Investigation finds 'reasonable likelihood' Post Office Capture software caused accounting losses

An analysis by specialist forensic investigators has concluded there is a "reasonable likelihood" that the Post Office's Capture software used by hundreds of subpostmasters in the 1990s caused accounting shortfalls for which the users were blamed and, in some cases, prosecuted.

It is estimated that between 1,500 and 2,000 subpostmasters used Capture between its introduction in 1993 until the controversial Horizon system was piloted in 1998 and rolled out nationwide in 1999.

The findings of the investigation commissioned by the Department for Business and Trade (DBT) and carried out by experts at Kroll are a chilling reflection of the subsequent behaviour at the Post Office, which later blamed thousands of branch managers for shortfalls that were caused by bugs in Horizon, leading to what has become known as the Post Office scandal.

Kroll's report made no conclusions on the safety of convictions of subpostmasters prosecuted over losses that might now be attributed to flaws in the Capture software. Kroll estimates that 13.5% of subpostmasters at the time were users of Capture. The report also found varying degrees of computer competency among Capture users, and that training was inconsistent.

The Kroll report findings were announced during a meeting in London between victims, the DBT minister responsible for the Post Office, Gareth Thomas, and Carl Creswell, DBT director for Post Office policy and business engagement.

The Capture controversy is the latest aspect of the wider Post Office scandal, which was exposed by Computer Weekly in 2009 and involved thousands of subpostmasters being wrongly blamed and even prosecuted for unexplained account shortfalls, that were caused by the error-prone Horizon IT system

In January this year, then MP Kevan Jones, who now sits in the House of Lords, highlighted evidence of injustices caused by the Capture computer system used in Post Office branches prior to the introduction of Horizon. This followed former subpostmasters coming forward after watching the Post Office scandal dramatisation and documentary on ITV, with stories of the problems they had using the Capture system and the severe detriment they suffered.

Capture was a PC-based application developed by the Post Office and uploaded onto a personal computer to carry out branch accounts. The software – referred to by some users as a “glorified spreadsheet” – was a standalone system, unlike Horizon which is a complex, networked system connected to centralised services.

Jones went to visit a subpostmaster earlier this year who he thought may be a victim of Horizon, but when he realised the dates involved it became clear another system could be at fault.

After three months of pressure from Jones and campaigners the government brought in Kroll, a specialist investigation firm, to examine whether Capture may have caused subpostmasters to be wrongly prosecuted of financial crimes or created phantom losses they had to repay.

The investigation sought to assess if the design, implementation and use of the Post Office Capture system could have resulted in postmasters suffering any detriment and whether the Post Office properly investigated any issues associated with the system.

"More needs to be done to investigate the Post Office and the vindictive way it attacked subpostmasters," said Jones. "I wouldn't trust the Post Office as far as I can spit."

DBT minister Thomas said one of his constituents was affected by the Horizon scandal and he was shocked when he heard about her case. "I continue to be shocked by what I read about how [subpostmasters] were treated."

The Post Office conducted its own investigation into Capture after the first reports of potential problems earlier this year, but did not investigate whether losses had been caused by errors from the software.

One of the subpostmasters who came forward after the ITV dramatisation is Steve Marston. He had a branch in Bury, Lancashire, and was prosecuted in 1996 for theft and false accounting following an unexplained shortfall of nearly £80,000. Marston said he never had any problems using the paper-based accounting system until his branch, which he ran from 1973, began using Capture.

“We were pushed into using it by the Post Office in 1996,” he said, describing it as a standalone system, which required the subpostmasters to buy their own computers to run the software. He added that he felt pressured into using the system at a time when many branches were being closed by the Post Office.

After an audit revealed a loss which he couldn’t fully cover out of his own pocket, he was advised to plead guilty of theft and fraud to avoid jail. The judge took into account two bravery awards Marston had previously received for standing up to armed robbers, saving him a jail sentence. He received a 12-month suspended sentence, lost his home and business, and went bankrupt.

