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Witness Name: David William Miller
Statement No.: WITN03470200
Dated: 2 Q Febrio 2 24
POST OFFICE HORIZON IT INQUIRY
SECOND WITNESS STATEMENT OF DAVID WILLIAM MILLER
I, DAVID WILLIAM MILLER, will say as follows:-
1.
I make this statement in response to the request for information from the
Inquiry, pursuant to Rule 9 of the Inquiry Rules 2006, dated 29 November 2023.
I can confirm that I am legally represented and had legal assistance in drafting
this witness statement.
When reading this statement, the following should be born in mind:
a) Iam74 years old;
b) I am being asked to recollect matters which occurred over 20 years ago;
c) I have no contemporaneous documents in my possession (other than
those provided by the Inquiry);
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d) Some of the documents provided by the Inquiry are not documents that I
would have seen at the relevant time. Their disclosure by the Inquiry is the
first time I have seen them.
e) I have watched a considerable amount of the Inquiry on YouTube.
Knowledge of the integrity of Horizon
3. _ My recollection is that I left the Horizon Programme Director role at the turn of
the year 1999 to take on a new role - Managing Director Post Office Network
which came about as part of the Group wide 'Consignia' reorganisation.
4. At this stage my view of Horizon was that it was a new, very large and
complex system which was under constant review and improvement by
Fujitsu. I never considered Legacy Horizon perfect but thought that any
problems with the system were subject to control procedures leading to
resolution.
5. I did not have any involvement with / oversight of such issues after I stepped
down as programme director. I only became aware of the significant Horizon
issues in respect of prosecutions / civil proceedings once I had read the
Hamilton & Others v Post Office Criminal Court of Appeal judgement. I then
read parts of Fraser J judgements in the group class action against the Post
Office.
6. I was shocked and very disappointed by the full extent of the Horizon issues
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evidenced in the judgements.
7. After stepping down as Horizon Programme Director I did not brief anyone from
the POL or RMG boards, investigation teams, legal teams or any other person
responsible for the conduct of prosecutions or civil proceedings because (1) I
thought that any problems with the system were subject to control procedures
leading to resolution and (2) I was unaware of the full extent of the Horizon
issues until I read the judgements I have referred to.
8. I was not a member of the POL Board until November 2001, so I do not
know what the Board discussed before that date. After that date I cannot
recall issues with the reliability of Horizon being raised at board meetings.
My post-Horizon Director roles
9. Between December 1999 - July 2001 I was Managing Director Post Office
Network. In that role my responsibilities were (1) management of all post offices
in the UK and Northern Ireland via three Sales and Service General Managers,
(2) Operations Directorate including Network Change and cash distribution, (3)
Automation Directorate including Horizon but also including other system
changes, (4) Customer and Network Directorate including relationships with
other parts of Consignia, Internal Communications and social network policy,
and relationships with NFSP, and (4) Personnel including relationships with
directly employed staff.
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10. This role lasted for 18 months, reporting to Stuart Sweetman. During the last
6 months I was on sick leave having both hips replaced. Just before I returned
to work in August 2001 the Consignia Group Board decided that the
reorganisation had not worked and reconstituted Post Office Ltd. I was
appointed Operations Director. The temporary MD of Post Office Ltd was Paul
Rich who covered the role until David Mills arrived as Chief Executive in early
2002.
11. As Operations Director I had the Retail Line including sub-postmaster
relations, cash distribution and a role to help David Mills understand the
business and assisting in recruiting new Directors as required. As the scope
of the changes needed became apparent David Mills changed my job title in
about 2004 to a Chief Operating Officer role which focused on some of the
major changes needed to stay solvent.
12. POL had agreed with the Government to reduce the size of the non-rural
network by 3000 and MP's had voted to provide £150m specifically to do
that. In addition, POL needed up to £200m investment from a financial
services partner to develop new business lines to replace the Benefits
Agency work. I was very closely involved with both of these projects.
13. I reported to Paul Rich who was temporary MD of Post Office Ltd until David
Mills arrived. I reported to him until late 2005 when he left the organisation.
I became the temporary MD for approximately two or three months until Alan
Cook (David Mills replacement) arrived I then reported to him until I retired
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14.
15.
16.
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on the 28" July 2006.
