Wednesday 15 January 2020

Letter demanding a public inquiry into the Post Office scandal

Eleanor Shaikh
This was sent on 10 January to the Secretary of State for Business, Energy and Industrial Strategy, Andrea Leadsom by Eleanor Shaikh. Eleanor's research into the extent of the government's control of and responsibilites regarding the Post Office has already made waves in Westminster.

This letter is another tour de force...


Dear Andrea Leadsom,

As a constituent of Jeremy Hunt I have been seeking justice for over two years for my ex-subpostmaster, Chirag Sidhpura, who was accused of theft by POLtd after an alleged shortfall of £57k at our branch in Farncombe, Surrey.

Chirag was not party to the Group Litigation as his case began in October 2017 and developed after the deadline to join. But for two years his plight has been hopelessly neglected by POLtd and my appeals to your predecessor, Greg Clark, on his behalf have achieved nothing to help his situation by way of engendering active shareholder intervention.

Now that the High Court Litigation has concluded and the catastrophic errors in POLtd’s management of its Horizon IT system finally exposed, it is vital that a public inquiry be established to determine how such far-reaching and profound failures were allowed to occur in a company owned solely by the UK Government and in the face of numerous warnings. These include the June 2015 Whitehall debate on the POLtd Horizon controversy during which MPs’ appeals for a judicial inquiry were disregarded by BIS.

I enclose a document which looks at significant presages of failure running up to the Horizon scandal which BEIS (and formerly BIS ) consistently failed to interpret during the years it chose to rescind its duty of oversight. The document draws upon multiple sources to chart the structures of governance by which meaningful oversight and intervention by BEIS, as Sponsor Department, could have been deployed over its Arm’s-Length Body. 

Its conclusions chime with the comprehensive findings of the Cross-Party BEIS Committee Report of October 2019. Unable to comment upon matters pertaining to the Group Litigation, this committee still raised wide-ranging concerns regarding the inadequacy of departmental scrutiny from BEIS over POLtd:
It is important that POL is held properly accountable by the Government for its decisions, whether strategic or operational, and there needs to be consistency in the criteria applied by Government in its decision of whether or not to intervene… 
We recommend that the Government undertake an urgent review of its mechanisms for holding Post Office Ltd to account and produces a clear statement of how it will do so in the future. This should examine how all Post Office Ltd’s decisions, operational or strategic, are supporting the comprehensiveness and sustainability of the Post Office network’.
The lack of scrutiny which handed POLtd free reign to conduct itself so disgracefully - and the cover-up which appears to have developed in its absence - has left a trail of human suffering so appalling that a public inquiry is the very least and the very last remaining mechanism by which we must all learn lessons, write them indelibly in the public domain and then hope to move forward.

There is, without doubt, sufficient public interest in the controversy to warrant such an inquiry: at its centre the once trusted and much-loved brand of POLtd which serves communities across the land in a social mission far beyond its purely commercial remit. A brand which is entrusted with contracts from multiple government departments yet which, for two decades, has hounded and prosecuted its own sub-postmasters for mysterious shortfalls without first conducting thorough investigations or admitting known errors in its IT system. 

An inquiry is needed to unpick the twists and turns on the road which led ‘the nation’s most trusted brand’, as POLtd obsolescently describes itself, to its final destination where, tens of millions of pounds poorer, the sinister alter-ego of its corporate identity has been revealed through painful and eye-wateringly expensive litigation.

An inquiry must uncover each step on this humiliating path right down to POLtd’s lowest, darkest hour in which the very contracts it used to hold innocent men and women liable for vast branch discrepancies - caused by its own negligence - were proven to be worth no more than the paper they are written on.

