Senior Post Office managers said “large amounts of cash scattered in unexpected places” may have meant deputy postmasters were “tempted” rather than accept an IT glitch, an official inquiry has heard.

Investigation into Post Office Horizon IT software glitches and related issues Prosecution of hundreds of deputy postmasters Evidence was heard on Wednesday from former North East Hampshire MP Lord Arbuthnot on charges of theft and false accounting.

He was a defender of victims in the late 2000s and 2010s and appeared in the ITV drama Mr Bates vs Post Officewhich has reignited interest in scandalous miscarriages of justice.

In addition to those wrongly prosecuted, many more are saddled with huge debts, have lost their homes, are ostracized from their communities, suffer from poor health, and some have left the country.

read more:
Victims may have made ‘profits’ of more than £1m

Lord Arbuthnot told the inquiry that senior Post Office officials had failed to accept the shortcomings of the IT system and told the deputy postmaster general they had “fallen into temptation”.

“Alice Perkins [former Post Office chair] and Paula Vinnells [former chief executive] Both raise the issue of having large amounts of cash in unexpected places,” Lord Arbuthnot said.

“I do not know whether the point raised so strongly by Alice Perkins affected her attitude towards the deputy postmaster general’s honesty or otherwise,” the peer added in his witness statement to the inquiry.

Ms Vinnells was recorded in a meeting with MPs in 2012 as follows: “It appears that some deputy postmasters have been borrowing money from Post Office accounts, as they do in retail operations, but this is not the Post Office How it works.

“Post Office cash is public money and if lost, the Post Office must recover it.”

unsafe conviction

Back in March 2013, Lord Arbuthnot told the Post Office that a conviction of the deputy postmaster general might be unsafe because evidence of flaws within Horizon had been discovered by Second Sight, the forensic accountants hired by the organization to investigate accusation.

Lord Arbuthnot considered the evidence undermined the conviction and showed there was a risk the Post Office failed in its duty to disclose any evidence that might weaken its prosecution case or aid the deputy postmaster defendant.

Second Sight discovered that Fujitsu, the company behind the Horizon system, had remote access to post office accounts.

Lord Arbuthnot told the inquiry: “If Fujitsu or the Post Office can manipulate the deputy postmaster’s account without the knowledge of the postal enterprise, how can you prosecute the deputy postmaster for something that cannot be proven to be the postmaster’s fault? Woolen cloth?”

He added that this fact alone undermined “the standard of evidence required in a criminal trial”.

“Big mistake”

Subpostmaster victims of problematic software were told they were the only ones experiencing problems with Horizon – something Lord Arbuthnot found was “completely wrong” and daunting as he I know a few cases.

“One thing that always bothers me deep down is that these people are being told, ‘You’re the only one this is happening to’.

“I feel like that’s completely wrong because, first of all, it’s obviously not falsifiable. They’re not the only people that this has happened to.

“Secondly, it isolates those deputy postmasters and deputy postmasters from the support of others in the same position.

“Thirdly, it has an element of intimidation and all of that reflects poorly on the way the post office and its deputy postmasters operate.”

‘The government refuses to take responsibility’

The government’s hands-off approach to the post office, which it fully owns, was criticized by Lord Arbuthnot after the inquiry heard he had contacted numerous government ministers about the injustices.

“This arm’s length arrangement essentially means the government refuses to assume the responsibilities associated with ownership,” he said.

“If you have an organization as important to the community as the Post Office, people have to be able to have appropriate control over it.”

Lord Arbuthnot also accused the Post Office of “colluding with MPs” in a “behind-the-scenes process of deceit” to cover up problems with the Horizon system.

He said the group became increasingly defensive in 2013 following an investigation by Second Sight.

The peer said: “They knew there were a lot of errors in the system but they didn’t tell MPs.

“This is something I know now, but I didn’t know then.”

The peer also told the inquiry he was not satisfied with Ms Vinnells’ “no” response after he raised concerns about the deputy postmaster general’s complaint about the Horizon system.

During her time as managing director, Ms Vennells defended the Horizon system when questioned by former MPs, describing it as “robust”.

After the investigation resumed, Paula Vinnells said in a statement this week: “I continue to support and focus on cooperating with the investigation and expect to provide evidence in the coming months.

“I am deeply sorry for the devastation Horizon has caused to the Deputy Postmaster General and his family, whose lives have been torn apart by Horizon’s false accusations and wrongful prosecution.

“I now intend to remain focused on assisting the investigation and will not make any further public comments until the investigation is concluded.”