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Witness Name: Michael John Whitehead
Statement No.: WITN11260100
Dated: 17 October 2024
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF MICHAEL JOHN WHITEHEAD
I, MICHAEL JOHN WHITEHEAD, will say as follows:
1. lama former Assistant Director (Grade 7) of the Shareholder Executive (“ShEx”),
later UK Government Investments (“UKGI”).
2. This statement is made to assist the Post Office Horizon IT Inquiry (the “Inquiry”)
with matters set out in the Rule 9 Request (the “Request”) dated 8 August 2024.
3. The contents of this witness statement are true to the best of my knowledge and
belief. I have referred to various documents in this statement. Where I have
referred to information from other sources, I believe that information to be true.
The matters referred to in this statement took place more than 10 years ago, and
I have been assisted in my recollection of events by contemporaneous
documentation. I have sought to clarify within the statement where I directly recall
an event and where I have relied to a large extent on the documents provided to
me. I would also like to make clear that, despite my best efforts, there are areas
where I have no direct recollection given the passage of time. I have made clear
where I have endeavoured to include informed conjecture to assist the Inquiry.
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4. In making this statement, I have been assisted by Eversheds Sutherland
(International) LLP, the recognised legal representative for UKGI, a Core
Participant (as defined in paragraph 5(a) of the Inquiry’s Protocol on Witness
Statements) in the Inquiry.
5. Before responding to the questions set out in the Request, I wish to express my
deepest sympathy to all the sub-postmasters and their families for all the
hardships and suffering they have experienced as a result of the appalling
miscarriages of justice perpetrated over so many years.
BACKGROUND
6. I studied for a Bachelor of Arts degree in Modern History at the University of
Oxford, graduating in 1965. Following my graduation, I joined Price Waterhouse
as a graduate articled clerk and subsequently qualified as a chartered accountant
with the firm in 1969. I remained at Price Waterhouse until I joined the Civil
Service in around 1974.
7. — I initially spent two years in the civil service in an accountancy role at what was
then the Department of Industry's north-west regional office in Manchester in the
Accountancy Services Division. I was then encouraged by my then Deputy
Director to move to a general role (as opposed to specialised accountancy role)
within the civil service.
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8. In 1978, I moved to London to take up a role within the Department for Prices
and Consumer Protection. I then spent a long career within what is now the
Department for Business and Trade (“DBT” or the “Department”) working on,
amongst other matters, the launch aid funding for the Airbus programme and
issues concerning the declining shipbuilding industry in the UK.
9. In around 1996, I took a posting to a role relating to the Royal Mail Group, within
what was known at the time as the Posts and Telecoms Division, which became
the Postal Services Directorate in 2001. In 2004, my team became part of ShEx
which had moved from the Cabinet Office to the DTI. During my time in this post,
the team was led by a “Post Office Executive Director” who was a SCS1 Grade
civil servant. The SCS1 reported to the “Director Royal Mail & Post Office” (SCS2
Grade).
10. I retired from ShEx in December 2013, on reaching my 70" birthday. At the point
of my retirement, I remained an Assistant Director within ShEx. Following my
retirement I had no further involvement in ShEx/UKGI matters or wider
government.
Early years in this role
11. As Ihave explained above, I began working on matters connected to the Royal
Mail Group in around 1996. My work primarily concerned the public-facing
network-related issues. The legal entity within which the Post Office existed at
that time was Post Office Counters Limited. In 2012 the entity became Post Office
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Limited (“POL”). When I refer to “Post Office” or “POL” within this witness
statement, I mean whichever entity was current at the relevant time.
12. For the first two or three years of my post, a key issue facing Post Office was that
the Department for Work and Pensions and its delivery arm, the Benefits Agency,
were pressing very hard to move the delivery of benefits, particularly pensions,
from a ‘book’ system where individuals collected their benefits at the Post Office,
to direct payments into their bank accounts. This would reduce the need for
recipients of those benefits to physically attend the Post Office to receive their
money. It was therefore imperative that the Post Office sought alternative
business to limit the potentially catastrophic impact of reduced footfall within its
branches resulting from this transition.
The POCL Working Group
13. From around 1997, up until 1999, I was a member of the Working Group on Post
Office Counters Limited (“the POCL Working Group”). The POCL Working Group
was intended to be a forum for discussion between officials from the various
government departments and agencies (for example, the Benefits Agency, the
DVLA, and the Passport Agency) who either had business delivered through the
Post Office network at the time, or whom it was hoped might, with the introduction
of Horizon, be attracted to use the network for delivery of their respective service.
For the avoidance of doubt, the work of this group was superseded by the
‘Horizon Working Group’, a Ministerial-chaired working group, to which I refer
below.
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14.
15.
16.
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A significant proportion of my role was handling ministerial correspondence or
providing Ministers with briefings in advance of meetings with key stakeholders
etc. This would include providing Ministers with advice on issues raised in
correspondence, and typically drafting a proposed reply for the Minister's
approval. Where it was necessary to gain further information from other sources
outside of ShEx, I would reach out to the relevant team/organisation (i.e. POL)
to source the necessary information, ensuring it met the Minister's requirements.
It is important to note that the expectation for briefing to Ministers and Permanent
Secretaries to be concise, with guidance of around two sides of A4 being
considered optimal (this typically fluctuated between a formal and enforced
requirement, and more informal guidance depending on the Minister/Permanent
Secretary). I wish to highlight this to clarify why, at points, some of the responses
provided to Ministers may appear to include minimal context.
When correspondence was sent to a Minister, the Minister's private office would
decide whether the correspondence should be addressed by a response directly
from the Minister, or whether it would be categorised as ‘treat official’ in which
case a response would go out under my signature or a colleague’s signature, on
behalf of the Minister. The private office would then create a case file and forward
the file to the relevant team to draft a response. I understand that this process is
still in place within the Department today.
