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Closing Submission
on behalf of The National Federation of Sub-Postmasters
in Phase 2 of the Post Office Horizon IT Public Inquiry
Chaired by Sir Wyn Williams
Introductory remarks
1.
In providing this Closing Submission the National Federation of Sub-Postmasters (NFSP) is
grateful to the Inquiry and to its Chair for allowing these submissions to be made. As with
other Core Participants in this Inquiry, these are not the final position of the NFSP, but a
summary of the NFSP’s position on the evidence which has been heard in Phase 2 and a way
to look ahead at what may be relevant in the forthcoming Phase 3, and following phases.
The NFSP has noted and supports the submissions of the Core Participants as set out by Mr
Stein KC in relation to the technical evidence of the way in which Horizon was to operate,
how key aspects were designed out (the ability of sub-postmasters to interrogate the
system) that there was an intention to use Horizon and ‘evidence’ from it to support civil
and criminal actions against sub-postmasters and also on the contractual basis of a pfi
project of such a scale.
The NFSP has been shocked, although with today’s knowledge, sadly not surprised, to hear
the evidence throughout Phase 2, from the Inquiry’s expert Mr Cipione, and others, that the
Horizon system could never deliver what was promised and what the NFSP understood from
assurances at government and Post Office level would be delivered. The evidence in this
phase suggests there may have been suppression within POCL with regard to the seriousness
and scale of issues with the system. The evidence of David McDonnell, former development
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manager at ICL, was that it was obvious to him that some of those involved could not design
the relevant code and that there was reverse engineering, a lack of peer review and
concluded the code was such that he had not seen anything like it. His evidence was that
the product could not do what it was intended to do. It is submitted that Mr McDonnell’s
evidence is of considerable importance and concern to the Inquiry as the design of the
system, alongside the procurement of it, is at the heart of the problem and all that flows
from the reliance on it as a system that was indeed fit for purpose.
It is indeed a question for the Inquiry as to whether all of this is sheer incompetence — at
government/procurement/contractual level, at design level and at implementation level—or
if there is something more sinister involved in some areas, where there were some who
knew there was something wrong but pressed on regardless, allowing things to go so far
that it became impossible — until the group litigation shone the light on it all — to row back.
This project reaches the highest level — the office of the Prime Minister — and multiple
Secretaries of State, who attended the Inquiry to give evidence. It might be a question for
the Inquiry as the effect of the regular changes at this senior ministerial and the reliance on
civil servants who may not have had the technical understanding of this project, in its scale,
cost and technicality — it is suggested that the evidence of Sir Geoffrey Mulgan was
illuminating on this point. In addition, Alan Milburn gave evidence that Ministers might not
see all correspondence, as civil servants might triage it, including the letter which Colin
Baker of the NFSP had written to him on 8" January 1999
It is submitted for the NFSP that it will be of critical importance to find out who knew what
about what was wrong with the system and if, how and why that information was
suppressed, allowing sub-postmasters, manager, assistants and Post Office employees to be
prosecuted and their lives devasted as a consequence. It is understood this may be more of
a focus in Phase 3, but informed by the evidence which has been heard in Phase 2.
It must be emphasized for the NFSP that it entered into the Horizon project, working
groups, roll-outs and feedback, on which more later, in good faith. That has made the
evidence on the technical failings, and institutional knowledge at ICL/Fujitsu and POCL of
such failings, hard to bear, given the way in which the NFSP believed the project as
presented to them was to be the saviour of post offices up and down the land.
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The revolution which Horizon was meant to bring
10.
The evidence of Colin Baker, General Secretary of the NFSP from 1991 to 2007 was that it
known and understood across the network of post offices and sub-post offices across the UK
that automation was needed, or there was going to be a huge loss of post office services in
communities. This was confirmed in a variety of evidence from, for example, Tony Kearns of
the CWU, Sir lan McCartney, Alan Johnston, Colin Baker and John Peberdy of the NFSP.
Without automation, it could be said that the service would wither and, in many areas, die.
