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Witness Name: Anthony John Roberts
Statement No: WITNO339_01
Exhibits: WITNO339_01/1- WITN0339_01/17
Dated : 7 September 2022
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF ANTHONY JOHN ROBERTS
I, ANTHONY JOHN ROBERTS, will say as follows:
1. I understand that the purpose of this witness statement is to set out matters of
fact of which I have personal knowledge.
2: This witness statement was drafted on my behalf and in my own words by my
solicitor during a process including the preparation of successive drafts after
communications between me and those advisers in writing, by telephone and
by video conference.
3. The facts within this witness statement are either within my own knowledge, or
derive from the records provided by the Post Office Horizon IT Inquiry.
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However, as it relates to events that occurred over twenty-three years ago there
are several areas that I do not recall. Where that is the case, I have said so.
4. This statement responds to the request for a written witness statement pursuant
to Rule 9 of the Inquiry Rules 2006 reference WITNO339R9-1/JA/20220608
dated 8 June 2022. My witness statement responds to the questions asked
regarding the development and roll out of the Post Office Horizon computer
project during the period 1997 to 2001.
Background
5, The Inquiry has asked me to set out my professional background, what my role
at Post Office Limited (POL) involved and my relationship to POL. I joined the
Post Office in 1967 as a graduate entrant, via the Civil Service fast track
scheme then called the Administrative Class of the Civil Service and spent the
whole of my professional career up to my retirement in 2002 in that
organisation. I held various senior positions, including as the Secretary to the
Post Office and Director Counter Services, until I was appointed to The Post
Office Board by the Government in 1985 as Managing Director Counter
Services a position I held until 1993. My role as Managing Director was the
usual one of running a UK wide business with directors of operations, finance,
marketing, and four regional directors reporting to me. My experience of
strategy development and general management were what had gained me that
role. Negotiations with unions was a major part of the role as was a long review
by the Monopoly and Mergers Commission of Post Office Counters (POCL)
future. As MD much of my time was taken up with this review; negotiations
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both with unions and clients such as DSS, along with developing POCL into a
“business” as opposed to a more minor part of the Post Office corporation
Towards the end of my time in that role there was the first development of an
approach to automating counters run by a director appointed from a civil service
IT background. My own role remained, as someone without IT experience, in
monitoring and deciding on issues such as resource provision as with any other
issues within the business.
I became Managing Director Group Services from 1993-1995 when my role
was assisting the Chief Executive in preparing for the privatisation of Royal Mail
which was intended to be the Governments’ policy after a wide consultation.
When the Government postponed this approach for political reasons and my
predecessor as CEO left, I became Chief Executive of the Post Office Group,
consisting of Royal Mail, Parcelforce and POCL in 1995, a position I held until
2002 when I retired. During my time as CEO each of the businesses mentioned
above were run by a Managing Director who in turn reported via me to The Post
Office Board. The Managing Directors (MDs) were appointed by The Post
Office Board, not the Government and hence were not members of The Post
Office Board, although they attended its meetings.
My main role across all the business was, with the Post Office Board, to ensure
and agree appropriate strategies for each business, including in the case of
Royal Mail and Parcelforce, their international businesses; aid, where
appropriate, and monitor that these were being implemented and followed
through by the MDs; be involved in dealing with Ministers, Members of
Parliament, Select Committees and Civil Servants through the then Department
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of Trade and Industry in discussions about these strategies, particularly those
concerning the future of the Post Office and any of its businesses.
Having been a Managing Director reporting over time to two different CEOs I
had a clear view of what relations I wanted with the Managing Directors who
now reported to me. I wanted to give them space to run their businesses. Each
MD organised their business in roughly the same way so, to give POCL as an
example, the Managing Director Counter Services was responsible to me for
the day to day running of that business with his senior colleagues who formed
the Counters Executive Committee where many of the decisions about running
Post Office Counters would be made. The most major were recommended,
usually via me, to the Post Office Board I did not see it as my role, nor did I
have the time, to run that business (or the two others). Post Office Counters
was the smallest of the three main Post Office businesses and my main dealing
with it in the period 1995 -2001 apart from standard annual issues such as
budget setting and approval of their Five-Year Plan, were in connection with the
development of Horizon. Not in any technical sense because the whole of my
background and experience related to general management, but in connection
with Government negotiations.
The Inquiry has asked me to comment on my experience up to, and as at, 1999
in respect of major IT projects. As an MD in the late 1980’s and as Group CEO
I had some experience at the strategic level of agreeing and monitoring IT
projects but my background was that of a general manager not someone with
particular expertise in the IT field.
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10. During my period as CEO, and at various times, I held roles outside The Post
Office including Chair of the Government Training and Enterprise Council for
South London; Chair of the CBI Training and Education committee; member of
the Government New Deal Task Taskforce; President of the European
Foundation for Quality Management and Governor of Henley Management
College. None involved issues which required detailed IT experience and I
believe I was appointed to all of them because of my general management
experience.
