Post Office corporate culture at root of Horizon scandal – Business Secretary

The Business Secretary has said the Post Office’s corporate culture is at the root of the Horizon scandal, but has insisted the organisation is still “an incredibly important institution in national life”.

Jonathan Reynolds told the Horizon IT inquiry he takes “ultimate responsibility” at governmental level for full, fair and prompt redress for subpostmasters.

He said there had been a “significant increase in the pace at which compensation has been paid” since the general election, and told the probe he did not believe it had been “at the cost of fair or accurate compensation being made.”

Giving evidence on Monday, Mr Reynolds said subpostmasters do not make “sufficient remuneration from what the public want from the Post Office”, adding that increases to their pay will require “very significant changes to the overall business model”.

Commenting on the culture within the Post Office in his witness statement to the inquiry, he said: “It is clear that the Post Office’s corporate culture is at the root of this scandal, and I want to make sure the system works for subpostmasters.

“I am supportive of a reform agenda which seeks to turn this ambition into reality.”

Lead campaigner and former subpostmaster Sir Alan Bates previously told MPs he wanted the Department for Business and Trade (DBT) to set a deadline of March next year for redress payments for claimants who took the Post Office to the High Court between 2017 and 2019 – also known as the GLO scheme.

Asked if he could commit to the deadline set by Sir Alan, Mr Reynolds said: “I’ve thought about this a great deal and obviously anything put forward by Sir Alan in particular is something I’ll consider to a significant degree.

“The position I’m in is I’m trying to make sure people get redress for a horrendous scandal … at a minimum, I don’t want to do anything that makes that injustice even worse.

“And the worry about a deadline – can you imagine a situation where, for whatever reason, a claim has not come in?

“I think it will be unconscionable to say that that is not going to be considered.”

Mr Reynolds added: “If my frustration at those claims not arriving in the department meant that I felt that was the only way to speed those up, and I felt that wasn’t going to prejudice any individual claim … it will be something that I will consider.”

Counsel to the inquiry Julian Blake asked: “If there is not full, fair and prompt redress for subpostmasters, do you take ultimate responsibility at a governmental level?”

The Business Secretary said: “Yes, I think this is an example of where in the past, there has been insufficient accountability, and ultimately as the Secretary of State, I take accountability for everything that is within the Department for Business and Trade.”

Mr Blake continued: “How do you propose that full, fair and prompt redress is going to be achieved?”

Mr Reynolds responded: “The first thing I would say is, I understand there has been, quite rightly, a lot of analysis in this inquiry about whether there is a tension between fair redress and the speed at which it is delivered, and I understand why that is of such importance to the work that is going on here.

It is clear that the Post Office's corporate culture is at the root of this scandal

“Since the general election, there has been a significant increase in the pace at which compensation has been paid.

“The overall quantum of compensation is up in the last four months by roughly a third, and the number of claims to which there has been an initial offer being made in response to that claim has roughly doubled in the last four months to what it has been in the four months preceding the general election.

“But I would very much want to say that I do not believe that increase in pace has been at the cost of fair or accurate compensation being made.”

Mr Reynolds added: “The position is still not to everyone’s satisfaction, but I think you can see we’ve tried to speed up compensation and redress, without that being at the cost of any claimant feeling that’s not an accurate or fair level of redress for them to receive.”

Mr Blake then asked: “In terms of cultural change, what do you see as the most important way in which the culture at the Post Office can be changed?”

Mr Reynolds replied: “I think the scale of this scandal cannot be separated out from the business model and the governance structure of the Post Office.

“So we need, from the work that I lead as Secretary of State and what this inquiry is seeking to do, to not just respond to the obvious injustice and the need for redress to follow that, but to understand why, as an institution, the Post Office has gone so wrong and what needs to change in future.

“For instance, I believe that is everything from the internal governance structure of the Post Office, right down to the level of remuneration that postmasters receive.

“I think despite the scale of this scandal, the Post Office is still an incredibly important institution in national life.

“I think it still has an incredible role to play in communities.

“I look at the business model of the Post Office, and I think even accounting for the changes in the core services that are provided … there’s still a whole range of services that are really important.

“But I don’t think postmasters make sufficient remuneration from what the public want from the Post Office, and I think that’s going to require some very significant changes to the overall business model of the Post Office.”

More than 900 subpostmasters were prosecuted between 1999 and 2015 after faulty Horizon accounting software made it look as though money was missing from their accounts.

Hundreds are still awaiting compensation despite the previous government announcing that those who have had convictions quashed are eligible for £600,000 payouts.