Suspense Accounts

As soon as Second Sight raised queries about POL’s suspense accounts they were sacked.  Whether the sacking was linked to the queries is open to debate and conjecture.   There is however no doubt that POL maintain suspense accounts for unallocated funds,

POL are not perfect – far from it – but they are unaccountable – so no outsider will get to the bottom of this mess without a formal government backed inquiry.   If I were in charge of such an investigation I would start with the suspense accounts.

Remember that suspense accounts can hold money that has already been deducted from SPMRs income as a result of the totally unfair contract that SPMRs sign.   SPMRs are liable for all unexplained losses in their branch.  Trouble is the explanation for a lot of these errors lies within POL’s control.   Some errors are never resolved and the monetary value in the suspense accounts is probably allocated to POL income at some stage.   Other errors take a long time to resolve.  Only recently an example came to light of a SPMR receiving a credit for an old error that the previous SPMR in the branch had already paid for.   The new SPMR queried this with the help desk and was advised to keep the amount.  Clearly inappropriate advice.

And just to put it all into perspective – SPMRs have been prosecuted, jailed and made bankrupt because they can’t explain the losses that have accrued at their branches – POL can’t explain them either but if they set their minds to it they probably could.

How bad could it be?

How about an example from an audit taken on Salford City Council – an organisation that processes obviously far fewer bill payments than POL.

The Council Tax and Benefits Section is based within the Customer and Support Services Directorate. It is responsible for the processing, billing and collection of Council Tax. A total number of 92,586 Council Tax bills were issued in March 2004 and net collectable income for Salford City Council was £63,895,246.

The Council Tax system is a key financial system for Salford City Council. It is also subject to external scrutiny from the Audit Commission and therefore an annual review is required to ensure the system is functioning effectively.

The agreed scope of the audit was to identify and evaluate the risks and controls associated with Council Tax. Key risks being:

  • Tax payers not charged
  • Tax payers charged wrong amount
  • Tax not collected
  • Incorrect accounting
  • System failure.

Overall, the audit testing undertaken confirmed that the Council Tax function is well controlled. The majority of controls are operating effectively and key risks identified are adequately controlled.

However, a number of weaknesses were identified, the most significant of these were:

  • A significant number of items had been posted to the suspense account that had not been cleared, dating from 5 April 1993 to 8 December 2004

A review of write-off procedures found that write-offs are not formally assessed to ensure only appropriate accounts are written-off, prior to Committee authorisation.

The Management Response?

Unidentified items are subject to prompt investigation, monitoring and clearance. The 61 uncleared items mentioned are the residue of 3369 items that have found their way into Council Tax suspense from the commencement of Council Tax in April 1993. 32 items are DWP payments, which were received without sufficient information for the PARIS system to process; these items are currently being looked at by the Recovery team and will therefore remain in suspense for the time being. The balance (29) items will be written off from the Council Tax suspense account before the 31st March 2005.

And just to point out the possible connection with POL the auditors make this note as well:

Not implemented

The Section Leader (Cashiers) has no direct control over bills / invoices issued. Recent e-mail sent to all Fund Managers requesting that they should include “obtain receipt as proof of payment” on all documentation.

Note, when customer pays via Pay Point, the receipt advises the customer to retain the receipt for proof of payment. Discussions will be held with Alliance & Leicester (for Post Office Ltd) to see if “retain receipts as proof of payment” can be added.

……

So it is clear that money collected from SPMRs may not only be sitting in POL’s suspense accounts but in the Suspense Accounts of other Bill Collectors.   How on earth could an SPMR be expected to ‘explain’ this situation

……………………….

Here is another ‘suspense’ account that caught my eye some years ago.  The National Insurance Fund state this in their internal documents…. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/89249/ni-fundaccount10-11.pdf

“Missing Dispatches There are instances of cheques claimed by Post Offices as being cashed, which are not received at Alliance & Leicester Commercial Bank (ALCB). The values of these ‘missing dispatches’ are allowed pending investigations by both the Post Office and ALCB. Following these investigations, those cheques treated as encashments are reported as ‘Post Office Losses’. Any cheques that were previously settled as ‘Post Office Losses’ but are subsequently received at ALCB are offset against the existing ‘Post Office Losses’ balance.”

I wonder if there is a record somewhere of the amount of money in that Suspense Account and how eventually it is cleared?

……..