Since retiring in 2002 I have had no business contact with POCL and Royal
Mail apart from membership of the Royal Mail Stamp Design Committee from
2002 onwards, and occasional social contacts with those with whom I worked
up until 2002.
The period from 1995 to 1997
12. The period 1995 and 1996 I find the most difficult to recall because it was the
time of the selection and appointment of ICL, in which I was not directly
involved, and some very small trials of the benefit card. The key issue was how
slow the whole process had become and the original timescale of implementing
much of Horizon after a couple of years was obviously not going to happen.
This resulted in a re-plan towards the end of 1996 followed by much more
activity in 1997 when I also became more involved.
13. By June of 1997 some 160 offices were involved in trials including bar coding
of benefit order books. These trials were going well but it was becoming clear
that there were delays in software development which would need more time
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to complete. This was reported to the Post Office Board in June and following
that I requested a full review of lessons to be learnt from the trials ((WITN0339-
01/1 POLO0028593 Memorandum John Roberts to Stuart Sweetman 16 June
1997).
The Inquiry has asked me to comment on my understanding of the delays and
technical issues as well as the robustness of Horizon at the time of this report.
I have also been asked to provide comment on my understanding of any
technical issues, the feedback that was obtained and any actions that were
taken to address these matters. The response to my request set out that there
appeared to be a real will from staff in the trial offices to have the system in
Post Offices and that the software was working satisfactorily in the trials but
that many practical actions such as better knowledge of the physical layout of
a sub post office; the quality of their electricity provision, interaction of terminals
and the security screen at the counter, were needed to improve installation
planning. Better /oca/ planning and communication were also required. All this
meant that the programme would take longer. The response also confirmed
that testing the software releases properly was more important than the speed
of the project. The response recorded, for the first time that I can remember,
that DSS might be considering termination of the project as a contingency
measure. Above all the document focussed on the practical actions, examples
of which are given above, that POCL needed to take to improve the installation
of Horizon. It did not mention any problems of software development and said
that three new software releases from ICL had been tested and accepted and
bar coding of order books was now available in over 150 Post Offices. The
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actions in the document which were intended to address these issues were
then taken forward within the POCL Horizon team, but because of these early
concerns all involved — POCL, BA and ICL — agreed that PA consultants should
carry out an independent review. This concluded that the programme was
achievable but that further costs and more delays were inevitable. The report
also made the point that POCL and ICL should look on both the Benefits Agency
and DSS (to whom the agency reported), as customers not as partners in the
project. PA Consultants’ view was that it was better to continue with Horizon
than to terminate.
Towards the middle of the year, after further discussions between POCL and
the DSS it was clear that DSS were concerned about delays and had begun to
brief Ministers about their concerns. This was very disappointing as it appeared
that while big issues still remained, with software delays the most recent being
about Electronic Point of Sale Services (EPOSS) being central to this, ICL had
reaffirmed their ability to deliver the programme and had increased technical
resources (WITN0339-01/2 POL00031128 Counter Automation Steering Group
23 July 1997).
The Inquiry has asked me to comment on my understanding of the delays and
technical issues as well as the robustness of Horizon at the time of the Steering
Group meeting. I have also been asked to provide comment on my
understanding of any technical issues, the feedback that was obtained and any
actions that were taken to address these matters. Whilst I was not involved in
the detail of what the software delays were, it was clear that Horizon was not
yet robust as a project, with work continuing, not just on software, but on the
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practical problems of implementation and communication. However, where
trials had taken place there was enthusiasm for Horizon from the staff and
subpostmasters based on market research carried out by the Horizon team.
Actions I wanted followed after this meeting had been set out in the detailed
memorandum sent to me a week before (WITN0339 01/1) with which I agreed.
A year of government discussions - 1998
17. The Inquiry has asked me to comment on my understanding of the delays and
technical issues as well as the robustness of Horizon at the time of the next
Steering Group meeting (WITN0339-01/3 POL00031131 Counter Automation
Steering Group 26 January 1998). I have also been asked to provide comment
on my understanding of concerns of the DSS in relation to the viability and
fitness for purpose of Horizon, any technical issues, the feedback that was
obtained and any actions that were taken to address these matters. There were
three key elements at the beginning of 1998 (WITN0339-01/3 POL00031 131).
ICL were concerned about their costs and were looking to charge more; DSS
were concerned about rising costs and delays to the programme and we, The
Post Office, were keen to continue with the trial. I had met both the Permanent
Secretary of DSS and the CEO of ICL informally in January to make sure they
both were committed to Horizon which they said they were although the ICL
CEO made it clear that they had commercial issues to discuss. On the DSS
side while their Permanent Secretary made it clear that there was concern that
the programme was over running badly compared to its original plans DSS still
wanted a viable programme delivered within the current revised timescale. She
also said the Benefits Agency felt the Post Office had been historically inflexible
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over negotiations on the existing (non- automation) contract for Pensions work.