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17.
18.
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Typically, a letter from another member of Parliament would receive a direct reply
from the Minister whereas most other correspondence would receive a response
from an official. In both cases, the text of the response would be drafted by an
official and in cases relating to the Post Office at this time, that would usually be
me.
An example of such correspondence can be seen in the submission dated 22
January 1999 drafted for the Secretary of State, and which included draft
correspondence advising that the Secretary of State accept an invitation from
Keith Todd, Managing Director of ICL, to discuss the common interests between
the Department and ICL (UKGI00015320). My advice states that “[iJn the context
of Horizon, an early meeting with ICL, would be particularly awkward at this
stage”. At the time of producing this witness statement, some 25 years after the
date of the advice, I am unable to recall to what this comment referred. I have,
however, seen that later I was copied into an update produced by David Sibbick,
Director Posts, to the Secretary of State and the Minister of State for
Competitiveness, lan McCartney, dated 9 April 1999, concerning the automation
of benefit payments and Horizon (BEIS0000368). The document indicates that
there were indeed tensions at that time between ICL (and now also Fujitsu), the
Post Office, and the Department. It appears that Fujitsu were threatening to
withdraw from the Horizon project unless the proposal for a Benefit Payment
Card was abandoned and a ‘smart card’ option (later the Post Office Card
Account (POCA)) for the payment of benefits adopted. I would have been
included in the circulation list as I was working closely with David Sibbick on Post
Office network-related issues at this time.
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19.
20.
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Although neither I nor the Department were directly involved, I understand from
reviewing the documents available to me that these contractual issues were
resolved in May 1999. I see from the contemporaneous correspondence that the
Department was keen to offer reassurance to sub-postmasters (“SPMs”) that
levels of income could be maintained across the network and that the progress
of the Horizon contract would be overseen by a new working group (“the Horizon
Working Group”). (Draft letter from lan McCarthy MP to David Drew MP, 17 June
1999 (UKGI00014072) & Draft letter from Alan Johnson MP to Matthew Taylor
MP, dated 7 October 1999 (UKGI00014043)).
On 27 August 1999 I drafted a letter for Alan Johnson MP accepting an invitation
for him to visit ICL Pathway headquarters at Feltham (UKGI00013804). I
understand from Mr Johnson's evidence to the Inquiry that this visit took place
on 6 December 1999. The purpose of the visit was for the Minister to observe a
demonstration of the system and to understand how the pilot of Horizon would
work, however I did not accompany the Minister on the visit to Feltham and
therefore have no recollection of any details relating to the visit.
ROLL OUT OF HORIZON
21.
I understand that a pilot of Horizon began to be rolled out in late-1999/early-2000.
In my position I had no involvement in overseeing any elements of the
implementation and operation of Horizon, including the rollout and acceptance of
the pilot, as these were operational matters for Post Office. The Department and
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ShEx would have tracked the stages of negotiations until the contract was
finalised, and subsequently followed POL’s progress in rolling the system out
across the network; although it had no role in agreeing the technical
specifications or its ultimate implementation. My team and I provided updates on
progress to the wider Department and Minister. In that sense, my, and the
Department's, role was one of monitoring progress, rather than exercising
oversight.
The Horizon Working Group
22. As I reference above, the Horizon Working Group was established in mid-1999
and was chaired by the Minister, first lan McCartney MP and later Alan Johnson
MP. Whilst I can recall that I chaired the meeting on at least one occasion when
the Minister was not available at short notice, this was not a regular occurrence.
(Notes of Horizon Working Group meeting on 13 December 2000
(BEIS0000567). The purpose of the Horizon Working Group was to explore the
scope for extending the range of services accessible through the Horizon
computerised platform being installed across the Post Office network. It was
attended by representatives of: the Postal Services Directorate (of which I was
one), the Post Office, the National Federation of Sub-Postmasters (“NFSP”) and
the two main unions (the Communication Managers’ Association and the
Communication Workers’ Union (“CWU”)). There may also have been attendees
from other areas of government who sought to deliver their objectives through
the Horizon platform. The majority of the proposed new services had been
identified following a review by the Performance and Innovation Unit (“PIU”) as
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23.
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summarised in their report of June 2000 (POL00004418). For the avoidance of
doubt, the Horizon Working Group had no role overseeing or resolving technical
problems with the Horizon software.
The Horizon Working Group received an update from the Post Office on the
Horizon rollout at each of its meetings (see for example, the note of the Post
Office update at the 22 August 2000 meeting (BEIS0000566)). Those updates,
and therefore the Horizon Working Group’s focus, concerned the progress and
rate of installation and training across the network. Where difficulties were
reported, they related to the difficulties in the Horizon roll out rather than the
operation of Horizon; for example, at the Horizon Working Group meeting on 8
November 2000 the Post Office reported difficulties with the Horizon installation
in 400 offices which lacked ISDN lines or electricity, or required substantial
building work (p. 19 BEIS0000558).
Accordingly, throughout the course of 2000, I became aware there had been
some reports of difficulties with Horizon during the rollout, however I have no
recollection of any suggestion that the issues which had come to light by that
point causing any concern about system integrity. My understanding, as recorded
in my briefing to Alan Johnson MP of 14 November 2000, was that the difficulties
were explicable as teething troubles, and that, overall, Horizon had been well
received and SPMs regarded its introduction as a positive step toward increasing
future business (UKGI00014136). This feedback is information which I would
have received from both POL and NFSP.