I’ll keep adding to this today as I find them ….https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/235125/0547.pdf

23. Payments to incorrect Post Office Card Accounts (POCA’s) Benefit expenditure has, on occasion, been paid into incorrect Post Office Card Accounts since they were established in April 2003. This is due to incorrect customer bank details being stored on the Heritage Benefit Systems for a relatively small number of customers. Corrective action is instigated as soon as, such errors become apparent. At 31st March 2005, an amount of approximately £400k was outstanding in relation to 5,000 payments (affecting 2,000 customers) being made to incorrect card accounts. Of this £400k, authority has been received from POCA’s parent bank to withdraw £38k from customer bank accounts. A number of other customers have also given authority to recoup a further £32k. The Agency is pursuing recovery of the above amounts, and a Ministerial steer which will be provided to the Department of Work and Pensions (which is experiencing similar problems) is expected to have an impact on how the Agency will proceed with this matter. At present, because the intention is to continue with recovery, no actual loss has occurred. However, it is possible that a proportion of the above amount will be formally classified as a loss in the 2005-06 accounts (or in subsequent years) and so this information is included to provide a more transparent view of the Agency’s year end position.

………………….

Tower Hamlets Audit 2010

The suspense account was not cleared in a sufficiently timely manner. At the time of the audit, the total balance on the suspense account was £35,222,261.49. Approximately £33m had only recently been posted (less than six weeks old) however 56 items dated back to the year 2006.

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The NFSP and POL

On Thursday, I am led to believe, the National Federation of Subpostmasters (NFSP) ceases to be an independent voice for Subpostmasters as it becomes a Post Office Ltd funded Trade Association.  Some may suggest that it has never truly been an independent voice but Thursday sees the much talked about Memorandum of Understanding between the NFSP and POL taking effect.

From Thursday all new Operators and Community Office Subpostmasters will be enrolled at POL’s expense into the NFSP.   They can opt out of course but why should they?   It’s free after all.

In this blog I don’t want to spend much time on discussing the NFSP.   The organisation after all is allegedly controlled by only two people, George Thomson and Mervyn Jones, both of whom receive extraordinary salaries for such a small company.  There is undeniably a case to be put that self interest could play a large part in their leadership roles.   With POL now committed to funding the salaries of these two gentlemen ad infinitum what they say or do allegedly on behalf of their members needs to be taken with a pinch of salt.

Several years ago, on a visit to POL HQ in London, I discussed the role of these two gentlemen with senior management at POL.  George, they said, sends them to sleep whenever he opens his mouth.   He is of no interest whatsoever to POL.  Mervyn on the other hand does provide some intelligence to the debate but they dislike him intensely so prefer not be in the same room as him if they can help it.

In some respects though I have a great admiration for George Thomson.  He rose from the ashes of a failed political career in several different parties to get to the top of what may be a small organisation in terms of numbers but an extremely large one geographically.   He did this by having the ability of knowing his audience and being able to talk to them on their level.  With no disrespect to many of my esteemed former colleagues, I have been to NFSP branch meetings and watched Videos of NFSP conferences, it is safe to say that George’s ability to talk to the majority of them on their level is natural.

Leaving aside the personal interest aspect for a moment, The NFSP’s position for many years – even pre George and Mervyn (G&M) – was to protect the commerciality of the network and ensure its survival by accepting and promoting cost cutting exercises such as network size reduction even if that resulted in hardship for some of its members.

G&M continued with that policy when NT was announced.   That was where they went sadly wrong.   It was too easy for POL to persuade them that NT was all about ensuring the survival of the network in the face of a reduced annual subsidy from the Government.   I think the concept that the underlying raison d’etre for maintaining the network size above its optimum commercial size was purely political, was lost on them.   What they should have done was to put a counter proposal forward to protect their members interests and not POL’s interests.    They could have and should have defended the amount of the subsidy being paid against the backdrop of huge head office overheads as well as comparing the measly amount of subsidy offered to a network of strategic importance to other subsidised national infrastructure organisations like the railways and utility companies.

Instead they opted to go along with POL and try to persuade their members to adapt or die.   Turkeys voting for Xmas is an often used expression when referring to SPMRs and NT.    That expression though is misused.  SPMRs never voted for it and were never given the opportunity to vote for it.   G&M relied instead on NFSP conference support to show they had a mandate to continue supporting POL and NT.   Here I could go into a dialogue on the NFSP conference, the attendees and what this annual paid for outing means to them.  It would be a long story but for those of you who have attended conferences in the past, or organised them as I have done, you will know that ensuring your attendance at next year’s conference by not saying anything contradictory or voting against the EC is a major factor in what gets decided at conferences.

