Post Office inquiry: Vennells ‘failed to tell MPs’ about 16 cases where Horizon software made errors

Former Post Office chief executive Paula Vennells failed to tell MPs about 16 investigated cases where the Horizon computer software had made errors more than a decade ago, the inquiry into the scandal has heard.

Questioned by members of parliament in 2012, Ms Vennells said there had not been a case investigated by authorities where the software was found to be at fault.

But, according to Jason Beer KC, lead counsel to the inquiry, there have been 16 reports of bugs in the software or court cases where workers were found not guilty. He asked Tory peer and long-standing advocate for victims of the Post Office scandal James Arbuthnot, who was present at the meeting, if Ms Vennells or other managers mentioned these cases, which appeared to show the software was capable of making mistakes.

The former Conservative MP said she and her colleagues had not mentioned any of them.

One such case dated back to 2006, where a subpostmistress from Northern Ireland was acquitted after successfully claiming the software caused a shortfall.

Post Office bosses had long claimed that the Horizon accounting software was not responsible for shortfalls in accounts and that subpostmasters had been stealing from the company.

Lord Arbuthnot also said he raised the subpostmasters’ plight with the Labour government 15 years ago but was left frustrated by their response, which he summed up as, “No, not me, guv”.

In an explosive testimony, Lord Arbuthnot criticised the actions of former government ministers and Post Office officials and said he was left frustrated at the reply to his 2009 letter to then business secretary Peter Mandelson, which asked for subpostmasters' complaints over the faulty Horizon IT system to be investigated.

The Tory peer also accused the Post Office of operating a “behind the scenes deception process” and its former chief executive Paula Vennells of keeping key information about the scandal from MPs.

Lord Arbuthnot told the inquiry that the former Labour government avoided responsibility over the scandal, after receiving a letter from junior minister Pat McFadden which suggested the concerns were instead a matter for the Post Office.

He said: “It was clear that the government was saying it was nothing to do with them.”

James Arbuthnot said he was not satisfied with how ex-Post Office CEO Paula Vennells responded to his concerns over Horizon (Jordan Pettitt/PA Wire)
James Arbuthnot said he was not satisfied with how ex-Post Office CEO Paula Vennells responded to his concerns over Horizon (Jordan Pettitt/PA Wire)

In the 2009 letter shown to the inquiry, Lord Arbuthnot wrote: “There does appear to be a significant number of postmasters and postmistresses accused of fraud who claim that the Horizon system is responsible, including at least two in my constituency.

“Given the level of impact this has on the personal lives of these postmasters and postmistresses and their families, often involving bankruptcy and significant financial hardship, I should be most grateful if you would let me have your comments on what can be done to investigate the matter.”

Lord Arbuthnot told the inquiry: “Since the government owned the Post Office I assumed that the government would be in the position to sort it out. But they were saying, ‘No, not me, guv’.

“I was frustrated and annoyed. It was clear that the government was saying it was nothing to do with them and I didn’t see at that stage where I could take it.”

Lord Arbuthnot compared the situation to the owner of a dangerous dog refusing to take responsibility for their pet.

He said: “What this ‘arm’s length’ arrangement essentially means is that the government is refusing to take the responsibilities that go with ownership and I don’t think it’s right to do that for various reasons.

“You cannot say that the dangerous dog has an arms-length relationship with you if the dangerous dog behaves badly. The whole process of arms-length control is a dangerous one, it seems to me.”

The Tory peer also criticised the behaviour of the Post Office, claiming that it had intimidated subpostmasters by telling them they were the only people being affected by shortfalls in the Horizon IT system.

“There was something at the back of my mind which continued to trouble me which was the number of these people who were being told ‘you are the only person this is happening to’,” the Tory peer said.

“That struck me as profoundly wrong because at first, it was obviously disprovable, they were not the only people it was happening to. Second, it was isolating those subpostmasters and subpostmistresses so they could not get support from others in the same position.

“And third it had an element of intimidation about it. All of which set the Post Office and its way of operating with its subpostmasters in a bad light.”

Alan Bates, former subpostmaster and founder of the Justice for Subpostmasters Alliance (PA Wire)
Alan Bates, former subpostmaster and founder of the Justice for Subpostmasters Alliance (PA Wire)

Lord Arbuthnot said the Post Office misrepresented a key report from forensic accountancy firm Second Sight in 2014 – which revealed a large number of bugs in the Horizon system – because it was preoccupied with protecting its “existence”.

“They knew there were a large number of bugs in the system that they hadn’t told MPs about,” Lord Arbuthnot told the inquiry.

“They were operating some sort of behind-the-scenes deception process which suggests to me now that they were stringing MPs along in order to preserve the robustness of Horizon, the existence of Horizon, and possibly the existence of the Post Office.”

In his witness statement about the 2014 report, the Tory peer wrote: “[It] contains many points that were damning.”

The Tory peer accused Ms Vennells of trying to “keep information about Post Office scandal from MPs”.

In his witness statement, he said that following the publication of the report, Post Office personnel became “defensive, legalistic and determined to keep from MPs information about which they had previously promised to be open.”

When asked which personnel he was referring to, Lord Arbuthnot told the inquiry: “Well, particularly Paula Vennells.”

Lord Arbuthnot added that it was after the rejection of the report by the Post Office that he and other MPs “essentially broke off relations” because they “couldn’t trust the Post Office anymore”.

The Tory peer had previously said he was “not satisfied” with the “brush-off” he received from Ms Vennells back in 2012, after he wrote her a letter raising concerns about complaints from subpostmasters about the Horizon system.

In his witness statement to the inquiry, the former MP said that Ms Vennells had written an “unsigned letter” which said there was no evidence to support those allegations and she was confident that the system was robust and fit for purpose.

Vennells was accused of keeping information about the Post Office scandal from MPs (PA)
Vennells was accused of keeping information about the Post Office scandal from MPs (PA)

He wrote: “The subpostmasters I had met seemed to me to be transparently honest. I do not remember anyone suggesting to me that the introduction of a new computerised accounting system had uncovered previously hidden fraudsters... I was therefore not satisfied with the brush-off I was getting by way of reply to my letters.”

Lord Arbuthnot’s testimony follows explosive allegations made by Alan Bates, former subpostmaster and head of the Justice For Subpostmasters Alliance, who said the Post Office is an “atrocious organisation” which was run by “thugs in suits” and was willing to do “anything and everything” to hide Horizon IT failures.

Between 1999 and 2015 hundreds of post office managers were prosecuted and handed criminal convictions.

A Post Office spokesperson said: “Our first priority is always to assist the Inquiry in its role to establish the truth. It’s for the inquiry to reach its own independent conclusions after consideration of all the evidence on the issues it is examining.”