Call for former Post Office CEO to step down from public roles after IT court battle lost

Peer James Arbuthnot called for former Post Office CEO, Paula Vennells, to step down from high-profile public roles after a lost court battle reveals her failings in major IT scandal.

Vennells has apologised for her failings that contributed to the suffering of the people that run the organisation’s branch network, but there are now calls for Vennells to quit her public roles. She is currently chair of Imperial College Healthcare Trust, which is one of the largest NHS hospital groups. She is also a non-executive board member for the Cabinet Office.

Vennells’ apology followed a massive defeat in a court battle where the Post Office threw millions of pounds of public money at defending its computer system against accusations that it was at fault for accounting inaccuracies, and not the subpostmasters that were often punished for it.

In May 2009, Computer Weekly revealed that the lives of some subpostmasters had been turned upside down after being fined, sacked, made bankrupt or even imprisoned because of unexplained accounting shortfalls (see timeline below).

Arbuthnot, previously Conservative MP, described the behaviour of the Post Office under the leadership of Paula Vennells as “both cruel and incompetent”.

Vennells left the Post Office after earning millions of pounds. She received a CBE For her services, while hundreds of subpostmasters are still counting the cost of bankruptcy, ill health, and criminals records.

Arbuthnot, now Lord Arbuthnot of Edrom, became a supporter of the subpostmasters when, as MP for Hampshire North East, he was contacted by constituent Jo Hamilton. She was a subpostmaster who was being threatened with jail for accounting irregularities that could not be explained.

He is calling for Vennells to step down from public roles. “The hallmark of Paula Vennell’s time as CEO was that she was willing to accept appalling advice from people in her management and legal teams. The consequences of this were far-reaching for the Post Office and devastating for the subpostmasters. However, there seem to have been no consequences for her,” he said.

Just before Christmas, Vennells, when pressed by a Daily Mail journalist, apologised. “I am pleased that the long-standing issues related to the Horizon [computer] system have finally been resolved,” she said.

“It was and remains a source of great regret to me that these colleagues and their families were affected over so many years. I am truly sorry we were unable to find both a solution and a resolution outside of litigation and for the distress this caused.”

Arbuthnot said there should be further consequences for Vennells, including stepping down from her high-profile public roles. “In any public sector organisation in which I were interested, I would not want to receive, still less pay for, the advice of Paula Vennells,” he said.

“The Post Office has lost tens of millions in damages and costs. The subpostmasters, while those involved in the action have recovered a proportion of their financial losses, it is hugely reduced by their costs, and they have also lost their reputations, their businesses, in some cases their families, their houses and perhaps even worse,” he added. “And Paula Vennells gets a CBE and is asked to carry on advising public sector organisations.”

Arbuthnot said it was Vennells’ job to question the advice she was receiving. “Instead, she sabotaged the mediation scheme she had proposed; she sacked and silenced Second Sight [forensic accountants she had chosen to investigate]; and in the litigation that she forced the subpostmasters to bring, she began the process of incurring massive costs to defend the indefensible.”

Former subpostmaster Alan Bates, who spearheaded the group litigation against the Post Office, first informed the Post Office about the problems in 2000 and contacted Computer Weekly in 2004.

Following Vennells’ apology, Bates told Computer Weekly: “It is a shame she didn’t bother investigating during the time she was in post, because it was repeatedly brought to her attention. How is this type of apology meant to comfort the 550 claimants who are being thrown pennies after costs are taken into account?”

The Post Office’s approach to the legal battle and allegations of problems with the Horizon retail and accounting system subpostmasters use has come under intense criticism by Judge Fraser, the high court judge that oversaw the group litigation which began in November 2018 and ended in December 2019 with an out of court settlement.

He described the Post Office’s denial of anything contradicting what the system – known as Horizon – said was today’s equivalent of maintaining that the Earth is flat.

In an earlier judgement, he said the Post Office was engaged in “oppressive behaviour” when demanding sums of money that could not be accounted for by subpostmasters.

“The Post Office describes itself on its own website as ‘the nation’s most trusted brand’. So far as these claimants, and the subject matter of this group litigation, are concerned, this might be thought to be wholly wishful thinking,” he added.

Fraser was not the only senior judge to criticize the Post Office, with the contractual relationship between the Post Office and subpostmasters likened to the treatment of Victorian factory workers, by Lord Justice Coulson in the Court of Appeal. This was when he rejected the Post Office’s application to appeal judgments from the first trial in the group litigation.