Incredible to think bosses didn't know about prosecutionspublished at 18:21 British Summer Time 16 April

18:21 BST 16 April

Emma Simpson
Business correspondent, at the inquiry

There’s a common theme to the string of Post Office bosses who’ve appeared at the inquiry in the last few days - from city big wig Adam Crozier to former banker David Mills, who was drafted in to turnaround the business.

How come most of them didn’t know sub-postmasters and postmistresses were being prosecuted by their own lawyers, or without any sort of external sign off? It seems incredible, now.

In these early days the Post Office was haemorrhaging money. Giving evidence today, Mills - a former Post Office CEO - made it clear that his priority was keeping the business afloat and he had "little brain power to do anything else".

But the answers also highlight a failure in corporate governance and a lack of clarity about who should have been informing the board about what was going on.

It's been another busy day at the Post Office inquiry - here's a reminder of all the key takeaways:

• David Miller, a former managing director of the Post Office, said he regretted a "missed opportunity" in 2004 when he did not read a report by an IT expert (ordered in the case of former sub-postmistress Julie Wolstenholme) which found Horizon to be "clearly defective" - acknowledging that if he had done so he could have taken action to address the issues

• A lawyer representing a group of sub-postmasters asked Miller if he was "incompetent" or "lying through [his] teeth" about not having read the report - he denied he was lying
• Minutes of a meeting in 1999 showed that Miller had told the board that Horizon was "robust" - despite issues having already been flagged - something he conceded he should not have said
• David Mills, who took over as CEO in 2002 and left at the end of 2005, acknowledged the Horizon system was integral to how the Post Office was operating during his tenure, saying it would have been "crisis mode" if the company had to go back to the drawing board on the system

• He highlighted serious financial challenges facing the Post Office when he was CEO, saying he inherited a "burning ship" and that his priority at the time was saving the business
• Mills said he was not aware the Post Office could prosecute its workers until almost the end of his time there

We're going to end our live coverage there - but the inquiry continues tomorrow morning and will hear evidence from former Post Office investigator Jon Longman. We'll see you then.

Today's page was written by Imogen James, Krystyna Gajda and Ben Hatton. It was edited by Marita Moloney, Mattea Bubalo and Sam Hancock.

Jacqueline Howard
Reporting from the inquiry

The evidence given today by David Miller and David Mills were two very different approaches to what was essentially the same admission - that those in charge of the Post Office didn't give issues with the Horizon software the attention they should have.

Miller, who moved through various roles in the Post Office, eventually ending up as chief operating officer in the early 2000s, repeatedly acknowledged that he should've asked more questions about problems with the accounting system - flagged as early as 1999.

For Mills, who was the CEO from 2002-05, he argued he was too preoccupied with making a failing business profitable to have spent time investigating an issue he said someone should have raised with him.

That's it from me at Aldwych House, which quickly emptied out once today's proceedings had wrapped up.

Concluding his evidence today, Mills says that his greatest concern in 2005 was to figure out how to replace Horizon in five years.

He says this was "of much more importance" than other elements he's being grilled on - such as sub-postmasters being told to reboot their systems, which he says would have seemed "trivial" to his daily life.

Stein comes back, asking if this was "more important than people losing their livelihoods", referring to the hundreds of sub-postmasters and postmistresses prosecuted by the Post Office.

"I didn't say that, you said that," Mills replied.

But Stein presses: "What would you say now?"

Mills replies: "Obviously the devastation to the lives of these poor postmasters was more important than anything else, and should never, ever have happened."

That's the end of today's hearing - stay tuned for some further analysis and a round-up of the key lines.

Another fiery finish there from Stein, who earlier asked former PO manging director David Miller whether he'd failed to read this same report Mills is being pressed on because he was "incompetent" at his job or "lying through [his] teeth".

He now asks Mills to be clear about why he hasn't read the Coyne report.

"You're either saying you haven't seen it or you don't remember having read it before giving evidence today - is that right?"

Mills says "erm" before Stein fires back, "which?"

"I don't remember it," Mills says, "but to be correct, all the information the inquiry has sent me, I've read."

Image source, Crown copyright

Sam Stein KC, who represents a group of sub-postmasters brings up an March 2005 article from a magazine for sub-postmasters, which Mills confirms was an attempt to respond to issues raised about the reliability of Horizon.

