Ex-Post Office boss wrote of ‘subbies with hand in the till’ during Horizon IT crisis

A former Post Office boss has said that he will regret for the rest of his life an email in which he wrote that “subbies with their hands in the till” were blaming Horizon technology for their cash shortfalls.

Giving evidence at the Post Office inquiry on Friday, Alan Cook – who was managing director of the group from 2006 to 2010 – said his words were “unacceptable” and denied it represented his view of subpostmasters at the time.

In an email to the Royal Mail Group’s PR officer Mary Fagan in October 2009 he wrote that there was a “steadily building nervousness about the accuracy of the Horizon system” and that it was strange because “the system has been stable and reliable”.

He added: “My instincts tell me that, in a recession, subbies [subpostmasters] with their hand in the till choose to blame the technology when they are found to be short of cash.”

In another day of startling evidence, Mr Cook also revealed he was “unaware” that the organisation had the power of prosecution and assumed the police and director of public prosecutions (DPP) were involved.

Mr Cook said it was “one of my regrets” he did not pick up on this at an earlier stage and added that he had “never come across a situation before that a trading entity could initiate criminal prosecutions themselves”.

He told the Horizon IT inquiry: “I was unaware that the Post Office were the prosecuting authority. I knew there were court cases but didn’t realise that the Post Office in about two-thirds of the cases had initiated the prosecution as opposed to the DPP or the police.”

In his witness statement, Mr Cook added: “To the best of my knowledge the risk and compliance committee was not given any information or reporting, nor did it have any oversight of the prosecution of subpostmasters.

“As a result, I did not take any steps as a member of the Risk and Compliance Committee to ensure that the Post Office was acting in compliance with its legal obligations in relation to those prosecutions and civil proceedings against subpostmasters. I was not aware that they were taking place.”

He told the inquiry he did not ask questions on the matter until he saw an article in Computer Weekly in May 2009 and also received letters from MPs with concerns about the Horizon IT system.

Mr Cook said in response he launched an investigation into possible issues with the IT system but left in 2010 before the review was completed.

The inquiry also heard that Paula Vennells, who worked as a network director while Mr Cook was in post, “likely” signed off on a trial bill of more than £300,000 after a subpostmaster Lee Castleton was accused of having a £25,000 shortfall at his branch.

East Yorkshire subpostmaster Mr Castleton was found to have a £25,000 shortfall at his branch and was made bankrupt after he lost his legal battle with the Post Office.

Mr Cook said that “delegated authorities”, such as Ms Vennells, who later replaced him as managing director, would have been able to sign off the large sums of legal funds.

Former chief executive of the Royal Mail Group Adam Crozier also gave evidence later in the afternoon and said he was not aware that lawyers within the organisation conducted prosecutions.

In his witness statement to the Horizon IT inquiry on Friday, Adam Crozier expressed “huge regret” over the “tragic situation” for subpostmasters and their families during his time at Royal Mail.

He told the inquiry: “I do not recall any involvement in or knowledge of the oversight of the investigations and prosecutions brought by Post Office Ltd against subpostmasters, either for theft, fraud and false accounting for alleged shortfalls in branch accounts for the recovery of such alleged shortfalls through the use of civil proceedings.”

Counsel to the inquiry Jason Beer KC asked: “Were you not aware that in fact there was no Post Office legal team – it had no separate legal in-house function and that civil and criminal proceedings were brought by lawyers within the Royal Mail Group legal team?”

Mr Crozier said: “I was not, no.”

At the beginning of the day, Mr Cook used the opportunity to “most strongly” put on record his personal apology to subpostmasters for his part in the scandal.

He said: “I wonder… if I could just say before we get started, I’d like to put on record most strongly my personal apology and sympathies with all subpostmasters their families and those affected by this.

“As we get into the conversation, obviously, there will be an opportunity for me to elaborate but it just felt to me that was an important thing to say up front.”

At the inquiry on Thursday, former Post Office boss David Smith, who was managing director between April and December 2010, suggested he was partly to blame for the Horizon IT scandal because he “didn’t really reflect” on how the organisation prosecuted alleged crimes.

He said there were “inherent risks” involved in the prosecutions taking place in-house as opposed to by an independent authority.

The Post Office has come under fire since the broadcast of ITV drama Mr Bates vs The Post Office, which put the Horizon scandal under the spotlight.

More than 700 subpostmasters were prosecuted by the government-owned organisation and handed criminal convictions between 1999 and 2015 as Fujitsu’s faulty Horizon system made it appear as though money was missing at their branches.

Hundreds of subpostmasters are awaiting compensation despite the government announcing that those who have had convictions quashed are eligible for £600,000 payouts.

Additional reporting by PA