (Rivus). On July the 11 2023 a notice of intention to cease to deliver
the contracted services from 29 September 2023 was received by Post Office.
Consequently, Board approved the Procurement plan to execute a direct award to Fraikin Ltd
to let a contract fora one year term for a maximum estimated total contract value of £2.45M
using Regulation 32(2)(c) which allows for direct contract awards insofar as is strictly
necessary, where for reasons of extreme urgency brought about by events unforeseeable by
the contracting authority occur. This contract will expire in September 2024.
A further competition procedure under CCS Framework RM6268 is recommended as Post Office
technical and commercial requirements are clear and in-scope for this framework.
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Tab 8.1 Procurement Requests
@
The CCS Framework is relevant having only commenced in May 2023, allows for a shorter
Procurement programme when compared to a Restricted FTS procedure and contains most of
the significant operators in the industry.
In addition, by using a framework, we benefit from preferred rates between suppliers, pre-
agreed terms and conditions, pre-vetted and qualified suppliers. Four years is the maximum
period permissible for a Framework Call Off and is agreed, by Fleet, as a suitable term.
Board is asked to delegate contract award, finalising contract terms to GE and authorise any 2
Directors or any Director and the Company Secretary to execute the contract.
Financial Impact
The estimated total contract value is £33.5m. This is calculated on the basis of the existing
£2.45m/year for maintenance increasing with inflation year-on-year at a rate of 6% per year.
Over 4 years this would be an expected spend of £11.4m. The additional contract value allows
sufficient headroom for the replacement, on a purchase and conversion or lease basis, of those
vehicles which are due to reach the end of their life during the course of the contract, as well
as any other significant project works (e.g., vehicle refurbishment, rectification of safety
issues).
Risk Assessment, Mitigations & Legal Implications
A compliant procurement exercise will be executed and there are no known PCR 2015 risks at
the outset of the procurement.
Stakeholder Implications
Having recently developed contract documents (including specifications) for the purposes of
the Fraikin Procurement, it is not anticipated that the requirements will change significantly.
Report — Strategic Procurement Pipeline
Board is requested to approve the Strategic Procurement Pipeline set out within Appendix A.
The attached slides at Appendix A set out the key procurement activities both in flight, and
those which are in preparation for publication to the market with a value threshold of >£5m
over the term of the contract and as such will require Board approval.
The Board will note the wide variation in activities listed. These range from low value, high
volume commodities contracts to high value, low commitment contracts providing a compliant
basis for future awards and/or variable commitment.
Sourcing strategy papers setting out routes to market, a recommendation and risks and issues
will be referred to Board following GE review.
Detailed award criteria and evaluation scoring are usually finalised just prior to the issuing of
the procurement documentation. Visibility of high-level award criteria can be supplied to Board
as part of the monthly progress report with material variations requiring further governance.
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Tab 8.2 Procurement Strategic Pipeline
Strategic Procurement Pipeline
September 2023 — August 2024
October 2023
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Tab 8.2 Procurement Strategic Pipeline
Post Office Limited - Document Classification: INTERNAL
Pending Strategic Procurement
+ The attached slides set out the key procurement activities both in flight, and those which are in preparation for publication to the
market with a value threshold of >£5m over the term of the contract and as such will require Board approval.
+ The Board will note the wide variation in activities listed. These range from low value, high volume commodities contracts to high
value, low commitment contracts providing a compliant basis for future awards and/or variable commitment.
+ Future Sourcing strategy papers setting out routes to market, a recommendation and risks and issues will be referred to Board
following GE review.
+ Detailed award criteria and evaluation scoring are usually finalised just prior to the issuing of the procurement documentation.
Visibility of high-level award criteria can be supplied to Board as part of the monthly progress report with material variations
requiring further governance.
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Tab 8.2 Procurement Strategic Pipeline
Post Office Limited - Document Classification: INTERNAL
Contract Start
Service
Current Supplier Date
Microsoft Enterprise
= Agreement (cioi0s2) __-°0/08/2021
Horizon Services Agreement
(100147) Ste)
Ftesu
Data Centre Ops and CN. 28/07/1999
Service
HNGX Test Rigs
Environments
Back Office Towe Services
including CDP (cio0139) _°2/02/2016
Digital Capabilities
Framework (5 Lots) TER
Call OF Contract for Slt
Insight Serve Kiosks (C100107) ia 31/01/2021
NcR
' Paystation Service(Hardware
Wortine ER a
149 of 197
Minimum
Term
3 years
26years
‘year
‘year
years
3 years
a2years
18years,
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IT Strategic Procurements
Compliant
Extension
None
None
‘year
Final Contract
End Date
30/04/2024
31/03/2025
31/03/2024
31/03/2024
01/02/2025
27/01/2024
31/03/2026
12/12/2023
Procurement Duration
veus {in months, consecutive)
£12m 3 months
£2339m 12-15 months
£16.5m pa 3 months
£2.6mpa 3 months
£230m 12 months
£40m 4 months
£17.9m 4 months
£18.75m_ 6 months
POL Board Meeting-31/10/23
Comments
‘Tobe reprocured under the Software Reseller contract (SCC) approved value of £45.5m over
the 3 year term.
CEO/CTO discussions tabled re a potential extension due to NBIT delays ~ Key extension
principles to be agreed. Consider external SME for negotiation & Exit whilst leveraging
trusted POL SME's, Procur risk increases by each Me particularly in
light of recent Pre-Market Engagement on DC Ops... Procurement advice is to go to procure
via competitive dialogue.
Strategy/funding re upgrade of Oracle database or move to Oracle Cloud Infrastructure (OCI).
Managing Service risks is also a key consideration due to the EOSL hardware & softwar
DC Ops & CNS to be extended by 1 year to be co-terminus with the Contract end date;
Modification to a contract in accordance with Regulation 72 (1) (b) of the Public Contracts
Regulations 2015.
Associated Capex Investment required. October GE & Board Paper in progress.
‘Test Rigs to be extended by 1 year to be co-terminus with the Contract end date,
Associated Capex Investment required. October GE & Board Paper in progress.
sary as legal's view.
Prove Plan for BO Services is ; planning.
disaggregation of Services. CFS ownership in question (IT or Finance). CDP Prove Plan in
draft.
CFS is supported via SAP until Sept ‘2027 (ECCS) ~ option to move to SAP Hana or explore
alternatives.
Replacement Framework to be shaped with stakeholders and re-tendered to provide Lots to
meet current business needs.
Replan underway
Business Case due at October GE & Board requesting funding to purchase new hardware to
replace the existing estate & ongoing support. New requirements will be via a lease model.
Procurement Sourcing Strategy in draft.
Extension required due to delays with NBIT Second Device. which WLare supportive of. 12
month auto-renewal is available; POL have already paid WL to make the Service Fibre
‘compatible . Alignment to the NBIT Second Device is critical.
POL-BSFF-137-0000003_0113
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Tab 8.2 Procurement Strategic Pipeline
Post Office Limited - Document Classification: INTERNAL
SPMP Strategic Procurements
Current Supplier Contract Start Date Minimum Term Compliant Extension I Final Contract End Date pom fm duration
raining Vendor Tec-03/24 2years Lyeart1 year 2apor7 £10m-20m Procurement 6-12 months egurements, route o/market and value are not yet
Requirements are not yet finalised. Route to market is
Procurement 6-12 months
implementation Partner Tender Tec-03/24 2years Lyear+1 year 12/2027 £10-48m (OR Competitive Dialogue YTADEN 3 2 HpersaAiC cite ae
TATE months process may be considered as the optimal route.
4
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Tab 8.2 Procurement Strategic Pipeline
Post Office Limited - Document Classification: INTERNAL
eee a ae ee reese I ee
UK Fuels Ltd
Rivus Fle
utions/Fraikin Ltd
Kinto Mobilit
vices Lid
Kesslers, Benchmark
and ITAB
fice Ltd
Digi Europe Lid
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Fuel Cards and Associated
Services for the Supply Chain
Commercial Fleet.
01/02/2021.
‘Commercial Fleet Maintenance
‘and New Vehicles and Conversion
services
07/07/2017
‘Company Cars for Job Need and
Perq schemes
22/05/2017
Branch Cash Safes plus locks, key 06/06/2018
lockers etc for Retail Network
Shop-Fit & Signage Manufacture, 01/04/2023,
Deliver and Install for Retail
Network
National Stock Centre Operation. N/A
Scales and ancillary equipment 01/07/2019
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Retail Strategic Procurements
Tears
Tyears
Syears
‘years
N/A
Syears
31/01/2024 3,265,338
N/A 30/06/2024 £11,500,000
N/A 22/05/2024 £12,600,000
Syears 31/03/2024 £13,100,000
N/A 31/03/2024 2,000,000
N/A 01/05/2024 NA
Byears 30/06/2024 £1,100,000
POL Board Meeting-31/10/23
Procurement Dur
{in months, consecutive)
‘months GE and Board approval of sourcing strategy in July 23
for an €8m, 4 Year agreement.
Procurement underway and will return to GE for
‘contract award approval.
months Following notification from Rivus Fleet Solutions of
‘withdrawal from the Market, a 12 month contract was
awarded to Fraikin in September 2023 under Reg. 32
‘with a value of £2.45m for Fleet Maintenance.
Sourcing strategy to be approved GE and Board in
October 23 for up to £33.5m Fleet Maintenance with
‘option to include Vehicle Purchase, Lease &
Conversion services
‘6 months GE and Board approved of sourcing strategy in March
23. Procurement live in October and will return to GE.
for contract award approval
months GE Approval of historic spend to extend the contract,
value to £13.1m.
GE and Board approval of sourcing strategy in July 23.
Procurement underway and will return to GE for
‘contract award approval.
6 months Contracts were put in place under Reg32 Emergency
procedures to replace previous provider, Futurama
following thei liquidation.
GE and Board approval in July 23 for replacement
‘contracts with a value of up to £15m (which will also
include additional services of CAD, Conceptual Design,
Ergonomics, Productivity Surveys and Branch
‘Surveys). Procurement live October and will return to
GE for contract award approval
12months ‘Outsourced Service to commence in August 2028
following completion of Procurement.
Contracted on basis of 10year contract with value of
£56.8m
GE, Board and DBT approved sourcing strategy. GE
‘approved contract award Sept 23.
‘months Based on spend during intial term, there is a
requirement to re-procure at the end of the initial
term.
Value of replacement contract potentially to exceed.
{£5m. GE and Board approval of sourcing strategy
required. November 23.
POL-BSFF-137-0000003_0115
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Tab 8.2 Procurement Strategic Pipeline
Post Office Limited - Document Classification: INTERNAL
Commercial Strategic Procurements
Contract compliance legal review previously approved direct awarded using Regulation 32(2\b)
\VOCALINK LIMITED 02/04/2019 NA rolling contact 31/03/2025 +£24,000,000 36 of the PCR 2015. Potentially need new legal review if anew contract is required.
in Branch G cloud procurement - sourcing strategy to GE (recommendation approved) for Board Sept 23.
Veriication(iBv) Tec 2years year+ Lyear eC ££12,500,000 36 Will then undertake G Cloud exercise for recommendation of award to GE & Board in October
Identity Services 2B
Network Strategy and Delivery Strategic Procurements
[sve I serome I simnten I Soe
ome Pere Seecveeee aoe eres ear i Contract being finalised with the new supplier and will bein place by end Oct 2023
Tec 3 years STEM Tec 20,000,000 2 SQ live -FTS negotiated procurement underway.
Database management,
hosting, campaign ome Saunt 1 yearsa year enn Sapcanes 5 New procurement tobe undertaken asap - sourcing options strategically to be evaluated and
Jmanagement, bespoke
data solutions
‘taken to GE and board for approval in November
Finance Professional Services Procurements
peice " ‘oe I ee mee I
Contract was modified in October 2022 under Reg 72 to extend the duration for a further 2
PRICE WATERHOUSE
years to October 2024,
COOPERS SEE 2 Yaar avast Leet CES END G Sourcing strategy for re-procurement sent to GE and Board for review at their October
‘meeting. Proposal is torun a Restricted FTS process.
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Tab 9.1 Disclosure of Evidence to Support Police Investig
POST OFFICE LIMITED
BOARD REPORT
Request for evidence release to
Title: Police Scotland and discussion of I Meeting Date: I 31st October 2023
broader policy change
Sarah I Gray, Group Legal
Kuthon Director Guanes Ben Foat, Group General
. John Bartlett, Head of Assurance ei . Counsel
& Complex Investigations (A&CI)
Input Sought
The Board is asked to 1) approve in line with policy to pass evidence to Police Scotland; and
2) for Board to discuss the pros and cons of a policy change which would allow a more confident
handling of Horizon data and its provision to law enforcement.
Executive Summary
e POL's current Investigation Policy (“Policy”), Cooperation with Law Enforcement Policy,
and Legal Play Book requires Board sign-off to permit the passing of HNGA Horizon
evidence to the police to support their investigations where POL may be the victim of a
crime;
¢ In line with this Policy, Board sign-off is sought for the passing of evidence to Police
Scotland relating to the potential criminal case and circumstances
ae
e Following the implementation of robust processes and the hiring of highly experienced
staff, a change to the current Policy and Play Book is recommended. This would remove
the necessity for Board approval prior to the provision of evidence to the police where POL
suspects that they have been a victim of crime and allow more efficient sharing of evidence
with police.
Questions addressed
e Should Board support a request to be made for their approval in line with current policy
for A&CI to provide Police Scotland with evidence relating to a suspected criminal offence
committed against POL at the Portree Post Office.
e Why POL should be more confident in providing Horizon data to law enforcement in their
criminal investigations where POL is suspected of being the victim of a crime.
