UK Edition
A senior civil servant told a Post Office chairman the organisation was spending too much money delivering compensation schemes and the Horizon scandal inquiry, newly uncovered letters reveal.
Tim Parker, its former chairman, was informed that costs remained “too high” and that the Post Office should work to deliver payments “at a lower cost” in a note outlining “strategic priorities” for the 2022-23 financial year.
The letter, sent after a government spending review in 2022, was written by Sarah Munby, then permanent secretary in the Department for Business, Energy and Industrial Strategy (BEIS).
The payouts relate to claims from sub-postmasters affected by the Horizon scandal. More than 900 were wrongfully prosecuted when faulty Fujitsu software incorrectly reported shortfalls on sub-postmaster accounts, for which they were then blamed.
The Government said the comments were referring to the legal costs, rather than compensation costs.
Ms Munby was forced to deny earlier this year that she had told Mr Parker’s successor to stall compensation payments before the next general election.
In the letter to Mr Parker, released on Tuesday following a freedom of information request, Ms Munby recommended that the process for managing settlements be improved.
The process should also deliver “value for money for the taxpayer, whilst also respecting the limitations on claimants to produce evidence in many cases and the need to deliver fair outcomes for affected postmasters”, she said.
The Post Office should also “work with officials to explore ways in which these activities could be delivered differently, in particular to deliver redress in a timely manner and at a lower cost, alongside continuing to review legal costs and controls”, the letter states.
Later in the letter, Ms Munby stressed the importance of postmasters receiving swift payments, writing: “I am grateful for the considerable efforts undertaken by POL to work with officials to comprehensively address historical matters in a timely manner.
“I was particularly pleased to note that interim payments have now been received by 66 of the 73 postmasters who have had their convictions quashed so far, and that the first initial full compensation offers have been made to those postmasters who have sufficiently advanced their claims.”
In February, Henry Staunton, who took over from Mr Parker as Post Office chairman in 2022, claimed he had been told by a “fairly senior person” to “stall on spend on compensation” ahead of the next election.
The allegation prompted Kemi Badenoch, the Business Secretary, to describe his account as “full of lies” in a statement to the Commons.
Ms Munby later revealed herself to be the “senior person” Mr Staunton referred to, but denied she had instructed any delay to payouts.
In a letter to Ms Badenoch, which she gave permission to be made public, Ms Munby wrote: “I did not at any point suggest to Mr Staunton, or imply to him in any way whatsoever, that there should be delay to compensation payments for postmasters.
“I did not believe they should be delayed and no minister ever asked me to seek delays.”
Both Ms Munby and Mr Staunton went on to publish notes of the meeting to defend their accounts.
Mr Staunton stood by his claims when he was questioned by MPs at a business and trade committee hearing last month. He said this is what he had been told “with a nod and a wink”.
He said: “I went back and sent the note.
“It was such an unusual conversation that I did a full note of it, actually putting in quotation marks what I was told.”
Liam Byrne, the addressing chair, commented: “I thought that your ‘nod and a wink’ phrase just about sums it up.”
At the same hearing, Nick Read, the Post Office chief executive, said: “I can categorically say that nobody in my team or I have received any instruction from the Government about slowing down compensation.”
A Post Office spokesman said: “Our sole aim is that every victim receives, as soon as possible, the justice and redress that they have too long awaited. That has and continues to remain the primary focus for everyone who works across our remediation department.”
Mr Parker declined to comment.
A Department for Business spokesman said: “The Post Office does not control the budget for compensation.
“These comments were clearly referring to the legal costs, rather than compensation costs, and must be read alongside the full letter which sets out in detail the work required to go further and faster on compensation payments.”
He added that £179 million had been paid out to more than 2,800 claimants.