Post Office described IT bugs as ‘exceptions’ to make them sound ‘non-emotive’, inquiry told
Senior figures at the Post Office began describing computer bugs as “exceptions” as they grappled with mounting complaints from sub-postmasters about its faulty Horizon IT system, it has emerged.
The then Post Office chief executive Paula Vennells made the suggestion to colleagues after she asked her husband for advice on a “non-emotive” way of referring to computer problems, the inquiry into the Post Office scandal heard.
It came amid concern within the company about bad publicity over the prosecution of sub-postmasters accused of stealing from branches.
Between 1999 and 2015, more than 700 Post Office managers were prosecuted after the faulty accounting software, provided by Fujitsu, made it seem like money was missing. At the time, the company insisted its systems were robust.
On Tuesday the inquiry heard evidence from the Post Office’s former lead in-house lawyer Susan Crichton, who was quizzed about a series of emails sent between senior figures.
This included a message from Ms Vennells, written in July 2013, which said: “My engineer/computer literate husband sent the following reply to the question: ‘What is a non-emotive word for computer bugs, glitches, defects that happen as a matter of course?’
“Answer: ‘Exception or anomaly. You can also say conditional exception/anomaly which only manifests itself under unforeseen circumstances xx'”
The Post Office’s director of communications at the time, Mark Davies, replied: “I like exception v much. Very helpful”.
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Post Office: New evidence revealed
Following the exchange, Post Office emails and documents began referring to computer problems as “exceptions” and “anomalies”, including in a briefing document written by Ms Crichton. The wording was also then used in a briefing note to MPs.
Julian Blake, counsel to the inquiry, asked the retired lawyer: “The wording here that’s being used, is there an element of smoke and mirrors about the whole thing now?”
She replied: “It certainly reads that way”.
Mr Blake said the use of “exception” instead of “bug” was “absolutely Orwellian”.
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The inquiry was also shown correspondence between senior figures about whether to launch a review into alleged cases of theft. An email from Ms Crichton showed she was against a full independent investigation into sub-postmasters who had already been convicted.
She wrote in June 2012: “I do not think that we want to be seen as re-opening cases but rather position this as a review of the existing evidence to enable an understanding of the outstanding concerns and the facts… For those who have not been prosecuted we can offer a full independent investigation”.
Ms Crichton agreed with Mr Blake that her stance had been a “mistake on her part”, and added: “I was too short-sighted maybe”.
She told the inquiry that she “tried to stop prosecutions reliant on Horizon evidence” but left her role as the company’s general counsel in late 2013 as former Post Office chair Alice Perkins had lost confidence in her.
Earlier, Ms Crichton began her evidence with an apology to those affected by the scandal.
“l am truly sorry for the suffering caused to you and your families. I wish that things had been resolved more quickly and again, I’m very sorry that they haven’t been,” she said.
The inquiry continues.
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You probably recall the stories about Leicester’s clothing industry in recent years: grim labour conditions, pay below the minimum wage, “dark factories” serving the fast fashion sector. What is less well known is what happened next. In short, the industry has cratered.
In the wake of the recurrent scandals over “sweatshop” conditions in Leicester, the majority of major brands have now abandoned the city, triggering an implosion in production in the place that once boasted that it “clothed the world”.
And now Leicester faces a further existential double-threat: competition from Chinese companies like Shein and Temu, and the impending arrival of cheap imports from India, following the recent trade deal signed with the UK. Many worry it could spell an end for the city’s fashion business altogether.
Gauging the scale of the recent collapse is challenging because many of the textile and apparel factories in Leicester are small operations that can start up and shut down rapidly, but according to data provided to Sky News by SP&KO, a consultancy founded by fashion sector veterans Kathy O’Driscoll and Simon Platts, the number has fallen from 1,500 in 2017 to just 96 this year. This 94% collapse comes amid growing concerns that British clothes-making more broadly is facing an existential crisis.
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In an in-depth investigation carried out over recent months, Sky News has visited sites in the city shut down in the face of a collapse of demand. Thousands of fashion workers are understood to have lost their jobs. Many factories lie empty, their machines gathering dust.
The vast majority of high street and fast fashion brands that once sourced their clothes in Leicester have now shifted their supply chains to North Africa and South Asia.
And a new report from UKFT – Britain’s fashion and textiles lobby group – has found that a staggering 95% of clothes companies have either trimmed or completely eliminated clothes manufacturing in the UK. Some 58% of brands, by turnover, now have an explicit policy not to source clothes from the UK.