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Report
1. Cooperation with Law Enforcement Policy (CLEP) and Legal Play Book
1.1. The current Group Investigation Policy was written during the long hiatus from 2015
to 2023 where POL did not conduct investigations nor proactively pass evidence to
police. This Policy identifies at 1.3 Core Principles, including proactively reporting
matters to law enforcement and the manner of the provision of information and for
what purpose it may be shared.
1.2. Policy minimum control standards requires that the Group Legal Director makes the
decision to report a potential crime against POL to law enforcement. Tool 2 of the
Legal Play Book is a flow chart which lays out how data intended to be shared is
categorised by risk and how it may be provided to law enforcement.
1.3. Where the evidence is not Legacy Horizon or HNGX and where there is no reason to
believe the data to be provided is unreliable or inaccurate, corroborative evidence
should be sought. Where none can be discovered in POL’s control, the evidence is to
be considered Medium Risk.
1.4. Point 3 of Tool 2 describes how the provision of Medium Risk data to law enforcement
must be managed: “The data must not be provided unless POL is legally compelled
to provide it or the Board approves its voluntary disclosure.”
1.5. This has now resulted in A&CI having to seek Board approval to produce a witness
statement to police which contains HNGA (the most reliable version of Horizon) data
so as to provide evidence to support a police investigation which POL requested.
1.6. The statement must be reviewed by in-house criminal counsel prior to release to law
enforcement.
1.7. There are at least 10 current A&CI cases where we will need to pass evidence to law
enforcement agencies which are currently investigating potential offences committed
against POL or are awaiting statements to commence investigations (a total of
c£4.5m in losses). Most will require Board sign-off under the current policy.
2. The Portree Case
2.1,
Confidential
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3. Confidence in using HNGA Horizon data
3.1. The CLEP and the Legal Play Book reflect what the SLC and A&CI consider to be an
overly cautious approach to governing how POL provides law enforcement evidential
? See Appendix 2 for the full statement.
> A fuller, 4 page, summary by A&CI of this case can be found in Appendix 2
Confidential
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Tab 9.1 Disclosure of Evidence to Support Police Investig
standard information. This is particularly true when it is to support police
investigations into matters where POL may be the victim of a crime. This comes from
a time prior to A&CI being formed, from when POL did not have a strategic
relationship with law enforcement, nor did POL have the intent to support LEAs.
3.2. In the last year, A&CI has built upon the rigorous processes applied in Dispute
Resolution that should give GE and Board confidence in providing evidence to police
in a nimbler fashion.
3.3. Dispute Resolution teams check to see whether there are training gaps, technical
issues, or bugs/errors which may explain shortfalls. This is then checked by A&CI
when A&CI take carriage of the case. The Portree statement is an example of how
A&CI break down the information to a granular level so that it can be understood by
the police, prosecution, any suspect of the police investigation and then ultimately
for a jury. This is a very transparent and open process which avoids POL jargon and
is aimed to lay out the information clearly for the police. The statement is then
reviewed by the in-house criminal lawyer.
3.4. The police then have an opportunity (and on-going duty) to check the reliability of
the data, as will the public prosecutors if the police seek their permission to
prosecute. Ultimately, given the publicity surrounding the “Horizon Scandal” we can
be confident that defence lawyers will seek to test the reliability of the Horizon data
used in the Crown's prosecution. Due to these layers of scrutiny, it is felt that we
should be more confident in presenting this data as we are able to rely on this
“relatively robust’ data or withdraw it if this testing identifies issues.
3.5. We laid out in section 1 the process that must be followed to release evidence to
police where the complaint to police (but ultimately not the whole case) relies on
Horizon data alone. It is A&CI’s view that this is an overly cumbersome and risk-
averse process.
3.6. A&CI are in the process of updating the investigations policy, the CLEP and the Play
Book. A&CI will be recommending a more efficient, streamlined, devolved and
confident approach to sharing evidence with law enforcement without Board
involvement and invite Board to discuss this in advance of the new draft papers later
in the year.
3.7. On 18" October 2023, GE discussed this paper and supported it being passed on to
Board for consideration.
* Horizon Issues Judgement 964
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Tab 9.1 Disclosure of Evidence to Support Police Investigations
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Appendix 1 - Draft Witness Statement for Police
Scotland (uploaded to the Reading Room)
Appendix 2 - A&CI summary of Portree Case
(uploaded to the Reading Room)
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Tab 10.1 Health & Safety Report
POST OFFICE LIMITED
BOARD REPORT
Title: Health & Safety Monthly Report Meeting Date: I 31% October 2023
Martin Hopcroft,
Author: Director of H&S, Environment and Sponsor:
Business Continuity.
Kathryn Sherratt,
Interim Chief Finance Officer
Input Sought: Noting
The Board is asked to note and discuss the contents of the report.
Executive Summary
A People risk has been registered due to the level of work-related stress reported in some
business areas. Stressors include excessive workload due to insufficient resource and the
pressure of responding to the Inquiry on top of the day job. Whilst colleagues have been
signposted to appropriate occupational health support, including bespoke support for witnesses,
we are mindful with the Inquiry progressing, things may continue to be challenging. The
People, H&S and Inquiry teams are reviewing and strengthening overall support and members
of the Group Executive are having conversations with their teams to understand the challenges
and adjust, where necessary.
We are responding to the recent property risk identified in the industry and related to the
deterioration of RAAC (Reinforced Autoclaved Aerated Concrete). However, we have very
thorough maintenance and inspection regimes, and leaks are identified and repaired as soon
as reasonably practicable. Whilst we believe the risk in our estate is low, we are undertaking a
full assessment of our properties with our FM partners.
Overall, we continue to see a low number of accidents reported, following on from the
improvement in safety performance seen during 2022/23. There has been a small increase of
minor accidents, all of which are investigated with learnings and best practice shared with
colleagues. We continue to develop our people across the business. There is a favourable
trend against expected levels of security incidents for this time of year. Robberies, ATM and
CViT attacks remain in a good position. Areas of ongoing focus include; progressing a plan to
strengthen our response to customer abuse and aggression; updating generic and individual
risk assessments and refreshing health and safety training across the business.
Report
1. Appendix 1 we summarise KPI performance for the last four years. YTD accidents reported
at P6 are slightly higher than they were at this point in 22/23 (24 vs 20). YTD lost time
related accidents are level (7 vs 7) with an additional 2 assaults reported by DMB.
2. Over the past couple of years, accident causation in DMBs has been mainly due to falls
indoors, however, we have seen a marked reduction this year. Whilst accidents due to
striking against objects or equipment, including bumping into or stepping onto objects
reduced in 22/23 we note a recent increase this year. We will continue to strengthen safety
culture in DMBs, adopting good practice, including use of safety champions, improved
reporting and applying learnings from accident and near miss investigations.
Strictly Confidential
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Tab 10.1 Health & Safety Report
@
3. The H&S Team are progressing a programme of Individual Risk Assessments, as approved
by Safety Board; following completion of business driver risk assessments. Workplace, DSE
and Lone Worker risk assessments are being rolled out to business areas during Q3.
4. Robberies during P6 (Sep) were down against expected level (2 vs 5), and down when
compared to last year (6). Year to date there have been 23 robberies vs 32 expected levels
and 32 last year. Reported abuse shows reductions on last year with 171 YTD vs 177 at the
same point last year. Also favourable against expected levels at 181, 29 reported incidents
during the period, 27 last month, down on the average (35). New self-help guidance and
support is held on the Branch Hub site. Network campaigns focused on security procedures
& best practice, including a week's drive conducting security health checks providing support
and guidance. Darker Nights Campaign: Don't leave Security out in the cold to be launched
network wide at the end of October with focus on Personal Safety, Benefit of Hindsight,
Customer Abuse, Suspicious Activity, Road Safety and ATM Crime. The Grapevine
competition is being run through Sep/Oct to encourage an increase in branch registrations.
5. Anew reporting tool to capture low level abuse has been launched by Security and the H&S
team on Branch Hub. New guidance, support and training products will be signposted and
the extra intelligence will enable a greater understanding of customer profile. Data has
started to flow, and may identify product areas associated with abusive customers. As data
builds, Security and H&S will analyse and use to target support and share with product
teams. We continue to work with partners and the Inter-bank group to benchmark tools, to
identify suitable video training and enhance guidance for branches.
6. In P6 there were 0 PO CViT robbery related incidents and 1 PO ATM attack. There were 12
industry ATM attacks, (3 force, 1 gas, 1 drag out, 6 cutting, 1 other). POL continues to
deploy gas suppression and the new ATMs are resistant to both gas and soft/solid
explosives. ATM trackers have been deployed in the higher risk areas to mitigate ram
raid/rip out attacks.
7. We have reviewed the Supply Chain Safety Plan and are progressing a number of initiatives
including; reviewing the robbery risk assessment and cross pavement risk profiling data;
enhancing the Safety Champion role; implementing recommendations from the OH
Musculoskeletal and fatigue review in CViT. The new Grapevine process to provide
immediate support to company car drivers following a breakdown to ensure they are safe
has been tested and implemented.
8. Our Head of Property has instructed our Facility Management partners, Atalian Servest and
BNP to urgently review all Post Office buildings for the presence of RAAC in the fabric. RAAC
was used in construction between 1950 - 1990 and is mainly found in external flat roof
panels. There are numerous reasons for failure, including roofs overloaded by plant, which
can cause sagging and pooling water, this can promote corrosion and deterioration. An
intrusive inspection may be needed as RAAC can be quite difficult to determine when
covered in render/paint. If found, then we will look to mitigate any issues. However, we
have very thorough maintenance and inspection regimes, therefore leaks are identified and
repaired as soon as reasonably practicable, we believe the risk in our estate is low. The
Property and H&S teams are working closely together to ensure our buildings are safe and
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compliant, with particular focus on updating premises Site Log Books, fire management and
ventilation at Wood St, Future Walk and Supply Chain sites.
9. A ‘people risk’ for mental wellbeing has been recorded due to an increase in ‘at work’ stress
reported in some business areas. Stressors include excessive workload due to insufficient
resource; the pressure of responding to the Inquiry on top of the day job; alongside
additional external pressures colleagues may have to deal with e.g. cost of living. Our
Occupational Health partner, Optima Health, continues to support our people and their lead
Wellbeing Consultant is providing support to Group Executive who are working with their
teams to review priorities to relieve pressure in the system. With the Inquiry progressing
things may continue to be challenging and the People, H&S and Inquiry teams are working
together to review the level of support in place for witnesses and will strengthen this due to
the heightened level of pressure and anxiety being felt by those involved.
10. We continue to provide wellbeing support to all colleagues, have stood up the annual flu
jab programme and are developing our Mental Health First Aid network including training
an additional 24 and providing refresher training for existing MHFAs. Whilst the volume of
mental health related absences increased in September (P6), the total number of days
recorded remained level. Mental health related absence in P6 accounted for 22% (17%) of
all absences recorded and 31% (31%) of all sick days reported. There were 86 Mental
Health related absences incurring 857 days in P6 compared to 61 incurring 849 days in P5
and 63 incurring 707 days in P4. Overall sick absence increased slightly to 3.71% in P6
(September) from 3.52% in P5 (August) and 3.31% in P4 (July).
1
i
. We have launched an online Wellbeing resource with content suitable for Postmasters, their
owners and staff. We will support quarterly campaigns and work closely with the Retail
teams and NFSP to signpost and help to raise awareness of the new resource.
Financial Impact
12. The financial impact of the above initiatives has been evaluated / budgets confirmed.
Risk Assessment, Mitigations & Legal Implications
13. Our highest risks include; violence and abuse aimed at postmasters and employees. The
security and health and safety teams will continue to strengthen mitigation; the potential
change to our risk profile due to increasing levels of cash in the network and; the growing
impact on colleague mental health, either directly or indirectly, due to workload and the
Inquiry.
Stakeholder Implications
14. Training should be provided to new directors and, where required, directors, management
and colleagues of Group subsidiaries.
15. Information - directors should consider the H&S information that flows to the Board to
support directors, subsidiary directors and management teams carrying out their duties.
Next Steps & Timelines
Safety Sub-Committee is held bi-monthly, with next meeting scheduled 6" November 2023.
Board and GE H&S reports will include updates, recommendations and decisions made by the
Sub-Committee.
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Appendix - Safety Board Dashboard
Accidents P6 (23/24) and Security P6 (23/24)
Health & Safety 4yr Performance
Year/KPI 19/20 20/21 21/22 22/23 22/23 23/24
Pizvio I Pizvro I PizvrD I Pi2vr> I PeYID) I PenD
All accidents 70 40 50 41 20 24
Allaccidents / 1000 employees 18.6 11.8 15.2 12.1 6.0 6.8
DMB 21.0 22.7 26.9 23.5 12.7 14.7
Support 75 07 21 0.6 0.0 0.6
Supply Chain 33.8, 15.3 23.5 20.1 88 99
Lost Time related accidents 10 5 16 10 7 7
Lost Time related accidents / 1000 26 8 49 2.9 21 19
employees
*LTIFR (lost time accidents/100,000hrs) 0.150 0.083 0.281 0.169 0.242 0.232
Days lost due to accidents 214 28 484 328 2i1 93
Days lost / 1000 employees 57 8 147 97 63 26
LTR (Accident days lost/100,000 hrs) 3.2 05 8.5 5.5 73 3.1
Days lost due to robbery (assault and sm a a = 7” ‘
trauma)
*LTR (Total days lost/100,000hr inc trauma) 48 07 8.9 9.9 12.0 3.1
RIDDORS (Employee) 2 3 6 4 2 4
NOTE: Whilst the number of days lost following an incident (assault / trauma) rose in 22/23 when compared to
21/22 (255 vs 23), this was due to one incident with a resulting long-term absence. NOTE: *It should be noted
that one single lost time accident increases LTIFR markedly by approx. 0.200 per month, LTIFR is the number of
incidents / 100,000hrs and should always be read alongside the Lost Time Rate (LTR) which is the number of lost
days / 100,000 hrs and an indication of the seriousness of the accident.
