Post Office believes it took £36m from subpostmasters with unexplained losses

The Post Office believes that it took about £36m between 1999 and 2015 from subpostmasters who were forced to cover shortfalls in their accounts that didn’t actually exist beyond the flawed Horizon accounting system used in branches.

This figure will increase as the organisation plans to soon write to around 25,000 current and former subpostmasters to remind them to apply to a scheme set up to offer financial redress if they believe they had Horizon-related losses.

After Horizon was introduced in 1999, subpostmasters began to report unexplained account shortfalls, which they were liable to cover due to the unfair Post Office contract. Many were prosecuted and sacked, and many more just filled the holes in their accounts from their own pockets. All these groups are owed financial redress.

During his three-day appearance before the Post Office scandal public inquiry, Post Office CEO Nick Read revealed that the company so far estimates that people running branches repaid around £36m in covering the unexplained shortfalls.

Sam Stein, KC representing victims of the scandal, asked where the money repaid to cover shortfalls had gone, to which Read replied: “There have been external forensic accountants looking at this particular problem, trying to assess what it is that has gone and where it has gone to. The current piece of work on this topic has identified a figure somewhere in the region of £36m between 1999 and 2015.”

He said that the work was based mainly on the assessment of the current redress scheme applications and that the figure “is not as definitive” as [the Post Office] would like it to be.

The project to work out how much was paid back by subpostmasters was last looked at by KPMG, said Read, adding: “Data going back a number of years is extremely difficult in the Post Office to identify, and that is our best endeavour in terms of where we have got to.”

Stein brought the recent YouGov report to Read’s attention. It revealed that large numbers of current subpostmasters are still paying their own money to cover unexplained shortfalls. “Those £10, £20 and £50 [payments] adds up to millions...your figure of £36m is growing,” said Stein.

According to the survey, commissioned by the public inquiry and carried out by YouGov, 57% of current subpostmasters have experienced unexplained shortfalls, including 19% reporting unexplained transactions, and 14% having had transactions go missing. A total of 69% of those surveyed  have experienced an unexplained discrepancy on the Horizon system since January 2020. Three-quarters said they have used their own branch money to cover discrepancies or resolved the issue themselves.

During questioning about the slow progress of payments to Post Office scandal victims in a recent public inquiry hearing, Read said that around 25,000 more mails will be sent to individuals who have not yet come forward to the Horizon Shortfalls Scheme (HSS).

The Post Office said that it has also been writing to those already in the HSS, following the government’s introduction of a fixed-sum option of £75,000 in March 2024.

It said: “We have been making top-up offers and payments to eligible subpostmasters who have already accepted an HSS offer and received a full and final settlement of less than £75,000, and we are now administering the fixed-sum offer more broadly for those postmasters with live applications still within the scheme.”

The Post Office scandal was first exposed by Computer Weekly in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to Horizon accounting software, which led to the most widespread miscarriage of justice in British history (see below timeline of Computer Weekly articles about the scandal since 2009).

• Also read: What you need to know about the Horizon scandal •

• Also watch: ITV’s documentary – Mr Bates vs The Post Office: The real story •

• Also read: Post Office and Fujitsu malevolence and incompetence means huge taxpayers’ bill •