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Witness Name: Neil William McCausland
Statement No.: WITN10290100
Dated: 06/06/2024
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF NEIL WILLIAM MCCAUSLAND
1, NEIL WILLIAM MCCAUSLAND, will say as follows:
INTRODUCTION
1. was appointed as Senior Independent Director of Post Office Limited (“POL”)
and Non-Executive Director, (“NED”) effective from 22 September 2011 to 30
September 2015. I held the position of interim Chairman of the Board between 1
August 2015- 30 September 2015.
2. This witness statement has been prepared in response to a request from the
Post Office Horizon IT Inquiry (the “Inquiry”) pursuant to Rule 9 of the Inquiry
Rules 2006, dated 15 March 2024 (the “Rule 9 Request”). In this witness
statement, I address each of the questions set out in the Rule 9 Request. I
have been assisted by my legal representatives, Kingsley Napley LLP, in the
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preparation of this witness statement.
BACKGROUND
3. Prior to joining POL, I was employed at Marks and Spencer PLC (“M&S”)
between 1982-1998. I progressed through various leadership roles within M&S
and in 1999, left to take on a role as Managing Director of C&A, a position I held
until 2001. C&A was heavily loss making and needed radical transformation.
Thereafter, between 2001-2002, I took on the role of CEO of NAAFI (“Navy,
Army and Air Force Institute”) a Government-owned business consisting of
shops and pubs for the British Military, which, at the time of my engagement,
was making substantial losses. I developed a strategy which restructured the
business and brought it back to profit. I subsequently became a non-executive
Chairman of a number of retail companies in the early 2000s which included
Snow and Rock, Kurt Geiger, TJ Hughes, Dwell and Floors- 2- Go. I was offered
these positions due to my specialist expertise in turning around loss-making
companies and/or developing retail commercial strategy for fast-growing
companies.
4. I confirm I have no higher education qualifications other than a degree in
Biology I obtained in 1981 from the University of Sheffield.
5. I confirm I do not have any particular expertise or qualifications in accountancy,
Information Technology (“IT”) or law.
6. I was appointed as a non-executive director (‘NED”) and Senior Independent
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Director of POL in September 2011. I retained these positions until September
2015 when I left POL. At the outset of my appointment, I was the sole NED in
addition to Alice Perkins, who was appointed as Chair of the Board in July
2011 ( minutes of the meeting of the Board of Directors, 22 September 2011
(POL00030365). Shortly thereafter, the following NEDs were appointed:
e Virginia Holmes, April 2012 (as reflected in the minutes of the meeting
of the Board of Directors, 15 March 2022 (UKGI00016088);
e Alasdair Marnoch, May 2012 (minutes of the meeting of the Board of
Directors, 23 May 2012 (POL00021507);
e Tim Franklin, September 2012 (minutes of the meeting of the Board of
Directors, 21 November 2012 (POL00027601);
e Susannah Storey, April 2012 (minutes of the meeting of the Board of
Directors, 18 April 2012 (UKGI0001 1499).
7. At the outset of my appointment in 2011, I was heavily involved in the setup of
POL to become an independent company as it was in the process of
separating from the Royal Mail Group (“RMG’”). Thereafter, as a NED, my role
was to assist with the development of POL’s strategy, monitoring performance
and holding the Executive to account. The Post Office was heavily loss-making
and needed huge transformation to develop a sustainable future. In addition,
my responsibilities included ensuring that the risk management system was
robust and the company accounts were scrutinised. In my role as the Senior
Independent Director, I was a sounding board for the Chair, Alice Perkins and
an intermediary for other NEDs. I was also a conduit for the shareholders in
accessing either the Chair or the Executive team.
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8. I held the position of interim Chairman of the Board between 1 August 2015- 30
September 2015. I address this in further detail in my response to question 59.
9.1 have continued to be a NED/Chairman since leaving POL. Over the last
decade I have migrated more towards roles in healthcare rather than retail as
I have found it more rewarding. The companies I have worked for since leaving
POL include:
e Skin Clinics: 2006 to 2019 (SKN Holdings Ltd);
e Joules: 2013 to 2018 (Joules Investment Holdings Ltd);
¢ Create Fertility: 2013 to 2021 (Create Health Global Ltd);
e Karen Millen: 2015 to 2019 (Karen Millen Holdings Ltd);
e Westerleigh: 2019 to present (Westerleigh TopCo Ltd);
e PHL: 2022 to present (PHL Group HoldCo Ltd).
POL CORPORATE GOVERNANCE AND MY ROLE AS A NON-EXECUTIVE DIRECTOR
10. I was headhunted by a recruitment firm for the position of NED of POL. I believe
I was interviewed for the position by Donald Brydon, who was the Chair of the
RMG at the time. I also believe that I was interviewed by the Head of the
Shareholder Executive (“ShEx”) and Alice Perkins.
11.1 was recruited primarily to assist POL modernise its business and to help it
become more financially sustainable by reducing their annual loss and
developing an independent infrastructure to allow it to operate as a
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12.
13.
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standalone company separate to the RMG. At the time that I joined, POL
was in a state of flux with its imminent separation from the RMG. The scale
of the transformation needed was huge which made it a very challenging role.
Although my recollection of the interview process has waned over time, I am
confident that at no stage during any of the recruitment interviews or
subsequent induction meetings or briefings was there any mention of Horizon
as an issue.
When I began my tenure as NED, I was heavily involved in overseeing the
setting up of POL as an independent business. After 2012, when POL became
an independent company, the majority of my time as a NED was spent
overseeing commercial projects, including the development of new products
such as Mails, Government services, Payment services, Financial services
and Telephony, in addition to also reconfiguring distribution channels,
slimming down the Crown Network, reconfiguring the main and local Post
Offices through Network Transformation and growing the digital capability of
POL. In addition to this, I oversaw the slimming down of POL’s cost base and
helped develop a refreshed strategic plan to include obtaining associated
Government funding and preparing for the possibility of mutualisation. All of
these projects were vital for POL to modernise and help it become financially
stable by reducing its annual loss and developing an independent
infrastructure from the RMG. It was a difficult time to join POL, given the state
of flux and the great many changes that needed to be made. I believe I was
recruited to the Board given my particular skillset in retail and in commercial
transformation.
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14.
15.
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All of the POL Directors (NED and Executive members) shared the usual
directorial responsibilities, which included compliance with the Companies
Act 2006 i.e. acting within our powers, promoting the success of POL,
exercising independent judgement, reasonable care, skill and diligence.
The Board was responsible for providing independent oversight and
constructive challenge to all actions undertaken by POL, this included
prosecutions. Criminal and civil litigation, either by or against POL, would be
considered at Board meetings. There was a standing Significant Litigation
Report which would be provided in the Board papers in advance of each
meeting and the Board would be updated verbally by either Paula Vennells,
Chief Executive Officer, (“CEO”) or General Counsel. There was not a focus
on prosecutions by the Board until after the publication of the Second Sight
Interim Report. Following this it was agreed that previous prosecutions would
be reviewed by POL’s external legal team and new prosecutions would be
paused. Towards the end of 2013, the Board and the Audit Risk &
Compliance Committee (“ARC”) were asked to review POL’s Prosecution
Policy. I have provided further detail in relation to this later in my statement.
I have been asked to comment on the Board’s oversight of POL’s IT. The
Board was aware that POL’s IT systems were underinvested. Many were
approaching end of life/end of contract, were expensive to run and were not
particularly user friendly and so time was spent reviewing options to improve
the IT architecture and functionality. Whilst this was not a standing item on
the Board agenda, it would be discussed on a planned review basis — as was
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16.
17.
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the case for many topics. This was led by the Chief Information Officer and
a lot of work was done to develop a new IT strategy based on splitting the
functionality into four “towers” under a service integrator (an application and
infrastructure tower, a data centre tower, an end user computing tower and a
network tower). This was designed to give a better, cheaper, more robust IT
architecture to cope with the future shape of the Post Office. The Horizon
contract with Fujitsu ended in 2015, and was expensive costing around £65
million per year. But in addition, there were 60 other small suppliers. This
new strategy would result in a more balanced and less risky supplier network.
As a part of this, Horizon was planned to be replaced/renewed, (although that
was planned for after I left the Post Office).
As to the Board’s oversight of accounting systems, these formed part of any
audit which would check controls. The audit plan and report were primarily
considered by the ARC Committee and were subsequently reported to the
Board. These audits were undertaken by the RMG/POL Internal Audit
department and also by the external auditors Ernst and Young. I cannot recall
how frequently these audits would take place. I was a member of the ARC
committee from its inception. The first ARC meeting took place on 23 May
2012 (POL00021431). Alasdair Marnoch was the Chair of the ARC committee
due to his background in accountancy. Tim Franklin also became a member
due to his background in banking and finance. Susannah Storey was also a
member for a period of time. Whilst I was an active member of the ARC
committee, I deferred to Alasdair Marnoch and Tim Franklin's expertise in
accountancy. In relation to any ARC discussions regarding audits of the
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18.
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accountancy processes, these would involve the auditors Ernst and Young
whose role would be to check the integrity of those systems and feedback to
POL in audit meetings and/or the RMG/POL internal audit team. It became
apparent from Ernst and Young's audit report in 2011 that there were some
minor controls that needed improving — which was acted upon. I recall being
assured by Ernst and Young’s Audit Partner (Angus Grant), the CFO (Chris
Day), the COO (Mike Young) and the Chief Information Officer (Lesley
Sewell), that the integrity of the accounting systems was sound, albeit slow
and clunky. Given that I am not an expert in either IT or accountancy, I
deferred to their expertise on these issues.
As to POL’s compliance with the Equality Act 2010, on a scheduled basis
throughout the financial year, the Human Resources Director of POL would
attend meetings to address the Board and outline POL’s compliance with all
HR legislation — including the Equality Act 2010. To the best of my
recollection, I cannot recall any concerns being raised regarding POL acting
in contravention of the Equality Act 2010 during my time as NED.
I have been asked to summarise the corporate structure of POL and RUG
when I joined as a NED. When I joined POL in September 2011, it formed
part of the RMG. The first six months of my appointment were focused on
setting POL up as an independent business separate from the RMG. The
task was not straightforward as the RMG and POL were sometimes in conflict
in negotiating the separation of the two companies and I was heavily involved
in overseeing the creation of a Distribution Agreement and a Master Services
Agreement, which set the future commercial structure between the two
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companies. This posed a unique set of challenges to myself and Alice
Perkins. During the first six months POL was not independent and was still
part of the RMG. Thereafter, there was a transitional arrangement allowing
POL to continue to use some of RMG'’s infrastructure until it built its own.
20. I have been asked to summarise how the POL and RMG Boards operated
when I became a Director.
21. Due to the planned separation of the companies, POL’s Board started
operating almost immediately after I joined, even though it did not have legal
authority until April 2012. Therefore, I did not have any involvement with the
RMG Board and have therefore only provided details in respect of the POL
Board. Accordingly, references in this witness statement to “the Board” refer
to POL’s Board exclusively. The Board met at least eight times a year. There
would be additional Board meetings as necessary to discuss any particularly
time critical issues. These were usually held by telephone conference. In
addition to Board meetings, we would also have at least one Strategy Day
every financial year, the purpose of which was less about monitoring
performance and more about setting and refining the future strategic direction
of the Company. All Board meetings were minuted as well as the Strategy
Day.
22. Alice Perkins was a strong and hardworking Chair, who set a clear agenda
and kept meetings running to time. To the best of my recollection, she
ensured that everyone around the table had their say, but ensured that no
one particular person was overly dominant. I recall there was always a
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23.
24.
25.
26.
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healthy amount of challenge and debate amongst members of the Board.
The Board agenda would be determined by Alice Perkins as Chair, in
consultation with the Company Secretary, Alwen Lyons and Paula Vennells.
There was a planned rolling sequence of topics which were on the agenda
for the Board to discuss, in addition to the standing regular items. This rolling
sequence encompassed all of the major transformation projects (the products
we sold and the distribution channels and also the main infrastructure items
such as IT and the cash supply chain). For all these topics, the relevant
member of Paula Vennells’ Senior Leadership Team would write a report for
the Board pack and attend in person to discuss it. As such the Board had
regular meetings with the members of the Senior Leadership Team.
The minutes of the Board meetings set out who attended each Board
meeting. Board meetings were regularly attended by all six NEDs, i.e. Alice
Perkins, myself, Virginia Holmes, Alistair Marnoch, Tim Franklin, Susannah
Storey in her capacity as ShEx, followed by her replacement, Richard Callard
from April 2014. Also regularly in attendance would be the two Executive
Directors - the CEO, Paula Vennells and the Chief Financial Officer,
(originally Chris Day until November 2014, followed by his replacement
Alisdair Cameron in January 2015) and the Company Secretary, Alwen
Lyons.