Subpostmasters though managed to express their opinion on NT very early on in the process by virtue of POL’s online survey of Subpostmasters taken in Early 2012.

About 9500 subpostmasters were asked to submit their choices for NT:

ONLY 5400 (57%) replied !  Now given the choices in the survey any reasonable person would have to assume that the 43% who didn’t respond clearly did not want to engage with NT.

2380 out of 5400 (44%) wanted to stay as they were.   So in total 2380 + 4100 = 6480 out of 9500  (68%) did not want NT.

Of the remainder 38% (2052)  said they were interested in signing a new contract.  Not surprising really as by the time of the survey the new Commission Rates for Transactions under the New Mains contracts had been revealed and presumably the vast majority of these respondents had worked out that they would be better off under NT (I have written elsewhere on this blog about how some branches are now actually being paid more than they were pre NT- some cost cutting exercise??)

It should be totally beyond belief (but sadly isn’t) that the NFSP in light of these statistics continued to support POL’s NT program.   I could now also write about the amount of money that started coming the NFSPs way from POL to ‘support’ NT.    Without these payments the NFSP would have been in severe financial difficulty.   It also became clear to NFSP that the new operators had no desire to be part of the NFSP organisation and as traditional offices were replaced by conversions the NFSP membership numbers – and therefore subscription income – started to decline.

So in stepped POL – and on Thursday they will enter into an agreement with the NFSP to support them financially over the next 15 years.  In return G&M must support POL otherwise they run the risk of losing their jobs.   The last vestiges of NFSP independence from POL will have disappeared  George and Mervyn no longer serve any useful purpose to their members. it seems POL, as I mentioned earlier, had reached this conclusion many years ago.

……….

PS over the years I have been receiving confidential copies of NFSP EC minutes.  They record in astonishing detail secret discussions surrounding NT with POL.  Many paragraphs are highlighted in Pink which indicates NOT TO BE REVEALED OR DISCUSSED WITH MEMBERS!   If their members had only known ………….

The Effect of Network Transformation on Subpostmaster Pay

Over the last few years Post Office Ltd (POL) has lost a lot of Government work.  There is a clear trend in the drop off of revenue from the Government and there is no reason to suggest that this will not continue as further budget cuts are made to Government departments.   The only reaction to this from POL is one of apathy.  Nothing they can do about it they say.  Perhaps not but perhaps they would be wise to review the original premise of the NT project which appeared to rely heavily on the likelihood of increased government work as a result of the NT Investment program and maintaining a network size way above its optimal size.

Instead POL’s focus has shifted to trying to increase sales of Financial Services.  But these products are sold mainly through the larger Main Style branches and offer little income to the vast majority of the smaller community branches.  Yet it is these smaller branches that are expected to open longer hours for greater convenience to their Post Office customers.

So any comparison of overall revenue paid to SPMRs must be taken with a pinch of salt – bigger offices are doing better and smaller offices are doing worse.

So let’s look at the figures.

There are about 9500 offices that are referred to in the Post Office accounts as Subpostmasters.

In 2014 they received £448m and in 2015 £435m – a drop of £13m a year.

In 2015 the number of opening hours per week of the network increased by 50,000 so an average over the year of 25,000 per week.   There are on average I would assume 2 counters per post office and 51 weeks in a year taking account of Public Holidays.

Without setting out all the calculations involved that sees Subpostmasters being paid 9.4% less per counter hour open.

But that doesn’t take into account the fact that some of the bigger offices are in fact doing a lot better.  If it was taken into account the vast majority of the smaller offices would be seeing a decline in income per opening hour way in excess of 10%.

To earn this decrease of course you have to employ staff because you can’t be expected to work these increased opening hours can you?  So the effect of the introduction of the Living Wage – a 10% increase – will have a serious impact on the viability of these smaller post office.

Just imagine – your income drops by 10% and the government that owns the business that is paying you less demands you pay your staff 10% more?   Where on earth is that money going to come from.  Completely and utterly unsustainable.

But wait! It doesn’t stop here.   Network Transformation hasn’t finished yet.   Half the network is still to convert to longer opening hours and loss of the fixed element of their pay.  The Network Subsidy is set to fall by over 50% by 2018.

