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.
Image: 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.
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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.”
Whitehall officials tried to convince Michael Gove to go to court to cover up the grooming scandal in 2011, Sky News can reveal.
Dominic Cummings, who was working for Lord Gove at the time, has told Sky News that officials in the Department for Education (DfE) wanted to help efforts by Rotherham Council to stop a national newspaper from exposing the scandal.
In an interview with Sky News, Mr Cummings said that officials wanted a “total cover-up”.
The revelation shines a light on the institutional reluctance of some key officials in central government to publicly highlight the grooming gang scandal.
In 2011, Rotherham Council approached the Department for Education asking for help following inquiries by The Times. The paper’s then chief reporter, the late Andrew Norfolk, was asking about sexual abuse and trafficking of children in Rotherham.
The council went to Lord Gove’s Department for Education for help. Officials considered the request and then recommended to Lord Gove’s office that the minister back a judicial review which might, if successful, stop The Times publishing the story.
Lord Gove rejected the request on the advice of Mr Cummings. Sources have independently confirmed Mr Cummings’ account.
Image: Education Secretary Michael Gove in 2011. Pic: PA
Mr Cummings told Sky News: “Officials came to me in the Department of Education and said: ‘There’s this Times journalist who wants to write the story about these gangs. The local authority wants to judicially review it and stop The Times publishing the story’.
“So I went to Michael Gove and said: ‘This council is trying to actually stop this and they’re going to use judicial review. You should tell the council that far from siding with the council to stop The Times you will write to the judge and hand over a whole bunch of documents and actually blow up the council’s JR (judicial review).’
“Some officials wanted a total cover-up and were on the side of the council…
“They wanted to help the local council do the cover-up and stop The Times’ reporting, but other officials, including in the DfE private office, said this is completely outrageous and we should blow it up. Gove did, the judicial review got blown up, Norfolk stories ran.”
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3:18
Grooming gangs victim speaks out
The judicial review wanted by officials would have asked a judge to decide about the lawfulness of The Times’ publication plans and the consequences that would flow from this information entering the public domain.
A second source told Sky News that the advice from officials was to side with Rotherham Council and its attempts to stop publication of details it did not want in the public domain.
One of the motivations cited for stopping publication would be to prevent the identities of abused children entering the public domain.
There was also a fear that publication could set back the existing attempts to halt the scandal, although incidents of abuse continued for many years after these cases.
Sources suggested that there is also a natural risk aversion amongst officials to publicity of this sort.
Mr Cummings, who ran the Vote Leave Brexit campaign and was Boris Johnson’s right-hand man in Downing Street, has long pushed for a national inquiry into grooming gangs to expose failures at the heart of government.
He said the inquiry, announced today, “will be a total s**tshow for Whitehall because it will reveal how much Whitehall worked to try and cover up the whole thing.”
He also described Mr Johnson, with whom he has a long-standing animus, as a “moron’ for saying that money spent on inquiries into historic child sexual abuse had been “spaffed up the wall”.
Asked by Sky News political correspondent Liz Bates why he had not pushed for a public inquiry himself when he worked in Number 10 in 2019-20, Mr Cummings said Brexit and then COVID had taken precedence.
“There are a million things that I wanted to do but in 2019 we were dealing with the constitutional crisis,” he said.
The Department for Education and Rotherham Council have been approached for comment.
Flawed data has been used repeatedly to dismiss claims about “Asian grooming gangs”, Baroness Louise Casey has said in a new report, as she called for a new national inquiry.
The government has accepted her recommendations to introduce compulsory collection of ethnicity and nationality data for all suspects in grooming cases, and for a review of police records to launch new criminal investigations into historic child sexual exploitation cases.
Image: Baroness Louise Casey carried out the review. Pic: PA
The crossbench peer has produced an audit of sexual abuse carried out by grooming gangs in England and Wales, after she was asked by the prime minister to review new and existing data, including the ethnicity and demographics of these gangs.
In her report, she has warned authorities that children need to be seen “as children” and called for a tightening of the laws around the age of consent so that any penetrative sexual activity with a child under 16 is classified as rape. This is “to reduce uncertainty which adults can exploit to avoid or reduce the punishments that should be imposed for their crimes”, she added.
Baroness Casey said: “Despite the age of consent being 16, we have found too many examples of child sexual exploitation criminal cases being dropped or downgraded from rape to lesser charges where a 13 to 15-year-old had been ‘in love with’ or ‘had consented to’ sex with the perpetrator.”
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3:18
Grooming gangs victim speaks out
The peer has called for a nationwide probe into the exploitation of children by gangs of men.
She has not recommended another over-arching inquiry of the kind conducted by Professor Alexis Jay, and suggests the national probe should be time-limited.