The frequency by which each subcommittee would meet would be spelt out
in their terms of reference. For the subcommittees of which I was a member,
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the ARC Committee would meet at least three times a year, the Nominations
subcommittee at least twice a year and the Remuneration subcommittee at
least three times a year. Whilst strictly not a subcommittee, the Post Office
Advisory Council (“POAC”) would meet at least three times a year. In reality,
as can be seen in the annual report, there were more subcommittee meetings
than the minimum requirement. For example, in 2013-2014, I attended eight
Board meetings, five additional Board meetings, six ARC meetings, six
Nominations subcommittee meetings, and five Remuneration subcommittee
meetings.
The Remuneration Subcommittee
. Iwas Chair of the Remuneration subcommittee and the other members were
Alice Perkins and Virginia Holmes. The Remuneration subcommittee was
responsible for making recommendations to ShEx on the remuneration
packages of the Executive Directors. This would involve reviewing policy and
packages for each member of the Senior Leadership Team who reported to
the CEO. We used an external consultancy firm, New Bridge Street, to
benchmark the POL remuneration packages against external organisations
which assisted us with setting remuneration levels. No material change could
be made to any of the Executive Director's remuneration packages without
the consent of ShEx. As Chair of the Remuneration subcommittee, I did the
majority of the work in preparing the materials for these meetings and leading
the discussions.
The Nominations Subcommittee
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28. The Nominations subcommittee was chaired by Alice Perkins. Virginia
Holmes and I were also members. The Nominations subcommittee was
responsible for reviewing the structure and composition of the Board and
making recommendations for change where necessary. The Nominations
subcommittee was also responsible for managing the process for both the
recruitment and replacement of Directors. In addition it was responsible for
overseeing the process of Board evaluation, where the performance of the
Board and its subcommittees was carried out.
The Audit, Risk and Compliance Committee (“ARC”)
29. As set out at paragraph 18, ARC was chaired by Alasdair Marnoch with
myself, Susannah Storey and Tim Franklin also members. Alice Perkins was
a member initially until Tim Franklin was recruited. ARC was responsible for
reviewing POL’s financial reporting which included a review of POL’s
accounting, accounting policies and internal financial controls. A second key
responsibility of ARC was the promotion and development of a risk
management framework suited to the complex nature of POL’s business. This
involved ensuring that the Executive established an effective framework
considering POL’s risk appetite, the actual risks that were identified and the
mitigating factors and then embedding this framework across the organisation.
ARC also reviewed the half year trading statement and the full year accounts
to assess the validity of assumptions made and the accounting policies. The
Terms of Reference for the ARC (version dated November 2013 and approved
by the Board on 26 March 2014) are at POL00423344.
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30.
3
32.
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The Pensions Subcommittee
This was chaired by Virginia Holmes. I was not a member of the Pensions
subcommittee and do not have a recollection of the Terms of Reference.
The Financial Services Subcommittee
. This was chaired by Virginia Holmes. I was not a member of the Financial
Services subcommittee and do not have a recollection of the Terms of
Reference.
The Sparrow Subcommittee
This was chaired by Alice Perkins and members included Alasdair Marnoch
(CFO), Richard Callard (ShEx) Paula Vennells (CEO) and Chris Aujard. I was
not a member of the Sparrow subcommittee.
The Sparrow subcommittee was established in April 2014. The Sparrow
subcommittee was set up to keep under review the progress of Project
Sparrow and undertake any other oversight function delegated to the
Committee by the Board as can be seen in the Project Sparrow Terms of
Reference (POL-00025794).
The Post Office Advisory Council (“POAC”)
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34. In addition to the subcommittees highlighted above, there was also POAC.
Whilst not strictly a subcommittee of the Board, POAC was established to
provide a forum for Post Office Stakeholders and other experts to discuss
issues of importance that impacted on customers, stakeholders and their
communities, as can be seen in the POAC Terms of Reference
(POL00228475). I was a member of this committee alongside Tim Franklin
who acted as Chairman. The idea behind POAC was to enable the Company
to better hear the views of SPMs and customers and to try and improve
engagement and workplace culture. I was a member of this committee
alongside Tim Franklin who acted as Chairman. POAC was established in
2014 and was set up to help create a pathway to mutualisation, where all the
stakeholders - POL employees, SPMs, customers and wider stakeholders-
worked collaboratively to improve the company for the good of all.
35. The Board packs of each Board meeting would detail the reports submitted
to each meeting. Board meetings would generally run for most of the working
day. Prior to each Board meeting, each member would receive a board pack,
which would generally consist of well over 100 pages. Software called Board
Pad was used to manage the business of the Board. The pack would have
a summary report from the CEO on POL’s priorities in addition to the monthly
management accounts. There were regular reports of the main business
priorities. The Board would also be addressed on a regular rotating basis by
members of the Senior Leadership Team on an array of projects, examples
included:
e Separation of POL from the RMG;
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¢ The Crown Network;
e Network Transformation;
e Direct digital capability;
e Mails;
* Government services;
e Banking and payment services;
e Financial services;
e Telephony;
e Customers and staff;
e IT;
e HRand people;
e Cash supply chain.
36. Board packs would also include reports from various subcommittees that had
met in the intervening period. Generally, these would include the minutes
from each subcommittee meeting followed by a verbal update from the Chair
of said subcommittee. Minutes of previous meetings were also included in the
board pack.
37. I have been asked to comment on the level of technical IT expertise of those
attending the Board. I am not a technical IT expert, nor am I an expert in
accounting. The Board would be addressed by the Chief Information Officer,
Lesley Sewell, who would report centrally through the Chief Financial Officer
to the Board. I confirm I have never had any training on IT and I’m a relatively
low-level user. I am not able to comment on the technical IT expertise of other
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members of the Board.
38.1 have been asked to comment on how members of the executive
management team would report to the Board if they were absent from Board
meetings. From my recollection, all members of the executive management
team did report on their projects or work streams at the Board meetings.
There would be a report from them included in the Board pack. They would
also be expected to attend that Board meeting to summarise and answer any
questions from the Board.
39. The POL executive management team all reported either to the Chief
Executive Officer, (“CEO”) Paula Vennells, or the Chief Financial Officer,
(“CFO”), Chris Day/Alisdair Cameron. Members of the executive
management team would regularly attend Board meetings and report from
their own work areas and answer questions from the Board. To the best of
my recollection, the majority of the NED’s contact with the executive
management team was through either the CEO or the CFO, or at Board
meetings. However, whilst there was no formal reporting line, there was a fair
amount of contact between the executive management team and NEDs
between Board meetings. For example, I personally would have had a lot to
do with the Human Resources Director in preparing for the Remuneration
subcommittee meetings and the Human Resources Director would then also
be in attendance for part of those meetings.
40. There was no reporting line from the POL Executive team or POL Board to
the RMG after the companies separated in April 2012. Before that time,
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Paula Vennells did report to the CEO of the RMG.
41. There was no reporting line from the POL Executive team or POL Board to
the Government other than through the ShEx, which would be either
Susannah Storey or Richard Callard depending on the time period in
question.
42. I have been asked to set out the extent to which I dealt with, or were involved
in oversight of the RMG or POL legal department.
43.1 did not deal with, or have any involvement in the RMG legal department.
44. In respect of POL’s legal department, the only involvement I had was in the
review of documentation at Board or ARC meetings via General Counsel.
General Counsel would provide the Board with a Significant Litigation Report
which would be tabled at each meeting. Whilst I know I would have
questioned and or challenged General Counsel on any particular part of their
report that caused me concern, I deferred on the whole to their expertise
given that I have no particular legal knowledge or expertise.
45. I have been asked to set out the extent to which I dealt with, or were involved
in oversight of the RMG or POL's IT departments.
46. I did not deal with, or have any involvement in, the RMG IT department.
47. In respect of POL’s IT department, my dealings were via the Chief
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Information Officer at Board meetings or Strategy Days.
48.1 have no particular skill or expertise in IT and any challenge by me or
questioning of the information presented to me by Lesley Sewell would
therefore be limited.
49. I have been asked to set out the extent to which I dealt with, or were involved
in oversight of the RMG or POL’s problem management team.
50.1 did not deal with, or have any involvement in the RMG problem
management team.
51. In respect of POL, I am unaware of what the ‘problem management team’ is.
52. Moreover, I did not deal with, or have any involvement in RMG’s
Management Security and or Investigation department.
53. In respect of POL, I can only assume the Inquiry is referring to the individuals
responsible for the investigation in shortages and/or anomalies in the branch
accounts. I was not involved in that process. Whilst there may be some
reference to anomalies in accounts within Board minutes, these would be
addressed directly by either General Counsel or Paula Vennells.
54. I have been asked to set out the extent of my knowledge and/or involvement
in the oversight of the investigation and prosecution of SPMs for theft, fraud
and false accounting for alleged shortfalls in branch accounts.
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55. During my recruitment process, I had no knowledge, whatsoever, with
regards to the investigation and prosecution of SPMs for theft, fraud or false
accounting and/or for alleged shortfalls in branch accounts. The vast majority
of criminal prosecutions against SPMs in relation to theft, fraud and false
accounting and/or alleged shortfalls in branch accounts had occurred before
I joined POL.
56. In or around May 2012, the issues reported around Horizon increased which
were reported to the Board via the CEO and General Counsel. It was at this
stage that POL agreed to appoint a forensic accountant to investigate the
SPM’s complaints (POL00021507). This led to the instruction of Second Sight
Support Services Ltd (“Second Sight”) and the subsequent Working
Group/Mediation Scheme. During this time, as a member of the Board, I
received regular updates on Horizon issues. In April 2014, the Board agreed
to the formation of the Sparrow subcommittee (of which I was not a member),
and so after that time I was less involved in the detail, although the Sparrow
subcommittee would report directly to the Board on matters concerning the
investigation and prosecution of the SPMs.
57. My involvement regarding the recovery of alleged shortfalls in branch
accounts was primarily as a member of ARC, where in particular we
discussed the future Prosecutions Policy in late 2013/early 2014 and made
recommendations to the Board to “soften” the POL policy.
58. I have been asked to describe any material change to the corporate structure
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of POL or the operation of its Board. During my four-year tenure as a NED,
the only substantive change to the corporate structure of POL was its
formation as an independent company in April 2012. In addition, there were
people changes and/or the formation or breaking up of subcommittees. By
way of example, there were “people-changes” such as the CFO changing
from Chris Day to Alisdair Cameron in January 2015. The creation of a new
subcommittee would inevitably affect the operation of the Board, as that
subcommittee would usually form a standing agenda item at any Board
meeting.
59. As to how the Government maintained oversight of POL during my time as
Director, throughout my tenure as a NED, once POL became an independent
company, there was always a ShEx NED on the board of POL. Originally that
was Susannah Storey in 2012 and she was subsequently replaced by
Richard Callard in 2014. The ShEx NED completed their duties as a company
director in the usual way. They maintained oversight of POL’s activities and
directly fed back to the head of ShEx and ultimately the Minister. As far as I
am aware, Susannah Storey and/or Richard Callard would have had access
to any material they required. They were also permitted to be on any of the
sub-committees they wished to join.
60.1 had confidence in both Susannah Storey and Richard Callard’s abilities.
They were knowledgeable, robust and not afraid of asking difficult questions.
KNOWLEDGE OF THE INTEGRITY OF HORIZON
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61. When I commenced my appointment with POL, I had no knowledge of Horizon
at all — much less problems or complaints with it. Over time, I became aware
that Horizon was clunky and not particularly user friendly and that some
controls needed improving. After the Second Sight interim report in 2013, I
became aware that the “broader Horizon system” needed improvement —
particularly the training and support, although from the information that was
made available to me I still believed that the software was sound and not
responsible for the losses reported by the SPMs.
62. Initially I was unaware that Fujitsu employees had the ability to remotely
access and alter SPM’s branch accounts. After the Second Sight review I
became aware of the allegations that this could happen, but was reassured
that in the rare instances where this did happen, it would be visible and
transparent to the SPMs. This issue was raised further when I read the
Deloitte Board briefing dated 4 June 2014 (POL00130618). I have addressed
this in more detail later in my statement.
63. At no stage did I receive any training with regards to the Horizon system.
64. The Horizon system was discussed very regularly at Board meetings. The
executive management team, particularly the General Counsel and the CEO,
but also the CFO and CIO repeatedly reassured the Board that the Horizon
system was fit for purpose. I and the rest of the NEDs asked questions
regularly probing the soundness of Horizon and we commissioned further
work to be undertaken in respect of this i.e. the instruction of Deloitte in April
2014. After the Second Sight Interim report, it became clear that the broader
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definition of the Horizon system showed shortcomings particularly in training
and support which I spent time learning about through the Business Support
Programme, though I always believed that the software was fundamentally
sound.
65. I was not involved in the RMG Board and so cannot comment on what
discussions they had regarding the reliability of the Horizon system.
INITIAL PERIOD OF APPOINTMENT AT POL
66. I was appointed by the Board as Senior Independent Director of POL, effective
from 22 September 2011 as set out in the minutes of the Board of Directors
(POL00030365). The terms of my appointment were confirmed in writing on
27 September 2011, which I accepted on 3 October 2011 (UKGI00017932).
67. As reflected in the minutes of the Board meeting dated 22 September 2011
(POL00030365), at the outset of my appointment, POL remained part of the
RMG with changes to the RMG structure and the POL Board underway. At
that time, Paula Vennells was the Managing Director of POL and reported to
the Chief Executive Officer of the RMG, Moya Green. That arrangement
continued until POL became independent of RMG on 1 April 2012.
