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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.

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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 the Post Office profited from shortfalls paid for by sub-postmasters.

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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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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.

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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.”

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.”

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‘Is today the day I’ll be diagnosed with cancer?’ Infected blood victim’s life turned upside down

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'Is today the day I'll be diagnosed with cancer?' Infected blood victim's life turned upside down

“Every morning I wake up and there is a small part of me that thinks, ‘Is today the day I’m going to be diagnosed with some sort of cancer?'”

This is the question Susan Lee asks herself every day. It is part of the mental anguish of living with Hepatitis C.

Susan was born with Von Willebrand disease.

As a child, her blood clotting disorder was treated with a product called Factor 8. It was supposed to revolutionise treatment for haemophiliacs.

Susan Lee with her father
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Susan with her father

Instead the American product farmed from prisoners and drug addicts was infected with HIV and Hepatitis. It was never screened or treated before being injected into the veins of patients.

The risks were known. Susan’s father raised concerns.

“I remember specifically on one occasion he went into the consulting room and spoke to my consultant,” says Susan.

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“[He] said, ‘I’m very worried about this, and I want you to let me know if Susan has or will receive any American blood products’.

“And he said to my father, ‘Absolutely not’.”

Susan Lee
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Hepatitis C has had a devasting impact on every part of Susan’s life

However, at 14, Susan discovered she had been infected with Hepatitis C, like thousands of other patients in the worst NHS treatment scandal in history.

Susan believes patients like her were exposed to great risk and potential death to increase profits for the companies that were producing these blood products.

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“I think unfortunately it always comes down to cost implications. And we know that American blood products were cheaper from those big pharmaceutical companies.

“We know there were other treatment options available. There were German products that were out there and could have been used, but at a higher price point, and they were not chosen.”

The Hepatitis C infection has had a devasting impact on every part of Susan’s life. She has had to give up her career as a barrister.

Susan Lee
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Susan with her mother

“It’s been a really, really difficult time for us as a family. And it’s intergenerational because we were given these products to take home, my parents were taught how to inject. My mother has a huge feeling of guilt surrounding that,” she says.

“Three weeks ago, she sat me down and said, ‘I’m so terribly sorry.’

“I said, ‘You’ve got absolutely nothing to be sorry for. It was nothing to do with you. You did your best’.

“Also my children, from having witnessed the times that I was really, really sick, you know, my daughters asking me, ‘Mummy, why can’t you run in the school races and for sports day?’

“Because I could barely lift my head off the pillow to get out of bed to be there.”

Later this morning, Susan and the thousands of other victims of the infected blood scandal will get answers to the decades-long search for the truth.

Westminster’s Methodist’s Central Hall where Sir Brian Langstaff will deliver his report into the infected blood scandal
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Westminster’s Methodist’s Central Hall where Sir Brian Langstaff will deliver his report into the infected blood scandal

At Westminster’s Methodist’s Central Hall just after midday, Sir Brian Langstaff will deliver his report into the infected blood scandal. It is expected to be damning.

Des Collins, senior partner of Collins Solicitors which represents 1,500 victims and their families, said the inquiry chair is likely to hold many people accountable.

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“If you are going to point the finger at someone, you’ve got to give them notice and it’s that notice process which has delayed [the report] probably for the last six months. So a lot of people will have the finger pointed at them.

“They will be held accountable for each individual part of the scandal, which is appropriate insofar as their involvement is concerned.

“I don’t think we’re going to get the finger pointed at one person saying, ‘You are responsible for the whole thing,’ because there are so many people involved in it and they’re all making individual decisions.”

Westminster’s Methodist’s Central Hall
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Westminster’s Methodist’s Central Hall

The significance of this moment cannot be overstated.

The great hall will be full of people infected with deadly diseases in secret trials, bereaved parents who saw their children die and all of the others affected by this preventable tragedy.

The atmosphere will be charged with emotion, anger and hopefully relief.

The delay in delivering justice has compounded the grief and anguish felt by so many. After being lied to and ignored for decades, they finally have their day.

This report must mark the beginning of the end of this shameful scandal.

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Sky News will have full coverage of the infected blood report on TV, online and on the Sky News app today

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‘Mum was given a death sentence’: 100 stories from infected blood scandal

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'Mum was given a death sentence': 100 stories from infected blood scandal

“Losing Gary, my soul mate, was beyond painful,” says Kathryn Croucher, whose husband died aged 42 in 2010.

