May 22, 2024

The Post Office is accused of covering up confidential Horizon documents

  • Written by Andy Ferretti
  • BBC economic correspondent

Post office bosses secretly decided in April 2014 to sack forensic accountants who discovered errors in their IT system, according to documents obtained by the BBC programme.

They also reveal that the government was aware of the decision taken by a sub-committee of the Post Office Board, code-named “Project Sparrow”.

Former Postmaster General Alan Bates said it was further evidence of a “total cover-up”.

The Post Office said it would be inappropriate to comment.

Downing Street said it took the reports “very seriously”.

Independent forensic accountants Second Sight played a key role in exposing the scandal, discovering flaws in the Horizon computer system that produced false evidence of cash shortages at subpostmasters, leading to wrongful prosecutions of subpostmasters.

Postmasters continued to insist that their systems were strong.

But they made a concession after pressure from representatives, and offered to develop a mediation plan to deal with what they said was a small number of cases.

The documents reveal that the Post Office planned to pay a total of only £1 million in “token payments”, or compensation, to subpostmasters as it suppressed evidence of computer errors in 2014.

But this was a significant underestimate of the ultimate cost of the scandal, which is now expected to be more than £1 billion.

Details of the Sparrow Project discussions were not revealed in evidence to subpostmasters as they challenged the Post Office through the courts in 2017-19.

He added, “This is what we opposed all the way. We always knew that they were covering it up, and it was very difficult to find evidence.”

The secret plan to dismiss Second Sight was revealed in the minutes of two Sparrow Project meetings in April 2014.

The minutes were released in heavily redacted form in 2021 after former Post Office chief executive Paula Fennells revealed the existence of Project Sparrow.

Now the BBC has obtained the unredacted minutes, which show what the Post Office did not want the public to see.

The bird project

The Sparrow project subcommittee was chaired by Post Office chief Alice Perkins and included chief executive Paula Fennells, along with the Post Office's senior in-house lawyer, general counsel Chris Ogard, and Richard Callard, a senior civil servant at UK Government Investments, then chief executive. Department of Business, Energy and Industrial Strategy.

The unredacted minutes of April 9, 2014 show that the subcommittee requested a paper be prepared on Second Sight's role and “options to support or reduce their role.”

Three weeks later, on April 30, 2014, they agreed on a plan to bring the investigation into subpostmaster cases “under the control of the Post Office,” removing Second Sight from its role of independently investigating subpostmaster cases.

Errors in the system

Nine months before the commission met, Second Sight filed a report on July 8, 2013 outlining computer errors that raised doubts about the reliability of Horizon data used to prosecute subpostmasters.

A week later, on 15 July 2013, the Post Office was warned in formal advice written by its lawyer Simon Clarke that it was breaching its statutory duties because the subpostmasters being prosecuted should have been told about the errors.

The next day, 16 July 2013, the Post Office's board expressed concern that Second Sight's review had exposed the company to allegations of wrongful convictions.

However, Project Sparrow minutes from April 2014 show that Paula Fennells, Alice Perkins and other members discussed closing or accelerating the mediation plan and planned to pay minimum compensation to subpostmasters.

Comment on the photo,

Alan Bates says it was 'a cover-up from start to finish'

The advice came after Linklaters' lawyers said they had only “very limited liability in relation to financial compensation”.

The minutes show the committee requesting a paper to tell them how to make “nominal payments” to subpostmasters applying for the mediation programme, which ministers publicly promoted at the time as a solution to subpostmaster complaints.

“The cost of all cases in the scheme to proceed to mediation will be in the region of £1 million,” the unredacted minutes said.

Committee members knew that the sub-postmasters would not be happy and that there was a “real danger” that “many applicants would remain unsatisfied at the end of the process”.

On 30 April 2014, following advice from Chris Ogard, the committee decided not to make any “ex gratuitous” payments – meaning payments to struggling subpostmasters to help them while their cases were examined.

They also requested the preparation of a paper on options for closing or accelerating the mediation plan.

Second Sight's interim report in 2013 stated that it found no systemic flaws in the Horizon system. But the word “systematic” had a specific meaning – no defects could be found in every branch of the post office.

What the Post Office didn't say was that it also came to an unwelcome conclusion, identifying incidents where flaws or errors in Horizon software resulted in 76 branches being affected by incorrect balances or transactions that took time to identify and correct.

On 17 December 2014, Jo Swinson, a former Liberal Democrat MP who served as Postal Minister in the coalition government at the time, answered a parliamentary debate on the scandal. She noted the independent role played by Second Sight.

The following year, in March 2015, as it was preparing to submit its full report, 11 months after the decision had been made, Second Sight's contract was terminated and the Post Office investigated the subpostmasters' issues internally.

Lord Arbuthnot, a former MP and outspoken critic of the handling of victims in the scandal, told the BBC that the government must take responsibility “for everything that went wrong” in relation to the sub-postmasters.

He added: “It is a clearly corrupt and ambiguous story that is on the right track for the government, and is deeply troubling.”

The Prime Minister's spokesman said on Friday that it was “correct” that there was an ongoing investigation and noted that the reports related to a previous administration.

The spokesman added: “The investigation must establish responsibility and consider what lessons need to be learned. For the government's part, we fully cooperate and support the investigation.”

Alice Perkins and Paula Fennels did not respond to requests for comment.

Linklaters also did not comment.

Chris Ogard and Richard Callard said through their public relations advisers that they would not comment during the investigation.

The British Government Investment Authority declined to comment.

Jo Swinson said: “The latest revelations about Project Sparrow meetings and decisions show the extent of the cover-up by Post Office Ltd – they were kept secret from Parliament and the public, and from ministers too.

“Not only did postmasters, including a government official, choose not to tell ministers, they told the opposite. They repeatedly told me that Post Office Ltd had never seen anything that would undermine any of their prosecutions, which is We know it now “Knowledge is simply not true.”

A Post Office spokesman said: “We never discuss individuals and it would be inappropriate to comment on allegations made outside the scope of the inquiry, whose role is to consider all evidence relating to the issues it examines and reach conclusions independently.”

“We fully share the goals of the public inquiry to get to the bottom of what happened in the past and hold accountable.”

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