68. At the time of my appointment, the Board was comprised of Donald Brydon
(Chairman of RMG), Alice Perkins (NED of POL), Les Owen (NED of RMG),
Paula Vennells (Managing Director of POL), Chris Day (CFO of POL), Alwen
Lyons (Company Secretary for POL) and Jon Milledge (Company Secretary
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for RMG). At the conclusion of the meeting of the Board of Directors on 22
September 2011, Donald Brydon resigned as Chairman and Director of the
Board and Alice Perkins was approved as Chairman.
69. When POL became independent, Paula Vennells became the CEO of POL
and Les Owen retired from the Board on 15 March 2012 as can be seen in the
minutes (UKGI00016088). Virginia Holmes and Susannah Storey were
appointed as NEDs on 4 and 18 April 2012 respectively (UKGI00011499).
Finally, Alasdair Marnoch was appointed as a NED on 23 May 2012
(POL00021431).
70.The ARC held its first subcommittee meeting on 23 May 2012
(POL00021431). The focus of that first meeting related to Ernst & Young's
preliminary conclusions on POL’s financial position for the financial year end
25 March 2012. The Executives present had all been with POL for some time,
albeit as part of RMG, however the NEDs present (Alasdair Marnoch, Alice
and myself) were still learning about POL and so were keen to understand the
auditor's (Ernst and Young) view of controls.
71. I have been asked to set out my recollection of the 22 September 2011 Board
meeting, in particular my recollection of the nature and purpose of my
interventions regarding POL’ sIT, and the nature and extent of my knowledge
and involvement with the IT and audit issues arising from the 2010/2011 Ernst
and Young Report. The minutes of the Board meeting of 22 September 2011
reflect that I was not formally appointed to the Board on this date as my
appointment was subject to final sign off by the Shareholder (POLO0030365).
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Non-Directors are described as “in attendance” rather than “present” on the
front-sheet of the minutes.
72. As I was an observer of this particular Board Meeting, I cannot recall if I
received the Board Pack in advance of the meeting or if I was provided with
documents on the day. I cannot recall being given access to the Ernst & Young
Audit report at that meeting.
73. In response to the Technology Update at POLB11/45 on page 5 of the
minutes, I queried if the IT architecture for supporting the Network
Transformation was clearly defined. I had been given some briefing on the
scale of Network Transformation, but I had no knowledge of the IT implications
of it. I also requested that the intellectual property ownership be checked to
ensure there was no risk in the Fujitsu contract. The purpose of my asking
these questions was to try and improve my knowledge and understanding of
POL’s IT and get up to speed with the workings of the business quickly. I also
wanted confirmation on who owned the intellectual property for Horizon as it
was unclear to me from the discussion whether this belonged exclusively to
Fujitsu or the RMG. I also queried whether POL required replacement colour-
screen pin pads across all Post Office branches as there was a significant
price discrepancy between colour-screen pin pads versus those with non-
colour screens and I wanted to be clear that we were not over-specifying the
pin-pads.
74. I have been asked to describe the extent of my knowledge and involvement
with the IT and audit issues arising from the 2010/2011 Ernst and Young
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Report. I had no knowledge or involvement with this prior to my appointment
as a Senior Independent Director. The Ernst and Young Report and the IT
audit were ongoing pieces of work at the time of my appointment to the Board.
My recollection is that the existing members of the Board were knowledgeable
on both topics and that the projects in relation to the audit issues were nearly
complete and so I was listening to those discussions to get up to speed.
75.1 cannot recall the Board’s discussions regarding the implementation of
SAS70 audits in any detail (see the IT Audit Update (POL00029438). I have
refreshed my memory from the minutes from 22 September 2011
(POL00030365) and I recall there was an intention to move to SAS70 by the
end of 2012, however, I do not recall having any particular involvement or
oversight of these issues and would not have contributed to this debate. This
is because this particular project was nearly complete and my focus instead
would have been on defining the new relationship between POL, the RMG and
the Government which included (but was not limited to) the drafting of articles
of association for POL and the creation of a distribution agreement between
POL and the RMG.
76. I have been asked to set out my recollection of the 10 November 2011 Board
meeting, in particular the purpose of my intervention relating to POL’s dealing
with Fujtisu. Unfortunately my recollection of this meeting is limited due to the
lapse of time. I therefore defer to the contents of the minutes produced at
POL00021502. Having reviewed those minutes, I believe that the pin pads I
had questioned at the Board Meeting of 22 September 2011 had subsequently
been ordered and signed off by the RMG Investment Committee. I had two
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concerns regarding this. First, from a process/governance point of view, I
wanted decisions of this nature to be signed off by the POL Board going
forward, in addition to RMG, given its imminent separation from the RMG and
the “transitional” six months. Also, I was concerned that we were potentially
over-specifying the product, as we were buying expensive colour screen pin
pads to put everywhere and I questioned whether smaller post offices would
be ok with the much cheaper black and white pin-pads. I was also questioning
if the 17% margin seemed potentially high given that this was bulk
procurement of a standard product. So, my interventions were to try to ensure
that POL adhered to a comprehensive procurement process which achieved
best value for money, and for the contract with Fujitsu in respect of these pin-
pads to be revisited to see if there was scope for reducing the costs to the
business. I don’t recall issues of this type being repeated during my tenure on
the Board.
. I have been asked to set out my recollection of the 12 January 2012 POL
Board meeting, in particular the background to the discussion recorded at
POLB12/03(c) within minutes POL00021503. Again, due to the lapse of time,
I have no independent recollection of this meeting. For the same reason, I
have no independent recollection of the discussion recorded at POLB12/06.
From reading the minutes, I think this discussion was about the clarity of
delegated authorities from ShEx vs the decisions that ShEx would need to
approve and also the subcommittees of the Board that were proposed to be
formed. I do not remember any discussion about the responsibilities for POL’s
legal department in this meeting.
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78. I have been asked to comment on the nature and extent of my knowledge of
the claims intimated by Shoosmiths/ Access Legal at this time. To the best of
my recollection, I had not been provided with the letter of claim from
Shoosmiths dated 23 August 2011 (POL00046944) prior to receiving it as part
of the disclosure provided by the Inquiry in relation to my Rule 9 request. I note
that the date of this document pre-dates my appointment to the Board. I do not
recall (and the Board Meeting minutes reflect) that the Board were provided
with any information and/or were involved in any discussions regarding any
claims intimated by Shoosmiths/Access Legal prior to the Board Meeting of 12
January 2012 (POL00021503).
79. \n preparation for that Board Meeting, the Board were provided with a
Significant Litigation Report authored by Susan Crichton, dated January 2012
(POL00095595). The Significant Litigation Report informed the Board that
POL had received four letters before action from a firm acting for former SPMs
who were dismissed when discrepancies between their branch accounts and
cash positions were discovered. We were advised that two of the four
claimants had previously pleaded guilty to false accounting in criminal
prosecutions brought by POL and that each SPM alleged wrongful termination
of contract “based on alleged failings in POL’s processes and computer
system”. The Board were advised that the “considered legal view is that the
Claimants are unlikely to succeed”. I do not recall anyone expressing a
contrary view to this but I am confident that members of the Board would have
questioned Susan Crichton as to the basis for her conclusion that the legal
claims were weak. The content of the Significant Litigation Report remained
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largely unchanged by April 2012.
80. I note that in the meeting minutes of 12 January 2012, (POL00021503), Susan
Crichton informed the Board that the SPMs were challenging the integrity of
the Horizon system. She did not provide any further detail as to the nature of
those challenges beyond confirming that the Horizon system had been audited
by RMG Internal Audit with those reports being reviewed by Deloitte. She
informed the Board that the audit report was “very positive” which I was
reassured by. Susan Crichton confirmed she would seek permission from
POL’s external legal team to disclose Deloitte’s audit report to the Board.
Whilst I do not believe that I had seen the audit report at this stage, I was not
overly concerned as I had been assured by Susan Crichton that RMG’s
internal audit had been reviewed by a reputable external provider (Deloitte)
who had not identified any issues.
8
. I recall that at the majority of future Board Meetings the Board would be
provided with a Significant Litigation Report which became a standing
document in the Board Pack. There would be regular discussions about
Horizon which led to further reviews of the system (addressed in more detail
below). In circumstances where the Board were repeatedly assured by Paula
Vennells, Lesley Sewell, Susan Crichton, Fujitsu and via various audits
(internal and external) that Horizon was robust and not responsible for the
discrepancies in accounting reported by the SPMs, no “red flags” presented
themselves to me during the time period in question.
82. I have been asked to explain why Susan Crichton sought to “clear the audit
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83.
84.
85.
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report with the external lawyers”. From reading the minutes, I believe Susan
Crichton is referring either to the RMG internal audit report or to the Deloitte
Report which reviewed the internal audit. I do not know what Susan Crichton
meant by her comment.
I have been asked to comment on to what extent I or other members of the
Board challenged the positions of senior managers as to the strength of the
legal claims. As set out above, I have no independent recollection of the
discussions recorded in the Board Meeting of 12 January 2012
(POL00021503). I note from those minutes that in relation to the Significant
Litigation Report, Les Owen sought assurance that there was no substance to
the claims brought by the SPMs and the Board were assured that Horizon had
been audited internally and the result reviewed by Deloitte, with positive
results. In support of this claim, the Board were also advised that the business
had been successful in every criminal prosecution it had brought which relied
on evidence taken from Horizon. I found this reassuring in terms of what we
were being told about the integrity of the system.
Whilst I cannot recall specifically challenging Susan Crichton at this meeting,
I believe the Board must have probed her statements as to the integrity of
Horizon, as I expect this triggered her offer to explore disclosing the audit
report to the Board.
At the Board Meeting of 15 March 2012 (UKGI00016088) at POLB12/41(c),
we were advised that Alice Perkins and Alwen Lyons had met with James
Arbuthnot MP, at his request, to discuss the SPMs’ concerns over Horizon.
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The Board were advised that a further independent review of Horizon may be
required.
86. I note within the Board Meeting Minutes dated 23 May 2012 (POL00021507)
at POLB12/69, there is reference to Paula Vennells’ update to the Board
following her and Alice Perkins’ meeting with James Arbuthnot MP and Oliver
Letwin MP. I confirm that at no stage during that update was the Board
informed of the SPMs’ concerns that their accounts on Horizon could be
remotely accessed. It was agreed by the Board that given the SPMs' concerns,
a further independent investigation should be undertaken by a Forensic
Accountant. This is what led to the instruction of Second Sight, addressed in
more detail below.
87. Whilst I am confident that myself and members of the Board questioned and
challenged the findings being reported by Paula Vennells, Susan Crichton,
Chris Day, Lesley Sewell and others, we were repeatedly assured that Horizon
was not responsible for the losses reported by the SPMs; a position that was
corroborated by a number of internal and external audits. Without any
particular expertise in accountancy or IT, my probing of those conclusions
would inevitably be more limited than those with the specialist expertise
instructed to undertake the audits. I did not disregard the SPMs’ complaints as
unimportant, but I was not presented with any cogent evidence that led me to
question the veracity of what was being reported at Board meetings. Moreover,
as part of my role as a Senior Independent Director of POL, I would regularly
visit Post Office branches, sometimes unannounced, to discuss various issues
with SPMs. Whilst it’s right to say that the SPM I spoke to would complain
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about the functionality of Horizon (describing it as clunky and not user-friendly)
I cannot recall a single SPM I spoke to who raised any concerns about the
integrity of Horizon being responsible for causing losses.
88. I have been asked why Les Owen resigned as a NED. Les Owen resigned
from the Board effective from 15 March 2012. He had held his position on the
Board on behalf of the RMG. He had remained on the Board to assist POL
with its transition in becoming independent from RMG. Les Owen resigned at
the final Board meeting prior to the legal separation of the two entities. As far
as I am aware, he remained on RMG’s Board for at least twelve months
thereafter. He could not have remained on POL’s Board during this period as
it would have presented a conflict of interest.
89.1 have been asked to consider page 91 of UKGI00011499 and set out the
nature and extent of my knowledge (or the Board’s oversight of) the Assurance
Review. In March 2012, RMG’s Internal Audit and Risk Management
department undertook a review of the robustness of Horizon. I do not know
specifically who requested this review, but I am confident that it was welcomed
by both the RMG Board and the newly formed POL Board as we all wanted
reassurance that Horizon was not to blame for the discrepancies reported by
the SPMs. I was provided with the Assurance Review as part of the Board
Pack for the Board Meeting of 18 April 2012 (UKGI00011499). Whilst that
review identified the need for improvements to Horizon, it did not indicate that
Horizon was in any way responsible for the discrepancies reported by the
SPMs.