In the article, written by Mills, he writes: "In reality, Horizon provides a reliable service for the majority of our branches, most of the time. About 99.7% of the time in fact..

"Having said that, I know that if your branch is affected by a loss of service it is still significant," it adds, and he goes on to say teams have been working to find ways of improving the level of service.

Mills says he was aware issues had been raised about the reliability of Horizon data, but says he was not aware at the time that the data was being used to prosecute sub-postmasters.

Still looking at the article a few minutes later, Stein pushes Mills and asks if he spoke to the IT team to ensure what he was putting in the article - reassuring sub-postmasters - was correct.

Mill says no, but adds that he had regular and direct conversations with the IT director "who had delegated authority to run the IT team".

Image source, Post Office inquiry

The questioning has been passed onto lawyers representing a group of some of the sub-postmasters prosecuted by the Post Office.

Tim Moloney KC is asking Mills about the state of the business when Mills was in charge.

Horizon was integral to the operation of the Post Office, Moloney says.

He poses to Mills that because millions had been spent on Horizon, if the Post Office was forced to go back to the drawing board on this system, the business would have been "in real trouble".

"Definitely," he replies. "Crisis mode it would have been."

Jacqueline Howard
Reporting from the inquiry

It's getting towards the end of the day, and we've reached the stage where the failings have been laid out for the inquiry.

As we've just reported in our last post - Stevens asks Mills if there was anyone in the Post Office organisation who should have identified those risks. In essence, he's asking Mills for a name.

Mills take a long time to answer.

He eventually answers that he was surprised that nobody did.

Stevens narrows the parameters and asks if anyone on the board should have identified the risks.

Again, a long silence, followed by "I don't know".

Mills says he can't say who was in charge of the investigation into Horizon in practice, that it moved around.

Stevens and Mills agree that this is a failing of corporate governance.

Who is responsible for that failing then, Steven asks.

"Me," comes the answer.

Mills is now being asked whether, during his time as CEO, he considered himself responsible for the risks associated with the Post Office's prosecution of hundreds of sub-postmasters, to which he says "no but I should've done".

"What do you think those risks were," Stevens asks for the inquiry.

Mills replies: "Of being wrong."

"I'm sure that there were many many risks associated with those prosecutions," Mills adds.

Pushed on whether there's anyone else who should've identified the risks involved in pursuing these prosecutions, Mills tells the inquiry: "I don't know."

"And I don't know, because I'm trying to think, at that time."

Image source, Crown copyright

We're back to talking about Tony Marsh, formerly the head of security at the Post Office.

Lawyer Stevens points out that in his witness statement, Mills says Marsh did not report either directly or indirectly to him.

Mills confirm this, and says he was aware Marsh reported on a "dotted line" to David Miller, who we heard from this morning.

"If Mr Marsh reported on a dotted line to David Miller, and David Miller reported to you, did he not report indirectly to you?" Stevens asks.

Mills acknowledges that is the case, but says his witness statement is not incorrect.

He says there is a "major difference" in different report structures. Miller would have to persuade Marsh what to do but "he couldn't tell him what to do" under the dotted line arrangement, Mills explains.

Asked if he felt unable to unable to exercise "any oversight" over Marsh and the investigations being conducted into sub-postmasters, Mills says "no".

In practice, he says, "some of the oversight that one could exert was purely a matter of personality".

This is "another case where that confusion of reporting lines was an important aspect of how one did or didn't manage Post Office Ltd", he adds.

Looking at prosecution, the inquiry lawyer asks what Mills' understanding was of the Post Office's private prosecutions when he joined the company.

Mills says that he had no previous experience of this before.

He says "in the bank" where he previously worked, he would have thought if they found "a chap who's nicking" it would have gone to the police.

Mills tells the lawyer he was not aware the Post Office could do prosecute its workers until "as very late as November 2005" - the end of his time in the role.

He cannot remember who eventually told him, he adds.

Pushed on whether he really did not know this, Mills says he knew they were taking people to court, but that he "didn't know that they were doing it in their own right".

Earlier, former chief operations officer David Miller was asked the same question. He says he found out when he joined the company in 1970.

Mills is being shown some notes that David Miller was shown earlier - of a 2005 meeting in which it was suggested a system needed to be set up to keep track of all the claims being made by sub-postmasters about issues with Horizon.

Like David Miller earlier, David Mills says he wasn't aware of the meeting, or these minutes.

