Post Office boss admits money from Horizon victims may have gone into executive pay

Money wrongfully taken from victims of the Horizon scandal may have gone into the pay of Post Office executives, MPs have been told.

Nick Read, chief executive of the Post Office, said the company has still "not got to the bottom of" what happened to the cash paid by sub-postmasters and sub-postmistresses in a bid to cover the false financial black holes created by the faulty Horizon software.

He said it has been investigated two or three times by external auditors, but it is something "we have struggled to uncover" due to various issues, including a low quality of data.

As it happened: MPs quiz Fujitsu - after admission of 'bugs and errors'

However, he admitted it is a possibility the money taken from branch managers could have been part of "hefty numeration packages for executives".

"It's possible, absolutely it's possible," he said.

Mr Read said the information has been provided to the statutory inquiry into the Horizon scandal, which will look into the question of where the money went.

He appeared before MPs on the business committee alongside Paul Patterson, director of Europe's Fujitsu Services Limited, who apologised for his company's "part in this appalling miscarriage of justice".

Mr Patterson also said the technology giant has a "moral obligation" to contribute to the compensation scheme for those whose lives were ruined by the scandal.

He said he has spoken to the company's bosses in Japan and it expects to have a conversation with the government about how much it should pay.

And in Scotland, the country's top prosecutor, Lord Advocate Dorothy Bain KC, apologised to those who "suffered a miscarriage of justice" as a result of prosecutions, which were handled by the Crown Office in Scotland and not the Post Office.

Ms Bain KC said she wanted to "acknowledge the harm caused to the people in these cases who have suffered a miscarriage of justice".

In a statement to MSPs at Holyrood, where she was giving evidence, she said: "The wrongly accused and convicted sub-postmasters and postmistresses are due an apology from those who have failed them, and I do that today as head of the system of criminal prosecution in Scotland.

"The Post Office is part of that system and I apologise for the failures of those in the Post Office who were responsible for investigating and reporting flawed cases."

It follows renewed outrage over the issue after the airing of ITV drama Mr Bates Vs The Post Office, which documented the postmasters' 20-year fight for justice.

Between 1999 and 2015, more than 700 Post Office branch managers were handed criminal convictions for theft and false accounting after discrepancies in Fujitsu's Horizon system made it appear as though money was missing at their stores.

Some went to jail, many were financially ruined and the scandal has been linked to at least four suicides.

Fujitsu boss: 'We are truly sorry'

Mr Patterson told MPs he was sorry on behalf of his company - as he accepted it would have to pay into the redress scheme.

"Fujitsu would like to apologise for our part in this appalling miscarriage of justice," Mr Patterson said.

"We were involved from the very start.

"We did have bugs and errors in the system and we did help the Post Office in their prosecutions of the sub-postmasters and for that we are truly sorry."

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He said the company gave evidence that was used to send innocent people to prison, and while he did not know exactly when bosses first knew of issues related to Horizon, it had bugs at a "very early stage".

Read more:
Investigators 'offered bonuses' to prosecute
Who are the key figures in the scandal?

The government has set aside £1bn for Horizon victims and previously indicated it will pursue Fujitsu for the costs if the inquiry finds it is to blame.

It has also said it will introduce legislation to mass exonerate people wrongly convicted in the scandal.

But on Tuesday the Lady Chief Justice - the most senior judge in England and Wales - said suggestions the judiciary had given the proposed legislation the green light were "simply not true".

Speaking to the Commons Justice Committee, Lady Carr said: "In so far as there's a narrative out there which suggests that the courts have been unable to cope with these cases, or would in the future be unable to deal with large volumes of these cases, that is simply very far off the mark. It's simply not factually correct."

She said it is "not and never has been for the judiciary to comment on the wisdom of proposed legislation that is well established, and it is something that the judiciary has never done and nor have I done".

Fujitsu boss Mr Patterson, who has been in his current role since 2019, said he did not know why the tech firm didn't act when it knew there were glitches in the system.

"On a personal level I wish I did and following my employment in 2019, I've looked back on those situations for the company and from the evidence I've seen, I just don't know."

MPs 'shocked' by evidence

MPs at times appeared frustrated at the lack of answers from the two executives about who knew what and when.

Mr Read was unable to say when the Post Office knew that remote access to the Horizon software was possible.

The assertion that remote access to the Horizon terminals was impossible was central to the Post Office's position that there had been no miscarriages of justice in the years it was prosecuting its staff.

It was only in 2017, during High Court proceedings brought by a group of more than 500 sub-postmasters, that bosses admitted it was possible - paving the way for convictions to be quashed.

Business and Trade Committee chairman Liam Byrne said he had been "fairly shocked" by the evidence.

'The whole thing is madness'

The committee also heard from Alan Bates and other campaigners, whose stories were covered in the ITV drama about the scandal.

They expressed frustration with the pace of the compensation scheme, saying it was "bogged down" by red tape and bureaucracy.

Mr Bates said his own process, for what he called "financial redress", had been beset by delays.

"I think it was 53 days before they asked three very simple questions," he explained. "It's madness, the whole thing is madness.

"And there's no transparency behind it, which is even more frustrating. We do not know what's happening to these cases once they disappear in there."

Speaking to Sky's Sarah-Jane Mee, Jo Hamilton - a subpostmistress who has had her conviction overturned - said: "Justice for me looks like the whole of the group that I went into court with - the 555 - looks like everybody getting full and fair financial redress.

"Once all of the 555 have been paid then my job will be done."