Seamstresses in one of the city’s former factories
Clothing industry workers in Leicester
Jenny Holloway, chair of the Apparel & Textile Manufacturers Association, said: “We know of factories that were asked to become a potential supplier [to high street brands], got so far down the line, invested on sampling, invested time and money, policies, and then it’s like: ‘oh, sorry, we can’t use you, because Leicester is embargoed.'”
Tejas Shah, a third-generation manufacturer whose family company Shahtex used to make materials for Marks & Spencer, said: “I’ve spoken to brands in the past who, if I moved my factory 15 miles north into Loughborough, would be happy to work with me. But because I have an LE1, LE4 postcode, they don’t want to work for me.”
Shahtex in Leicester used to make materials for Marks & Spencer
Tejas Shah, of Leicester-based firm Shahtex
Threat of Chinese brands Shein and Temu
That pain has been exacerbated by a new phenomenon: the rise of Chinese fast fashion brands Shein and Temu.
They offer consumers ultra-cheap clothes and goods, made in Chinese factories and flown direct to UK households. And, thanks to a customs loophole known as “de minimis”, those goods don’t even incur tariffs when they arrive in the country.
An online advert for Chinese fast fashion company Shein
According to Satvir Singh, who runs Our Fashion, one of the last remaining knitwear producers in the city, this threat could prove the final straw for Leicester’s garments sector.
“It is having an impact on our production – and I think the whole retail sector, at least for clothing, are feeling that pinch.”
Inside one of the city’s remaining clothesmakers
While Donald Trump has threatened to abolish the loophole in the US, the UK has only announced a review with no timeline.
“If we look at what Trump’s done, he’s just thinking more about his local economy because he can see the long-term effects,” said Mr Singh. “I think [abolishing de minimis exceptions] will make a huge difference. I think ultimately it’s about a level playing field.”
A spokesperson for Temu told Sky News: “We welcome UK manufacturers and businesses to explore a low-cost way to grow with us. By the end of 2025, we expect half our UK sales to come from local sellers and local warehouses.”
Thames Water, the UK’s biggest water provider, has been hit by a record fine by regulator Ofwat.
The company has been fined £122.7m following Ofwat’s “biggest and most complex” investigation.
It follows two investigations related to Thames Water’s wastewater operations and dividend payouts.
Of the total fine, £104.5m – 9% of Thames Water‘s turnover – has been levied for breaches of wastewater rules – just below the maximum 10% of turnover that Ofwat could have applied.
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Pic: istock
Another £18.2m penalty will be paid for breaches of dividend payment rules.
It is the first time Ofwat has fined a company for shareholders’ payments which do not “properly reflect” its performance for customers and the environment.
The fine will be paid by Thames Water and its shareholders, Ofwat said, rather than customers.
‘Unacceptable’ environmental impact
The regulator was highly critical of Thames Water’s handling of wastewater, describing it as having an “unacceptable” impact on the environment.
Its investigation of treatment works and the wider wastewater network uncovered failings which “amounted to a significant breach of the company’s legal obligations” and caused that unacceptable environmental impact.
The company announced a 40% spike in sewage spills in December for the period from January to September 2024.
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Thames Water boss can ‘save’ company
The fine was so large because Ofwat’s chief executive, David Black, said Thames Water “failed to come up with an acceptable redress package that would have benefited the environment”.
“This is a clear-cut case where Thames Water has let down its customers and failed to protect the environment,” Mr Black said.
“Our investigation has uncovered a series of failures by the company to build, maintain and operate adequate infrastructure to meet its obligations.”
As a result, Thames Water is required to agree to a remediation plan with Ofwat within six months.
Another investigation by the Environment Agency into environmental permits at sewage treatment works is ongoing.
Bad news for Thames Water finances
Thames Water serves 16 million customers across London and the South East and has just about fended off effective nationalisation, having secured an emergency £3bn loan. Its debts now top £19bn.
These fines were not factored into Thames Water’s financial planning for the next five years. The company’s chief executive, Chris Weston, told a recent sitting of the Environment, Food and Rural Affairs select committee that Thames Water’s future was dependent on Ofwat being lenient with fines.
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A Thames Water spokesperson said: “We take our responsibility towards the environment very seriously and note that Ofwat acknowledges we have already made progress to address issues raised in the investigation relating to storm overflows.
“The dividends were declared following a consideration of the company’s legal and regulatory obligations. Our lenders continue to support our liquidity position and our equity raise process continues.”
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