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Spring 2001 — Correspondence relating to Cleveleys SPO
25. Inthe spring of 2001, I replied to correspondence from a Mrs Jackson relating to
her daughter, Mrs Wolstenholme, whose contract as SPM at Cleveleys Modified
Sub Post Office had been terminated. I have been shown draft letters which show
that I wrote to Mrs Jackson on at least three occasions, (30 March 2001
(UKGI00049066); 14 May 2001 (UKGI00049067); & 21 May 2001
(UKGI00013864)). I have not been provided with Mrs Jackson's inbound
correspondence by the Inquiry and UKGI has not been able to locate copies at
the time of producing this statement. Doing the best I can to recall what I knew
at the time, I believe that I would have considered that Mrs Jackson's references
to “transactional logs showing hundreds of calls”, as referred to in my letter of 21
May 2001 (UKGI00013864), as an example of teething problems in operating
Horizon, either by way of difficulties that Mrs Wolstenholme was having operating
the system, or alternatively as a consequence of explicable technical difficulties
relating to the service. I do not consider that, at that time, I would have had reason
to consider it as anything more substantive. Whilst I can see that my letter of 21
May 2000 (UKGI00013864) suggested that Mrs Wolstenholme should take legal
advice if she considered her contract wrongly terminated, as far as I am able to
recall, the first knowledge I had that Mrs Wolstenholme became a party to civil
proceedings was when reading her witness statement to the Inquiry during my
preparation to make this statement.
Dealings with Royal Mail/POL senior management 2000-2008
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26.
27.
28.
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Between 2000 and 2008 I had no discussions concerning the integrity of the
Horizon system, or the conduct of court proceedings against SPMs with any
senior executives or board members of Royal Mail, as the parent company. As
to my contact with POL during the same time, I do not specifically recall
discussing these matters with anybody from the senior executive team. My
channels of communication would predominantly have been with Mike Granville
or Martin Humphreys, but correspondence or discussions with them on these
issues would likely have post-dated 2008.
For the avoidance of doubt, I do not consider that it was the role of ShEx to
oversee or monitor the conduct of prosecutions at an operational level, as this
was the responsibility of the Post Office. Our interest in SPM prosecutions arose
from our overarching requirement to ensure that the appropriate governance
structures to manage such activities were in place, as well as the need to seek
information in relation to specific cases as a result of correspondence to Ministers
from MPs, direct representations by SPMs, or, later, approaches by the JFSA.
In around 2009, I began to become aware of complaints by SPMs relating to
Horizon. The issue came to my attention as it began to be raised in
correspondence with the Minister, who at that time was Pat McFadden MP. As
we continued to receive Ministerial correspondence and, later, Parliamentary
Questions, it is likely that I raised the matter with Alan Cook, Managing Director
of POL, although I have no specific recollection of this or documents to which I
can point.
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29.
30.
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In a speech to Parliament dated 8 July 1999 (RLIT0000219) announcing the Post
Office White Paper, Stephen Byers, the then Secretary of State, stated that
‘although the Government will set out clear objectives for the Post Office, they
will not be involved in the day to day business operations’. In line with this policy
statement, the stance taken by ShEx and the Department was that complaints
relating to the Horizon IT system were operational matters for the Post Office. I
considered that to be an appropriate approach; Horizon was the Post Office’s IT
system to enable them to deliver their core functions. To use an example to
illustrate my understanding of the distinction between the boundaries of policy
and operations concerning Horizon, I would have considered the decision that
the Post Office should move to a computerised central system was a policy
decision. Once the policy had been decided that the network was going to be
automated, its day to day operation and delivery were then wholly operational
matters, with which the Government should not become involved. Had the
Government, ShEx or the Department sought to get involved with such matters,
I believe that we would have been met with significant resistance from the Post
Office.
Where the response from the Department indicated that the matter was an
operational one, the Minister might ask POL to respond to the correspondent
directly. When such a request was made for a direct response from POL, the
POL CEO would be asked to reply direct to the MP, copying in the Minister, and
placing a copy of their reply in the House of Commons library.
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31.
32.
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An example of this is Robert Porteous’ email to Alan Cook (POL), dated 30 April
2009 concerning an earlier letter from Brian Binley MP to Pat McFadden
(POL00027890). This was dealt with by Mr Porteous, Pat McFadden MP’s
Private Secretary, who tasked Alan Cook with responding to Mr Binley’s query
surrounding correspondence he had received from Rebecca Thomson of
Computer Weekly highlighting SPM complaints about Horizon and the conduct
of POL in response. I have no recollection of this specific case from 15 years
ago, however I think it is almost certain that I would have drafted or advised on
this reply. My role advising on and drafting replies to complaints from MPs and
SPMs continued with successive Ministers until I left the role in December 2013.
Within my role I did not have any direct dealings with journalists either by way of
a meeting or by responding directly in correspondence. Enquiries from journalists
would have been handled by the Department's press office. During preparation
of this statement I have been shown an article regarding Horizon by Ms Thomson
which was published in Computer Weekly on 11 May 2009 (POL00041564). I do
not have any recollection of reading this article, however it is highly likely that I
would have read the article at the time, as the Department used a press cutting
service which provided hard copies of any coverage which had been picked up
from of a range of magazines and newspapers relevant to Post Office and Royal
Mail issues. That being the case, it is likely I would have discussed it with my
contacts at POL, although I have not seen any documents to this effect when
preparing my evidence for the Inquiry and have no specific recollection now of
doing so. Having read the article again in preparation for this statement, I think it
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is likely that this is the first time I would have seen a number of cases presented
together and set out in some detail.
Awareness of RM/POL Action Against SPMs
33. I believe that it was around this time, whilst Pat McFadden MP was the Minister,
that I first became aware the RM/POL were bringing prosecutions against SPMs.
