Rosie Brocklehurst explores what we have learned from the evidence to the Post office Inquiry from the former Chief Executive and then looks ahead to the compensation burden that will hit the next Government post-election. A Labour Hub long read.

We all like to think we know how the system works. It’s not what but who you know that matters. This common mantra is offered to explain the numerous instances in Britain’s corporate and public life of the inexplicable elevation to high office of untalented people, including highly paid chief executives most of whom have never worked on the shop floor.  It applies to a few politicians too.

But let us focus on the elite world of corporate backscratchers and their facilitators in the civil service.   By soaking themselves in a lexicon of meaningless managerialism learned at the feet of some overpriced McKinsey-style consultants, they go on to be awarded vast salaries and bonuses, public honours, multiple non-executive directorships. In the case of Paula Vennells, this is indeed what happened.

Many of those who listened to the woman who has not spoken about the Horizon scandal for ten years, and who gave evidence over three days at the Inquiry last week, were astonished that she had ever been appointed CEO.  When cornered by the forensic interrogation of the measured and composed Jason Beer KC, her face crumpled with self-pity. Yet Vennells was icily in control most of the time, enough to deliberately litter the room with the word ‘compassion,’ as if such words, when thrown about, might leave an impression that she possessed some.

Bosses are often rewarded for failure yet delude themselves that their legacy has been a genuine, public contribution. Daydreamers amongst us might observe that if front-line workers were paid more than senior managers, this elevation into powerful positions of grandeur and influence of the tawdry and talentless would not happen.  But when these fraudsters are  potentially involved in hiding information that could lead to the finger of guilt being pointed at more powerful others, then they are often protected and given,  gongs – sometimes even peerages, a fact brought home in recent days, by the exposure in Sir Brian Langstaff’s report of Lord Ken Clarke of Nottingham’s  behaviour when he gave his supercilious evidence at the Infected Bloods Inquiry.

Vennells seems to perfectly fit the bill of the incompetent boss – and interestingly, was almost attempting to give that impression over the three days of her evidence giving. “As CEO I was responsible,” she conceded.  “I tried my best” and “I was not informed,” were her responses to Beer’s polite but forensic questioning.  Several observers were quick to point out that you can’t be criminally charged with incompetence, but you can be charged with negligence. 

Prior to her fall from corporate grace, the ordained lay preacher stepped down from her Church of England role. The Archbishop of Canterbury Justin Welby turned his back on her after not long ago nominating her to become Bishop of London. She was forced to give back her CBE received in 2019 following a public petition.  She had tried to hold on to her job as Chair of the Imperial Healthcare Trust. But another board member threatened to resign if she did not leave. Last week she admitted to having had no work since 2021. But she owns a nice mansion with grounds. Her role as the Post Office CEO covering a period from 2011-2019 was a job for which she was paid a total of £5 million including bonuses. It is worth emphasising that some of those bonuses were paid on the basis of illusory shortfalls, demanded back from subpostmasters accused of theft.  The money was often extorted with menaces from aggressive investigators, a group now given the soubriquet of ‘the untouchables.’

POID avoid

Although she worked as a senior Network Director for  the Post Office side of Royal Mail Group for five years, before becoming CEO, Paula Vennells claimed she did not know the Post Office employed 100 investigators in the Post Office Investigations Unit, (POID) nor that it was one of two organisations in the country which had the legal powers to privately prosecute those it investigated in England, Wales and Northen Ireland, and to recommend prosecutions and pass on investigative material to the Procurator Fiscal in Scotland.  

Vennells had presented to the Inquiry a 755-page dossier of responses to documentation, notable solely for how unreflective it was. It skirted around the issues without offering any thoughts on what she had done. Jason Beer KC said the Inquiry would have appreciated some reflection from her.  Instead, he got: “I trusted people too much;” “They disappointed me;” “I was not told.” It was Vennells’ attempt at an exculpatory position.   But who schooled her?

Mischcon de Reya were her legal advisors, paid for indirectly by you and me. For several months, campaigners such as myself have been trying under Freedom of Information to extract a briefing on AIG’s liability insurance for officers and directors, a document presented by Post Office hired solicitors Bond Dickinson (now known as Womble Bond Dickinson) to the Post Office on August 7^th, 2013. If it exists, and there is no indication that it does not, it is being withheld from campaigners.  However, Bond Dickinson’s legal advisor to the Post Office, Andrew Parsons, is due to give evidence at the Inquiry before July. It is he who allegedly told the Post Office Board that insurance details should not have a paper trail.  