Commentary
CVT tosses Period CViT robberies 0
—— yTD3
pened + 147 CViT cross pavement observations conducted
_ during the month
= = Vigilance and correct wearing of helmets was good.
paced] ET . © however there were @ couple of failures to wear body
eps ME srmiguriend bociycerhisin London: & Stveteld,
pag RT » 7
an nN OR mn nm ne om me ‘+ Industry CVIT attacks continue to be tow. tis
expected industry CVIT attacks will outturn around
34 by YE vs pre-pandemic levels of 198.
+ 2industry CVIT robberies in the period. G4S an ATM
: replen in GMP and a CiT in Merseyside
= 17 Industry CViT robberies YTD
* 3 GMP. 3 Merseyside. 3 West Mids,
. + 12CrT. 4 Burg. 1 depot bura
. + Seasonal Security Message reteased as part of Q3
8 focus of Safety on the Road in advance of the
k; planned TTL Training.
4
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Commentary
Robbery Losses aay
. were down vs expected levels for this
K TX time of year (2.v= 5), and down vs last yr (6)
Of the 2 incidents, 1. was attempted vs 1 suffering a
loss (Clutton)
I
¢ Last year, we suffered 6, - 4 of which were
q N successful with £51k losses, whereas this
ae N year they were £7k
. 8 vo
‘ee me © 22.robberies vs 32 expected YTD, 32 last year.
+ £55k loss vs £154k expected YTD. £355k last year
Robbery Incidents .
5196 of robberies unsuccessful YTD, an improvement on
last year same point at 2496
* Fewer weapons noted. YTD 7.49% weapon enabled (6 no
‘weapons, 7 blade. 7 firearms. 3 blunt) vs 88% last year.
218 security visits conducted providing bespoke
= security support & guidance
BN S N] «Retail robberies reported, 3 vs 1 ast month, the average
ise 1 t02 per month
Wd,
t
&
Injuries Sustained (Commentary:
riod 0 injuries.
YTD injuries YTD, down on last year, 7 and equaling
expected levels.
Abuse & Aggression
‘+ Reported abuse shows reductions on last year with
171 YTD vs 177 at the same point last year. Also
favourable against expected levels at 181,
‘© 29 reported incidents during the period, 27 last month,
down on the average (35).
‘+ New self-help guidance and support is held on the
Branch Hub site.
© Focus on Abuse, Aggression & Violence guidance
as part of the Darker Nights Campaign: Don't
leave Security out in the cold.
‘Commentary
Period 1 low level ATM attack using a crowbar (no toss)
YTD 2 vs expected levels of 4
= + Industry ATM crime continues to be tow. Itis
expected industry attacks will outturn sround 250 by
YE vs pre-pandemic levels of 326. 75YTD. of which
Cardtronics suffered 4796, Tesco 19%, NoteMachine
N N 15%, Sainsburys 1196
12 industry ATM attacks in the period (13 Aus)
+S Tesco, 3 Carctronies, 2 Sainsburys, 1 Note
Machine, 1 Barciays
+ Gauteng, 3 force, 1 gas, 1 drag out. 2 other
+ POL continues to deploy gas cuppreszion, and
the new ATMs are resistant to both gas and
sotVeolid explosives
: + ATM vackers have been deployed in the higher risk
areas to mitigate ram raidrip out attacks.
© Particular focus on ATM incidents as part of the
=o em ne Darker Nights Campaign: Don't leave Security out
In the cola,
3
WH,
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POST OFFICE LIMITED
BOARD REPORT
Title: Post Office Brand Meeting Date: I 31%t October 2023
Richard Taylor, Group Corporate
Author: Simon Marshall, Head of Brand Sponsor: Affairs, Brand and
Communications Director
Input Sought: Discussion
For noting: Insight into the consumer brand, including the effect of the Horizon scandal,
strategic brand risks and challenges, and consideration for rebranding strategies. The reports
and insights referenced in the footnotes have been uploaded to the Reading Room.
Executive Summary
In the June Board meeting, questions arose about rebranding Post Office, especially in light of
the Horizon scandal, but also in relation to brand confusion with Royal Mail. Acknowledging the
complexity of a rebrand, the Board sought clarity on the brand's alignment with its vision. This
paper addresses these queries, supported by insight, to facilitate further Board discussion.
Despite facing challenges over the years ranging from prolonged digital disruption to early-
stage reputational fallout from the Horizon scandal, the Post Office brand remains resilient.
However, the Inquiry and future media attention, such as the 2024/2025 ITV drama, pose new
challenges. These risks are exacerbated by consumer perceptions of a stagnating brand.
Although rebranding is a significant venture, the full ramifications of forthcoming events will
become clearer through sustained research to inform future brand strategy consideration.
Horizon Scandal - Consumer Insight
1. Consumer Awareness Levels: Since 2021, we've tracked consumer awareness of the
Horizon scandal. While it hasn't notably impacted brand trust', prompted awareness? did
see fluctuations. It rose from an average of 44% before February 2022 to 57% at the
Inquiry's start, eventually reverting to 44% in February 2023. Spontaneous awareness
experienced similar trends, peaking after the BBC Panorama screening before falling back.
2. Impact of Media and Events: A comparison of charts in Appendices 1 and 2 reveals
that media coverage leads to spikes in our metrics. Notably, these spikes correspond to
the human impact aspect of the Horizon scandal, as evidenced by the first phase of the
public Inquiry and the BBC Panorama episode. Comparatively, subsequent, more
‘technical’ or process-oriented Inquiry phases have not elicited the same level of public
engagement or impact. This is likely due to these phases receiving less media attention.
3. Commercial and Behavioural Impact: Existing consumer awareness, mainly news-
driven, hasn't visibly impacted trading to date. While purchase consideration remains
unclear due to the challenge of tracking lost sales intent, periodic research on claimed
future behaviour due to scandal awareness indicates a 26-32% negative response?.
See chart in Appendix 1: Trusted Brand vs Treats Postmasters Fairly (July 2021 - August 2023)
? See chart in Appendix 2: Public Aware of The Post Office Horizon Scandal (July 2021 — August 2023)
3 Appendix 3: Likelihood of Horizon Scandal Awareness Impacting Post Office Usage
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4. Unaffected Brand Trust and Revenue - Hypotheses: Whilst perplexing, several
nuanced factors may be shielding brand trust and revenue from the Horizon scandal's
impact to date. Post Office brand trust mainly exists with postmasters rather than POL,
while ‘doomscrolling’ and 'scandal fatigue’ could also be diluting public interest. IT-centric
headlines may lack the appeal to engage a broad audience, and a prevailing distrust in
public institutions may also play a role. Additionally, complex consumer decision-making,
convenience, and the lack of alternatives, e.g., bank closures, could be limiting factors.
Horizon Scandal - Outlook and Challenges
5. Upcoming Risks: Whilst traditional news hasn't markedly impacted our brand, the
forthcoming ITV drama 'Mr Bates vs The Post Office’ may have a different impact. Its focus
on the human element could deepen emotional engagement and widen its reach.
6. Potential Impact Scenarios: Heightened public awareness could produce a cascading
effect with varying levels of severity. For example, among others:
a. Minimal Impact: Limited harm to public trust may occur, though corporate
reputation could face slight challenges, affecting postmaster engagement,
recruitment, staff morale, and commercial relationships.
b. Moderate Impact: A significant shift in public perception could temporarily
reduce consumer trust, affecting some product categories and sales channels.
c. High Impact: In an extreme scenario, a dramatic change in public opinion could
lead to substantial trust loss, impacting revenue for some product categories and
a broader range of stakeholders and have implications for current priorities.
d. Long-Term Consequences: Impacts like increased customer churn at product
renewals may emerge over time. Competitors could exploit this, raising our
promotional costs and necessitating additional incentives to meet targets,
financially affecting both Post Office and its commercial clients.
General Consumer Brand Insights
7. Key Brand Pillars: Our brand stands on five core pillars: Expert postmasters, local
accessibility, essential products & services, dependable presence, and institutional trust.
These pillars, while not necessarily brand growth drivers, are foundational.
8. Public Perception as a National Institution: Consumers do not merely view Post Office
as a ‘brand’. Instead, it holds a place in the public consciousness akin to national
institutions like the NHS or BBC. Both Post Office and its postmasters are often seen more
as ‘public servants’ committed to community service than as commercial entities.
9. Competitive Landscape: Unlike a single competitor, Post Office operates in multiple
categories against various competitors. The direct-to-consumer approach by partners like
Royal Mail adds another layer of competition. At a brand level, our competition manifests
in the constant evolution of consumer expectations and behaviours.
10. Core brand metrics‘: Since standardising our brand tracking methodology in June 2021,
metrics have remained largely static, with minimal fluctuations that mirror historical data.
Brand trust is a crucial metric for commercial sustainability and averages 72%,
outperforming many well-known brands, likely due to our longevity, customer
relationships with postmasters and associations with Royal Mail and government services.
Whilst not directly contributing to commercial growth, metrics that align with our social
purpose score highly, averaging 79%.
* August 2023 Brand Tracking metrics
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11. Despite these strong figures, full product awareness and consideration is low, with only
41% of consumers feeling well-informed, particularly in the Financial Services and
Insurance (FS&I) sectors®, where consideration drops further, and usage is around 1-2%.
12. Consumer Perceptions: In-depth qualitative research initiated in October 2022° brings
to light three polarising themes:
a. Theme 1 - essential but losing relevancy: Post Office is celebrated as a vital ‘life
admin hub,’ offering a myriad of services. Conversely, there’s a perception that the
brand is 'out of touch with modern life,' especially among middle-aged/young adults.
b. Theme 2 - community asset but muddled: Post Office is revered as a key
community hub and vital connector between people and organisations. However,
inconsistent service and confusion with Royal Mail create a 'muddled’ brand identity.
c. Theme 3 - loved but dated: The brand is cherished as ‘living history,’ stirring a
sense of nostalgia, but is threatened by a perception of being a ‘dusty relic,’ often
reflected in criticisms about messy branches, long queues, and irrelevant services.
13. Brand perceptions by generational cohort:
a. Gen Z (c. ages 11 to 26): While they have limited engagement with Post Office,
their view is generally positive. Our brand serves a one-dimensional functional need:
returning and sending parcels. They express limited nostalgia but recognise and
respect its importance to older generations.
b. Millennials (c. age 27 to 42): This cohort respects Post Office but finds its
relevance increasingly limited. Their fast-paced lives make the perceived inefficiency
of our services less appealing. They harbour fond memories but see us losing
significance due to their preference for digital services.
c. Gen X (c. ages 43 to 58): This group has a stronger connection to Post Office,
reminiscing about the brand's role during key life milestones. Despite this, their
comfort with digital technology means the brand lacks modern-day relevance for
them. They do, however, express sentimentality of us fading from view.
d. Baby Boomers (c. ages 59 to 74+): Post Office plays a significant role in their
daily lives. They have the deepest connection to the brand, and their views are largely
positive, with any negativity focusing on less competitive pricing and the threat of
closures. Covid-19 drove some within this cohort towards digital alternatives.
14. Fragmented product portfolio: Analysis shows our brand is chiefly linked to postage
and parcels in consumers’ minds, with other products lingering on the periphery. This
arrangement illustrates a fragmented, unclear, and disjointed view and suggests a
potential ‘glass ceiling’ limiting our ability to grow authentically in areas like FS&I.
Strategic Brand Risks & Challenges
15. Over the long term, our insights indicate that diminishing consumer relevance represents
a more enduring brand challenge in comparison to the Horizon scandal. While the scandal
is indeed worrying and significant, it represents a critical juncture, whereas consumer
relevance is an ongoing issue and less likely to recede. The full extent of any resulting
damage from the scandal will remain uncertain until the ITV drama is broadcast, along
with subsequent documentaries, journalist coverage, and the Inquiry reports its findings.
16. Social Purpose vs Commercial Business: Balancing societal expectations with business
imperatives presents a complex challenge. The perception of us as a 'national institution’
5 See chart in Appendix 4: Funnel Metrics (August 2023)
* Post Office Consumer Brand Research Debrief and Post Office Book of Consumer Stories (November 2022)
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does bestow a level of trust and respect but can also lead to consumer complacency. This
mindset, where people assume that Post Office will 'always be there,’ undermines the
sense of urgency to engage with our services. It weakens customer loyalty, which is
essential for long-term sustainability in increasingly competitive markets.
17. Complacency Risk: Our brand metrics remain stable, which, on the surface, is
encouraging. However, it's important not to equate stability with unwavering strength.
Stability could be a result of brand inertia, or it could even be influenced by external
factors such as brand confusion with Royal Mail. Given our brand ecosystem's complexity,
taking these metrics at face value would be short-sighted.