I was aware that this was done as a private prosecutor, and I had been given
assurances by Mike Granville that the prosecutions were brought to the same
standards as regards process, procedure and evidence requirements as those
prosecuted by the CPS (POL00326828). The fact that these cases were going
through the criminal court process, in some cases resulting in a verdict of guilty
following trial, provided me with a degree of comfort that a proper approach was
being taken in terms of prosecutions.
34. My understanding was that these cases were brought in reliance upon evidence
generated by the Horizon system and the records that it produced of cash
shortfalls. I assumed that it would be the evidence generated from Horizon that
would be used to mount a prosecution in terms of the case being made against
the individual concerned, potentially supplemented by the results of a physical
cash audit.
35. In terms of my knowledge of the civil proceedings, not having a legal background
I did not appreciate any significant distinction between POL taking criminal or civil
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36.
37.
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action other than it was my understanding that the criminal cases were more
serious in terms of the allegations against, and consequences for, the SPMs.
On 12 Jan 2010, I received an email from Stephen Robling providing an “update
on Horizon roll-out and results of cash audits as part of the pilot”
(UKGI00035900). Although this email refers to the roll out of Horizon Online and
also cash audits, I have no recollection now of either of these matters. I was not
involved with the detail of the Horizon Online roll out, which was the remit of
Stephen Robling.
On 20 May 2010, Alan Bates (now Sir Alan Bates) wrote to Ed Davey MP to raise
the issues championed by the JFSA (UKGI00016119). That letter came to me to
draft the response which I did and which was sent on 31 May 2010.
(ABAT00000001). The response acknowledged the JFSA’s concerns, but
explained that the integrity of Horizon was an operational and contractual matter
for POL and declined the proposal for a meeting. Although I cannot say at this
point whether any amendments were made to my draft by the Minister before it
was sent, I consider the content and tone of the letter that was sent is typical of
Ministerial responses to similar correspondence at that point in time.
It is likely that I would also have provided advice to the Minister along with the
draft letter and a copy of Alan Bates’ letter, particularly because the Minister had
only been appointed a few days before on 20 May 2010, and so would need to
have been briefed on the issue. I have not seen a copy of any written submission
and, if it is in fact the case that there was no written submission, it may have
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been that I provided an oral briefing to the Minister in the margins of a series of
introductory meetings which took place at this time. Alternatively, I may have had
a conversation with his private secretary to provide the background on this issue
and explain the Department's position. I would be very surprised if the draft letter
had been provided to the Minister without any advice.
On 8 July 2010 Alan Bates wrote once more to Ed Davey MP (UKGI00016099).
This time, the Minister decided to agree to a meeting with Alan Bates. I see from
the submission prepared to support that meeting that I describe it as being for
“presentational reasons” and that the meeting was accepted on advice, in the
face of a potential Channel 4 news item. Although I have not seen a copy of the
original advice to accept the meeting, I consider that the description of the
meeting as being for presentational reasons was an accurate and appropriate
description for three reasons. First, the allegations that were being made by the
JFSA were serious and, if they were found to be correct, would mean that the
complainants were victims of dreadful miscarriages of justice and therefore it was
right that the Minister was engaging with the issue and, importantly, was seen to
be engaging. Second, Alan Bates’ letter made his point well and with force.
Finally, there was an indication that the story might gain wider traction and
therefore we had to be fully cognisant of the facts in case asked to comment.
Against that background, it would have been important to highlight to the Minister
the potential public perception of a situation where a Minister repeatedly declined
an invitation from Alan Bates/the JFSA. By framing the meeting in this manner
there was no intention to downplay the importance of the meeting.
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40.
41.
42.
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On 21July 2010, Oliver Griffiths, who was the ShEx Deputy Director and my line
manager, copied me into an email to POL’s Managing Director, David Smith
(POL00417098). Mr Griffiths attached a number of letters and questions from
MPs asked Mr Smith to tell him how confident POL was that there was nothing
behind the claims being made by SPMs. I have not been provided with a copy of
any response, however, given that the line was maintained by ShEx and the
Department after this point, I think it is likely thata POL representative responded
to ShEx providing their assurances.
In preparation for the forthcoming meeting between Ed Davey MP and Alan
Bates, on 28 July 2010 I sent an email to Sue Huggins at POL seeking certain
information necessary to prepare the Minister (POL00417097). I asked POL for
their “comments/factual responses” to the matters raised by the JFSA in
correspondence and on its website. This was a direct request for specific
information to include in the briefing to the Minister. POL provided the briefing I
had requested, titled “Brief to BIS for Edward Davey's prospective meeting with
‘Justice for Sub-Postmasters Alliance” (POL00055950).
On 5 October 2010, I produced a briefing to Ed Davey MP ahead of his meeting
with Alan Bates (UKGI00014164). A part of that document, including the section
relating to the integrity of the Horizon system came from the information provided
by POL in their briefing. As mentioned above, it was my role to ensure that the
briefing covered the areas requested and provided the Minister with the
necessary information to prepare for the meeting. On this occasion the
information required would not have been held by ShEx and could only have
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43.
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come from POL. As noted earlier in the statement, I was therefore entirely reliant
on POL to provide the detail and I consider that it would have been inappropriate
for me to edit the assurances that POL was giving. I therefore relied on what POL
had told me and included it in the briefing so that the Minister was aware of POL’s
position. While I did not explicitly set out that the sections had come directly from
POL, I find it most unlikely that this would not have been understood by the
Minister.
On 7 October 2010, I attended the meeting between Ed Davey MP and Alan
Bates. I do not now have any specific recollection of the discussions that took
place in the meeting and would have been invited to attend as an observer only,
having drafted the briefing in advance of the meeting. During this meeting, Ed
Davey MP gave a commitment to Alan Bates that he would follow up with POL
on certain points which had arisen. These were points which had attracted either
his or my attention during the meeting, and which went beyond the information
obtained for the briefing.