Image source, Crown copyright

Jacqueline Howard
Reporting from the inquiry

Mills has just admitted that he can't remember whether or not he has read the Coyne report that was sent to him ahead of time by the inquiry, which is a major element to the questioning today.

A couple of times now, we've seen him forget a key phrase, name or lose his train of thought. A little earlier, he chuckled and blamed "old age" for blanking on a detail.

In these moments, you get a real sense of how long this saga has stretched on for.

It's a moment to remember how long the wrongfully accused, and in some cases charged, sub-postmasters and sub-postmistresses, have been fighting for justice.

Sir Wyn Williams, chair of the inquiry, interjects in the proceedings.

His question is simple - does Mills think the highly-discussed expert report by IT expert Jason Coyne should have been shown to the Post Office risk committee?

"Yes, I think it should have been, Chairman," he replies. It's a report that Mills says he has never seen before.

There's a bit of to-and-fro following this between Mills and Stevens.

Lawyer Stevens says the document was sent in advance of the hearing, but Mills says "I'm sorry, if it was I would have read it and I might well have forgotten the fact that I've read it."

Image source, Post Office Inquiry

Jacqueline Howard
Reporting from the inquiry

The inquiry is looking at a "risk register" document, which lists the potential future financial risk of the Wolstenholme case as £1 million.

Mills says he saw the £1 million figure, noted it as an issue and didn't look any closer.

"I hadn't properly assimilated the fact that the reliability of Horizon was in mind. What was in my mind was £1 million pounds," he says.

He's asked why he didn't look any closer.

"If I had concentrated on any issue at that level, I'd have never gotten anywhere near to turning the Post Office [finances] around," he replies.

This gets to what is emerging as the crux of Mills's evidence. He's argued that Horizon was an IT issue and so it should have been dealt with by that team. He had too much on his mind regarding keeping the wider Post Office business afloat to spend time on it.

We're back from a very brief recess and we're immediately being shown an email, sent in 2004, from Post Office contracts manager Keith Baines to David Mills where Julie Wolstenholme's case is once again being discussed.

Wolstenholme was a sub-postmistress who challenged the integrity of the Horizon system in a court case against the Post Office. You can read a brief summary of that case and why it matters here.

The correspondence being shown references challenges to the reliability of the Horizon system. Questioned over whether he asked about the nature of that challenge, Mills says he did not.

Mills says he "wasn't that clever", adding "I'm sorry, I didn't ask about it".

Peter Ruddick
Reporting from the inquiry

This afternoon at the inquiry we're returning to one of the other key themes in this latest phase: priorities.

In a testy back and forth with one of the barristers, former Post Office chief executive David Mills is effectively asked if he was putting profit over other issues facing the business.

Mills denies that but he does admit that his priority was "saving" a business losing so much money.

When asked if he didn't have the resources to focus on other risks, the former boss said: "You're putting words into my mouth. I didn't have the brain power to cope with any more than I was coping with during those first six months. I am very sorry."

It is another reminder that the background to this scandal - a struggling business - may have hampered certain key figures from noticing what was going on in the foreground with innocent sub-postmasters.

Continuing his questioning, the inquiry lawyer asks if Mills was aware of any issues raised by Bates about Horizon.

He says he was not aware.

Stephen Timms MP was involved in these concerns, emailing Betty Williams MP in 2004 to explain that Bates was dismissed and POL (Post Office Ltd) found no evidence of a fault with Horizon.

Mills is now asked about his relationship with Timms and if it was likely that he would be made aware of these issues.

"No, I don't see the connection with your question," he says to Stevens.

And when asked about how often he met with Timms, Mills says they only spoke on the phone "three or four times" when he worked at the Post Office.

David Mills is asked about a letter sent by Betty Williams MP - over former sub-postmaster Alan Bates's Post Office contract being terminated in 2003.

Bates led the campaign for justice after he was sacked for discrepancies in his accounts.

"Were you aware about Alan Bates at this time?" Sam Stevens asks. No, Mills replies.

The inquiry sees a letter from Bates to Williams, written in 2003, saying the comments about "lost confidence" are a smokescreen, and the "real truth" is problems with Horizon and the lengths Horizon will go to, to keep it covered up.

Image source, Crown Copyright

As we reported earlier, there was a fiery exchange this afternoon between Sam Stein KC - who represents sub-postmasters - and former Post Office manager David Miller.

Watch it below: