Briefing Paper for Debate on the Future of Post Office Ltd

The Future of Post Office Ltd

A debate scheduled for 17th November in Westminster Hall

Briefing Paper

The Post Office is one of our last remaining national treasures but matters are coming to a head now and the mismanagement of the company since separation from Royal Mail has been catastrophic and extremely expensive for the government.  This debate has been sponsored by the CWU but it is also supported and welcomed by a large number of Subpostmasters whose livelihood and therefore the future of their Post Office branch is under threat.   No MP wants or needs a Post Office to close in their constituency but many are, and the trend of subpostmasters suddenly handing their keys back to POL is growing.  I urge you to join this debate and take note of what the critics are saying.  It is time for the management of Post Office Ltd to be replaced and an alternative solution found.

Accountability

Ostensibly POL are accountable to parliament hence this debate, yet they are in practice not accountable to anyone.   A company the size of POL which receives massive amounts of Government subsidy requires external critical scrutiny of their performance but the government fails completely to do this in any shape or form.   The National Audit Office has no responsibility for POL.  The Public Accounts Committee has never investigated the company but yet POL has received £2 billion in subsidy over the last 4 years and no questions have been asked on how it has been spent.

Most notably when a member of parliament queries the performance of POL, the Minister invariably reports that this is a matter for POL and asks Paula Vennells to reply by way of a letter.   POL are in a position to congratulate themselves every step of the way.

A key problem from a parliamentary perspective is the lack of interest from parliamentarians in the regular scrutiny of performance of POL despite the massive investment in its future from them.  As an example, when the last set of financial accounts were made available the link to the report was not correct on the Post Office web site and not corrected for several weeks after.   Only those MPs who were provided with the correct link by email would have received access to the report.  No other MP or member of the public bothered to review their performance and crucially allowed POL to be selective in who they shared their accounts with.

This lack of accountability and regular scrutiny is the key reason why POL are in the state they are today.

Separation

The separation of POL from Royal Mail has been a disaster and from an external perspective it looks as if the relationship between the two parties is failing fast.   POL and RMG are tied together by a Mails Distribution Agreement – this from the RMG IPO Prospectus:

In April 2012, RMG transferred Post Office Limited (“POL”) to the Selling Shareholder. POL operates the UK’s network of more than 11,500 Post Office branches. The Group and POL have entered into the Mails Distribution Agreement, a long-term distribution agreement, under which POL sells Royal Mail postage stamps and the Group’s retail products (under the “Royal Mail” and “Parcelforce Worldwide” brands) to customers across the UK’s Post Office branch network. POL currently sells Royal Mail postage stamps and the Group’s retail products as agent of RMG and customers contract with RMG through the agency of POL. Under the agreement, POL receives separate remuneration from RMG for each product sold plus an additional fee payable periodically. In FYE 2013, approximately £1.7 billion of the Group’s revenue was generated through the sale of the Group’s postage stamps and products by POL on the Group’s behalf. In FYE 2013, the Group made payments of £371 million to POL, including the annual fee and other remuneration payable under the Mails Distribution Agreement as well as payments in respect of other operational items. Following Admission, POL will remain, subject to the PSA, in the ownership of HM Government.

It costs RMG 22% to allow POL to sell their products yet of this the subpostmaster receives less than 2%.  Looking at it another way, RMG pays POL more for reselling their products than POL pay to the entire branch network for ALL the products the branches sell not just RMG products.  As RMG are now a public company responsible to their shareholders it calls into question whether or not RMG would be better off selling directly to subpostmasters and other retailers.

From a subpostmaster’s perspective, a subpostmaster who buys a franking machine from RMG and continues to sell mail using that instead of stamps and labels from POL would be likely to earn more money without having to sell any other product.  Queues in his shop would be smaller and he would not have to deal with the nightmare that is POL.

The question has to be asked what exactly does POL bring to this Mails Distribution Agreement and is there a long term future for it?