Will it work – how on earth could it?  Post Offices are closing for good all around the country right now as a result – what on earth do these people at POL think would inspire someone to open them back up?   Yet these closed offices remain on the books of POL as temporarily closed so not included in the statistics.  They hide these in order to get their bonuses.

In a couple of years I am not going to turn round and say I told you so – what I am saying today is that I AM TELLING YOU THIS IS SO AND THIS IS WHAT IS GOING TO HAPPEN – IT IS INEVITABLE. ONLY FOOLS WOULD DENY IT AND FOOLS SHOULD NOT BE PUT IN CHARGE OF SPENDING £2 BILLION POUNDS OF TAXPAYER’S MONEY.

The Citizens Advice Report

Yesterday the Citizen’s Advice Bureau (CAB) published a scathing report on Branch Standards in the new PO Local Models.

The Post Office section in CAB is a successor to the same section that existed in Consumer Futures.  It obviously focuses on the delivery of service standards to consumers and in doing so protects their (the consumers) interests.

From a purely consumer point of view, NT has many advantages.   Longer opening hours,brighter and more attractive branches as well as more convenience with the PO Counter integrated into the retail counter.   So CAB are entirely supportive of this concept as they should be and will work constructively with POL to achieve this.

But there are three important groups here to consider.  Customers, POL and the Operators/Owners of the PO Locals.

The report highlights the failings of the PO Local model and encourages POL to do something about it by delivering a consistent service across the network according to the branch standards POL have determined to be acceptable.  What is missing is research into how NT has affected the Operators of PO Locals and reasons why they have failed to deliver expected standards.   Without that information, gathered on a regular basis, we can neither establish what has gone wrong nor monitor trends in Operator behaviour.

The report does not and cannot suggest how POL can fix the problems that CAB have highlighted and nor does it establish why.   As I have just said, we need a report on that and I think CAB are in the process of preparing one, but in the meantime, I can certainly have a stab at it by stating the bleeding obvious!

Put aside the consumer advantages of NT for a moment – why not – they certainly will experience only a disadvantage when their PO Local closes for good.

First – break down the new Locals into groups.

a) Existing Post Office Branches that chose to convert to the new Model.

Other than for the one off financial inducement of Investment into their branch and a lump sum compensation package for loss of earnings, it is totally beyond me why anyone would have chosen this route when they so easily could have gone ahead and ‘converted’ themselves while retaining their core tier payment.

These then are existing subpostmasters with experience.   They probably deliver good service and standards without intervention from POL and they have embraced the concept of PO Local and longer opening hours for less pay.

Should be a success story BUT what they do do is skew the results of the CAB survey in POL’s favour.

As the CAB report points out the next, larger wave of conversions will be to new premises and new operators, so it is likely that this ‘skew’ factor will be diminished in future reports.

b) Post Office Branches that converted to PO Local on sale of business

These are then new operators in existing PO Branches where on buying the business they had to convert to a PO Local format.   The most important point here is that when they bought the business they could only rely on the likely PO Income provided by POL and not on the historical PO Income received by the outgoing SPMR.  They mostly would have had no prior experience of running a PO nor have any idea of how the remodelled branch would affect the retail sales.   The PO income in most cases would be at the most 50% of the previous owners income – a significant drop.

What has transpired since they bought their shop is that PO Income has fallen significantly while the workload has increased.  They have become aware of the numerous PO transactions they have to undertake for no reward and they now realise that there is significant financial risk inherent in operating a Post Office for a number of reasons.   They have gone through several employees and become aware of the need to train new employees in Post Office work but also the cost involved in doing so.   They now realise that in order to get staff suitable to handle Post Office work they need to pay realistic wages or they will leave.

They now know that on a weekly basis POL will send them a list of new procedures and processes they must follow as well as a list of mistakes that POL made in the previous week’s list.  Working with POL is a nightmare and they don’t get paid very much for it.

Then there is the much vaunted Combi Counter.   I am a great believer in this concept and how it could work – I have used it in my two post offices before NT came along.  Neither of these though were big retail offices – standard cards and stationery in the last one and we managed fine to incorporate PO services and retail at the same counter.  It doesn’t work so well in the larger retail outlets like busy Convenience Stores.   The owner watches with despair as  the queue at his retail counter grows while an ebay customer waits for proof of posting on 20 items he has prepaid on Ebay.

Then one of his assistants makes a mistake.  Gives the customer too much in a POCA payout.   He rings the help desk.  Tough is the answer.  Your mistake you pay for it.