She did not comment more than that on the current fitness of the Horizon
programme. This conversation did not match entirely the views of the Benefits
Agency where reported informal conversations between their staff and POCL’s
indicated there was still a desire from some to move away from POCL and
introduce Automated Credit Transfer (ACT) as the means for paying benefit
recipients. This was no surprise as I recall this had been a long held position
of some in the Agency.
I agreed with the Steering Group that the line we should take was to press on
with key planning dates leading to a revised roll out date of January 1999 and
in parallel deal with any commercial issues between POCL, and ICL or DSS.
At this stage Horizon was not yet fully developed although the earlier trials had
been successful. For different reasons - ICL commercial ones, and DSS
concern about cost and delay - the situation was becoming difficult and POCL,
on a contingency basis, rightly sought legal advice on their position if any
participant should seek to withdraw from the project.
In the early months of 1998, it was becoming clearer that some in the DSS
wanted Ministers to withdraw from the project. There had always been some
officials in DSS who preferred to move straight to ACT and withdraw as much
work as possible from POCL but in 1998 there were still many benefit recipients
who did not have a bank account. POCL had also made it clear that if Benefit
transactions were removed from Post Offices this would have a major effect on
the size of the network with many Post Offices having to be closed. This
argument was strongly supported by Ministers in the Department for Trade and
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Industry (DTI), which was the sponsoring department of The Post Office
Corporation, but inevitably led to differences of view between the DTI and DSS.
These discussions were not helped by ICL increasing their charges for the work
they were doing. It was these issues that led to a decision in Government to
ask Sir Adrian Montague to conduct a study of the project on behalf of the
Treasury. Progress on the project was slowed while all parties awaited the
results of that study.
At my informal meeting with the Permanent Secretary of DSS earlier in the year
to discuss the future of Horizon I had gained the impression that she had not
yet concluded that DSS should withdraw. However, when I was asked to meet
the Minister of State, Frank Field, at DSS in early summer it was clear at that
meeting that he wanted to give ICL a thirteen week notice period of withdrawal
from the project if ICL were not able to meet the terms of the contract by then.
He also wanted The Post Office Board to agree to this. It was thought that he
considered Horizon an obstacle to his view of how to pay social security
benefits and wished to move directly to ACT.
The Inquiry has asked me to comment on my understanding of the delays and
technical issues as well as the robustness of Horizon at the time of the Post
Office Board meeting of 12 May 1998 (WITN0339-01/4 RMG00000027). I have
also been asked to provide comment on my understanding of the position of
the DSS in relation to the future of Horizon, any technical issues and why the
Board decided that the Post Office should not join the DSS in issuing a 13 week
notice of cure to ICL Pathway. The Board discussion of this request to move
directly to ACT took into account the further project slippage — the precise
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reasons for this I cannot recall - which had been reported to the meeting and
meant a key milestone date of 5 October would be missed. Nevertheless, all
of us on the Board felt that any project of this complexity was bound to have
software problems which would mean delays. We were not content that such
delays had occurred to the extent they had and we could not consider Horizon
a robust project at this stage but we did not agree that setting a deadline of 13
weeks to meet the terms of the contract was the correct approach to solving the
issues between ICL, DSS and ourselves which needed further discussion. The
Board also felt that it should await the recommendations of the Sir Adrian
Montague review and finally was concerned that if they followed the approach
of the 13 week deadline and this led to cancellation of Horizon at the end of that
period it would raise considerable questions over the future size of the Counters
network.
Soon after the meeting described above the conclusions of the Treasury
Review of Horizon by Sir Adrian became available. I have been asked by the
Inquiry to comment on my understanding of the conclusions of the Treasury
Panel in relation to the viability of the Horizon project and the options identified
for the future of the Horizon project. I have also been asked to confirm why I
did not consider the cancellation of the Benefits Payment Card to be viable.
The Review's overall conclusion was the same as that of the PA Consultants
Review in 1997 — that the Horizon project was technically viable though
complex and was likely to suffer further delay and costs. Three main options
for the future emerged from Ministers’ consideration of the Report. The options
were - continue Horizon with the Benefit Card; continue without the Benefit
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Card; terminate the programme completely. In my, and the Board’s, view to
terminate or continue without the Benefit Card would pave the way for DSS to
move to ACT, which many in DSS had always wanted, but would leave the Post
Office losing around £250m of revenue. The need to compensate for this would
inevitably impact on the future of many of our smaller sub-post offices as we
sought to reduce costs to replace lost DSS revenue. This was the reason that
we felt such a move was not a viable option for the Post Office. Later a further
option of “controlled migration to ACT” by which I believe was meant a slower
move to total ACT was suggested. In the light of all these suggestions I wrote
to the DTI Minister of State, copied to the Minister for Welfare Reform
(WITNO339-01/5 POL00028648 Letter of 9 July 1998) setting out the Post
Office position and stressing how important the benefit card was to Horizon.
Ministers then asked that a way forward was found between the three parties,
DSS, ICL and POCL. As a result the Treasury appointed Graham Corbett (later
to become the Regulator for the Post Office Corporation) to facilitate
discussions between ICL, DSS and POCL in order to agree commercial terms
for continuing the project which would then be developed into new Heads of
Agreement. Unfortunately, the discussions did not end in an agreed way
forward.
