Post Office CEO speaks out
Apr 20, 2021 —
In the last update I mentioned that hopefully we would have some better news to come. Well Alan Bates, the tenacious ex Postmaster that has fought for justice over the last decade on behalf of thousands of other Post Office Scandal victims has pulled the latest card from his sleeve. The solicitors acting on behalf of the group have sent a Pre-Action Protocol Letter to minister Paul Scully for a Judicial Review into the current 'whitewash inquiry' that is ongoing. This is on top of the submission that was made to the Parliamentary Ombudsman late last year. This is an attempt to have the current inquiry stopped and replaced with a full statutory inquiry with full terms of reference to include compelling witnesses to give evidence under oath and for them to be cross examined. This will allow us to understand exactly who knew what and when, the only way we will ever get any accountability. The second part will be to include the details of the settlement that the group entered into at the end of 2019, where after all costs and funding paid for meant there was 11.5 million to distribute to 550 claimants. That does not even cover a fraction of the losses incurred, the worst part it doesn't even repay the monies that Sub Postmasters wrongly paid to the Post Office, which ultimately ended up in their profit and loss account. We had no option but to enter that settlement, the group were only at trial 2 of the 4 trials set out by the court and already we had ran up legal and funding bills of £46 million trying to match the Post Office obscene spending from their unlimited government funding. If you look into it closely and see how many legal counsel and solicitors Post Office Ltd used you will be stunned! We simply did not have the funds to continue into the further trials, and our funders were no longer prepared to inject more capital because it meant no matter what damages we were awarded the entire amount would have been wiped out in costs. To put it simply we were outspent and backed into a corner to settle under duress. The Pre Action letter as you can read below mentions the Group has met with the Metropolitan Police with regards to Fujitsu evidence given during trails that ultimately led to the conviction of Postmasters.
You can read the letter by the groups solicitor Howe & Co below :-
Post Office Ltd released their annual accounts recently and it showed they suffered significant losses due to the litigation, a hole that is going to have to be filled by the government and ultimately the taxpayer. Post Office has admitted it simply does not have the financial ability to hand out the compensation that will be needed for the new Historical Shortfall Scheme that currently has over 2400 applications. So you can imagine if it does not have the funds for that it certainly does not have the funds it will need for the malicious prosecutions claims that will come from those that have their convictions quashed at the Court of Appeal later this week. Then we have the further 900+ prosecutions the Post Office currently has under review. So the £153 million the government will provide Post Office Ltd towards the Shortfall Scheme is a drop in the ocean as to what will be needed in the future. I don't believe I am tilting at windmills to suggest this bill could run up to or over £1 billion pounds by the time this is all over. What is heartbreaking for all those suffering and what makes you so angry is the longer this drags on the costs just increase. The Post Office requires lawyers, the government requires advisors and lawyers and all the time the reputation of the business suffers further.
This Friday will see a large group of Postmasters have their fate revealed when the judge hands down the judgement about their appeals at around 10:00 am. This will be the largest ever miscarriage of justice ever seen in the United Kingdom and again this is just the beginning of those numbers. It is truly frightening that this could happen to anyone, let alone in a once trusted British Institution that is 100% owned by taxpayers and the government. The media attention is already picking up and I will be there to support them on the day.
I recently spent many hours writing new letters to a number of MP's, ministers and the new CEO of the Post Office a few weeks ago. Letters were sent to Boris Johnson Prime Minister, Kwasi Kwarteng Secretary of State for Business, Paul Scully Postal Minister, Keir Starmer Leader of the Opposition and finally Nick Read Post Office CEO. I made sure every letter made the individual points needed for each relevant MP or minister and exactly what was needed to progress forward.
Post Office CEO Nick Read, released a statement in the recent released accounts of the company that I have to admit I was rather shocked and surprised at. It genuinely seems he really does want to change the Post Office for the better and understands the failings of the past management and their actions.
This is some of what he said, I will include more detail at the end of this update.
'Maximising the potential of Postmasters should be the priority and we should behave accordingly. Sadly, this has not always been the case. The Post Office does not have a business without those working hard in branches every day, serving communities across the United Kingdom. Genuine value, for a business such as the Post Office, and one with an overarching social and public purpose, should not solely be represented by its ability to generate profit, important though that is. The real test is whether the business model enables our Postmasters to thrive – on that metric, we have more to do. To be successful, we must see this as a partnership above all else – one in which we are preoccupied only by what helps our Postmasters thrive.'
He has finally said what every Postmaster up and down the country has been saying for years. All that has gone on recently is loss of products, reduction in commissions for products, removal of guaranteed payments and expectation of longer opening hours. All those thinking they haven't had a pay rise or losing out due to inflation, could have a look into the life of a Postmaster over the past 15 years (without the Horizon Scandal), they have year in year out taken drastic pay cuts and had to subsidize the Post Office with their retail offering. Since campaigning for justice I have had countless messages, emails and tweets telling me they are working for less than £3-£4 per hour in their Post Office branches. It is nothing short of a disgrace for the responsibility you have and to make up any loss that comes your way.