The national inquiry will direct local investigations and hold institutions to account for past failures.
Home Secretary Yvette Cooper said the inquiry’s “purpose is to challenge what the audit describes as continued denial, resistance and legal wrangling among local agencies”.
On the issue of ethnicity, Baroness Casey said police data was not sufficient to draw conclusions as it had been “shied away from”, and is still not recorded for two-thirds of perpetrators.
‘Flawed data’
However, having examined local data in three police force areas, she found “disproportionate numbers of men from Asian ethnic backgrounds amongst suspects for group-based child sexual exploitation, as well as in the significant number of perpetrators of Asian ethnicity identified in local reviews and high-profile child sexual exploitation prosecutions across the country, to at least warrant further examination”.
She added: “Despite reviews, reports and inquiries raising questions about men from Asian or Pakistani backgrounds grooming and sexually exploiting young white girls, the system has consistently failed to fully acknowledge this or collect accurate data so it can be examined effectively.
“Instead, flawed data is used repeatedly to dismiss claims about ‘Asian grooming gangs’ as sensationalised, biased or untrue.
“This does a disservice to victims and indeed all law-abiding people in Asian communities and plays into the hands of those who want to exploit it to sow division.”
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3:07
From January: Grooming gangs: What happened?
The baroness hit out at the failure of policing data and intelligence for having multiple systems which do not communicate with each other.
She also criticised “an ambivalent attitude to adolescent girls both in society and in the culture of many organisations”, too often judging them as adults.
‘Deep-rooted failure’
Responding to Baroness Casey’s review, Ms Yvette Cooper told the House of Commons: “The findings of her audit are damning.
“At its heart, she identifies a deep-rooted failure to treat children as children. A continued failure to protect children and teenage girls from rape, from exploitation, and serious violence.
She added: “Baroness Casey found ‘blindness, ignorance, prejudice, defensiveness and even good but misdirected intentions’ all played a part in this collective failure.”
Ms Cooper said she will take immediate action on all 12 recommendations from the report, adding: “We cannot afford more wasted years repeating the same mistakes or shouting at each other across this House rather than delivering real change.”
Image: Home Secretary Yvette Cooper responded to the report. Pic: PA
Conservative leader Kemi Badenoch said: “After months of pressure, the prime minister has finally accepted our calls for a full statutory national inquiry into the grooming gangs.
“We must remember that this is not a victory for politicians, especially the ones like the home secretary, who had to be dragged to this position, or the prime minister. This is a victory for the survivors who have been calling for this for years.”
Ms Badenoch added: “The prime minister’s handling of this scandal is an extraordinary failure of leadership. His judgement has once again been found wanting.
“Since he became prime minister, he and the home secretary dismissed calls for an inquiry because they did not want to cause a stir.
“They accused those of us demanding justice for the victims of this scandal as, and I quote, ‘jumping on a far right bandwagon’, a claim the prime minister’s official spokesman restated this weekend – shameful.”
The government has promised new laws to protect children and support victims so they “stop being blamed for the crimes committed against them”.
The families of three of the British victims of last week’s Air India crash in Ahmedabad have criticised the UK government’s response to the disaster, saying they “feel utterly abandoned”.
It comes after an Air India Dreamliner crashed shortly after take-off from Ahmedabad airport in western India, killing 229 passengers and 12 crew. One person on the flight survived.
Among the passengers and crew on the Gatwick-bound aircraft were 169 Indian nationals, 53 Britons, seven Portuguese nationals and one Canadian national.
In a statement, the families of three British citizens who lost their lives said they were calling on the UK government to “immediately step up its presence and response on the ground in Ahmedabad”.
The families said they rushed to India to be by their loved ones’ sides, “only to find a disjointed, inadequate, and painfully slow government reaction”.
“There is no UK leadership here, no medical team, no crisis professionals stationed at the hospital,” said a family spokesperson.
“We are forced to make appointments to see consular staff based 20 minutes away in a hotel, while our loved ones lie unidentified in an overstretched and under-resourced hospital.
“We’re not asking for miracles – we’re asking for presence, for compassion, for action,” another family member said.
The families listed a number of what they called “key concerns”, including a “lack of transparency and oversight in the identification and handling of remains”.
They also demanded a “full crisis team” at the hospital within 24 hours, a British-run identification unit, and financial support for relatives of the victims.
A local doctor had “confirmed” the delays in releasing the bodies were “linked to severe understaffing”, according to the families, who also called for an independent inquiry into the UK government’s response.
“Our loved ones were British citizens. They deserved better in life. They certainly deserve better in death,” the statement added.
Sky News has approached the UK’s Foreign, Commonwealth and Development Office for comment.
Families and friends of the victims have already expressed their anger and frustration – mostly aimed at the authorities in India – over the lack of information.