Gains – there is a moral in this story

Yesterday at the inquiry an email was shown that clearly indicated that as a result of the infamous Receipts and Payments Mismatch bug, gains were recorded in some of the branches affected.  These gains had been recovered from the SPMR presumably by a Transaction Correction.   Post Office then decided the only way to rectify the situation ‘fairly’ – many months later – was to repay those gains they had recovered from the SPMR and not by way of Transaction Correction but via the SPMR pay packet (which is a significant detail in its own right).

What follows is a story.   It represents a thin line between Hypothetical and Real.  Much of it is in actual fact true.

Mrs Pennells

In January 2019, Vaula Pennells was the Manager of the Sub Post Office in Trumpton.   She enjoyed her job and she had been doing it for a long time.   So long in fact that she was nearing retirement.  The only issue she had with her job was with the Subpostmaster who owned the branch.   He was absent most of the time and left Vaula to do all the work.   The SPMR had bought the branch a year or so earlier and had introduced a new regime in that if there were any losses in the branch they were to be recovered from the wages of the employees.    Vaula herself had had over £1,000 taken from her wages as a result.

At the end of one particular busy day in January 2019, Vaula found that the branch accounts were suddenly £2,000 to the good.   It had been a long day so Vaula took the £2,000 and put it in an envelope in the safe and adjusted her stock accordingly so that the daily balance was accurate.  She did not investigate what had caused the discrepancy.

At the end of June 2019 Vaula eventually retired and as she handed over to the new Manager they both checked the contents of the safe to ensure the contents matched what was reported on Horizon.   Vaula knew the envelope was still there and knew that only she knew about it so with a retirement holiday coming up she decided to take it for herself.   After all the SPMR had held her responsible for losses it was only right she was entitled to the gains.

In late August, Post Office phoned the branch and informed them that due to a processing error a Remittance In error had occurred in January and that when the Remittance Slip had been scanned by Horizon,  Horizon did not record the actual physical amount of cash that the branch had received.   POL wanted the £2,000 back. 

The SPMR looked back at the paper copies of all transactions and balance snapshots they had for that day and could not see any discrepancies.   The receipt for the Remittance in was found and the end of day balance snapshot showed no variance.   The SPMR explained that the lady on duty that day had retired in June and he had no contact number for her.   The SPMR further explained that he had been following the GLO that had only recently finished in court and pointed out that according to his contract he was perfectly entitled to keep the gains.    POL refused this argument.  They said they knew what caused the problem.  They knew they had sent the correct amount of currency and they knew the Remittance Slip matched what was sent.  It was only a wee problem with the actual scanning of the barcode on the remittance slip that had resulted in the glitch.

Much of the substance for the story above comes from this article in Computer Weekly in 2019 https://archive.ph/w6cbK  I have recently found out a lot more about what happened at that time which I cannot discuss for legal reasons but suffice to say the story above is closer to reality than it is to fiction.  The Post Office in the form of Julie Thomas did not provide the complete story to Karl Flinders at Computer Weekly and in an email to me on the same subject Al Cameron, the CEO said this:

Re: The error , Catch 22 and Some other thoughts ,….

Alisdair Cameron <alisdair.cameron@postoffice.co.uk>

Sat 29/06/2019 09:12

To:​Tim McCormack <t.j.mccormack@outlook.com>​

Tim thanks so much, I have a half written email to you in my drafts so this is very timely.

I appreciate that the last years have made it very difficult to have easy and open conversations but I do think that a shared desire to do the right thing for Post Offices gives us many shared views.

I also understand why you will work straight through to prosecutions etc but my belief is that if we and Postmasters are communicating openly then these issues should not lead to that. I am delighted you liked the approach, that is how it should always be – and quicker – transparent and open as well as fixing and solving issues so no one is anxious or out of pocket.

What would therefore also be best is people telling us what is happening and I am sure you will have seen the extra investments in field teams to build more trust and dialogue. You know that I think we have work to do on culture, that is no secret.

You also raised the scanning issue but in checking back we can find no issues or differences arising – if we are missing something please encourage people to bring it to my attention.

Obviously I can’t talk about the litigation and I won’t – but I promise that we won’t let our thinking be dominated by continuity of advice or positioning.

I talk to a lot of Postmasters and how we engage them in the running of the business as we drive to alignment and shared interests based on mutual trust is absolutely something I am thinking about. It won’t be a quick process. 

With that caveat, I would therefore be delighted to meet Helen – let me know if that is what she would like also. 

I don’t know how long I will be doing this job, maybe only a few more weeks but do feel free to communicate any any time.

Kind regards Al

Al Cameron wrote this to me on the understanding that I would never have access to the internal correspondence that lay behind his reply.   Sadly that is no longer the case and I have seen evidence of a massive cover up of a computer error that was in existence from January 2019 through to July 2019 while the GLO was on going.

Post Office said this to Computer Weekly:

“We are aware of an issue with a small number of Cash Pouch REM barcodes, which we are working to resolve as quickly as possible,” it said.

“The issue means that when the barcode is scanned, it is only recognising part of the REM, which means it does not register the full value of the REM on Horizon. This may also impact Bureau services.”

First and not in itself inconsequential ‘a small number’ is totally wrong it was a large number.   Second – it was not happening to the entire network – how could such an intermittent error manifest itself randomly?   Third – this was a computer error that generated gains for an SPMR and finally Fourth which is currently vitally important for obvious reasons, this is a computer error involving another system not Horizon that has caused a discrepancy in Branch Accounts.

At the end of the day, the scandal will be broken down into two parts.   The role of the good guys and the role of the bad guys.

There is no better shining light on who one of the good guys is here than in the Computer Weekly article.

Mark Baker, postmaster branch secretary at the CWU, said: “We have discovered a variant of the Dalmellington error that works against the Post Office and this time in favour of the subpostmaster. The Post Office had no idea about it. If the subpostmaster had done what the manual says and settle to cash, the subpostmaster could take the cash out of physical stock and keep it.”

“But that would be immoral and potentially illegal, so my advice to subpostmasters is don’t settle to cash, settle centrally.”

Mark Baker is telling SPMRs to ignore what is stated in their contract and do the right thing from a moral and ethical perspective.   It is beyond belief that POL have survived these last 24 years devoid of any employee with the moral and ethical backbone such as Mark demonstrates here.

As for Vaula?   What of her moral and ethical duties in March before the error was known by POL?   What if the SPMR eventually took legal action against her?   Maybe more to the point how could POL legally recover the £2k from the SPMR if he refused to pay?

How will it all play out?

Welcome back my friends to the show that never ends 
We’re so glad you could attend, 
Come inside, come inside – Emerson Lake and Palmer

A few weeks ago someone asked me how I thought the Post Office Scandal would all play out. It is a question I have been pondering ever since. 

I started this blog back in 2015 with this introductory post https://problemswithpol.wordpress.com/2015/08/24/hello-world/ 

I had just got rid of my post office under the Network Transformation program (NT) but was still supportive of the future of the Post Office network if only the people in charge could see the problems that existed and did something about them.  

As for Horizon and all its problems, I had been ‘working’ on that behind the scenes and in dialogue with others for a few years already. Only a couple of months later in late 2015, Stephen Mason published the transcript of Seema Misra’s trial which provided clear and undeniable proof that a miscarriage of justice had been brought about by POL which provoked me to focus on the unfolding scandal almost exclusively. 

So how will it all unfold? 