Anyway Nick Read also went on to say :-
'I have mixed emotions as I write my first review to the annual report since joining the business in September 2019. Naturally, I am pleased to be the new Chief Executive of a business with the customer trust, social relevance, and commercial promise which the Post Office has in abundance. However, this sense of excitement is tempered by the group litigation between some Postmasters and Post Office Limited which was still continuing as I joined. My reflection from the two civil judgments in the litigation and, more directly from meeting many Postmasters and colleagues, is that there is a cultural dissonance within Post Office. There is, and has been, a divide in the way the business operates, borne of a misunderstanding of the relationship between Post Office Limited and Postmasters. To be a successful franchise we need to ensure that the interests of franchisor and franchisee are aligned and mutually beneficial. Maximising the potential of Postmasters should be the priority and we should behave accordingly. Sadly, this has not always been the case. For historical reasons, safeguarding and promoting the interests of our Postmasters was not given
enough priority. The urgent task is to emerge from this scandal with clarity that Postmasters are at the heart of this business.
The Post Office does not have a business without those working hard in branches every day, serving communities across the United Kingdom. We need to reshape the business to prioritise the support and the service we provide to that front line so customers and clients can be served even better. We have started on the long journey to reset our relationship with Postmasters and change our culture. We are making progress. Every Postmaster now has direct support from an Area Manager and we have invested in training initiatives to support them.
You can read the full report here :-
It is in my opinion a direct attack on the previous management and Paula Vennells, that she failed at all of the above and put making a profit for the Post Office and ultimately her bonus at the heart of every decision that was made. When I wrote to Nick Read in March I wanted to make sure I acknowledged the right things he was doing to give him credit where it was due but the ways in which we as claimants have been let down and he could do more. Here are a few snippets of the letter :-
'It is encouraging to hear the change in tone at Post Office Ltd with regards to maximising the potential of Postmasters which as you rightly say was not the case previously. Without them the Post Office does not exist as they make up the vast majority of the business. The other point to make is every single one of these Postmaster owned branches are different. They are based in different locations, have different cliental and football, and for this reason one model does and never has suited all. Although it is important that Post Office make a profit it is imperative that these Postmasters thrive and want to grow their business, not fighting against a management who only want to drive cost efficiency without any inventive ideas to grow for the future.'
I went on to explain my story from starting out in the Post Office network in 2006 and how I was able to buck the trend and grow my income and commissions. I can tell you it certainly wasn't by following the mantra of only telecoms and financial services. It was by concentrating on the core products of Mail, Banking and Travel, the kind of business that was repetitive week in and week out generating regular footfall and income. This is exactly what they want to get back to.
'I can see your vision for a return to basics, it is just sad that it has taken so long and many offices are virtually now unviable as a result of the Network Transformation program and mass reductions in salaries.'
I went on to lay out in no uncertain terms about the way Post Office has acted throughout the scandal and what needs to be done to address these failings.
'Anyway onto the main reason I am writing to you today. You say your excitement is tempered by the group litigation between Postmasters and the Post Office (myself being one of them). You came into the business and wanted this resolved, however the way Post Office Ltd conducted itself in the litigation was nothing short of a disgrace. Spending unlimited amounts of taxpayer cash, attempting to bring the court into disrepute by applying for the judge to recuse himself for the simple fact you didn’t like his findings and the failure to disclose documents that were in the possession of the Post Office. At times Post Office released documents way beyond deadlines hampering the claimants case. It is now known as we heard in the Court of Appeal this week that Post Office Ltd still had not released all the relevant documents to the claimants in the previous civil litigation, not really a great look for openness and transparency is it? Also forgive me for not trusting the Post Office but since it has also come to light about a member of the security team authorising the shredding of documents and meeting minutes, how do we know this hasn’t happened previously before that without full disclosure of every single document the business holds. You say there is and has been a dissonance within the Post Office. It has always been a ‘them and us’ approach in the 9 years I was a Sub Postmaster.