Since separation RMG has become a profitable company under keen commercial management and the scrutiny of its institutional investors.  The same cannot be said for POL.  Their management shows no evidence of any form of commercial acumen.   Under the same scrutiny as RMG, it is abundantly clear that the current management of POL would have been replaced a long time ago.

Crown Offices

There is no better indication of the inability of POL to run a successful commercial enterprise than their own disastrous attempts to operate several hundred Crown post office branches.

Network Transformation was all about reducing the amount POL paid to subpostmasters by encouraging them to merge their Post Office franchise with a strong retail offering.  The footfall generated by the Post Office would ensure increased retail sales.  Surely you would have thought that POL would follow suit and introduce a similar retail offering in the branches that they owned and operated.  After all, the Crown branches are generally in extremely prominent positions in the High St.  POL has  failed to do so.  What is absurd is that they want to move these branches into nearby retailers that offer stationery, greeting cards, newspapers and confectionery yet that have not attempted to enter this market themselves despite the massive footfall and brand awareness that they possess.

Again under accountability, POL has really no idea how profitable the Crown network could become under astute commercial management because they are under no pressure from anyone to do so other than the unions.   There is certainly a case to be made before it is too late for the entire Crown network to be handed over, yet remaining in state ownership, to the very people that have shown they can run successful Post Office branches despite having to work for POL and they are the subpostmasters.

Subpostmaster Income

A key element of Network Transformation was to enable POL to maintain the size of its network according to the statutory requirements laid out in the Postal Services Act.  POL described that target as delivering a sustainable network.  Yet they have failed to comprehend what ‘sustainable’ actually means.   As the vast majority of branches are privately owned and operated by subpostmasters whose ownership changes hands from time to time in the normal course of events (between 600 and 800 a year at the start of NT) then ‘sustainable’ means that there is a continual supply of small business entrepreneurs willing to purchase a Post Office franchise.

Subpostmaster income has now dropped to ridiculously low levels and the number of outlets for sale has therefore increased dramatically including many of the newly converted offices that POL has spent absurd amounts on refurbishing.  That of course is coupled with less and less people being interested in taking a branch on.  The inevitable is already happening and there is an increased trend of subpostmasters now just handing back their keys and losing their original investment through lack of buyers.

Unaccountability prevails yet again.  POL has all the figures to confirm this but they release them to no one.  Indeed it is a statutory requirement that POL produce to parliament an annual report on the network size – not an onerous task you would imagine to perform after their year end on the 31st March yet as of today 4/11/16 that report is nowhere to be seen and most importantly no one from government seems concerned about POL’s tardiness.

Cash in Transit

Despite statistics informing us that the use of cash is declining faster than ever cash is, and will remain for a long time to come, a crucial part of our economic infrastructure.

It is interesting to note that parliament recognises this in that Cash Delivery companies are one of the very few private enterprises that are statutorily entitled to road fuel in times of national crisis.

POL plays an important and increasingly vital part in the distribution of cash around the country.  With High St banks now closing branches right left and centre the Post Office is the last outlet for cash in an increasing number of locations.

In addition the cost of the ATM Link network is now under discussion and the cost of cash handling including distribution is of major concern.   Deposits and change giving are key requirements for SMEs around the country, without local access to such services many would find it difficult to survive.

POL however is under no obligation to provide such a service and they find the cost of doing so just as high as the banks do.  In order to cut costs the whole Cash in Transit division of POL is under the threat of outsourcing.  If that were to happen a key and strategic element of our national economic infrastructure would be out of the control of the government and open to all the risks of business failure.

POL management need to be advised accordingly and a strategy devised by the government to ensure this key element of POL’s business remains under their control.

Judicial Inquiry

In the last set of accounts published by POL, management finally acknowledged that they are subject to a massive claim from the Justice for Subpostmaster Group.