18. Franchising and Licensing Trade-offs: While these strategies have diversified our
offerings and reduced operational costs, they introduce brand compromise:
a. Brand fragmentation: Licensing out our brand poses challenges in maintaining
a unified customer experience. The extent to which brand values and customer
experience are integrated into these offerings often vary, thereby affecting
customer perception and loyalty.
b. Complex service routes: The dispersion of customer service across multiple
third-party providers creates customer friction and risks diluting brand equity.
19. Product Relevance: While partnerships have expanded our product range, this
diversification has often led to functional but not compelling offerings. The market
increasingly values innovation and customisation—elements that are largely absent from
some parts of our current portfolio. This lack of differentiation limits our ability to create
strong brand advocacy and puts us at a competitive disadvantage.
20. Transactional vs Relational: Post Office has historically been a transactional brand,
offering services that are increasingly segmented in their challenges and opportunities.
Our parcel services face intense price competition but remain relevant due to the shift
towards online shopping. Conversely, our everyday banking services are experiencing
growth due to the closure of bank branches but face the long-term challenge of a transition
towards a cashless society. This places Post Office in a difficult position, bridging the gap
between a declining physical world and an emerging digital future. While this role is valued
for its ‘duty of care’ to the less digitally savvy segments of society, it complicates our
ability to transition from a transactional to a more relational brand, especially when
consumer perceptions are still anchored to our traditional, transactional offerings.
21. Brand Confusion with Royal Mail: Our brands have a deeply rooted historical
association, which leads 72% of the public to incorrectly believe we are the same entity.
This conflation can have detrimental effects, as seen by the drop in brand trust in
December 2022, which was attributed to Royal Mail's industrial action. While consumer
education could clarify the distinction, this poses its own risks. Highlighting our
separateness may cause price-sensitive customers to seek cheaper alternatives directly
from Royal Mail, further eroding our customer base.
22. Generational Gaps: Our services resonate more with older demographics like Baby
Boomers, while other generations prioritise speed and digital convenience. As the older
cohorts naturally decline in numbers, emerging generations like Alpha and Beta may find
little relevance or connection with us, raising concerns about our future customer base.
23. Digital Transformation: The digital age presents both an opportunity and a challenge.
Embracing digital transformation for customer experience, e.g., online queuing systems
that reduce in-branch wait times, may improve customer perceptions. However, moving
towards a digital-first world threatens our historically transactional, physical-service-
based business model.
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24. No single customer view: The absence of comprehensive customer data at the branch
level hinders our ability to understand, engage with, and ultimately retain customers. This
data gap limits our capacity for targeted marketing, personalised service, and loyalty
programme development, all of which are integral for brand growth.
25. USP erosion: Our key brand pillars have traditionally been grounded in ‘reliability,’ a
critical but increasingly insufficient aspect of brand trust. Customers now demand
innovation and personalised experiences, areas where we currently fall short. Other
threats include postmaster churn leading to less experienced operators, further branch
closures, attrition of government services, difficulty meeting expectations for digital
innovation, and a decline in trust due to subpar product or customer service experiences.
Rebranding Strategies and Considerations
26. While declining brand relevance alone wouldn't typically warrant a rebrand, the
reputational challenges posed by the Horizon scandal amplify the need for thorough
analysis and considered action. Our brand is currently at a critical juncture, akin to the
‘ordeal’ stage in Joseph Campbell's Hero's Journey framework. Navigating this phase
carefully could pave the way for a narrative of genuine redemption and renewal.
27. Timing a rebrand in the aftermath of a brand crisis is a delicate matter. Acting too quickly
could be perceived as a superficial attempt to 'whitewash' past issues, while delaying
action may miss a vital period during which public interest is heightened, sacrificing the
opportunity for meaningful engagement and constructive narrative shaping.
28. Typical Rebranding Scenarios: Given the current financial and operational constraints,
the scope for a comprehensive rebrand seems limited in the immediate term. However,
post-assessment of the 2024 impact, several strategies could merit further exploration:
a. Wholesale Rebrand: This entails a full rebranding and renaming exercise,
demanding significant time, change, and investment. While potentially effective,
it also carries inherent risks and requires long-term stakeholder commitment.
(e.g., British Telecom / BT, Norwich Union / Aviva)
b. Brand Refresh: This would maintain the ‘Post Office’ name but introduce a new
visual identity. While cosmetic, this could catalyse future transformations and
rekindle public engagement. (e.g., Nationwide - 2023)
c. Brand Transitioning: This involves a change of brand architecture to a 'House
of Brands’ structure. It addresses corporate reputation and brand fragmentation,
prioritising Financial Services and Insurance (FS&I) as a growth area while
creating a new model for future sustainable growth. (e.g., Facebook / Meta)
29. Financial Implications: Although exact costs for each rebranding strategy remain
nebulous, any path forward would undeniably necessitate considerable investment and
bring about its own set of risks.
Next Steps
30. A question posed during the June 2023 Board meeting encapsulates the essence of our
brand's strategic crossroads: Does the brand reflect what the Board envisions for the
future? While we recognise that substantial change entails an exhaustive review and
significant commitment, we seek further Board input to clarify the collective vision for
the brand the Board wants to create, enabling us to align with its objectives.
31. In the coming months, we will provide a further update that outlines the broader risks
identified, the mitigation strategies in development, and the plans we are putting in
place to address the enduring impact of the Horizon scandal for 2024 and beyond.
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Appendix 1
Trusted Brand vs Treats Postmasters Fairly
745-7546 a 7am 75%
72% 719 73% a 7356 79q 72% 72% 73% a5 P3% yg, 72% 73% 73% 3%
73 7
70% x 71% 70%
oN EES ons
Public inquiry PL RM Industrial
44%
29% 40% 40% sim 39% son
35% 35% 359% 35%
4% am 3% 34%
PRS 33% 39% 315 2H oy, 31% 22% 33% aig 38% 33%
BBC Panorama
(pre & post)
or wr oe mw DH Hm HD WDM HM HM WH Pf Hf Hf wo Hw Pp P Oo YH HP H
CP LLL LLP OP LL BLOOD LP ELI EP OE L ES LK SB
—Trstworthy brand —=Treats Postmasters fairly
Appendix 2
Public Awareness of the Post Office Horizon Scandal
B BF KR & BR 8 & 8 € € 8 &€ &€ & § € € F RF RB RR BK AB
= g : 3 § 8 § & ee $253 fe ee §
2 8 § 8 Be GF F FF 2 FF 8 Fee EP EE gE TF
f 8
& §
Bog il rrompted Awareness I= —Spontaneous Awareness.
Source: Appencix 1 & 2: Post Office Brané Tracker, August 2023. UK Nationally Representative Sample Base: c.2,000
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Appendix 3
Likelihood of Horizon Scandal Awareness Impacting Post Office Usage
Post Office branches for Post Office branches for Travel Money fromPost Identity services from Post Other products & services
postal services cash & banking Office branches or online Office branches or online _ online from Post Office
Wi tikely ME neutral Ml Unikely
Source: Appendix 3: Post Office Brané Tracker, June 2022. Base: 1449 (those aware of the scandal/news stores).
Appendix 4
Funnel Metrics - Awareness, Consideration and Usage
of Post Office Products & Services
90%
Awareness mConsideration Usage
Ah ih Wiitnere
VIEL EEE, LILLE EP
70%
2
so
e
40
e
e
8
e
we
a 1p “e
‘Source: Appencix 4: Post Ofice Brand Tracker, August 2023, UK Nationally Representative Sample Base: 2,000.
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Technology
Dashboard
POST
OFFICE
POL-BSFF-137-0000003_0134
Tab 10.3 Technology Sub-Committee Dashboard
IT Operations & Key Projects
‘Comments: A good period for branch service with no major incidents in September. There has been a slight increase in
IT incidents raised due to challenges with PUDO device connectivity which has now been resolved. The number of
average branches down at start of day has increased versus previous months (although still below 12 month average)
due fo a small number of phone lines being accidentally cancelled as part of a cost saving exercise.
12 month
Jun-23 Jul-23 Aug-23 -Sep-23 average
# major IT branch incidents
66 77
HiRaised Resolved mem
# IT branch incidents (non-major), K Ber ARO 505
Raised Resolved = = pai ad ==
% Horizon uptime = a — —
# average branches down (start of day) 5 12
— =
# branches down for over a week 3 5 5 12
= 4 —_ = =
# formal complaints (closed incidents 2
for which Postmaster wants to raise a 8 8 8 9
formal complaint on its handling) = = = II I_I
IT operations — colleague and back ot
‘Comments: There were three major colleague IT incidents in September; 1) a Verizon incident preventing effective call
routing in call centres which lasted 44 minutes, 2) a Microsoft Dynamics incident preventing (call centre) colleagues from
being able to log new cases or work on existing cases which lasted 26 hours, 3) a Credence incident affecting an
application's availability which lasted 15 minutes. The increase in volume of IT tickets raised was anticipated after
‘summer and is in line with that seen in previous years. 12 month
Jun-23 Jul-23 Aug-23 Sep-23 average
# major colleague IT incidents a4 3.3 2323
MiRaised Mi Resolved Oo ee I
# IT colleague incidents (non-major), K 09 0808 0808 0908 0909
Raised Resolved EE es ee Ee OB
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‘Comments: TCs are down in September versus August with the volume in August having been unusually high. One
driver of the increase in TCs in August was stock TCs. There were 1009 in August, approximately 4x normal volume.
This increase in August was due to a) non-barcoded stock not being returned and b) a significant increase in obsolete
stock. TCs for stock retumed to normal volumes in September.
12 month
Jun -23 Jul - 23 ‘Aug - 23 Sep -23 average
# transaction corrections by financial 83 12.9 13.6 W7 W7
4 :
tthe) -_ = = = =
TC reporting is done as per financial periods that runs in a 4,4,5 pattem (in weeks) across the year
Key projects (outside of SPM) with any red RAGS
Project RAG Update
r) + Status reverted to amber following review of programme strategy which has led to
Ipoleompienrca ‘a scope revision changing a) costs and b) timelines.
+ Status red due to a) lack of funding available within the change budget beyond
FY23/24 and the need to agree a support model
+ Branch Hub delivery remains on track with Branch Hub on Horizon being rolled
‘out to the entire network throughout October
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Tab 10.3 Technology Sub-Committee Dashboard
Cybersecurity, Risks and Change Management
Peewee MM
‘Comments: We are now reporting AWS vulnerabilities reflecting our new approach to assurance especially on the SPM ‘Comments: No new intermediate Technology risks this month. There have been no very high intermediate Technology
Programme... These are now scheduled for remediation in Release 2.1 and 2.2. There were no Branch incidents in the risks since the downgrading of Copper Stop Sell risk from ‘very high’ to ‘high’ in Jun-23. We are refreshing the
period. technology risks in ime for our report for ARC in January
42 month 6 month
Jun-23 Jule23. == Aug-23Sep-23 average Jun-23 Jule23. = Aug-23 © Sep-23 average
56
# high security incidents A 25 9 A 2 9 % 4 # intermediate Technology risks
Colleague Branch a - II = = im Very high
# open pen test findings HD po pa na 9 ft ° ° ° ° o
mCrtical SHigh — me —o 1 _t —_ ——_ Wi High
# AWS vulnerabilities (SPM — Prod)’ 4120 4210 3897 4132 (I {10) II I
critical © High bail eed eed edd I bl anes a
ium
# AWS vulnerabilities (BAU — Prod)’ N/A data not collected by 629 i]
Crtical High environment in previous months Lapa NIA i) II Le) II
1 Review of AWS vulnerability reporting after environment clear
-up exercise expected to result in a decline in figures.
Horizon change and defect management
‘Comments: This month one new defect with the potential to have a financial impact on branches was discovered in testing and raised, although no branches have yet raised it as an issue. This defect relates to APADG transactions. Transactions are
currently recovered in the opposite order to the order in which they were added to the basket. Requirements are being gathered for Fujitsu to deliver a fix. Separately, there has been an increase in the number of changes made to reference data and
‘APADG; This is a reflection of an increased number of business change requests. The continued use of this change route brings risks around introducing defects into Horizon; we are looking to improve the controls and management processes around
‘APADC / reference data changes.
12 month 12 month 12 month
Jun-23 Jul-23 Aug-23 Sep-23 average Jun-23 Jul-23 Aug-23 Sep-23 average Jun-23° Jul-23 Aug-23 Sep-23 average
9 24
Pa ciapcesiieacetolretere cel #uses of Fu's account for ops A Hdefects Potentiaifin.impact oo of otf to Zt
data and APADC (Automated 206 aks a8 eee 255 processes (privileged access) Mil a Z a) MiRaised ap
Payments Advanced Data ll as se 8 Resolved No fin. impact 20 20 =
Gerais # uses of emergency account a 5 =o =
by Fu for system changes’ 0 0 0 a a 3 z Criticality score >30/58 ; 4 a
#FJimplemented platform 62-80 66 74s # Fd remote access. e201 $ & § Ml Under investigation
changes = a e = investigations into issues with I 47 a MENS being developed
aparticularcounter/branch ll = = $5 = m Ficawaling deploy
05 & & inclosure process
1 Number of uses of the "break glass’ account used when Fulitsu are doing changes / updates / maintenance to the system; sometimes these are out of hours (e.g, the regular executor is off shift) 2 Average is 4 month average
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Tab 10.3 Technology Sub-Committee Dashboard
People & SPM
‘Comments: Morale has taken a significant hit in Technology over recent months, with concerns around funding outs
and uncertainty relating to SPM triggering a number of resignations. The recent survey of those on SPM programme as,
part of the ongoing review exercise highlighted a need to take urgent action to motivate those in the programme,
Metrics TBD:
Workforce satisfaction trend over
time (score caloulated from bimonthly 1% 58% 549%62%62%62% 63% 66% 57% 65% 65%
Technology barometer) cas
0%
ae a ead
# perm /FTC vacancies 412 month
Wlopent Filled Jun-23 Jul23Aug-23 = Sep-23 average
cay iB 4 13 4 DG
ees
‘% contractors of total resources? a
% YTD training budget spent (note
that this figure can go up and down as
budget is released throughout the year) 28% 22% @
1 Open vacancies average is 5 month average 2 Average this month is 11 month average
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Tab 10.4 Retail Dashboard
POST OFFICE LIMITED
BOARD REPORT
Title: Retail Performance Dashboard Meeting Date: I 31st October 2023
Tracy Marshall, Retail Engagement
maton Director Sponsor Martin Roberts, Group Chief
m a Mel Park, Central Operations Pp m Retail Officer
Director
Input Sought: Noting
Board is requested to note the Retail Performance Dashboard containing performance data for
Period 6 (to 24't September 2023).
