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Norman Lamb MP.
Edward Garnier QC MP Our ref; 283952
House of Commons
London
SW1A OAA
February 2012
Thank you for your recent letter, enclosing correspondence from your
constituent Mr Kamaljit Kooner who is a former subpostmaster requesting that
you attend a meeting about subpostmasters who had their contracts with Post
Office Ltd terminated as a result of accounting irregularities.
It is not for me, or any other member of the Government to comment on or
make recommendations about who you meet. Furthermore, operational
matters, which include the Horizon IT system is the responsibility of senior
management at Post Office Ltd. The Government, as shareholder, does not
play a role in operational matters
However, I am aware of a small number of incidents where subpostmasters’
contracts have been terminated, and in some cases court action has
subsequently been taken, following the identification of financial discrepancies
and shortages. However, neither I, nor the Department are able to comment
on, or intervene in individual cases concerning operational and contractual
matters. It may, however, be useful if I provide some background information
about the Horizon IT system.
Post Office Ltd continues to express full confidence in the integrity and
robustness of the Horizon system. They base this on the fact that Horizon has
been operating for over 10 years and typically processes 230 million
transactions a month from over 30,000 counter positions in around 11,800 post
office branches.
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The system and the processes around it offer a very high level of security and
resilience and are designed to ensure that should part of the system or
equipment fail that the integrity of the accounting records is always
maintained. The system has proved to be very robust since its introduction.
The Horizon system was fully tested at the time of the nationwide
implementation and all new software releases are also subject to rigorous
testing prior to going live in order to assure the accuracy of the accounting
processes. For example, the testing for a recent upgrade to the system was
independently assured by Wipro as being ‘best practice’ (Wipro is amongst
the largest global IT services companies in the world and recognised experts
for Product Engineering and Testing).
As regards ongoing performance, the Horizon information security
management systems are accredited to industry standards and there are
extensive controls to ensure data validation and reconciliation. A transaction
log is available for every branch and full audit logs of all system and user
activity and transactions are securely sealed, backed up and retained to
provide an evidential and investigative repository.
Post Office Ltd also categorically states that there is no remote access to the
system or to individual branch terminals which would allow accounting records
to be manipulated in any way. In addition, I understand that all system activity,
down to the individual key stroke, is also recorded into a separate vaulted
transaction file with every record encrypted and written to the log and with
each record having a unique incrementing sequence number. This log is
retained on a separate server independent of Horizon, is retained for at least
seven years, cannot be altered in any way and all access to it is securely
controlled. This approach is consistent with that of banking systems and
provides a fully secure audit file which can show all system activity down to a
single keystroke in a particular branch.
Ensuring that subpostmasters receive appropriate training to perform their
duties is vitally important. It is not in the interests of the taxpayer, the
customer, or the company for subpostmasters to be making costly and
avoidable errors as a result of a lack of training. Post Office Ltd has assured
me that all new subpostmasters are given extensive training, typically
including both classroom training and in branch supervision and guidance from
a Post Office Ltd manager. Post Office Ltd has told me that they provide a
telephone helpline for subpostmasters seeking advice and support, and has
informed me that additional training can be arranged for those subpostmasters
who request it.
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NORMAN LAMB MP