Post Office chairman Henry Staunton ousted amid row with government
The chairman of the Post Office is being forced out of the role amid frustration in Whitehall over the state-owned company’s governance as it reels from the Horizon IT scandal.
Sky News has learnt that Henry Staunton, who only became chairman of the Post Office in December 2022 after a long career in FTSE boardrooms, was this weekend told by Kemi Badenoch, the business secretary, that he was to be replaced amid mounting tension with the government.
Sources said this weekend that Ms Badenoch had notified him of the decision in a telephone call on Saturday afternoon.
The hunt for a new chairman will come as the government tries to force through legislation that will more quickly compensate hundreds of sub-postmasters who were wrongly convicted over the faulty software which triggered Britain’s biggest miscarriage of justice.
One insider said there had been several sources of tension between the Post Office chairman and the government in recent months.
Among them, they said, was a row over the prospective appointment of a new senior independent director to replace Ben Tidswell, who is due to step down in the coming months.
Mr Staunton and a number of colleagues are said to have been keen for Andrew Darfoor, a former financial services executive who is one of the company’s existing non-executive directors, to take the position.
However, the government is understood to want to appoint a Whitehall insider to the role as it looks to strengthen the Post Office’s corporate governance.
Tensions also arose last year over the mistaken payment of bonuses to Nick Read, the chief executive, which were linked to its cooperation with the Horizon inquiry.
Insiders said, however, that Mr Staunton’s exit was not directly related to the Horizon scandal itself.
A government spokesperson said: “In a phone call earlier today, the secretary of state for business and trade and Henry Staunton, chair of Post Office Limited (POL), agreed to part ways by mutual consent.
“An interim will be appointed shortly and a recruitment process for a new chair will be launched in due course, in accordance with the Governance Code for Public Appointments.”
Mr Staunton could not be reached for comment on Saturday.
The government’s shareholding in Post Office Limited is managed by UK Government Investments (UKGI), which is also responsible for the public’s stakes in Channel 4, the Met Office and other state-owned companies.
The Post Office relies on government funding to operate, and has been struggling in recent years amid tougher competition across the sectors in which it operates.
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Mr Staunton previously chaired Phoenix Group, the insurance company, and WH Smith, the high street retailer.
His executive career included a stint at ITV, while he held other boardroom seats at companies such as BSkyB – which was the listed company that owns Sky News – and Ladbrokes.
The decision to replace him comes as the government tries to exert a firmer grip on the fallout from the Horizon crisis, with Rishi Sunak pledging new laws to “swiftly exonerate and compensate” those affected.
“People who worked hard to serve their communities had their lives and their reputations destroyed through absolutely no fault of their own,” the prime minister told MPs earlier this month.
“The victims must get justice and compensation. Sir Wyn Williams’ inquiry is undertaking crucial work to undo, to expose what went wrong, and we’ve paid almost £150m in compensation to over 2,500 victims.”
The eventual bill is expected to total in the region of £1.5bn, although more victims of the Horizon scandal have continued to come forward since the broadcasting of an ITV drama, Mr Bates vs the Post Office.
Sky News revealed earlier this month that Ms Badenoch was seeking urgent talks with Fujitsu to thrash out a compensation package for sub-postmasters affected by the scandal.
Ms Badenoch wrote to Takahito Tokita, the Japanese company’s chief executive, in the wake of an acknowledgement from Fujitsu bosses that it had a “moral obligation” to contribute to the compensation bill.
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“As you may know, my department is at the forefront of our government’s efforts to right the wrongs of the past,” Ms Badenoch wrote earlier this month.
“I am committed to ensuring that postmasters affected get the justice they deserve.
“This is why the UK government announced new legislation… to overturn wrongful convictions and a plan to ensure swifter access to compensation.”
The latest shake-up of the Post Office’s leadership comes in the same month that Paula Vennells, its former chief executive, surrendered her CBE after growing public and political pressure.
Kevin Hollinrake, the postal affairs minister, has said he would support prosecutions of those involved in the scandal and its cover-up.
Business
Ex-Post Office head of IT says Paula Vennells ‘hoped to avoid’ inquiry – and reveals she blocked her number
A former Post Office executive has said she was forced to block ex-boss Paula Vennells’ phone number after the ex-CEO called multiple times asking for help to avoid an independent inquiry into the Horizon IT scandal.
Lesley Sewell, previously the company’s head of IT, told the Post Office inquiry on Thursday that former CEO Ms Vennells had reached out to her four times between 2020 and 2021.