There has to be multiple answers to this as there are different groups to consider. 

Most importantly how will it all end for those that have been affected by the scandal? That is a question only those affected can answer and I was not, so I cannot comment because I know I cannot imagine what they have been through. I did try to imagine once when I was reading Hugh Thomas’ book. I stopped to think about it as he described the cell door closing. My mind could not process it – totally unimaginable of how I might have felt or what my reactions might have been. 

All of them will eventually be provided with some amount of redress but it is becoming clear that none of them will receive the amount they requested. What a difference it would have made to their lives and to the prolonged scrutiny of POL had POL and the Government provided each and every one a few pounds more than they originally requested. When all is said and done and the legal costs of the multiple redress schemes are totalled it will surely reflect that it would have been a sound commercial decision to have done this. 

As an aside – imagine owning a shop and you sold a faulty product worth £1 to 555 customers. The customers come back for a refund. You offer them 20p, they argue with you and eventually 555 angry customers leave your shop with 80p. Imagine having 555 happy customers that leave your shop with £1,01p (not suggesting of course that any of the 555 would be happy regardless of what they receive in redress) 

That analysis of the legal costs will also provide an insight into the financial incentive the various legal firms employed by POL and the Government have enjoyed to delay and hinder the redress schemes. Perhaps the only good to come out of that particular finding will be a precedent for future scandals to be wary of. 

For Post Office Ltd, the future is bleak. It is clearly in complete disarray at the moment and the only thing saving it from meltdown is the prospect of a general election. The former Chairman is on record as saying he was told to ‘hobble’ towards that point when the new Labour Government will have to provide the new strategy for the network and I believe that to be the case (although I would disagree with his interpretation that that meant delaying redress). 

Given the public interest in all things Post Office scandal related, I don’t think the Labour party can avoid mentioning their intentions for POL in their upcoming manifesto and while it will be interesting to see what they say, there will no doubt be a caveat that any decisions will need to be delayed until the Inquiry reports. 

In typical Yes Minister fashion, the civil service will have their own opinions and will influence what the Labour Party eventually come up with. I would suggest it will be along the lines of an independent report which calls for input from interested parties and will probably take a few years to complete. If there is one thing that has come to influence my opinion on what should happen to POL over the years it is the number of ‘interested parties’ that each have their own opinion. Reaching consensus among them all is totally impossible and therefore it is pointless for me to have an opinion! 

That said, control of the destiny of POL is the key factor and it should be addressed in one way or another by the Inquiry. From the top down, and the present Secretary of State is a prime example of this, the ownership and governance of POL since separation in 2010 has been devoid of any one person with proper commercial experience and acumen until perhaps old Henry came along and look what he found. Such a mess has been made of the commercial opportunities that the network of branches could provide it has got to the point where it is unlikely to interest any potential buyers and more to the point any suitably qualified employees capable of making a difference. 

Mutualisation has been mentioned recently. It was also mentioned before in 2010 and didn’t get very far. It won’t get very far again. 

From wanting the network to flourish and succeed in 2015 to now where I couldn’t care less for an institution that has lost its public purpose and reputation.  

What will the Inquiry find in their report? 

The inquiry will probably report in late 2015. There will be severe criticism of individuals and organisations and these will be provided with an opportunity to rebut these criticisms. Then the government will act upon the recommendations. Of more interest to those involved will be the reaction of the Metropolitan Police to the findings of the Inquiry. There is a great deal of hope that certain individuals will face criminal charges but within the Civil Service there will be great concern for that to be allowed to happen. Just one trial will be enough to reopen the scandal to further scrutiny and perhaps in even greater focus than the Inquiry has had time to do. Who knows what pressure can be brought to bear on the Justice Department and the Met Police but it will be significant. I would suggest that only those miscreants identified by the Inquiry that are prepared to plead guilty will be charged with an offence. 

Of the least significance, and only to me, is how my small involvement will end. The only thing I have done really over the last year or so is to try and keep interest going on Twitter when there wasn’t any media coverage. That of course ended in January and since then I have realised just how much it took over my life. I am going to watch the Inquiry over the Summer and then try to completely disengage until …. 

POL release their new version of Horizon …. and we can start all over again. 

Welcome back my friends to the show that never ends 
We’re so glad you could attend, 
Come inside, come inside 

The Real Reason Staunton was Fired.

The title of this blog suggests that all the other reasons for Staunton’s dismissal put forward by Badenoch were just a smoke screen to obfuscate the fact that she could not dismiss Staunton solely on the grounds I will put forward here.     So forget about bullying and lack of effort in expediting compensation claims, this is all about Staunton performing his job as was required of him but coming to a decision that was not to the liking of Badenoch. 

The first we knew of Staunton’s sacking came from Sky News who reported it on Saturday 27th January. Their report included this: 

https://news.sky.com/story/kemi-badenoch-confirms-sacking-of-post-office-chair-but-says-issues-go-beyond-horizon-it-scandal-13058390

There is a particular problem with this assertion and it is down to due process. The Secretary of State is required to approve the appointment of directors to POL but unfortunately for Kemi, she is not involved in the selection process of candidates. She clearly overstepped the mark here by insisting on her choice and to be fair Staunton did too as he indicated to Badenoch who his preferred candidate was. 

Staunton was sacked on Saturday because Sky News was told Staunton was being sacked on the Monday and given Badenoch was due to appear on Kuenssberg the following day she had to act to prevent even more difficult questions being asked. The interesting thing though is why Staunton needed to be sacked on the Monday. 

The selection process for the Senior Independent Director had already started. The timetable for that process is in the public domain: 

And as you can see the long listing meeting, where potential candidates are selected from applicants, was due to take place on the week commencing 29^th January. This is when Badenoch’s preferred candidate could have been thrown out of the selection process. 

It is worth noting that the original ‘argument’ between Badenoch and Staunton about this appointment had happened weeks before and subsequently the post was advertised, using due process on the Government website. I can imagine what Henry, a senior city director/chairman for many years, thought about a here today/gone tomorrow politician with no experience whatsoever telling him she insisted in her choice being appointed. Perhaps that’s where the alleged ‘bullying’ comments came in? 

https://apply-for-public-appointment.service.gov.uk/roles/7960?titleSearch=&bodySearch=Select+organisation&department=1012&regulated=&bodyJustice=&remunerated=&status=closed&sort=openingAt%3Adesc&body=Select+organisation

It’s pretty clear there had been an oversight by someone in the Department because they didn’t realise that when it came to the selection of a candidate to present to Kemi for approval, Henry was in the pound seats so to speak as he headed the Nomination Committee. 

We know Gratton would have voted for Kemi’s choice and maybe the Independent Assessor too, but with Saf Ismail supporting Henry, Henry’s casting vote as chair would have ruled the day so he had to be got rid of. 

And more importantly replaced by Ben Tidswell, the current Senior Independent Director whose retirement has caused this debacle and who would vote along party lines. 

Which brings me to the point about the particular role the SID has on any board of directors. 

“The senior independent director position is quite a key role on any board.   They are the person that other non executive directors can turn to for independent advice and vice versa the SID can have a word with NEDs on how they might be expected to vote at the next board meeting.   More importantly for this ‘story’ is that the senior independent director has a key role in supporting the chair in leading the board of directors and acting as a sounding board and source of advice for the chair.   Key then that the Chair has a say in who is appointed to that role.” 