In the above roles I had very little involvement with the RMG legal
department except to discuss sub-postmasters contract business
restrictions. As far as I recall, POL did not have an independent legal
department whilst I was working for the organisation. POL / RMG IT was
dealt with at POL Executive team level where it was a separate Directorate. I
was not involved in any of the detail in respect of POL IT, so would not deal
with them save at Director level to discuss strategic issues such as
whether/how horizon would be replaced. I have no memory of a POL / RMG
‘problem management team’. POL / RMG Security worked to Group although
they were described as 'embedded' in POL. I met Tony Marsh regularly for
approximately an hour and he had access to me at any time.
I was aware that POL was, from time to time, involved in the investigation
and prosecution of sub postmasters for criminal offences arising from alleged
shortfalls in branch accounts, but I did not know any of the detail and was not
involved in the oversight of investigations or prosecutions.
Likewise, I was aware that POL would, from time to time, pursue postmasters
for the recovery of alleged shortfalls branch accounts, including through civil
proceedings, but again I did not know any of the detail and was not involved
in the oversight of such action.
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17.
18.
19.
20.
21.
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In terms of civil actions, I was unaware of the detail of the policies, guidelines
and practices followed by POL / RMG when bringing a case against a sub-
postmaster. Nor was I aware of how audits of sub-postmaster’s branch accounts
were conducted - the auditors were part of Finance — I was not aware of the
conduct of such procedures.
In terms of practices and policies adopted by POL in respect of suspending or
terminating sub postmasters’ contracts. When I was Head of Retail Network, I
was involved in a few cases involving the termination of sub-postmasters
contracts and would have checked the relevant policies at the time but
otherwise did not have a detailed knowledge of them. As a Board Member I did
not get involved in the detail of specific cases.
In terms of criminal prosecutions any relevant policies were with Group and
were never part of my remit. I was unaware of the detail of the group policies
until I watched the Inquiry.
I did not pass on information about the reliability of the system because (1) my
tole was taken over by David Smith who had worked with me and was aware of
the issues and (2) I believed that the issues were being addressed going
forward.
In none of the above roles did I manage or arrange the distribution of
information relating to the ongoing reliability of the Horizon System within POL
- this was the responsibility of the IT Department.
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POL corporate governance
22. My understanding and recollection was that my main responsibility and focus
was whether POL was a going concern between November 2001 and July
2006. This was discussed regularly and frequently because Board Member had
legal duties if they formed the collective view that POL was not going to meet
its liabilities.
23. I do not recall the POL Board having oversight of criminal prosecutions - this
was dealt with by the Security and Legal departments (who were part of Group).
In hindsight, this seems to be a significant oversight by the Board.
24. There would have been POL Board discussion of civil litigation if it was material
to the financial position of the company or its reputation, but I do not recall this
happening.
25. The POL Board took an interest in the future development of its IT and agreed
business cases as appropriate. The day to day running of its systems was left
to the POL iT Department and Fujitsu.
26. Any proposed changes to major accounting systems would be discussed at the
Board as business cases. Preparation of accounts year on year was the
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27.
28.
29.
30.
31.
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responsibility of the Finance Department, with the Board signing off the
accounts.
It was expected that any serious breach of the Race Relations Act would be
reported upwards to the Board for urgent discussion - but I can't remember the
precise process for how this happened — I think it was via Company Secretariat.
I was not aware of this ever happening.
The corporate structure of POL and RMG when I joined POL as a director was
that POL was led by a Chief Executive who had a number of direct reports who
were both Executive Team and Board Members. The direct reports were
Operations, Finance, Personnel, IT, Marketing and Network Banking. POL was
a wholly owned subsidiary of RMG. The CEO of POL was an RMG main board
member.
In terms of how the POL Board operated when I became a director, the Board
met frequently (although at irregular intervals) during the financial year. There
was an External Chair plus one other external member, both of whom were part
time. The style of the Board was inquisitorial, focused on performance of
Executive Directors, company viability, strategy and major programmes. The
Board did not focus on day-to-day matters.
The Chair and Chief Executive determined the agenda of Board meetings, but
all members could suggest items to be tabled at any meeting.
The board meetings were regularly attended by the Chairman, POL Executive
Directors, External Directors and the Company Secretary from RMG.
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33.
35.
36.
37.
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32.Due to the passage of time, I cannot recall any detail about the Board's,
subcommittees, their membership or their terms of reference. I recall there
was an audit committee and risk sub-committee but I was not member of
either.