The catastrophic fallout of POLtd’s behaviour is belatedly emerging now victims’ testimonies fall under the media’s spotlight. It is a scenario which leaves in its wake the wreckage of reputations and of businesses, the loss of homes and the breakdown of marriages. It has criminalised the innocent and casts a shadow of depression, PTSD and stress-related illness. At its most harrowing it has led to imprisonment and suicide. It is a pattern replicated hundreds of times over and behind the ranks of the 550 Claimants made visible through the Group Litigation await unseen cases estimated by the Communication Workers Union to be also in the hundreds. And this notwithstanding the thirty-four POLtd cases under consideration by the Criminal Cases Review Commission under for potential malicious prosecution, among which are 22 prison sentences. The scale of injustice is unprecedented and simply staggering.

It is essential that a rigorous and impartial investigation be carried out to establish factually the causes of events which led to such widespread and corrosive impact and for inference to be drawn from these facts regarding the likelihood of liability. To this end I respectfully ask that you set in motion a statutory public inquiry under the Inquiries Act 2005.

Such an inquiry must identify ways to prevent a recurrence of this tragedy, it must hold individuals and organisations to account and frame recommendations to give much-needed reassurance to sub-postmasters still serving POLtd’s customers across the land. Its legacy must rebuild public confidence in a brand upon whose Services of General Economic Interest many communities rely, with a dependence felt nowhere more keenly than in remote, rural or deprived, urban areas and by vulnerable customers comprising the elderly, disabled and those on low incomes. 

Such an inquiry must allay public concerns by reaching beyond the compass of the High Court at a time when serious reservations over the network sustainability of POLtd are already, justifiably, being voiced.


1: Evaluate the level of competence of the present POLtd Board, senior management and investigative department, the majority of whom remain in office despite two damning High Court Judgements. 

For years,  the Board’s readiness to accept a dangerously misplaced, self-interested belief in Horizon’s infallibility, despite a wealth of evidence to the contrary, must be questioned and suitability for continuance of Board membership be carefully weighed. In this, an inquiry may be mindful of Lord Arbuthnot’s suggestion that, with the exception of the recently appointed CEO Nick Read, ‘the government should clear out the entirety of the board and senior management of the Post Office and start again’.  

Scrutiny must be applied to the Board’s decision to pursue litigation of such magnitude which hung on an inversely slender chance of success and for sanctioning a trajectory for POLtd whose direction was so high-risk as to be described by its own counsel as presenting an ‘existential threat’ to its entire operations. 

Displaying scant capacity for self-reflexivity or rational judgement, POLtd’s Board and upper echelons of management clung with brutal determination to a blind faith in Horizon which, according to Judge Fraser, ‘amounted to the 21st century equivalent of maintaining that the earth is flat’ (929, Horizon Issues Judgement, 16th December 2019). It presided over a culture described as ‘capricious and arbitrary’ and which ‘demonstrates the most dreadful complacency, and total lack of interest in investigating these serious issues, bordering on fearfulness of what might be found if they were properly investigated’. (217, Horizon Issues Judgement, 16th December 2019). 

An inquiry must determine if this self-same body is genuinely capable of forging the radical overhaul which it is now incumbent upon POLtd to deliver. Can the panel assure itself and the public that this same Board now suddenly possesses the credibility, the business acumen, the will and the ethical compass to engineer the wholesale reparation of POLtd’s IT systems, its support & investigative mechanisms and its corporate culture as envisaged by Second Sight in its prescient recommendations of January 2016? (See enclosed document ‘Fixing the Post Office’). 

On this Board sits BEIS’s representative, a UKGI colleague entrusted to evaluate and, if necessary, to challenge POLtd strategy and risk parameters. In the light of internal POLtd documents revealed during the litigation relating to Horizon’s flaws, this Board member’s exposure to, or failure to uncover, critical information in the years leading up to the crisis-  and this individual’s subsequent transmission of, or failure to transmit, such information to the Sponsor Department, must also fall within the remit of an inquiry.

