Post Office - Horizon System

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Jo Swinson (East Dunbartonshire, Liberal Democrat)
Yesterday evening, an interim report into alleged problems with the Post Office’s Horizon computer system was published. The report was commissioned by Post Office Ltd from external forensic accountants, Second Sight. The Horizon system records all transactions conducted at every post office counter across the country. The Government welcome the publication of the interim report and the Post Office’s statement in response.
Although Post Office Ltd is 100% owned by the Government, the company operates at arm’s length as an independent commercial business. The Government do not play any role in operational matters. It is important to note that the issues in the report have no impact on Royal Mail, which is an entirely separate business. It is also important to be clear that, contrary to misleading media reports, the review explicitly confirms that
“we have so far found no evidence of system-wide problems with the Horizon software”.
The very small number of sub-postmasters who have experienced issues with the Horizon system are a minute proportion of the tens of thousands of people who have been successfully using the system across the network of 11,500 branches on a daily basis since 1995. Out of 68,000 users, only 47 cases have been put forward to the review.
I want to emphasise that the interim report makes no comment on the safety or otherwise of any conviction of a sub-postmaster for fraud, theft or false accounting. Equally, even if it had, the Government cannot intervene in the legal process to review or appeal past convictions. These matters can properly be dealt with only by the relevant judicial authorities. The interim report published yesterday analysed four cases. It found that there was scope for the Post Office to improve aspects of its support and training for sub-postmasters, and it has already taken steps to do so. The Post Office has further proposed a number of measures to build on some of the points made in the Second Sight report on support and training for sub-postmasters. I welcome those initiatives as, I understand, does my right hon. Friend Mr Arbuthnot, who has played a key supporting role in identifying cases for examination in the review.
The Post Office statement issued yesterday welcomed the broad thrust of the report’s findings and outlined three initiatives to deal with the issues raised. First, it will set up a working party to complete the review of cases started by Second Sight, and will consider all 47 cases brought forward by the Justice for Subpostmasters Alliance—the JFSA—and MPs. The JFSA has been invited to join the working party. Secondly, an independent figure will chair a review to determine how best to adjudicate disputed cases in future. The JFSA and other stakeholders will also be invited to take part in this process. Finally, a new branch user forum will provide a channel for sub-postmasters and others to raise issues at the highest level on business processes, training and support. The company will take forward the proposals as an urgent priority. I commend this statement to the House.
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Hansard source (Citation: HC Deb, 9 July 2013, c198)
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1:41 pm

Ian Murray (Edinburgh South, Labour)
I thank the Minister for the advanced copy of the statement and for coming to the House.
This is a disturbing affair. At a time when sub-postmasters’ income is being squeezed, the last thing they need is to lose confidence in the system they use to operate their businesses. The people in the post office network are the lifeblood of our communities and must be supported in every way possible. A recent National Federation of SubPostmasters survey found that operating costs were rising while personal drawings were falling, and that one in four sub-postmasters take no salary from their businesses. Most sub-postmasters earn little or no income from either financial or Government services, the two areas that Ministers identify as having real growth potential for post offices. The NFSP removed its support for the Postal Services Bill on the basis of the abject failure of the Government to deliver the “front office for Government” services they promised at the previous election. That is what makes today’s revelations on the Horizon system all the more worrying.
I welcome the steps taken by Post Office Ltd to investigate the concerns raised by the Justice for Subpostmasters Alliance and Mr Arbuthnot. Its website has a case-by-case analysis of sub-postmasters who did nothing wrong, but for whom alleged defects in the system had resulted in problems with cash reconciliation and processing payments. Press reports this morning say that the Post Office has admitted to software defects in the Horizon system, but the Post Office press release would have us think that this is a mere training problem.
Second Sight, the independent company employed by the Post Office to investigate these issues, said that while there was no fundamental problem with the Horizon system, there were bugs in the system that resulted in it identifying defects resulting in a shortfall of up to £9000 at 76 branches. The Post Office has recognised, however, that the report raises questions about the training and support being offered to some sub-postmasters. This raises wider questions on the current network transformation programme. Training concerns have been consistently raised by Opposition Members, the Select Committee on Business, Innovation and Skills and Consumer Futures, but the move to a Locals model could result in fewer fully-trained in our post offices.
If post office services are merely being administered from the front counter of a newsagent or shop, can we guarantee that the servers will be fully trained to ensure that the issues with the Horizon system do not arise in the future? The Minister did not address that question in her statement, and the National Federation of SubPostmasters has raised this issue time and time again. It responded today by welcoming the Post Office statement, but also said
“We are encouraged to see that Post Office Ltd (POL) concedes that there is scope for improvement in its training and support programmes—issues which the NFSP has raised repeatedly with POL.”
This is all at a time when Crown Post Office staff are in industrial action, the transformation programme is struggling to be delivered, sub-postmasters’ incomes are dropping, there is a dispute with Royal Mail on the segregation of mail payments, the future of the inter-
business agreement is unclear due to Royal Mail privatisation, and Post Office senior management have awarded themselves bonuses of more than £15 million.
What processes will be put in place to compensate sub-postmasters and former sub-postmasters who have been disadvantaged, fined, lost their businesses, homes or even jailed, as a result of the problems with the Horizon system? The Minister said that the interim report makes no comment about any convictions, criminal or otherwise, but can she tell the House how those serious issues will be dealt with? When did the Government know about this investigation and the problems with Horizon? How will she ensure that all staff are adequately trained in the transfer to a Locals model? Can she confirm or deny recent reports that there are ongoing talks to change the voluntary Locals network model to a compulsory model, due to the slow take-up of the transformation?