Contingent liabilities: As a large, nationwide retailer operating in dynamic and competitive markets, we may be subject to regulatory investigations and may face damage to our reputation and legal claims. From time to time, we may be named as a defendant in legal claims or be required to respond to regulatory actions in connection with our activities. This may include claims for substantial or indeterminate amounts of damages from customers, employees, consultants and contractors, or may result in penalties, fines, or other results adverse to us. Like any large company, we may also be subject to the risk of potential employee or agent misconduct, including non-compliance with policies and improper use or disclosure of our assets or confidential information. A High Court claim has been issued on behalf of a number of postmasters against Post Office in relation to various legal, technical and operational matters. Full particulars of the claim (including as to quantum) have not yet been received by Post Office. The Directors do not consider the outcome of any current claim or action will have a material adverse impact on the consolidated position of the Group

POL has until July next year to publish their annual report which will have to include a contingent liability for the JFSA action.   The government and indeed all MPs need to be informed much sooner than that how much is at stake.  It could well be several hundred million pounds.

In addition to the claim from the JFSA, that is understood to be quantified early next year, several of the unfortunate subpostmasters who were convicted and imprisoned are in the process of having their cases reviewed by the Criminal Cases Review Commission.  In the opinion of many senior legal counsels there is every reason to believe that these cases will be returned to the appeal court and ultimately the convictions overturned.  When that happens the machinations of the POL prosecution service will be exposed in court with all the repercussions that will follow.   Association and support of the current POL management team could become extremely embarrassing for politicians.

It doesn’t end there either.  The police have opened an investigation into alleged misconduct in public office against one of POL’s employees with regard to the prosecution of one the convicted SPMRs.  That investigation is on hold until the CCRC report their findings.  When it is re-opened the investigation may well extend to senior management who approved or at least ignored the conduct of the individual in question.   Jail sentences are mandatory in these cases.

All in all a rather unhealthy state of affairs for a government owned national treasure and one that the media has already been attracted to.  There can be no doubt that the ultimate outcome of all this, no matter how long the current investigations take, will be a full scale independent judicial inquiry.  As David Cameron said at PMQs in a response to a question on the JFSA saga.

 “I would hope that it would not be necessary to have a full independent judicial inquiry to get to the bottom of this issue, but get to the bottom of it we must” PMQ 1/7/15

He may have hoped it would not be necessary but it is now.

Any MP who stands by POL at this time must be prepared to defend their stance against the outcome of such an inevitable inquiry and the resultant media backlash.

POL and Uber

Last but not least , the recent decision in the Uber Employment tribunal case stating that the drivers should be classed as workers has extremely serious implications for the Post Office and the government.  The Uber case is being appealed but if the decision is allowed to stand it is almost certain that an action by subpostmaster to be classed as workers will prevail.  Taking into consideration the number of subpostmasters there are currently and have been in the past the outcome of that could lead to compensation payments running into hundreds of millions of pounds not only from POL but HMRC as well.

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Post Office Network Transformation – Wrong from the start…

Post Office Network Transformation – Wrong from the start…

I believe a book is being written about the problems within the Post Office.  This could well be a chapter in its own right.   I understand that the majority of readers of this blog have a close connection with the Post Office and therefore understand the background to what I am about to point out.  It should have been ‘bleedin obvious’, to use the vernacular, to all concerned and that, dear reader, probably gives us the best insight we have into the complete lack of commercial acumen within the upper levels of POL management.

There were, and still remain, many good points about NT which sadly keep getting rolled out to hide the mess underneath;  a mess of POL’s own creation I might add.   The fact is though that right from the start it was doomed….

Let me take the Main Post Office concept as an example.   In 2010 news broke of the Network Transformation project.  Details were sketchy and even the NFSP had a problem keeping up with what seemed like daily changes to the scheme.  So when it became clear that only 3000 or so Sub Post Office would become the chosen few every SPMR wanted to know is they were to be one or not.  Investment into the branch coupled with increased Transaction related pay seemed liked a good idea as well as the prospect of increased value of the business.   To that end, and to answer these SPMRs a list was produced for POL people so they would know which branches were the chosen ones.   George Thomson, General Secretary of the NFSP, admitted to me at the time that the list existed but Freedom of Information requests to see this list were denied.  Why the secrecy?

