Mail Inquiry: Vennells ‘didn’t tell MPs’ about 16 cases where Horizon software made mistakes

Former Post Office chief executive Paula Vennells failed to tell MPs about 16 investigated cases where Horizon computer software made errors more than a decade ago, an inquiry into the scandal has heard.

Asked by members of parliament in 2012, Ms Vennels said there had been no case investigated by authorities in which software was found to be at fault.

But there have been 16 reports of software bugs or court cases in which workers have been found innocent, according to Jason Beer KC, lead counsel in the investigation. He asked Tory peer and long-time advocate for victims of the Post Office scandal, Lord Arbuthnot, who was present at the meeting, whether Ms Vennels or other managers had mentioned these cases, which appeared to show the software was capable of making mistakes.

The former Conservative MP said she and her colleagues had not mentioned any of them.

One such case dates back to 2006, when an auxiliary postwoman from Northern Ireland was acquitted after successfully arguing that software caused the shortage.

Post office bosses have long argued that Horizon accounting software was not responsible for the shortfalls in the accounts and that sub-postmen were embezzling from the company.

Lord Arbuthnot also said he spoke to the Labor government 15 years ago about the postmaster general’s plight, but was left frustrated by their response, which he summed up as: “No, not me, boss”.

In explosive testimony, Lord Arbuthnot criticized the actions of former government ministers and post office officials and said he was left frustrated by the response to his 2009 letter to then business secretary Lord Mandelson seeking complaints from the postmaster general about faulty Horizon IT. system to be investigated.

The former MP also accused the post office of “running” a “behind-the-scenes process of deception” and the former chief executive – Paula Vennells – of withholding key information about the scandal from MPs.

Lord Arbuthnot told the Horizon IT inquiry that the former Labor government shirked responsibility for the scandal, after receiving a letter from junior minister Pat McFadden suggesting the concerns were instead a matter of the post office.

He said: “It was clear the government was saying it had nothing to do with them.”

In a 2009 letter presented to the inquiry, Lord Arbuthnot wrote: “There appear to be a significant number of postmasters accused of fraud who claim that the Horizon system is responsible, including at least two in my constituency.

“Given the level of impact this is having on the personal lives of these postmasters and their families, often including bankruptcy and significant financial hardship, I would be very grateful if you could allow me your comments on what can be done to investigate the matter .”

When asked, Lord Arbuthnot said: “Since the government owned the post office, I assumed that the government would be in a position to sort it out. But they said: ‘No, not me, boss’.

“I was frustrated and annoyed. It was clear that the government was saying it had nothing to do with them and at that stage I didn’t see where I could take it.”

Lord Arbuthnot compared the situation to the owner of a dangerous dog who refuses to take responsibility for his pet.

He said: “What this ‘arm’s length’ arrangement essentially means is that the government is refusing to take on the responsibilities that go with ownership and I don’t think it’s right to do that for a variety of reasons.

“You cannot say that a dangerous dog is on an equal footing with you if a dangerous dog misbehaves. It seems to me that the whole process of arm length control is dangerous.”

The Tory also criticized the organisation’s behaviour, claiming it had intimidated deputy postmasters by telling them they were the only people affected by flaws in the Horizon IT system.

“There was something in the back of my mind that kept bothering me, which was the number of those people who were told ‘you’re the only person this is happening to’,” the Tory said.

“That struck me as profoundly wrong because at the beginning, it was obviously undeniable, they weren’t the only people to whom this was happening. Second, it is the isolation of those deputy chiefs so that they cannot get support from others in the same position.

“And thirdly, it had an element of intimidation. All this put the post office and its way of doing business with its sub-postmen in a bad light.”

Lord Arbuthnot said the Post Office misrepresented a key 2014 report by forensic accounting firm Second Sight – which revealed a number of failings in the Horizon system – because it was preoccupied with protecting its “existence”.

“They knew there were a number of errors in the system which they did not inform MPs about,” Lord Arbuthnot told the inquiry.

“They were running some sort of behind-the-scenes process of fraud, which now suggests to me that they got the representatives involved in order to preserve the robustness of Horizon, the existence of Horizon, and probably the existence of the post office.”

Writing in his witness statement about the report published in 2014, the Tory wrote: “The report contained many points which were damning.”

A Tory peer accused Ms Vennells of trying to “withhold information about the Post Office scandal from MPs”.

In his witness statement, he said that after the release of the report, Post Office staff became “defensive, legalistic and determined to hide from MPs information they had previously promised to reveal”.

When asked which staff he was referring to, Lord Arbuthnot replied: “Well, Paula Vennells in particular.”

Lord Arbuthnot added that he and other MPs “essentially cut ties” after the Post rejected the report because they “could no longer trust the Post”.

The Tory previously said he was “not happy” with the “rejection” he received from former Post Office chief executive Paula Vennells back in 2012, after he wrote her a letter raising concerns about the Postmaster General’s complaints about the Horizon system.

In his witness statement to the inquiry, the former MP said Ms Vennells wrote an “unsigned letter” saying there was no evidence to support the allegations and she was confident the system was robust and fit for purpose.

He wrote: “The sub-postmen I met seemed to me to be transparently honest. I do not recall anyone suggesting to me that the introduction of the new computerized accounting system had revealed previously hidden fraudsters… So I was not satisfied with the rejection I was getting in response to my letters.”

Lord Arbuthnot’s testimony follows explosive allegations from Alan Bates, former postmaster and head of the Postmasters Justice Alliance, who said the Post Office was a “brutal organisation” run by “thugs in suits” and was prepared to do “anything and everything” to hidden IT failures Horizon.

A spokesman for the Post Office said: “Our first priority is always to assist the investigation in its role to establish the truth. It is for the Inquiry to reach its own independent conclusions after considering all the evidence on the issues it is examining.”