The request to check out liability insurance papers for Board directors and officers dated August 3^rd, 2013, took place less than a month after the Simon Clarke advice was supplied from the then hired Post Office lawyers, Cartwright King.  The Clarke advice revealed that miscarriages of justice may have taken place due to the false evidence on Horizon flaws delivered in court by Fujitsu ‘expert’ Gareth Jenkins. The Clarke advice was suppressed and did not come to public light until 2019 during the 555 Group Litigation civil case at the High Court.

Prior to Vennells’ appearance at the Inquiry, earlier in May, two former Ministry of Justice employees came to give evidence. They probably got off lightly from media commentary because, as is the nature of things, journalists to this central London gladiatorial contest on the fifth floor of Aldwych House, were reserving their energies for ‘Paula’, as the main event.   

The two witnesses were, firstly, Belinda Cortes-Martin (formerly Crowe) a long-time former civil servant and information chief at the Ministry of Justice, whose caveats, qualifying clauses, and caution at answering anything definitively, would have made Sir Humphrey proud. She became the go-between to the Board on the mediation scheme Working Group and surreptitiously worked on Project Sparrow, a name so secretive, the Post Office tried to bury the ‘Sparrow’ name with legal privilege status during the Group Litigation High Court case.

Secondly, came Patrick Bourke, cocky Head of Government Affairs at the Post Office, a role that in most organisations works closely with Communications.  He too came from the Ministry of Justice. Prior to him, the Inquiry had heard from one Mark Davies, the Director of Communications from 2012 to 2019.

How did Belinda Cortes-Martin (Crowe) and Patrick Bourke know there was a job going at Post Office’s London HQ. Well, in Cortes-Martin’s case, because former top civil servant Alice Perkins was the Post Office Chair at the time 2011-2014, and effectively Vennell’s boss.

Perkins had known Cortes-Martin as a civil servant and as Director of Information at the Ministry of Justice.  While  Cortes-Martin’s overt job was to service the mediation Working Group set up under Sir Anthony Hooper, her covert job on Project Sparrow was to deal with independent investigators Second Sight. But even the best civil servants fall prey to error sometimes. The Inquiry showed her a note she had written where she expressed the desire to “fetter” Second Sight. She looked a little put out when presented with a word which she said she would not have used if she had thought it might be read ten years later. Quite.

We could tell from various emails shown at the Inquiry that Mark Davies was one of Vennells’ most influential and trusted advisors.  He had also been a trusted advisor for five years to Alice Perkins’ husband Jack Straw who had been made Secretary of State for Justice from 2007-10, when Cortes-Martin and Bourke worked there.  It’s who you know, and Alice certainly knew Belinda, as the latter helpfully explained in her witness statement.

Alice Perkins was a skilled civil servant in her own right, the kind of person who rather than making Sir Humprey proud, emulated his facility to manage process and narrative. Vennells gave an insight into this skill when she told the Inquiry how Perkins had advised her once how important it was when giving evidence, to first establish what she must say, and then request the information to back it up.  This advice seems to have been taken to heart, for prior to attending the Business, Innovation and Skills (BIS) Parliamentary Select Committee in 2015, Vennells urgently asked for help from her loyal minions to shore up the briefing pack.

Lord Arbuthnot and Second Sight have both claimed that Vennells misled that same Select Committee, when she denied there had been miscarriages of justice because if there had been, “it would have been important to me to surface those.”   

A year earlier according to an effusive Vennells’ email to Mark Davies, in 2014, he had delivered a cracking BBC One Show rebuttal against the accusations of  Kevan Jones MP. Jones was acutely aware of the human impact of the Post Office actions because of his constituent Tom Brown, a subpostmaster who received a certificate of valour in his early subpostmaster career for fighting off robbers, but who was accused in 2008 of stealing £85,000 from his post office when it was Horizon that caused the shortfall.  Harassed and bankrupted, Tom died earlier this year before his conviction could be overturned, so he received no compensation. 

“Vennells was haughtily dismissive of Kevan Jones when talking about the One Show,” said Christopher Head, former subpostmaster and campaigner. “But we know subpostmasters are hugely grateful to Kevan who, as far as I am aware never missed a Post Office debate in the House.”