Basically a Whip for the non executive directors to make sure they vote the way the whip wants them to. Having a Whitehall nominee in that position, given the circumstances of this scandal I expect is quite crucial for the Department so that is why they, the Dept thought they could avoid scrutiny and insert their chosen candidate. 

As it turns out a real problem has now emerged for the Department. Should their preferred candidate get through the nomination/selection process it doesn’t go straight to Kemi for approval it goes back to the POL Board who previously voted 6/2 in favour of Henry’s choice. In the absence of Henry that is still 5/2 although I would assume Read will be told to tow the Dept’s line and the other Directors reminded of their chances of being appointed to similar positions in the future. 

Finally, it is interesting that Badenoch did not mention of this as a reason for Henry’s sacking to Henry in her phone call to him but when this matter was debated in the House of Lords the following Tuesday, Lord Orford said this: 

“We have the chair, and through the increased scrutiny resulting from the Government perhaps being more interventionist, some disagreements within the board have come to light. “ 

“The assessment at the moment is that, with the strengthening of the non-executive directors and the current executive team in place, we have a team that can continue to manage the Post Office.” 

More interventionist indeed to the detriment of due process perhaps. 

Bonusgate Raises its Head Again and this time it is far more serious

Let’s get right to the point. From Post Office Ltd’s Annual Report with respect to Bonus Payments for ALL potential recipients (and applies to STIP as well): 

NO BONUS PAYMENT WHATSOEVER IF NETWORK SIZE FALLS BELOW 11,500

The figure of 11,500 is stipulated and described by the Government in at least 2 documents: 

The Shareholder Framework Document 

Click to access post-office-limited-shareholder-relationship-framework-part-1.pdf

And the ‘Entrustment Letter’ which is key requirement for state funding: 

Click to access 2018_04_16_Entrustment_Letter_FINAL.pdf

It is totally undeniable from these two documents that the branches that make up the minimum network size of 11,500 MUST meet the minimum Access Requirements. 

Post Office Numbers as of March 23 Briefing Report to Parliament  

Click to access SN02585.pdf

WITHOUT THE 232 DROP AND COLLECT BRANCHES THE NETWORK SIZE AS STIPULATED BY THE AFOREMENTIONED DOCUMENTS IS LOWER THAN THE BONUS GATEWAY METRIC 

11685 minus 232 is less than 11,500 

Taking a bonus under these circumstances is probably fraud and criminal and very easily proved in debate if any parliamentarian wants to take on the Minister who will have no answers to the simple questions I would put to him. 

Statistics Don’t Die

Last night I received the most interesting reply I have had from an FOI to POL and the result gives rise to some interesting statistics.

On Monday 8^th January, following the TV Drama the previous week, Kevin Hollinrake MP stated in Parliament: 

Again, I thank the right hon. Gentleman for the work he has done on behalf of his constituent and I am so sorry to hear she has passed away. I have a similar situation in my constituency, as Sam Harrison of Nawton, near Helmsley, sadly passed away last May before she received compensation. It is a tragedy. As the right hon. Gentleman knows, compensation will be paid to the executors, who will probably be family members, so it is not about any saving of money but nevertheless we still want to accelerate the process. I totally agree with what he says about the lack of evidence in some cases, which may be 20 years old. In those situations, the benefit of the doubt should be with the victim, ensuring that the settlement is assessed as generously as possible and paid out as quickly as possible. 

A sad reminder that many due redress from POL will not live to benefit from it when it eventually arrives, if at all. 

I say ‘if at all’ because for some time now – years in fact – I have been concerned about the amount of effort POL are putting in to trace the estates of the deceased. This concern originated from being contacted by the daughter, Myra Philp, of a deceased victim who had not been contacted by POL and who made contact by herself with the HSS only to be told that it was closed to late applicants. 

Having raised this concern with POL directly I thought (stupid me) that they would have resolved the issue, so it was with some surprise and indignation that I read Sharon Kerrigan’s alarming piece in the Independent ( https://www.independent.co.uk/voices/post-office-mr-bates-cumbria-b2474999.html ) the same day as Kevin Hollinrake specifically stated that the estates of the deceased victims would receive redress. 

In order to track down former SPMRs so that they can be informed of the four current compensation schemes by letter (unrecorded as far as I know) POL have used a perfectly legitimate technique of providing a Credit Agency, Experian, with a list of National Insurance numbers and in return been provided with a list of known matching addresses (hopefully current) and a flag indicating whether or not the person is deceased or not. 

So I asked POL for some statistics on the success rate of this technique and was surprised to receive more information than I had requested. https://www.whatdotheyknow.com/request/credit_agency_report/response/2543122/attach/3/FOIA%20Response%20FOI2024%2000008.pdf?cookie_passthrough=1 

Part (a) represents the number of NI Numbers submitted, Part (b) the number of hits and Part (c) the number of deceased flags returned. 

I think it is fairly safe to assume that the number in (c) is included in (b) 

If we now transform the table above into some percentages it looks like this: 

I also have some dates I can add to this from an email you will see later in this blog. 

Experian provided the HSS data in March 2020 and the Stamps Data in September 2020. If someone from POL is reading this then perhaps they might explain how the number of NI numbers supplied to Experian reduced between March and September but there could be a reasonable explanation – unlikely though given the contents of the aforementioned email. 

The statistics from this are frankly ridiculous and here I must make one important assumption. When I submitted my FOI, the person that was assigned to report back to the FOI team took my request as being fairly straightforward and supplied the numbers without giving any thought whatsoever to the statistics they represent and therefore no further explanation was required. 

The statistics In no particular order: 

1. Between March and September of 2020 an abundance of miracles occurred and at least 391 former SPMRs rose from the dead (1064-673) 

2. If the difference between submitted numbers between the HSS and Stamps Schemes was as a result of not supplying NI numbers of the deceased flags received in March then in 6 months 2.7% of former SPMRs had died which gives an annual rate of 5.4% (UK Rate is 1%) 

3. When POL put their mind to matters and actively seek out a cohort such as those in the pro-active case review and overturned convictions one, they are remarkably successful – less than 1% not found as opposed to 21% of those in the suspended cohort. 

4. The good news for those suspended is that it appears your chances of surviving are closer to the UK Death Rate average. In fact you are 4 times better off than those in the HSS cohort. 

5. The bad news for those suspended is that POL aren’t very good at tracking you down with over 20% untraceable. 

6. If you are dead you don’t get a letter so I assume you have to add the deceased figure to the not found column to arrive at the true overall not found percentage which is about 18% 

7. If you paid the going rate to an Heir Finder service my guess is that they would be delighted to use their skills for less than £100 a name – a total cost of less than £1m  

The Email 

From: historicalshortfallscheme <historicalshortfallscheme@postoffice.co.uk> 

Date: 01/09/2022 14:13 (GMT+00:00) 

To: myra philp  

Cc: historicalshortfallscheme <historicalshortfallscheme@postoffice.co.uk> 

Subject: Re: Historical Shortfall Scheme – Mary Logie Philp – Auchtermuchty 

Good Afternoon Myra, 

Thank you for your email to Simon Recaldin, HM Director 

He has asked me to reply to you on his behalf. 

In order to verify addresses we engaged with Experian before inviting Postmasters to join the Historical Shortfall Scheme (HSS). 

The address provided by Experian (in March 2020 in preparation for the HSS mailing) was xxxxxxxxx 

We posted the invitation to join the scheme to this address however we did not get a response. 

We then further engaged with Experian for the Stamp Scheme mailing in September 2020. 