I have been asked by the Inquiry to comment on my understanding of the
position of the Government and ICL to be this time in relation to the future of
the project. During this period the Government position was not clear to the
Post Office. I assumed that DSS certainly would by now have preferred to
move directly to ACT; DTI were concerned about the cost to the Post Office
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network if such a change were made and the Treasury position was looking for
the least cost solution which did not see a major financial disbenefit to ICL, the
major British computer company, whose business case had reduced by £250m
(WITNO339-01/6 RMG00000015 Board Minutes of 10 November 1998), a
major concern for them. In order to try to produce a workable financial solution
for ICL, who were still prepared to continue the project, POCL did try hard to
develop a non-binding Heads of Agreement with ICL as the two main parties
but this stayed on the table as further discussions in Government attempted to
find a way forward. My recollection of that time is that all participants —
Government , ICL and POCL — were trying hard to ensure that the project went
ahead, not least because, in spite of the uncertainty these high-level
discussions must have been creating for the teams, work was still happening
on the technical side of the project. but it effectively remained in its early stages
with many things yet to be solved. Even so a number of Post Offices were now
paying benefits on a test basis so progress continued albeit slowly.
I have been asked to comment on my concerns at the time of the Board meeting
on 10 November 1998 in relation to the quality and reliability of the Horizon
system at this time and what action I took to address them. The biggest issue
at this stage had nothing to do with the quality or reliability of the system — this
was still being worked on — it was the need for a decision about the way forward
which was now in the hands of Ministers. My recollection of this period is that
I was very much involved in the Government discussions but not in what the
teams might be doing as until we were clear that Horizon would go ahead there
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was little point in pressing them on their progress. In any case that was more
a question for the Managing director and project director.
The end of 1998 was a critical time for Horizon. I have been asked by the
Inquiry to comment on my understanding of the position of the Government and
ICL in relation to the future of the project at this time which I consider was
probably the closest Government and the Post Office came to cancelling the
project. The Secretary of State for Industry was seeking a way forward with
ICL which requested ICL to set out how they intended to finance the programme
and respond to his letter by 9 December (WITN00339-01/7 RMG00000012
Board Minutes 8 December 1998). ICL were concerned about their finances
and I recall were very concerned about the tone of the Secretary of State’s
letter. They were still keen to complete the project but not at any price. ICL
had also confirmed that an expected software release required more laboratory
testing.
I have also been asked to comment on my understanding of the cause(s) of
any delays, the results of software testing at this time, how this affected my
assessment of the quality and reliability of Horizon and what action was taken
to address those matters. I had considerable concern about the project at this
time as software problems had continued and the financial position of ICL was
not at all clear. As far as I can recall, I was not being briefed in detail about what
the software problems were, mainly because I felt I could add nothing to their
possible solution, but I was told that the latest software release required more
laboratory testing which would mean a further two month delay While all these
discussions went on, the Horizon project team continued to work with ICL, in
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order to improve the quality and reliability of Horizon which was not yet good
enough even though a number of its more limited trials and tests had worked
well. From the point of view of the Post Office Board there was little we could
do at this point until we knew how ICL were going to respond to the Secretary
of State who had requested that they reply by 9 December 1998 to a letter from
him in which he sought their agreement to revised Heads of Agreement with
POCL and the Benefits Agency. The ICL position with the Government
appeared to the Post Office to have hardened with its parent company, Fujitsu,
now involved and presumably concerned about the additional costs facing ICL.
28. During the whole of this period of delays and negotiations the Managing
Director would have kept me informed in general terms about work the teams
were doing on software development. I did not get involved in the detail of this
nor did I offer advice on what might be done as I did not have the knowledge to
do so. I would have pressed on timing and costs in normal circumstances but
these were entirely dependent on the developments described above which
continued into 1999 when I took a similar approach. While I am sure — but can’t
recall in any detail — that I would have continued to be kept in touch with
software development in general terms, only when the project reached its final
development stages later in 1999 were I and the Board discussing specifically
the last remaining software issues that required solution before the system
could be formally accepted. This is recorded later in this
evidence. (WITN0339-01/8 POL00000353 Board minutes of 14 September
1999 )”
An agreed way forward 1999
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I have been asked by the Inquiry to comment on my understanding of what the
Government's relationship with ICL and Fujitsu was like between January and
May 1999 and what I understood to be the position of the Prime Minister in
relation to the future of the Horizon project. I have also been asked to confirm
my understanding of the options identified by the treasury and the position of
the Post Office in regard to these options during this period, the circumstances
in which the Post Offices signed the Heads of Agreement and the pressure by
the Government in relation to the Heads of Agreement. The year began with
the Post Office Corporation and ICL pressing Ministers for decisions on the
future of Horizon. We did not know what ICL’s relations were like with the
Government but assumed some tough talking was going on about their future
in the project as a result of their rising costs. We discovered that as Ministers
had been unable to agree, the issue had been remitted to the Prime Minister
(WITN0339-01/9 POL00028603 Minute from Stuart Sweetman). We had no
knowledge of the PM’s views but what emerged from Government was an
option, we assumed from Number 10 via the Treasury, which would scrap the
benefit card and pay benefits electronically through ACT into a simple credit
only account using a branded smartcard. This proposal was to be worked up
by the end of April 1999 and developed into some non-binding Heads of
Agreement. We did not like the proposal as it did not include the benefit card
and did not explain how the “unbanked “ would receive benefits but felt there
was no option but to try and make it work. It became clear as detailed
discussions, working up these proposals, continued into April and as the
deadline for a response approached, that neither Treasury, the DSS or the
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Benefits Agency supported the current approach of retaining the benefit
payment card. The options open to the Post Office and POCL were either POCL
becoming a bank with a smart card or termination. April and May 1999 were the
two key months in reaching a decision on whether the Horizon project should
go ahead. POCL were in discussion with Fujitsu ICL who we believed were
concerned about their finances in the light of the Government's proposal.
