Horizon scandal: More than £1m claimed as Post Office ‘profit’ may have come from sub-postmasters
More than £1m of unexplained transactions were transferred in to Post Office profit at the height of the Horizon scandal, leaked documents have showed.
The papers seen by Sky News show a snapshot of transfers from a Post Office “miscellaneous client” suspense account over a four year period, up to 2014.
A suspense account is where unexplained, or disputed, transactions remain until they are able to be “reconciled”.
Unaccounted-for transactions were transferred out of the Post Office suspense account and into their Profit and Loss account after three years.
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Ian Henderson, director of Second Sight – the forensic accountants hired years ago by Post Office – said: “The Post Office was not printing money. It was accumulating funds in its suspense account.
“Those funds belong to somebody, either to third party clients or to sub-postmasters, and part of the work we were doing in 2015 was drilling into that.”
Mr Henderson said they were sacked not long after asking questions about whether Post Office profited from shortfalls paid for by sub-postmasters.
Mr Henderson told Sky News that the money could potentially have come from sub-postmasters’ pockets
More than 900 sub-postmasters were wrongly prosecuted due to faults with Horizon accounting software.
A letter from Alisdair Cameron, the Post Office’s chief financial officer, to Second Sight in February 2015 states some “postings cannot be traced” to “underlying transactions”.
He added: “We are not always able to drill back from the combined totals to itemise all the underlying transactions.”
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‘Compensation paid by summer’
Mr Henderson said the letter shows that “the Post Office was benefiting from this uncertainty due to, frankly, bad record keeping, but taking it to the benefit of their Profit and Loss account.”
He maintains that it’s impossible to prove for sure that sub-postmasters’ money went into Post Office profit because of a “lack of granularity”.
He says therefore that it is of “sufficient public interest” that a further independent review into the use of suspense accounts should happen.
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Mr Henderson added: “It didn’t come from thin air, where did the money come from? That’s a fundamental question Post Office have not answered.”
Meanwhile, separately, a secret recording obtained by Sky News indicates that Post Office was trying to gag the independent forensic accountants.
The recording is of a meeting in January 2014 between Second Sight, a lawyer and a Post Office representative.
It took place over a year before the accountants were sacked.
In the conference call there are signs the relationship between Post Office and Second Sight was beginning to weaken.
There is discussion about a contractual confidentiality agreement, a “Letter of Engagement” between the parties.
In the recording Ian Henderson says: “Either, you know, we have unfettered discretion and authorisation to just talk to MPs or we haven’t.
“At the moment, the way the document is drafted, we are prevented from doing that. That’s the issue.”
His colleague at Second Sight, Ron Warmington is heard agreeing.
In another part of the recording there are more concerns raised that the investigators are being blocked from talking to MPs.
Mr Henderson says: “My point is we should not be gagging either the applicant or Second Sight in being able to respond, you know, fully and frankly to MPs who frankly sort of set this whole process in motion.”
The Post Office representative replies saying they’re not trying to gag anybody.
Mr Henderson describes “a point of principle”: “In exactly the same way that when we were doing spot reviews, we disclosed to MPs, when they asked us a specific question, the information provided to us by Fujitsu and by Post Office.
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“And that’s why it’s so important to establish this principle that there should be no gagging of Second Sight in relation to being able to discuss our investigative work with MPs.”
In the same meeting his colleague Ron Warmington said that if it later emerges that Second Sight have been “effectively gagged” in its dealing with MPs, “it’s not going to be Second Sight they are particularly annoyed with, it’s going to be Post Office.”
The representative responds directly with: “I think that’s something that the Post Office will have to deal with if – if it arises.”
Adding that “some of the terminology in terms of gagging is probably an exaggeration of what it is that is trying to be done here, and at the moment you haven’t signed anything.”
Post Office released a statement in response to the findings: “The statutory public inquiry, chaired by a judge with the power to question witnesses under oath, is the best forum to examine the issues raised by this evidence.
“We continue to remain fully focused on supporting the inquiry get to the truth of what happened and accountability for that.”
Business
‘Significant’ step in establishing national restorative justice programme for Post Office victims
A “significant” step has been taken in establishing a national restorative justice programme for victims of the Post Office’s Horizon IT scandal.
Children of affected postmasters, as well as those directly hit by the faulty accounting software, will be part of the partially Fujitsu-funded programme, as the UK’s Restorative Justice Council acknowledged more than financial compensation was needed.
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Data from the Fujitsu-made Horizon computer program led to the wrongful prosecution of more than 700 postmasters for theft and false accounting, while many more racked up large debts, lost homes, livelihoods and reputations as they borrowed heavily to plug the incorrectly generated shortfalls in their branches.
As part of the inquiry into the scandal, its chair, Sir Wyn Williams, recommended the government, the Post Office and Fujitsu engage in a formal restorative justice plan to provide “full and fair redress
Restorative justice aims to repair harm by bringing together victims and those responsible.