Then he gets a call from Branch Standards – the Ebay customer that didn’t buy anything in his shop including postage, has phoned in a complaint about the way he was treated –  a casual mention by you to him that you don’t get paid for these transactions and could he support his local post office by actually buying something- sparked him off.

Now tell me – what will a survey – a proper survey up close and personal – reveal about his thoughts on POL and whether or not he is thinking about chucking the keys in and getting rid of the Post Office?

c) Traditional branches relocated into nearby business

Almost the same as b) but with much more financial information at hand to back up subsequent decisions on the future of the branch.   Promises were made on performance – retail sales would be up – increased remuneration from PO sales – footfall through the roof …… and of course this guy needed to make a substantial investment of his own in the new branch not just in the cost of refurbishment but also loss of existing retail space.

He can monitor if what was promised was delivered and for the very reasons in b) it didn’t.   He started losing existing customers due to queues caused by PO work – footfall was up but his retail sales were static because of the loss of retail space and aforementioned customers.

And the along came POL in the shape of Branch Standards and told him to improve.   In one ear and out the other – if you don’t like how I am operating this branch then take it away he says.

Conclusion

The owners won’t reveal to POL how they feel and even if they did POL wouldn’t reveal that to anybody.   What CAB need to do – because this is the reason why branch standards in Locals are so low – is to provide a regular survey on PO Local operators opinions and monitor trends with particular emphasis on the groups of branches I describe above.

It has become far too easy and financially justifiable for a PO Local operator to walk away from running a Post Office and then what happens to the consumers?

I’ll answer that final question with a current example.  Glenluce Post Office, a traditional branch, closed suddenly several years ago.  It had a salary of about £25k.   It was offered to the ONLY shop in the village at that time for a paltry £7,500 per annum projected (not only that but the shop owner would have lost out on Lottery Sales as well to POL) so the offer was politely declined.   There was much hoo hah in the local press about it – community council meetings etc but nothing happened and Glenluce ended up with an Outreach service a few hours a week.   Earlier this year that outreach service suddenly stopped as the SPMR resigned.   Glenluce has no post office service and hasn’t had one for many months.  The most interesting thing though is that this time there was no hoo hah – no local press reports – no interest whatsoever.  The Post Office had gone and the local community had got used to the idea.   That is how fragile the network is at the moment – use it or lose suddenly takes on a new connotation when folk lose it and suddenly realise they can do without it after all.

Cheers, Tim

The Lee Castleton Case – Consequences

A follow on from yesterday – there are certain inevitable consequences from Lee’s story that are worth considering.

Lee went to trial knowing full well that if he lost he could well be held liable for massive costs far outweighing the disputed amount.    That surely has to count for something – at the very least a clear indication that he did not benefit in any way from the mistakes that were made.

He lost and was ruined to the tune of £350,000.   The decision of the court was published for all to see and the amount Lee lost personally as a result of the costs was publicised.

So the consequence of that was that SPMRs in similar positions to Lee were clearly under a lot of financial incentive not to follow his path to the courts.   In order to avoid paying POL the lost ‘money’ they had to prove to POL that it was not their fault and they had to do that before they became liable to handing the money over to POL.   So there again there was significant financial pressure on these SPMRs, in the light of Lee’s court case, to ‘hide’ the losses until they could find out what happened.   This is financial pressure of POL’s own making – an incentive to commit the crime of False Accounting.    Yet as I pointed out yesterday, POL were culpable of removing the very paperwork they would rely on to find the error before the error came to their attention at close of business.

I believe that if Lee had put forward my argument that he could not have found the error because of POL’s actions then the court would have placed the onus of proving the loss was attributable to Lee back on to POL.

So let’s say Lee won (and hopefully will win in the future) and the result was POL had to prove in all future cases of unexplained branch losses who the culprit was.   That would put an extremely different complexion on how SPMRs faced with such losses handled them surely?

There would be no pressure on them personally to commit the crime of false accounting.   They could declare the shortages safe in the knowledge they had not benefited personally.  POL would be forced to investigate and discover what happened and regardless of whose mistake it was the outcome would be that POL would surely put in place procedures for it not to happen again.

Whatever the outcome of the investigation – either a POL mistake or a counter assistant mistake/theft – then the SPMR – even if POL tries to recover the money from them has recourse to recovering the amount from the eventual recipient.

The fact that at the moment, even now after all these years, POL still stop investigating when they can legally recover the losses from the SPMR by virtue of an erroneous contract, is appalling.