This is when Experian returned a deceased flag against the record for Mary Philps, so no letter was sent on this Scheme. 

We hope that explains how we tried to trace your late mother. 

Kind regards 

Historical Shortfall Scheme 

Myra’s Mum sadly passed in 2017. In March 2020 Experian considered she was still with us but then in September they had the correct information. How Experian come to ascertain Death is unknown and perhaps there is an undue delay in recording this in their database but if so then this is of – at least should be – concern to POL. 

What is more disconcerting is the fact that POL clearly indicate in the email to Myra that if you have passed then we aren’t going to try and find you. 

To add to all this I have been involved in a case in Northern Ireland for a number of years where a former SPMR was contacted by the HSS but he threw the letter away because he it specifically stated it was not applicable to convicted former SPMRs which he was. He was not contacted by the Case Review team despite POL having his address. It was only by chance he got in touch with me who redirected him to legal advice (his appeal is ongoing) 

This whole mess needs an audit by an independent team and by independent I mean one not selected by POL or the Government. The only people I would trust are the Advisory Board at the moment. 

Out with the Old and in with the New

8th January 2024

The TV Drama has been an unmitigated success and will be the catalyst for action by the Government that should have taken place years ago.    The power of public opinion, particularly in an election year will see that no stone is left unturned in the search for the truth and a brighter future for the once loved national institution that is the Post Office.

It is reported today that Ministers will meet and discuss options that include removing Post Office from the much delayed compensation process.   The fact that it has come to this is a reflection of the inadequate and incompetent leadership in the current Post Office executive team.

If there is to be a brighter future for the Post Office network, if it is to be saved at all, then the removal of the players that have exacerbated the scandal rather than resolved it is a prerequisite.

The Main Board

Led by Henry “baffled” Staunton who replaced the miscreant, Tim Parker in 2022 as chairman, the current constituents of the board, en masse, are as responsible as any other for the current mess.   If Ministers are meeting to remove POL as an entity from the compensation process, then it is only because the board has failed to act properly.

Why is it that there is still no representative on the board from the side of the truth?  There are plenty of admirable and much respected candidates, not least Lord Arbuthnot and Alan Bates.

Why is it that the board has taken no punitive action against the executive team for accepting and keeping bonuses that the CEO Nick Read felt obliged to return (although only after he pulled his pants up)?

Trust is the word most often associated with the POL brand.   Recovering that trust now, after last week’s drama, can only be achieved by the company being led by people that were on the right side of the scandal and not those who are prolonging it unnecessarily.

The Executive Team

There are 9 members of the current POL executive team.    There has been quite a few coming and goings since the GLO decision in 2019.    I can imagine the ‘goings’ were more inspired by career damage by association rather than incompetence.    It is more than a flippant point now.   What idiot would choose to join such a national disgrace of a company now for anything other than stupidity and a great deal of money.  POL are not going to be attracting good quality individuals any time soon to join them.

It is worth remembering that POL are in the process of replacing Horizon with something they have written themselves.    Not a project I, or many like me as an IT professional, would care to be associated with.   Their ‘career’ website is still looking for developers and there appears to have a good deal of turnover in their IT staff.   I would hazard a guess that for those who have joined the project in the last couple of years they are on a downward progression in their careers.

Nick Read CEO:

Joined in 2019.  Replaced Al Cameron who was acting CEO.   Interestingly Al wanted the job full time but clearly was seen as not being capable.   Read on the other hand joined from Extra Energy which ceased trading under Read’s watch.  Read had previously been CEO of Nisa where he was no stranger to bonus scandals https://www.thegrocer.co.uk/nisa/as-nisa-readies-for-date-with-destiny-nick-reads-job-is-done/558539.article

Read’s first job was to sort out the settlement agreement and fair’s fair, I heard some good words spoken about him during that process.   He and I started corresponding via email and he actually listened to what I had to say at the time and acted upon some and rejected other ideas.

Let us make it clear though, he was adamant that the GLO settlement was full and final at the time.   Later he changed his tune completely saying it was grossly unfair.   Wonder what his opinion will be tomorrow?   To put Read into perspective there is a video clip of him at the NFSP conference after the NFSP Chairman had made a mostly derogatory speech about POL which drew a standing ovation from the NFSP Members.   Read could be seen ASKING the members of his team at his table whether or not he should stand up and join in.   Not the best decision maker it seems to have at the top of POL.

His role in Bonusgate is well known.  I would say he and his team have been lying their teeth off about what actually transpired and that is a crucial fact if it is indeed true.    If a CEO was appointed, or Second Sight re-appointed, the risk that the real truth behind Bonusgate (and other matters of course) be revealed is not just to the corporate image of POL but to the criminal records of those involved.    It is no co-incidence that the Met Police are still looking at Bonusgate.

Read has to go.  Tarnished by Bonusgate, Disclosuregate and CompensationGate his next gate needs to the exit one.

Al Cameron Chief Financial Officer

Joined in 2015 so has been there through a lot of the scandal’s history and ultimately ‘replaced’ Vennells in early 2019 when she was sacked.    If he is to be remembered for anything during his term in office at POL it will be that he was acting CEO during the recusal debacle in the GLO.    

More recently we don’t actually know if he is still with the company.  He may be terminally ill for all I know but he didn’t sign off the accounts in last year’s annual report.   He was also completely absent from any discussion surrounding the bonus scheme and he did not pay back the full amount of his bonus in connection with the Inquiry Metric that Read did.   That suggests at the very least friction between Read and Cameron highlighted by the fact that Read only gave Cameron a 3 out of 5 performance rating that meant Cameron did not receive his full bonus payment.  

As some might know I take an interest in POL’s annual report and occasionally submit an FOI for clarification of matters arising.   In the greater scheme of things I am a complete nobody with absolutely no influence other than writing this blog which does not get much attention (other than from Switzerland recently – that’s a private message to some civil servants who appear to be interested in what I have to say).    It begs the question then why Al Cameron took it upon himself to call me of all people to discuss an FOI I had submitted, tried to explain what had happened then asked me to retract the FOI from the WhatDoTheyKnow website and got clearly upset when I said I wouldn’t as there were journalists following the story.  

It looks as if Dodgy Al hasn’t been around POL since March and I am speculating that since he has a 12 month notice period (linked to his LTIP Bonus!) then we will hear he has ‘resigned’ in due course.     What I would give for Dan Neidle to replace him!

Replacing a CFO though is going to be a really difficult task for POL.  Who is going to take it on without a commitment to reveal past financial ‘misjudgements’ and dodgy dealings?

Owen Woodley – Deputy Chief Executive Officer

Joined in 2016 so deeply embroiled in the scandal, GLO and subsequent failings.

Strangely though I haven’t really heard of him (I left POL at the same time he joined) but the most noticeable thing about him is that he was appointed to his current role in July last year.   No doubt someone in the Civil Service has realised that Read isn’t up to the job and Woodley has been selected as his eventual replacement.    Also a further kick in the teeth to Cameron who was desperate to be appointed as CEO after Vennells was sacked.    He needs to go as well.

The rest – including Ben Foat the General Counsel.

All need replacing.   If they joined prior to 2019 then they are deeply complicit in everything that has transpired since and if they joined after 2019 then they are idiots for remaining.  The only past members of the executive team that joined after 2019 that I have any respect for are those who jumped ship and left.

