More than £1m of unexplained transactions were transferred in to Post Office profit at the height of the Horizon scandal, leaked documents have shown.
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.
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 the Post Office profited from shortfalls paid for by sub-postmasters.
More than 900 sub-postmasters were wrongly prosecuted due to faults with Horizon accounting software.
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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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9:45
‘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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2:37
Post Office redress delay overshadowed by executive drama
Mr Henderson added: “It didn’t come from thin air, where did the money come from? That’s a fundamental question the Post Office has not answered.”
Meanwhile, separately, a secret recording obtained by Sky News indicates that the 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 the 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.
“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.”
The Post Office released a statement in response to the findings, saying: “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 to get to the truth of what happened and accountability for that.”
A Jewish campaign group has cancelled today’s Walk Together demonstration amid safety concerns, as the Met Police says the risk of disorder from a pro-Palestinian march is not high enough to seek a ban.
Thousands had been expected to attend the event in central London as part of the Campaign Against Antisemitism (CAA) event, which would have coincided with today’s pro-Palestinian march.
The CAA said it cancelled the event, where people would have walked “where they please”, after receiving “numerous threats” and identifying “hostile actors (who) seem to have intended to come to any meeting locations that we announced”.
It added: “The risk to the safety of those who wished to walk openly as Jews in London… as part of this initiative has therefore become too great.
“We are no less angry about these marches than our Jewish community and its allies. We want to walk.”
The CAA said it had suggested “concrete measures” to government aimed at changing how the pro-Palestinian protests are policed.
It highlighted concerns over antisemitic chants, inflammatory placards, and instances of glorifying terrorism, as well as incidents of violence, including attacks on police officers.
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“Police have told us that they intend to handle the march no differently from the passive way that they have become accustomed to over the course of more than six months,” the group added.
But the Met’s assistant commissioner, Matt Twist, said the force aimed to police “without fear or favour”, adding that the impact of the weekly pro-Palestinian protests was “felt widely” but had been a “particular cause of fear and uncertainty in Jewish communities”.
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Mr Twist added that pro-Palestinian protests had “never” reached the threshold where it was a “risk of serious public disorder”.
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13:02
Extended video of ‘openly Jewish’ row
He said: “The only legal route to ban a march is if there is a risk of serious public disorder – that is rioting or serious violence that could not be dealt with by other restrictions or conditions.
“We have never got close to that threshold on these Palestinian Solidarity Campaign (PSC) marches to date.”
The CAA had announced its Walk Together after its chief executive, Gideon Falter, was prevented from crossing a road near a pro-Palestinian protest by a police officer last week because he was “openly Jewish”.
Footage showed a tense, lengthy stand-off between police and Mr Falter as one Met officer described his presence as “antagonising”.
The campaigner then spoke to another officer who said if he remained in the area, he would be arrested.
After the incident, Mr Falter was critical of the Metand said there were “no-go zones for Jews”, while Scotland Yard apologised twice for the officer’s choice of words.
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0:39
Standoff between protesters in London
The PSC protest today, which organisers claim could attract “hundreds of thousands” of protesters, will take place on a pre-agreed route.
Simultaneously, a separate demonstration arranged by the pro-Israel Enough is Enough group will go ahead following a route parallel to the PSC march.
The Met Police said 450 arrests have been made since the pro-Palestinian marches began, with 193 of those being for antisemitic offences, the majority involving placards, chanting or expressions of hate speech.
The cost of policing the protests stands at approximately £38.5m, the Met added.
The King’s constitutional work has continued, but the public outings were stopped.
His family has stepped up to support him, and protocols were in place should the need arise.
But it has been an incredibly challenging time for the House of Windsor.
News of the Princess of Wales’s cancer diagnosis a double blow for the family.
There remains a lot of uncertainty; the King won’t return to full duties, and his engagements will be adapted to reduce the risk while he recovers. There’s also no confirmation yet about the big set piece events like Trooping the Colour or an overseas state visit.
But this is a significant moment. And the King’s return to public work will start with a personally poignant visit, as he and the Queen meet patients and staff at a cancer treatment centre.
The deaths of the Reading terror attack victims were “probably avoidable” and contributed to by the failings of multiple agencies, an inquest has found.