Steve Lewis, from South Wales, had worked for the Post Office since 1983, originally as a counter clerk, and was a Post Office auditor for a number of years.

When he suffered unexplained losses, he was told by the Post Office that he was an isolated case. He lost his business, had to sell his home and suffered mental health issues, with related relationship troubles.

The ITV dramatisation brought to life a scandal that Computer Weekly exposed in 2009 and has been writing about ever since. Despite a High Court case that proved subpostmasters were wrongly blamed for accounting shortfalls, the overturning of wrongful criminal convictions that were based on Horizon evidence and a statutory public inquiry that has run for over two years, it took the ITV dramatisation to push the scandal into the mainstream and brought out former Capture users who had similar problems to Horizon users.

After the TV drama was broadcast, public anger forced the government to act, including the introduction of unprecedented legislation to overturn more than 700 criminal convictions en masse.

Although Capture and Horizon are worlds apart in terms of technology, complexity and the number of users, there are parallels between the problems experienced by users of Capture and Horizon.

For example, when Capture was introduced, subpostmasters that had never experienced unexplained accounting issues in long careers in Post Office branches, began to suffer losses.

Like with Horizon, the Post Office knew there were bugs in the system and even had to completely rewrite it. As revealed by Computer Weekly in March this year, a 1994 letter from Tom Coleman, then a National Federation of Subpostmasters (NFSP) account manager at the Post Office Agency Development Centre, sent at the time to NFSP assistant general secretary Kevin Davis, revealed the rewrite of the software – which suggests the system was known to be problematic.

Patrick Sedgwick, a former Post Office worker who has investigated and campaigned for Capture victims, said: "With all the messages sent out [at the time] warning subpostmasters of bugs, the Post Office was signing its own confession."

Computer Weekly has also identified problems in the training provided on Capture. Subpostmasters used it without any training from the Post Office. In the early 1990s subpostmasters were not all experienced users of PCs and the lack of training mirrors one of the subsequent causes of the Horizon scandal, where users struggled with the new IT system. Despite a Post Office document from 1995 outlining the training users received, former subpostmasters, who encountered serious problems with Capture, have come forward revealing they had no training.

Computer Weekly last week revealed that the Post Office changed its behaviour towards subpostmasters with unexplained losses when Capture was introduced, which also echoed a change after Horizon’s introduction.

According to a Freedom of Information (FOI) request, in the six years before Capture was introduced by the Post Office to automate manual processes, fewer than five subpostmasters were investigated over account shortfalls in four of the years, seven investigations were carried out in 1992, and 11 investigations took place in 1993. But in the following six years, the number of investigations increased dramatically to an average of 191 a year, reaching 378 in 1998.

This mirrors a dramatic change that followed the introduction of the Horizon system to branches in 1999, in relation to the number of subpostmasters convicted of financial crimes. According to a separate FOI request from 2020, in the seven years between 1991 and the year before Horizon’s introduction, an average of six subpostmasters were convicted per year, compared with an average of 52 a year in the 13 years following its introduction, until the Post Office stopped prosecuting in 2013.

Hudgell Solicitors, is advising more than 70 people who have turned to it for help having experienced unexplained losses in their branch accounts during the 1990s.

Neil Hudgell, lawyer at the firm said: "Like Horizon, it was a flawed system which was destroying lives whilst officials repeatedly ignored the evidence playing out in front of their eyes. We know the Post Office was made aware of issues and software faults, yet when sub-postmasters experienced unexplained losses, they were blamed, made to balance the books, suspended and prosecuted.

"Once again, it has only been as a result of the bravery, determination and resilience of those affected, who came forward to speak about what had happened to them, and ultimately would not let injustice go unchallenged, which led to this independent review being commissioned. It should have never have needed such a long, hard battle to reach this stage, and there now must not be a long, hard battle ahead for exoneration and compensation," added Hudgell.