Mark Davies was also the man who strongly advised Vennells against sending hundreds of cases of potential miscarriages of justice for review by the Criminal Cases Review Commission (CCRC). This followed the CCRC’s concerned letter to her, seeking information about alleged miscarriages of justice. Davies said she would be unwise to refer cases because of the very bad press coverage that would ensue.  So, Vennells, who told the enquiry she never takes advice from just one person, took ‘the steer’ from him. Thus, Vennells dropped one of the many chances she had had, to do the right thing.

The superb investigative journalist Nick Wallis thinks what the CCRC were told by Vennells following their letter, and how it sits with evidence presented to the Inquiry, is a smoking gun.  It could see Vennells charged.  If not, the Justice for Subpostmasters Alliance and Alan Bates may well seek a private prosecution.

‘Anomalies’

Some subpostmasters have no faith in the process, believing that Inquiries, even statutory ones, partly because they are not courts of law, cannot ensure meaningful accountability.  People yearn for accountability of course, but when has there actually been any true accountability in recent scandals and how much less likely is accountability when more than one Government administration has been entangled in decisions that initiated and perpetuated the fiasco?   

This Conservative Government hoped exoneration of the convicted and offers of compensation would make the story go away. Exoneration for over 700 has been enacted by Parliament and only awaits Royal Assent. But there was no time to include Department for Work and Pensions cases which many campaigners wanted. When it comes to compensation, the process has become painfully and inexcusably slow.  

Evidence of wrongdoing is piling up. Vennells was forced last week to admit she had been told Horizon had bugs and subpostmaster terminals could be accessed remotely, early on. She is a woman alert to language. She had sought a less emotional and slangy word to describe IT bugs, using the words ‘anomaly’ and ‘exception’ as a useful way to describe the flawed IT system.  Shortly after, anyone in the Post Office who talked about Horizon, were referring to ‘anomalies’ and ‘exceptions’ instead of ‘bugs, errors and defects.’   Is this not the deliberate massaging of language to obscure the truth?

We know that as early as 2013, Vennells had been familiar with bugs.  She alone had had the reference to the defective Horizon system removed from the Royal Mail prospectus of sale in 2011. We know because this single successful intervention was a prime example of her “earning her keep” as she put it in her performance review to Alice Perkins, the following year, a ‘knowing’ assertion if ever there was one. 

Callousness

The cross-examination of Vennells uncovered shocking evidence of callousness.

In an e-mail after the suicide of subpostmaster Martin Griffiths, who threw himself in front of a bus, leaving a wife to agree to turning off his life-support three weeks later, two children and a hefty mortgage, it is astonishing to see how the woman who likes the word compassion, responded.  She immediately put out a written request that someone look into a rumour that Martin Griffiths had prior mental health problems.

In between Bourke, Davies, and Cortes-Martin, came Lesley Sewell (former acting Chief Operating Officer and Chief Information Officer/Head of IT) who according to her witness statement, transferred in from the infamous Northern Rock a couple of years after the financial crash. Deeply unhappy because of a ‘restructuring’ demotion, according to her witness statement, she left the Post Office in October 2014, placed on gardening leave.

Surprisingly, years later, her old boss telephoned her out of the blue. This was the CEO who had she felt restructured her out of her job. She assisted, she says, but finally blocked Vennells from calling her when, so she claimed, Vennells continued to pump her for information in order to prevent a Public Inquiry from being set up. 

Lesley Sewell was among the five people Vennells named last Thursday as the people who were most to blame for her own failures – including Legal Counsel, Susan Crichton who appointed Second Sight.  According to Vennells, Crichton was heavily criticised by Post Office Chair Alice Perkins, for failing to rein them in.

Another in Vennells’ bad books was Jane MacLeod, the Legal Counsel 2015-19, an Australian national who left the country in 2020 and refuses to return to Britain to be questioned about her written evidence. Others named were Chris Aujard, replacement Legal Counsel to Crichton and Mike Young, former Chief Operating Officer, and Sewell’s boss.  

Sir Wyn Williams publicly called for help on the third day of Vennells’ evidence. The Inquiry Secretariat had failed to find an address for Young in order to call him to give evidence.  Meanwhile, the Sun newspaper had the budget to locate Jane MacLeod to a “£2 million townhouse” in Sydney with a heated swimming pool on the roof.  “No comment” was all she said, which was a lot better than the tonally vicious letter she had sent years ago to Computer Weekly, when they ran a story about the sacking of Second Sight.   

