22 Dec 2019, 13:24
Curate behind the Post Office witch‑hunt
Sub-postmasters falsely accused of fraud want their persecutors called to accounts
December 22 2019, 12:01am,
The Sunday Times
Paula Vennells has said she was interested in ‘giving back’ at the Post Office
Parishioners at the Church of St Owen near Bedford often used to ask the Rev Paula Vennells about the Post Office after her Sunday morning sermon. As chief executive of the taxpayer-owned organisation for seven years, the part-time curate could expect to be told of its shortcomings. “I hear . . . if the Post Office does something they don’t like,” she said in 2014.
So the past few Sundays must have been uncomfortable. Earlier this month, the Post Office agreed to pay £58m compensation to 550 former sub-postmasters who were unfairly blamed by the organisation — and in some cases prosecuted and jailed — for apparent financial shortfalls at their branches. The fault, it was confirmed after a long-running legal dispute, lay instead in the Post Office’s own computer system.
Campaigners are pushing for a public inquiry and a boardroom clearout. They have also rounded on Vennells, 60, who was made a CBE in January, three months before she retired from the Post Office, having earned almost £5m while hundreds of sub-postmasters faced bankruptcy and criminal charges.
The scandal exposes poor judgment across the organisation — from the middle managers who continued to target sub-postmasters when the company had already admitted it was at fault, to the senior executives who took big bonuses.
The corporate failures have drawn comparisons with Thomas Cook, which refused to apologise after the deaths of two children in a Corfu hotel in 2006. Peter Fankhauser, the chief executive, said at the inquest in 2015 that there was “no need” for Thomas Cook to apologise. It was later suggested the tour operator had paid too much attention to legal advice in its handling of the tragedy.'
Similar criticism has been laid at the door of Vennells and her executives, who for years fought a legal battle against the sub-postmasters — racking up fees of £23m, all funded by the taxpayer.
Lord Arbuthnot, the former Conservative MP for North East Hampshire, who has highlighted ordeals faced by sub-postmasters accused of theft and false accounting, called for an inquiry. “These people have been under extraordinary pressure for decades,” he said. “The Post Office clearly knew there were things wrong with the [IT] system.”
He said the settlement was “not enough” to make up for the suffering they had endured. An inquiry, he added, would root out who was accountable. “It starts with Paula Vennells, but it includes the whole board of the Post Office.”
The scandal stretches back to the start of the millennium, when the Post Office — under former chief executive John Roberts — installed a new computer system from Fujitsu known as Horizon. Sub-postmasters began reporting discrepancies on their tills, in some cases of several thousands of pounds at a time.
In 2011, Vipinchandra Patel was handed a £200 fine and ordered to wear an electronic ankle tag for two months after he pleaded guilty to aiding and abetting fraud and abuse of his position as sub-postmaster at Horspath near Oxford. He later blamed the Horizon IT system and said he had pleaded guilty to avoid a jail sentence. The Post Office ordered him to repay more than £36,000, forcing him to sell his wife Jayshree’s gold jewellery.
“My existence lost any meaning,” he said. He was denied a loan to help his children buy property due to his criminal record. “Not being able to do anything for my children was heartbreaking.”
Patel, now 67, had run the village post office since 2001. He started noticing discrepancies only after the new computer system was installed. Patel, who hopes to have his conviction overturned, is clear on who caused his suffering. “I personally hold the whole board responsible,” he said.
After complaints mounted, the Post Office hired the investigative firm Second Sight to conduct an inquiry, and in 2013 it admitted there had been software defects — but said the system overall was effective. It did not look for the cause of the errors, and refused to hand over key files to Second Sight. It was found to have brought cases against sub-postmasters on “inadequate evidence”.
The Post Office published a report that cleared itself of wrongdoing and tried to enter mediation talks with sub-postmasters, a widely criticised approach.
Stories such as Patel’s highlight the human cost of the scandal. Now the Post Office — which made pre-tax profits of £31m in the year to March 31, up from £8m a year earlier — has agreed to pay out, attention is focusing on the executives who fought the sub-postmasters.
Top of the list is Vennells, who refused to speak to The Sunday Times last week. She directed inquiries to the Post Office, even though she no longer works there. Others include Tim Parker, the current chairman, and Alice Perkins, who is married to former Labour justice secretary Jack Straw and chaired the Post Office from 2011 to 2015. A long list of ministers with responsibility for the Post Office are also in the firing line. The incumbent is Kelly Tolhurst.
Vennells, who has neglected to apologise to the sub-postmasters, has spent her career speaking out about fairness in business. She joined the Post Office as network director in 2007, and became chief executive in 2012. A year later, she said in an interview that part of the reason she had taken the job at the Post Office was an interest in “giving back”. She has said her faith helps with business strategy. “There is something around Christianity about being the best you can possibly be,” she said in a 2014 interview.
She earned £4.9m while chief executive, including £717,500 in her final year. That included £143,000 in short-term incentive payments, after a 20% cut applied by the company’s remuneration committee to take into account the “ongoing postmaster group litigation and its impact on the business”. Vennells, who started at Unilever, is now a non-executive director at the retailers Dunelm and Morrisons, and chairs the Imperial College Healthcare NHS Trust.
A source close to Dunelm suggested Vennells had been advised to take a hard line against the sub-postmasters by her legal team: “I would have thought she’d been advised to put up a hard front until the worst came down on her head.”
Others who know her questioned why she did not take a more principled stance. “I’ve implemented a lot of systems over the years and what the Post Office did broke most of the rules,” one said. “The response goes to the heart of what you think you are as an organisation. If you think you’re responsible and doing something worthwhile, you stand up to a lawyer who’s saying you mustn’t do something because it’ll cost money. You say, ‘We have to do the right thing.’”
Tim Parker, chairman of the Post Office, said: “Personally and on behalf of the Post Office I would like to sincerely apologise to those affected. We accept that, in the past, we got things wrong in our dealings with a number of postmasters and we look forward to moving ahead, with our new chief executive leading a major overhaul of our engagement and relationship with postmasters.”
The Post Office hopes chief executive Nick Read will restore relations with its staff. However, the signs are not promising. Read, 53, was formerly chief executive of the supermarket chain Nisa, but left suddenly during its takeover talks with the Co-operative Group. At the time, Nisa did not give a reason for his exit. A former company insider said he had been “let go” because the board was disillusioned with his performance.
Thrown out after years of anguish
Pamela Stubbs discovered she was losing her Post Office branch when an official from the taxpayer-owned organisation arrived to ask for her keys. She was thrown out, then had to watch as a replacement sub-postmaster was brought in to the business she had run for 20 years.
The suspension followed years of anguish during which the 71-year-old was forced to hand thousands of pounds to the Post Office after her till showed a string of discrepancies. She gave up her seat on the district council due to the embarrassment.
“Everyone was told the postmistress had money problems and had been taking cash,” she said.
Stubbs took on the Post Office in Barkham, near Wokingham in Berkshire, after her husband died from cancer in August 1999. The couple had run the business together for 12 years.
Problems with the Horizon till system started in 2009, when she moved the Post Office into a portable cabin while improvement works were carried out. She started reporting huge discrepancies — sometimes several thousand pounds at a time.
Stubbs initially paid the Post Office for the shortages but disputed its claims and began keeping paper records of transactions. By the time the Post Office carried out an audit in January 2010, her system was found to be £26,000 down. She was told to resign and had the keys to her Post Office taken away. Despite her ordeal, Stubbs feels fortunate. “There was one family who had to go back and live with their parents because the Post Office took their house away,” she said.
She knows who she holds responsible: “The Post Office only has one shareholder, and that shareholder is the government.”
What happened to those postmasters is reflected into the NHS and it's supporting regulatory and governance framework - right the way up to the secretaries of state. Incompetent and at times corrupt senior managers cover and smother their and their organisation's mistakes and then are economical with the truth in order to worm out of their accountabilities. Regulators, tribunals and government ministers then turn a blind eye rather than confront the problem. No wonder we have a shortage of nurses - - - perhaps many of them are sick of working within such a culture. The NHS - built on love - run on fear.
This lady needs a good spanking for jumping ship before the trouble was sorted out. Postmasters and mistresses are one of the pillars of small communities, usually well known and respected. If a dozen were found to be crooks no-one would have raised an eyebrow. By the time 550 had been added to the hall of shame one would have thought any sensible person would think there was a system fault - especially as they were all protesting their innocence. Then to sting the taxpayer £23 million for unnecessary legal fees! She will have to spend a lot of time on her knees for this lot. The whole board who during this time were trousering huge bonuses should be sacked.
Vennells and the rest of the board responsible for this diabolical and consciously deliberate act of incompetence, misjustice and bullying will continue to be rewarded and go on to be given further, more highly paid board positions.
This is the way the old boy and girl network of board level appointees works. Totally incestuous and unaccountable. Just as happened with the collapse of the banks.
Our society and particularly corporate governance system is completely screwed.
This needs a public inquiry and if sufficient evidence, prosecution of the PO board and their agents / expert witnesses for offences such as conspiracy and perjury.
People at the top of large organisations often justify their large salaries by stating they “ are responsible for the work of the organisation”.....
Reprehensible behaviour by PO senior management, only explanation must be to line their own pockets with fat bonuses. Portraying yourself as a religious person when you do not know right from wrong. This a not a case of grey, it is black and white, once the PO knew it was wrong it just defended and defended whilst in parallel putting in place sophisticated covering up mechanisms.
Fortunately, the nation escaped nationalisation of many industries in the general election. Otherwise they would all behave like this.
The problems in the Horizon project were known very early on and commented on by the IT press, notably Computer Weekly. A basic understanding of statistics would show that an increase in fraudulent transactions was outside normal process variation for post offices. Fujitsu/ICL, Capita and other consultancies were behind this government backed project and it could not be seen as a failure.
This is yet another example of people believing the software rather than the evidence. Software cannot be proved to be correct only tested. Tests only test what is tested, there will be many things untested.
Commercial pressure often pushes software into use before it is ready. This has happened even when the software is safety critical, 737 MAX ?
Few companies reward employees for bad news. So manages push the boundaries and often get well rewarded. Until there are mechanisms in place that will counter these pressure these errors will go on.
Such problems are not caused by 'software' but human error due to poor quality software engineering and inadequate software validation and testing.