Post Office scandal: Civil servants misled me over Horizon, ex-minister says

Lucy Neville-Rolfe says she "lost confidence in the quality of Shareholder Executive's advice"
Photo: Mark Thomas/Alamy Live News

A former minister has told the Post Office Horizon IT Inquiry that civil servants repeatedly “misled” her over concerns about prosecutions related to the IT system and failed to provide her with impartial advice.

Appearing before the inquiry yesterday, Baroness Lucy Neville-Rolfe said civil servants in the Shareholder Executive, which from 2003-2016 managed the government's shareholder relationships with businesses it owned or part-owned, failed to give her accurate information about concerns related to the Horizon accounting software. She said they also obstructed her attempts to get to the bottom of the problem.

The Post Office inquiry is investigating the implementation and failings of the Horizon IT system, which was produced by Fujitsu subsidiary ICL Pathway. More than 700 subpostmasters were convicted of theft, false accounting and fraud in the 15 years after Horizon was introduced and hundreds more have been accused of wrongdoing.

Baroness Neville-Rolfe was a junior minister in the then-Department for Business, Innovation and Skills, where she was responsible for postal affairs, between May 2015 and July 2016.

Appearing before the inquiry yesterday, the Conservative peer said she felt she had been “sold short by officials” while trying to understand concerns raised about the Horizon system and the related prosecutions.

“What I would have been helped with was accurate information in relation to Horizon – sadly, this was in short supply. I believe I was misled, and this is an unacceptable situation,” she said.

In written evidence to the inquiry, Neville-Rolfe said briefing packs provided to her soon after taking over the Post Office brief had given her “clear and strong advice" not to get involved after she had heard concerns about prosecutions of postmasters.

Officials in the Shareholder Executive, or ShEX, told the minister there was “no evidence of systemic issues” with the IT system and that it was their “strong recommendation” that government should stay out of the row, her statement read.

But while she did not initially have any concerns about the information she was given, she said her “faith in the objectivity and impartiality of the ShEx advice began to wane”.

“They continually repeated the same mantra, and in the later stages it felt like I was having to fight them. They seemed closed to the possibility that all was not as it seemed, and seemed to be doing what they could to ignore my steers or reverse my direction of travel,” she added.

Several times in her written statement, Neville-Rolfe stressed ministers’ reliance on officials to manage “the huge demands on ministerial time”.

“Your office receives considerable amounts of paper of which only a part will be set before you and of that you can only read part… Ministers are heavily reliant on the private office to make the right judgements about what the minister needs to know about and/or see and to record their meetings and decisions,” she said.

A former senior civil servant at the Ministry for Agriculture, Fisheries and Food and the Prime Minister's Policy Unit at 10 Downing Street, Neville-Rolfe added: “Of course, ministers can and do test and challenge the information and advice they are given – and, indeed, I am not shy in doing so – but, again, ministers cannot second guess all the information they are given but must make judgements in the knowledge that they do not have much time and in the expectation that they are provided with information in good faith and following proper analysis of the available evidence

"As a former civil servant myself, I always assumed that officials were giving me proper advice, and as a minister I was used to relying on the objectivity and thoroughness of official advice.”

Officials 'minimised' report findings

In her written evidence, Neville-Rolfe told the inquiry that the first briefing pack she received in June 2015 after requesting an “early meeting” on the problems with the Horizon IT system was “undoubtedly… well-prepared” and “reassuring”.

The pack said there had been “over two years of independent scrutiny of POL's Horizon IT system and no evidence of systemic flaws has been found”. Post Office Limited had commissioned an independent company, Second Sight, to examine the system for systemic flaws that could cause accounting discrepancies. Two reports produced by Second Sight “make clear that there is no evidence of system-wide problems with Horizon”, the briefing said.

She said that a second briefing pack she received the same month said Second Sight's independent review had found "no evidence of systemic flaws in Horizon" but identified that "in some cases POL could have provided more training and support to subpostmasters, and POL have since made changes to address this".

Both briefing packs made reference to a mediation scheme that had been put in place.There were 136 applicants to the scheme. Neville-Rolfe said the documents stressed “that this was a tiny number of complaints" and claimed that "the vast majority of subpostmasters are using Horizon effectively every day". 

Investigators blamed “errors made at the counter” by the subpostmaster or their staff for the majority of losses, the latter briefing note said. It said cases “range from, at one end, examples where POL could and should have provided more support to the subpostmaster in preventing errors being made, to the other end, where there has been clear fraud or dishonesty from the subpostmaster or their staff”.

Once again stressing a lack of evidence for systemic problems with Horizon, the note also said there was “no evidence that any of POL's prosecutions against subpostmasters for either false accounting or theft are unsafe”. 

The note gave "clear and strong advice that I should not become involved", Neville-Rolfe said. It also referenced comments by the then-head of the National Federation of SubPostmasters that members of the Justice For Subpostmaster Alliance, which campaigns for justice for those affected by the scandal,  were "trying it on".

“Despite JSFA's complaints and calls for a new investigation, it is our strong recommendation that government should maintain the position that this is not a matter for government, and increase our distance from this matter,” the briefing read.

In the weeks that followed, Neville-Rolfe said officials "consistently minimised" the findings of Second Sight's report into Horizon.

“I assumed, and as a minister I was entitled to expect, that ShEx would summarise the report accurately. If ministers cannot trust the accuracy of information provided by officials, government would grind to a halt,” she said.