So even if you were one of the chosen ones you had no way of finding out other than to apply the general rules for being selected and that was to do with footfall and demographics.   You might have had a rough idea but couldn’t be certain so for several months SPMRs were in the dark as to their future.

Now you have to remember that NT was a cost cutting exercise.  In order to justify the £1.35 Billion POL had to show that the overall effect would be a reduction in payments made to SPMRs.  The 3000 ‘chosen ones’ selected for Mains would lose their monthly fixed Core Tier Payment in return for higher transaction related pay (TRPs).  Let us suppose, in a very conservative fashion, that POL decided that for the Mains at least the overall effect of the move to TRP only pay would be cost neutral.  That is for the 3000, what they received before is what they would get after.  All well and good you might say but not quite.   This was to be a voluntary program after all and a voluntary program can only work with willing volunteers.

Which brings me to another list.  This was the list of enhanced TRPs that the new Mains would receive.   It was extremely confidential.  No one knew what was on it although some examples were leaked by POL as a ‘little teaser’… Really?  So why did they not want the prospective mains post offices to know the numbers?   Well fairly obvious really.  If the nett effect was to be cost neutral then out of the 3000 selected offices there had to be a mixture of winners and losers.   Clearly the losers weren’t going to convert in a hurry but the winners would be trying to get on board as soon as possible.   Most importantly though POL needed the NFSP to convince their members that NT was the way to go, that there was no plan B, that their investments would be lost without it.   Trying to convince an SPMR that the way forward is for their neighbouring Post Office to make more money while you make less wasn’t going to hold water.   With hindsight of course the NFSP at least got two parts of their forecast right.  There is no plan B (currently) and most remaining SPMRs have lost a significant part of their investments if not all.

Back to the mysterious TRP list.  I got my hands on a copy and at an appropriate moment in reply to a post on the NFSP forum from an Executive Council member I published the list in full.   George Thomson was outraged.  He didn’t just delete the post, he shut the whole forum down as it was becoming increasingly obvious that the ‘scaremongerers’ as we were labelled had rumbled what was going on and what was going to happen.   Not many got to see a copy of those TRPs but those that did reported mixed fortunes.  Some were going to make a lot more as a Main while others stood to lose a lot and clearly were not going to engage with NT voluntarily.

This action by Thomson is a clear indication in my opinion that he knew what the problem with NT was – he must have been told by POL because I don’t think he is capable of working out these things himself – and that if the TRPs were leaked on a grand scale he would never be able to convince his members to back it.

So NT got going and Lo and Behold the very first offices to convert to Mains were ones that were going to make more money.   You should be aware that as part of the ‘selling’ of NT, Field Change Advisors (who had no idea how to run a Post Office) showed the prospect what he would earn after NT based using the new TRPs.    This practice was dropped later and instead prospects were advised of the increase in sales due to additional footfall as well as cost efficiencies of having a Horizon terminal at their retail counter.

Initial converts were happy and of course were eager to tell everyone what a success their transformation was.  POL were exuberant.  They were spending lots of the £1.35b, they were converting their target Post Offices – not quite on schedule but close enough to convince the Civil Servants that they were doing a grand job – and the payment to SPMRs was increasing!

Now several years later and without going into detail NT has failed completely.  The effect on SPMR commission has in fact been cost neutral for the Mains and no great savings have been made.   Now POL’s only alternative (a plan B?) is to reduce the TRPs considerably and they are going to find great difficulty in doing that unopposed.    The breaking strain has been reached already with offices just closing their doors as a result of the poor compensation for difficult and tiresome interaction with the bureaucratic nonsense of POL.   This remains a problem that POL don’t understand but which was pointed out repeatedly at the onset of NT.  When a new style PO gets shown the door by an operator which local businessman in their right minds is going to take it on without finding out why it was thrown out in the first place?

So if you are interested in talking to your MP about this, show them this blog.  Ask them to ask the Business Secretary why those TRPs were not published initially.  Why was the NFSP forum closed down when they were published on there?  What wasn’t the list of prospective Mains Offices not revealed in Freedom of Information requests?   How much money did they say they would save and how much have they?   Get them to ask who POL are accountable to although I know the answer – nobody.

