The Post Office expects to have paid out more than £650m in compensation to branch owner-operators by next March, after the ITV series about the Horizon IT scandal resulted in a huge spike in claims, the inquiry has heard.
Simon Recaldin, the head of the four redress schemes the Post Office runs, told the public inquiry into the scandal that the state-owned body had so far paid out £302m after the hundreds of wrongful prosecutions that were based on evidence from the flawed IT system.
He said there had been a “clear acceleration” in the number of claims made by post office operators this year and the organisation expected the amount it had paid out to rise to £1.15bn by the end of March 2026.
Sir Alan Bates, the central figure leading the drive for justice for hundreds of branch owner-operators and the subject of the ITV drama Mr Bates vs the Post Office, has said he will once again consider taking legal action if all claims are not resolved by March next year.
The inquiry was shown documents on Monday from a Post Office board meeting in March this year that said the organisation had received 1,146 late applications to its redress schemes, with 697 coming after the broadcast of the damning drama in January that brought the plight of owner-operators to national attention.
The Post Office officially stopped taking applications for its schemes in late November 2020. However, it moved to continue taking further applications from the end of 2022.
Recaldin added that the Post Office had “tentatively agreed” a date to close one of its compensation schemes with government just before the ITV drama broad because the number of new applicants had dwindled to “a handful a week”.
“I’m very grateful for the TV drama to have raised the issue [and prompted more applications],” said Recaldin. “The peak in activity is absolutely the result of the ITV drama.”
He added that a date of March 2025 has been discussed with government to end taking applications for the Horizon shortfall scheme.
Recaldin provided statistics in his written evidence that showed that a “standard” claim took an average of 445 working days until compensation was delivered, although this had decreased to 302 working days in 2024.
“This process takes too long, full stop,” said Recaldin. “It does take too long but there is a process that has to be gone through. Could it be quicker and more efficient? Yes. That is what we try to do continuously.”
The Post Office has been heavily criticised for the way it has handled redress for owner-operators, with its former chair Henry Staunton saying that his view was the remediation department acted in a “bureaucratic and unsympathetic” way.
Recaldin said the current projection was that the organisation would ultimately pay out about £1.4bn to settle all claims regarding Horizon. Last week, the chancellor, Rachel Reeves, said in her debut budget that the government had set aside £1.8bn to cover all claims.
The current redress schemes exclude applications from managers and assistants at branches, as they have a contract with the owner-operator rather than a direct one with the Post Office.
Recaldin said he understood the government was considering whether to extend the criteria, but there was not enough money set aside to cover potential payouts if eligibility were to be extended to cover the employees of owner-operators who may have claims.
He also said the government was considering whether to accept claims relating to issues with the version of the Horizon IT system still in use at the Post Office. Thousands of owner-operators have said they are experiencing “discrepancies” using the current system, with many covering shortfalls with their own money.
Recaldin repeated the view held by Nick Read, the outgoing chief executive of the Post Office, that the organisation should not be handling the redress schemes.
The remediation chief, who has worked at the Post Office since January 2022, said his view was that there was a “real danger of a conflict of interest” with the organisation operating as “judge, jury and witness”.
“There was clear direction from the government that there has to be a degree of accountability here [for the Post Office], and that it was feet to the fire time.”
The inquiry continues.