BUT if I am right – and nobody yet has told me I am wrong – about the contract then POL are now running the risk of ending up in court again as they cannot rely on Lee’s case as a precedent.

The further consequences of that would in my opinion be criminal charges against those who sought to recover money that as has already been pointed out may never have existed in the first place.

I would appreciate comments on the analysis above – I am sure it makes sense.

The Lee Castleton Case

All in my opinion …. please insert the word ‘allegedly’ where appropriate ….

Most, if not all of you, visiting this page will be subpostmasters I guess.   You will be aware of all the publicity surrounding the ‘Horizon Scandal’ and the work of the Justice for Subpostmasters Alliance (www.jfsa.org.uk).

I became aware of the JFSA years ago – my initial thoughts were that these were a bunch of discredited subpostmasters who were trying to blame the computer system for their own errors.    But my opinion has changed.   There is overwhelming evidence now to support their arguments that they did indeed suffer losses attributable to the system.    They may well have made a mistake in covering the branch losses by signing off incorrect amounts and thereby committing the offence of ‘False Accounting’.   But there is no doubt in my mind that none of them profited as a result of the discrepancies that appeared at their branch.

The Lee Castleton Case stands out though, because here is a SPMR who did not attempt to hide his branch’s losses.  He called for an Audit as soon as he became aware of discrepancies and when further discrepancies appeared he advised POL immediately.  Just as he should have done.

In total the amount of discrepancies reached nearly £23,000.   POL could not pursue Lee for False Accounting because he had declared the correct amounts in his balances.  Nor could they pursue a Theft charge because they could not prove Lee had stolen the money – for a start the money may never have actually existed as the mistakes that caused the error could have been a simple case of miskeying a transaction.

But POL in their wisdom – after sacking Lee – decided to pursue him in the courts for the amount of the discrepancy £23k.

Don’t you think this is strange if as I have stated POL couldn’t prove the amount actually existed in cash?

Not to POL though and Lee elected to represent himself when the case came to the High Court in December 2006.

He lost the case and POL were awarded not only the amount of the discrepancy but also costs which totalled I believe in excess of £350k – Lee lost everything.

Lee followed the letter and spirit of his contract but when the push came to the shove, POL didn’t help or assist – they wanted their money back even though the couldn’t prove it wasn’t their fault.  So if you are sitting there thinking this couldn’t happen to me – read on – because it could and does happen on a regular basis.   Which one of you hasn’t had unexplained losses at your branch that you have had to make good?   Some are small losses , some are not so small and some are huge like Lee’s.   POL don’t publish the accounts of individual Subpostmasters who have had to repay thousands do they?  That wouldn’t be good for business and certainly would not attract new investors thinking of buying a PO.

So back to Lee’s story.

The reason I am writing this today is that, over the weekend, I found and analysed the Judge’s decision on Lee’s case.  It is a complete travesty of justice and I am certain that had Lee taken on legal representation rather than fighting the case himself he would have won.

The Judge’s decision can be found here http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/QB/2007/5.html&query=lee+and+castleton&method=boolean

And I will refer to it with necessary extracts from now on….

The first point to note is that POL relied on Lee’s subpostmaster contract to show that it was Lee’s responsibility to prove that the error was not his or any of his assistants.    It appears that Lee did not challenge this and the Judge refers to Shaw v Picton to decide that it was Lee’s responsibility to prove POL could be held responsible for the losses.

Well in my opinion this is where the Judge gets it wrong.

“It is quite clear, that if an agent (employed to receive money, and bound by his duty to his principal from time to time to communicate to him whether the money is received or not,) renders an account from time to time which contains a statement that the money is received, he is bound by that account unless he can shew that that statement was made unintentionally and by mistake. If he cannot shew that, he is not at liberty afterwards to say that the money had not been received, and never will be received, and to claim reimbursement in respect of those sums for which he had previously given credit.”

There are obviously two parties to Lee’s contract, Lee and POL.   The extract above supports POL’s position that Lee would be liable under the terms of his contract BUT this extract does not take into account the extenuating circumstances of working for POL as a subpostmaster and the other conditions of his contract that apply.  The Judge at the end of the decision actually cites this from the subpostmaster’s contract Section 22 clause 3 provides that the subpostmaster will be responsible for ensuring that transactions will be carried out accurately…..and that all documentation is properly completed and despatched at the due time. 

