Government covers its ears as complaint by victims of Post Office abuse heads to ombudsman

A complaint against the government’s handling of the Post Office during a period that saw the organisation prosecute subpostmasters for crimes they did not commit, will go to the Parliamentary Ombudsman after a government department denied responsibility.

In the complaint, which is now public, subpostmasters accuse the government of failing in its duty to oversee and regulate the Post Office, allowing it to wrongly prosecute subpostmasters for unexplained losses, rather than investigating possible computer errors.

A Computer Weekly investigation in 2009 revealed that subpostmasters were blamed for unexplained financial losses, which they claimed were caused by errors made by the Horizon IT system that they use in branches. The Post Office denied this, and many subpostmasters were subsequently prosecuted for theft and false accounting, with prison sentences, community service, criminal records and heavy fines among the injustices they suffered as a result. This has become one of the biggest miscarriages of justice in UK history (see timeline below).

Subpostmasters took the Post Office to court in a group litigation action to prove the computer system was to blame for unexplained losses. They won the multimillion-pound High Court battle, which concluded in December 2019, proving that the Horizon computer system was to blame for unexplained accounting shortfalls, and not them.

They were awarded a £57.75m settlement from the Post Office, but after legal costs and money for the litigation’s funders, claimants were paid only about £11m between them. This came nowhere near covering the losses experienced by the subpostmasters, never mind compensating them for their suffering. For example, one subpostmistress who was wrongly found guilty of theft was sent to prison and lost her livelihood, but received only £8,000.

Subpostmasters demand £300m, as part of their complaint to the ombudsman, to recover the huge costs they incurred in a court battle that exposed the government-owned Post Office’s role in a scandal that ruined many lives.

As is protocol, the subpostmasters, through the Justice For Subpostmasters Alliance (JFSA) campaign group, first had to send their complaint to the Department for Business, Energy and Industrial Strategy (BEIS), which was given a deadline of the end of November to respond to the complaint. It did so on the final day of the month, but in its response, it denied responsibility.

The response from Adam Shortman, a senior civil servant at BEIS, said: “Having reviewed the complaint, the additional documentation you provided and your previous correspondence, I can confirm that, although I was very sorry to read of the hardship faced for individual postmasters, I have determined to uphold the previous decisions made by the department. The department’s position has not changed since your recent correspondence with minister Paul Scully. The reply from the minister stated that the issues regarding the Horizon IT system and the prosecution of postmasters were an operational matter for the Post Office and that government cannot accept any requests for payment.”

Alan Bates, the former subpostmaster who has fought the Post Office over the issue for nearly two decades, said: “BEIS has decided not to answer one single point in the complaint we submitted; it obviously decided it was not possible to defend the indefensible.”

Bates added: “For some strange reason, BEIS and the government can’t see that being the 100% owner of a business that it is continually financing to keep afloat makes them liable for the damage that business inflicts on others. This is especially true in our case, when there is significant evidence to show it has been involved in decisions and the cover-up that has been going on for many years.”

The complaint will now go to the Parliamentary Ombudsman, where the government’s involvement will be scrutinised, including key questions that the postmasters demand are answered, such as who knew what, who did what and when.

The submission has to be made by an MP, and in this case it will be Kevan Jones, Labour MP for North Durham, who has been a major voice in Parliament campaigning for justice for the subpostmasters.

“The Parliamentary Ombudsman can investigate complaints from members of the public who believe that they have suffered injustice because of maladministration by government departments or certain public bodies,” says the House of Commons Library Briefing, The Parliamentary Ombudsman: role and proposals for reform.

It continues: “Maladministration can be defined as the public body not having acted properly or fairly, or having given a poor service and not put things right.”

In February, the government said it had been misled by the Post Office. In the House of Lords, UK government minister Martin Callanan said at the time: “BEIS 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.”

But the government’s constant description of the Post Office as an arm’s-length body over which it has no operational control is wearing thin among parliamentarians. Labour peer Peter Hain said recently that the government had ultimate responsibility for the scandal.

“The permanent secretary of the department is the accounting officer for the Post Office, the government has a representative on the board and the government is ultimately responsible for this scandal,” he said. “It is not good enough to keep delaying this with lots of processes and reviews – they have got to be compensated fully.”

Conservative peer James Arbuthnot, who has campaigned for justice for subpostmasters for many years, said it was hard to believe that the government, “which owns, directs and funds the Post Office”, has at any stage been ignorant of what the Post Office has been doing.