POCL were also in discussions with the Treasury and set out the commercial
position they intended to put to the Post Office Board for Treasury response
(WITNO339-01/10 POL00028574 Letter David Miller - Treasury Permanent
Secretary). The letter also made clear that I was happy to meet with the
Permanent Secretaries of the Treasury and DSS to see if we could progress
things. I do not recall that meeting taking place.
This was a period of considerable negotiation between the various parties with
Fujitsu ICL in particular taking a hard line on being prepared to wind up their
involvement in Horizon if they were not able to agree an approach with
Government. We believed they were under pressure from their auditors to
make large provisions in their accounts. Fujitsu wrote to the Prime Minister on
7 April and insisted that new legally binding Heads of Agreement be signed in
order for them to continue. This approach drove the Government timetable for
decisions.
I have been asked by the Inquiry to comment on my understanding of the
technical issues and robustness of Horizon at this time. For me, the issues at
that moment, and throughout the process which ended with acceptance of new
Heads of Agreement, were not the robustness of Horizon or technical problems,
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of which some still remained, but whether the Post Office could agree with the
Ministerial proposal. The negotiations were not at any time affected by views
on either side, of the technology, they were solely about the overall future of the
project, its cost and the Government proposal on the table. The prospect of
major reductions in the Post Office network if Horizon was terminated were
foremost in my mind.
In May, all the issues came to a head (WITN0339-01/11 POL00028618 Horizon
Board Paper). ICL had stated that they did not believe the original proposal of
a Benefit Card would now work as DSS would act against its effective operation.
The Chairman of the Post Office Board had written to the Secretary of State for
Industry setting out how a new service including smart cards and banking might
work and how it needed to be paid for. While I and the Board still preferred the
original route of the Benefit Card it was becoming very clear that after the
suggestions from the Treasury ICL and DSS (for different reasons) would not
go down that path. We were also clear that if a Post Office network was to
remain then it had to be automated to serve customers, especially those without
bank accounts, and in so doing avoid a major reduction in the number of Post
Offices both main and Sub post offices. It was also important to ensure that
The Post Office was not accused of withdrawing from the original Agreements
with ICL, which could lead to litigation, as opposed to working with them to
develop an agreed alternative. (WITNO339-01/12 POL00038847 Letter from
Slaughter and May).
After an exchange of letters between the Chairman of the Post Office Board
and the Secretary of State for Industry, (WITN0339-01/13 POL00028611
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Correspondence between the Post Office Chair and Secretary of State) the
Board met on 23 May to review the proposal for Horizon’s future from the
Secretary of State which would effectively create POCL as a bank into which
benefit was to be paid by Government for withdrawal by those eligible via a
card. This proposal was to be worked up in detail over the following three
months. While the Board still felt that the proposal was not the best use of
shareholder's funds, the Government was in fact the shareholder and as such
had the right to take that decision — and the Secretary of State did have the
power to direct the Post Office to follow his wishes, although no suggestion of
this had been made. It was clear to all of us on the Board that this proposal
was the only one on the table; was what the Government wanted and were
prepared to help finance. Without it the automation of Post Office counters was
unlikely to go ahead with major impact on its business and future of many who
worked in it. The Board thus unanimously agreed to the Government's proposal
which allowed POCL to draw down from £480m funds which would otherwise
have gone to the Government from Post Office corporation profits. ACT would
not be implemented before 2003 and if the Post Office felt in the future it had to
cancel Horizon because of the performance of ICL then Government would
allow the £150m cancellation fee to come from the same source as the £480m.
This was agreed by the Government. In the light of this and in particular
because the alternative option to terminate would have seriously worsened the
commercial position of POCL and slowed considerably its opportunity to offer
a banking solution in the future, the Board agreed the Heads of Agreement and
that POCL should continue to work with ICL to deliver an automated solution.
