Post Office’s Horizon accounting system: Calls for an independent inquiry

In December 2019, the High Court ruled the Post Office’s Horizon electronic accounting system had suffered from a number of bugs, errors and defects. This followed a long campaign by sub-postmasters who argued they had been falsely accused of fraud as a result of these technical faults, resulting in job losses, bankruptcy and, in some cases, imprisonment. This dispute and the stories of those effected were the subject of a recent BBC Panorama programme, broadcast on 8 June 2020.

Since the ruling, there have been calls for the Government to establish an independent, judge-led inquiry into Horizon and the Post Office. Responding to these calls, the Prime Minister, Boris Johnson, said on 26 February 2020 the Government would “[get] to the bottom of the matter”. On 10 June 2020, the Government confirmed there would be an independent review. However, the Opposition has criticised the scope and powers of this review. It has argued only a judge-led inquiry might ensure those responsible for the decisions on Horizon are held to account.

The establishment of an inquiry will be the focus of the following oral question on 18 June 2020:

“Lord Arbuthnot of Edrom to ask Her Majesty’s Government, further to the answer by the Prime Minister on 26 February (HC Deb, col 315), what steps they have taken in relation to the establishment of an independent inquiry into the Post Office’s Horizon accounting system.”

Horizon IT system

The Post Office introduced the Horizon accounting system in 2000. Horizon was used to process financial transactions at Post Office branches. The provider of the original system was ICL, then partly owned by Fujitsu and fully incorporated within Fujitsu in 2001.

Following its introduction, sub-postmasters began to report errors arising when using the system, with the system recording shortfalls. These errors resulted in sub-postmasters being in arrears to the Post Office. The sub-postmasters said when they raised their concerns, the Post Office told them it was unaware of there being any faults in the Horizon system. Many sub-postmasters took out loans or remortgaged their houses to pay the money the Post Office said they owed. Some lost their contract with the Post Office or were accused and convicted of false accounting. These and other problems came to light following a series of investigations, including by Private Eye and the journalist Nick Wallis.

The Post Office launched its own inquiry into Horizon in 2012 and established a complaint review and mediation scheme. A group of sub-postmasters subsequently began legal action against the Post Office in 2015. In December 2019, the Post Office and the sub-postmasters announced they had reached an out of court settlement. In the same month, the High Court published a ruling on the issues, confirming that there had been faults in the Horizon system and that it had not been sufficiently robust. Subsequently, the Criminal Cases Review Commission said in June 2020 that it had so far referred a total of 47 Post Office cases to appeal.

Calls for an inquiry

Since the December 2019 ruling, members of both the House of Commons and the House of Lords have call for an independent inquiry into the Post Office and the Horizon IT system. Lord Arbuthnot (Conservative) argued that there should be a judge-led inquiry. During a question for short debate on 25 February 2020, Lord Berkeley (Labour) said an independent public inquiry might be the only answer to establishing who was responsible for the faults in the system and how these were handled. He suggested this inquiry might consider the role of the current and previous governments in providing oversight, given the government was the sole owner of the Post Office.

During prime minister’s questions on 26 February 2020, the Prime Minister, Boris Johnson, was asked by Kate Osborne (Labour MP for Jarrow) whether he would commit to launching an “independent inquiry”. Mr Johnson responded saying he was “happy to commit to getting to the bottom of the matter in the way that she recommended”.

Following this commitment, the then chair of the Business, Energy and Industrial Strategy Committee, Rachel Reeves, wrote to the Prime Minister on 3 March 2020. In her letter, she said the Prime Minister had “appeared to commit” to a public inquiry in his response to Kate Osborne. Ms Reeves asked him to confirm whether the Government would launch an independent public inquiry and, if so, when this would be. The Prime Minister is yet to respond to this letter.

On 5 March 2020, Lord Arbuthnot raised the issue of the inquiry during an oral question on the compensation of sub-postmasters effected by Horizon. He asked the Parliamentary Under Secretary of State at the Department for Business, Energy and Industrial Strategy, Lord Callanan, to provide information, including how the inquiry might be independent of both the Post Office and the Government. Lord Callanan said the Government was still “looking into what [needed] to be done” and that the next steps would be outlined as soon as possible. This issue was raised again during an oral question on 25 March 2020. In response, Lord Callanan said the Government was looking for an independent chair and was finalising the terms of the inquiry.

Confirming an independent review

On 10 June 2020, the Parliamentary Under Secretary at the Department for Business, Energy and Industrial Strategy, Paul Scully, responded to an urgent question from the shadow minister for Business, Energy and Industrial Strategy, Chi Onwurah. Mr Scully confirmed the Government would establish an “independent review”. He said this review would consider issues including whether the Post Office had learnt the necessary lessons from the Horizon dispute and how the Post Office was going to rebuild trust with its network of sub-postmasters. Mr Scully also said the review would be chaired by someone independent of both the Government and the Post Office. Ms Onwurah criticised the announcement, arguing the Government should launch a judge-led inquiry. She said only a judge-led inquiry could compel the Post Office to cooperate with the investigation.

The answer to this urgent question was repeated in the House of Lords on 11 June 2020 by Lord Callanan. The shadow spokesperson for Digital, Culture, Media and Sport, Lord Stevenson of Balmacara, asked whether the review would have the same powers as a public inquiry to compel witnesses to give evidence and the disclosure of documentary evidence. Lord Callanan responded saying the review’s terms of reference were similar to those of an inquiry and that the decision to undertake a review would enable progress to be made in a shorter timeframe. He also said the Post Office had agreed to cooperate with the inquiry and ministers would take “further action” to ensure their cooperation if necessary.

Business, Energy and Industrial Strategy Committee inquiry

The House of Commons Business, Energy and Industrial Strategy Committee launched an inquiry on the Post Office and Horizon earlier this year. The current chair, Darren Jones, has written to the Post Office (the current and former CEOs) and Fujitsu on 3 June 2020 to ask questions about their conduct concerning Horizon.

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