Executive Summary
From a governance perspective it is important that our Group Executive and Post Office Board
have oversight of our performance and, crucially, are aware of any specific areas requiring
further work to enhance performance, as well as improvements in train or planned, to
remediate.
The purpose of this report is to provide a summary of the key points to note regarding
performance in P6, with a primary focus on those areas with a ‘red’ RAG status and requiring
further improvement. The report details improvements underway or planned, with progress
against delivery of such improvements monitored on an ongoing basis by the Retail team.
Against each improvement opportunity or action, an accountable owner is identified who will
drive each activity forward to completion, as well as a planned completion date.
The key metrics are shown in table format, with current performance, YTD average and a
year-on-year comparison, and this can be seen in Appendix One with corresponding planned
improvements shown in Appendix Two. The Retail Performance dashboard itself, containing
detailed information for each of the policy areas, can be found in the reading room.
Whilst a number of the metrics continue to be amber and red, and recognising the significant
process and behavioural improvements required to move them to green, paragraph nine
highlights the promising outputs of the Operational Excellence visits to date. At a total
network level we are seeing a steady decline in the volume and value of discrepancies of both
those settled in branch and those reviewed or disputed. In addition, the Network
Reconciliation Team have worked hard to reduce the outstanding banking reconciling items
from circa. 1300 to circa, 690 and aged open cash and 3" party reconciling items from circa.
2,350 to circa. 1750, although there is still work to do to bring them both below target.
The dashboard for P6 and associated improvement actions has already been reviewed by the
Retail Committee.
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Report
Cash Management
1. The volume of counterfeit notes being received into the network is a cause for concern
at present, with the Scottish £20, an exceptional counterfeit which is very hard to spot
even under UV light, being prevalent across Scotland as well as England and Wales. We
have communicated to postmasters several times over recent months regarding this
issue, with handy hints and tips as to how to spot counterfeits in branch, including the
checking of serial numbers. There continues to be engagement with NatWest at a senior
level to discuss potential solutions to the issue at hand.
2. At present, Post Office are not passing losses generated by Scottish £20 notes back to
branches. All associated processes are now mapped out and this will assist us in
developing a policy to articulate our overall approach, which is work in progress. Given
the sophistication of the counterfeit notes in circulation and the volume of notes passing
through our branches, it is clear that postmasters are not adequately equipped to
identify them quickly and easily in branch. Whilst some branches have suitable note
counters to be able to detect counterfeits, many don’t, and therefore rely on manual
checking.
3. A Counterfeit Banknote Taskforce, led by Martin Roberts, has been established in order
to coordinate potential interventions into one activity plan. The taskforce comprises
members from Commercial, Retail and Treasury who will deliver activity to bring the
issue back under control and will report regularly to GE on progress. The key focus for
this group is to secure funding (both internal and external) to provide note counters,
with the appropriate maintenance support model, to the highest volume cash branches
(c3700 branches account for 80% of the cash movement). This will not only enable the
identification of counterfeit notes during the customer deposit process but also enable
faster and more accurate back office cash processes. A recent time and motion study
found the use of note counters to be nearly 3 times faster than manual counting.
Transaction Corrections, Discrepancies and Postmaster Accounts and Accounting
Dispute Resolution
4. Metrics reported on the dashboard under the headings of i) Transaction Corrections
(year to period 6 we have issued circa. 59k gross value £34m), ii) Discrepancies and
Postmaster accounts (year to period 6 Review or Dispute has been used circa. 4k times
with a gross value of circa. £18.2m and 26k discrepancies with a gross value of £9.8m
has been settled in branch), and iii) Accounting Dispute Resolution (there are 789 cases
currently under investigation and 1600 cases awaiting triage) have been consistently
reported as Red or Amber over recent months.
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Tab 10.4 Retail Dashboard
@
5. These metrics all contribute to the business’ overall position on postmaster losses, for
which the year to period 6 charge is £6.1m (£0.5m adverse to budget) and the amount
provisioned for postmaster balances currently totals £32m (£14m current postmasters
and £18m former postmaster).
6. The Operational Excellence Programme (previously BDIP) is now well established
providing much needed programmatic governance over the various workstreams.
7. Workstreams within the Programme represent the main areas of the Postmaster journey,
where process improvements have been identified to support a reduction in the overall
value and volume of discrepancies, enable a more robust contract management
framework and deliver a timely and consistent investigation and resolution of losses.
8. Many of the improvements identified as part of the Programme are being delivered within
BAU resource, some of which are listed below:
e Review and update of the Operating Manual
e Area Manager Operational Excellence visits
e Update of back office operational risk model
e Improvements to the MI to allow insight driven action
9. Our Area Managers have performed 5,000 Operational Excellence visits to 3,774 branches
and the data is highlighting early signs these visits are making a difference (see bullet
points below). We will continue to validate the data and monitor the branches post their
visit to ensure the improvement is sustained.
e Inthe 30 days after receiving a visit the percentage of cash declarations by branches
had increased by 3.8%
e In the 8 weeks after receiving a visit the number of instances of excess cash had
reduced slightly by 2% however, the average value had decreased by 11%
e Inthe 2 periods after receiving a visit the volume of discrepancies raised via Review
or Dispute had reduced 34% and the absolute value had reduced 24%
e Inthe 2 periods after receiving a visit the volume of discrepancies settled in branch
had increased 7% but the absolute value had reduced 34%
10. A budget transfer of £0.3m from CIO into Retail was approved in July this year, to increase
resource in the Network Support Team and work through the back log of open discrepancy
investigations and those awaiting triage. All offers have been made and start dates agreed.
The backlog of open investigations has reduced from over 1100 in period 2 down to circa
790 in period 6, and whilst the number of cases awaiting triage has reduced since the
start of the year, the additional resource will be focused on working through these cases.
11. In addition, we have highlighted further improvements that will be delivered within
existing BAU activities in the next couple of months, namely:
e Provide more direction, upskilling and robust data to the Area Manager Operational
Excellence visits with a view to identifying and delivering more targeted interventions
that can be tracked and reported on
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e Increase the scope of the Branch Assurance visits to provide a data led focus on
operational excellence, as well as assuring cash and stock values. Ensure an
appropriate intervention is delivered that will be tracked and reported on
e Assessment of the support model provided to Postmasters in the first 6 months of
their tenure, including face to face and remote monitoring, agreed KPI review and
consistent sign off process.
e Support the subsequent releases of NBiT by delivering a full health assessment to
pilot branches and providing interventions and assurance visits as required to ensure
they are fit to support the roll out.
12. As a further element of the Programme, the results of a training intervention being
delivered by Tesco will be tracked. In a recent restructure Tesco removed their Post Office
Field team and transferred their responsibilities to the existing Retail Field Team. Branch
operational compliance has declined significantly since this support was removed and so
they are about to deliver an online training intervention to over 440 branch colleagues
across 87 branches. We will monitor the pre and post KPI's for these branches in order to
determine the success of the intervention and we will provide an assurance visit to a
sample of these branches to ensure the training is improving the cash and stock accuracy.
13. Since the Operational Excellence Programme commenced in June 2023 a number of
network wide initiatives have either been approved or are being explored, as noted below:
¢ Opportunity to provide note counters as detailed in paragraph 3 (year to date cash
transaction correction volume is c35k (60%) with a value of £16.1m (50%).
e Approval of Auto Stock Rem in, pilot due to land April 2024 (year to date stock
transaction correction volume is c3.2k (6%) with a value of £0.2m (1%).
e Proposal to include payment for performing robust back office processes in the
monthly Postmaster Remuneration from April 2024.
e Request by GE to review options to recover losses within an agreed set of
circumstances.
These initiatives, along with the exit of lottery at the end of January 2024 (year to date
transaction correction volume 12k (21%) and value £3.3m (10%) will have a significant
impact on the discrepancy landscape across the whole network in the latter half of this
financial year and the first half of 24/25.
14. The Operational Excellence Programme will focus on landing the big network wide projects
as detailed in paragraph 13 and ensuring the process improvement activity detailed in
paragraphs 8,11 and 12 is delivered and impact tracked to ensure we remain on the right
trajectory and provide confidence that this is receiving the right level of focus and scrutiny.
Once all of this activity has landed and is embedded in branches towards the latter half of
2024/25, we will review the resulting discrepancy landscape and propose further
interventions with an associated funding requests as appropriate.
15. Given the scale of the current issue with discrepancies and postmaster losses, it is
important to manage expectations regarding the speed at which we will see improvements
to the operational metrics. This is as much about cultural change for PO and postmasters
as it is about process change, and we know this will take time to embed.
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Tab 10.4 Retail Dashboard
@
Postmaster Contracts
16.
17.
18.
The average duration of suspensions for open cases currently stands at 262, significantly
lower than the P4 figure of 321 but higher than the YTD average of 258. This is a result
of several positive improvements to SLAs being implemented, including a new two-week
legal assurance review. Although there has been positive progress here, this is well
above the target of 90 days that we have set ourselves and will be working to achieve as
far as possible moving forward. We have also now agreed an SLA of 20 days for
discrepancy investigations undertaken by Network Support and Resolution, with an
aspiration that these will actually be completed with 10 days, therefore helping to drive
down the overall time-frame.
The Postmaster Suspensions Decision Governance Committee continues to provide a
greater focus on suspension cases and any case moving over the 90-day timescale is
now reviewed by this group to determine whether it is proper to continue with the
suspension or reinstate.
It should be noted that our averages include branches where the postmaster has been
arrested; cases where we are dependent on the outcome of a police investigation. In
these cases, Retail are being supported by the Assurance and Complex Investigations
team to engage with police forces to expedite the outcome.
Next Steps
19.
We will continue to submit the dashboard for GE noting each month.
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Tab 10.4 Retail Dashboard
Appendices
Appendix 1 - Retail Performance Dashboard Summary Period 6
‘Onboarding satisfaction 18396 22%
Onboarding duration 138 days 148 days
Confidence after e-learning 97% 96%
‘Cnbomrsang end Trini confidence after classroom training 95% 95%
Branches engaging with training 2036 NA
96 capacity filed in refresher training sessions 48% 39%
Number of complaints received 387 332° 349
Postmaster Complaints. resolved within 10 days - 82% 293% 79%
Volume of outward cash discrepancies 18 8
Volume of inward surpluses 4137" 4947
Cash Management Volume of inward shortages 3882" 4790
Volume of inward counterfeit notes. 1124 1386
96 of pouches containing discrepancies 28% 106%
Percentage of successful cash declarations 288% 88.2%
Volume of total transaction corrections 10824 12827
Total value of transaction corrections 771m" £6m
‘Transaction
Volume of cash remittance transaction corrections 60se* 7900
Volume of aged open items 2014 3120
Volume of total reported discrepancies 4590" 4905
Discrepancies and Value of total reported discrepancies (not net) £4.5m* £sm
Postmaster Accounts Volume of Review or Dispute discrepancies 626° 601
Value of Review of Dispute discrepancies (not net) 3m? £3.3m
lactease in amount provisioned for postmaster balances £072m* £03m
Volume of discrepancies received for investigation 417° 409
‘Accounting Dispute Volume of investigated discrepancies completed 383° 331
Resolution Open investigations 693° 488
Average days to resolve 28 4
Open Postmaster Account Support cases 2662 NA
Network Monitoring/ Number of Network Monitoring cases 192" 227
Branch Assurance Support Number of branch assurance activities 46° 53
Number of suspensions 1 Fa 1
‘Average suspension duration (cases closed this period) 223 (dosed cases since P12) N/A
‘Average suspension duration (open cases) 258 NA
Number of terminations 3 ra 4
Decision reviews 3 1 o
6 Decision reviews upheld (cumulative) 95% 96% 100%
* This data is adjusted to reflect either 4- or 5-week periods
Arrows show performance against last period
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Tab 10.4 Retail Dashboard
Appendix 2 - Summary of the key improvements planned
Area Metric Improvements planned or in pl ‘Owner
completion
Onboarding + Implement text alerts = SMS wl be sent regular In November Tracy
bs satisfaction throughout the journey of incoming and outgosng postmaster progress 2023 Marshall
Onboarding ‘Onboarding + Complete veratonert to 3 vacancies —vocancies or fulyrecuted end aweking srt in October Tracy
duration progress 2023 Marshait
a ee ee
Confidence after ¢- Ka cones ces i pecanine te tg et Say ot tie ota
earning *
+ Support Area Manager training promotion initiative ~The technology team provided data on Complete Complete Tracy
the number of AMs / RMS who have used the lerring management system and provided a Marshall
list of branches (ora 350) who were sent conformance messaging around mais segregation,
Yyet.di not progress to reading the messages or going through any ofthe training content
‘rallable to them. This was sent on 14° September for AMs/RMs to use to promate training
Pastanneten + Create a system to enable of waits A team ro Tracy
% ‘member has been made temporanly ayalable to service the weekly management of Marshal
raining Casroom vary wats over a3 orth prolong wech fe bate fw 8
‘dedicated person to perform this role willbe reviewed
+ FILS classroom trainer vacancies - Four new starters are now fully accredited andthe Complete Complete Tracy
‘S copacity filed in requirement ofa fith vacancy is under review. Marshal
training sessions
Branches engaging
‘wth training,
+ Deliver Training Regional « ‘Complete Tracy
aa regan rmgur to ce vars ou caret mang cher wes proncted Se Se Marshall
different channels available to access the training content were explained. Lee Taylor to
‘advise on actions to be taken,
+ Process to be agreed and mapped for dealing with counterfeit notes - The “asi” process In October Russel
‘has now been documented. and a further meeting is scheduled for 3* October to map out the progress 2023 ‘Hancock
‘recommended process to agree going forward.
emeaien ‘+ Postmaster support — 3 communication was sent to postmasters to point to guidance in Complete Complete Russell
botlco! Branch Focus on what to check for when recerving Royal Bank of Scotland £20 and £50 Hancock
piers ncn notes to aid counterfeit identification.