As John Peberdy of the NFSP said in his evidence, the concern that the Benefits Agency were
going to move away from using the Post Office network meant that the aim of automation
was to expand the range of services that could be available at a post office. He said that the
Post Office needed bringing into the modern era [page 56, transcript 2 December 2022]. As
Alan Johnston [page 60/61 transcript 1 December 2022] said, in his role as General Secretary
of the CWU, he saw automation as the salvation of the post office counters network as the
CWU was concerned about the number of closures of Crown Offices. It is submitted this is
why the support for the introduction of the system for those on the ground ran so deep and
explains the reluctance to publicly question the system, lest automation be taken off the
table or delayed for years.
It is submitted that the need for automation and the support for it to save the UK’s post
office network forms the backdrop to the procurement, development of and introduction of
Horizon. But, what was happening behind the scenes, in relation to, for instance,
procurement, design, cost, was unknown to those on the ground, including the CWU and
NFSP. As mentioned above, those on the ground entered into the project with good faith,
with the genuine aim and understanding that automation, in the form of Horizon, was what
would save Crown and sub-post offices.
In considering the automation of the post office network, it is submitted that it will be
important for the Inquiry to understand the different types of office where post office
services were offered and the numbers of such offices involved:
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e® Crown Offices which were run under the auspices of the Post Office and where staff
would often be members of the CWU [as explained by Tony Kearns of the CWU in his
evidence on 29 November 2022]
e Sub-Post Offices which were run as businesses by individuals and which would often
have a shop or similar independent business running alongside and where sub-
postmasters could be members of the NFSP, although not all were [as explained by
Colin Baker and John Peberdy in their evidence on 30 November and 2 December
2022].
Horizon Working Group
11. The Horizon Working Group (HWG) was established by Sir lan McCartney whose evidence was
that he always felt it was important to hear about the “lived experience” of those on the ground
and not only from those who were responsible for the product itself. He saw a role for the CWU.
because they had been involved in the earlier mechanisation of Royal Mail delivery services and
had experience of some difficult discussions at that time. Sir lan considered it was important to
ensure they felt they could give from their perspective how IT should work. He wanted the CMA
there, being the managers on the floor working with the CWU members and as management
their duty is to put across the view of the company and it was important that management
expertise was reflected. He saw the NFSP as important, not just because of 20,000 outlets but
years of experience and knowledge of a customer base, operation of the facility and their
knowledge in terms of what would be required to sustain their business. BEISO000346 gave the
terms of reference, and described the group asa ‘valuable forum’. It was to include ICL, POCL,
Government Ministers, including the Secretary of State and relevant civil servants.
12. It is submitted that the basis of and reasons behind the HWG was well intentioned by Sir lan,
however, the evidence of Colin Baker, Tony Kearns and John Peberdy was that the unions saw it
as a higher level group, not one where the nitty gritty of technical or teething problems on the
ground would be discussed with those operating at the highest level in government, the Post
Office and ICL. It is submitted that this was entirely reasonable on their part. As Colin Baker said
[transcript page 28, 30 December 2022] about the Horizon Working Group and what issues he
raised, he said it was a “high level group”. John Peberdy acknowledged in his evidence that the
NFSP wanted to bring what influence they could to the HWG because: “Nobody wanted to shut a
village post office. Nobody wanted to shut a post office. So any method to keep them open, and
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bearing in mind the Government had made a pledge to keep a nationwide network of post
offices.” [Transcript page 61, 2 December 2022].
Colin Baker, Tony Kearns and John Peberdy all gave evidence that they saw the HWG as a high
level group and only one of the mechanisms for raising issues. While the Inquiry has been
interrogating the opportunity that the HWG presented for the technical issues being
experienced during the trials to be raised, as Colin Baker said, the meetings were about Horizon
and what he was hearing about were screens dropping off and the HWG did not seem to be the
place for raising the on the ground technical issues. That said, the CWU and NFSP’s evidence
was that the HWG was a mechanism to be involved in a group where the parties responsible for
the project were round the table. It is submitted that the HWG was a higher level group and the
unions were right to feel it was not one for discussing the detail of what was happening on the
ground. Asked by counsel to the Inquiry about whether or not he should have cut through to
the HWG and raised the more detailed issues there, Colin Baker said: “This was the Horizon
Working Group, chaired by Government. Those sort of discussions were left for management of
the Post Office, and those that were responsible to delivering the programme.” This was echoed
by John Peberdy who said that he did not accept the NFSP could have done more to question
the Horizon system overall, he said that they did as best they could to highlight the issues that
were being brought up by members in the trials. His concern then was that the system freezing
meant information was being lost in balancing and that sub-postmasters were having to make
up the difference as it was not (as was understood then) a real loss for the Post Office because
the sub-postmaster would make up the difference. Of course, that later turned out not to be
the case and prosecutions followed, but at the time, this was Mr Peberdy’s concern.
