MPs attack Post Office sub-postmaster mediation scheme

By Matt Prodger
Home affairs correspondent

A Post Office and pillar boxImage source, PA
Image caption,
Sub-postmasters are responsible for deficits at their branches

MPs have criticised the Post Office for how it has handled claims its IT system caused at least 150 sub-postmasters to be wrongly accused of false accounting and fraud.

Sub-postmasters say computer software was responsible for the apparent loss of hundreds of thousands of pounds.

Jo Hamilton, who pleaded guilty to false accounting, said the Post Office "never attempted" to find the money.

About 140 MPs have withdrawn support for a Post Office mediation scheme.

The UK's 11,500 sub-postmasters are not directly employed by the Post Office.

For several years, a vocal minority of sub-postmasters say that they have been made scapegoats for what many claim is a faulty IT system, which created thousands of pounds worth of shortfalls where none existed.

Media caption,
Sub-postmaster Jo Hamilton: "I was originally charged with stealing"

Sub-postmasters, who run smaller post offices, are forced to make up any shortfalls from their own pockets.

Some have been bankrupted, others have lost their homes, and a few have gone to jail.

But the Post Office said there was no evidence of a systemic issue with its software.

Case study: Sub-postmaster

Image source, Getty Images

Jo Hamilton, who used to run a sub-post office from her village shop in South Warnborough, Hampshire, pleaded guilty to false accounting following a discrepancy of £2,000 in December 2003.

"They decided to take my wages for the next 10 months to pay it back because, under the terms of my contract, you have to make it good if you're down.

"I had to remortgage the house and repay the money. Originally, I was charged with stealing. They said if I repaid and pleaded guilty to 14 counts of false accounting, they would drop the theft, so the decision was made - I'd be less likely to go to prison for false accounting than theft.

"If I didn't plead guilty, they would have charged me for theft. I couldn't prove I didn't take anything, they couldn't prove I did and at the time they told me I was the only person that had ever had problems with [the IT system] Horizon.

"I didn't know what the hell was going on. They never made any attempt to investigate the money or where it had gone.

"I would love to see all of our names cleared and some of us have our money back."

In 2013, a mediation scheme was set up by Post Office Ltd after independent investigators discovered defects with the Horizon accounting system used in its branches.

So far, 144 MPs say they have been contacted by sub-postmasters in their constituency.

The MP leading them, James Arbuthnot, sent a letter on Tuesday to Post Office chief executive Paula Vennells, accusing the organisation of rejecting 90% of applications for mediation.

"The scheme was set up to help our constituents seek redress and to maintain the Post Office's good reputation," he said. "It is doing neither.

"It has ended up mired in legal wrangling, with the Post Office objecting to most of the cases even going into the mediation that the scheme was designed to provide."

Another MP, Mike Wood, said: "Either the Post Office is awash with criminals who open sub Post Offices for personal gain, or something has gone terribly wrong.

"MPs are inclined to believe the latter and we are all shocked that the Post Office seems not to want to get to the bottom of all this."

But a Post Office spokesperson said the letter from MPs was "regrettable and surprising".

"We take these issues very seriously and have done since setting up a review more than two years ago.

"We are paying for the small number of postmasters who have raised issues to get independent advice and have opened up a mediation scheme."