 

Why did the jury find Seema Misra guilty?

(If you are unaware of the Seema Misra trial please refer to my other blogs on this)

I woke up this morning thinking about this very point.   Always worthwhile to consider all angles.

We have the complete transcript of the trial (http://journals.sas.ac.uk/deeslr/article/view/2217)  to consider and that includes some interaction between the jury and the judge.   At the end the jury ask specific additional questions before retiring to reach a verdict and I think this gives the best insight into the way they were thinking at that late stage in the trial.

The questions:

a) When you buy a ticket for the lottery is it on the till in the shop and how is it related to the Horizon System?

b) How long was it that she dismissed Nadia after dismissing her husband for suspected theft?

c) Where is any statements from the trainees —” – presumably “trainers” – “— or cross-examination by the barristers in court on her honesty or ability to be the boss of the post office or even the area manager?

d) Has Mrs Misra’s husband the authority by the Post Office to unlock the Horizon system and get into the post office section?

e) Was Mr Misra in charge of the Lottery till as well as Mrs Misra?

In my opinion the trial was biased from the start as there was no support for the defence team from an experienced subpostmaster who was unconcerned (POL’s contract with SPMRs prevent them from ‘telling’ tales)  about speaking out about the dubious practices of POL.   There was therefore no chance whatsoever that the jury could gain any sort of understanding of how a Post Office operates and how complicated it really is.

Question (a) demonstrates that the defence had failed completely to make the jury comprehend the significance of the Lottery issue.  In fact  it seems to me very clear that the defence themselves did not quite grasp the significance of this.  Prior to the losses in question being discovered by POL Seema had for some reason not been transferring the Lottery money received through to POL accounts leading to a loss of some £20k from memory.   When this was pointed out to Seema she immediately made the losses good and in doing so POL accepted that not only she had made a genuine mistake but that – and this is vitally important -they were losses and not theft.  She was liable to POL for these losses which she admitted to but she hadn’t stolen the money although she was the beneficiary of the proceeds.

Losses incurred in a branch are just that, losses, and they incur a debt to POL under the terms and conditions of the SPMRs contract.  When they occur the SPMR has to pay them back which Seema Misra not only offered to do but was actively seeking to do by borrowing money from her relatives in order to protect her investment in her shop.

(b) is a good question.  It is unclear why they asked it but consider the circumstances.  A husband and wife team were working for Seema in her Post Office.   Seema found losses being incurred and immediately suspected the husband of stealing so sacked him.   It is very strange then that the wife continued to work in the PO after her husband was sacked.  The point though to make is that when an employee takes money from a sub post office that is theft which they can be prosecuted for.  The effect though on the branch accounts is a loss which as I have said is a debt to POL that the SPMR must make good.

The possibility that the employees of the branch could have been responsible for the losses by stealing was discounted by the judge, prosecution and as far as I can tell the defence due to lack of any evidence as well as the fact that losses continued to mount after the suspected employees had been sacked.   The fact though is the judge in his summation made exactly the same point about lack of evidence regarding Seema.  No CCTV, no witnesses and no evidence of large amounts of money stashed away or being spent.  In fact more investigation was done into Seema’s affairs than that of the possible miscreants.

That in turn leads to a most troubling issue.  POL have a record of prosecuting SPMRs both in the Civil Courts as well as the Criminal Courts, ostensibly in order to seek legal protection to recover the losses incurred.    (see the Panorama program for proof of this)

There is though a significant difference between a Civil trial and a Criminal trial and that is the burden of proof.  A criminal trial requires evidence to prove beyond any reasonable doubt that a crime has been committed while a civil trial requires the mere establishment of the event to have occurred on the balance of probabilities.  So why then did POL choose civil prosecution in some cases and criminal in others?

