Current subpostmaster account shortfalls reveal extent of Post Office’s pre-2019 neglect

Hundreds of current subpostmasters might have been hounded for money or prosecuted had the Post Office not been forced to change its ways in 2019

Current figures on subpostmaster accounting shortfalls put into perspective the Post Office’s “staggering mismanagement” of discrepancies experienced by those operating its branch network prior to a High Court ruling in 2019 that forced it to change its ways.

Under the Post Office’s policy for retrieving shortfalls in subpostmaster branch accounts before the 2019 court case, there would currently be potentially thousands of subpostmasters responsible for making up shortfalls that appear on the Post Office’s Horizon accounting system. These shortfalls could have nothing to do with their actions.

A freedom of information (FOI) request for data on current subpostmaster accounts has revealed that more than 2,000 branch accounts balanced short at the end of December 2023. Of these, 314 were over £10,000 in deficit of the figure showing on the Horizon system, 191 were between £5,000 and £10,000 short of balancing, 688 had a shortfall of between £1,000 and £5,000, and 890 were up to £1,000 short. The FOI data also revealed that 344 accounts were in surplus of the balance expected on the Horizon system.

In what has become known as the Post Office Horizon scandal, following the introduction of the IT system in 2000, 736 subpostmasters and branch workers were convicted of financial crimes and many more were forced to make up unexplained shortfalls when accounts showed a deficit that could not be explained. The contract subpostmasters signed with the Post Office made them responsible for making good shortfalls unless they could prove the cause was not their own error or dishonesty.

During the High Court trial, judge Peter Fraser said the contract was weighted in favour of the Post Office. In a later judgment, Fraser described the Post Office’s denial of anything contradicting what the Horizon system showed as today’s equivalent of maintaining that the Earth is flat.

It was after the judgments, when the Post Office settled the case with the 555 subpostmasters, that it improved its process for investigating shortfalls. Before their High Court victory, the Post Office would use its unfair contract with subpostmasters to force them to make good shortfalls, without thorough investigation.

Computer Weekly asked the Post Office for an explanation of the latest figures revealed by the FOI request. A spokesperson said: “It is not uncommon for a franchise business, whether across the retail or other sectors, to have their franchisees submit positive or negative accounts at the end of each month.”

It also alluded to inadequate investigation of shortfalls before 2019. “At Post Office, we have implemented a number of measures since the [High Court] judgment in 2019 to ensure the support we provide postmasters who may have a discrepancy is much improved, and involves working in partnership with them to understand how a discrepancy has occurred.”

The Post Office spokesperson added: “At the end of each month, the number of postmasters who are in a negative balance will always vary as there are a number of factors that can lead to a postmaster having a negative balance. It could be as a result of a discrepancy or discrepancies, disputed transaction corrections, unpaid fees or unpaid invoices relating to work carried out at their branch, or a combination of all or some of these factors. It’s also possible that a negative balance could have accumulated over a long period of time whilst we work with the postmaster to reduce or eliminate their negative balance.”

Alan Bates, the former subpostmaster who led the fight for justice, said the level of incompetence and mismanagement by the Post Office over the years had been “absolutely staggering”.

He added: “This latest news hardly comes as a surprise. Until a totally independent organisation fully investigates what has been going on with the Post Office and its finances since the introduction of Horizon, stories like this are bound to continue to surface.”

Computer Weekly first exposed the scandal in 2009, revealing the stories of seven subpostmasters and the problems they suffered as a result of the Horizon system (see below timeline of all Computer Weekly articles about the scandal).

• Also read: What you need to know about the Horizon scandal

• Also watch: ITV’s documentary – Mr Bates vs The Post Office: The real story

Read all Computer Weekly articles about the scandal since 2009

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