Accordingly, on 4 November 2010, I attended a meeting at POL to discuss the
points Ed Davey had agreed to follow up on during the 7 October meeting. POL’s
responses to these points were included within a briefing note which was emailed
to me by POL’s Mike Granville on 2 December 2010 (Email: POL00326826;
Attachment: p.6 POL00326827)). Again, I do not recall the 4 November meeting
itself. From the issues recorded in POL’s document, it appears that the
information I was seeking related to points raised at the meeting which went
beyond the matters covered in Alan Bates’ correspondence prior to the 7 October
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45.
46.
47.
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2010 meeting and so had not been covered in the information obtained for the
briefing.
On 7 December 2010, and by way of follow up to the above, Ed Davey MP wrote
to Alan Bates (POL00186759). The letter details information about remote
access to Horizon, which POL had provided in response to the queries raised in
the 4 November meeting. Again, this was information that could only have been
obtained from POL and the request to POL to obtain it was intended as a diligent
exercise to obtain necessary information from the appropriate source. The
information was included faithfully in the letter so that Mr Bates would be provided
with the facts as we understood them to be.
On 9 September 2011 I wrote to Alan Bates on behalf of the Minister.
(UKG1I00013720). This was an example of a ‘treat official’ response in which I
thanked Alan Bates for notifying the Minister that instructions had been given to
issue letters of claim against POL by members of the JFSA.
It may be helpful for the Inquiry for me to explain that, around this time, soon after
Ed Davey MP came into office, the practice of forwarding Ministerial
correspondence to the chief executive or managing director of POL and asking
them to reply ended. My recollection is that it was Mr Davey’s preference to be
more personally involved with correspondence than had been the case with his
predecessors. This may have been because of his already established personal
interest in Post Office and the Post Office network. I believe that he wanted to be
more proactive in providing a personal response on Post Office matters. However
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48.
49.
50.
51.
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it remained the case that matters to do with Horizon were ones that ShEx/the
Department regarded as operational matters for POL. With a move away from
asking POL to respond directly to correspondence, it was inevitable that
information from POL needed to be relayed within correspondence sent in the
name of the Minister.
On 3 February 2012, Norman Lamb MP succeeded Ed Davey MP as Minister for
Employment Relations and Postal Affairs.
On 25 February 2012, Alan Bates wrote to Norman Lamb MP requesting a
meeting and enclosing a JFSA survey completed by SPMs, the results of which
Mr Bates explained were in contrast to the assurances Ministers had been given
by the Post Office in relation to integrity of the Horizon IT system (p. 7
UKGI00014165).
I note from a letter dated 4 April 2012 from Norman Lamb MP to Alan Bates, that
Norman Lamb MP invited Mr Bates to arrange a meeting with his private office,
but noting that any meeting would need to take place in the context of the legal
action underway between a number of JFSA members and POL (p. 8
UKGI00014165)).
Mr Lamb agreed to meet Alan Bates and a meeting was arranged for 28 June
2012. On 18 June 2012, I emailed Mike Granville to inform POL that the meeting
between the Minister and the JFSA had been scheduled (UKGI00049011). This
was the same day as a meeting between JFSA, James Arbuthnot MP (now Lord
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52.
53.
54.
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Arbuthnot of Edrom), and POL at which it was announced that POL would
commission a firm of accountants to investigate the JFSA’s concerns.
My understanding is that ShEx was not involved in the decision to commission
an external investigation by forensic accountants; it was POL that decided to
appoint Second Sight. I do not specifically recall providing advice to Ministers on
the appointment and have no recollection of whether anybody at ShEx gave
detailed consideration to the review being carried out independently by the
Cabinet Office or another arm of government rather than by external and
independent accountants.
I prepared a briefing for Norman Lamb MP, dated 27 June 2012
(UKG1I00014165). As usual, the briefing sought to provide the Minister with
sufficient background to the matter, including the developments since the last
update (i.e. the commissioning of independent forensic accountants). I note that
the section of the briefing headed “Horizon system and POL process on
accounting irregularities” (p.5) is broadly the same as the corresponding section
in my briefing to Ed Davey MP. This was because that section set out POL’s
position which had not changed at all during the intervening months. Although it
appears from the documents I have been shown that this meeting between
Norman Lamb MP and Alan Bates took place, I have no direct recollection of it.
In September 2012, Jo Swinson MP was appointed as Minister and on 17
September 2012, she wrote to John Pugh MP concerning Horizon matters in
response to his letter to Norman Lamb MP dated 20 August 2012 ((p. 5
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UKGI00016102) & (UKGI00001443)). I believe that the letter from Jo Swinson
MP would have either been drafted by me or by my colleague Peter Batten. I
believe that we have sought information from POL in case there was any
particular issue in the case to which Mr Pugh had referred in his correspondence
which might usefully be reflected in the Minister’s reply. In this case, the letter
reiterated POL’s confidence in Horizon and also referred to Second Sight’s
review.
55. Following this correspondence, Jo Swinson asked for a briefing note in October
2012 (UKGI00016102). I believe that the briefing would have been prepared by
POL so that the Minister could understand POL’s line in relation to SPM
complaints about Horizon. Whilst I would have reviewed the document to make
sure it addressed the Minister’s questions, I would not have amended the note
before it went to the Minister. In any event, I am sure that I would have retained
POL’s wording expressing its full confidence in the integrity of Horizon; as I have
already mentioned, I would have relied upon POL’s drafting as being truthful and
I would have been wary of altering the text in case it inadvertently altered the
accuracy or meaning of the note. I also did not have cause to doubt the
truthfulness of POL’s stance which at the time seemed plausible when taking into
account the relatively small number of JFSA complainants in the context of the
millions of transactions over thousands of terminals across the country.