Lee Castleton was taken through the Civil Courts and lost to POL.   There is much correlation between Seema Misra’s circumstances and Lee’s: unexplained losses, repeated and continued to this day, denial of any wrongdoing as well as absolutely no evidence of theft by either of them and certainly no evidence of financial gain.  Why wasn’t Lee charged with criminal conduct if the evidence was exactly the same?

The ONLY difference between the two is that Lee hadn’t made the mistake of signing off on accounts that were at odds with the true balance in the office.   Had he done so and subsequently been charged with False Accounting then no doubt he would have been sent to trial for theft.

And therein lies the rub.  A theft charge is only brought by POL after admission of a False Accounting charge – they can’t have one without the other – so why both and in Seema Misra’s case why 5 charges of false accounting and not more or alternatively just one?  The reality is that it assists the prosecution in making their case and in Seema’s case the prosecution introduced this right from the beginning by informing the Jury in the prosecution’s opening statement that Seema had been, and had admitted to, quote “cooking the books”.

c) I am amazed but glad that at least someone in the jury picked up on that fact that Seema may not have been at all capable of running a Post Office branch.  From reading the transcript that is my understanding of the situation.  She clearly did not know what she was doing and had completely given up on trying to get to the bottom of the problems.  She admitted this in court.   The absence of the testimony of an experienced Subpostmaster in this case is self evident and would have added to, if not confirmed, the suspicions and doubt of the jury member who asked this question.   Remember – beyond reasonable doubt and this question as well as the others suggests a fair degree of doubt.

d) and e) A very good point and a clear indication of the failure of the defence to point out all the other possible reasons for the losses.   Why was it left to the jury to question these alternative reasons?   I am not suggesting for one moment that Seema’s husband was responsible but it is the duty of the defence to raise reasonable doubt in the jury’s minds and they failed – completely.

It is utterly beyond comprehension how Seema Misra was convicted by the jury of theft.  It is an appalling travesty of justice that will surely be returned to the appeal court by the Criminal Case Review Commission.   When the case is eventually heard in the Appeal court I am sure there will be questions asked about the absence of testimony in the original trial from an experienced subpostmaster capable of criticising POL and willing to do so in court.  I am one of these, yet even the CCRC have refused to accept me as an ‘expert’ witness which I find frankly appalling.

CWU and the Post Bank

CWU and the Post Bank

This week’s strike by CWU members in the Post Office provided some media attention on the ongoing problems at the Post Office whose future looks decidedly uncertain.

Dave Ward, the general secretary of the CWU, is seeking a conference that all stakeholders can attend to discuss the future of the Post Office network and look at alternative ways to make it a useful and strategic part of this nation’s infrastructure as it once was.   Foremost in his thoughts is the introduction of a Postbank, something that has been successfully combined with a post office network in other countries.

It is an admirable suggestion and a possible solution not only to Post Office problems but also the problem of the rapidly diminishing branch network of High St banks.

However in my opinion, the way things stand at the moment, a Post Bank could never work and the reasons why it can’t work define the key problem that will undermine any future attempts to save or reinvent our beloved Post Office network.

As I have said Dave is seeking a conference to address Post Office issues and invite all stakeholders.  Well that’s part of the problem in a nutshell.  The stakeholders.  Who are they?  Who identifies them?  Who do you leave out?   There are so many groups floating around that seem to think they have stake in the Post Office that Dave better hire Wembley football stadium I think to make sure they all get a seat.

But the one apparent stakeholder you have to leave out is the current Post Office management team.  They are the culprits and the ones who have destroyed the network all in the vain attempt to make it financially sustainable.  They have ignored the critics who from day one of this current Network Transformation project identified correctly what the future would bring.   Of all the comments that were made by these critics at the start of NT, two stand out: “it will no longer be a shop in a Post Office it will be a Post Office in a shop” and “lose the brand, lose the business”.

The other part of the problem then is that while the network size remains much the same, the experience, skill, and wages paid to the staff performing PO functions has fallen to an all time low.  So desperate were POL to meet their NT conversion targets that they took on anybody that was stupid enough to want one.   The Post Office is now a negligible part of the shop owner’s income and deserves and gets little attention.  As was also pointed out at the start of NT, moving POs into mainly convenience stores was always going to be dangerous as convenience stores have an extremely high turnover of staff at minimum wage.

