Post Office scandal: MPs warn the firm is 'not fit' to handle victim compensation

The Post Office is "not fit" to run any compensation schemes for victims of the Horizon scandal and should be removed, MPs have warned.

The Business and Trade Committee said in a report it is a "disgrace" so little has been paid to ex-postmasters.

It added that the Post Office's leadership is in "disarray", after its chairman was sacked and it emerged its chief executive is being investigated.

The firm has agreed to release the HR report at the centre of the row.

Labour MP Liam Byrne, chair of the committee, said: "It's high time for the circus of recent weeks to end and for cheques to start landing on the doormats of innocent victims."

The report showed that just £1 in £5 of a budget set aside for victims' compensation has been issued following what has been described as one of the greatest miscarriages of justice in British legal history.

Between 1999 and 2015, more than 900 sub-postmasters were wrongly prosecuted due to faulty software.

Incorrect information provided by a computer system called Horizon, developed by Japanese firm Fujitsu, meant that sub-postmasters and postmistresses were prosecuted for stealing money.

Many of those convicted went to prison for false accounting and theft. Many were financially ruined and some have since died.

Alan Bates has campaigned for justice for former sub-postmasters affected by the Post Office-Horizon scandal

Hundreds of sub-postmasters are still waiting for redress despite the government announcing those who have had convictions quashed are eligible for a £600,000 payment.

The report cites both victims' lack of confidence in the Post Office - which is owned by the government - which they said "ruined the lives of innocent sub-postmasters".

It recommends that the Post Office is removed from involvement in the schemes and is replaced by a new independent body.

Lee Castleton, a former sub-postmaster who lost a civil case against the Post Office and faced bankruptcy, welcomed the recommendation. "I think it's important to realise that for the traumatised victims going through the process of redress that's constantly fraught and difficult and combative," he told the BBC.

Asked about whether changes could result in delays to receiving compensation, Mr Castleton said: "It's been 20-plus years for victims - if it's an extra month or so it wouldn't really be that difficult to navigate."

But other former sub-postmasters are concerned. Tim Brentnall told BBC Radio Wales the government should take on the committee's recommendations "as long as it doesn't increase the timescales".

Lawyers who represent many former sub-postmasters recently said it could take up to two years for the £1bn compensation budget to be fully paid out because of bureaucracy involved and complexity of the cases.

Ministers are currently working up plans to speed up compensation, with details expected to be announced in the next few weeks.

According to the Post Office, approximately £170m has been paid to more than 2,700 claimants across three schemes.

• How do the Post Office compensation schemes work?

• Post Office victim settles but feels 'guilt'

The report also pointed to chaos in the leadership ranks at the Post Office.

Its former chair, Henry Staunton, was sacked by Business Secretary Kemi Badenoch at the beginning of the year. He later gave an interview to the Sunday Times claiming that he had been advised by a senior civil servant to stall compensation payments to sub-postmasters until after a general election.

Ms Badenoch denied the allegation. claiming that Mr Staunton was under investigation over bullying claims - something the ex-chairman said was false.

It then emerged it was actually Post Office chief executive Nick Read who was the subject of a whistleblower's report. The Post Office said the report raises a number of allegations, "someone of which relate to Mr Read but a number which do not".

However, a spokesman for the Post Office's former HR chief who filed the so-called "Speak Up" document told the Times that the document had been "misrepresented", and it was not "directed at anyone other than Nick Read". Mr Staunton was not even named, he said.

In Thursday's report from the committee, Mr Read has been accused of supplying "misleading evidence" to MPs relating to the company's use of non-disclosure agreements and PR firms.

Mr Read has also been accused of threatening to resign as chief executive if he did not get a pay rise - claims that are, according to Mr Staunton, contained in the whistleblower's report.

Last month, Mr Read denied under oath before MPs on the committee that he had ever threatened to resign. Mr Read maintained this in a subsequent letter to the committee on 5 March reaffirming that he has never issued a resignation letter or resigned verbally.

Post Office minister Kevin Hollinrake later confirmed that Mr Staunton had twice asked for Mr Read's pay to be doubled in a bid to stop him from quitting. The request was denied.

Former sub-postmaster and campaigner Alan Bates said the ongoing row was a "distraction" and the government needs to "get on and pay people".

'Unacceptable delays'

The cross-party committee of MPs is now demanding an independent body be established to help victims "through every stage of their compensation claims".

Mr Byrne said: "Justice delayed is justice denied and bluntly, justice has been denied to our innocent sub-postmasters for far too long."

The Post Office provides evidence to the Department for Business, which administers the Group Litigation Order scheme for 555 sub-postmasters, led by Mr Bates, who were involved in the landmark court case against the Post Office.

Meanwhile, it runs two other schemes for former sub-postmasters.

They include the Overturned Conviction Scheme for those with quashed convictions that were originally initiated by the Post Office and the Horizon Shortfall Scheme which is for those who experienced shortfalls because of Horizon but were not convicted or part of the 2021 court action.

Mr Byrne said the Post Office "needs to be taken out of the redress schemes altogether".

The report also calls for legally binding timeframes for when compensation should be delivered to affected sub-postmasters in order to stop "unacceptable delays".

The Post Office welcomed "the direction of this report into speeding redress" for victims. "Post Office would have no objection to relinquishing our role in administering redress," said a spokesperson.

"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."

A government spokesperson said that it is "working tirelessly to get compensation into the hands of those postmasters and postmistresses wronged by the injustices of this scandal."

"We will consider this report, and its recommendations, carefully and respond in due course," they added.