Summary

Despite massive bonus payment promises (POL refer to bonuses as Payment at Risk – so guaranteed unless something really really drastic happens) POL will find it impossible to recruit worthy individuals into a team that consists of tarnished reputations and incompetents.   A clean sweep is required led by people who have always been on the right side of integrity and truth.

Second Sight’s Second Sight

In 2015 Second Sight were sacked from their contract to provide an independent report into the failures of Post Office in relation to what now know to be the Great Post Office Scandal. The reason for their sacking is obvious to all now – they were getting too close to the truth and in the process of widening their investigations into non Horizon matters. 

It is so important to note the history of POL’s incremental and reluctant admittance of their failures. They have repeatedly sought, and perhaps the only issue they have been successful in, to limit the scope of any investigations and court actions to the Horizon computer system. In this the Government, in the shape of the various iterations of the Business and Trade department over the years, has supported them and in doing so set out the terms of reference for the current public inquiry into the scandal https://www.postofficehorizoninquiry.org.uk/publications/terms-reference 

This scandal and the subsequent and on-going cover up is NOT about a faulty computer system, it is about the people that set up and co-ordinated a business plan, the intent of which was to protect the reputation of the Post Office at all costs in the face of overwhelming evidence that something – no – many things were badly wrong with their approach, their procedures and systems. It is fairly clear now from the live evidence sessions at the inquiry, that underlying all of these problems was an institution filled to the brim with incompetents – a situation that exists to this day. 

No better recent example of this is the Bonusgate fiasco in early 2023. While the police continue their investigation into this matter to see if they can establish deliberate and wilful actions, it is self evident that the fools that contributed to the 21/22 annual report could not read and identify the clear errors in what they themselves had written. If they can’t be trusted to do that simple task then what hope do they have to recognise more complex issues within their organisation that need addressed. 

There are at least two readily identifiable issues that need to be investigated by Independent Forensic Fraud Investigators: 

Chesterfield 

Chesterfield is the common POL internal reference to their Financial Services Centre. This is where POL process manually, various forms of financial transactions that can and do affect branch accounts. Everybody makes mistakes when it comes to manually entering details into computer systems and from time to time there is the distinct possibility that miscreants may be employed into a position of trust where fraud becomes a likelihood rather than a remote possibility. Horizon is a computer system for branch accounting, but there are a multitude of other computer systems in play at Chesterfield some of which no doubt we don’t even know the name of – yet … and therefore there is a set of Known Error Logs still to be examined by independent Auditors as well as the manual procedures both current and historical. 

Best remind ourselves here that currently the appeal court will only accept appeals that feature the Horizon computer system AND POL will oppose ALL appeals that don’t. 

Second Sight were refused access to Chesterfield (as far as I know) but even before Second SIght came along there were other experts keen to see inside this fortress of internal errors such as Professor MacLachlan in Seema Misra’s trial and were refused. From what we now know about the Scandal and the cover up, it requires no cynicism on our part to suggest that POL are hiding a lot more. 

Suspense Accounts 

These are accounts that hold balances that cannot be identified enough to be allocated to a specific account and when, despite efforts (normally I would have said best efforts there but this is POL after all) they remain unallocated these balances are transferred to the Profit and Loss account and no longer subject to scrutiny.  

Individual transactions that end up in the Suspense Account could be likened to a fountain of errors, each providing a starting point to investigate further while those transactions whose balance has been transferred to the P&L account are like unfired shells in a cannon which could blow POL clean out of the water. No wonder they don’t want these accounts investigated. 

I know a little more than perhaps I should about Second Sight’s concerns about these accounts and it is not for me to reveal that here but suffice to say, POL did not want Second Sight to go anywhere near these. Without these accounts being looked at, no inquiry will be able to reach a proper conclusion as to what went down and what is still going down at POL. 

From a contemporaneous account from a good and trusted friend of mine in 2001, POL had £6m sitting in SPMR suspense accounts and put out a message to all Area Managers to make sure they ‘retrieved’ at least half of that from the SPMRs by Xmas. Says it all really. 

Why Second Sight? 

They are the ONLY organisation that can be trusted to deliver an independent report. I am sure there are others that could deliver such a report but that report could not and would not be trusted by all parties. 

They have a head start – they know where to look and some of the people that remain from their previous investigation. They will be able to report much faster than anybody else. 

If POL or the Government were to try and appoint anyone else it would be met with justifiable ridicule.

Second Sight will be met with hostility from many. One might consider that a bad point but I reckon it would be beneficial in that it would weed out, almost immediately those who could take the organisation forward from those who would wish it to remain as it is, cloaked in controversy and untrusted. 

Summary 

Second Sight need to be appointed to finish the job they started and to explore new areas of interest that have emerged since 2015. The Inquiry terms of reference currently preclude the inquiry from looking at these other matters which are likely to be crucial in establishing that Horizon was not the only source of errors that led to malicious prosecutions. The public now has an important job to persuade the powers to be that Second Sight be appointed as soon as possible. With a general election coming up prospective MPs should be well aware that supporting such a high interest public campaign can only benefit their cause. 

Post Office Annual Report 22/23 (Part 2)

Foreword 

I have been commenting on POL’s Annual Report for several years now. Sometimes it seems to me that I am the only one who bothers to read them and share my thoughts. I started this blog in the early days of Network Transformation where my hopes were to point out the ‘frailties’ of POL strategy and management in the hope that it would inspire change for the betterment of the SPMR community and the customers they serve. I have repeatedly questioned myself on my purpose of looking at these documents. I want the Post Office Network to succeed but in pointing out the problems with it I am also implanting doubts into the minds of potential SPMRs which the network needs every year to replace those who retire or hand in the keys. I think it is time to restate the purpose of my musings and that is to see the current management of POL removed, and replaced from the multitude of good people out there that have the business acumen, morals and ethics to overcome the inbred culture of denial, inability and low intelligence within POL management. These attributes are the root of all the evil, past and present, that manifests itself in this organisation they call the ‘most trusted brand’ on the High St. By the end of next week it will be the least trusted and the owners, the Government cannot ignore that something drastic needs to be done. Throwing money at these miscreants is not going to solve the problem. Throwing management out onto the street certainly will if they are replaced by respectable alternatives. 

The Report 

POL routinely publish the report many months late. This year almost 9 months after the end of the financial year. This invariably leads to ‘confusion’ in the written material between what actually happened during the year in question and the months afterwards during which the report was written. This year is no exception, and the Chair, CEO and CFO all appear to have selective recall as to which post report date events they comment on. 

A good example is mortgages: 

The CEO mentions this: 

Chief contributors to this result were banking services and ATMs, up 14% year-on-year; platform products including mortgages, savings, loans and credit cards, up 119% year-on-year, benefiting from interest rate decisions; 

But makes no mention of this: 

Bank of Ireland said it will stop providing mortgages and personal loans through the UK Post Office and has ended its financial services joint venture with the AA in the UK, as the group it continues to restructure its offering in that market 

You can call me Betty

Another more intriguing example which needs an explanation is the whereabouts of the CFO, Alisdair Cameron. I reported in my previous blog on this ARA that Nick Read’s assessment of his CFO’s performance during the year was less than satisfactory. Perhaps that is the reason that this year it was Nick Read who signed off the Financial and Business Review instead of Cameron or it may be that Cameron is on garden leave as is the rumour. If that rumour is true then he has been on garden leave since March and certainly worthy of reporting as is Cameron’s failure to repay the full Inquiry Bonus Metric as Read did. It could also be that he is on sick leave but 9 months without the input of your CFO for whatever reason is a most notable post year end event that should be reported. 