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90. I have been asked to describe the discussion recorded at POLB12/60 of the
Board Meeting Minutes dated 23 May 2012 (POL00021507). I have no
independent recollection of this discussion and I therefore defer to the content
of the minutes. I concur with Susannah Storey’s summary of the role of the
ShEx and it reflects the responsibilities I've outlined in paragraphs 59-60 of my
statement. I don’t recall any conflicts of interests arising beyond discussions
regarding funding. In that scenario, the Board would request that the ShEx
member recuse themselves from the Board meeting so that this could be
discussed privately.
THE INSTRUCTION OF SECOND SIGHT
91.1 have been asked to describe my and the Board’s key priorities from June
2012 to May 2013. At the outset of this period, POL had very recently
separated from the RMG which resulted in a number of changes to personnel
on the Board (see my response to question 5). The NEDs were therefore
learning how to work effectively with one another and the Executive.
92. The key priorities for the Board during this period can be summarised as
follows:
e Strategy and Business Transformation Change Projects: The Government
had agreed to fund a £1.3 billion transformation programme, which allowed
POL to transform the network by modernising and growing the services
offered by POL, whilst maintaining the size of its branch network. This
included reviewing and improving all the products sold by the Post Office -
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Banking, Postal, Government services, Telecoms and Energy. The
rationale behind this transformation project was to enable POL to
significantly reduce its reliance on the annual Government subsidy by 2015
and create a sustainable future. As such, there were many sub-projects
that were ongoing during this period reviewing not only what POL sold, but
how those services were sold, for example Network Transformation and
the Crown Offices. Efficiency and cost control remained a big priority with
projects such as IT transformation and the cash supply chain. Given the
size of this overarching Business transformation programme, the individual
projects were regularly discussed at Board Meetings and incurred
considerable time and effort.
At the beginning of 2013, it became clear that the overall Transformation
programme was over-ambitious in places and lacking ambition in others.
This led to a revision of the strategy, for example in relation to Mails we
opted for a greater focus on parcels and less emphasis on letters.
Governance: Improving POL’s Governance structures was key so that the
necessary structures were in place to enable POL to operate as an
effective independent company (within the ownership of ShEx) and to lay
the groundwork for POL to potentially become a mutual in the future. The
subcommittees of the Board were being formed during this period, such as
the ARC, Remuneration, Nominations and Pensions subcommittees and
then later the Financial Services and Sparrow subcommittees.
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e Finance/ Performance: Improving the financial performance of POL. The
NEDs worked closely with members of the Executive and the Senior
Leadership Team to improve POL’s output and profitability. There was a
focus on getting faster traction and delivering results.
e People: The Board were keen to focus on POL’s people and workplace
culture. The level of performance for staff members within POL required
improvement and so work was undertaken to try and improve performance
via training, coaching and performance management. Time was also spent
in trying to improve the culture of POL itself by bridging the gap between
Head Office and the SPMs. The majority of SPMs were not happy with the
Post Office’s communication, strategy or performance. In the same way
that the Post Office was losing more money each year, many SPMs were
also not making money from the Post Office business and had seen a
decline in both revenue and footfall (which was important as it drove their
retail trade).
93. The NEDs divided the work between us, playing to our own strengths and
specialist skills wherever possible. My personal priorities for POL were
focussed on the transformation issues and eradicating the losses in the Crown
Network, Network Transformation, Digital transformation, the Mails project,
Government Services and reducing POL’s cost base, or making it variable with
revenue rather than being fixed. I naturally gravitated towards these priorities
given my commercial background in retail. As such, a lot of my day-to-day
work involved working with Kevin Gilliland (Network and Sales Director) and
Martin Moran (Commercial Director).
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95.
96.
97
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94. In addition I was focussed on establishing the Remuneration subcommittee,
developing the framework for Executive remuneration and worked a lot with
Fay Healey (who, at the time, was the Interim Head of Human Resources). I
also worked alongside Paula Vennells and Chris Day in relation to all these
projects.
I have been asked to describe the nature and extent of my involvement with
POL'’s initial meetings with MPs concerning the Horizon IT project. I did not
have any meetings or discussions with any MPs, including Lord Arbuthnot MP,
concerning Horizon or the concerns raised by SPMs at any stage. To the best
of my knowledge and recollection, these meetings were attended by Paula
Vennells and Alice Perkins, sometimes with support from Alwen Lyons. They
would report back to the Board.
Between June 2012 — May 2013, I was aware from Significant Litigation
Reports brought to the Board meetings, that claims brought by SPMs had been
intimated by Shoosmiths/Access legal. I was not provided with a copy of the
correspondence itself and so was unaware at this point in time that the
possibility of remote access had been raised (POL00046944). This
correspondence was not shared with the Board by Susan Crichton, Paula
Vennells or others directly involved with the JFSA.
. I was aware that Lord Arbuthnot MP had concerns about the integrity of
Horizon following his discussions with members of the JFSA and knew that
Paula Vennells had met with him on a number of occasions from May 2012
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onwards.
98. I was not involved in the decision to instruct a forensic accountant to review
Horizon. During the Board Meeting of 23 May 2012, Paula Vennells and Alice
Perkins updated the Board on their meeting with Lord Arbuthnot MP and Oliver
Letwin MP. The meeting was described as a “success” with a further meeting
to be arranged with the other MPs who had cases in their constituencies. I
cannot now recall the detail of this verbal update. The Board were informed at
that time that POL had agreed to use a forensic accountant to investigate the
system, (POL00021507).
99.1 was not involved in the selection or instruction of Second Sight. My
recollection is that the Board were notified of Second Sight’s instruction either
during or shortly after the Board Meeting of 23 May 2012, (POL00021507). I
believe the Board were informed of their instruction after Second Sight had
already been appointed. I do recall querying whether they had sufficient
manpower and sufficient expertise in IT to be competent in undertaking a
comprehensive review of Horizon. The Board were assured that they were
sufficiently competent and that Susan Crichton had worked with them
previously and held them in high regard.
100. I was not involved in any discussions and/or overseeing the drafting of the
terms of reference for Second Sight’s investigation. The Board were informed
of Second Sight’s appointment but I do not recall the Board seeing their terms
of reference. I do not recall challenging this, so I presume I considered it
reasonable for Alice Perkins and Paula Vennells (who had attended the
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meeting with Lord Arbuthnot MP), together with Susan Crichton to determine
the ambit of their appointment.
101. I was not involved in what access Second Sight had to documentation
within POL’s control.
102. I have been asked to set out the extent to which the Board were kept
informed about POL’s initial meetings with Lord Arbuthnot MP and the
instruction of Second Sight. I have limited my response to the time period of
June 2012 — May 2013 as per the rule 9 request.
103. During this period, the Board were aware that Paula Vennells had met with
Lord Arbuthnot MP and others regarding the JFSA’s concerns regarding
Horizon. The Board were notified that POL would instruct an independent
forensic accountant to review the integrity of Horizon. The Board agreed this
was a sensible and worthwhile exercise (POL00021507).
104. In the Board Meeting of 23 January 2013, Alice Perkins advised the Board
of the work being undertaken by Second Sight to investigate the claims made
in relation to Horizon and that the SPMs had until the end of February 2013 to
submit their complaints (POL00021510). The Board were advised Second
Sight would aim to complete their audit by the end of Summer 2013. The Board
were aware that James Arbuthnot MP had been involved in discussions with
Paula Vennells regarding Second Sight’s audit which gave comfort that the
scope of the investigation was comprehensive. I have no specialist expertise
in either IT, accountancy or law and so I deferred to the judgment of Paula
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Vennells, Alice Perkins and Susan Crichton as to the terms of reference for
Second Sight’s review. Myself and the other NEDs were most interested in
finding out if Second Sight had discovered a flaw in Horizon that would explain
the discrepancies reported and the SPM’s losses. I recall being frustrated at
the amount of time it took for Second Sight to provide their Interim report; but
the Board were regularly assured that to date, there was no evidence to
suggest fault. I had no reason to suspect that I was being provided with
anything other than complete and accurate information.
105.1 believe the Board provided adequate oversight of the Second Sight
investigation based on the information that was provided to us. The Board was
repeatedly assured by the Executive (CEO, CFO, CIO and General Counsel)
that Horizon was fit for purpose and not responsible for the discrepancies
reported by the SPMs. That position was corroborated by RMG’s internal
audit, which had been reviewed externally by Deloitte. Moreover, there was
nothing in the RMG annual accounts or any briefings which led us to believe
RMG knew there was an issue with Horizon. We were also assured that Fujitsu
had confirmed Horizon was fit for purpose which I regarded as reassuring
given that Fujitsu themselves are subject to a rigorous auditing scheme, this
was combined with the fact that we were informed that their expert witness
had repeatedly given evidence in criminal prosecutions which had resulted in
convictions. However, evidence to the contrary came from the JFSA, which
was precisely why the Board concurred that an independent forensic
accountant should be instructed to review Horizon. Whilst Second Sight’s
investigation took far longer than expected, the Board meeting minutes reflect
that the Board pushed for updates (for example the minutes of the Board
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meeting on 21 May 2013 (POL00021513), as we all viewed the outcome as a
priority.
THE HELEN ROSE REPORT, INTERIM REPORT AND THE ADVICES BY SIMON
CLARKE
106. I was unaware of the existence and/or contents of “the Helen Rose report”
(document FUJ00086811) prior to receiving it as part of the disclosure pack
provided by the Inquiry in relation to my Rule 9 request. I do not know Helen
Rose and have not worked with her.
107. I have been asked to set out my recollection of the Board meeting of 1 July
2013 and in particular, what information I received regarding the Second Sight
investigation and what instruction the Board gave to Paula Vennells on how to
deal with it. Paula Vennells advised the Board that there had been recent
developments with the progress of Second Sight’s review and that their interim
report would be presented at a meeting of MPs on 8 July 2013. The Board
were advised that Second Sight’s investigation had found no systemic issues
with Horizon but had highlighted areas for improvement in support areas such
as training. We were also told that for a system as large as Horizon, there
would occasionally be anomalies and that two were known of in recent years,
the details of which had been passed onto Second Sight to consider as part of
their investigation. The minutes of the Board meeting on 1 July 2013 reflect
Paula Vennells’ concern about the quality of the report insofar as it “was not
as factual as expected” (POL00021515). My recollection is that Paula Vennells
said the report made very generalised statements and in some places was
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inaccurate.
108. The Board encouraged Paula Vennells to challenge Second Sight to ensure
changes were made where possible so as to ensure the Interim Report was
evidence-based and factual in its content. We also requested that POL’s own
communications team be ready to combat any inaccuracies included in
Second Sight’s Interim Report and be in a position where they could respond
proactively.
109. The Board's desire at this stage was to review Second Sight’s Interim Report
and to work constructively with all parties to ensure that any clear actions
which arose from Second Sight’s audit were implemented.
110. I was unaware of the existence and/or contents of Simon Clarke’s advice of
15 July 2013 (document POL00006357) prior to receiving it as part of the
disclosure pack provided by the Inquiry in relation to my Rule 9 request.
111.1 have been asked what, if any, steps I took to be briefed on the matters
discussed at the 16 July 2013 Board meeting and/or what contributions I made
to any decisions taken. As noted in the minutes of the Board meeting of 16
July 2013 (POL00027514) I was absent from the meeting. On the rare
occasions where I missed a Board meeting, I would have a call with Alice
Perkins in advance to share any views that I wanted the Board to consider
and follow up with her afterwards.
112. On 4 July 2013, Paula Vennells provided an email update to the Board
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regarding Second Sight's investigation (POL00145185). We were notified that
Second Sight had not found any evidence of systemic issues with Horizon but
had identified some wider failings in the training and support provided to SPMs.
We were notified the Interim Report was expected by 5 July 2013 and that it
would be shared with Fujitsu for a review to ensure accuracy, as well as
Paula’s recommendation that POL should welcome the findings of the report
and commit to improve the support and training provided to SPMs.
113. On 6 July 2013, Paula Vennells updated the Board advising that Alan Bates
was willing to work with POL in respect of its programme to improve training
and support. She also advised us that Alan Bates’ “main issue is not ‘the
computer’ but the human aspect” and that he had raised the idea of setting up
a new independent third party that SPMs could approach if they were facing
issues with Horizon which could not be resolved via usual POL channels
(POL00099026). I cannot recall if I had received Second Sight’s Interim Report
by this time; I believe I received it on 8 July 2013.
114. By the time of the Board Meeting of 16 July 2013, I would have reviewed
Second Sight's Interim Report (POL00130412) which had been long awaited
by the Board. It was helpful insofar as it clarified what the broader definition of
Horizon encompassed and highlighted some deficiencies for POL to resolve.
I knew we needed to put in place an action plan which would remedy those
deficiencies and was reassured that Paula Vennells’ suggested approach as
to next steps (as outlined in her email of 8 July 2013, POL00099121) had been
received constructively by Lord Arbuthnot MP and the JFSA.
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115.1 remember being disappointed when reviewing Second Sight’s Interim
Report. After 12 months of work, I had expected more clarity, certainty and
recommendations as to the detailed workings of Horizon and whether Horizon
was responsible for the discrepancies reported by the JFSA and other SPMs.
