Government admits it was too passive managing Post Office as parliamentary pressure builds

The government has acknowledged that it was too passive in managing the Post Office, which saw the publicly owned organisation make decisions that destroyed the lives of the people who represent them on high streets across the UK.

Over the past 20 years, the government has failed to address serious mismanagement by the Post Office, despite concerns being raised and made public.

Computer Weekly first reported the problems with Horizon in 2009, when it made public the stories of a group of subpostmasters. Soon after this, more subpostmasters came forward, but the dispute dates back further than that (see timeline below).

A multimillion-pound case, which concluded in December, saw 550 subpostmasters take the Post Office to court in a group litigation, in an attempt to redress the grievances caused to them by the error-prone computer system they use, as well as contract terms described as oppressive by a High Court judge. Subpostmasters were prosecuted for theft or false accounting as a result of accounting shortfalls that were caused by the Horizon IT system, with some subpostmasters jailed.

After the subpostmasters won the court battle, which vindicated them and implicated the Post Office with serious failures, their fight for justice continues. Pressure is being put on politicians with calls for the legal costs of subpostmasters to be paid by government and the launch of a judge-led public inquiry.

Subpostmasters were awarded £57.75m in damages, but after costs were taken out they were left with around £10m, which means subpostmasters will not even get back the money they lost. There are also calls for the people responsible for allowing the scandal to happen to face justice.

An all-party parliamentary group (APPG) will meet affected subpostmasters on March 16 to discuss redress of the grievances with subpostmasters.

The government will come under the spotlight for its management of the publicly owned Post Office, which it describes as an arm’s-length organisation of which it has no day-to-day control.

Campaigners have criticised the government for not preventing the Post Office from wrongly prosecuting subpostmasters, as a member of government sits on the board of Post Office. There are also questions for the government about why the Post Office was allowed to spend millions of pounds fighting the court case, despite being aware of problems with Horizon.

During a debate in the House of Lords, Conservative peer Stuart Polak asked Ian Duncan, Conservative peer and parliamentary under-secretary of state in the department for Business, Energy and Industrial Strategy (BEIS), what the exact role of the department’s representative on the board of directors of Post Office is.

Duncan confirmed there is a non-executive director who is responsible for representing the department and the government, but said the role has been passive, and will be changed following the court judgements.  

“His role has evolved from a perhaps more passive approach to a much more active one going forward. We have to have a much stronger view about how we manage this area, through the chief executive, the chairman and the non-executive director with responsibility for governance and clear adherence to the responsibilities of the board itself.”

“Passive should be described as non-existent,” said Alan Bates, the former subpostmaster who led the legal action against the Post Office. “The government has a statutory duty to be involved in the Post Office.”

Over the past two decades, the Post Office has prosecuted subpostmasters for theft and false accounting, when the losses were actually caused by faults in the computer system. Some subpostmasters were sent to prison, and hundreds, potentially thousands, were forced to cover losses that were not their doing. 

In his judgement in the High Court for the second trial in the court case, which focused on the Horizon computer system, Judge Fraser said the Post Office had exhibited “a simple institutional obstinacy or refusal to consider any possible alternatives to their view of Horizon, which was maintained regardless of the weight of factual evidence to the contrary”. 

“That approach by the Post Office was continued, even though now there is also considerable expert evidence to the contrary as well, and much of it agreed expert evidence on the existence of numerous bugs,” he added.

“This approach by the Post Office has amounted, in reality, to bare assertions and denials that ignore what has actually occurred, at least so far as the witnesses called before me in the Horizon issues trial are concerned. It amounts to the 21^st century equivalent of maintaining that the Earth is flat.”

Lord Justice Coulson in the Court of Appeal has likened the treatment of subpostmasters by the Post Office to the way Victorian factory owners treated their workers.