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34. I have been asked by the Inquiry to comment on to what extent the technical
issues with Horizon influenced public sector negotiations over the future of the
project and whether the financial implications of cancelling the project impacted
the focus upon technical integrity and robustness of Horizon during the
negotiations. I do not know if these negotiations themselves which were kept
confidential, affected the work on technical issues relating to Horizon but during
this time the teams involved did keep working together although the long period
of discussions about the future of Horizon, finishing with the agreement to a
new banking approach to benefits payment, had inevitably slowed the project's
development. The fact that it had become clear that DSS and then wider
Government did not want the Benefit Card had a major impact on technical
work, as did the inevitable discussions about finance for any alternatives. The
fact that these discussions and eventual decisions were made at the highest
levels in the Government and the Post Office did at least allow the relationships
between the Post Office teams and ICL (which had remained good) to enable
some technical work to continue. Keeping separate strategic decisions about
Horizon’s future and technical decisions about how it might work, had been
essential. As far as staff, subpostmasters and the National Federation of
Subpostmasters and Communications Workers Union involved in the trials
were concerned, there was not a single complaint that I was aware of about
delays or difficulty with using the new system during this period of delay and
negotiation.
35. Atits meeting on 20 July 1999 (WITN0339-01/14 POL00000352 Board Minutes
of 20 July 1999) the Board had to decide if it wished to sign the new Heads of
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Agreement. The financial arrangements had been settled by the Secretary of
State’s letter (WITN0339-01/13) and Fujitsu had provided a written guarantee
to POCL of its support for ICL. The Board was also satisfied that ICL could
develop Horizon over time and was given the example of similar work it had
done for the Irish Post Office.
I have been asked by the Inquiry to comment on my understanding of any
technical issues and the robustness of Horizon at this time. I have also been
asked to comment on my knowledge of any problems experienced by
subpostmasters, any concerns I raised and why the decision to sign the
contract with ICL was remitted to the Chairman and Chief Executive. The Board
were assured by the Horizon Project Director in the meeting that the system
was robust and fit for service. The only issue reported was that some
subpostmasters were having trouble balancing their accounts which was seen
at the time as a training issue, not a system issue. This was to be remedied by
increasing staffing to help subpostmasters who had any difficulty and a new
training package. The Board felt these were sensible steps to take, as was the
proposal that any incidents arising from using the software and equipment
would be grouped into high, medium and low and that one high incident or 20
medium incidents would result in the system not being formally accepted.
There was also to be a pause in roll out of the system for 4-6 weeks so that
experience so far could be reviewed. Nevertheless, there were concerns that
issues were still arising and the time before the proposed date (a month away)
for signing the revised contract with ICL was short. It was agreed by the Board,
given the importance of the contract, that the Chairman and I, unusually, review
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37.
38.
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its main terms with Managing Director POCL, and agree with him whether the
project was in a fit state for the contract with ICL to be signed by POCL.
I have been asked to provide details of this meeting, including my recollections
of the atmosphere at that meeting, the respective positions and my opinion as
to the sufficiency of the discussions and competencies of the persons involved.
While I cannot recall much more detail about this meeting (it occurred 23 years
ago) it was no different to any other Board Meeting in which Horizon was
discussed. The atmosphere would have been workmanlike, practical and down
to earth (as it was at all Post Office Corporation Board Meetings) with the
Managing Director Counters agreeing that the Chairman and I would review the
main terms of the contract with him, not as a criticism, or as the Board taking
some kind of position against POCL but as extra support for what would be a
crucial decision on the project. This review was not meant to be a line by line,
word by word, examination of a contract — that was for our lawyers and contract
experts — it was meant to be for the two senior members of the Board to
consider, with Managing Director, whether the broad contract terms were
acceptable to the Post Office in the light of the Secretary of State’s decisions
on finance and the state of the project as reported to us by the Managing
Director and the Project Director. As such the decision to work in this way
received the appropriate amount of Board attention, discussion and then
agreement, by all Board Members on a difficult and important subject.
After this meeting the team were reporting that there had been good progress
on resolving outstanding issues and they expected to accept the system by 18
August 1999. The Chairman and I agreed on the basis of our briefing that
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39.
40.
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POCL should sign the contract with a final acceptance date for the system being
15 November 1999 to allow for any slippage. (WITN0339-1/8 ). However, formal
acceptance was not met on 18 August. While the overall project was more
robust with the resolution of earlier issues reported to the Board in July
(WITNO339-1/14) there was still more work needed to deal with three issues —
improving training for subpostmasters; lock outs and screen freezes and the
quality of some accounting data. ICL did not accept that these were major
issues but agreed to set a new acceptance date of 24 September (WITN0339-
1/8). I cannot remember what the details were of the remaining technical
problems, whilst on the training problems we were expecting that the use of
time from 300 local managers in helping subpostmasters get used to the new
system would be beneficial. In the meantime, the Board requested that the
intention to continue to roll out the trial Offices up to 900 be revisited while work
went on to remedy the software issues. Both the MD POCL and Project Director
Horizon had been present during those discussions and knew what needed to
be done.
In these final months before formal acceptance of Horizon from ICL, in terms of
governance, the Board agreed the terms that POCL were using as the basis for
acceptance. When these acceptance terms were not met by the agreed
deadline, the Board agreed that POCL were correct to refuse to accept Horizon.
Joint teams from ICL and POCL worked on the issues during August and
September and the Board were told that they had been remedied. I have a
recollection that the meeting of POCL and ICL to see if the system could be
accepted was facilitated by the Managing Partner of PA Consultants (who I
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don’t believe I had met) and who was of the clear opinion that the system could
be accepted. I cannot now recall who told me this or how I received the
information but on such an important decision it has stuck in my memory,
hopefully correctly. The Board had never put pressure on POCL to accept the
system merely to meet an arbitrary deadline but were obviously pleased that
the work of both ICL, POCL and an independent senior person from a well-
respected firm of consultants with a reputation in IT and technical matters had
concluded that POCL could accept the system. The system was then accepted
on 24 September and POCL. The meeting of both POCL and ICL to agree that
the system could be accepted was facilitated by the Managing Partner of PA
Consultants who was of the clear opinion that POCL could accept the system.
In the light of this POCL accepted the system on 24 September and authorised
a national roll out of the system with a limit in 1999 of 1800 offices. The roll out
would pause in November and resume in January 2000 at a rate of 300 offices
per week. The report to the Board in October, a month after acceptance of the
system did not mention any technical problems. Implementation of 200 offices
a week, as planned would continue until 8 November when a review would be
made of progress to date (WITN0339-1/15 POL00000354 Board minutes of 26
October 1999). The pause was a sensible approach which enabled a review
of the system and time to fix any faults which might emerge — as was usually
the case with any new IT system.
I have been asked to comment on the robustness of Horizon at this time, my
understanding of any technical issues, my knowledge of problems experienced
by subpostmasters and any concerns raised in regard to any of the above. The
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42.
43.
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Board were reassured at that meeting that the system was robust otherwise it
would not have been accepted. No complaints about the system from staff
were reported to me and it seemed to be running effectively. I did not raise any
concerns while I waited for evidence from the agreed roll out.
I have also been asked to comment on the robustness of Horizon at the time of
the board meeting on 11 January 2002, my understanding of any technical
issues, my knowledge of problems experienced by subpostmasters and any
concerns raised in regard to any of the above _.At the end of the period of
pause, there were still issues of system stability, accounting integrity and the
need for training support (WITN0339-1/16 POL00000336 Post Office Board
minutes of 11 January 2000) but the team expected that these would not hold
up the restart of roll out on 24 January 2000. Accounting integrity was seen as
an issue of training for subpostmasters and one of the needs for increasing
familiarity rather than a technical issue. By this time some thousands of offices
had been equipped with Horizon and no reports of major problems or staff
issues were made to me or the Board or complaints from the National
Federation of Subpostmasters or Communications Workers Union. I felt it
reasonable to assume that the system so far was working satisfactorily given
that 20 years ago (and probably even today) any project of this scale would
expect to meet technical problems and system changes as it was used in day
to day operation.
I have also been asked to comment on the robustness of Horizon of the board
meeting on Consignia of 12 June 2001, my understanding of any technical
issues, my knowledge of problems experienced by subpostmasters and any
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concerns raised in regard to any of the above In the period from then up to
the summer of 2001 as roll out continued I was not aware of any major problems
with the system or issues which were raised at Board level. Nothing was said
to me by the Unions about issues facing their members nor, as far as I can
recall nor did I receive any letters directly from members of staff complaining
about issues with Horizon and in the minutes of its meeting on 12 June 2001
(WITN0339-1/17 POL00021476 Minutes of Consignia 12 June 2001) the Board
noted that 40,000 terminals had been installed and 60,000 staff trained on
Horizon and congratulated the team. We also wanted to move on to
discussions at a future meeting of the marketing potential of Horizon both as a
bank and a supplier to government who were starting to develop a Government
Gateway project for access to all Government services. I do not believe we
would have contemplated those ideas if there had been any concern about the
way the system was operating. Certainly there were no reports coming to me
or the Board of any major problems.
General Comments
44. I have been asked to provide any general comments in relation to the following
areas:
44.1. Any other meetings that I recall were significant in respect of the
procurement, design, pilot, roll out and modifications to the Horizon IT
system
44.2 Any steps to seek reassurance from ICL/Fujitsu in regard to the Horizon
system that I can recall
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44.3. Any political pressures that I can recall in respect of the timing of the roll
out
44.4 Whether I consider there was sufficient knowledge amongst the board in
respect of the governance of an IT project of this sort
44.5 Whether looking back I feel the Board effectively scrutinised the
procurement, pilot and roll out of Horizon
44.6 Any other matters that I consider will assist the Chair
I have set out in the paragraphs above the role of the Post Office Board and
myself in dealing with Horizon. I have commented on all the key meetings I can
remember and mentioned the occasions when I saw the CEO of ICL. Having
by 2001 been the CEO for six years and before that a managing director, I felt
strongly that my role and that of the Board was to set the strategy for counter
automation, monitor its progress, ensure that the business under its managing
director, in this case POCL, had support from the Board whenever required but
not to run the project. Most Board meetings during the period 1999 and 2001
discussed progress with Horizon, any difficulties being faced and the business's
plans to deal with them. It was felt that this was the correct level of governance
given that, in the same way as many companies 25 years ago, the Post Office
and its Board were in the early stages of grappling with IT and were more
dependent than in most other areas of management on its professional IT staff,
consultancy help where appropriate and its contracted suppliers such as ICL.