Given that this was only an Interim report and it was very clear that further
investigations were needed, the Board agreed that it would be nonsensical to
depart with Second Sight at such a critical stage — particularly given the
amount of time it had taken to receive the Interim report. The Board were
however unhappy with the limited progress that had been made and stressed
that the Executive needed to improve their management of Second Sight’s
investigation so that future investigations were conducted in a robust but
efficient manner.
116. Whilst there was no obvious answer as to the discrepancies reported by the
JFSA and SPMs in Second Sight’s Interim report, there were sufficient
thematic issues reported to make me (and I think the rest of the Board) support
the appointment of an independent party to adjudicate in disputed cases
brought by the SPMs. Second Sight's Interim Report had highlighted that
improvements could be made to the support and training available to SPMs
which was the subject of a separate action plan.
117.1 have been asked to set out what steps I thought POL should take in
response to Second Sight’s Interim report. By the time of the Board Meeting
of 16 July 2013, my recollection is it had been agreed that there should be a
scheme in place to address the SPMs complaints about Horizon in the
immediate aftermath of the Second Sight Interim Report. The Board were
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provided with an “Update on the work programme arising from the Horizon
report” dated 26 July 2013 (POL00192962). This set out the proposal for what
later became the Working Group and Mediation Scheme. At the time, POL’s
intention was not to enter into mediation with those SPMs who had been
subject to criminal prosecution. Instead, POLs external solicitors, Cartwright
King, were instructed to review past and present prosecutions to identify any
cases where the Second Sight Interim Report needed to be disclosed. At the
Board meeting of 27 November 2013 (POL00021520) the Board discussed
past prosecutions and whether they would be included in the mediation
process. The CEO explained that Sir Anthony Hooper, Chair of the Working
Group, had originally thought this would be inappropriate, but was now inclined
to look at each case individually. Ultimately, cases involving criminal
convictions were admitted to the Scheme and were fully investigated.
Applicants were then provided with the information gathered during the Post
Office and Second Sight’s investigations so that applicants could use this
material should they choose to appeal through the criminal courts (see
‘Mediation Scheme: What You Need To Know’ paper (POL00029805).
118. There was acceptance that as the results of Second Sight’s investigation had
revealed flaws in the wider Horizon system (as defined by the Interim Second
Sight Report) and if these were responsible for the discrepancies reported by
the SPMs, then financial compensation may be appropriate and this would be
assessed individually on a case by case basis.
119. I have been asked to what extent, if at all, did my views on POL’s response
to the Interim Report diverge from other Board members or senior
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management. Paula Vennells had been directly involved in most (if not all) of
the face-to-face conversations with Lord Arbuthnot MP, other MPs and the
JFSA. She had briefed the Board reasonably thoroughly on these issues in the
two weeks before the Board meeting of 16 July 2013. Whilst I was not present
at that meeting, thereafter, I do not recall any disagreement between the Board
and the Executive regarding the key issues; namely, all parties wanted Second
Sight to finish their investigation and everybody wanted an independent
process to try to resolve the historical issues with the SPMs.
120. Having reviewed the minutes of the Board meeting of 16 July 2013
(POL00027514), it is clear there was a debate about how well the Second
Sight investigation had been managed by the business — with the NEDs being
more critical than the Executive. The NEDs were clear that POL needed to
take a firmer grip on the remainder of Second Sight’s investigation so that it
was concluded in an expeditious, but robust, way.
121. I was unaware of the existence and/or contents of the advice of Simon Clarke
(document POL00006799) prior to receiving it as part of the disclosure pack
provided by the Inquiry in relation to my Rule 9 request.
122. I have been asked to comment on the nature and extent of my involvement
with, or oversight of, POL’s review of past convictions of SPMs in prosecutions
based on data generated by the Horizon IT system. During the Board meeting
on 16 July 2013 and as flagged in her emails over the previous couple of
weeks, I note that Paula Vennells explained that POL planned to conduct a
review with POL’s external lawyers on the implications of Second Sight’s
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Interim Report for past prosecutions. The Board meeting minutes record that
“the Board were concerned that the review opened the Business up to claims
of wrongful prosecution” (POL00027514). As I was absent, I do not know who
raised that point but the minutes present it as a consideration of the Board as
a whole.
123.1 did not have any direct involvement in the review of past convictions of
SPMs based on data generated by Horizon. The Board agreed that this was
necessary and were advised by the Executive that the position was being
reviewed by POL’s external lawyers Cartwright King, who concluded that
disclosure was appropriate in ten out of 301 cases. In view of the potential
interest from the CCRC, Brian Altman KC was asked to conduct an
independent review of the process, reaching the conclusion that it was
“fundamentally sound”.
THE MEDIATION SCHEME
124.1 was not directly involved in the establishment or running of the Initial
Complaint Review or Mediation Scheme. Prior to the publication of Second
Sight’s Interim Report on 8 July 2013, I was aware that Paula Vennells
intention was to set up an independent working group who would be tasked
with trying to resolve the SPMs’ issues with Horizon that had not been resolved
via usual POL channels. In parallel, Alan Bates was suggesting a similar
scheme. This resulted in the establishment of the Working Group which was
represented by members of POL, the JFSA and Second Sight, who were
tasked with assessing each SPMs’ complaint on a case-by-case basis and
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determining whether they were eligible for mediation. This led to the Mediation
Scheme established in August 2013.
125. I had greater oversight of the above schemes at Board Meetings prior to the
establishment of the Sparrow subcommittee in April 2014. The idea behind
the setting up of the Sparrow subcommittee was that they were a specialist
subcommittee who would be able to undertake a “deep dive” into the Horizon
issues and report back to the Board. The amount of focus needed on the many
Horizon issues (the Working Group/Mediation Scheme, Linklaters advice and
the Deloitte reports) meant that it made sense to create a subcommittee who
had the necessary skills and could devote the necessary time to the issues.
Once this was created, it inevitably meant that there were less detailed
discussions at the whole Board. I had faith in the capabilities of the Sparrow
subcommittee; its membership consisted of three NEDs, Alice Perkins (Chair),
Alasdair Marnoch (Chair of ARC) and Richard Callard (Shareholder NED),
who had been selected to form part of the subcommittee as they had been
more heavily involved with the JFSA and the Working Group than myself.
Alasdair Marnoch and Richard Callard were both accountants and Alasdair
Marnoch had some knowledge of IT having worked in large software
businesses. Paula Vennells and Chris Aujard were also members of the
Sparrow subcommittee. The Board would be provided with the minutes of each
Sparrow subcommittee meeting and an oral update would also be provided. I
am confident that I would have challenged and asked questions of the Sparrow
subcommittee if any part of what was being reported to the Board caused me
concern.
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126. The Business Support Programme, headed up by Kevin Gilliland, was
established in parallel with the Working Group. This was a substantial project
tasked with reviewing the thematic issues raised by Second Sight and resulted
in changes in the way SPMs were appointed, trained, communicated with and
supported. This was important as it had the potential to significantly reduce
problems going forward.
127. I was not responsible for deciding the ambit of Second Sight’s investigation
and was not asked to be involved in the creation of their terms of reference.
My understanding is that this was agreed by Paula Vennells in conjunction with
the JFSA and Lord Arbuthnot MP.
128.1 did not have any involvement in the extent of Second Sight’s access to
relevant information and documents. I do not know who was responsible for
the extent of Second Sight’s access to relevant information and documents.
129.1 had no direct involvement in POL’s response to Second Sight's findings.
The Board were advised that Second Sight’s Interim Report contained
inaccuracies and was not evidence-based (POL00021515). I have set out my
views on the quality of that report at paragraph 117 above. I believe Paula
Vennells was responsible for POL’s response to Second Sight’s findings.
130. I do not recall receiving Second Sight’s Part 1 Report, (POL00004439), Part
2 Report (POL00030160) or the updated Part 2 Report (POL00021791). Nor
do I recall being provided with POL’s response to the Part 2 Report
(POL00030160). I was however aware of their existence and would receive
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updates on their contents via the Sparrow subcommittee minutes and
feedback at Board Meetings. I did not specifically ask to see these documents
as I had complete confidence in the skills and abilities of the Sparrow
subcommittee; all of whom I regarded as well qualified. I trusted the Sparrow
subcommittee to raise any significant concerns with the Board directly (as is
the way I operated in relation to all sub-committees of which I was not a
member). My attention was also heavily focused on the other many significant
challenges posed to POL at that time, particularly regarding the Network
Transformation programme. I address this in further detail below.
131.On 10 March 2015, the Board were advised that POL had completed its
investigations of cases under the Working Group and that all cases that had
not been subject to a court ruling would be passed to mediation (see email
from Alwen Lyons to the Board (POL00102370). This decision had been the
topic of much discussion amongst the Sparrow subcommittee, which had
been communicated to the Board in the preceding months and had resulted in
Chris Aujard producing guidance documents “Initial Complaint Review and
Mediation Scheme” in February 2014 (POL00027452) and “Initial Complaints
Review and Mediation Scheme: The way forward” in June 2014
(POL00346787). The latter document had arisen out of Alice Perkins’ request
in the Board Meeting of 21 May 2014 for the Sparrow subcommittee to explore
whether the scheme could be changed (POL00027383). The Board were
conscious that Second Sight’s assessment of individual cases was taking a
very long time and was not progressing in any meaningful way. Originally the
scheme was due to have completed all cases by March 2014. As of 12
December 2014, only 7 of 150 applicant's cases had been mediated and far
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more than that were still waiting for Working Group review. The Post Office
had trained 20 investigators to work on these cases. The closure of the
Working Group was brought about with a view to accelerating the whole
scheme. Any SPM referred to mediation still had the option of obtaining a
report from Second Sight (which POL would fund) but we removed the
necessity of the report from Second Sight as a mandatory part of the process
with a view to bringing the scheme to a conclusion in an expeditious way. The
Sparrow subcommittee took the lead on this strategy and reported back to the
Board with its recommendations. I was aware and supportive of this decision
as I believed the changes to the scheme were designed not to “terminate” the
process but to accelerate it, which I believed was in the interests of all parties.
132. I have been asked who at POL was responsible for strategy and/or decision
making in respect of the Mediation Scheme and Working Group. Paula
Vennells was responsible for the creation of the Working Group and Mediation
Scheme, as well as the framework of how it would operate. Paula Vennells
appointed Belinda Crowe as Programme Director for Project Sparrow.
Belinda reported to the General Counsel and then onto Paula Vennells. She
led on all issues regarding the Working Group and Mediation Scheme for POL
and also led the Lessons Learnt Review on the appointment and management
of Second Sight.
133. The Board were provided with details of how the Mediation Scheme and
Working Group would operate in an email sent on Paula Vennells’ behalf on
28 August 2013 (POL00027792). I was supportive of the scheme and was
keen that there should be a collaborative and supportive approach involving
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the JFSA to resolving the conflict between POL and the SPMs.
134. As to which cases should form part of the Mediation scheme, it had been
discussed and agreed by the Board that an independent person should be
appointed to Chair the Working Group. On 31 October 2013, the Board were
advised that the Rt. Hon Sir Anthony Hooper had been appointed (minutes of
Board meeting (POL00021519). My understanding of the scheme was that Sir
Anthony Hooper had a significant amount of autonomy as to how the scheme
would run and he ultimately had the casting vote to decide to refer a case to
mediation if POL and JFSA could not agree. Second Sight were also
appointed to prepare reports for each applicant's case with a recommendation
on whether the case should be referred to mediation. I was supportive of this
approach; in order for the scheme to work, it needed to be independent.
135. The Board were informed that the mediation would be undertaken by the
Centre for Effective Dispute Resolution, (“CEDR’), which was reassuring given
that they were entirely independent and would provide credibility and greater
confidence in the scheme.
136. I believe Paula Vennells was responsible for the decision on whether to offer
financial compensation to SPMs, albeit she would have been assisted by
Belinda Crowe, Chris Aujard and other members of her Senior Leadership
Team. Whilst there eventually was disagreement between the parties about
the level of compensation, there was always an intention to offer financial
compensation.
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137. At its inception, the ambit of the Mediation Scheme was primarily Paula
Vennells’ responsibility though the Sparrow subcommittee. The Board, to a
lesser extent, did have some influence on the ambit once it was formed. I have
provided further detail in relation to this later in my statement.
138. I have been asked who at POL was responsible for determining whether to
commission further independent investigations into the integrity of the Horizon
IT system and the ambit of any such proposed investigation. In February 2014,
the Board commissioned Linklaters LLP to provide advice concerning the level
of claims and potential financial exposure for POL in connection with the
Mediation Scheme, prompted by the emerging claims for compensation far
exceeding what POL had expected (“Linklaters advice”). The Board also asked
Linklaters LLP to address alternative mechanisms that could be used to
address the current cohort of mediation cases. Linklaters produced a report
on 20 March 2014 (POL00107317), which provided reassurance regarding
POL’s liability provided Horizon was fit for purpose but reiterated the Board’s
previous concern that Second Sight’s Interim Report (POL00130412) had not
definitively addressed the reliability of Horizon. On 26 March 2014, the Board
agreed to commission a further piece of work to address this issue (minutes of
the Board meeting (POL00021523), which resulted in the instruction of
Deloitte. At the Board Meeting of 30 April 2014, the Board questioned Gareth
James, a Partner at Deloitte, seeking clarity on whether Horizon was a reliable
and robust system. The minutes reflect Gareth James’ position that at that
time, Horizon showed strong areas of control but further work was required in
order to be definitive. This resulted in Deloitte's Board Briefing dated 4 June
2014 (POL00130618). This is addressed in further detail later in my statement.