Friends James Furlong, 36, Joseph Ritchie-Bennett, 39, and David Wails, 49, were stabbed to death by Khairi Saadallah, now 29, in Forbury Gardens on 20 June 2020.
Three other people were also injured before Saadallah, who shouted “Allahu Akbar” (God is greatest), threw away the eight-inch knife and ran off, pursued by an off-duty police officer.
Saadallah was handed a whole-life sentence at the Old Bailey in January 2021 after pleading guilty to the three murders and three attempted murders.
Judge Coroner Sir Adrian Fulford today delivered his findings on the killings of history teacher Mr Furlong, pharmaceuticals manager Mr Ritchie-Bennett, and scientist Mr Wails.
Mr Fulford said the deaths “probably would have been avoidable” if the mental health service had given “greater priority to stabilising [Saadallah] and securing access to long-term psychological therapy”.
He added that if his “extremist risk had been better analysed”, Saadallah would probably then have been recalled to custody the day before the attacks, meaning they would never have happened.
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The coroner said the deaths of the three men were “contributed to by the failings of multiple agencies”.
Saadallah, who came to the country as a teenager from Libya, where he was trained to fight as a child soldier for a group now banned as a terrorist organisation in the UK, had a long history of offending and was released from prison on licence just 15 days before the attack.
The inquest heard six weeks of evidence looking at his management while he was in jail and on probation, his mental health and the assessment and response to his risk of terrorism.
The Old Bailey heard the Home Office dealt with Saadallah with “woeful inadequacy”, while he was referred to the government’s Prevent de-radicalisation programme four times.
MI5 “triaged” him on four separate occasions, once opening a “lead investigation”, but the security service said they found no evidence he planned to leave the country or commit an attack.
Saadallah had a string of previous convictions for offences including violence and possession of a knife, and spent repeated spells in jail between 2015 and 2020.
Prison intelligence reports showed a pattern of fighting, threats to staff, self-harming and suspected drug use, along with references to extremism.
A counsellor said she “harassed” mental health services to examine him in the year before the killings, while one probation officer broke down in court as she recalled unknowingly “managing an unconvicted murderer”.
The inquest also heard Thames Valley Police officers did not find a knife at Saadallah’s home during a “welfare check” the day before the attack after they were not told he was threatening to harm himself and others.
‘Catastrophically failed’
Mr Furlong’s father Gary said the victims’ families had listened with “shock and utter disappointment” to the evidence, which had led them to “fundamentally question” whether their faith in authorities to protect their loved ones was misplaced.
“Our boys did not stand a chance,” he said.
Dr Wails’s brother Andrew said UK state agencies had “catastrophically failed” in their duty to protect the public from Saadallah and that the attack “destroyed our lives”.
Calling Saadallah a “cowardly terrorist”, Andrew Wails said: “[He] had been a member of a proscribed terrorist group and murdered people, he confessed to throwing grenades at people in public places in Libya, yet he was let into the UK and allowed to remain here.”
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1:18
‘The state catastrophically failed in its duty’
Parallels to London Bridge stabbings
Nick Harborne, chief of Reading Refugee Support Group, also said the stabbings “could have been avoided” having warned various bodies about Saadallah months before the attack.
When the news of the stabbings broke, Mr Harborne “instantly knew it was Saadallah”.
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2:26
Reading attack ‘could have been avoided’
He said he had tried to communicate with Prevent, community mental health services, and the Probation Service, to notify them of Saadallah’s “potential for violence”.
Mr Harborne likened Saadallah’s trajectory to the terrorist Usman Khan who committed the 2019 London Bridge stabbings, and he referred to the attack in his communications with the various agencies.
“There is stuff we could all have done better… The tragedy didn’t have to happen,” he said.
Assistant Chief Constable Tim Metcalfe of Counter Terrorism Policing South said was “still work to do” to address the issues surrounding the case.
He added: “In this moment it is also important to reflect on the terrorist threat that we in UK policing and our partners face. It is significant and continually evolving.
“Many of the cases we are working on now involve people with complex mental health and social needs. We also are seeing more individuals with mixed or unclear ideology, who can be more difficult to assess and manage.”
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