The True Story of How the UK Post Office became a Failed Organization.

A modern fable.

In 1999 the UK Post Office introduced a new computer system named Horizon into its network of post offices throughout the UK. The system managed the important tasks of transactions, accounting and stocktaking. Soon after it was introduced postmasters complained about bugs in the system which was reporting shortfalls, many amounting to thousands of pounds. Postmasters were discovering losses they could not explain. The Post Office took large numbers of postmasters to court where they were found guilty of theft, fraud and false accounting.

In court representatives of the Post Office testified that each case was unique; there was no evidence of widespread problems and on that basis the postmaster was always found guilty. Many former postmasters and postmistresses have described how the saga ruined their lives. They had to cope with the long-term impact of a criminal conviction and imprisonment, some at a time when they had been pregnant or had young children. Marriages broke down, and courts have heard how some families believe the stress led to health conditions, addiction and premature deaths.

In December 2019, the Post Office paid out £58 million to sub-postmasters who were awarded compensation for past false prosecutions of monetary theft that had been based on faulty evidence from the Horizon IT system. The judge presiding on the case, Mr Justice Fraser, described the Post Office’s approach to the case as “institutional obstinacy” that, “…amounted, in reality, to bare assertions and denials that ignore what has actually occurred, at least so far as the witnesses called before me in the Horizon Issues trial are concerned. It amounts to the 21st century equivalent of maintaining that the earth is flat.”

The CEO of the Post Office during this period was Paula Anne Vennells, CBE who just happens to be an ordained Anglican minister. Under her leadership, from 2012 to 2019 the Post Office prosecuted hundreds of subpostmasters for fraud, despite knowing that the financial discrepancies were actually arising from computer errors for which her own company was responsible. In 2019 she became chair of the Imperial College Healthcare NHS Trust in London. She also became a non-executive board member of the Cabinet Office.

On 19 March 2020, Vennells was harshly criticised in the House of Commons, particularly by Kevan Jones, MP for North Durham, who said, “Obviously, as a board member she knew what was going on, including the strategy in the court case and the bugs in the system. What happened? She got a CBE in the new year’s honours list for services to the Post Office. That is just rubbing salt into the wounds of these innocent people. There is a case for her having that honour removed, and I would like to know how she got it in the first place when the court case is ongoing. Added to that, she is now chair of Imperial College Healthcare NHS Trust. Again, I would like to know why and what due diligence was done on her as an individual… In December 2020 it was announced that she would be leaving these roles early, for personal reasons.”

Vennells subsequently apologised to workers affected by the scandal, saying, “ I am truly sorry we were unable to find both a solution and a resolution outside of litigation and for the distress this caused.”

There were more than 700 prosecutions based on Horizon evidence. The commission and the Post Office are asking anyone else who believes their conviction to be unsafe to come forward. Those whose convictions have been quashed are Josephine Hamilton, Hughie Noel Thomas, Allison Henderson, Alison Hall, Gail Ward, Julian Wilson, Jacqueline McDonald, Tracy Felstead, Janet Skinner, Scott Darlington, Seema Misra, Della Robinson, Khayyam Ishaq, David Thomas Hedges, Peter Anthony Holmes, Rubina Shaheen, Damien Owen, Mohammed Rasul, Wendy Buffrey, Kashmir Gill, Barry Capon, Vijay Parekh, Lynette Hutchings, Dawn O’Connell, Carl Page, Lisa Brennan, William Graham, Siobhan Sayer, Pauline Thomson, Tim Burgess, Nicholas Clark, Margery Williams, Tahir Mahmood, Ian Warren, David Yates, Harjinder Butoy, Gillian Howard, David Blakey and Pamela Lock.

Following the convictions some of these former postmasters went to prison, were shunned by their communities and struggled to secure work. Some lost their homes and even failed to get insurance owing to their convictions. Three have since died. They always said the fault was in the computer system, which had been used to manage post offices’ finances since 1999.

