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Taxpayers to fund a further £150m for Post Office IT scandal

Total bill for the scandal goes well over £1bn, as subpostmaster campaign leader considers private prosecutions of Post Office executives

The taxpayer bill for the Post Office Horizon scandal has increased by a further £150m, as the UK government announced further support for the troubled organisation and its compensation payments to victims.

Minister for enterprise, markets and small business Kevin Hollinrake said in a written statement to Parliament, published on 20 October, that the government is providing £150m in additional financial support to the Post Office, “plus any contingency that may be required” - which may account for a further £40m if that contingency is needed.

The cash will pay for the Post Office’s ongoing involvement in the public inquiry into the scandal where hundreds of subpostmasters were wrongly convicted as a result of flaws in the Horizon IT system that caused accounting errors in their branches.

It will also help to fund compensation for the victims. The government announced in September that it will pay £600,000 to former subpostmasters who have had wrongful convictions overturned, to settle their claims – although many of those eligible for the payment say it is insufficient for the devastating effects that being convicted has had on their lives.

The latest announcement takes the amount taxpayers are expected to pay for the Post Office scandal well beyond £1bn.

Computer Weekly revealed in January 2022 that the government had already put aside £1bn to support the Post Office, which previously admitted it would not be able to afford to pay the costs associated with what has been called the most widespread miscarriage of justice in UK history.

In January last year, a government spokesperson described the £1bn subsidy as a “top estimate” of what would be needed to support the Post Office, yet the total bill could be even higher. In the latest statement, Hollinrake said the final level of funding required is currently being finalised.

Horizon replacement fund

He also revealed the government is helping to pay for the replacement of Horizon. The IT system is due to be replaced by 2025 – the chosen supplier has yet to be announced.

“The government will confirm to the House the outcome of considerations on financing needs at the earliest opportunity following finalisation,” said Hollinrake in the written statement. “The government also intends to provide additional funding to help with the development of the replacement for the Horizon IT system and to ensure the Horizon system is maintained before that replacement is rolled out.”

The Post Office operates independently, but the government is its sole shareholder.

Hundreds of former subpostmasters were prosecuted for financial crimes based on evidence from the Horizon computer system used in branches. The system has since been proved to be error-prone and 93 convictions have so far been overturned. Computer Weekly first exposed the scandal in 2009, with the stories of seven subpostmasters (see timeline of Computer Weekly articles below). A public inquiry into the scandal is underway.

Meanwhile, Alan Bates – the campaigning former subpostmaster who led the successful High Court action that proved Horizon was to blame for the accounting errors that affected him and his fellow victims – has told Computer Weekly he has had early discussions with lawyers concerning possible private prosecutions against Post Office executives involved in the scandal.

Many victims have called for Post Office managers to be held accountable for the decisions that led to their prosecution. The Post Office used its legal powers to conduct prosecutions without reference to external agencies such as the Crown Prosecution Service. Evidence presented to the public inquiry has raised questions around the way the organisation fulfilled those powers, with suggestions of evidence being withheld that may have exonerated victims

Read all Computer Weekly articles about the scandal since 2009

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