If Dave thinks these types of employees can offer a banking service then he’ll have to think again.   Five years ago it would have been possible while the skilled and experience subpostmaster network was well equipped to handle such work although there was and still is another part of the problem that needs to be addressed.

The management team that brought in the disaster of NT remain in place.  You couldn’t put the likes of Paula Vennells in charge of a bank for goodness sake.  The only thing she has proved herself good at is hiring people that are happy to tell her how good she is.   Incompetence is so rife in Post Office management that they all need to go as soon as possible.   That is the key issue.

Perhaps there is a way to make the Post Office relevant again.  Perhaps it may be through a Post Bank.   But not in the hands or at the suggestion of the raving idiots who brought about the demise of the network in the first place.

We should all be concerned about the future of Post Office Limited

Les has made a success out of the postal services industry after leaving POL. Someone like Les should be running Post Office Ltd. i.e. someone who knows what is going on and what it takes to make a difference before it is too late.

Les Gilbert

12th September 2016

The Communications Workers Union has given notice that their Post Office workers intend to commence industrial action this week and that they will, rather unusually, be joined in doing so by Post Office Managers represented by Unite the Union.

It is all too easy to dismiss this as yet another public dispute, the seemingly inevitable Post Office strike that seems to take place almost annually in the run up to Christmas but this time it is different. The Unions have recognised that the future of the Post Office network is under threat.

“The Post Office is at crisis point and the government has to step in” says Communications Workers Union General Secretary Dave Ward. 

A significant number of Postmasters also appear to have also lost confidence in the ability of Post Office Limited to run the network. Postmasters run 97% of the country’s 11,500 Post Office…

View original post 654 more words

An Anonymous Phone Call

I really should have been expecting this at some point.   My blog has stirred up a few moral issues for some and now one kind subpostmaster has decided to reveal all in a phone call to me over the weekend.  I have no idea who he is but what he told me makes complete sense.

I don’t know how many former and current subpostmasters are now claiming money back from POL via JFSA/Freeths but I believe it runs into the hundreds.   It is entirely likely that all of them at some stage will receive compensation once the truth about Horizon becomes clearer.   These are people who lost money to POL.

But the computer doesn’t differentiate between Credits and Debits when it makes a mistake.   It is just as likely that there are a similar number of SPMRs out there who have benefited from Horizon mistakes.    The SPMR contract is clear though.   All gains after balancing the books are for the SPMR to withdraw from the safe for his own benefit and of course he/she is responsible to settle all losses with POL.

Which brings me back to the phone call from a very kind soul who has for the first time as far as I am aware revealed an error in Horizon which has resulted in him gaining a five figure sum.  He didn’t tell me the exact figure but he did say it was closer to six figures than four!

He explained the details.  A business customer made a large cash deposit at one of his branch’s counters and the assistant later remmed it out to the Safe Stock Unit.   The SPMR remmed it in as normal.  At the close of business however the counter balance showed a significant gain which he could not understand but he recollects that it did seem to be a multiple of the stock transfer but as it was a gain he left it assuming that it would rectify itself.    By the end of the month nothing had happened to rectify this so he set the money aside in the safe in case of a visit by the auditor.

To cut a long story short – this happened a further two times over a period of 18 months or so – and the gains mounted up.  He admits to not informing the help desk and I agreed with him that he didn’t need to not only because of his contract but also because the CEO of POL says that there are no errors in Horizon!

You would think that such large losses to POL would be noticeable but no – bless their cotton socks – they aren’t and never have been.   So when NT came along this SPMR decided to leave the network and found a replacement shop willing to take the PO on.   he received suitable compensation  when he left and he also received an audit on his last day in the office.

