Government claims it was misled by Post Office over IT scandal

As the likelihood increases of a public inquiry into the Post Office’s treatment of subpostmasters in the Horizon IT scandal, the government has said the Post Office misled it when asked whether issues raised by subpostmasters about the Horizon system were true.

Responding to questions during a House of Lords debate on 25 February, Martin Callanan, a UK government minister in the House of Lords, suggested the Department for Business, Energy and Industrial Strategy (BEIS) had been misled by the Post Office over Horizon IT problems.

As prime minister Boris Johnson commits to a public inquiry into the Post Office Horizon IT scandal, this could be seen as the government distancing itself from blame.

Callanan said: “The Department for Business, Energy and Industrial Strategy relied on Post Office management to investigate the issues with the Horizon system and the government was assured that the system was robust and the issues being raised by the postmasters were being handled appropriately. BEIS pressed management on these issues and was given consistent advice from the company’s experts that appeared to verify these claims at that time.’

But he added: “In hindsight, of course, facts have come to light through the litigation that has revealed that advice given during that period was flawed.”

Callanan was referring to the judgment in the second trial in the recent multimillion-pound litigation involving subpostmasters who had suffered as a result of IT problems causing losses, and the Post Office’s insistence that this could not be the case and that subpostmasters were to blame for false accounting or theft.  

As revealed by Computer Weekly in 2009, subpostmasters were being blamed for losses that they claimed were caused by computer errors. The Post Office always denied this and prosecuted subpostmasters, with many paying back the losses and some even going to prison (see timeline below). MP Andrew Bridgen recently described the scandal as “one of the biggest miscarriages of justice in UK history”.

The judgment by High Court judge Peter Fraser said Post Office claims that the Horizon IT system was robust and could not be blamed for the losses were wrong and “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 21st century equivalent of maintaining that the Earth is flat.”

The fact that the problems were made public in 2009 by Computer Weekly and then followed up by other news organisations, means the government was warned over a decade ago, yet the prosecutions continued.

The government has already admitted it was too passive when it came to managing the Post Office, in the light of the revelations made in court and the damning judgments that followed.

During a debate in the House of Lords, Conservative peer Stuart Polak asked Ian Duncan, parliamentary under-secretary of state at BEIS, what exactly was the role of the department’s representative on the Post Office’s board of directors.

Duncan confirmed there was a non-executive director responsible for representing the department and the government, but he said the role had been passive, and would be changed following the court judgments.  

“His role has evolved from a perhaps more passive approach to a much more active one going forward,” he said. “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.”

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

In this week’s debate, Callanan confirmed that the government “will be monitoring closely the progress the Post Office is making on delivering its programme of commitments following the settlement”.

Former Post Office CEO Paula Vennells will inevitably come under the spotlight in any public inquiry. She was CEO between 2012 and 2019, during a period when many subpostmasters suffered at the hands of Horizon.

After earning millions of pounds at the Post Office and being awarded a CBE for services to it, Vennells moved to Imperial College Healthcare NHS Trust, which she chairs. Concerns over her appointment are being reviewed in line with the NHS’s Fit and Proper Persons regulation, after a former NHS doctor raised them with reference to the Horizon scandal.