Neville-Rolfe said officials continued to advise not to intervene or arbitrate, saying it was a “commercial matter for the Post Office”.

Ahead of a BBC Panorama programme in late June 2015 that she had been warned would be “highly critical” of Post Office Ltd, Neville Rolfe said officials advised her that Horizon "is a matter for Post Office and sub-postmasters and it would be inappropriate for government to intervene".

Neville-Rolfe said that, following a meeting with POL representatives, ShEx's assistant director, Laura Thompson, had advised her to write to the prime minister setting out her assessment of the situation and that “priority should be to put this issue to bed – continued uncertainty and allegation does damage to Post Office's business and prevents those individuals with cases from reaching a resolution”.

"I essentially ignored this advice. By this stage, and especially following the meeting with MPs and POL, I was coming to have reservations about ShEx's advice overall and the attitude of the Post Office to the whole issue,” Neville-Rolfe said.

She also said her request for a senior official from outside ShEx to attend a meeting to discuss proposals for independent oversight of Horizon issues in August was ignored. “I was not supported by a senior official outside of ShEx, and so I was deprived of high-level official input into the policy independent of ShEx,” she said.

The written evidence includes several examples of incidences where officials "pushed back" against requests from Neville-Rolfe.

'I was fighting ShEx'

Neville-Rolfe said that in preparing for the inquiry, she had seen an email chain from August 2015 in which a ShEX official had asked to speak to POL representatives ahead of a meeting. In it, the official said he wanted to make them “aware of [Neville-Rolfe’s] mood and position (not that there's too much to worry about)".

Mark Davies, POL's communications director, responds by organising a conversation with ShEx.

Neville-Rolfe said: “I find this troubling. This seems to me to be clear evidence that ShEx – whose role it was to provide me and other ministers with objective and impartial advice, to scrutinise POL's actions and to hold it to account – was taking steps to provide advance warning to POL about my concerns and intended direction of travel.

"I cannot see any good reason for them to have done so. I am sadly driven to the conclusion that ShEx and POL, perhaps inadvertently were in effect working together to try to deflect me, and that ShEx were not giving me the independent and impartial advice that I needed.”

Neville-Rolfe also described being dissatisfied with draft correspondence prepared on her behalf. On one occasion, in early August 2015, she said she was “unhappy” with a draft response that said there was “no evidence of systemic flaws” in Horizon and that problems were “best resolved directly between the two parties involved”.

Neville-Rolfe also said she was “not content” that a note to update No.10 and other departments on the issue represented her views correctly.

“I did feel at this stage that I was fighting ShEx,” she said.

After a number of disagreements with ShEx over advice and correspondence, Neville-Rolfe said she “lost confidence in the quality of ShEx's advice”.

“We were going round in circles, and they were unwilling to engage with the issues in the way I felt they needed to. In my view ShEx had lost objectivity, and its officials were unable or unwilling to scrutinise POL properly – even though that was an essential part of their role. The advice they gave seemed closed minded, deaf to the issues and constantly repeating the same mantra," she said.

"As time went by I felt as though they were trying to obstruct, or shut down, my efforts to get to grips with the issues. This may have been connected in some way to a dogmatic belief that ALBs should be entirely free of government interference; and certainly I was repeatedly advised that POL should be left alone. I do recall feeling the pressure of the consistent advice from ShEx that these were not matters for government and to hold that official line, but based on what I now knew that was no longer a tenable position.”

POL's summary of investigation 'materially misleading'

Neville-Rolfe also told the inquiry she had been misled by POL about the findings of a report into Horizon by Jonathan Swift QC.

The report raised concerns about the software and whether the Post Office had enough evidence to bring charges of theft against subpostmasters. However, it was not shared with ministers or the Post Office board and only four copies were made.

“If it had become public it would have been extremely transformational,” Neville-Rolfe told the inquiry.

In her written evidence, she said the "reassuring" summary of the report she received from Tim Parker, chair of Post Office Limited, was "materially misleading".

She said Parker had failed to tell her the report was complete despite having several meetings with the minister, leaving her with the impression the work was still ongoing and that she would receive its findings at a later date.

She had only only seen the full report for the first time as part of the inquiry, she said.

Among other things, she said Parker's summary of the findings failed to make reference to concerns it raised about remote access, which "directly undermine the information provided to ministers and, in turn, parliament, and indicate serious historic and ongoing concerns as to POL's compliance with its disclosure obligations in relation to criminal prosecutions and convictions".

"I was surprised and disappointed to discover, years later, that Mr Swift's findings were not disclosed as part of any criminal or civil proceedings. I do think this is nothing short of scandalous," she added.

Neville-Rolfe 'surprised' by gaps in record-keeping

Several times in her written statement, Neville-Rolfe suggested there had been inadequate record-keeping by officials about the scandal since it first happened.

She said a “large number of documents which would have been helpful” in preparing her witness statements – including the minutes of several meetings and her ministerial diary – had “not been made available” to her.

She suggested this could be because the Shareholder Executive, including its staff and records, were transferred out of BIS to become part of UK Government Investments in 2016 – the same year BEIS was merged with the energy department to become the Department for Business, Energy and Industrial Strategy.

“This has made it particularly difficult for me to piece together what happened 10 years ago and I am surprised by the lack of records of senior civil servant engagement in Horizon in the core department and of my regular, brief updates with the secretary of state,” she said.

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