Why MPs lost faith in the Post Office's IT investigation, but vowed to fight on

A group of 140 MPs has removed its backing for a Post Office scheme to redress subpostmasters' grievances over alleged false accounting

A group of 140 MPs removed its backing for a scheme set up by the Post Office to help redress the grievances of subpostmasters who have suffered fines and jail terms for alleged false accounting – but said it will fight on, through legal and political means.

In 2009, Computer Weekly revealed the stories of subpostmasters who had received heavy fines and even jail terms for alleged false accounting, which they blamed on the Horizon accounting system provided by the Post Office.

Thousands of Post Offices use the IT system, developed by ICL/Fujitsu Services, for their accounts.

The group of MPs – led by James Arbuthnot, member of Parliament for Hampshire North East – said it had lost faith in how the Post Office handled cases and removed its backing for the investigation. It will now seek redress of subpostmasters' grievances through legal and political means.

“I do not want to build up hopes that the other methods are going to be more successful than the current ones, so I will not be specific – but it will involve legal and political campaigns,’ said Arbuthnot.

He confirmed that he is not standing for re-election at the next general election and will be handing his role in the campaign group to MP Kevan Jones, member of Parliament for North Durham.

Arbuthnot is currently applying for a debate on the subject to be held in Parliament.

Post Office U-turn

The MPs retracted their support for the Post Office's investigation after it refused to agree that all cases recommended for mediation – by the investigation firm chosen by the Post Office, Second Sight – should go to mediation.

There is also major disagreement over whether subpostmasters that pleaded guilty to false accounting should go to mediation, and whether the system should look at the Horizon software in isolation, or put the wider system under the spotlight.

Out of 119 cases heard, the Post Office has objected to 90% going to mediation – despite the agreement at the outset that exclusions from the process would be the exceptions to the rule, said Arbuthnot.

Plea bargaining

Arbuthnot became involved as a result of a member of his constituency – Jo Hamilton a postmistress in South Warnborough in Hampshire between 2003 and 2005 – being fined by the Post Office.

Post Office auditors visited Hamilton's branch in March 2005 and told her she owed the Post Office £36,000. They prosecuted her for theft and 14 counts of false accounting, but later dropped the theft charge – after she agreed to plead guilty to false accounting.

Following a disagreement with the Post Office over which cases need to go to mediation, Arbuthnot said he could no longer support the scheme.

“The scheme was set up to help our constituents seek redress and to maintain the Post Office’s good reputation. It is doing neither," Arbuthnot said. 

"It has ended up mired in legal wrangling, with the Post Office objecting to most of the cases even going into the mediation the scheme was designed to provide.”

Of the cases that have so far gone through mediation, the outcomes are not known because the Post Office said this is confidential.

Arbuthnot criticised the Post Office’s refusal to allow those subpostmasters that pleaded guilty to false accounting to go to mediation, on the grounds that they are guilty of a criminal offence. But subpostmasters said they were offered a deal that, if they pleaded guilty to false accounting, they would not be charged with theft – and so avoid a prison sentence.

Although technically there was false accounting, subpostmasters claim this was not intentional but the result of Horizon and the processes it involves. “It was agreed between the MPs and the Post Office that those who pleaded guilty would be included,” said Arbuthnot.

Obfuscation

The scope of the investigation is another major bone of contention, said Arbuthnot. He said the Post Office had changed its stance on the definition of “the system”, from meaning the software and the other processes around it – including systems that interface with it and training – to just the Horizon system itself. Another report from Second Sight is expected in April 2015, which sources believe will reveal more issues with Horizon and its supporting processes.

In a letter to Arbuthnot, Post Office CEO Paula Vennells defended the Post Office investigation. “In summary, it is my view that the scheme and its processes are, in fact, operating as they were designed to. The scheme has been enormously helpful: We have found out much more about the underlying complaints of individual applicants and, through the scheme mechanism, we are seeking where it is possible and realistic to do so, to resolve each of those individual complaints. That has always been our shared ambition for the scheme and, on any reasonable and fair-minded view, I do not see any proper reason to revisit and alter the processes we designed together at this juncture or, indeed, at all.

"I am very proud of the responsible manner which the business has acted on this matter and I can assure you that Post Office will continue thoroughly to re-investigate every case that has been raised by individual applicants and we remain committed to trying to resolve, in a manner which is fair to all parties, the issues they have raised in the context of the scheme.”

Post Office 'awash with criminals'

One source said the Post Office is refusing to investigate cases that have come to light since the original deadline for subpostmasters to make a claim.

Mike Wood, member of Parliament for Batley and Spen, summed up the feelings of many that there are too many cases in doubt for the Post Office to hold its current stance.

“Either the Post Office is awash with criminals who open sub post offices for personal gain or something has gone terribly wrong. MPs are inclined to believe the latter and we are all shocked the Post Office seems to not want to get to the bottom of all this.”

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