The Post Office is not fit to run compensation schemes for those whose lives were ruined by the Horizon scandal, a parliamentary committee has said.
Just 20% of the budget set aside for compensation has been paid out, the business and trade select committee found in a report, and said an independent organisation should take over.
After last month’s chaotic evidence session with the Post Office’s chief executive, Nick Read, and its former chair Henry Staunton, the cross-party committee’s chair, Liam Byrne, described the organisation as being in “disarray”.
Staunton, who was fired in January by the business secretary, Kemi Badenoch, had told MPs that Read was under internal investigation and he had repeatedly threatened to resign over his unhappiness with his £436,000 basic annual salary.
At the same time, the committee had heard from lawyers acting for victims of the scandal that they believed it would take another two years for the £1bn compensation budget to be fully paid out given the bureaucratic hurdles put in front of claimants.
Byrne said: “Justice delayed is justice denied. And bluntly, justice has been denied to our innocent subpostmasters for far too long. It’s high time for the circus of recent weeks to end and for cheques to start landing on the doormats of innocent victims.
“We now know the Post Office knew of problems 20 years ago. Yet at best, only £1 in £5 of the budget for compensation has been issued. That is a national disgrace.
“The spectacle of the battle between the Post Office chief executive and its former chairman lights up a simple truth; that the top of the Post Office is in utter disarray and not fit for purpose to run the payouts to former subpostmasters.”
The committee’s report further said MPs had been provided with misleading evidence by Read, a former British army officer who has led the Post Office since 2019.
He had wrongly denied both that the Post Office had used non-disclosure agreements when settling with operators and that public relations firms had been hired to deal with the fall-out over the recent ITV drama about the scandal, said the report.
“The Post Office is not fit for purpose to administer any of the schemes of redress required to make amends for one of the biggest miscarriages of justice in British history,” the MPs concluded.
In a letter responding to the report on Thursday, Read denied supplying “misleading evidence”. He highlighted his clarification in a previous letter, which had stated there were “no confidentiality provisions in the settlements being agreed through the Horizon shortfall scheme” and that Post Office operators “are free to discuss these in full with anyone they choose to once they have been agreed”.
On the use of PR firms, his letter to the committee’s chair said: “In relation to Post Office’s use of external communication agencies, as per your report’s footnotes, the exchange was, in our view, accurate – all of our current agencies have been contracted since well before the broadcast of Mr Bates vs Post Office, working across a number of different workstreams.”
More than 900 post office operators were pursued through the courts between 1999 and 2015 after errors in the Post Office’s faulty IT system Horizon caused false shortfalls to show in financial accounts. Many more were forced to pay back shortfalls that did not exist.
The Post Office runs two financial redress schemes, the Horizon shortfall scheme for post office operators who were forced to reimburse false shortfalls in their branch accounts, and the overturned convictions process.
It also provides evidence to a third scheme for the 555 post office operators who took the organisation to court in 2016 but who are still awaiting full redress.
The MPs said they had heard of a “toxic” culture at the Post Office.
“The Post Office ruined the lives of innocent subpostmasters”, the MPs’ report found. “It subsequently failed to facilitate redress. Unsurprisingly, subpostmasters have no confidence in the Post Office. The Post Office’s leadership remains in disarray; its chairman has been dismissed; and its chief executive, Nick Read, is under internal investigation.”
The committee said the government should now legislate to provide legally binding timeframes for the settlement of compensation claims, described as the “Bates test”.
The idea had been proposed to the committee by Alan Bates, who has been leading the campaign for justice for post office operators and who was the central character in the recent ITV drama. He has yet to accept a compensation offer from the Post Office.
A Post Office spokesperson said they accepted the committee’s recommendation.
He said: “Post Office welcomes the direction of this report into speeding redress for one of the worst miscarriages of justice in British history, and we will study its recommendations carefully.
“While £179m has been delivered in redress to victims of this scandal, and settlements reached with 2700 postmasters, more needs to be done. Post Office would have no objection to relinquishing our role in administering redress.
“Whatever is decided, we will continue to work with government, parliament and the independent advisory board to do everything possible to speed up justice and redress for victims of this terrible scandal.”