The Small Print 

From the report: 

For the Group to continue to meet its liabilities as they fall due and continue to deliver on these fundamentally important activities, continued funding and support is required from the Government. Without additional funding and support being provided by the Government, to fund the exceptional and investment activities identified above, including the costs to support the POHIT Inquiry, run the Remediation Matters activities and replace the Horizon system, the Group forecasts breaching the terms of the Working Capital Facility provided by DBT. The Group forecasts breaching its Security Headroom covenant in both the base case and severe but plausible downside scenario, which is a restrictive covenant within the Working Capital Facility provided by its Shareholder, within the going concern period. Furthermore, without additional funding, the Working Capital Facility would need to be used for purposes other than that for which it was originally intended, being short term liquidity, and would also become fully exhausted, resulting in the Group being unable to meet its liabilities as they fall due. Letter of Support In order to ensure the Group can continue to operate, deliver on the fundamental activities described above and meet its liabilities as they fall due, the Shareholder has issued a Letter of Support indicating the Government’s intention to provide additional funding and support to the Group. Subsequent to the Balance Sheet date but prior to signing these financial statements, the Shareholder has provided waivers of both the Security Headroom covenant and the usage clause of the Working Capital Facility, which will come into effect as required and remain applicable until the end of July 2024, by which time the Government intends to have provided additional funding. These waivers ensure the Group can continue to maintain access to this source of liquidity in the event that additional funding is not in place by the time breaches could occur. Government has also committed to continue to engage with the Group to assess the need for an extension to the current waiver period should that be necessary, with forecasts indicating that a breach in Security Headroom will occur in the going concern period unless additional funding beyond that outlined below is forthcoming. 

This is the most significant issue reported in the ARA. Basically what it is saying is that POL are financially bankrupt (as well as morally) and would not only dip into the Working Capital Facility (which in the days of the EU was subject to great scrutiny by the EU State Subsidy Commission) but exhaust it completely which is another £200m or so down the tubes. 

Post Office seeks to minimise the amount drawn down on the working capital facility from DBT (“the facility”) in order to reduce its interest cost. The facility is limited to a maximum of £950 million (2022: £950 million); the unused facility at the end of the year was £519 million (2022: £621 million). The maximum drawn down under the facility during the year was £750 million in January 2023. The facility is available at one day’s notice and expires on 31 March 2025. 

Equates to from the above = Facility £950m less max draw down £750m = £200m 

Unquestionable Support 

There is no denying that POL are too precious to be allowed to fail. The Government, free of EU scrutiny, are masters of avoiding any question of dodgy subsidies so HMT will continue to provide as much money as POL want. The only minor problem with that is that other sources of lending will definitely be unwilling to provide finance to POL and I suspect even Santander will be carefully checking their exposure. This financial weakness also filters down into the foundations of the network. Potential SPMRs nearly always borrow to finance purchase of Post Offices and High St lenders will be more wary than ever in offering finance to a business model built mostly on hope rather than strong growth prospects. From my own practical experience in this matter I have reminded Read and his predecessor many times that this is real risk area for POL and its statutory requirement to provide 11,500 branches (which also triggers executive bonuses by the way so they should pay more attention to it in my mind) 

Cash Flow 

POL provide some excuses for this but I am sure they and the Government were hoping that no-one would notice for hopefully obvious reasons. 

Over the course of the year nett cash flow was £183m – not bad eh?? 

Well not until you take into account that Creditors jumped by a massive £229m from £541m to £770m. So POL’s creditors are financing a major part of the mess that they created and it is ‘clearly’ in line with Government Prompt Payment Code which reads: 

Paying suppliers or partners promptly and within the agreed payment terms is not only an ethical responsibility but economically beneficial for all parties and the wider economy. Speed and certainty of payment and stable cash flow are essential for all businesses to flourish and grow. 

Summary 

POL is no longer a viable company under the present management and without Government support. That Government support is unwavering and will never end regardless of which political party is in power but the support required post finalisation of compensation claims will continue to grow and I assert that based on past performance and in particular the selection of candidates to lead POL to a brighter future. Until such time as the Government of the day realises that then sadly I could not recommend any potential SPMR to attempt to purchase a Post Office Franchise. It really calls into question, and a very important question from a legal and criminal aspect, how exactly are POL managing to persuade people to purchase a franchise these days with all the implications of personal gain for the executives in charge by meeting the 11,500 branch network target annually?? 

POL’s Annual Report and Accounts 2022/23 (Part 1)

I guess what most people will be interested in, in this report, is the aftermath of the Bonusgate scandal earlier this year.   So I will look at that first and report on other aspects of the ARA later.

Bonusgate was related to a one off incentive bonus plan named TIS which included a contentious metric that referenced targets that had to be basically signed off by Sir Wyn Williams and his team at the inquiry.   Therefore there are two aspects to look at; a) what the Chairman, CEO and Remuneration Committee say about the scandal and b) the bonuses awarded this year.

The Chairman’s Response

“Regrettably, the year will also be remembered for the failings of governance included in last year’s remuneration report which included an inaccurate description for one element of a senior bonus scheme. This failing, together with some deeply unsatisfactory lapses in processes, resulted in an independent review commissioned by Government, as well as a review by our incoming Chair of our Remuneration Committee (“Remco”) who took the task on prior even to completing her induction into the business. Appropriate repayments were made by those in receipt of the award. I repeat here the apology I gave on behalf of the business to Ministers and to the Select Committee for Business and Trade. The fact that the reviews concluded that our Remco could have decided that the Inquiry Support metric had been achieved and that there was therefore a justifiable basis on which to make the award is, to a large extent, academic. Our stakeholders rightly expect better of us and I am determined that we will implement the various recommendations made to us, as well as those made by Remco’s new Chair, without delay or equivocation. That work is well underway.”

There is a lot in this paragraph to digest and there is no doubt it is carefully worded given that the Met Police are still interested in further Bonusgate developments and there certainly could be a development as a result of what is said here.  So let me jump to that point first and tackle the rest later on.

“The fact that the reviews concluded that our Remco could have decided that the Inquiry Support metric had been achieved and that there was therefore a justifiable basis on which to make the award is, to a large extent, academic.”

The words “could have” are grave cause for concern and given that this ARA in particular will have been looked over with a fine tooth comb for any mistakes then there can be no doubt that these two words were very carefully chosen. 

“Could have” is in contrast to how Ms Burton described the award of the Inquiry Metric to recipients:

“ On a black and white reading of the first sub-metric, it was not achieved as by then the Inquiry had not completed, nor had the feedback from Sir Wyn (quite rightly) been sought. However, it does seem that Remco exercised discretion, bearing in mind that events had changed and that they were pleased with progress, which is why they rated the overall metric as achieved”

What we must also remember is that there are no minutes of any kind and apparently no recollection of ‘discretion’ being discussed with regard to this metric in the many Remco meetings leading up to the award of these bonuses.