It is possible for instance that the mistake(s) were made by miskeying a transaction which was supported by a paying in slip – say a Giro deposit.    The assistant keyed in £1000 instead of £100 which left the branch accounts short of £900.

Under the terms of Lee’s contract he is obliged to remit to POL at the time of the last collection the documentation relevant to the transactions his branch has performed that day.   Which would include the erroneous pay in slip.

At the close of business, AFTER the documentation has left his branch, he is expected to make a cash declaration.  At which time the error would become apparent but would remain untraceable because the documentation Lee needs to investigate the discrepancies has left his branch.

POL as the principal, under the terms of Lee’s contract, have made it impossible for Lee to show that the statement was made unintentionally and by mistake.

Clause 22 that the Judge cites, is unenforceable as one condition ensures that the other cannot be met.

There are two inescapable facts in this case.   Lee to this day does not know what happened to the money, and POL probably don’t know either (I have to say ‘probably’ because having won the case and received settlement there is a huge financial incentive for them not to reveal later evidence to the contrary).

And then there is more.  The utter misconceived arrogance of POL and their employees could not be highlighted more than by the words of their star witness in this case,

Mr. Andrew Wise, of the Network Directorate of the claimant, had worked for the Post Office since 1991 and had a working knowledge of the Horizon computer system. He wrote in his witness statement that he thought that every transaction (apart from online banking such as withdrawing or depositing cash at the counter) recorded by the clerk on to their computer has a corresponding physical document, such as TV licence counterfoil, savings bank deposit [or] withdrawal slip or cheque. After explaining the matter in some detail, he wrote this

Accordingly, it can be seen that if the clerk or subpostmaster makes a mistake when imputing [sic: inputting?] transaction details into their computer, there are a number of points at which this can be picked up, because there are daily and weekly reports that the subpostmaster[s] have to produce at which stage they have to check and satisfy themselves that the physical documents evidencing transactions (for example, cheques, giros, pensions and allowances) match what they have entered on the system. In addition to that, there are various teams responsible for different sorts of paperwork produced by the branch, including a giro bank team, cheques team and pension team. For example, if the clerk records an item incorrectly on the system, they should pick this up on either their daily or weekly report. However, if they fail to do so, this will be picked up at the Processing Centre. If an item has been wrongly recorded, an error notice would be generated, although this can easily take up to 12 weeks or so. This will mean that if a transaction has been over or under stated there will be either a claim error or a charge error respectively. That evidence was not challenged, and I accept it.

First of all Mr Wise kindly points out that not only the Subpostmaster but POL themselves require access to the ‘different sorts of paperwork’ in order to determine if an error has been made.

But he also excludes from his description the possibility that the Processing centre could themselves make a mistake – possibly even the same error that Lee and/or his staff may have made in the first place.

And then he makes matters completely worse and in my opinion the Judge should have dismissed the case when Mr Wise stated that it take up to 12 weeks for such an error to be noticed.   We, in Duns, waited over a year for a transaction correction in our favour.

There is also evidence that not only do the Processing Centre make mistakes they end up crediting the wrong branch back!

Lee was fighting this case by himself.   After the Judge had decided that he was responsible for showing that the errors were not his fault he tried to show that it was possible it was a Horizon error.  There is no doubt that the Horizon computer system has bugs but trying to prove in a court of law that this was indeed the likely cause of the discrepancies wasn’t going to work and hasn’t worked for the many who have tried before and since.   POL have all the evidence and they are not going to release it although I have two or three easily demonstrable examples.  I don’t think Lee had much of a chance in court without presenting the argument I have put forward here.    It would certainly lead to POL having to prove the origin and consequences of the error and that is something they cannot do.

……………….

We all make mistakes.   Whether or not Lee or his staff did, I don’t know.   Was it miskeying a transaction or a Horizon computer error I don’t know either.  But what is and must be clear that Lee (and others in the JFSA cases) did not benefit personally from these mistakes.   At the end of this sorry saga we still don’t know what caused the errors and most importantly it is likely that POL don’t know either.  Surely it is not only the responsibility of POL to find out without reasonable doubt what the errors were but to put in practice a system where these errors could not occur again.

What is without doubt in my opinion is the fact that POL could never again seek in court a similar judgement based on Lee’s trial.

POL need to be taken to account for this travesty of justice.  Lee should be given the benefit of doubt and the money he has lost be re-imbursed.    There certainly needs to a full independent judicial enquiry into the running of this state owned organisation.