It is submitted that the important point is what the NFSP and others were doing about those
problems on the ground. Colin Baker’s evidence was that he and others on the NFSP National
Executive were hearing from members about difficulties experienced in the trials and that much
of his focus was on taking these issues directly to Post Office. And it is perhaps worth noting
here that Paul Rich on the 21 October 2022 commented on the NFSP, and there is a
minute of the Post Office which highlights that the involvement of the NFSP would be
kept to a minimum, saying at transcript page 50 that the NFSP "certainly weren't in the
Post Office's pocket. They were vociferous if they thought there had been substantive
complaints by those sub-postmasters who had used the system because of these sort of
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issues I'm sure they would not have been alerted to it and they would not have been slow
in coming forward with those.”
Colin Baker, Tony Kearns and John Peberdy were all able to explain the particular issues which
arose with balancing and confirmed that there had always been issues with balancing prior to
Horizon. This could be a simple as not including some stamp sales. He explained the contract
which sub-postmasters had, which was they were responsible for losses and often put their own
money in to balance. While it is with the benefit of hindsight it may be seen that balancing on
Horizon, or rather difficulties with balancing on Horizon, were a problem, on the evidence it is
submitted that at the time it could not be determined at the time what was human error and
what was system error. As Colin Baker said it was ever thus, did not appear to be the great issue
that it was to become and was one of a melee of things, such as frozen computer screens, which
were showing as issues. It is submitted that it is not to minimize what did become a very
significant issue in criminal prosecutions, but that what the NFSP and others were seeing was
not something that foreshadowed what was to come.
Both Colin Baker and Tony Kearns explained their oganisational networks where issues about
balancing were dealt with locally and would not generally come to ‘head office’. It is a question
for the Inquiry as to whether the dots were capable of being joined by the unions at this much
earlier point and thereby prevented what ultimately took place. But, as Colin Baker said, this
was a ‘slow burn, not a big bang’. [Page 61 transcript, 20 December 2022): “It didn't start with
the Big Bang, as I explained before. It was a slow, a gradual increase in the numbers of sub-
postmasters. And I only get to hear numbers of sub-postmasters. And I only get to hear what is
fed to me. Now, there's three classes of sub-postmasters, can I put it that way? There are those
that are members of the Federation and would refer it to the branch secretary and who we hope
would refer it. There are non-members, who wouldn't, obviously, because they're not members.
And a third category is those that felt embarrassed that they had losses in their Post Office and
weren't saying anything. And so we had to amass pass this information the Federation
headquarters, via the branch secretaries and the Executive Council. If that didn't happen, we
wouldn't get to know about it. And so, at this point, 1999, it wasn't the real problem that it is
now.”. This also matched the evidence of Tony Kearns of the CWO who outlined something
similar for his organisation. It is submitted that it is an important point that not everyone
involved in balancing losses or prosecutions was a member of a union, whether the CWU or the
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NFSP. With a network of thousands of post offices and sub-post offices, how possible would it
really be to join those particular dots?
It is submitted that this will principally be a question for Phase 3, but in considering it here on
the evidence available, the unions would have to known about things they did not know about—
for instance, the Post Office intention to use Horizon as evidence to prosecute, that the Horizon
system could and would give wrong information, that this could and would be used against sub-
postmasters and Post Office employees. It is submitted that it is a leap, at this stage, to go from
reporting issues and trying to have them resolved to a large scale prosecution of sub-
postmasters and Post Office employees.