You must realise that due to the actions of Post Office Ltd in court and the unlimited funding Post Office had from BEIS as they allowed you to continue with the litigation, as we have seen in FOI requests the claimants had very little chance of success overall, our funding was running low and you simply outspent us. The judge mentioned on numerous occasions that even for a commercial entity the spending was obscene. We were therefore forced into settlement, not out choice but under duress. Had we continued we would have ran out of funding and had to stop and even if we were successful the amounts needing to be repaid to our funder could have eclipsed the damages awarded. Now it was us as claimants who exposed all the shocking revelations of the Post Office’s actions over the two decades and allowed you to make the necessary changes you are now making. Without us the business would not have been able to be turned around. I fully endorse the Historical Shortfall scheme you have agreed to setup to ensure Postmasters are given redress for the actions of the Post Office. However as you are probably aware because these new claimants have no legal expenses and Post Office has already been exposed of their actions, even if these new claimants decide to take the legal route rather than the new scheme, Post Office will not have any defence. Therefore whichever route the new claimants take they are to receive substantially more compensation, much closer to the actual losses they made at the hands of the Post Office. If you want to reset the relationship with Postmasters past and present and change the culture of the Post Office, then I am afraid that until full disclosure is made and changes made to this Historical Shortfall scheme this cannot and will not happen. For the same scandal and cover-up one group of claimants who didn’t bother to join the group litigation are now going to receive far greater sums of compensation, and they are to achieve that by using the judgement from the claimants who battled tooth and nail to expose years of wrongdoing and cover-up within the Post Office.
So if you are genuine with regards to resetting the relationship of Sub Postmasters, changing the culture within the Post Office and turning the business model on its head then I urge you to do the right thing and go further. Allow the 555 claimants to use the historical shortfall scheme to have their cases and losses calculated as they would have in the scheme had they not gone down the litigation route (let’s remember this scheme would never have been setup if it hadn’t been for us and Post Office would be carrying on as if nothing had happened) and then deduct the amounts they have already received from the £11 million litigation settlement (after legal expenses) from the amount due under the new shortfall scheme. This would show you genuinely want to put this scandal to bed once and for all and move on. The reality is otherwise it is not going away as the group will continue until fair justice is delivered for everyone and continue to expose the Post Office wrongdoings.
I have written to the Secretary of State, the Postal Minister and the Prime Minister outlining similar to what I have suggested along with calls to make the inquiry statutory. Also I have suggested another idea instead of the government/taxpayer footing the bill for all of this mess as is currently the case. The Post Office (with recommendations from yourself) could request from the government a further commercial loan at an agreed interest rate to cover the entire cost of full settlement to the group, settlement of the Historical Shortfall scheme and settlement of the malicious prosecution claims that are to follow after the conclusion of the Court of Appeal hearing. This loan could be provided to the Post Office on a long term basis anything from 20 to even 30/40 year period with the ability to re-negotiate the terms as needed based on profitability and cash flow. From the recent accounts without the one time exceptional items of the litigation and legal costs it appears the Post Office is progressing in the right direction to profitability. Without the one time write downs you would have achieved close to £80 million in profits. You could use the annual profits to pay an agreed % of that off this new loan so therefore the more profit that is made the more that is repaid. This could have a lower and higher threshold that is adjusts the % based on the level of profits. Wouldn’t this send to the public and Postmasters that the Post Office itself is paying for the mistakes and wrongdoing of the past rather than the taxpayer footing the majority of the bill. It also allows the Post Office the flexibility based on its future progress, cash flows and profit. I know the business needs to succeed and want to see this happen regardless of the past especially for the current Postmasters. This would also help send the message that the Post Office is committed to resetting its relationship with Postmasters, change its image and move on from the dark days of the past.'
Just a few days ago Nick Read made a statement calling on the government to fully compensate ALL victims including those involved in the litigation. Now either the letter triggered this or he was going to do this all along (I am sure the letter would have definitely helped!).
Nick Read stated :-
'We must ensure that all Postmasters affected by this scandal are compensated and compensated quickly. However The Post Office simply does not have the financial resources to provide meaningful compensation. I am urging government to work with us to find a way of ensuring that the funding needed for such compensation, along with the means to get it to those to whom it may become owed, is arranged as quickly and efficiently as possible. Although the parties entered into a full and final settlement of the Group Litigation in good faith, it has only become apparent through various news reports since quite how much of the total appears to have been apportioned to the claimants’ lawyers and funders. It is at least understandable that the claimants in those proceedings should continue to feel a sense of injustice. Settling up from Post Office accounts is: "not for the Post Office to determine or even within its gift."
So there we have it, Nick Read says that the government should ensure all claimants are fully compensated. It has since been reported the government has again refused to budge on this after Nick's plea. It is why I have suggested the alternative, that the Post Office ultimately pays via a commercial loan from the government with interest paid. This means the government and taxpayer profit from the loan. It is something Nick Read can push for and use the line it is what he demands in order to continue in the position of CEO of the network. Will he continue to do the right thing? Only time can tell, but I certainly have a lot more respect for Nick than previously. Trust is easy to offer but even easier to break, so watch this space.
Read Nick Wallis latest post on his site :-
I will send out another update once we hear the outcome from the Court of Appeal on Friday. Don't forget to watch all the major news channels, I am sure history is about to be made for a large number of people..........
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