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139.1 have been asked who at POL was responsible for the strategy of
responding to concerns raised about the Horizon IT System by MPs and
journalists. Paula Vennells was responsible for the strategy of responding to
concerns raised about Horizon by MPs and journalists. When responding to
journalists, she would have had significant assistance from Mark Davies,
Group Communications and Corporate Affairs Director. In respect of MPs, I
believe she would have been assisted by Alice Perkins and Alwen Lyons,
Company Secretary.
140. I have been asked what my and the Board’s key priorities were from July
2013 - September 2015. Many of the priorities were consistent with those from
the two years prior. POL was continuing its huge Business transformation
journey to make it fit for purpose for the future. POL’s shareholder — the
Government - had signed off on a very significant £1.5 billion funding
agreement with the expectation that POL became less loss-making initially and
then profitable, so that it decreased its reliance on the annual government
subsidy. As a result, my focus was on helping POL grow revenue and cut
costs. The main revenue areas (i.e. all the products that POL sold) — Mails,
Government services, Financial services, Telecoms and Energy- were the
subject of much work to generate additional revenue (and customer footfall)
flowing through Post Offices. The entire network of Post Offices needed to be
transformed to become more “what the customer wanted” (i.e. removal of Post
Offices behind bars, modernising them into what you see today and extending
the opening hours). During this period, there was also significant debate about
“Network Transformation” moving from voluntary conversions (which is all
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there had been so far) to mandatory conversions. The “Digital” project was
picking up pace as we went about digitising everything we sold so we could
offer our customers the ability to transact with Post Office physically or digitally
- however they wanted.
141. Cost-cutting mainly focussed on;
e The Crown Network (the large Post Offices directly run by POL) which
had been losing £50 million a year and needed to become profitable;
e Re-engineering both the cash supply chain and also the IT
infrastructure, both of which were costing very significant amounts of
money, but were not providing a good service;
e The governance function which was also developing with the business
developing an Enterprise Risk Management framework and an internal
audit function to improve its capability.
142. Personally, I was heavily involved in all of the above projects — i.e. — what
POL sold and how they sold it, with the intention of bringing it back to
profitability.
143. In addition to the above, there were three areas which increased in
importance significantly during this period. Two of these areas resulted in the
establishment of subcommittees to provide better governance:
« The work on the Horizon issues had become a bigger priority following
the Linklaters advice and the slow progress being made with the
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Mediation Scheme. There were many workstreams addressing the
deficiencies identified in Second Sight’s Interim Report, which were
running in parallel — i.e. the Business Support Programme, the Working
Group/Mediation Scheme, The Lessons Learnt Review and the review
of POL’s Prosecution Policy. From March 2014, this was governed
through a new Board subcommittee — the Sparrow subcommittee-
which I have addressed above. I was not personally involved in this
other than when the Sparrow subcommittee reported to the Board.
e Financial services was accelerating, and growing in importance and
complexity and so a new Financial Services subcommittee was formed
with Virginia Holmes as Chair and Tim Franklin as a member. Once
the subcommittee was formed, I had far less to do with Financial
Services.
e There was a growing desire to create a pathway to allow POL to be
changed from a Government-owned business to a mutual (i.e. owned
by the stakeholders rather than by the Government, similar to the Co-
op). This required different governance and ways of working with its
stakeholders. As such, there was a priority to accelerate a better
relationship between the SPMs and Head Office, which resulted in the
formation of the Post Office Advisory Council. This was chaired by Tim
Franklin with myself as a member. I was heavily involved in this.
144.1 have been asked for my view on the purpose of the Mediation Scheme
when it was introduced. The Mediation Scheme was created to resolve
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individual complaints that SPMs had made about Horizon. To my recollection
everybody on the Board thought that it was a good idea, and we were keen
that it had support from all stakeholders and that it had an independent Chair.
145.1 was not aware of any difference between POL's public position on the
purpose of the Mediation scheme and views of the Board or Senior
Management.
146. I have been asked why Susan Crichton resigned from POL. I do not know
why she resigned. I'm sure Paula Vennells gave an explanation during the
Board meeting of 25 September 2013 (POL00021518) but I cannot remember
what that explanation was and at the time I do not remember it ringing alarm
bells with me. The Board were keen to ensure that the Horizon issues were
properly managed whilst the interim General Counsel was brought up to
speed. As evidenced in the minutes at POLB 13/88, Paula Vennells advised
the Board that an interim General Counsel would receive a full handover.
147. I have been asked to what extent, if at all, did I notice any change in approach
to the Mediation Scheme and/or Second Sight upon Susan Crichton’s
resignation and the appointment of Chris Aujard. The Mediation Scheme was
in its infancy at the time that Susan Crichton departed from POL and I do not
remember noticing any particular change in approach following Chris Aujard’s
appointment.
148.1 had no reason to believe I was receiving anything but accurate and
complete information regarding Horizon from POL’s senior management. I
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trusted Paula Vennells, Susan Crichton, Chris Aujard and Mark Davies to be
open and transparent about any issues which required the Board’s attention.
In my capacity as a NED, I would receive regular updates either at Board
meetings or in-between. The basis for the establishment of the Sparrow
subcommittee was to allow for a detailed and robust review to be undertaken
of the “Sparrow issues”. The minutes of each Sparrow subcommittee meeting
were provided to the Board and either Paula Vennells or Alice Perkins would
provide an oral summary of the issues. We would also receive regular updates
on the Business Support Programme and the progress of the Mediation
Scheme.
149. Overall, I felt I was receiving accurate information; much of it was at a
summary level rather than the level of detail that the Sparrow subcommittee
would consider. At the time I did not feel that the Board were being misled or
being given inaccurate or incomplete information. I had greater visibility over
the detail in the review of POL’s Prosecution Policy as this was a topic of
discussion at ARC meetings.
150. The minutes of Board Meetings reflect there were many occasions where the
Board probed the Executive for further information or reassurance on the
range of Sparrow issues. If I felt I did not have enough information by which
to make a decision, I would say so.
151.1 cannot remember which member of the Board sought advice on personal
liability for malicious prosecution and/or reporting the possibility of such claims
to the insurer. I am confident this query did not come from me. I cannot be sure
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why the question was asked but I assume one of the Directors was concerned
about personal liability for wrongful prosecution and wanted to understand who
it would impact and the position regarding insurance.
152. The Board received advice on this issue via Chris Aujard’s “Update on the
Work Programme arising from the Horizon Report” dated 26 July 2013
(POL00192962).
153. I have been asked to set out the nature and extent of my involvement in the
Board’s and ARC Committee’s review of POL’s prosecutorial function and in
particular my understanding of the difference between civil and criminal legal
proceedings. My understanding is that the primary purpose of criminal
prosecutions is to punish and deter wrongdoing. The primary purpose of civil
proceedings is to recover financial loss and/or compensation.
154. My main involvement with POL’s prosecutorial function was via the ARC
committee meetings of 19 November 2013 (POL00038678) and 11 February
2014 (POL00038643). In preparation, ARC received a proposal from Chris
Aujard dated 13 November 2013 (POL00027143). Prior to these ARC
meetings, I did not have detailed knowledge of the prosecutorial powers of
POL. I was also in attendance at the Board meeting of 26 February 2014
(POL00021522) when the company’s Prosecution Policy was reviewed.
155. I recall there were mixed views at the ARC as to the change in policy. Overall,
there was a consensus that there should be a change in approach and I
remember being surprised that with the exception of RMG, POL was the only
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commercial organisation of its type that carried out its own private
prosecutions. This had been brought to my attention by Brian Altman KC’s
report. The ARC committee queried how the business would be able to recover
branch losses through the Civil Courts and were advised by Chris Aujard that
it “may be slower and not recover much” (POL00038678). We were hesitant
to make a sudden and significant departure without further information. At the
November 2013 meeting, it became clear that more work needed to be done
to understand the implications of any change in policy. We requested further
information from Chris Aujard who provided ARC with document ‘Prosecution
Policy’ (POL00030900) on 7 February 2014.
156. The ARC considered three options as set out in section 4 of POL00030900:
e Option 1: Preserving the status quo- i.e. continuing with a prosecutions
policy substantially the same to that used previously;
e Option 2: Pursuing a prosecutions policy more focused on more
egregious misconduct- i.e. higher value cases and/or those involving
vulnerable members of society and/or those involving particularly wilful
wrongdoing and engaging with the police in relation to other matters;
e Option 3: Ceasing all prosecutorial activities but instead actively
involving the police/CPS where it was felt they were likely to take
matters forward.
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157. There was a fair amount of debate about this, albeit nobody was in support
of the Prosecution Policy continuing unchanged. I did not believe it was
necessary for POL to maintain such a strong emphasis as it had done on
deterrence against SPMs committing theft, false accounting or fraud. The
recovery of money was discussed but was not an issue — the sums of money
involved in criminal prosecutions were relatively small and it seemed to me
that civil proceedings were more effective in asset recovery, which I pointed
out to my fellow ARC members in an email to the Board dated 11 February
2014 (POL00104233). I also felt that continuing a policy with such a strong
emphasis on deterrence ran contrary to the aims of the transformation
programme where POL’s engagement of the SPMs was key. It would also be
counterproductive with the path to mutualisation and also to Network
Transformation, both of which I supported. My recollection is that myself, Alice
Perkins and Susannah Storey were largely in support of Option 3, whereas the
Executive largely favoured Option 2. There were several arguments that
Paula Vennells put forward as to why option 2 would be better - and may be
a good interim step rather than going straight to option 3 which included:
* because the situation was still changing rapidly as the Branch Support
Programme was starting to have success in reducing the number of
SPM Horizon issues;
* because there was the potential for an “over-interpreted” read-across
to the ongoing Mediation Scheme and the planned Horizon
replacement programme - i.e. that it would be seen as an admission
that we were wrong to pursue prosecutions in the past. Paula also
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highlighted that the huge scale of POL made it unlike any of the other
companies it was compared with;
* and also there was concern that the CPS would not have the capacity
to take cases on.
158. The ARC ultimately concluded, and the Board supported, that POL should
adopt Option 2 so that POL’s Prosecution Policy should change so as to only
pursue the most serious cases involving vulnerable members of society, very
high value cases or cases with particularly wilful wrongdoing. POL would
pursue all other cases via the CPS or the Civil recovery route. I (and others),
saw this as an interim step and it was agreed it would be reviewed at least
once a year. The direction of travel was towards stopping criminal
prosecutions altogether, but this policy seemed a sensible interim step whilst
there were so many moving parts. I supported this change and in my mind the
level of risk between pursuing Options 2 and 3 was low given that POL had
paused all prosecutions.
159. So, in summary, I did not believe that it was necessary for POL to maintain
such a strong emphasis on there being a deterrent against SPMs committing
theft, false accounting, or fraud, although I felt that there should remain some
level of deterrence.
160. I have been asked if I considered the perceived convenience of recovering
money to be a reason to prosecute SPMs for alleged shortfalls rather than
seeking civil recovery. I do not think this was a consideration. The main reason
that criminal proceedings took place was to punish the offender and act as a
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deterrent, which I believe, was a hangover of the RMG approach. In many
instances, POL did already initiate civil proceedings for debts that it believed
were owing by SPMs, rather than via a criminal route. I took the view that if the
key motivation was asset recovery, POL would be better off pursuing the civil
route. I have addressed this in more detail in my answer to question 51.2.
161.1 have been asked to what extent, if at all, did the Mediation Scheme
influence the decision making on POL’s future prosecutorial role. Following the
publication of the Second Sight interim report in July 2013, there were a
number of parallel streams of work initiated: a review of past prosecutions and
POL’s future Prosecution Policy, the creation of the Working Group/Mediation
scheme, the Business Support Programme and a Lessons Learnt Review.
These were independent and running in parallel, but feedback from Second
Sight’s Interim Report was the common link.
162. The ARC discussed in November 2013 (POL00038678) and February 2014
(POL00038643) whether a change in the Prosecution Policy would influence
the mediation process. There was a concern from some that if we adopted a
policy to stop prosecutions altogether, it could be seen as an admission by
POL to have pursued prosecutions without merit. Whilst this was a
consideration for some, ultimately, I think overall it was only a small factor in
the decision to adopt a new policy.
163. I have been asked to describe my and the Board’s views on the Linklaters
advice produced in March 2014 and in particular, what steps were deemed
necessary or appropriate in light of that advice.
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164.1 cannot remember the views of individual Board members regarding
Linklaters advice (POL00107317). However, I do not recall that there was any
material difference of views between us.