It can be seen from the various reports and minutes of meetings of the NFSP that, for their part,
they worked tirelessly to engage with Horizon and to bring the issues affecting their members to
the attention of the Post Office and Government. David Miller and Alan Johnston were among
those who attended conference, special meetings and NEC meetings of the NFSP. The issues
were brought to them, either through such meetings or directly by Colin Baker and John
Peberdy. Their evidence was, as was that of Tony Kearns, that they relied on the assurances of
the Post Office that the issues they brought would be or had been dealt with. It is submitted
that they had no reason to believe that this was not the case, and that despite all of the work to
feedback on the trials that Post Office would go ahead with what may be found to be knowledge
that the system was not fixed. The NFSP trusted what they were being told (see, for instance,
Colin Baker, transcript page 60, 30 December 2022 — “/ had no choice but to believe them,
because they were masters of it alf’]. \t might be said with hindsight that trust was misplaced,
even abused. As Colin Baker, Tony Kearns and John Peberdy all said, the unions wanted
automation, it was to be the saviour but not at any cost. Colin Baker and others repeatedly
emphasized in their evidence that they wanted the system, but they wanted it to be right, not
rolled out at any cost.
Colin Baker’s evidence was that he knocked on doors and took the concerns his members were
bringing to the Post Office, to people such as David Miller. His description to it becoming his
‘life’s work’ and ‘beating the drum’ for sub-postmasters was emphasized in his evidence at page
16 and 17 of the transcript of 30 December 2022, where he said he’d speak to anyone, go
anywhere, use any channels to find out what was happening, but this was predominantly Post
Office Counters Limited, who always “reassured” him. He said he did not know at the time how
many people were actually involved in the project, that he was never allowed anywhere near ICL
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Pathway and that the NFSP (like the CWU) had no say in the procurement, design or sign off of
Horizon.
It is submitted that the words of Sir Geoffrey Mulgan [transcript page 149, 1 December 2022]
are most pertinent here, given the efforts which Colin Baker and John Peberdy to raise the issues
sub-postmaster were reporting from the trials and at meetings attended by Post Office:
~A year or two after this I was responsible for doing a big review of how Government handled
risk of all kinds, and a very common pattern in risk is that people lower down it hierarchy spot
problems and risks but then it's filtered out as communication goes up to the top of the
hierarchy and I expect in retrospect this was exactly a case like that, where many of the people
on the ground involved knew some of the problems and the flaws, but for different reasons, as
communication went up through the many, many levels of very hierarchical organisations, the
DTI, Post Office, DSS and so on, that got filtered out. [emphasis added]
It is submitted that this is exactly what happened. The NFSP was banging the drum, was
knocking on doors, was reporting the issues and was being reassured they were all being dealt
with. They believed that what they were feeding back to Post Office was making its way to
those they did not have access to, for instance, ICL Pathway. But, it transpires that was not the
case.
In closing, the NFSP submits that it was, as John Peberdy said, a small cog in a very big wheel.
Certainly it was one with important information which it fed back, all as described in the
evidence. But when compared to the might and size of ICL/Fujitsu, UK Government Departments.
and the Post Office, a small organisation doing what it could to feedback but where it had no
decision-making role and no access to those who were designing the very systems which its
members had to use. It is submitted that the role and actual influence of the NFSP to change
things was more limited that thought by some. It is submitted that a comparison between, for
instance, ICL/Fujitsu and an IT PFI project being rolled out across the UK on the one hand, and
those on the ground on the other, is a difficult one to make. It is submitted that Sir lan’s good
intentions with the HWG could not, in reality, square that circle.
Looking ahead to Phase 3 and the operation of Horizon, it is submitted that the evidence from
Phase 2 about the Horizon system and how those on the ground were actually dealt with, will be
key. The NFSP will continue to support the Inquiry in all of its work in that phase in order for the
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light to be shone on a system that the evidence suggests was not fit for purposes, reassurances
about which were false and which was rolled out anyway, regardless of the human cost to come.
National Federation of Sub-postmasters
22 Windlesham Gardens
Shoreham-on-Sea, BN43 5AZ