So why be so careful in choosing these words?   There is still a controversy over the sudden appearance of the word ‘discretion’ in the excuses offered to the Select Committee and later to the general public when ‘discretion’ was not mentioned previously in letters of apology to the Inquiry and in the original Select Committee hearing into the scandal.   That is in contrast to an FOI (https://www.whatdotheyknow.com/request/annual_report_and_accounts_20113) that revealed that after the board had signed off the original ARA and a sub committee (including NIck Read) had been appointed to make non-material changes to the ARA, that sub committee very pointedly changed wording relating to the Gateway Metric from:

“…exercised its discretion in determining that the incentive plan should trigger…”

To

“…considered the gateway metric as achieved…”

It is therefore totally and utterly inconceivable that Read and Co were unaware of the wording in the Inquiry Metric and as I have explained elsewhere the obvious reason why the Inquiry Metric wording was not changed was because they spotted it too late. We know from Ms Burton’s Report that Tom Cooper was aware of the problem in a RemCo meeting in January 22 and with the payment date set for 31/3/22 then POL could not seek Shareholder Approval for the changes as it would take months.

Repayment of Bonuses relating to the Inquiry Metric

The chairman doesn’t waste too many words on this (perhaps he should have given it greater thought) …

“Appropriate repayments were made by those in receipt of the award”

Here I thought I would attempt to be smart and try and work out the total repaid by comparing the staff costs stated in last year’s report to the restated version in this year’s report.  I thought I could subtract the latter from the former and come up with a positive figure which would be the amount paid back.   I guess POL got there first and surprise surprise that calculation results in a negative figure.   They appear to have restated the staff costs using a different ‘approach’ for which I have already submitted an FOI about.

So let me just concentrate on the two miscreants in chief, Nick Read and Al Cameron.

Nick Read, eventually and only after public pressure, repaid the full part of the bonus attributable to the Inquiry Metric but Al Cameron only repaid that part of the bonus that related to a sub metric.

“Note 2: The 2020/21 Executive Directors’ STIP was cancelled and replaced with the Transformation Incentive Scheme (“TIS”) which was paid out in March 2022 and therefore included in the 2021/22 figures rather than in the 2020/21 figures. The 2021/22 figures have subsequently been adjusted from the 2021/22 report to reflect the amounts voluntarily repaid by the CEO and CFO respectively, of; CEO: £54,469 and CFO: £6,120.”

How can it be, in any stretch of the imagination, that the Chairman thinks it is appropriate that his two most senior executives fundamentally disagree on what was the appropriate amount of their bonus to pay back?   To try and paint over the discrepancy is just plain bad governance and a complete failure to exercise control over the company he chairs (and is paid handsomely for doing so).

It also appears that Nick Read is pretty pissed off with Al Cameron too and decided to get revenge AND a financial hit on Cameron when it came to reviewing his Chief Financial Officer’s performance.

“Individual performance Individual performance impacts on the final award made to individuals, based on an assessment of performance against objectives. Individuals are rated from 1 to 5, with 5 being the highest level of performance. The end of year performance rating drives a personal performance multiplier, which is applied to the overall outcome of the scheme metrics. The Chair determined a performance rating of 5 for Nick Read for 2022/23 in recognition of his effective leadership and the strong trading profit delivered for the Group. The CFO was rated 3 for his performance in year, by the CEO. This resulted in a multiplier of 1.3 for the CEO and 1.0 for the CFO.” 

I probably have this a bit wrong but it looks to me that Read’s downbeat appraisal of Al’s performance cost Al £25k!

Talking about Mr Cameron.  During the year there have been various reports he is on long term sick, garden leave or just working from home but it does seem at least he is still with the company.   One does wonder why he remains given that his boss doesn’t think very much of him but could it be to do with a 12 month notice period PLUS a potential 70% stretch award in his Long Term Incentive Plan to 2025?

The CEO’s response to the Bonus Scandal

Nick Read elected not to comment on it all in this year’s annual report.   No apology.  Nothing.

The Remuneration Committee response

“In addition, the 2021/22 annual report and accounts should have made clear that the Committee did in fact exercise its discretion in respect of the Inquiry sub-metric rather than recording that it had been achieved. This error was understandably upsetting to many Post Office stakeholders, not least our Postmasters past and present. Quite appropriately, the CEO and my predecessor have both publicly apologised for this oversight. Members of the senior leadership team and Group Executive have repaid amounts relating to the inquiry sub metric, and the CEO has since voluntarily repaid the full amount relating to all four sub-metrics grouped in the 2021/22 annual report under the heading “Inquiry”, with the other three sub-metrics being associated with culture change, operational processes and the validation of the Horizon and Common Issues judgement”

In a way I feel sorry for Amanda Burton.  She took the position on not knowing this was going to hit her straight away and more importantly she clearly had no idea of the deceit commonly practised by POL when they are discovered to have been doing something wrong.   Perhaps Ms Burton be best minded to review the FOI I mention above that disclosed the ‘changes’ the Board Sub Committee made to the ARA after the Inquiry Metric had been approved and paid.

But she soon found out how to join the club and join in the obfuscation:

“Members of the senior leadership team and Group Executive have repaid amounts relating to the inquiry sub metric”

No detail to this equals no shame.   Public money misspent on erroneous bonuses and she basically can’t be bothered to even mention the word ‘clawback’.   How bad must your behaviour be in POL before Clawback of bonuses is considered?

“Executive Directors are subject to malus and claw back in the STIP and LTIP. This provides for the reduction or return of all or part of bonus payments in the event of misstatement of the accounts, error, gross misconduct, or instances where the Executive Director has contributed to serious reputational damage of the company, a material corporate failure or some other exceptional event. Additionally, the Committee has the absolute discretion to make adjustments, including a downward adjustment, to any bonus payment due under any scheme if it considers such adjustment to be appropriate having taken into account all relevant factors.”

There’s that word ‘discretion’ again – they certainly use discretion when they decide when to use discretion and when not to – if you get my drift.

This Year’s Bonus Awards

No more one off Transformation Incentive Schemes then.  Back to the old standard of Short Term and Long Term Incentive Plans (STIP and LTIP). There is no LTIP payout for the year 22/23 but there is a STIP and the table below indicates performance against the factors that determine whether or not a bonus is payable or not. This year Read only received £137k and Cameron £85k in bonuses and my heart truly bleeds for them. How they will survive the winter I do not know.

Just to explain the table using the first factor, Trading Profit.

The Remco decide on an overall maximum payout of bonus per individual which can only be achieved if the ‘max’ target (aka stretch) is met and of course if RemCo decide not to intervene using their god like powers of ‘discretion’.

So if you were entitled to £100k bonus then using the Trading Profit weighting and noting the company had recorded performance in excess of the max target then on that metric you would already have earned £30k of your bonus. The Bonus only becomes payable once the threshold is reached and is calculated on a straight line basis between threshold and max to determine what proportion of the bonus would be payable if the max had not been achieved.

Now bonuses of course have to act as incentives and they can only do that if the target set is seen to be achievable but the target must also be seen as being of benefit to the company. Only fair then that when setting a target for Trading Profit you take into account last year’s Trading profit don’t you think? 

And that’s exactly what POL do. Last year’s trading profit was a whopping £42m so of course you want to encourage your team to do better this year so you set the threshold at a huge £27m and the Max at £41m. These fucking geniuses at POL have incorporated a bonus into their pay scheme that will start paying out at 27/41 = 66 percent of last years trading profit and will pay the maximum amount if they fail to achieve last year’s trading profit. What an incentive.

As for Change Spend – entirely within the control of the company unlike Trading Profit. It is like a bonus for flicking a switch on and off.

Mails Revenue not achieved but probably discretion was applied.

The only thing they came close to achieving properly was Banking Revenue.

