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.”
Ryanair has reported another year of record profits and passenger numbers.
The average fare at the airline, which is Europe’s largest by passenger numbers, was 21% more expensive than 12 months earlier, its annual results showed.
But the company suggested a cut in ticket prices could be on the way after this summer when prices will either be the same or more expensive than last year.
Annual profits reached €1.92bn (£1.64bn), surpassing the previous record of €1.45bn (£1.26bn) made in the year ending March 2018.
Passenger numbers also outpaced previous all-time highs and are now well above pre-pandemic numbers at 184 million – a rise of 23% on the pre-COVID year of 2019.
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Ticket prices
Those passengers paid fares costing an average of 21% more than the year up to March 2023 but Ryanair’s chief executive Michael O’Leary said if the company has to cut fares to have planes 94% full next April, May and June “then so be it”.
While demand is “strong” for summer flights and its summer schedule will operate over 200 new routes, the low-cost carrier said it remained “cautiously optimistic that peak summer 2024 fares will be flat to modestly ahead of last summer”.
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Boeing headwinds
The passenger increase has come despite Boeing‘s delays in delivering new planes to the airline.
Ryanair had staked a large part of its financial success on expansion through 300 new 737 MAX 10 aircraft.
But the plane manufacturer has been beset by delays amid regulatory and media scrutiny of safety at its manufacturing sites after a door blew off an Alaska Airlines Boeing 737 MAX 9 jet.
There’s a risk those delays “could slip further”, Mr O’Leary said.
But Ryanair said it would receive “modest compensation” from Boeing for the delays.
The no-frills carrier also said its fuel bill rose 32% to €5.14bn (£4.4bn).
Billionaire Sir Jim Ratcliffe has told Sky News that Britain is ready for a change of government after scolding the Conservatives over their handling of the economy and immigration after Brexit.
While insisting his petrochemicals conglomerate INEOS is apolitical, Sir Jim backed Brexit and spent last weekend with Labour leader Sir Keir Starmer at Manchester United – the football club he now runs as minority owner.
“I’m sure Keir will do a very good job at running the country – I have no questions about that,” Sir Jim said in an exclusive interview.
“There’s no question that the Conservatives have had a good run,” he added. “I think most of the country probably feels it’s time for a change. And I sort of get that, really.”
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Sir Jim was a prominent backer of leaving the European Union in the 2016 referendum but now has issues with how Brexit was delivered by Tory prime ministers.
“Brexit sort of unfortunately didn’t turn out as people anticipated because… Brexit was largely about immigration,” Sir Jim said.
“That was the biggest component of that vote. People were getting fed up with the influx of the city of Southampton coming in every year. I think last year it was two times Southampton.
“I mean, no small island like the UK could cope with vast numbers of people coming into the UK.
“I mean, it just overburdens the National Health Service, the traffic service, the police, everybody.
“The country was designed for 55 or 60 million people and we’ve got 70 million people and all the services break down as a consequence.
“That’s what Brexit was all about and nobody’s implemented that. They just keep talking about it. But nothing’s been done, which is why I think we’ll finish up with the change of government.”
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UK needs to get ‘sharper on the business front’
Prime Minister Rishi Sunak has indicated an election is due this year but Monaco-based Sir Jim is unimpressed by the Conservatives’ handling of the economy.
“The UK does need to get a bit sharper on the business front,” he said. “I think the biggest objective for the government is to create growth in the economy.
“There’s two parts of the economy, there’s the services side of the economy and there’s the manufacturing side. And the manufacturing, unfortunately, has been sliding away now for the last 25 years.
“We were very similar in scale to Germany probably 25 years ago.
“But today we’re just a fraction of where Germany is and I think that isn’t healthy for the British economy… particularly when you think the north of England is very manufacturing based, and that talks to things like energy competitiveness, it talks to things like, why do you put an immensely high tax on the North Sea?
“That just disincentivises people from finding hydrocarbons in the North Sea, in energy.
“And what we need is competitive energy. So I mean, in America, in the energy world, in the oil and gas world, they just apply a corporation tax to the oil and gas companies, which is about 30%. And in the UK we’ve got this tax of 75% because we want to kill off the oil and gas companies.
“But if we don’t have competitive energy, we’re not going to have a healthy manufacturing industry. And that just makes no sense to me at all. No.”
‘We’re apolitical’
Asked about INEOS donating to Labour, Sir Jim replied: “We’re apolitical, INEOS.
“We just want a successful manufacturing sector in the UK and we’ve talked to the government about that. It’s pretty clear about our views.”
Sir Jim was keener to talk about the economy and politics than his role at struggling Manchester United, which he bought a 27.7% stake in from the American Glazer family in February – giving him an even higher business profile.
Old Trafford stadium in Manchester. Pic: AP
Push for stadium of the North
He is continuing to push for public funds to regenerate Old Trafford and the surrounding areas despite no apparent political support being forthcoming. Sir Keir was hosted at the stadium for a Premier League match last weekend just as heavy rain exposed the fragility of the ageing venue.
“There’s a very good case, in my view, for having a stadium of the North, which would serve the northern part of the country in that arena of football,” Sir Jim said. “If you look at the number of Champions League the North West has won, it’s 10. London has won two.
“And yet everybody from the North has to get down to London to watch a big football match. And there should be one [a large stadium] in the North, in my view.
“But it’s also important for the southern side of Manchester, you know, to regenerate.
“It’s the sort of second capital of the country where the Industrial Revolution began.
“But if you have a regeneration project, you need a nucleus or a regeneration project and having that world-class stadium there, I think would provide the impetus to regenerate that region.”
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