plus: Where has all the money gone (again)?

Hello!

I said I didn’t think I’d be able to get another newsletter away this week, but I had a feeling things were going to stack up if I didn’t, so here goes:

There was a parliamentary debate on the Post Office’s management culture on Thursday. I’ve just finished reading/watching it. It was one of the better ones, and some news lines have been forthcoming.

Marion Fellowes secured the debate. She told the Post Office minister:

“Many sub-postmasters I have spoken to recently told me that they plugged shortfalls out of their own pocket for years… Have Post Office management let the Minister know when they will give an estimate of the excess claimed in Horizon shortfalls, from the introduction of the system to the end of financial year 2019-20? That is important because all that excess money, which was not owed, was put into Post Office Ltd and management bonuses were paid on profits.”

The minister, Kevin Hollinrake noted Fellowes’ question “about the surpluses [sic] and where they ended up – whether they went into a suspense account, into profit and loss, or into bonuses for directors“

and told her:

“We are currently conducting an exercise to find out where that money went and how much it was, and we will report accordingly.”

Magical mystery money

We have known for some time that the Post Office seemed entirely unable to account for the cash it took, with menaces, from Subpostmasters, to cover Horizon discrepancies.

In 2022, the Post Office CEO Nick Read was pressed by Darren Jones MP on the matter. Jones asked:

“If victims were putting money into the Post Office, surely you know that money came in from somewhere. Did it just go to your bottom line?”

Read replied: “It went into a general suspense account.”

This seems very odd. Odder still, i have been told that after a period of time the money in the general suspense account was counted as profit on the Post Office’s bottom line.

We’re going on a money hunt

In December, on the Investigating the Post Office Scandal podcast Ron Warmington and Mark Baker tried to answer the question Where Did All the Money Go? which touched on the issue, but was mainly concerned with how money could leak out of the Post Office network or be generated out of nowhere by the Horizon system.

The specific question of where did money go within the Post Office once it had been demanded from Subpostmasters has never been forensically examined (though Ron thinks asking questions about it may be one of the many reasons why the Post Office terminated Second Sight’s investigation). The minister’s answer suggests that exercise might be in hand.

Not least, I would suspect, because the police has told The Times it is currently investigating persons within the Post Office for fraud.

UPDATE: I have contacted the minister. He told me:

“I have asked UKGI to work with Post Office Limited to establish the total sum of shortfalls paid back by Postmasters to the Post Office and how that was recognised in the accounts.”

I really hope this is a diligent exercise conducted by independent and external forensic accountants. The Post Office has demonstrated it is not able to do work like this properly by itself.

Incidentally – Second Sight have a new website! Check it out.

Other lines from yesterday’s debate

– As we long suspected, the minister confirmed there is a pot of £1bn available for compensation, but this could go higher:

“Thus far is £1 billion,” he said. “That is the number we are working to at the moment. However, we have always been clear that that is not a cap and it will not stop people getting fair compensation for their claims.”

– There was an acknowledgment from Hollinrake that the Historical (now renamed Horizon) Shortfall compensation Scheme (HSS) was potentially unfair. He told Fellowes:

“I, too, have concerns about some elements of the original Horizon Shortfall Scheme. We are looking at that, in conjunction with the advisory board, to see what might be done to make sure that those payments were fair.”

– Finally there was confirmation that Al Cameron, Post Office Finance Director and interim CEO during the group litigation is off on long term sick. In attempting to reassure MPs that Post Office senior management personnel had changed since 2019, Hollinrake told the House:

“only one [current] member of the board was there at the time, but they are on extended leave on health grounds and do not work on the board.”

Although he wasn’t named, Cameron is the only person who fits the bill. Some people might wonder why he has a job at all, but then Marion Fellowes told the House that:

“40 current management staff were there throughout the Horizon scandal period. Some have given evidence to the inquiry demonstrating elements of the toxic management culture that has gone on too long… very little has changed in the organisation.”

Disclosure

Wednesday’s Disclosure has now been broadcast by BBC Scotland – you can watch it here. Three things stood out – the actions of the NFSP, the Post Office’s extreme bad faith during the ill-fated Complaint and Mediation Scheme and the extraordinary bullying of a Subpostmaster by a police officer.