Second Sight Interim Report
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56. On 27 June 2013 I received an email from Martin Edwards at POL
(POL00296716). Mr Edwards suggested that I had heard rumours about the
Second Sight investigation and wanted to speak. I have no recollection of the
rumours and cannot recall what they might have related to in the context of
Second Sight, nor can I think where any rumours would have come from. I
suspect it may have been something relating to the timing of the completion of
Second Sight’s report, but I have no way of knowing now whether that was in fact
the case.
57. On 28 June 2013 I received an invitation to a meeting with POL to discuss
Second Sight’s investigation (Email: (POL00189533) & Meeting invitation:
(POL00296917)).
58. On 4 July 2013, a catch up meeting took place between the Minister and the
ShEx POL team. From the agenda, I can see that a number of matters relating
to POL were to be addressed, including the Minister's meeting with James
Arbuthnot MP on 3 July 2013 to discuss the emerging findings of Second Sight’s
review (UKGI00001665). It appears that I was tasked to lead on this item of the
agenda but do not have a recollection of this or of the meeting itself
(UKGI00001654). I would also comment that the email reference in Will Gibson's
to keeping the agenda to one side was another example of the requirement for
brevity in documents provided to the Minister to which I referred earlier in this
statement.
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59. The meeting between ShEx and POL to discuss Second Sight’s investigation
took place on the morning of 5 July 2013 at 08:30. I do not recall details of what
was discussed, however from emails sent later the same day, it seems that we
were provided with a copy of Second Sight's draft interim report and received an
update from POL on their views on the report and their next steps
(UKGI00001691).
60. I have been shown a scanned copy of Second Sight’s draft Interim Report which
appears to show my manuscript annotations at pages 5 and 6 of the document
(UKGI00001694). My annotation to page 6 of the draft Interim Report suggests
to me that I had asked POL about their policy on SPM surpluses, which had been
highlighted by Second Sight at paragraph 6.5 of the draft Interim Report, as this
is not something about which I would have had any prior knowledge and
therefore presume it was discussed during the meeting with POL.
61. My overall impression of the Interim Report was that it suggested that there could
be some substance to the JFSA's claims. The report certainly cast doubt on
POL's complete denial of failures and total defence of Horizon’s integrity,
although the extent and nature of what had been found was not apparent at this
stage.
62. During the early afternoon of 5 July 2013, Will Gibson drafted some initial “lines”
for BIS to take and Peter Batten produced a short summary of the Interim Report
(UKGI00001692). Although I was copied-in to these emails, my input was
minimal. Peter’s summary of the report become the basis of a short briefing which
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63.
64.
65.
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ShEx provided to Jo Swinson MP's office on the afternoon of 5 July 2013, into
which I was copied, and which was provided along with a scanned copy of the
Draft Interim Report. (Email from Peter Batten to Jo Swinson MPs' office dated 5
July 2013: (UKGI00001693); (UKGI00001694); & (UKGI00001695)). My only
involvement with the Minister’s private office on 5 July 2013 was to provide
advice to be passed to the weekend press officers (UKGI00041991).
On 7 July 2013, the Minister’s private office sent an email to Will Gibson, in to
which I was copied, asking ShEx to produce a briefing for the Whips
(UKGI00001764).
The Second Sight Interim report was published on 8 July 2013. During the
morning of 8 July 2013, I sent two emails to the Minister's private office containing
a suggested briefing for the Whips and then, later, information relating to three
initiatives proposed by POL in response to the report ((pp. 2-3 UKGI00001748) &
(UKGI00001745)). While these emails were sent in my name, I think it is likely
that the content was a collaborative brief with the team; I think that Peter and I
would probably have worked together and that it was a matter of who was best
placed to undertake the next iteration at any one time against the background of
other live issues being dealt with in tandem. The Minister's private office
incorporated the information we provided into a briefing note for the Whips and I
supplied some comments on their draft by email at 14:46 (p.1 UKGI0001748).
On the evening of 8 July 2013, I attended a meeting at the Houses of Parliament
(POL00029664). The meeting was attended by James Arbuthnot MP, Alan Bates,
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66.
67.
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Second Sight and others and I attended as an observer in order to see how the
report had been received by the key stakeholders.
ShEx then became involved in the preparation of a Ministerial statement in the
face of a proposed urgent question from James Arbuthnot. My colleagues Will
Gibson and Peter Batten led on that work, although I was copied into an email to
POL, dated 9 July 2013, requesting specific data relating to criminal prosecutions
of SPMs (UKGI00001852). Hugh Flemington at POL swiftly responded to three
out of four of ShEx’s requests on 9 July 2013, although one remained outstanding
and necessitated further chasing (POL00060681).
On 17 July 2013, after Jo Swinson MP had made her Ministerial statement, Peter
Batten enquired as to whether the requested information had been provided by
POL. It had not. In my reply, I commented that POL had “a habit of dropping
everybody off when we seek 'awkward' data.” (UKGI00001852). What I meant
by this comment was that, from time to time, ShEx would seek information from
POL and would be told that it would be provided, but time would go by with it then
not being provided. This was especially true if there was no specific deadline for
the information, such as a deadline for contributing to a briefing for a meeting, or
into a draft response for a Minister's letter or a Parliamentary Question. There
would be occasions when it would drift and we would need to chase. That said,
it is also true that we were in frequent contact with POL and they did provide
extensive information on a wide range of matters.
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68. In around July or August 2013 I made the decision that I was going to retire by
my 70" birthday. Both Will Gibson and I had been impressed by Peter Batten’s
performance and it was felt that he would be a good replacement and ready to
take on this role. My view was that this would also provide valuable consistency
and continuity within the team. Consequently, for my last few months at ShEx I
stepped back to a degree, to allow Peter a lengthy handover period and to ensure
he was fully cognisant of all issues while in the meantime I remained copied in
on substantive correspondence, predominantly in an advisory capacity.