Regarding the dispersal or suppression of crucial, if potentially incriminating, information on Horizon’s flaws between interested parties see the enclosed document ‘Who Was In The Know’ in which Ron Warmington (MD, Second Sight) expertly delves into the realms of who might have known what about ‘the Truth’ at given points in the sequence of events. The net is cast as wide as the hierarchies of POLtd, Fujitsu, Ministers and the Government-appointed Civil Servant Board Member.
Email correspondence between POLtd CEO Paula Vennells, Angela Van den Bogerd, senior POLtd management and Fujitsu engineers such as Gareth Jenkins, Stephen Parker (Fujitsu Post Office application support) and Andy Dunks (Fujitsu IT security analyst) must be subject to meticulous investigation. Confidentiality Commitments used by POLtd to silence voices which run counter to its corporate narratives must be waived.

2: Seek to establish how POLtd was permitted by BEIS to conduct highly aggressive and costly legal tactics with such reckless regard to the public purse. According to Judge Fraser ‘Both this level, and rate, of expenditure is very high, even by the standards of commercial litigation between very high-value blue chip companies’.

POLtd’s legal costs were recorded as £20m in its Reports and Accounts of 2018/19 which is exclusive of the £3m of the previous year, of its legal costs to the end of 2019, of the £57.75m price-tag of its ‘final’ settlement and of costs pertaining to the unresolved CCRC cases.

POLtd’s attempt to sack the managing Judge mid-trial (‘virtually unheard of in sensible civil litigation’ according to The Register, 18th December 2019) and its ill-advised attempt to appeal the Common Issues Judgement (failing on every one of its 26 counts), are just two examples of its attritional, financially irresponsible and arguably irrational conduct. It flies in the face of assurances given to Parliament by BEIS’s Lord Henley (19th November 2018) on the very issue:
As the sole Shareholder, the Government expects the Post Office Limited to ensure value for money principles in its use of resources at all times’.
An inquiry must therefore ask who sanctioned such costly and cavalier legal tactics fuelled by the public purse, widely thought to be effected to prolong or even derail the judicial process. It was a strategy which unnecessarily inflated not only POLtd’s legal costs (on which the Public Accounts Committee and National Audit Office must be drawn) but also, ultimately, cost the victims dearly. An inquiry might consider whether, by exhausting the Claimants resources, POLtd arguably coerced them to a premature settlement before the hearing of all four scheduled trials.

Of the £57.75m received by Claimants in this settlement as little as £8-£11m will remain once their legal, insurance and funding costs are met. According to their own legal team ‘People will not recover anything like their full losses’ (James Hartley, Computer Weekly, 13th December 2019).

It is a travesty that this deflated figure fails even to match the total sum of phantom shortfalls estimated at £18m which have been repaid to POLtd by sub-postmasters over the years.

Had POLtd dealt fairly and transparently with its sub-postmasters from the outset, Claimants would not have been forced to adopt the third-party funding structure which inevitably so materially diminished their victory.

Had BEIS exercised intelligent shareholder oversight and/or  intervention, POLtd could have been persuaded to conduct itself with appropriate fairness and transparency from the beginning - both in respect of its behaviour towards sub-postmasters and its behaviour during the litigation.

An inquiry might therefore advise whether, on this issue, the Government should itself release  funds to supplement the compensation so it more realistically reflects the scale of damages suffered and recognises the role played in this controversy by successive governments in turning an indefensibly blind eye.

3: Determine if millions of pounds of unallocated funds which have for years accrued in POLtd suspense accounts represent the reverse effect of IT failure. It is suspected by Independent Forensic Accountants Second Sight, who spent years investigating POLtd, that they may, in part, represent the accumulation of phantom shortfalls generated by Horizon but subsequently made good by sub-postmasters under duress. 

This being the case, it is only logical that these substantial sums, hitherto creamed off to inflate POLtd’s own profits or else left hanging in suspense limbo for years, should be released to further supplement the Claimants’ remuneration.

4: As a matter of urgency consider whether POLtd should any longer be trusted with the powers it wields to bring about its own prosecutions. This privilege currently permits POLtd to do so independently of the Crown Prosecution Service, thereby escaping the checks and balances that CPS involvement would routinely invite.