In a recent interview Paula Vennells remarked upon her Christian beliefs:

“My faith does not write the strategy. What my faith does is motivate me around how I deliver it. There is something around Christianity about being the best you can possibly be. If you can get everyone to work in that way you are bound to do your best for the organisation. It doesn’t mean to say you don’t take tough decisions.”

Being the best you possibly can be includes learning from mistakes past and present.   Ms Vennells as a Christian has to show compassion and understanding for the people whose lives her organisation has destroyed by reason of being employed by POL in the first place as a subpostmaster.   I can’t see God being too impressed with her track record in that regard.

Post Office Ltd and the Freedom of Information Act

As a government owned entity Post Office Ltd still fall under the jurisdiction of the Freedom of Information Act – I bet you they wish they didn’t – but there you go.

I have just been sent this response to a Freedom of Information request by a colleague who was requesting POL to send him a list of Post Office Branches that were classified as Community status.

Heaven help us all – I nearly fell of my seat laughing at this load of Guff copied below – do they not realise it could end up on the Internet for everybody to see?

a) “some of these businesses could be thriving retail businesses” – well you would hope so wouldn’t you?  I mean not all the 2,000 or so community offices are going bankrupt surely?

b) ” could potentially damage the individual Postmaster”  – would that be mentally, physically or financially?  Idiots!

c) ” implications for those branches not on the list” – very sad but true – they are totally screwed by NT!

d) “deemed not to have community status but may be viewed by their customers as
serving the local community” – what planet are these morons on?  Don’t they think ALL branches are viewed by their customers as serving the local community – you have to laugh….

e) The rest?  Well you have to wonder how much these people are getting paid, their qualifications and probably more to the point the intellect of their manager who hired them in the first place.

Its good to laugh I guess

……………………………………….

Post Office Response ..

Post Office considers that if a list of community branches were to be released this would be likely to prejudice the commercial interests of both Post Office Limited and individual Postmasters.  An example of how a Postmaster’s commercial interest could be prejudiced by the disclosure of this information is how a particular branch could be viewed.  Some of these businesses could be thriving retail businesses, that are deemed to be considered as classified as a community branch purely by location and proximity to other retailers, others may be very small operations that may be considered as non-commercial locations.  Releasing information into the public domain of the community status of a Post Office, could potentially damage the individual Postmaster and their business based on assumptions that may be made about the commercial nature of the business and/or the Post Office service.  Also, the release of such a list has implications for those branches not on the list that are then deemed not to have community status but may be viewed by their customers as
serving the local community.
In addition, information on the location, opening times and services provided at
specific Post Office branches is available on the Post Office website via the Post Office
branch finder tool such that customers have access to this information or this can be
obtained from the Post Office customer helpline on 0345-611-2970.
Personal Information 

We believe that such a list would contain the personal data of Postmasters. While the
list of branches deemed to be community branches may not identify a Postmaster by
name, we believe that because the nature of many Post Office branches is that they
are run by individuals, alongside their own private retail business, that reference to a
branch name is inextricable from a reference to the Postmaster who runs that branch,
particularly to those with local knowledge. We therefore believe that publishing a list
of branches allows living individuals to be identified from that information and
therefore constitutes personal data. The disclosure of a list would immediately make
all community branches public knowledge. The most immediate concern would be the
inferences that could be drawn between the categorisation of the branch as a
community branch, or not as the case may be, and the position of the individual
Postmaster in terms of the commercial nature of their business.

Public Interest 
As information has been exempted under Section 43(2) and Section 40(2) of the act,
a public interest test applies. This involves weighing the balance of public interest in
maintaining the exemption or releasing the information. Post Office Limited
understands that there is public interest in promoting the transparency and
understanding of matters which are of interest to the public. However, there is also
strong public interest in ensuring that Post Office, its branches and Postmaster’s are
able to operate in a fair marketplace regarding the dialogue procedure and to ensure
that Postmasters are not commercially damaged or harmed by the release of the
information.
Post Office considers that, with regard to the information that has been withheld from
disclosure, the public interest is best served by maintaining the exemptions respect of
the information requested.

I am sorry I have been unable to provide the information you requested, however if
you are dissatisfied with the handling of this response, you do have a right to request
an internal review. You can do this by writing to the address below stating your
reasons for your internal review request.

Information Rights Manager
Post Office Limited
Information Rights Team
1st Floor
Finsbury Dials
20 Finsbury Street
London
EC2Y 9AQ