POL Review of Criminal Convictions and Knowledge of Clarke’s advice and
Altman reviews
69. I do not recall being aware that POL undertook a review of criminal convictions
and I do not believe that I provided any advice to Ministers on that process.
70. I have been shown an email which I sent to my colleagues Peter Batten and Will
Gibson on 5 July 2013 (to which I have already referred above) which refers to
POL commissioning external lawyers to review “all cases where legal action
against an SPM has been initiated by POL since separation or may be pending”
(UKGI00001691). I cannot now remember what I was told about this review but
I think I would have understood this to have related to criminal and civil
proceedings.
71. I did not see either the advice POL received from Simon Clarke or Brian Altman
KC's general or interim reviews, in part or in whole, whilst at ShEx, nor do I recall
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ever receiving any briefing on them. The first time I saw these documents was
when the Inquiry provided me with copies as part of its Rule 9 request. Having
now reviewed them, I consider that had I been aware of them at the time, they
would have given me cause for concern, as they would have given credence to
the position adopted by the JFSA and may well have resulted in further action on
ShEx’s part.
The Working Group and Mediation Scheme
72. I do not recall having any involvement with the mediation scheme prior to my
retirement from ShEx in December 2013. My understanding is that the scheme
was devised, implemented and overseen by POL, the JFSA and James
Arbuthnot MP. As far as I am aware, there was no role for ShEx or Government.
The NFSP and George Thomson
73. In response to a question I have been asked by the Inquiry, my professional
relationship with George Thomson involved fairly frequent contact with him on a
range of issues relating to SPMs, sub-post offices, the NSFP, and discussions
about concerns about government policy towards the network and viability of
offices. These included network change, the network transformation programme
and adding other government services into the network.
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74. With regard to the Horizon IT system, I do recall speaking to Mr Thomson on two
or three occasions about the allegations being levied against Horizon and I recall
that he was quite dismissive of the JFSA and SPMs in those discussions.
REFLECTIONS & RECOMMENDATIONS
75. My recollection is that during the period 2000 to 2013, the Department and
Ministers fulfilled their roles and responsibilities to the best of their abilities within
the framework which had been established in respect of ALBs, Executive/Judicial
separation and Post Office operational matters, and the knowledge and
information available to them.
76. I do not recall any significant changes in Departmental or Ministerial portfolios
between 1998 and 2013 which adversely affected the level or quality of
Government oversight of ShEx, RMG or POL. The primary focus for Ministers
would vary in line with whichever major issues or events required most attention
at the time. Examples of major issues during this time include the privatisation of
Royal Mail, the separation of POL from Royal Mail, network change programmes
and funding for POL.
77. Even with hindsight, it is difficult to identify how a different approach to POL
oversight might have been achieved before Summer 2013 and the publication of
the Second Sight Interim Report. One specific action which may have been of
value would have been for ShEx to press for POL to instigate an independent
review of the JFSA specific cases and associated allegations made before the
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instruction of Second Sight in 2012. However, prior to the appointment of Second
Sight, I believe that the true scale of the problems and numbers of cases was not
visible to ShEx. Therefore the proportionality argument advanced by POL
appeared to us to be a strong point in favour of POL’s defence of the Horizon IT
system.
78. It is nearly 11 years since I retired and I have no knowledge of the current
structure of, and arrangements for, government oversight of POL and its
governance. I therefore do not feel qualified to offer any suggestions on what
further changes might be made to improve or strengthen them.
STATEMENT OF TRUTH
I believe the content of this statement to be true.
Signed:
Dated: 17 October 2024
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Index to First Witness Statement of MICHAEL JOHN WHITEHEAD
Document I Document Description Inquiry URN Inquiry
no Control
number
1 Submission dated 22 January 1999 I UKGI00015320 UKGI026113-
drafted by Mike Whitehead for the 001
Secretary of State RE: Meeting in
due course to discuss the range of
issues in which the Department
and ICL have a common interest
2 Briefing from David Sibbick to BEIS0000368 BEIS0000348
Secretary of State (Mr McCartney)
re latest developments on Horizon
3 Letter from Mr McCartney to David I UKGI00014072 UKGI024865-
Drew MP re the changes 001
announced recently to the Horizon
project to automate the post office
network
4 Letter to Matthew Taylor Esq. MP I UKGI00014043 UKG1I024836-
from Mr Johnson re concerns of Mr 001
and Mrs Hannaford of Penwithick
Post Office about the planned
changes for the Post Office
5 Letter from Alan Johnson to UKGI00013804 UKGI024597-
George Hall re progression of the 001
Horizon programme
6 Note of the 13th Meeting of the BEIS0000567 VIS00014093