Ms Sewell said that she blocked Ms Vennells’ number due to discomfort with the contact.
In her witness statement to the probe, Ms Sewell said that one of Ms Vennells’ emails referenced the need to fill in memory gaps regarding Horizon and “Project Sparrow”, a committee addressing issues with forensic accountants who identified flaws in the accounting system.
“Paula contacted me on four occasions in total. I recall blocking her number after the last call as I did not feel comfortable with her contacting me,” Ms Sewell said.
“I had not spoken to Paula since I had left POL [Post Office Limited] in 2015.”
Lesley Sewell giving evidence to the Post Office inquiry. Pic: PA
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According to Ms Sewell’s testimony, former chief executive Ms Vennells said that she had “been asked at short notice” to appear before a parliamentary select committee on “all things Horizon/Sparrow and need to plug some memory gaps”.
Ms Sewell says Ms Vennells added: “My hope is this might help avoid an independent inquiry but to do so, I need to be well prepared.”
Ms Sewell, who struggled to contain her emotions and broke down in tears while giving her oath at the start of her inquiry evidence, was offered support and breaks as needed by chairman Sir Wyn Williams.
Sir Wyn told the former executive: “Ms Sewell, I appreciate this may be upsetting for you, Ms Price will ask you a number of questions in a proper and sensible manner, but if at any time you feel you need a break, just let me know, all right?”
Lesley Sewell taking the oath at the Post Office inquiry. Pic: PA
The Post Office has faced significant scrutiny following the ITV drama Mr Bates Vs The Post Office which highlighted the Horizon IT scandal.
The faulty system led to the prosecution of more than 700 sub-postmasters between 1999 and 2015, with many still awaiting full compensation despite government announcements regarding payouts for those with quashed convictions.
London City Airport will on Thursday name its first permanent female chief executive as it targets approval of an expansion plan that would create nearly 1,500 jobs.
Sky News understands that the Docklands airport has told staff that Alison FitzGerald, who has been co-CEO since January alongside finance chief Wilma Allan, has landed the role.
A woman wearing a face mask walks by London City Airport, which suspended its operations during the pandemic
She replaces Robert Sinclair, who left in January after six years to become boss of the High Speed 1 rail link.
The airport is owned by a consortium of Canadian pension funds and Kuwait’s sovereign wealth fund, which have backed a plan to increase its annual passenger traffic from about 6.5m to 9m.
It is appealing against Newham Council’s rejection of a planning application that would see it extend operating hours at the site, which is popular with City commuters.
The airport’s proposals include no increase in the annual number of flights and, in what it claims is a first for a UK airport, a commitment that only cleaner, quieter, new generation aircraft will be allowed to fly in any extended periods.
The runway at London City Airport
The appeal is being reviewed by the Independent Planning Inspector.
Its change of leadership makes London City the second of the capital’s airports to name a new CEO in quick succession, following the arrival at Heathrow of Thomas Woldbye last year.
“London City delivers one of the best passenger experiences in the UK and I’m committed to building on this success even further,” Ms FitzGerald said.
Representatives of Thames Water’s multinational syndicate of shareholders are poised to quit as directors of its corporate entities after refusing to inject the billions of pounds of funding required to bail it out.
Sky News has learnt that a number of board members at companies connected to Kemble Water Finance, Thames’s parent, are expected to resign in the coming days.
City sources described the move as “the logical next step” after the owners of Britain’s biggest water utility said they would not commit more than £3bn to help upgrade its ageing infrastructure and shore up its debt-laden balance sheet.
A default on part of Thames Water‘s holding company debts last month has raised the prospect that the company is heading towards special administration, a form of insolvency that would effectively leave the government liable for managing a utility firm which serves nearly a quarter of Britain’s population.
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Thames Water is owned by a group of sovereign wealth funds and pension funds from countries including Abu Dhabi, Australia, Britain, Canada and China.
A number of the investors are represented on boards which sit at various points in the group’s labyrinthine capital structure.
It was unclear on Wednesday whether Michael McNicholas, a representative of the giant Canadian pension fund Omers and who sits on the board of Thames Water Utilities Limited, was among those in the process of stepping down.
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Along with the rest of the privately owned water industry, Thames Water faces a crucial moment next month when Ofwat, the industry regulator, publishes its draft determination on companies’ five-year business plans.
The draft rulings will be subject to negotiation before final versions are published in December.
Thames Water and a spokesman for Kemble declined to comment.
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