165. I found the Linklaters advice reassuring in that it reiterated that absent any
proof that Horizon was malfunctioning, POL was within its legal rights to
recover losses (whether made by user error or theft) and as such, it was
generally not liable to pay significant amounts of compensation in those cases
and therefore, the total amount that could be claimed by applicants was likely
to be significantly less than the £100m that had been previously flagged to the
Board.
166. However, the one area that I (and I think the rest of the Board) wanted follow
up on, was to get to the bottom of whether there was any evidence to suggest
that Horizon was not working as it should be. The Linklaters advice appeared
to share the Board’s view that Second Sight’s Interim report did not adequately
address this, particularly whether any weaknesses or points of malfunction had
been identified. In the detail of the individual cases brought by the SPMs, there
seemed to be a distinct lack of evidence as to how and why there may have
been malfunctions with Horizon and how any such malfunctions could have
caused the losses in the particular cases. As a result of all of the above, the
Board wanted that clarity to give us reassurance that Horizon was robust and
not responsible for the losses. The Board meeting minutes of 26 March 2014
(POL00021523) reflect that the Linklaters advice was one of the catalysts for
the setting up of the Sparrow subcommittee and the following action points:
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e The commission of a further piece of work to review Horizon, how it was
supposed to work, before identifying any weaknesses and likely points
of malfunction;
e For the terms of reference of that further piece of work to be reviewed
by Linklaters LLP to ensure this work would answer the question as to
whether Horizon was reliable;
e For the Sparrow subcommittee to review and agree the terms of
reference, once approved by Linklaters LLP.
167. At the Sparrow subcommittee’s first sub-committee meeting on 9 April 2014
(POL00148075), they approved the terms of reference for the Deloitte Project
Zebra Reports. The Sparrow subcommittee was responsible for the instruction
and overseeing of Deloitte’s Horizon assurance work. The minutes of the first
Sparrow subcommittee meeting reflect at that time that “no issues had yet
been identified through the cases being investigated or any other route that
has called into question the integrity of Horizon” (PS14/4).
168. On 30 April 2014, Gareth James, a Partner at Deloitte, addressed the Board
directly. He provided a reassuring summary that “all the work to date showed
that [Horizon] had strong areas of contro! and that its testing and
implementation were in line with best practice. Work was still needed to assure
the controls and access at the finance service centre” (minutes of the Board
meeting (POL00021524). My recollection is that the Board probed Gareth
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James as we were concerned to know the truth about Horizon’s reliability
(POLB 14/55). The Board agreed at its meeting of 21 May 2014 that the review
would be considered by the Sparrow subcommittee when it was ready
(POL00027383, POLB 14/76). I cannot remember the views of individual
Board members. I did not myself feel concerned following Deloitte’s Phase 1
Report (POL00105635) and I was reassured that the Sparrow subcommittee
would consider the final report in detail and would report back any concerns.
169. I received Deloitte’s Board Briefing (“the Briefing”) (POL00130618) by email
on 4 June 2014 (POL00029733) sent on behalf of Lesley Sewell and Chris
Aujard. The email which accompanied the document read positively and did
not draw my attention to any red flags- which I would have expected them to
do given they acknowledge the content is “technical”. My IT skills are basic.
When I read the Briefing document it was clear that some controls needed to
be improved, but I did not think there was a major problem. The Executive
Summary did nothing to correct that impression.
170. The Briefing was not discussed by the Board at the meeting of 10 June 2014
(POL00021526) as this was in fact a Strategy Away Day with a packed agenda
and many external speakers/guests. It was agreed that the Sparrow
subcommittee would review the Briefing at their next meeting and consider
whether Deloitte should be instructed to carry out a “Part 2”.
171.1 did not receive Deloitte’s full Report.
172. I have been asked to set out the detail of any discussions I had concerning
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the termination or restriction of the ambit of the Mediation Scheme and Second
Sight.
173. The Board were concerned that the Mediation Scheme was taking too long
and Second Sight did not appear to have the resources to cope with the
volume of work in a reasonable timescale to a sufficient standard. My
recollection is that this was first raised in early 2014. At the February 2014
Board meeting, Paula Vennells reported that Second Sight had yet to produce
their first written report for the Mediation Scheme (POL00021522) and in
March 2014 it was reported that Sir Anthony Hooper had challenged the quality
of the work undertaken by Second Sight, insisting on more evidence-based
reports (POL00021523). The Board responded by establishing the Sparrow
subcommittee to monitor the scheme in more detail and consider whether any
other alternative arrangements might help to bring matters to a resolution. At
their meeting of 9 April and 30 of April 2014, the Sparrow subcommittee
considered various options to change the Mediation Scheme and the
involvement of Second Sight.
174. An Update Paper was prepared by Chris Aujard for the Board in June 2014,
in which a number of alternative options for the mediation process were
identified, although not implemented (UKGI00002392). By November —
December 2014, it appeared that the scheme was failing and was likely to be
unsustainable. Both POL and the JFSA seemed to lack confidence that the
scheme would work. A paper (POL00102254) came to the Board dated 2
March 2015, with an update following a Sparrow subcommittee meeting of 18
February 2015. The Sparrow subcommittee had endorsed the Project team’s
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recommended approach i.e. to change the Mediation Scheme, so that POL
adopted a presumption in favour of mediating all non-criminal cases within the
complaint review and Mediation Scheme. This would mean all cases would
go straight to mediation and bypass the Working Group’s assessment
(although applicants could still request a review of the case by Second Sight if
they wanted which would be funded by POL). The Sparrow subcommittee and
the Board thought that this would make the process faster, simpler and more
likely to reach resolution.
175. I do not recall being provided with a copy of Second Sight’s Briefing Report
Part 1 dated 25 July 2014 (POL00004439). However, the Board was briefed
by the Sparrow subcommittee and advised that no systemic issues had been
found with Horizon (POL00027514).
176.1 do not recall being provided with Second Sight’s Briefing Report Part 2
dated 21 August 2014 (POL00030160). However, the Board was provided with
an update from Chris Aujard on 29 August 2014 who reported that the report
was “both of a poor quality and somewhat one sided”. He described the report
as “inaccurate”, “contained no clear statement of the evidence upon which
many of the opinions expressed in it were based” and included a “commentary
on matters which are beyond the scope of the Scheme” (POL00101243). I had
no reason to doubt what I was being told although I was frustrated at the whole
process. I knew the reports had been reviewed by the Sparrow subcommittee
in-depth and deferred to their judgment.
177. I have been asked why I wished to explore whether POL could use the leak
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of Second Sight’s Part 2 briefing report to “stop/alter the process that we are
involved in” (POLO0101325). My reference to “Sparrow” in document
POL00101325 was a reference to the Working Group/Mediation Scheme and
not the wider Horizon issues. As set out above, by September 2014 my view
was that the existing Working Group/Mediation Scheme was not working well.
It was taking far too long without any real resolution and did not seem to be in
anyone’s interest. My reference to “stop/alter the process that we are involved
in” was a reference for my desire for the Sparrow subcommittee to find a better
and more efficient way of doing things.
178. I have been asked why I felt the closure of the Working Group had been “very
well handled” (POL00102370). The closure of the Working Group was a
sensitive issue and needed to be handled carefully and effectively so that the
SPMs did not disengage from the Mediation Scheme. It was common for me
to give praise to members of POL who had executed a task well to say thank
you and well done. This is what I was doing in my email to Jane MacLeod and
Mark Davies.
INTERIM CHAIRMAN AND RESIGNATION
179. I have been asked to explain the background to my appointment as Interim
Chairman. The original succession plan was for Tim Parker to seamlessly take
over as Chairman from Alice Perkins at the beginning of August 2015.
However, it took slightly longer to recruit Tim Parker than originally planned
and Alice Perkins did not want to extend her departure date. It was announced
that Tim Parker would take up the role of Chairman on 1 October 2015. I was
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asked and agreed to take on the role in the interim period (minutes of Board
meeting of 15 July 2015 (POL00021535). I chaired one in-person Board
Meeting on 22 September 2015 in my capacity as Interim Chair
(POL00021538). My responsibilities during that period were that of a normal
Chairman. However, I was conscious that Tim Parker's arrival was imminent
and he had agreed with Baroness Neville-Rolphe that he would undertake his
own independent review of the Horizon issues once he joined the Board. I
therefore very much saw my role as “holding the fort” during the intervening
period between Alice Perkins and Tim Parker.
180. I resigned from POL because my four-year contract came to an end. I felt a
strong affinity to the Post Office and I very much wanted to see it continue into
the future in a sustainable shape and I felt proud of what we had achieved at
that time.
GENERAL
181.1 have been asked for my views on the adequacy of the POL Board’s
oversight of the integrity of the Horizon system. Throughout my tenure, there
were very regular discussions at Board meetings about the integrity of the
Horizon system. The Board were consistently provided reassurance by a
multitude of individuals — many of whom had either specialist IT or
accountancy expertise- that Horizon was robust and fit for purpose. Examples
of this include:
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At one of my first Board meetings on 12 January 2012 (POL00021503),
when POL were still under RMG ownership, there was a discussion
between Les Owen and Susan Crichton where the Board were assured
that Horizon worked as expected and was not responsible for the SPMs
losses (POL00021503);
RMG/POL’s Internal audit, with the results reviewed by Deloitte;
The ISAE 3402 IT annual audit jointly commissioned by POL and
Fujitsu (see minutes of the ARC 13 November 2012 (POL00021430);
Ernst & Young (the auditors for POL) regularly audited Fujitsu IT
controls and noted no issues of concern as evidenced in the minutes of
the ARC, 15 May 2014 (POL00108523);
By Fujitsu and their expert witness who would regularly give evidence
in court under oath about Horizon’s reliability which resulted in
convictions;
Second Sight’s Interim Report which stated they had found no evidence
of any “systemic flaws in Horizon”. A Business Improvement Plan was
set up to improve the findings around training and support;
Following Linklaters advice, the Board commissioned Deloitte to carry
out a further review. Gareth James’ update to the Board on 30 April
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2014 reassured us that ““all the work to date showed that [Horizon] had
strong areas of control and that its testing and implementation were in
line with best practice. Work was still needed to assure the controls and
access at the finance service centre” (POL00021524); and
e Deloitte's Phase 1 Report (POLO0105635) and_ Briefing
(POL00130618) did not raise any particular red flags with me, albeit I
knew the controls around the system needed improving. The Sparrow
subcommittee who were responsible for reviewing these documents in
detail did not flag any concerns.
182. At Board meetings, there was regular questioning and probing of the
Executive team by the Board regarding the integrity of Horizon, as evidenced,
by way of example, in the minutes of 26 March 2014, (POL00021523), 30 April
2014, (POL00006566) and 21 May 2014 (POL00027383). The Board set up
the Sparrow subcommittee to give detailed oversight of Horizon’s integrity and
linked issues.
183. To assist the Inquiry in putting the matter in context, each day, six million
transactions were carried out by about 70,000 users of Horizon on behalf of
POL without a problem. In the context of 150 SPMs in the mediation scheme,
out of the 500,000 users of Horizon (going back in time to when Horizon was
introduced), this seemed to be quite a contained issue, which would not
indicate a system-wide issue. I personally was not hearing the same Horizon
issues coming from the National Federation of Subpostmasters (“NFSP”) or
from visits I made to individual Post Offices. So, at the time, I felt there was a
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reasonable amount of oversight from the POL board about the integrity of the
Horizon system.
184. Regarding the Board’s oversight of prosecutions and civil proceedings based
on data generated by the Horizon IT system, throughout 2012, the Board had
limited visibility over prosecutions or civil proceedings; relatively little
information came to the Board, and the Board was largely unaware of the size
of the issue.
185. Following the decision to appoint Second Sight, the Board ensured they had
updates at each Board meeting until Second Sight’s Interim Report was issued
on 8 July 2013. At this stage we were aware (and supported) the pause of all
future prosecutions whilst a review was undertaken. I think this was
reasonable oversight in the context of the information that was known to the
Board.
186. It has subsequently become clear that I was not provided with (or made
aware of) Simon Clarke’s appointment or the reports he provided. That is
wholly unacceptable. However, I do not regard this as a lack of oversight on
my part; I cannot have oversight of matters of which I have no knowledge.
187. The response to the Board’s concerns about claims of wrongful prosecution
led to the review from Brian Altman KC, who was asked to oversee the process
of reviewing historical cases, advise on disclosure obligations and make
recommendations as to future policy. I believe this was good governance. His
report concluded that the process was fundamentally sound and identified that
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POL needed to disclose Second Sight’s Interim Report in a select number of
cases. This was reassuring and I do not think there was a basis to prompt a
further review.
188. The Board had faith and trusted in Susan Crichton, Chris Aujard, Brian
Altman KC, Cartwright King and Bond Dickinson - all of whom were legal
professionals. I had no reason to be suspicious of their advice, particularly as
independent legal advice had been sought. This view was strengthened by the
Significant Litigation Reports which confirmed no appeals against convictions
had been lodged by any of the SPMs.
189. The Board requested that the ARC conduct a review of POL’s Prosecutions
Policy which resulted in a change that very significantly reduced the scope of
cases that POL would prosecute.