Horizon Working Group held on 13
December
7 Performance and Innovation Unit POL00004418 VIS00005486
Report into Modernising the PO
Network
8 Note of the 10th Meeting of the BEIS0000566 visSo0014092
Horizon Working Group 22/08/2000
9 Email from Stuart Sweetman to BEIS0000558 VIS00014084
Mary Spoor, Derek Davis, Basil
Larkin RE: Horizon Working Group
10 Memo from Mike Whitehead to UKG1I00014136 UKG1I024929-
Alan Johnson cc'ing David Ribbick 001
Re Visit to South Ribble and
Chorley Constituencies
1 Letter to Mrs Jackson dated 30 UKGI00049066 UKGI057831-
March 2001 001
12 Letter to Mrs Jackson dated 14 UKGI00049067 UKGI057832-
May 2001 001
13 Letter from Mike Whitehead, DTI, UKGI00013864 UKGI024657-
to Mrs EM Jackson 001
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14 Hansard extract dated 8 July 1999 I RLITO000219 RLITO000219
15 Robert Porteous’ email to Alan POL00027890 POL-0024531
Cook (POL), dated 30 April 2009
16 Computer Weekly Article 11 May POL00041564 POL-0038046
2009 titled 'Bankruptcy,
prosecution and disrupted
livelihoods - Postmasters tell their
story’
17 Email from Mike Granville to Mike I POL00326828 POL-0174008
Whitehead: RE: Information
requested
18 Email from Stephen Robling UKGI00035900 UKGI044795-
(ShEx) To: Mike Whitehead (ShEx) 001
CC: Oliver Griffiths (ShEx) re
Update on Horizon roll-out and
results of cash audits as part of the
pilot
19 Letter from Alan Bates, Justice for I UKGI00016119 UKGI026912-
Sub-Postmasters Alliance (JFSA) 001
to Edward Davey MP re Meeting
request
20 Letter from Edward Davey MP to ABATO0000001 ABAT00000001
Alan Bates re answer to his
request for a meeting
21 Letter from Alan Bates to Edward UKGI00016099 UKGI026892-
Davey MP, re Justice for Sub- 001
Postmasters Alliance
22 Email from Oliver Griffiths, ShEx POL00417098 POL-BSFF-
Deputy Director to POL’s Managing 0237249
Director, David Smith
23 Email from Mike Whitehead (ShEx) I POL00417097 POL-BSFF-
to Sue Huggins, Mike Granville and 0237248
others re: Justice for Sub
Postmasters Alliance
24 Brief to BIS for Edward Davey’s POL00055950 POL-0052429
prospective meeting with ‘Justice
for Sub-Postmasters Alliance’
25 Briefing from Mike Whitehead UKGI00014164 UKGI024957-
(ShEx) to Ed Davey RE: Meeting 001
With Alan Bates
26 Email from Mike Granville to Mike POL00326826 POL-0174006
Whitehead 2 December 2010 RE:
Further information
27 JFSA response issues — paper for I POLO00326827 POL-0174007
BIS
28 Letter from Edward Davey to Alan I POLO0186759 POL-BSFF-
Bates RE: Response to Letters 0024822
Dated 14 and 21 October 2010
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29 Letter from Mike Whitehead (BIS) I UKGI00013720 UKG1I024513-
to Alan Bates JFSA re. Letters of 001
Claim on behalf of JESA members
30 Agenda for meeting with Alan UKGI00014165 UKGI024958-
Bates to discuss the JFSA’s claims 001
its members are victims of endemic
flaws in POL’s Horizon system
31 Email from Mike Whitehead to Mike I UKGI00049011 UKGI057768-
Granville RE: Meeting with Alan 001
Bates
32 Email from Mike Whitehead to Jo UKGI00016102 UKGI0238950-
Swinson MP's Office re: POL 001
Horizon System with attached
documents
33 Letter from Dr John Pugh MP to Mr I UKGI00001443 UKGI012257-
Norman Lamb of 20 August 2012 001
34 Email from Martin Edwards to Mike I POLO0296716 POL-BSFF-
Whitehead re Horizon investigation 0134766
35 Email from Martin Edwards to POL00189533 POL-BSFF-
(GRO) Re: PO/BIS meeting on 0027596
Second Sight investigation
36 Email from Sarah Paddison to POL00296917 POL-BSFF-
Alwen Lyons, Martin Edwards, Will 0134967
Gibson and others RE: PO/BIS
Meeting on Second Sight
Investigation
37 Agenda for catch up meeting UKGI00001665 UKGI012479-
between the Minister and the ShEx 001
POL team.
38 Email from Will Gibson to Mike UKGI00001654 UKGI012468-
Whitehead and others Re: Post 001
Office Catch up
39 Email from Mike Whitehead to UKG1I00001691 UKGI012505-
Peter Batten, Will Gibson re: SS - 001
report highlights
40 Scanned copy of Second Sight’s UKGI00001694 UKGI00001694
draft Interim Report with
manuscript annotations
41 Email from Peter Batten to Mike UKGI00001692 UKGI00001692
Whitehead and Will Gibson. Re:
Lines
42 Email from Peter Batten to UKGI00001693 UKG1I00001693
Swinson MPST cc Will Gibson,
Mike Whitehead and others RE
Draft Second sight report into POL
Horizons system
43 Narrative and summary of the UKGI00001695 UKGI012509-
001
Second Sight report
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44 Email from Angela Balakrishnan to I UKGI00041991 UKGI050886-
Mike Whitehead, Peter Batten and 001
Will Gibson re: Draft Second Sight
report into POL's Horizon system
45 Email from Will Gibson to Mike UKGI00001764 UKGI012578-
Whitehead, Peter Batten, MPST 001
Cable and others re Arbuthnot
46 Email from Mike Whitehead to UKGI00001748 UKGI012562-
MPST Swinson, cc Will Gibson, 001
Peter Batten and others re: FW:
Horizon: James Arbuthnot MP
47 Email from Mike Whitehead to UKGI00001745 UKGI012559-
MPST Swinson, cc Will Gibson, 001
Peter Batten and others re Horizon:
James Arbuthnot MP - Second
Sight Report
48 External Meeting Minutes of POL00029664 POL-0026146
08/07/13 at Houses of Parliament
49 Email from Mike Whitehead to UKGI00001852 UKGI012666-
Peter Batten and Will Gibson re: 001
Second Sight report - follow up to
Friday
50 Susan Rudkin Case Study - Email / POLO0060681 POL-0057160
Chain from Hugh Flemington to
Will Gibson Re Will - Intel on MP
Case - JFSA Case Intel to follow
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