As for the Horizon Replacement Incentives, I am keeping my eye on them as they are also included in the LTIP and my guess is that the LTIP wording and targets will now be changed because they haven’t a hope of meeting them.

Finally

There’s a hole in your bucket of bonuses dear Henry dear Henry and it was caused most appropriately by Lisa who is no longer around to suggest how you might fix it. That bucket is leaking controversy and scandal and most likely in my opinion, criminal behaviour. No point in clutching at straws and trying to fix it dear Henry, your axe is far too blunt and I suggest you move on and take a couple of execs with you.

Bonusgate – Beyond Reasonable Doubt

This blog sets out to examine who knew what and when and why Nick Read elected not to change the wording in the Inquiry Bonus metric.

Before I begin perhaps it would be astute of me to throw in a few ‘allegedly’s’ and a couple of ‘hypothetically’s’ into this blog post with POL being well known litigious types. But I won’t. If I say something in here they or Mr Read find upsetting enough to sue me for then bring it on I say. Any legal action would have to be heard in a Civil Court and it would fall on me to prove to the court that what I state as fact is, on the balance of probabilities, correct. 

If, on the other hand, the Met Police, found what I have to say ‘interesting’ and decide to take Mr Read and his cohorts to criminal court, the Met Police would have to prove beyond reasonable doubt that I was correct. 

In both cases there is only circumstantial evidence to support my assertions. Very much a “he said, she said” scenario to be decided ultimately by a judge (and perhaps a jury). In my opinion, in this case there is far far more circumstantial evidence pointing towards downright theft than there ever was, and pointed out to the jury by the judge, in the trial of Seema Misra. 

At the Business and Trade Select Committee meeting on 20/6/23 into the Bonusgate affair, the new chairman of POL stated this (https://committees.parliament.uk/oralevidence/13349/pdf/) 

Henry ‘I’m baffled’ Staunton seems to say that the people responsible for Bonusgate are long gone and his NEW team are all very experienced with terrific judgement so this error could not have happened under their watch. Nick Read, as you will see below, was more than involved in letting this happen yet her remains in position. It can be easily inferred that Staunton believes Read to be inexperienced and has poor judgement – something I wholeheartedly agree with. Why is he still there then? 

WHO KNEW WHAT AND WHEN 

The Annual Report and Accounts (ARA) of Post Office Ltd containing the erroneous Bonus Metric were signed off by the board on 12^th July 2022.  At the same board meeting a sub-committee comprising of Carla Stent, Alistair Cameron, Nick Read and Tom Cooper were authorised to scrutinise the annual report as approved and make any non-material changes they required.  (see https://www.whatdotheyknow.com/request/992904/response/2369133/attach/3/FOIA%20Response%20FOI2023%2000354.pdf?cookie_passthrough=1)  

This sub-committee made some significant changes to the Approved ARA and these are detailed in this table (https://www.whatdotheyknow.com/request/1018432/response/2438779/attach/3/FOIA%20Response%20FOI2023%2000497.pdf?cookie_passthrough=1) 

Changing ”I am acutely aware” to ”It is clear” is, on the face of it, an insignificant change but it actually represents the very detailed scrutiny that this sub-committee must have given the draft ARA before it was ’published/signed’ on the 17^th August 2022.     

It is important to note that this detailed scrutiny took place some FOURTEEN MONTHS AFTER the Inquiry was placed on a Statutory Public level. 

It could be argued that the change of text on page 42 authorised by the sub-committee was a Material Change as it removed the word ‘DIscretion’ from the Master Metric known as a Gateway Metric.    If a Gateway Metric is not achieved then no bonuses of any kind can be paid.   An example, of which a lot more could be said, is that there is a statutory requirement (Postal Services Act 2011) for POL to maintain a network of 11,500 branches – that is a gateway metric and if they fail in their statutory duty they get no bonuses. 

The word ‘Discretion’ regarding the Inquiry Bonus Metric was first introduced by Lisa Harrington in the Business and Trade Select Committee Hearing into the Bonus Scandal.  It was NOT used in relation to the Inquiry Bonus Metric in the ARA despite the scrutiny of the sub-committee.  A really important point in my opinion for the police to consider.

From a legal perspective it must surely be that it is far beyond the balance of probability that the sub-committee members knew that SIr Wyn and his inquiry had no inkling of the Bonus Metric .   Nick Read and Al Cameron had been paid the bonus relating to the metric on 31/3/22 in any event.   

In addition Nick Read was actually reprimanded by Sir Wyn Williams in connection with a newspaper article (Scotland on Sunday 8^th May 2022) where Read stated POL had provided over 3 million documents to the Inquiry where in fact it was less than 70,000.  To be reprimanded by someone  shortly after receiving a bonus payment for allegedly meeting that person’s requirements is a serious flaw. 

https://www.scotsman.com/business/post-office-horizon-it-scandal-scotland-this-cannot-be-allowed-to-happen-again-nick-read-3684527

Click to access 20220527%20Letter%20from%20Nick%20Read%20to%20Chair%20of%20the%20Inquiry_Redacted.pdf

Establishing that Read and Co definitely were aware of the wording and significance of the Inquiry Metric in the annual accounts is pretty straightforward.  It is extremely likely that a court, if asked to decide, would favour ‘beyond reasonable doubt’ rather than the lesser finding of ‘on the balance of probability‘ that they knew fine well the wording and significance of the metric. 

It begs the question though why did they leave the wording in? A question I did not really ask myself at the time of all the media interest in the story and until yesterday didn’t have an answer to. 

As Paul Simon sang – the answer is easy if you take it logically. 

We know for a fact that the original wording of the metric was in place before the Inquiry was put on a statutory footing and it is an utterly inescapable conclusion that the sub-committee that authorised detailed changes to the ARA in August 2022 were perfectly aware of the problem surrounding the wording. 

Sometime between these two dates the error was noticed and a decision was taken to leave the wording as it was. I will give Read the benefit of the doubt here and say that that decision was taken AFTER Read was paid out on the bonus on 31/3/22 

BECAUSE 

To change it after Read was paid would mean: 

1. Drawing attention to it  

2. They would require authorisation from the SoS thus implicating her in approving a nonsense bonus metric 

3. There would be no paper trail of the decision to award the metric if it should be later investigated. 

4. Read and Co would have to pay back the bonuses they had received. 

Not changing it clearly and in hindsight presented only one problem – someone might notice but other than me who reads the annual report in detail anyway? AND if someone did in fact notice it they could just say it was a clear mistake, it was baffling etc etc and get away with it. So what better than to delay publication of the report as long as possible – a report signed off on 17^th August 22 didn’t see the light of day until March 23. 

Problem is someone noticed and pointed it out to Sir Wyn who demanded some answers. Those answers were provided to the Inquiry the night before the King’s coronation in order to cover it up. Sir Wyn, recognising this, infuriated Read by replying immediately in order to get the story out. The press took it up as did Darren Jones MP at the Business and Trade Select Committee which ultimately led to Read repaying the full amount of the bogus bonus metric.

This scandal hasn’t finished yet. Every single person involved in the cover up is at the mercy of the first individual to whistleblow which will happen in due course (maybe it already has?). 

A final thought – why pay back the bonus metric in full and not insist as is POL’s right under clawback that others pay back that part of their bonus unless you feel guilty about doing so? 

As the man said “The great thing about telling the truth is you don’t need to remember what you said”.  So readers of this blog who agree with my theories might need to review what Read has written and stated in public about his involvement in this scandal.