Matin
Roberts
Mel Park
‘+ Set up Counterfeit Banknote Taskforce - setup a cross function tear inclusing in October
Management ‘representatives from Commercial, Retail and Treasury, to bring Governance and structureto progress 2023
the planned improvements.
+ Note counters as part of Branch Discrepancy Improvement Plan—The provision of note Planning May 2024
Percentage of counters willbe reviewed as part of the Operational Excelence Plot using for 50
successful cash approved) along with the training requred to ensure a behavoural changein their use.
declarations Ceci large cepts prt accepting ther sky to detecting courte 35 wel as
Using them to improve the accuracy of cash returned to the cash
* Crate a jin action plan wth NESP- regu NESP meetings to dacs Vansacton eons In December MelPark
‘ad possible ‘and solutions wil generate an acton plan. Last meeting heidi progress 2023,
‘September -next one will be 23 October.
‘and value * Bostmaster support - a communication willbe sent to postmasters to give hints and tips for In September Mel Park
Liecard Camelot accounting to drive down errors. Best practice information for scratch card progress 2023
transaction counting was provided tothe AM's forthe Operational Excellence vists which wal be
Tiveection! scratch card related this month and a supporting video has been produced
Comrections + Analyse and deliver data on banking mis-key transaction corrections ~ Data analysis willbe In October: Met Park
‘completed and provided tothe Operational Excellence initiative to enable AMS to tak to progress 2023
‘branches that have had banking mis-keys about how to prevent these in future,
Volume of cash + Operational Excllence visits - Operational Excellence week (4 Sep} happened, where Area Complete Complete Mel Park
tematance Managers drove conformance in branch by focusing on vanous areas, including volumes of
‘wansaction cash remvttance transacton corrections
corrections
Continued on next page
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181 of 197
‘Training to take place on key focus areas - retresher traning was given on areas where the
Ime opan has oe ode to fois on eckson WA cond wk eer ew eter
Volume of aged
Ps) and deliver data on cheque Oat analysis wal
De campced and pone ste Operaooal cence are enble Aso ako
branches about best prachce for cheque accourtang~ planned for November
Volume of total Plan to review root causes with the business ~ The cause analysis has been shared with
teportes [BOP and Trarung to feed into Operabonal Excelence, which should focus on accurate cash
‘iscrepancies dedarabons.
Volume of Review + Decision to be made on to make ry npr to Horizon around the
or Dispute Review or Dispute process - sil awatng decision
erscrepancies
Volume of ‘Strategic Partner Process - new discrepancy suppott process wth Tesco /One Stop &
islve. Due tolow: ‘hs is extended untl end December to embed
received for suficenty.
investigation
Volume of ‘Additional Resource - The 24 role has been filed internat from the existing team and offers
snwesbgated have been made to fil al other vacancies = completion date amended to October by which
exscrepancies ‘ume we will inow A the remorung posinons have been accepted
completed
Open investigations ~ Pecrstment = as above
Average daysto Recruitment -as above
fesotve
‘Open Postmaster + Recrutment ~ as above. Aged Postion Team alo in place to support reduction of volumes.
‘Account Support
eases
Improve and increase span of branch metrics — Ute model of the new risk
ingheator is complete and i use ona tal basis fr learungs and workang tough neve ways
of wortang and eaty results ResuRs so fr are postove and the Operatenal
fester nated eet te
of Work wath Branch support reach - callaboration wth Branch
Htarhosigcaess”' I Aeurene to provceocven pectic ufomnaton on benches tt eure oppo vs
“This wil enable mexe effective taloted reach in areas that a Branch Assurance Adviser ts
visting. makung beter ise of thew ume
Increase resource for a temporary period -2 secondments to commence to increase
rescurce forthe next Gmenths.
Review the contract suspension process to determine any area that cause
Renee delays. Aim is for 3 90-day,
oe Spec cacioaln SLAs fr log esorsice ling plo of wert compte Ot
cree en and Process improvement has now been agreed = & SLA for Gacrepancy vestigations
meee Undertaken by Network Support & Resolution of 20 days. with an aspiration that that they
wel be completed in 10 days.
POL Board Meeting-31/10/23
‘Complete Complete
in
progress 2023
in ‘Ongoing
Progress,
Awaiting TBC
update
in December
progress 2023,
in October
progress 2023,
tn October
progress 2023
tn October
Progress 2023
tn October
progress 2023
Complete Complete
‘n
progess 2023
Complete Complete
Complete Complete
Mel Park
Met Pack
Met Park
Met Pack
Mel Park
Met Park
Mel Pak
Mel Park
Mel Park
Tracy
Marshal
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Tab 10.5 Christmas operational readiness
@
POST OFFICE LIMITED
BOARD REPORT
Christmas Peak 2023 Project Plan
Title: and Marketing Update Meeting Date: I 31st October 2023
Melanie Park, Central Operations
@uttor: Director Sponsor: Martin Roberts, Group Chief Retail
Laura Joseph, Director Customer Officer
Experience, Marketing & Digital
Input Sought: For noting
Board is asked to note the:
e Key dates highlighted in the Christmas Peak 2023 project plan.
e Risks to successful delivery and actions to mitigate the risks.
« Christmas Peak 2023 Marketing plan.
Executive Summary
Following presentation of the Outline Project Plan and Christmas Marketing plan to GE in
August, this paper shares the confirmed timeline and key dates for Christmas 2023 and
presents the high-level risks and associated mitigation identified by the Working Group and
Steering Committee.
In addition, the paper outlines the marketing plan (full presentation available in the reading
room), where customer insights and key feedback from last year has been used to develop an
integrated strategy and plan, to drive awareness, consideration and conversion of relevant
products and services, demonstrating how we can help people have a more meaningful
Christmas.
Report
Outline Christmas 2023 Project Plan
1. Each individual function has a detailed timeline to deliver Christmas 2023, however key
dates to note are highlighted in the timeline below.
Q Q QUiEixoy QQ Ble
Network Campaign Launch Christina, Christmas
‘Distribution of Date Dashboard Begins eae Days:
‘Christinas Helpers
cua I SEE I ee eciers I Bite
Supply chain (>) Retail, Retait Ores Finance
Owe" Oltkxe OFS stil ieen
1
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Tab 10.5 Christmas operational readiness
2. Whilst many of the risks to delivering a successful Christmas are consistent each year,
this year we are confident that industrial action is unlikely to disrupt operations. However,
the ongoing cost of living crisis will continue to put pressure on the retail environment.
The success of POL’s mails and parcels roll out strategy means there will be a very different
operational landscape in many branches this Christmas due to the increased number of
carriers and products. The Mails Team continue to work closely with the Retail Team to
ensure branches are set up to deliver a successful Christmas. Circa 400 branches have
been identified as having low storage capacity and high forecast parcel volume, and each
will receive a visit from their Area Manager to discuss the best operational solution. A
PUDO Services: Operational Guidance Hints and Tips was published on the 28" September
and was referenced in Martin’s Postmaster email on 21: September. The full list of risks
captured for Christmas 2023 and the associated mitigating controls are detailed in the
Risk Assessment section of this paper.
3. One of the key enablers to closely monitoring performance throughout the peak period is
the daily Christmas KPI Dashboard (see Appendix 1). Daily reporting will commence on
Monday 13 November 2023 (last years’ start date was 14% November) and a cross
functional KPI review meeting will meet 3 times a week (Monday/Wednesday/Friday) at
10.30 am, to ensure the Mails performance information is up to date, starting from week
commencing 13* November. This review meeting will become daily if required i.e. for
business continuity. Last year the daily reporting ceased on 31* of December 2023 to
cover the period between Christmas and New Year. This year production of the dashboard
will cease on Saturday 23rd December and a lighter version reporting will be delivered
from the 24th December to the 31:* December, to allow the teams to focus on production
of the post Christmas Trading, GE and Board reports
4. Post Office did not issue a Christmas Trading Statement in January 2023 however a
statement was issued in the preceding 2 years. The Christmas 2023 plan will work towards
the timely production of the Christmas 2023 Trading Statement, with the publishing date
to be agreed early in the New Year.
5. Period 9 closes on Sunday 24 December and the P9 CEO Report and Period Performance
Report will be produced as per the business-as-usual process. The Christmas Review
Board Report will follow the current report format guidelines and be presented to GE on
17th January 2024 (paper deadline 12th January 2024) and the Board meeting on 30%
January 2024 (paper deadline 22% January 2024).
6. The date for the cross functional Christmas business review will be held on 24" January
to allow for a detailed review of the complete Peak Period including the start of January
which is always a busy parcel returns period.
7. Branches receiving proactive SSK maintenance visits and additional monitoring have been
confirmed (See Appendix 2) and maintenance visits started at the beginning of September
and will continue until Mid-November.
Marketing Plan
8. Insight informs us that people consider spending time with family as the most important
aspect of Christmas (95% of respondents to a You Gov 2022 survey). In addition, 8 in 10
parents worry that they don’t have the money or time to make Christmas magical.
Confidential 2
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Tab 10.5 Christmas operational readiness
9. Feedback from Postmasters, including what worked well and what didn’t last year, has
also been recognised including:
e Reducing the number of point-of-sale marketing assets, from 39 to 28.
« More effective methods to communicate any changes to last posting dates, using QR
codes in leaflets, blank posters, and timely social media posts.
10. Recognising these and other insights and feedback has helped inform the following key
campaign elements:
« Our brand positioning, ‘we can help with that’, will be located next to our logo instead
of a stamp, to give greater prominence to the message and how we can help.
« We've developed a range of gift-wrap designs, and using realistic photography that
illustrates meaningful Christmas scenarios.
« Messaging will promote relevant products, including mails, banking, international
money transfers and Gift Cards and how we can help.
e We'll use a range of channels from in-branch, emails, website, and social media. In
addition, press and radio activity will update people on last posting dates, international
customs, and RM Tracked 24/48.
e We'll continue to track customer sentiment, including spend levels and attitudes
towards Christmas.
11. The Choose Your Campaign portal was open until 3 September. 2,028 branches ordered
merchandising they preferred. This included 948 strategic partner branches. This was an
increase of 530 branches compared to the Summer Travel campaign.
12. The warehouse completed the Christmas show material pick on Thursday 19* October
and these should be delivered by Wednesday 25" October, 12 days ahead of Perfect Day.
13. The full marketing plan is detailed in the additional PowerPoint presentation published
with this paper in the reading room.
Financial Impact
The table details the marketing budget for 2023:
nel bo23 Budget bo22 Budget
Branch point-of-sale £200k £190k
Social media £65k £10k
Public relations £25k £25k
Total £290k ex VAT £225k ex VAT
Confidential 3
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Tab 10.5 Christmas operational readiness
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Risk Assessment, Mitigations & Legal Implications
The table below highlights the risks and mitigations the working group has identified for
Christmas 2023:
Area Title Description Mitigation Plan
Christmas sure Christmas Helpers no longer transact on a branch f'®#" and concise comms and guidance required around not
Retail a if ransacting on horizon terminal and how best to support when out
Helpers Horizon terminal when supporting at Xmas S rcnchee
: ; UDO Services Operational Hints and Tips shared with
isk of space in some branches given the unknown
Mails pace In Branch : postmasters, as well as advance sight/estimates of expected parcel
umes expected from some of the new mails carriers. Povtas
larketing collateral for RM dates to include QR code link to
— jebsite where last posting dates can be updated.
hails sst Posting J ast posting dates may vary across different carriers larketing to come up with solution for in branch POS for non-RM
ast posting dates.
ast posting dates for RM & Evri have been confirmed tbe for DPD.
eps have been taken to improve the deliverability ofthis plan
he deadline to deliver, test and rollout the technical * Extra test resources prioritised onto the project
Lea snl ou¢or Pune Wauilion Before chats ees light + Project & test eum werkingin a Cy Towers
ails improve collaboration
ales in branch
+ Temporary postponement of maintenance to Horizon
test environments
+ Dual running of BAT and UAT alongside the SV&l testing
[Ensure current operational processes can be maintained over
Mais egregation _ Multicarrier sales increase risk of mis-segregation peak and continue to closely monitor compliance
Engagement with NFSP to agree proposal to support seg checks.