Throughout two High Court trials POLtd was consistently proven to withhold evidence despite the overarching duties of disclosure beholden to a prosecuting authority. On its secrecy Judge Fraser remarked:
there are obligations upon parties in terms of disclosure. So far as criminal cases are concerned, these concern the liberty of the person, and disclosure duties are rightly high. I do not understand the motivation in keeping this type of matter, recorded in these documents, hidden from view; regardless of the motivation, doing so was wholly wrong’ (457, Horizon Issues Judgement, 16th December, 2019).
Of its current Business Improvement Director, Angela Van Den Bogerd, he observed that:
she did not give me frank evidence, and sought to obfuscate matters, and mislead me’ (Common Issues Judgement, 15th March 2019),
Her witness statement also stated, in terms, the exact opposite of what the reality of the situation was’ (249, Horizon Issues Judgement, 16th December, 2019).
Such scant regard for the truth, even under oath at the High Court, exhibited by the highest ranking (but not only) POLtd witness, is incompatible with POLtd’s authority to bring criminal cases in the name of the Crown and must be relinquished with immediate effect. Ideally this should not await the formal process of an inquiry.

Moreover, POLtd employees’ consistent track record of mis-presenting, twisting or concealing fact (including before the BIS Select Committee, 2015) has prompted Lord Arbuthnot to call for inquiry to be Judge led, indeed for a full Judicial Inquiry.

5: Finally, identify means of embedding more rigorous departmental oversight of POLtd by BEIS and for it to relinquish once and for all the defence of POLtd’s ‘operational independence’ by which it has erstwhile sought to rationalise its non-intervention.

For, left to its own devices and  without the supervision of a higher authority it is doubtful that POLtd will engineer its own transformation.

POLtd is a company whose corporate DNA was, until less than two months ago, so entrenched in its sense of absolute power that it’s ‘oppressive’ conduct towards sub-postmasters was likened by Lord Justice Coulson to that of ‘a mid-Victorian factory-owner’. It was said to exhibit ‘institutional obstinacy’ and, according to Judge Fraser, borders on ‘institutional paranoia’ (946, Horizon Issues Judgement, 16th December 2019).

The litigation has exposed in POLtd a split personality which has, for twenty years, presented a highly polished and (almost) convincing veneer of propriety to the Government, to the public and to numerous courts of law. And with such unparalleled autonomy that it dared even deploy counsel and expert witnesses to uphold a facade which has been proven to be the exact opposite of reality.
Tighter shareholder oversight is critical.

Correspondence between two broken ex-sub-postmasters seeking resolution from POLtd’s terrifying incompetence as recently as December 2019 (supplied) suggests that the pace of corporate transformation is either insufficiently urgent, superficial, or both, and that any rhetoric from POLtd’s well-tuned PR machine to the contrary must be fully scrutinised and substantiated by BEIS to ensure it is not concealing default behaviours of POLtd’s former self.

The emails were written in desperation, the culmination  of months of mismanagement of cases involving alleged discrepancies at two branches. They were sent just days before POLtd congratulated itself on its  ‘major overhaul of our engagement and relationship with postmasters’ (joint statement on the announcement of settlement, 11th December 2019) and shed light on the hand-me-down teams to whom, even with the noblest of intentions, a new CEO must delegate his vision.

An inquiry must satisfy itself that Nick Read alone constitutes a sufficient enough change of guard for the undertaking of mobilising such inertia. Chairman Tim Parker’s response to Judge Fraser’s Common Issues Ruling ‘We have taken his criticisms on board and will take action throughout our organisation’  of March 2019 is looking seriously late on delivery, yet to anyone caught in POLtd’s invisible noose, a delay can be the difference between life and death.