That audit revealed no surprises although the SPMR had retained all the gains in cash just in case something cropped up.   This all happened some time ago.  The money remains invested he says just in case POL come snooping – but even if they did wouldn’t that be an interesting case to put before a Judge and Jury just as POL did to Seema Misra?  POL as prosecutor could only put the case that Horizon is fallible in order to win!

Whoever you are Mr SPMR – thanks for letting me know.   I am sure there are hundreds in a similar position.

Intermittent Errors

Co-incidentally – as I have now taken over a lottery terminal with my newsagent business I have just come across a letter Camelot sent out to all their retailers.  Makes really interesting reading in that it acknowledges an intermittent fault with their system and provides retailers with information on what to look for and how to deal with it when it happens.   Now if only POL could do something similar!!!

 

 

 

 

Was it something I said?

To these blithering idiots….

The day after my post suggesting that the Annual report was a tad late they decided to publish it.  Perhaps in haste but then again probably not.  They just can’t help making complete asses of themselves.

When you read these reports you have to read the previous year’s report in conjunction in order to determine what is new and what has been omitted.   One of the most revealing new entrants is a section in the Financial Risks Section::

Financial regulatory breach The Post Office operates under an extensive regulatory environment, covering areas such as financial and postal services, telecoms, procurement, competition law and data security. This environment continues to evolve, particularly in the financial services arena, and we need to ensure that the changing requirements continue to be identified and met.

The consequences of such risk they state are:

This could result in loss of revenue, increased costs, financial misstatement and damage to reputation with stakeholders.

I couldn’t agree more… increased costs certainly and particularly when fighting legal action.  Have you any idea of how much they have spent on prosecuting innocent subpostmasters?  That will pale into insignificance when they are forced to pay compensation to the hundreds of SPMRs claiming damages against them.

Financial misstatement indeed … I’ll come back to that point.

Damage to reputation with stakeholders?   A successful High Court action by JFSA against POL will permanently remove any remaining reputation that POL retains not to mention the outcome of the ongoing criminal investigation into illegal actions by their Prosecution Team.

So having stated the risks and the consequences you think POL would take a little bit more notice of the JFSA group.   But no they don’t although they now feel obliged to mention the upcoming court case further on in their report.

They state …

Contingent liabilities: As a large, nationwide retailer operating in dynamic and competitive markets, we may be subject to regulatory investigations and may face damage to our reputation and legal claims. From time to time, we may be named as a defendant in legal claims or be required to respond to regulatory actions in connection with our activities. This may include claims for substantial or indeterminate amounts of damages from customers, employees, consultants and contractors, or may result in penalties, fines, or other results adverse to us. Like any large company, we may also be subject to the risk of potential employee or agent misconduct, including non-compliance with policies and improper use or disclosure of our assets or confidential information. A High Court claim has been issued on behalf of a number of postmasters against Post Office in relation to various legal, technical and operational matters. Full particulars of the claim (including as to quantum) have not yet been received by Post Office. The Directors do not consider the outcome of any current claim or action will have a material adverse impact on the consolidated position of the Group

The last sentence is notable..

The Directors do not consider the outcome of any current claim or action will have a material adverse impact on the consolidated position of the Group

Really?  I have force fed Paula and her cronies with details that are listed on this blog of serious errors in the Horizon system that have led to substantial paper losses for Subpostmasters.   I know they have read my posts.  They cannot be in denial because now they know the worst.   When it comes to court they will be blown out of the water.  So the directors still believe that such a court case with all its surrounding media attention will have no adverse effect on the Group?   What planet are they living on.  Don’t they read the rubbish that they write themselves?

This could result in loss of revenue, increased costs, financial misstatement and damage to reputation with stakeholders.

Don’t they have the gumption to include a financial provision into their accounts against the likelihood that they are going to lose the cases and face multi million pound damage awards?  Remember POL don’t insure against these matters!

Perhaps they should have a look at what they say about such provisions in their own annual report?

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at an appropriate pre-tax rate.

I can point the POL directors towards two companies who recently went bust because they failed to provide for the possibility that an existing legal award could be, and was, overturned in the appeal court.

They remain unaccountable idiots.