Post Office chair was aware of Horizon concerns from day one but failed to act

The Post Office’s former chair learned of concerns about Horizon almost immediately after joining in 2011, yet failed to challenge the organisation’s line that the system was robust.

Alice Perkins chaired the Post Office for about four years from July 2011 – a period when it was defending the Horizon system’s reliability amid challenges from former subpostmasters, MPs and journalists.

Board meeting minutes shown to the public inquiry into the scandal today (5 June) revealed that Perkins hoped to convince campaigning MPs that the system was reliable.

She missed opportunities to share what she knew about concerns over Horizon which could have potentially averted some of the devastating effects of the Post Office scandal.

During the latest inquiry hearing, Perkins said that when she joined the Post Office she set out to learn about an organisation she admitted she knew little about.

One example was a meeting with Angus Grant, an auditor from Ernst & Young (E&Y), soon after she started her role. Perkins’ notes, written immediately after the meeting and revealed in the hearing, show that Grant raised his and E&Y’s concerns about Horizon.

Recording what Grant told her she wrote: “With Fujitsu the Post Office drove a very hard bargain on price but they took back on quality/assurance.” Perkins said she understood this to mean the Post Office had negotiated a lower price, but in return Fujitsu had reduced the assurance they could give Horizon.

Inquiry barrister Jason Beer KC suggested this was a “very important message to have received” and Perkins agreed.

In their meeting, Grant told Perkins other significant pieces of information. He said Horizon was a risk, that there were concerns over whether it captured data correctly, and that subpostmasters suspected of theft were claiming it was because of a problem with the system.

Beer asked: “You would agree that if the computer system – which 11,900 Post Office branches use on a daily basis to process millions of transactions worth billions of pounds a year – is a real risk to the independent professional auditors, then it’s a real risk to the Post Office too, isn’t it?”

Perkins said she wrongly interpreted this as being about the auditors’ ability to audit the accounts: “I don’t think, wrongly, that I would have made the connection with the operation of Horizon at the branch level.”

Beer said it’s the same thing. He asked: “If the computer system is a real risk to the auditors’ ability to sign off accounts, there may be something wrong with the computer system, which is important to the Post Office in its day-to-day business.”

Perkins said she sees this clearly now, but at the time she was new to the role and was absorbing a great deal of information and did not give “enough weight” to this link

She told the inquiry: “[Grant] was absolutely telling me that he thought Horizon had real problems and was explaining the background to that, but what was not jumping out at me in the way that it would now was the reference to the cases of fraud with subpostmasters suggesting it’s a systems problem.”

During the hearing, Beer also put to Perkins that in a meeting in 2012 she wanted to convince MPs, including peer James Arbuthnot, previously MP for North-East Hampshire, that the system was not at fault for subpostmasters’ difficulties.

Perkins said this was absolutely not the case. The inquiry was then shown the minutes from a board meeting just two days after Perkins had met Arbuthnot. The minutes stated that Perkins had explained that she and the company secretary had met Arbuthnot to discuss the subpostmaster cases questioning Horizon’s integrity.

The minutes said: “[Perkins] hoped that she could find a way to convince Arbuthnot and other MPs that the system was not at fault.”

In response, Perkins said: “I do not know what was in my mind at the time but it was clear that it was always my intention that we should take a proper look at this.”

It also emerged during the hearing that Perkins was concerned about the Post Office’s relationship with Horizon supplier Fujitsu.

She wrote in the 2011 notes from the meeting with Grant that the Post Office was being too nice in relation to Fujitsu and that the Post Office was being naïve.

She believed the Post Office and Fujitsu relationship was unequal: “I think it would have been to do with the number of people, experience of people, the fact that in companies buying IT services they have often hollowed out their own capabilities. I knew that the procurement of IT systems in the Post Office up until that point had been handled by the Royal Mail Group and the Post Office was going to have to build its own capability to stand on its own feet. I would have been concerned about this.”

During the next four years while Perkins chaired the board, the Post Office Horizon scandal entered a critical phase. This period saw increasing pressure from campaigners, MPs and journalists and an independent investigation into the Horizon system.

In the hearing it became clear, given her knowledge of Horizon concerns, that during this period Perkins missed a litany of opportunities to challenge the Post Office view that Horizon was robust.

She blamed former general counsel Susan Crichton for her ignorance of legal advice that called into question Post Office prosecutions of subpostmasters.

During the hearing she said she had no sight of warnings such as advice from barrister Simon Clarke in 2013, that Fujitsu expert witness Gareth Jenkins had failed to provide evidence of software bugs during the trials of subpostmasters who had blamed Horizon for the accounting shortfalls for which they were prosecuted.

The Post Office scandal was first exposed by Computer Weekly in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to the accounting software (see timeline of Computer Weekly articles about the scandal below).