Caren Lorimer (pictured) had been suspended after an audit. Instead of being questioned by Post Office investigators, she was interviewed under caution by a copper, who told her:

“I’ve got statements in here fae professionals. Professional auditors, who’ve worked for the Post Office for years, right? They know that Horizon system upside doon, back to front and inside out, right? They could talk in any court until they’re blue in the face about every single aspect of that system, right?”

According to the police officer, who clearly wished he was in Taggart, the Horizon system was “completely and utterly foolproof“. The auditors had “done all their checks“. He told Caren:

“Nobody will ever believe you to sit there and say I put it in the system. It’s no there. So where is it?”

A terrified Caren ended up pleading guilty to embezzlement. She is sadly no longer with us.

The BBC write up of the Disclosure programme is here, but do watch the episode if you can. It’s only 29 minutes long and as I think we’re all learning in the light of the ITV drama – television can have a far more powerful impact than print.

Tax Help for Subpostmasters

One of the unfairnesses baked into the HSS scheme was over tax. The lawyer Dan Neidle has written extensively on this.

Now Rebecca Benneyworth MBE, a chartered accountant (described to me by Dan as a “leading light” in the tax world) has set up a website with the help of former Subpostmaster Chris Head (pictured), to give free help and advice to Subpostmaster claimants trying to navigate the bear traps set for them by the compensation process.

Incidentally Chris Head was in the House of Commons gallery to watch yesterday’s debate and was praised by Marion Fellowes for the “good job” he does helping other Subpostmasters with their claims. He gets about, doesn’t he?

Other news

– The i newspaper has been making the running on Capture: “Post Office admits wrongful prosecutions may be linked to second faulty IT system“

and

“Post Office inquiry may be widened to include second IT scandal, No 10 confirms“

I’m going to dig into this the moment I get some time. A number of secret emailers appear to have worked on the system, so I need to speak to them before I do anything.

– There was a meeting on Wednesday between the minister and union representatives over plans to mutualise the Post Office: “‘Constructive’ talks held over transfer of Post Office ownership to operators“

Interestingly, the NFSP was not invited. The NFSP wonders if this was “a deliberate attempt by those involved to undermine the role of the NFSP as the recognised representative body of postmasters and to cause further worry, concern and division within the network.”

– Ed Davey continues to fight for his political life with new revelations that he was only advised to meet Alan Bates of the JFSA for “presentational reasons”: “Ed Davey was advised to meet Post Office campaigner Alan Bates to avoid bad publicity“

– STV: “Post worker facing financial ruin over Horizon scandal thanks locals for support“

– ITV: “We’re haemorrhaging money’: Sub-postmasters say Horizon software issues still leaving them in debt“

– Radio Times: “Mr Bates star Monica Dolan weighs in on “danger” of government’s Post Office response“

and here’s another unexpected effect of Mr Bates v The Post Office in the Telegraph: “Post Office branches welcome more customers in wake of ITV Horizon drama“

Mystic Tim

Finally, I would like to draw your attention to a blog post by regular correspondent Tim McCormack. It was written in 2016. In the post Tim – an experienced former Subpostmaster – spelled out to the Post Office management in the clearest possible terms the damage they were doing by refusing to listen to him and the Justice For Subpostmasters Alliance.

It suggests to me the Post Office and the government must have positively taken the decision to do the wrong thing (fight the JFSA and attempt to bury them through sheer financial and legal firepower) rather than look at the facts sitting in plain sight.

In 2018, lest we forget, Al Cameron allegedly told two union executives the Post Office’s litigation strategy in Bates v Post Office was to:

“win by virtue of being able to find the money to make the litigation process onerous, time-consuming and difficult at every step of the way.”

There’s more on that in my book.

Thanks

A big thanks to anyone who spotted a potential news line over the last week and passed it on to me. Apologies if it didn’t make either newsletter, but I think they’re getting long enough already!

I am extremely grateful to everyone who has been in contact about anything in recent weeks. I am trying to slowly wade through my backlog of correspondence. But now I’m clocking off for the weekend.

Have a good one.

Nick