Post Office ‘failed to investigate’ Horizon before prosecuting subpostmasters

The Post Office failed to investigate whether cash shortfalls could have been caused with malicious software or IT systems before taking legal action against subpostmasters, an independent report has found.

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The Post Office failed to properly investigate the root cause of cash shortfalls at sub-post offices before sacking or prosecuting over 150 subpostmasters, an independent report has concluded.

The Post Office commissioned forensic accountants Second Sight to conduct the independent review in June 2012 but failed to publish the final reportThe review, which the BBC says was not leaked to BBC Radio 4’s Today programme, but released 'for background', found the cash shortfalls could have been caused by malicious software, faulty IT systems or human error.

A Post Office spokeswoman told ComputerworldUK the report was produced for "mediation purposes" and made available to those directly involved but has not been published to protect the privacy of the individuals concerned. 

However Alan Bates, chairman of the Justice for Subpostmasters Alliance, accused the Post Office of using "smoke and mirrors to deflect everyone from the Second Sight report they are hiding".

The subpostmasters claim problems with the Post Office’s £1 billion Fujitsu Horizon system, which records financial transactions in branches, caused a discrepancy between cash and sales. The system was introduced in 2000.

Subpostmasters affected were contractually required to make up the difference themselves and a number were sacked or prosecuted for theft when they could not pay. However the cash shortfalls could have been caused by "inadequacies" with Horizon such as poor error detection processes, "faulty equipment" and software bugs, Second Sight's report said.

An interim report by the investigators last September found the system had about 12,000 communication failures every year, software defects at 76 branches and old and unreliable hardware.

The accountants have claimed the Post Office hindered their investigation by withholding documents. In February, Second Sight investigator Ian Henderson told MPs the Post Office was obstructing the independent inquiry by refusing to hand over files relating to the prosecution of over 150 sub-postmasters.

The Post Office brought prosecutions with “inadequate investigation and inadequate evidence”, he added.

Henderson said problems with Horizon were “relatively rare” but issues could be caused by “an unusual combination of circumstances such as power and communication failures, or errors at the counter”.

Henderson said many subpostmasters felt they “had no option” but to enter false figures into Horizon and their behaviour had been “perfectly understandable”.

A Post Office spokesman said: “Over the past three years there have been exhaustive investigations which have not found any evidence of systemic problems with the Horizon system.

“The mediation scheme was set up to address individual complaints and that is what we have gone to great lengths to do – a number are now resolved. The complaints are considered on their facts and substance.”