Posters and standees to inform customers
ince the cyber attack last year SSK’s can no longer [CDC digital journey to help reduce time at the counter
Mails sk ransact international parcels lear communication in Xmas Helpers guidance to assist with
birecting customers to the right counter
iewe ‘ Advance notice of Christmas Eve on Sunday and impact to branch
{sift cards Gift Cards [This year Christmas eve which is typically the highest day I. sning times will be highlighted on the website. Gift card sales
sales for gift cards, falls on a Sunday a lower footfall day
ill be closely monitored in the week leading up to Christmas
tock Ksreater overlap between the value and POS distributions [Advance booking of warehouse agency staff to support with
supply Chain prock " ‘ ‘i
istribution _Iuill place pressure on resource availabilty. picking, packing and distribution
905 material in new formats can lead to less than jorked with marketing to have early sight of the product range
supply Chain Btock packaging fidequate packaging options and damaged material when find potential ordering combinations to purchase the appropriate
Janding in branches. consumables.
‘tential for IT incidents impacting ability for branches to nhanced IT support plans will be in place and a change freeze
{" incidents I rade or sell specific products (ICDC in Christmas 2022) _fmplemented early December
Kostof ving fontinuing economic uncertainty and Cost of living crisis ra, win continue to be closely monitored and managed across the
Business ost ould impact on consumer spending and general business [["'s Wil continue to
tivity
trike action is a much lower likelihood this year with pay
business ike Action AMHPOt Stes, Royal mal stkes,CWU tikes: Winey eee rm the CHU in place now. Contngery plans exist
ve Eee fhould industrial action happen
Confidential 4
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Tab 10.5 Christmas operational readiness
Appendix 1 - Daily Christmas KPI Dashboard
Actual Budget Variance. YoY YoY % Actual Budget Variance YoY YoY %
Mails - RM 29 218 o1 (46) (7) ns 16 08 (6.6) (8%)
Mails - Non RM 05 06 (0.1) 03 189% 13 14 (01) 10-29%
Retail/Lottery & Gift Cards 19 20 © @1) (03) (12) 68 65 03 (01) (%)
Government Services 27 a os 10 56% 72 76 (04) 08 12%
Banking Services 189 182 07 08 4% 623 @2 OL 22 4%
ATMs 20 20 00 oa 4% 67 65 02 04 m%
International Money Transfer 30 31 (0.1) 03 MK 95 98 03) a 14%
Travel Money 36 3a 04 04 14% 103 94 1010
Payment Services & Payzone 22 19 03 © (00) (1%) 82 66 15 10 13%
‘Voucher Encashment oa on 0.0 © (04) (73%) os 04 = 04 (2.4) (75%)
Mortgages, Savings & Loans 13 13 00 00 o% 38 38 0000 0%
Credit Cards 02 02 00 © (01) (40%) 07 06 0.0 (03) (34%)
PO Insurance 50 sa. (0.1) 04 9% 147 150 (03) (1.7)—(10%)
Identity Services 04 04 01 (00) (3%) 14 1202 (0.2) (14%)
Supply Chain/Other 09 07 03 0.0 2% 26 2204 (05) (17%)
Total Revenue 7 627 20 10 % 208.4 2008 36 (3.7) (2K)
Confidential S
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Tab 10.5 Christmas operational readiness
Appendix 2 - SSK Support Branch List
‘CurrFAD Branch Name ‘Stream NCR Proactive
(15 branches)
009013 _I High Street (10) DMB Y
905893 Stlohns OW 7
355057 — I Notingham WHS T
013201 Birmingham DMB Y
453420 Liverpool WHS: Y
005343 I Sunderland Cy OW 7
003422 Manchester DMB Y
a7isit poste WHS Y
005008 ‘Clapham Common DMB Y¥
501329 _I Newcastle Upon Tyne WHS Y
347504 Bath WHS: Y
121012 _I Bromley WHS Y
010109 Milton Keynes DMB Y
011704 I Belfast city DMB Y
CurrFAD I Branch Name ‘Stream ‘VIP Cover 50 ‘CurrFAD I Branch Name ‘Stream VIP Cover 50
015207 Derby City GM4 ¥ 009013 High Street (10) DMB ¥
203116 Colchester WHS, ¥ 009323 Stohns DMB ¥
619519 Exeter GM4 Y 555227, Nottingham (WHS, ¥
208005 Camden GM4 ¥ 013201 Birmingham oMB ¥
034907 Eastbourne WHS: id 453420 Liverpool WHS, y
012311 I Grimsby DMB 7 (005343 [Sunderiand City DMB. Y
019001 Battersea GM4 ¥ {o18002 Poplar oma, ~
014323 The Markets DMB. ¥
356320 Huddersfield GM4 Y 471511 Bristol WHS: Y
(054011 [Regent Street St. James's GMa Y 558136 [Norwich WHS, Y
030003 __I The City of London DMB ¥ (005008 I Clapham Common DMB ¥
005925 Bexhill-on-Sea DMB. y 331434 __ISt Helens GM4_ ¥
010033 St Peters Street DMB Y 501329 Newcastle Upon Tyne WHS ¥
7349320 _ [Halifax WHS: Y 347504 [Bath WHS Y
268039 I Reading WHS Y 121012 [Bromley WHS y
I — 1 oras23—[toncestr OR v
361546 _I Winchester WHS ¥ (008046 [Windsor DMB 7
281020 [Harrow WHS Y E5611 I Cardiff WHS y
(004003 [Houndsditch. DMB. ¥ (011704 I Belfast City DMB. Y
(009432 [Stockport DMB Y 301349] York WHS Y
026329 __I South Shields DMB ¥ (008113 I Cambridge City DMB ¥
014137 ‘Oxford DMB ¥ 006007. London Bridge DMB ¥
Confidential 6
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Tab 11.1 Board Evalu update on progress
POST OFFICE LIMITED
BOARD REPORT
fai Board and Committee Evaluations 9 7
Title: 2023/24 Meeting Date: I 31 October 2023
Author: Rachel Scarrabelott!, Group Sponsor: Henry Staunton, Chairman
Company Secretary
Input Sought: Discussion and Decision
Report
In line with provision 21! of the UK Corporate Governance Code 2018 the Chairman is
considering commissioning an externally facilitated Board evaluation. Internal Board and
Committee evaluations were conducted for financial years 21/22 and 22/23, with the last
external Board evaluation conducted 3 years ago.
Whilst under Matters Reserved for the Board authority has been delegated to the Nominations
Committee to approve the appointment of external facilitators for Board and Committee
evaluations, the Chairman would like to take the views of Board members as to the
commissioning of an externally facilitated Board evaluation, and the potential external
facilitators, in light of the recent reviews of aspects of the Company’s governance as set out
in the A Burton Report and the Simmons & Simmons Report, and also given the
commencement of the Grant Thornton governance review.
In terms of potential external facilitators the Board has a number of options:
(i) The Board may wish to consider appointing Grant Thornton to conduct the Board
and Committee evaluation process for FY23/24. Given Grant Thornton are
already engaged on the governance review it is likely that time and cost
efficiencies could be achieved should they be appointed. Additionally appointing
Grant Thornton would avoid a further external party evaluating aspects of the
Company’s governance;
(ii) The Board may wish to consider appointing an external facilitator separate from
Grant Thornton. Options include appointing a boutique firm such as Indigo
Governance, Board Excellence, or Condign Board Consulting, who specialise in
conducting Board Effectiveness reviews or appointing a larger firm with specialist
corporate governance expertise to facilitate the review.
Provision 21 of the UK Corporate Governance Code 2018 states that:
“There should be a formal and rigorous annual evaluation of the performance of the board, its committees,
the chair and individual directors. The chair should consider having a regular externally facilitated board
evaluation. In FTSE 350 companies this should happen at least every three years. The external evaluator
should be identified in the annual report and a statement made about any other connection it has with the
company or individual directors.”
Confidential
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Tab 11.2 Sealings Report
@
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POST OFFICE LIMITED
BOARD REPORT
Input Sought: Approval
The Directors are invited to consider the Register of Sealings and to approve the affixing of
the Common Seal of the Company to the document set out against item numbered 2223 in
the Register of Sealings.
Executive Summary
For the Directors to resolve that the affixing of the Common Seal of the Company to the
document set out against item numbered 2223 in the Sealings Register is hereby confirmed.
Strictly Confidential
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Title: Sealings Report Meeting Date: I 31%t October 2023
_ I Rubia Khanom, Company 2 Rachel Scarrabelotti, Company
i Secretariat Administrator Speier Secretary
POL-BSFF-137-0000003_0153
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Tab 11.2 Sealings Report
Date Created Post Office Limited Company Number
20/10/2023 Register of Sealings 2154540
Seal Number Date of Date of Persons Attesting Destination of
1 File Ref. Sealing Authority Description of Document To Document Document
2223 12/10/2023 03/10/2023 Land Registry form RX4 - Application to withdraw a Restriction placed on Rachel Scarrabelotti, Group Kombeh Secka, Legal
reo ™ ~~ “ee 1 Company Secretar
GRO the mye
original restriction was placed on the Property at the request of the Royal
Mail Group Limited (“RMG’) in an effort to secure monies it understood
were owed to Post Office Limited by one of their postmasters, Siobhan
‘Sayer, who is one of the registered proprietors of the Property. Following
the registration of the restriction Ms Sayer pleaded guilty to one count of
fraud in relation to the apparent loss to Post Office of £18,997.00. This
conviction has now been overturned by the appeal courts and the sum of
£18,997 is now not owed to Post Office or RMG. In light of this, the
registered restriction has no legal basis to be in place and therefore needs
to be withdrawn.
2
Strictly Confidential
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Tab 11.3 Future Meeting Dates
POST OFFICE LIMITED
BOARD REPORT
Title
Future Meeting Dates
Meeting Date:
31s October 2023
Rubia Khanom, Company
Author: I Secretariat Administrator
Sponsor:
Input Sought: Noting
Rachel Scarrabelotti, Company
Secretary
The Directors are requested to note the future meetings dates scheduled in respect of Post
Office Limited Board and Committee meetings.
2023
Date Time Meeting
Monday 30 October 2023 15:00- 16:00 I Investment Committee
Meeting
Monday 30 October 2023 16:30- 17:30 I Succession Planning Meeting
Tuesday 31 October 2023 09:00- 17:00 I Board
Wednesday 01 November 2023 08:30 - 10:30 I Historical Remediation
Committee"
Tuesday 07 November 2023) 15:30- 17:00 I Additional ARC
Monday 27 November? 2023) 14:30-17:00 I ARC
Tuesday 28 November 2023 09:00 - 09:30 I Nominations Committee
Tuesday 28 November 2023 09:30 - 10:45 I Remuneration Committee
Tuesday 28 November 2023) 11:00- 17:30 I Board
2024
Date Time Meeting
Monday 29 January> 2024) 14:00-17:00 I ARC
Tuesday 30 January 2024 09:00- 17:00 I Board
Tuesday 27 February 2024 09:00- 12:30 Additional Board to discuss the
initial review of the 2024/25
budget
Tuesday 27 February 2024) 13:00 - 13:30 I Nominations Committee
+ As mentioned in Di’s email, the HRC Meetings will be moved from a Thursday to a Wednesday to accommodate diaries. Occurs
every 2 weeks on Wednesday effective 22/03/2023 from 08:30 — 10:30.
? In November 2023, there is an External Audit session from 13:30 — 14:00.
3 In January 2023 and January 2024, there is an Internal Audit session from 17:00 - 17:30
Strictly Confidential
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Tab 11.3 Future Meeting Dates
Tuesday 27 February 2024) 13:30- 15:00 I Remuneration Committee
Monday 25 March 2024) 10:00- 12:30 I ARC
Monday 25 March 2024, 13:00- 17:30 I Board
Tuesday 21 May 2024) 09:00- 12:00 ARC
Tuesday 04 June 2024 09:00 - 09:30 Nominations Committee
Tuesday 04 June 2024) 09:30-11:00 I Remuneration Committee
Tuesday 04 June 2024) 11:15- 17:00 I Board
Monday 08 July 2024) 14:30- 17:30 I ARC
Tuesday 09 July 2024) 09:00 - 14:00 I Board
Tuesday 09 July 2024 14:30- 18:00 Board Strategy Away Day - 1
Wednesday 10 July 2024 08:30- 17:30 I Board Strategy Away Day - 2
Monday 23 September 2024) 14:00-17:00 I ARC
Tuesday 24 September 2024) 09:00 - 09:30 I Nominations Committee
Tuesday 24 September 2024) 09:30-11:00 I Remuneration Committee
Tuesday 24 September 2024) 11:15- 17:30 I Board
Tuesday 29 October 2024 09:00-17:00 Board
Monday 25 November 2024) 14:00- 17:00 ARC
Tuesday 26 November 2024, 09:00 - 09:30 Nominations Committee
Tuesday 26 November 2024) 09:30- 11:00 I Remuneration Committee
Tuesday 26 November 2024) 11:15- 17:30 I Board
2025
Date Time Meeting
Monday 27 January 2025) 14:00-17:00 I ARC
Tuesday 28 January 2025 09:00- 17:00 I Board
Tuesday 25 February 2025) 09:00- 12:00 I Board
Tuesday 25 February 2025) 12:30- 13:00 I Nominations Committee
Tuesday 25 February 2025) 13:00 - 14:30 I Remuneration Committee
Tuesday 25 March 2025) 09:00- 12:00 ARC
Tuesday 25 March 2025) 12:15- 17:30 I Board
2
Strictly Confidential
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Tab 11.4 Forward Agenda
Post office Limited
Board Governance Map & Forward Plan 2023/24 (n.b, items are shaded where the item or date is tentative)
‘STANDING ITEMS FOR PRESENTATION
[Welcome and Conflicts of Interest I Companies Act 2006 s.177I chair Noting x x x x x x x x &
[Minutes from previous meeting “Term of Reference I Company Secretary Approval x x WA x x x x WA x
[Matters Arising NA ‘Company Secretary Noting x x WA x x x x WA x
[committee reports (verbal) Terms of Reference Committe Chairs Noting x x WA x x x x WA x
[CEO report “Terms of Reference CEO ating & discussion I > x Wa x x x x Wa x
oscil ParfoneanesIRegsrt ‘Terme of Reference cro Noting & discussion} x x WA x x x mf WA x
(including Change Spend)
‘STANDING FTENS FOR NOTING (NO PRESENTATION)
scheduled nem dicussion tem icannually
lor annually, including violence at
Health & Safety Report Terms of Reference cro Noting x x WA x x x x WA x [feoberioe eporting, The Director of Health
land Safety, Environment and Business
IContinuity attends for these items.