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46. I have also set out the many contacts with Government and the pressures
leading to the decision to sign the Heads of Agreement set out by the Secretary
of State for Industry. There is no doubt in my mind that the implementation of
Horizon was made more complex by the role of Government as both a customer
(through DSS and the Benefits Agency) and shareholder of the Post Office
Corporation. Some parts of Government would have preferred to move directly
to ACT for Benefit Payments while others, with some responsibility for The Post
Office Corporation, understood the effect such a change could have on the Post
Office network and sub-post offices in particular. It was also clear by May 1999
that while the option favoured by Government was very costly, it was prepared
to agree to the Post Office Corporation financing this in a way which minimised
the overall effect on POCL While there was no overt political pressure to agree
the contract with ICL the alternative of termination was felt by all of us on the
Board as a much worse strategic option for POCL, particularly when views
expressed by Governments about future privatisation being likely to exclude
POCL were taken into account. But after this and the financing issues were
settled, the Post Office was left clearly in charge of the speed of roll out with no
political interference.
47. Within The Post Office Corporation of around £8billion turnover the Board’s role
in governing any major project would fluctuate depending on the issues that
arose. It was also important that that governance did not become so substantial
that the responsibility for the project was taken away from those in the business
whose role it was to deliver Horizon. During the period from 1997 to June 2001
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I believe that, on balance, the oversight of Horizon from those of us on the
Board was sensible and appropriate.
48. I have no papers other than those provided to me by the Inquiry and have tried
to set out as fully as I can my recollections of a period now some 20 plus years
ago.
Statement of Truth
I believe the content of this witness statement to be true.
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Index to First Witness statement of Anthony John Roberts
WITN03390100
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No.
Exhibit Number
Document
Description
Control
Number
URN
1
WITNO339_01/1
Memorandum John
Roberts to Stuart
Sweetman 16 June
1997
POL-0025075
POL00028593
WITN0339_01/2
Counter
Automation
Steering Group 23
July 1997
POL-0028721
POL00031128
WITN0339_01/3
Counter
Automation
Steering Group
minutes of 26
January 1998
POL-0028724
POL00031131
WITN0339_01/4
Post Office Board
minutes 12 May
1998
VIS00007435
RMG00000027
WITN0339_01/5
Letters from John
Roberts Chief
Executive of the
Post Office to lan
McCartney MP
Minister of State
DTI and Frank
Field MP Minister
for Welfare Reform
re. views
POL-0025130
POL00028648
WITN0339_01/6
Post Office Board
minutes of 10
November 1998
VIS00007423
RMG00000015
WITN0339_01/7
Post Office Board
Minutes of 8
December 1998
VIS00007420
RMG00000012
WITN0339_01/8
Post Office Board
Minutes of 14
September 1999
VIS00001327
POL00000353
WITN0339_01/9
E-Mail from Stuart
Sweetman to
Neville Bain, John
Roberts re Horizon
Update on new
agreement 23 Feb
1999
POL-0025085
POL00028603
10
WITNO339_01/10
Letter from Stuart
Sweetman to
POL-0025056
POL00028574
Page 30 of 31
WITN03390100
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Exhibit Number
Document
Description
Control
Number
=
j=
Steve Robson, HM
Treasury 9 April
1999
1
WITNO339_01/11
Letter from Stuart
Sweetman to John
Roberts attaching
Post Office Board
Paper: The Future
for Horizon
(POB(99)o/s,
draft), 5 May 1999
POL-0025100
POL00028618
12
WITNO339_01/12
Letter from Jeff
Triggs (Slaughter &
May) to David
Sibbick, copied to
others, dated
13/05/1999 re
possibility of
litigation in relation
to Horizon.
POL-0027633
POL00038847
13
WITN0339_01/13
Letter from John
Roberts to Mike
Kinski, John Lloyd,
Miles Templeman
and Rosemary
Thorne re letters
exchanged
between PO Board
and Secretary of
State for DTI on
Heads of
Agreement with
ICL, 24 May 1999
POL-0025093
POL00028611
14
WITN0339_01/14
Post Office Board
Minutes of 20 July
1999
VIS00001326
POL00000352
15
WITNO339_01/15
Post Office Board
Minutes of 26
October 1999
VIS00001328
POL00000354
16
WITN0339_01/16
Post Office Board
Minutes of 11
January 2000
VIS00001310
POL00000336
17
WITN0339_01/17
Consignia PLC
Board Minutes of
12 June 2001
POL0000009
POL00021476
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