Long-sought family involvement
On Thursday, the Restorative Justice Council (RJC), which runs the project, said it would expand engagement to children and families of victims.
The move marked “a significant advancement in the establishment of a national restorative justice programme for those impacted by the Post Office Horizon IT scandal”, the body said.
Relatives have long sought acknowledgement and support for the harm they suffered.
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‘We’ve carried the trauma for 20 years’
Some have told Sky News how their eating disorder escalated due to the prosecution of a parent, and they carried trauma for decades.
Calls for a family fund were made to redress the “chances that were taken from us growing up”.
What’s involved?
Online listening sessions for children of those affected and people previously unable to attend are planned in an effort to ensure all voices contribute to the restorative justice programme.
Also involved in the initiative is equipping the government (via the Department for Business and Trade), Post Office and Fujitsu “with the necessary skills and knowledge to engage in restorative dialogue with integrity”, the RJC said.
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Post Office scandal children seek justice
Group-based sessions with organisations involved in the scandal and a confidential safe space service for affected people to share their experiences and explore healing without the pressure of a formal process will be created.
Freelance restorative listeners are being recruited by the service for this purpose.
The formation of the scheme acknowledges the limitations of financial redress, with the RJC saying “true restoration requires truth, acknowledgement, accountability and meaningful action beyond financial compensation”.
The funding question
The restorative listening and wellbeing service is being funded by Fujitsu.
It comes amid questions as to the contribution of the Japanese multinational to redress.
Fujitsu has said it is “morally obligated” to contribute to the costs, but the extent would be determined by the outcome of the Horizon scandal public inquiry. Further inquiry reports are to be released in the coming months.
The Post Office is government-owned and so it’s taxpayers who fund victim payouts.
What next?
The RJC initiatives are pilot schemes for now.
Feedback from them is intended to shape the design of a full, long-term, national restorative justice programme, due to launch in April.
An updated report on restorative justice for Post Office victims will be published in January.
“The next phase is about translating their voices into real, restorative action – ensuring that healing, accountability and cultural change progress hand in hand,” said RJC chief executive Jim Simon.
So far, 145 individuals have been involved, with an extra 200 postmasters expected to be engaged between November and March.
“Engagement is good and continues to grow,” Mr Simon said.
Tech giants Apple and Amazon have defied industry predictions with better-than-expected financial results.
Apple’s success is largely thanks to record-breaking iPhone sales, while Amazon’s is down to cloud computing arm Amazon Web Services (AWS), in spite of last week’s outage which knocked out thousands of websites.
AWS revenue accelerated 20.2% to $33bn (almost £25bn), which CEO Andy Jassy said was a pace it hadn’t seen since 2022. AWS accounts for 60% of Amazon’s total operating income.
Cloud growth has been a key focus for the company in the face of ever-growing pressure from rivals Google and Microsoft, which also reported revenue leaps this week.
While welcoming its latest results, Amazon has also issued a cautious sales outlook. File pic: Reuters
iPhone on the charge
With Donald Trump introducing punishing tariffs on India and China – the main manufacturing hubs for the iPhone – Apple’s record revenue has been even more welcome for boss Tim Cook.
The tariffs cost Apple $1.1bn (£824m) during the past quarter and are expected to cost another $1.4bn (just over £1bn) during the final three months of the year, but the new iPhone 17 range is a hit.
Consumers have been won over by a price point that didn’t stray above last year’s model, particularly in the US and Europe, leading to sales totalling $49bn (£36.1bn) during the July-September period – 6% up on last year.
Global market analyst IDC says almost 59 million iPhones were sold worldwide in the July-September quarter, putting Apple second behind Samsung at 61.4 million of their Android-powered phones.
Buoyed by the iPhone results, Apple earned $27.5bn (£21.4bn), or $1.85 per share (£1.44), nearly doubling its profit from a year ago. Revenue climbed 8% from a year ago to $102.5bn (£80bn).
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Tim Cook was famously once referred to by Donald Trump as ‘Tim Apple’. Pic: Reuters
Wall Street analysts had been cautious about both companies, and their tech rivals, because of uncertainty caused by tariffs and whether investment in AI has been overplayed.
While welcoming its latest results, Amazon has issued a cautious sales outlook for the fiscal fourth quarter, citing continued Trump tariffs as a possible bump in the revenue road.
Companies, including Amazon, are introducing AI into nearly every facet of their operations in hopes of reducing costs and boosting productivity. There have been tens of thousands of job losses at US tech firms this year.
On Wednesday, Federal Reserve Chair Jerome Powell said he did not believe the AI boom was a speculative bubble like the dot-com era, when many companies were “ideas rather than businesses”.
Today’s AI leaders “actually have earnings,” he said.
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