“Every day was a struggle dealing with the knowledge he was HIV and Hepatitis C positive.”

“Mum always said she was given a death sentence,” recalls Ronan Fitzgerald. His mother, Jane, died aged 54 after being infected with Hepatitis C when she was 16. “It was a ticking time bomb.”

Infected blood inquiry Sky News promo image

Sky News will have full coverage of the infected blood report on TV, online and on the Sky News app today.

More than 30,000 Britons were infected with HIV and Hepatitis C after being given contaminated blood products in the 1970s and 1980s.

Around 3,000 people have died as a result of the scandal, while many more still live under the shadow of health problems, debilitating treatments and stigma. Now, the findings of a public inquiry, first announced in 2017, will finally be published.

These are 100 faces of infected blood victims that either they, or their families, have shared with Sky News.

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Brixham: People remain scared to drink tap water as things slowly return to normal after parasite disease outbreak

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Brixham: People remain scared to drink tap water as things slowly return to normal after parasite disease outbreak

“I’m never drinking tap water again,” Kayley Lewis says.

“My symptoms have made me lose a stone in two weeks.”

Ms Lewis and her two children have been suffering from diarrhoea, vomiting and stomach cramps for over a fortnight – since South West Water found small traces of the parasite cryptosporidium in the Hillhead reservoir.

“I can’t trust them [South West Water] again.

“I might start using tap water for dishes… but definitely never to drink. Ever.

“I’ve been completely put off now… especially because of how poorly it makes you feel.

“I just don’t think I could ever try and risk going back to that.”

Pic: PA
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A bottled water collection point in Devon. Pic: PA

At least 46 people are confirmed to have the disease, while as many as 70 other cases of diarrhoea and vomiting are also under investigation, the UK Health Security Agency (UKHSA) has said.

South West Water (SWW) has repeatedly apologised – telling Sky News today that they are working “around the clock” to get all households back to using safe water again.

This could be as early as this Wednesday, drought and resilience director at SWW David Harris told me.

“We’re looking at somewhere between mid to late next week before we’ll be in a position to be able to responsibly lift that boil water notice.”

David Harris said it could be a couple of weeks before the boil water notice
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David Harris said it could be a couple of weeks before the boil water notice is lifted

So far, 14,500 households in the Alston supply area can drink their tap water without boiling it first – as advised by SWW.

However, some 2,500 homes in Hillhead, upper parts of Brixham and Kingswear have been told to continue boiling – and cooling – their water supplies before drinking it.

Steve Price, who runs the Station Guest House B&B near Brixham, said he lost a couple of thousand pounds in bookings due to – understandably – paranoid customers.

“Losses we anticipate are roughly around £2000 from people that have cancelled and directly stated that the cancellation was due to the water situation.

“So we would anticipate that at the bare minimum as compensation.”

Read more
Contamination ‘shouldn’t have happened’, SWW boss says
Water firm apologises after parasite detected in reservoir
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Kayley Lewis has been drinking bottled water since the disease outbreak
Image:
Kayley Lewis has been drinking bottled water since the disease outbreak

Mr Price has spent the afternoon emptying the B&B’s water tanks in order to minimise the risk to his guests.

“In terms of money – we’re just flushing it away!

“A couple of hundred pounds worth. But this supply feeds the showers, sinks and bathrooms.

“It needs to be completely emptied and cleaned to avoid risks”.

Mr Price’s business isn’t the only one suffering.

It’s a bleak picture across the neighbouring towns.

This time of year Brixham is usually buzzing with holidaymakers – especially by the harbour side.

The past week, however, has been another story.

“It’s a ghost town”, Sally Tollon, an employee at a local chippy tells me.

“We’re really quiet… you can see it’s empty, because people are frightened to come down because of the water situation.

“On average we make a thousand pounds a day. Yesterday we did half of that.”

Sally Tollon's says the fish and chip shop where she works is losing money
Image:
Sally Tollon says the fish and chip shop where she works is losing money

Despite things slowly getting back to normal, people are scared.

They have lost faith and trust in a water supply – one woman told me – they had “always taken for granted”.

It’s clear rebuilding the community’s trust and confidence in their water supplier will take some time in the coming weeks and months.

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