The Post Office settled the civil claim brought by more than 550 claimants for £57.75m, without admitting liability, in December 2019. Opening the appellants’ case on Monday, Tim Moloney QC said: “Essentially the Post Office in the face of all the evidence was prepared to accept that subpostmasters of previous good character, who had hitherto run decent responsible profitable businesses, became criminals overnight. Alarm bells should have rung.” He added, “The Post Office “chose to disbelieve the subpostmasters … It chose to ignore the distress that was being suffered by those subpostmasters.”

“Trust is the lubrication that makes it possible for organizations
to work.”  WARREN BENNIS

About davidsprott

Artist, writer, veteran IT professional
This entry was posted in Digital Transformation, Governance, Technology and Society, Trust and tagged , , . Bookmark the permalink.

5 Responses to The True Story of How the UK Post Office became a Failed Organization.

  1. Brian Fish says:

    I listened to this series, it really is shocking. From memory I think some of our colleagues were involved in work with the PO at the time Horizon was being developed. Closed culture, denial and group think, asset recovery as the single objective all above any ethical or moral compas. An object lesson indeed.

    In the end I think most issues come down to governance, if we could get corporate and public bodies governance changed we could do a lot: involve people, provide the external point of view, insist on decent wages and fair returns etc.

    Non of the political parties priorities it because, like constitutional reform it’s boring. But as we are becoming ever more plutocratic we need to grasp this nettle. There are those who think a new economy is e,edging bottom up, and whilst that is true it’s slow and doesn’t adress the problem of the incumbents or the transition.

    I struggle to see how else we can make any progress and avaoid a climate change catastrophe.

    • davidsprott says:

      I have come to the conclusion that climate catastrophe is sadly inevitable. It’s already happening and isolated events will continue with progressively greater impact. But by the time mankind acts collectively, it’s too late. Johnson chairing COP 26!? Joke!!

      • Brian Fish says:

        David, this is worth a listen and offers some hope
        https://www.bbc.co.uk/programmes/m000qwt3

        Tom Heap – 39 ways to save the planet. I just listened to the one on farming…the issue is for government to understa=nd all these initiatives and work out the policy incentives to scale and replicate. It is doable, our brainpower got us to here, it has to be the way we get through.

  2. davidsprott says:

    Hi Brian, Yes, systemic cultural failure. Do you think it was led from the top or was it more pervasive? What do you think the root cause was? I also note the government inquiry is not mandated to look at organisational issues and just to focus on IT failure!!!!!

    • Brian Fish says:

      Perhaps the roots are a tangle, I’m not sure about the tap root; there must be some specific PO cultural factors, a long history with slow adoption of technology, a simple process – get the post out with a historical command and control structure that doesn’t encourage questions, a blame culture associated with traditional occurrences of mail being interfered with – when we sent money post the organisation had to be stringent and come down on wrong doers because it was all manual and relied on trust. More modern failings added to the mix such as forgetting (or never being aware of) Fred Brooks “No Silver Bullets”. Reluctance to embrace modernisation in the form of outsourcing and franchising esp. go post masters. Buyers regret – Horizon cost so much it must be right, defensiveness by the contractors. It would take an real deep dive to figure out.

      In general terms we don’t seem to want, let alone understand learning cultures except where there is really no alternative like in the airline cabin. Even then look at how hard it was to get basic checklists into operating theatres (are we amputating the right leg, yes its the left one).

      A learning culture on its own isn’t a panacea. A historical note of interest to me and passing relevance; The German Army on the Western Front in WW1 had a formal learning system, all battle experience was reported back to HQ and then disseminated to other units. As a result of this all units in the front line knew about tanks within 24hours of their first use. Even so it wasn’t them who invited the tank.

      Everything is complicated when you delve into it, its possible to use systems thinking to map it all out, thats hard enough. When I look at my generation and remember the 70’s and what a leg up society gave me, I feel ashamed at the results we have now. Getting from paper to real world, with humility – thats the difficult bit. Nevertheless there is lots of unreported good stuff happening and the rising generations instinctively get that change is needed. When I encounter them its me thats playing catch up.

      I remain optimistic out of necessity (because I have grandchildren) and as an act of defiance.

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