An MP has accused the Post Office of sabotaging the publicly funded mediation scheme that it set up for subpostmasters who were fined and even imprisoned over false accounting.
The subpostmasters claim the Post Office's Horizon accounting system is to blame for accounting errors that resulted in more than 150 accusations of fraud.
James Arbuthnot, MP for Hampshire North East, was so shocked at the Post Office's treatment of subpostmasters that he applied for an adjournment debate for the first time in his 28 years in parliament.
Yesterday, MPs met in Westminster Hall for the debate over the investigation into alleged faults in the accounting system. During the debate, Arbuthnot described the Post Office’s behaviour over the investigation as “duplicitous". MPs also accused the Post Office of being “high-handed” with MPs and running a “flawed, degraded and deteriorating accounting system".
The contract subpostmasters sign with the Post Office was described as “Dickensian” and slanted in favour of the Post Office. (See the full adjournment debate here.)
Heavy fines and jail terms
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.
Computer Weekly timeline of events
September 2009: Postmasters form action group after accounts shortfall
November 2009: Post Office theft case deferred over IT questions
January 2013: Post Office announces amnesty for Horizon evidence
December 2014: MPs to debate subpostmaster IT injustice claims
Arbuthnot has led a group campaigning on behalf of subpostmasters who believe they have been wrongfully convicted of false accounting. Earlier this month, Arbuthnot said he can no longer support the Post Office's mediation process because he has lost faith in it.
“The way the Post Office has treated subpostmasters – and now the MPs supporting them – is so worrying that in my final few months in Parliament it has become necessary for me to apply for an adjournment debate," said Arbuthnot.
He said that, although no major fault with the system has been identified, this does not mean one does not exist.
Collusion and fraud
Arbuthnot described a letter he received from retired computer programmer, Charles Goodwin, explaining that “collusion and fraud by some unknown third parties could give rise to some of the cases".
“Charles Goodwin’s hypothetical fraud fits in with some of the facts in these cases that would be hard to disprove. Then if a subpostmaster began to complain too loudly, the fraudsters could reimburse that subpostmaster and move to another,” said Arbuthnot.
He said subpostmasters who suffered difficulties were told by the Post Office they were the only ones having problems, so many of them kept it quiet to get to the bottom of the problem.
Arbuthnot said the Post Office had changed its stance on the definition of “the system”, from meaning software and other processes around it, including systems that interface with it and training, to just the Horizon system itself.
Another report from investigator Second Sight is expected in April 2015, which sources believe will reveal more issues with Horizon and its supporting processes.
On the software itself, the jury is still out, but not so for the Post Office help system which the Post Office has admitted was “inadequate”, said Arbuthnot. He said he is aware of two examples in his constituency.
Subpostmaster experience: Jo Hamilton
Arbuthnot told the story of Jo Hamilton, which Computer Weekly revealed in 2009.
Jo Hamilton, a postmistress in South Warnborough, Hampshire between 2003 and 2005, started experiencing problems in October 2003. She entered every transaction into the system using the touchscreen till, and at the end of the week the computer would tell her how much money she should have.
“One time it said I was down £2,000, so I rang the Horizon helpdesk. The supervisor told me to do various things, and three minutes later I was £4,000 down. Whatever I did after that, I couldn’t get it to come up any different,” she said at the time.
The Post Office told her she owed the money, and took repayments out of her monthly wages. “It made me reluctant to phone them, because it was just crazy – when I asked for help, it just doubled the amount and said I owed it money.”
Hamilton’s problems worsened and her alleged losses reached over £30,000. Post Office auditors visited the branch in March 2005 and told Hamilton she owed £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.
"No faith in the Post Office"
MPs told the stories of constituents that have suffered as a result of accountancy errors. Concerns were raised that all prosecutions were conducted in house, with no “independent” involvement of the Crown Prosecution Service (CPS).
Arbuthnot said he has no faith in the Post Office mediation scheme set up to get to the bottom of the problems.
Government minister Jo Swinson, MP for East Dunbartonshire, and parliamentary under secretary of state for employment relations, defended the scheme.
Despite MPs claiming that 90% of cases recommended for mediation were rejected, Swinson said that just two out of 24 cases recommended for the mediation scheme have been put through the scheme.
Arbuthnot said the 90% figure refers to the amount of cases the Post Office is arguing should be rejected "and that is the problem". Swinson said they will return to the issue.
Read more on Financial applications
Pressure for public inquiry into Post Office IT system scandal begins with mountain to climb
Government should not be allowed to dismiss subpostmasters’ claims over Horizon IT scandal
Call for former Post Office CEO to step down from public roles after IT court battle lost
Court of Appeal judge rejects Post Office request in Horizon IT case