Board Paper = 24/01/2022 — Senior Operational X (Moved
Retail Performance Dashboard confirming ture I Improvement ManagerI Noting - x - - from x - - oq feat Pete rashid ark ara
‘submissions Chief Retail Officer September) ~— (inindahidiiainld i
(Application
x I ofconfiete
(Remediation I Policy paper, x (OC
JRemediation Matters: RU and Public I Terme of Reference I RU andauiry Executive I ping x x NA Unit "I PFA'Triage I Pecuniary I x NA x
— - ‘Scope/Cost I case of Clive I Principles)
Tnerease) I Malam -
Somins)
[Governance Rema: Forward Pan, -
eicreanes ears Tos Terms of Reference I Company Secretary Noting x x NA x x x x NA x
x
ine sates provements echedued
Reprante anata ‘Terms of Reference Executive Team Noting x x WA x (recuesens: x x WA x Jdiscussion item lly and this item is
procurement rik exceptions cea attended by the Biectr of Procurement
LICAL TTENS: (annual unless oherwine tated in notes column)
femoral [Aditionl Board on 20/02/2024 to discuss the
budget an pertrmance against intial review ofthe 2024/25 budget. Final draft
strategie Tara of Reference oro submion to 0 x Iepprovedn March for eubmassion othe
Shareholder.
Approval for
[riwereet pesaitote tant: Ferms of nce ‘submissi fo be s¢
sl al rh Terms of Refers cro mason x robe scheduled.
lr yearend 31 March, deadline for fing 31
x (only Ge -I x (Ge, Ane
Terms of Reference ARC Chair/ CFO Approval x Pete Bl doery December but must st be lid in Parlament
INetwork Performance Report Terms of Reference INetwork Svategy Pelvery} Approval x pas sect Sapeerebar ot October. Tie Rabon:
leovernance Report (terms of
Terms of Reference I Company Secretary Approval x
193 of 197 POL Board Meeting-31/10/23
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Tab 11.4 Forward Agenda
Discussion and [the Board and Committe Evaluations should be
Approval of X (Update on Jestermallyfacitated every third year to comply
[Bond iand Commitéos(m “TarmajoF Reference) feepeter recommended Progress) : Iwith the UK Corporate Governance Code and
aeons Publi Sector guidance on corporate governance.
Teena Chohan (People
ciey Complianc® Ig srval no
Icode of Business Standards ‘Terms of Reference ger) and janene I APBrOVAl x x
‘Mellor (Senior Employee son
lations Menage
ad of Customer
lhe statement and recommended actions are
Experience Strategy &
[Modern Slavery Act Statement Terms of Reference I Deployment / Retail & Approval x ee ee
irrrent Rar cussion fs usually minimal. The nest approval
heat ni be required in ly 2023.
Foproval (towing
[croup tavestigations & Co-operation
re Fle ese or Group ep rear I "RCC and ae 11780). Jon old since September 2021.
Peopie strategy (including cutture) I Terms of Reference [Group Chet People OficerI Discussion [re be sched
board discussion every 6 months.
P iionhibeoe! [September 2025: Ths has not been added tothe
Isuccession below Board and GE —_I Evaluation & Board Action IGroup Chief People OfficerI Discussion X (See Note) saath epee a am
tevel) ironatesiyra0za! Ischeduled on 30th October 2023, ahead of the
Cetober Board dinner and Board meeting
ise Tes of Reference Disuesion [Tobe sched
I@roup Risk Poticy ‘Terms of Reference I Chief Financial Officer Approval ee
Head of Corporate I Noting (ether 10 [Marie agreed with Al Cameron this would be
Icorporate Social Responsibility Marie Molloy Emait_I, Responsibility 8 Social I minute slot or for fermered fon Go Sr ecw eri
eMlloy Ema Iampact& Group CorporateI imu itor x Je didnot align wth the ToR. Richard Taylor
iad ‘fairs, Brand and anh land Mark Cazaly were advised this would goto
Communications Director] IGE and Board instead. Annual Item.
‘Group Corporate Afar,
Feet ‘Terms of Reference Brand and Noting ITo be scheduled.
— ‘Communications Director
{TEMS SCHEDULED
= ph
-xthnson (Programme
; stephen Faulkne-Atkinson Funding Drawdown/I
Project Darwin Manager) & Russell x
mall 03/06/2023] anager § Russe A oval
Director)
- Pot Board Action - 07 tuna Cameron (Group CFO) /
Pesta haba Roskioe! 2022 [Asha Patel (FPSA Director)I a
leview of Busines Performance Metrics and
Ja cameron (Group CFO) / t
neview of Business Performance [P84 Strateny Anay Day "cameron (Geup CFO) Pisin response to the Boar's interest in how
teeter Next Steps Pa isckoee (aiad x Ie measure performance outside proftabiity, as
ns 2eth September 2023, I 24 Transforma bre as an assessment of new longer-term
commercial opportunites In Platform Products.
POL Board Meeting-31/10/23 194 of 197
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Tab 11.4 Forward Agenda
[Potential Waiver regarding Security
Headroom
lassurance Framework for the
POL Board Action - 24
January 2023,
[Al Cameron (Group CFO) /
Zdravko Mladenov (Group
GE Decision, RCC &
'ARC (noting with
POL00458015
POL00458015
[POL/PoMS Contractual Documents
I- Master Services Agreement (POL & PO!)
- Master Distribution Agreement (POL 8.
23/10/2023
lemail rom Sarah Koniarski
‘Transformation Officer)
Paul Dashwood (Head of
[strategie Paform Modernisation I Z"0v40 adenow email “Ser Digat information [presenaton), Bard fo be contmed.
ronrenane ‘ie Gooting witout
eosin)
Tel Sryth Ererpiee I —_ Approval
Ena from Laie Lomax Jserovas tobe agreed wth 406 et. Wl then
cx 08s programme feud & bata atonal ning x
naa I angus cS to GE and Baad
rave Menor (Group
spur brew Down Submission I EmAlrom Shalay GeeryI ‘Sarg inomnaton I Approval x
it)
Tin Heles (Strategy
Ena rom Helen Bussey nea
Jue Review trea I "tndiontamsten Graney I *
Zito Mlsdenov (Group
Ea frm At Khanna on
Peo Replacement Project, Ge Digtalinorsaten I Approval x
casraers =e
Toul fam Domine I EFS Minne, Soap
copper stop sett etal from Domine Ir bigal erator I Funding Aproval x x preset Manager: Domine Norman
tar
a om Ena Fara] EN Mince, UP
[anerican xpress Agreement 04/0/2003 and" I Chet Digan Xgtonniy
05/09/2023 ‘Officer mann
Tinen Ola Horan
ana Haney} 298 10 Test), Approval - Further x (owing
Fujitsu Data Centre Email from Dionne Harvey \emyth (Enterprise Cloud 8] year extension to Procurement
Data Transformation ‘Bist March 2025 update)
Directo)
Taraike Menor (Group
POL Boar Action - 08 a ecnotogy Dashboard wil be presente
[enoteny Det arayse23 I Chef igta information I Notag s peredcaty once NET roout bogie
iconoR Enterprise Agreement [Emi fom Praveen Pai onI hrs roby (Cf I pra .
on
Popo Representative Agreement I" on 23/si/20z2 I Commer contract Noting x
(Pot 8 pon ant
mult Princials Aareement (POI 8 Bot
(uk) & Capital One fEurope)] & POL)
(Went
Post office insurance - Outsourcer
= mat rom Russe Tavener] Owen Woodley (Deputy I Apepoval with no adationa
[Gonstidation - Webnelp Contact on 02/05/2028 2} precentaten Soars on
[pencorn! 17/08/2023)
‘Email from Kathy Togher I Kathy Togher (Project X (Payzone IX (Payzone
EE CE _on 29/06/2023, Manager - Commercial) wspprevel ¥ integration) I integration)
Bank of freland FS Joint Venture I Era from Ed Outtonan I Owen Woodley (Deputy =
lar 10/08/2023, 0)
195 of 197
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Tab 11.4 Forward Agenda
Iris wil eet out the conclusion of the contracting
Jcommercat Contracts = PUDO/ Mails I Emailfrom Barbara I Owen Woodley (Deputy I ot oh
Update Brannon on 06/09/2023 CEO} id lprocesses for Parcels 2 Go, Evri and DPD
Owen Woodley (Deputy 21/06/2003: Wi be covered in Stateay
Pot Board Aton -28 I ‘CEO}/ Neil Sula seaion. Owen ha also offered separate
Pesilaistmtoay + Hnmersien Seasion March 2023 (Managing Director a Ideepdive sessions if Board Members would like
Parcels and Mal) ie
ain Edwards (Nebr
Iporoval of he Business Case andthe sel
combined strategy - Next Generation] "ais fomstacty Caine)" Stratagy 8 Oalvey I monty I y Jing sltondetled ther and to provide
alls Automation and Second Device I 2/08/2023 cisco and ens Ge nl) tetas fade sarove ing
(het oming GE and Boor
Ia am Ross BorFat oo] Ross Borket (Weado?
lari contract/ spend approval ee ores ( Approval Decision x
(da
Martin Kearsley (Product prose,
peilcooiFramescefica Email tom Sarare I "Poole Diedor= I Dicusion/ market xc<nteim_ [inal del sgn ofa Board Mesting on 08th une
" Brannon on 26/09/2023 I Banking, Payments and Approval context and Update) I2024.
‘ranenton! Product) merging I envelope for
deal) I negotiation)
Email from Elinor Hull_I ‘Owen Woodley (Deputy
identity Services Director)ICEO)/ Elinor Hull (Identity] Approval x
IYoti sub-Contract/ GDS One Login
leontract ‘on 05/06/2023, Services Director)
Briefing on changing to Agent status I Email Exchange between I Martin Kearsley (Product
Ifor Banking services / Briefing on I Rachel Scarrabelottiand I Portfolio Director ~
Ichanging to Agent status for Banking I Martin Kearsely I Banking, Payments and
[servic 17/03/2023, Transactional Products)
land maoping potal cones of I Email from Tor Crawiond I lane Wile, Hatori
interest in the Inquiry Stacrco's ‘on a5pesaoes I, Matters Legal services I Deesion x
aionsmaking land Pubic Inguiry Diet
Decision
JRCC ACTION from 27/06/2023: The Chair
‘Simon Oldnal (Horizon Jrequested SO consider clear metric that show
Pesaro ay ena) RCC Action 27/06/2023 I “sng GLO IT Director) the progress being made and the impact the
Ichanges have brought in relation to HI.
[An outline of the known SME opportunity for POL
lacross product areas, andthe planned activities
Jeoard strategy Away Day -I 0 build 9 strategy for improving our
v Day to build a strategy for improving our SME
Martin Roberts (Chief
sme opportunity for POL es Steps Paper x
2eth september za I Netlonend doen nay on how we ean Go me wth
smal bones cstrers
ews smu Amey07+I santana et nov fou Rt ian hin st ot a
Jovervew of our Retail Plan ies sere her hrom I "mnaeta x Pesos et
lenloyment oth pein of change
Jautnorised Signatories ust (addition I afm Rachel I achat scarabelett, I ocean x
Jor Deputy company Secretary) carabelotion I croup company SerelaryI
‘Wate
ing the waiverof privilege I Email rom Hole Waugh I Diane Wie: Watoneal I aceon
(Rebuiding Trust section) on 08/07/2023 Ip nay et ae
eenoe Programme (culture mal from Helen Bussey I Owen Woodley, Deputy I ovsaron P X (orca
ranetormation) ‘on 10/08/2023, ce6 pour)
POL Board Meeting-31/10/23 196 of 197
POL-BSFF-137-0000003_0160
Tab 11.4 Forward Agenda
[Post office Brand
POL Board Action
(06/06/2023
Richard Taylor, Group
Corporate Affairs, Brand
‘and Communications
Director
Discussion
POL00458015
POL00458015
lexternal Policy Review
lGoard Strategy Away Day -I
Next Steps Paper from
26th September 2023
Tim Metnnes (Strategy
‘and Transformation
[26/09/2023: An update on the extemal policy
review work being commissioned by POL, that
lm inform discussions with DBT on thelr policy
position as well as wider pre-election
le activity. Work on this external
Ieview has now commenced,
197 of 197
POL Board Meeting-31/10/23
POL-BSFF-137-0000003_0161