If POLtd’s corporate culture, network modernisation and sustainability is to be guaranteed under its new CEO and the watchful eye of BEIS, it must be built on the foundation of a Framework Agreement drawn up between these parties. It may be pertinent for an inquiry to consider why this has not yet occurred. This should formally establish principles of governance and lines of accountability within the POLtd/BEIS relationship including the remit of UKGI. It should include in its scope details of the ‘circumstances of, and rights upon, intervention’ belonging to BEIS and must be conceived in the light of a thorough re-examination of the entire viability of POLtd’s business model. This model has, to date, sustained itself on the premise of its entitlement to offload liability for all branch shortfalls onto sub-postmasters, an entitlement which the Common Issues Judgement ruled POLtd no longer possesses - indeed never did. It is for an inqury to seek evidence that will assure stakeholders that the dysfunctional nature of POLtd’s business model is being reshaped to accommodate this seismic shift.

Final words here must go to my ex-sub-postmaster, Chirag Sidhpura, who was powerless to prevent all that he had ever worked for being snatched from his grasp by a company owned by your department.
I lost everything overnight, my dignity, respect and everything which I built over the course of 5 years, Post Office took it all away without a proper investigation and explanation, with no care in the world of how would a family man support his family without pay’. 
‘This brought stress into my marriage, family life, to the point where my wife said to me it’s either the business or your family, but I could not walk away from either as I had done nothing wrong’. 
‘My frustration was still there and getting worse, I broke down and didn’t know which way to turn, my family life was suffering, interaction with my children was getting worse. After talking to my doctor I was prescribed Setraline anti-depressants which has helped’.
Chirag’s is another unresolved story which bears witness to the complacency, incompetence and cruelty of POLtd management until as recently as 2019.

The High Court Litigation may be over and victory rightly seized by the Claimants but the battle to reclaim POLtd and restore it to the fully-functioning, dynamic, Nolan-principled business that it must become has only just commenced.

Will BEIS up tools and actively involve itself in redrawing POLtd’s road map and will you, as its Secretary of State, trigger a public inquiry laying the foundation for this rejuvenation? For the sake of all sub-postmasters - past, present and future - I sincerely hope that you will.
I look forward to your response,

Yours sincerely, 
Eleanor Shaikh

N.B. I have identified three instances where a potential conflict of interest within an inquiry exists. The first, that of Paula Vennells whose tenure as CEO of POLtd spanned critical years of the Horizon controversy, now in office as a non-executive Director of the Cabinet Office. Aside from the very serious concerns aired in the Fit and Proper Person referral made against Ms Vennells (supplied) it should be noted that, not only must Cabinet Office advice be sought on whether or not an inquiry should be held, but also that the Cabinet Office functions as the pinnacle of overarching oversight of departmental ALBs. Owning as it does the process for reviewing ALBs the Cabinet Office may itself, therefore, come under scrutiny during a public inquiry. Ms Vennells position at its core risks compromising any impartiality in both respects due to her significant personal interest in investigations not being conducted.

Additionally, according to the Cabinet Office Inquiries Guidance it falls to the Permanent Secretary of your department, Alex Chisholm, to ‘put processes in place to start collecting relevant evidence... suspending the usual process of archiving and destruction of papers’.

Alex Chisholm is also the principle Accounting Officer of BEIS, is a non-executive Director of UKGI and until 2017 the Accounting Officer of POLtd’s parent company Postal Services Holding Company. Given questions might be asked by an inquiry as to whether or not Alex Chisholm was successfully is discharging his combined duties of oversight in all these roles and given that BEIS will be both sponsor of and party to the inquiry, such potential conflicts of interest must be brought to its attention.

Lastly, Michael Keegan, potentially implicated in the controversy through his role at Fujitsu, was last year appointed a Crown Representative at the Cabinet Office. As Fujitsu’s UK Chairman 2015-2018, previously its CE, and a UK board member since 2010, Keegan’s tenure spans critical years during which his IT company managed Horizon on behalf of POLtd. So gravely concerned was Judge Fraser by the veracity of evidence given by Fujitsu employees to previous courts in a number of criminal cases, that he is passing a separate dossier to the Director of Public Prosecutions.
Fujitsu is a long-standing and major IT supplier to the government.

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