Executive Directors submitted functional reports to each Board meeting
highlighting matters of significance. There was a Risk Register review at each
meeting.
The level of IT expertise of those attending Board meetings varied. For
example, Ric Francis had previously worked in Safeway Supermarkets as the
IT Director. There would also have been others who had some experience but
I cannot now recall that with any detail. My own IT experience was limited.
All members of the Executive team were on the Board and so were able to
report to the Board. If they could not attend any given meeting, they would file a
report and if necessary, would send someone to attend in their absence for the
relevant part/all of the meeting.
The Chair and CEO of POL sat on RMG Board but I don't know about the
onward relationship with / reporting lines to the DTI.
POL' s corporate structure seemed to me to be adequate at the time.
However, in retrospect I have concerns about the degree of autonomy
enjoyed by Security and Legal and the lack of POL oversight.
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38 I cannot recall any material change to the corporate structure of POL or the
operation of the Board up until my departure in 2006.
39 I did not have any detailed understanding of the formal processes by which
DTI exercised oversight over POL except that it was done via Group,
particularly in terms of strategic decisions about the size and shape of the
PO network, how that impacted directly on the size of financial subsidy and
therefore POL's overall budget. I am unable to comment on the adequacy of
Government oversight.
40 Ata lower level a lot of work was carried out by my department directly with
DTI about the Rural Network. Similarly, the issues around deploying Network
Reinvention which closed 3000 urban Post Offices at the cost of £150m. I
was personally responsible for this project and during its course, over 2
years, had regular meetings with Officials and Ministers. I felt that DTi put in
the work to help inform these decisions.
41 When the Chair of POL / Non-Executive Director were appointed the CEO
and COO of POL were given the opportunity to meet candidates and
comment. The final decision on appointments was with Chair Group Board. I
do not know why these roles were deemed necessary except to say that the
impetus came from Group.
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42 From the best of my memory the Risk and Compliance Committee was created
because Sir Mike Hodgkinson (Chairman POL) had been used to operating
with one at Heathrow Airport where he had been Chief Executive. The top team
of POL was supportive of the idea.
43 I cannot now remember what the remit of the Committee was beyond
controlling the company's Risk Register.
44 As far as I recall I was not a member of the committee.
45 I am not aware that the Committee monitored POL’s compliance with legal or
ethical obligations in terms. of financial shortfalls, prosecutions or civil
proceedings.
46 In terms of POLB04/1191 of POL00021486 I can't remember but I don't think
the Board did discuss the issue of POL’s prosecutorial function in respect of
sub postmasters on 15 December 2004.
Audit / ARQ data
47 Looking at document FUJ00171979 (ICL report on Horizon Data Centres dated
January 2001) I was on sick leave from 1 February to 31 July 2001 so I was not
involved with this matter.
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48 I originated the requirement for access to ARQ data to be made available, but I
was not involved subsequently and had no involvement in negotiations regarding
rights of access to data held by Fujitsu, in order to pursue prosecutions or civil
proceedings.
49 I do not recall being aware of any reluctance within POL in investigations to
make requests for ARQ data. I understood that although budgets were tight the
view in POL would have been that if ARQ data was needed it should be
requested.
50 I was not involved in the issue of incomplete ARQ data identified in the email —
POL00114566.
IMPACT Programme
51 I had no involvement with the design and implementation of the IMPACT
Programme. I was aware of it and its progress was reviewed at the Executive
team. The Programme was originated and run initially by David X Smith who
handed it over to Peter Corbett, the Finance Director.
52 As far as I recall I was not made aware of any issues regarding the IMPACT
Programme by the Security & Investigations Team.
53 In respect of changes to the suspense account rules, by which sub postmasters
would no longer be able to place disputed discrepancies in a local suspense
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account and roll into a new trading period, I don't think the POL Board
discussed this when I was present.
Wish You Were Here error notices
54 Looking at POL00157433 and POL00172836 — an email from Tony Marsh and
attached spreadsheet — I have no recollection of this issue, so cannot assist as
to what the issue was, or what steps were taken to deal with it.
Board Meeting on 20 August 2003
55 Looking at POL00021483, Tony Marsh worked for the Group Security
Director with a dotted line to me. He was designated Head of Security in POL.
I met him regularly and he had access to me at any time if I was available. I
had a good working relationship with him and I trusted him.
56 As far as I can recall at no time when I was present did the Board discuss the
prosecution of sub-postmasters or the reliability of Horizon data as the basis
for prosecution.
Civil proceedings against Ms Wolstenholme (Cleveleys)
57 Looking at POL00142503, POL00118229 and WITN00210101, I was made
aware of this case by Mike Granville, who was the Head of Section in
charge of sub-postmaster contracts because Ms Wolstenholme was
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challenging her employment status which if she had succeeded would have
fundamentally changed POL’s business model. I cannot comment on what he
may or may not have known.
58 This was some time around about 2001. However, I was not made aware at
that time that Ms Wolstenholme was challenging the Horizon System.
59 My first formal involvement with the case was that I was asked to sign off the
compensation payment to Ms Wolstenholme in 2004, in the absence of Peter
Corbett, who was on holiday. Rod Ismay's note to Donna Parker (my PA at
the time) secured a slot in my diary for Tony Marsh. We met for
approximately 10-15 minutes. To the best of my memory, he told me there
was an issue with the expert advice which had led our counsel to say that the
case was unlikely to succeed. It was clear that he did not think much of the
expert. The view was that we should cut our losses and pay up. He said
something about Horizon — I cannot recall specifically what he said but I
remember checking with him whether there were issues with Horizon (I said
something like; “you are not saying there are issues with Horizon are you,
Tony?”) He said that there were no issues and I got the impression it was a
one-off case. During the meeting, he produced some paperwork to
authorise payment which I signed.
60 As far as I recall I was not given a copy of the expert report or counsel’s advice
nor did I request it — I definitely did not read it at the relevant time. Had I known
what the sub-postmaster was saying about the system and the details of expert
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report then I would have asked further questions/raised concerns with others.
61. Knowing what I now know about Horizon and the way it was used to wrongly
prosecute and bring civil claims against sub-postmasters I very much regret not
reading the expert's report and counsel's advice — had I done so I would have
taken action to address the issues raised. I acknowledge that by not reading
them there was a missed opportunity.
$90 Release
62 I cannot recall my what my involvement was, if any in the S90 release.
63 Looking at POL00028984, I do not remember the specific individuals
mentioned in the email chain. It maybe that one or two were in my department
further down the chain of command but I have no specific recollection of them. I
was not aware of the matters raised in this email, whilst I was employed by POL.
Horizon Online
64 The email from David X Smith dated 25'" March 2001 attaching the document
entitled Horizon Beyond 2005 in POL00104333 was sent to my work email
address whilst I was on sick leave. However, it reflected the discussions I had
been involved in with others in relation to forward planning for the necessary
continuation of Horizon beyond 2005. My involvement in the development of
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Horizon Online was in 2006 when acting MD for a couple of months in between
David Mills and Alan Cook. I also signed off the document RMG00000041
which was prepared for me by Ric Francis the IT Director and his team who
were developing Horizon online.
General
65 To the best of my knowledge, there are no other matters that I can think of that
will assist the Chair.
Statement of Truth
I believe the content of this statement to be true.
Dated: 28 keormany 20244 :
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Index to Second Witness Statement of David William Miller
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No. URN Document Description Control Number
1. I POL00021486 I Minutes of the POL Board Meeting I POL0000019
on the 15" December 2004
2. I FUJ00171979 I ICL report on Horizon Data Centres I POINQ0178160F
dated January 2001
3. I POL00114566 I File on audit record requests POL-0113672
4. I POL00157433 I Email from Tony Marsh, copied to POL-0145765
David Miller, on 1 July 2003
5. I POL00172836 I Spreadsheet attached to Email from I POL-0168289
Tony Marsh, copied to David Miller,
on 1 July 2003
6. I POL00021483 I Minutes of the POL board meeting on I POLO000016
3 August 2003
7. I POL00142503 I Email from Rod Ismay to Donna POL-BSFF-0001779
Parker and others
8. I POL00118229 I Advice on evidence and quantum by I POL-0120149
Mr Brochwicz-Lewkinski dated 26"
July 2004
9. I WITN00210101 I Report of Jason Coyne in POL v I WITN00210101
Wolstenholme
10. POL00028984 I Email chain ending with an email POL-0025466
from Brian Trotter to Sandra MacKay
on 6 March 2006
11] POL00104333 I Fax to David Miller on 25 March I POL-0103916
2001 with attachment
12.) RMG00000041 I David Miller's Report on _ the I VISO0009022
Extension of Horizon — services
contract including system
replacement dated January 2006