With absolutely no budget at all, the following day, a couple of subpostmasters and I took a few minutes to track down Mike Young with a Google search. We found he is a part-time advisor to a large ‘IT Lab’ project run by the University of Exeter Business School. At your service, Sir Wyn.

On June 5^th and 6th, Alice Perkins will be called to give evidence at the Inquiry.

Oh, I almost forgot – Mark Davies, Comms supremo who had known Alice Perkins, Jack Straw, and the family well, remained at the Post Office for several more years, when Alice moved on to become a BBC Governor in 2014. It was Mark Davies, who the following year, led the attempt to stop the first BBC Panorama programme on the scandal in 2015 and succeeded in delaying it.  Mark Davies is now newly ensconced at the Refugee Council as Director of Communications.

Meanwhile the next Government faces a compensation debt burden

Henry Staunton, the former Chairman of the Post Office, sacked in January this year after 13 months in post by Kemi Badenoch, Secretary of State at the Department of Business and Trade (DBT), may well have been right when he claimed DBT Permanent Secretary Sarah Munby  had told him early in 2023 to limp slowly (with compensation) into the next election. That election is now imminent.

 It certainly looks as if a civil service-guided strategy to kick compensation payments over to a new Government, probably a Labour administration, will come to pass.  

 On July 5^th, a Labour Government could be facing claims for a total of £11.5 billion in compensation from two high profile scandals – the Horizon Post Office scandal (£1.5 bn and 24 years) and the Infected Bloods scandal (£10 bn and 60-plus years). This is quite apart from payments arising from Grenfell and from the useless Covid pandemic Track and Trace system (£37bn) and the appearance of corrupt management of some of the huge PPE contracts during the Covid pandemic and lack of fraud clawback for loans. 

 But after 14 years of maladministration, we hear Britain’s coffers are empty. Borrowing is already so high we may not be able to borrow as much as we need to heal Britain’s parlous, ruinous state.

 What Labour may have to spend on compensation will not go to NHS workers or teachers.   Expect to hear lots of talk of ‘hard choices’ when taxing the rich is mooted by those who do not buy Rachel Reeves’ cautious decisions.

 If Reeves sticks to her announced policies, she will essentially have little room for extra spending.  Most economists would agree that borrowing for consumption spending increases the pressure of debt. Borrowing for investment does not, since it is supposed to generate sufficient additional output and income (and hence tax revenue, even at constant tax rates) to repay the debt comfortably. The first thing a Labour government should therefore do is make that distinction more clearly. 

 Borrowing to pay compensation is defined as borrowing for consumption.  Since the beneficiaries will most likely need to spend the money, a proportion, perhaps 30 per cent, will immediately re-accrue to the Treasury in higher tax revenue from the extra spending.

 For example, as Professor of Economics Emeritus and former Director of Imperial Business SchoolDavid Begg told me:

“If you give £100,000 to a struggling person, the likelihood is that they will spend most of it, giving rise to additional VAT revenue, possibly extra corporation tax, and even perhaps income tax. In terms of borrowing, we do not say a household gets poorer when they take out a mortgage. We recognise that it has financed an asset of even greater value. For governments it is easy to keep track of debts but almost impossible to value their assets (road, tanks, schools, hospitals, etc). So instead we compare debt to income  (hence debt/GDP) rather than assets. But current income is a poor measure of current wealth.

“Moreover, if new debt finances consumption, it unambiguously increases future fiscal problems, whereas if new debt finances investment (plant, machinery, buildings, infrastructure, environment, education, even health) then it increases future output and future tax revenue and hence may actually improve the public finances. 

“How much fiscal room is there today?  Some, maybe even quite a bit, if the additional spending is contributing to higher future output; much less if the additional spending is simply being more generous to the poor, which may be morally desirable.”

The argument needs to be made: only Labour can put things right and we will do it whatever the cost because people have suffered enough. 

 To caveat this spending, Labour needs to say: “The rest of our policies will generate the additional growth and tax revenue sufficient to finance the compensation.” And what is more – it is true. A new Government must swiftly deliver justice to those who have suffered untold harms.

Rosie Brocklehurst is a journalist and press officer (retired) who worked for the Labour Party, LWT, the BBC and several charities.

Image: Wallasey Post Office. Author: Rodhullandemu, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.