190. In January 2015, the Criminal Case Review Commission (“CCRC”) asked for
“information on the Criminal cases involved in Sparrow” (‘Sparrow and the
CCRC Paper (POL00021531). Following the Board Meeting of 28 January
2015, Mark Davies informed the Board that the investigation of all cases within
the Mediation Scheme was now complete and “/POL] have not identified
anything through the scheme to suggest a conviction is unsafe, and no appeal
has been made against a conviction” (UKGI00003151). By this time, the
Sparrow subcommittee had been set up, and they discussed the CCRC
request at their meeting on 18 February 2015 (POL00006574). Once again,
the Board were confident that there was nothing to suggest that convictions
were unsafe and no appeal had been made against any conviction. Paula
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Vennells was planning to positively engage with the CCRC, which felt
appropriate.
191. Overall therefore, I think that the Board’s oversight of prosecutions and civil
proceedings brought by POL based on the data generated by the Horizon IT
system was adequate.
192. However, with what I know now, what transpired was plainly wrong. Had I
received Simon Clarke's advice (as I should have done), I believe the situation
would have been different.
193. As to my views on the adequacy of the government's oversight of POL, my
view is that the Government's level of oversight as to the workings of the Board
and POL was reliant on the level of information passed to it and shared by the
ShEx representative of the Board.
194. I have been asked to reflect on my time at POL and set out whether there is
anything I would have handled differently in relation to the Horizon IT system
and its associated issues. With hindsight, a consistent theme running
throughout the chronology is the lack of information which was given to the
Board. It is the responsibility of the Executive to provide the Board with
accurate, up-to-date information on the operation and management of the
company. It is the responsibility of the Board to satisfy itself that the company
is being properly run, and to ask for more information where that is required.
In hindsight, in my view, the main issue was the absence of key information
which was held back from the Board which meant that the Horizon issues were
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not high enough on the Board’s radar. With hindsight, in respect of the
information we were given, the Board was too trusting of the Executive and
did not ask for detailed source information often enough.
195. Of the over 900 private prosecutions brought between 1999 and 2020, the
vast majority (well in excess of 800) were brought before April 2012 when POL
was still under RMG ownership and overseen by RMG’s management. When
POL became independent on 1 April 2012, it inherited the vast majority of the
Horizon issues as legacy issues, yet myself and the other NEDs were not
provided with any corporate history about this. It is clear from POL00046944
that issues concerning remote access were being raised under RMG’s
ownership before I was appointed, yet nowhere, in any briefing to the new POL
board, or to Government, was this disclosed as an issue. That feels wrong.
Had I been informed of the Horizon issues from the outset, I believe I would
have pushed for the adaptation of the Board so that it included those with
specialist IT and legal skills- instead of relying so heavily on the apparent
expertise of others. As a Board, we also would have probably commissioned
someone like Deloitte to do a discreet piece of work, specifically regarding
remote access, which might have flushed out the issue much earlier.
196. The situation was worsened by the context that the Board were operating in.
At the formation of POL in April 2012, there were very many, very significant
issues fighting for attention: Network Transformation, subsidy funding,
preparation for mutualisation and pension arrangements, all of which have
been detailed in my response.
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197. The Board did challenge the appointment of Second Sight as we were
concerned whether they had the resources and the requisite expertise. With
hindsight, I should have pressed harder and my view remains that the situation
would have been improved by the instruction of one of the “Big Four”
accountancy firms. The Board also could have undertaken a detailed review
of Second Sight’s letter of engagement and scope. However, at the time the
Board did not realise its importance and we were reassured that the JFSA and
Lord Arbuthnot MP were supportive of the Mediation Scheme.
198. The Board ideally should have been more involved in the ongoing
management of Second Sight. Linklaters LLP were very critical of their work
in their report of March 2014 and with hindsight this could have prompted more
active intervention.
199. In July 2013, Simon Clarke’s advice was not shared with the Board. Instead
Brian Altman KC’s report was commissioned by the Executive without my
knowledge of the existence of Simon Clarke’s advice. I can see no good
reason why Simon Clarke’s advice was not shared with the Board. It may have
changed our decision-making and attitude as it was significantly more critical
of POL than Brian Altman KC’s review. Similarly I was unaware of the
existence of the Helen Rose report and I do not believe that I was told that the
reason that we could no longer use Gareth Jenkins was because he had been
discredited.
200. I do not think that the Board received the full Deloitte Project Zebra Report. I
do not know if the Sparrow subcommittee saw it. The Board was given a
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somewhat misleading verbal briefing and an incomplete Board Summary,
neither of which clearly exposed the serious problems that Deloitte found.
201.1 do not recall seeing any of Second Sight’s Reports following the Interim
Report in July 2013. I assume that they were discussed in detail at the Sparrow
subcommittee, but the discussion at Board level was at summary level only.
Looking back now, it clearly would have been better to have had more detailed
discussions using source documents at the Board. However, again, this has
to be seen in the context of the huge workload that the Board had and the
whole reason for having subcommittees in the first place.
202. It is inevitable and right that the NEDs place trust in the Executive on any
Board. However, my ability to challenge the Executive is contingent on the
information that is shared with me. I strongly believe that if the Executive had
been more transparent and provided the Board with the information it should
have, the outcome would have been different.
203.1 can confirm, having been asked, that there are no other matters that I
consider of relevance to the Inquiry that I would like to draw to the attention of
the Chair.
Statement of Truth
I believe the content of this statement to be true.
Page 76 of 83
Dated:06/06/24
Index to First Witness Statement of Neil McCausland
WITN10290100
WITN10290100
URN
Document
Description
Control Number
POL00030365
Minutes of the meeting of the
Board of Directors, 22
September 2011
POL-0026847
UKGI00016088
Minutes of the meeting of the
Board of Directors, 15 March
2022
UKGI026881-001
POL00021507
Minutes of the meeting of the
Board of Directors, 23 May
2012
POL0000040
POL00027601
Minutes of the meeting of the
Board of Directors, 21
November 2012
POL-0024242
UKGI00011499
Board papers of the meeting
of the Board of Directors, 18
April 2012
UKG1I022307-001
POL00021431
Minutes of the Audit, Risk
and Compliance Committee,
23 May 2012
POL-0018061
Page 77 of 83
WITN10290100
WITN10290100
POL00423344
Terms of Reference for the
Audit Risk and Compliance
Committee dated November
2013 and approved by the
Board 26 March 2014.
POL-BSFF-0238159
POL00025794
Board Subcommittee —
Project Sparrow Terms of
Reference
POL-0022273
POL00228475
Post Office Advisory Council
Terms of Reference
POL-BSFF-0066538
10.
POL00130618
Deloitte Board Briefing
Report, 4 June 2014
POL-0120670
11.
UKG1I00017932
Terms of Appointment, 3
October 2011
UKG1I027939-001
12.
POL00029438
Post Office Limited IT Audit
Update (SAS70)
POL-0025920
13.
POL00021502
Minutes of the meeting of the
Board of Directors, 10
November 2011
POL0000035
14.
POL00021503
Minutes of the meeting of the
Board of Directors, 12
January 2012
POL0000036
15.
POL00046944
Letter of claim from
Shoosmiths to Post Office
Limited, 23 August 2011
POL-0043423
16.
POLO0095595
Significant Litigation Report,
January 2012
POL-0095178
17.
POL00021510
Minutes of a meeting of the
Board of Directors, 23
January 2013
POL0000043
18.
POL00021513
Minutes of a meeting of the
Board of Directors, 21 May
2013
POL0000046
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19.
FUJ00086811
Helen Rose Report (Version
1), 12 June 2013
POINQ0092982F
20.
POL00021515
Minutes of a meeting of the
Board, 1 July 2013
POL0000048
21.
POL00006357
Simon Clarke advice on
expert evidence,13 July 2013
POL-0017625
22.
POL00027514
Minutes of a meeting of the
Board of Directors, 16 July
2013
POL-0024155
23.
POL00145185
Email from Paula Vennells to
the Board of Directors
regarding Second Sight
update, 4 July 2013
POL-BSFF-0004312
24.
POL00099026
Email from Paula Vennells to
the Board of Directors
regarding Second Sight
update, 6 July 2013
POL-0098609
25.
POL00130412
Second Sight’s Interim
Report
POL-0120589
26.
POL00099121
Email from Paula Vennells to
the Board of Directors
regarding update on Second
Sight review, 8 July 2013
POL-0098704
27.
POL00192962
‘Update on the work
programme arising from the
Horizon report’ paper, 26
July 2013
POL-BSFF-0031025
28.
POL00021520
Minutes of the Board meeting
of 27 November 2013
POL0000053
29.
POL00029805
‘Mediation Scheme: What
You Need To Know’ paper
POL-0026287
30.
POL00006799
Simon Clarke advice on
disclosure, 2 August 2013
POL-0017591
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31.
POL00004439
Second Sight Briefing Report
— Part One, 25 July 2014
VIS00005507
32.
POL00030160
Second Sight Briefing Report
— Part Two, 21 August 2014
POL-0026642
33.
POL00021791
Second Sight Briefing Report
— Part Two, 9 April 2015
POL-0018270
POL00102370
Email from Alwen Lyons to
the Board of Directors
regarding Sparrow update,
10 March 2015
POL-0101953
35.
POL00027452
‘Initial Complaint Review and
Mediation Scheme’ paper, 20
February 2014
POL-0024093
36.
POL00346787
‘Initial Complaints Review
and Mediation Scheme: The
way forward’ paper, 3 June
2014
POL-BSFF-0172508
37.
POL00027383
Minutes of a meeting of the
Board of Directors, 21 May
2014
POL-0024024
38.
POL00027792
Email from Paula Vennells to
the Board of Directors
regarding independent
mediation scheme
announcement, 28 August
2013
POL-0024433
39.
POL00021519
Minutes of a meeting of the
Board of Directors, 31
October 2013
POL0000052
40.
POL00107317
Linklaters LLP legal issues
report, 20 March 2014
POL-0105625
41.
POL00021523
Minutes of a meeting of the
Board of Directors, 26 March
POL0000056
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2014
42.
POL00105635
Deloitte Project Zebra —
Phase 1 Report,
POL-0104595
43.
POL00021524
Minutes of a meeting of the
Board of Directors, 30 April
2014
POL0000057
POL00021518
Minutes of a meeting of the
Board of Directors, 25
September 2013
POL0000051
45.
POL00038678
Minutes of a meeting of the
Audit, Risk and Compliance
Sub-Committee, 19
November 2013
POL-0027989
46.
POL00038643
Minutes of a meeting of the
Audit, Risk and Compliance
Sub-Committee, 11 February
2014
POL-0027954
47.
POL00027143
Papers for a meeting of the
Audit, Risk and Compliance
Sub-Committee, 19
November 2013
POL-0023784
48.
POL00021522
Minutes of a meeting of the
Board of Directors, 26
February 2014
POL0000055
49.
POL00030900
‘Prosecutions Policy’ paper
for the meeting of the Audit,
Risk and Compliance Sub-
Committee, February 2014
POL-0027382
50.
POL00104233
Email from NM to the Board
regarding 11 February 2014
ARC Teleconference, 9
February 2014
POL-0103816
51.
POL00148075
Minutes of a meeting of the
POL-BSFF-0007198
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WITN10290100
WITN10290100
Project Sparrow Sub-
Committee, 9 April 2014
52.
POL00029733
Email from Alwen Lyons to
the Board of Directors
regarding message from
Chris Aujard and Lesley
Sewell on the Deloitte
Briefing, 4 June 2014
POL-0026215
53.
POL00021526
Minutes of a meeting of the
Board of Directors, 10 June
2014
POLO0000059
UKG100002392
‘Initial Complaints Review
and Mediation Scheme:
Update Paper’, 18 June 2014
UKGI013206-001
55.
POL00102254
‘Project Sparrow — Update
and Options’ paper, March
2015
POL-0101837
56.
POL00101243
Email from Alwen Lyons to
the Board of Directors
regarding an update on
Sparrow from Chris Aujard,
29 August 2014
POL-0100826
57.
POL00101325
Email from Neil McCausland
to Paula Vennells regarding
Sparrow update and leak, 9
September 2014
POL-0100908
58.
POL00021535
Minutes of a meeting of the
Board of Directors, 15 July
2015
POL0000068
59.
POL00021538
Minutes of a meeting of the
Board of Directors, 22
September 2015
POL0000071
60.
POL00021430
Minutes of a meeting of the
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WITN10290100
WITN10290100
Audit, Risk and Compliance
Sub-Committee, 13
November 2012
POL-0018060
61,
POL00108523
Minutes of a meeting of the
Audit, Risk and Compliance
Sub-Committee, 15 May
2014
POL-0106620
62.
POLOOO06566
Minutes of a meeting of the
Project Sparrow Sub-
Committee, 30 April 2014
POL-0017845
63.
POL00021531
Minutes of a meeting of the
Board of Directors, 28
January 2015
POL0000064
UKGI00003151
Mark Davies’ ‘Sparrow and
the CCRC’ paper (undated)
UKGI013965-001
65.
POL00006574
Minutes of a meeting of the
Project Sparrow Sub-
Committee, 18 February
2015
POL-0017848
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