A damning report into the faulty Post Office IT system that preceded Horizon has been unearthed after nearly 30 years – and it could help overturn criminal convictions.

The document, known about by the Post Office in 1998, is described as “hugely significant” and a “fundamental piece of evidence” and was found in a garage by a retired computer expert.

Capture was a piece of accounting software, likely to have caused errors, used in more than 2,000 branches between 1992 and 1999.

It came before the infamous faulty Horizon software scandal, which saw hundreds of sub-postmasters wrongfully convicted between 1999 and 2015.

The “lost long” Capture documents were discovered in a garage by a retired computer expert who came forward after a Sky News report into the case of Patricia Owen, a convicted sub-postmistress who used the software.

Adrian Montagu was supposed to be a key witness for Pat’s defence at her trial in 1998 but her family always believed he had never turned up, despite his computer “just sitting there” in court.

Mr Montagu, however, insists he did attend.

He describes being in the courtroom and adds that “at some point into the trial” he was stood down by the barrister for Mrs Owen with “no reason” given.

Sky News has seen contemporaneous notes proving Mr Montagu did go to Canterbury Crown Court for the first one or two days of the trial in June 1998.

“I went to the court and I set up a computer with a big old screen,” he says.

“I remember being there, I remember the judge introducing everybody very properly…but the barrister in question for the defence, he went along and said ‘I am not going to need you so you don’t need to be here any more’.

“I wasn’t asked back.”

Sky News has reached out to the barrister in Pat Owen’s case who said he had no recollection of it.

‘An accident waiting to happen’

The report, commissioned by the defence and written by Adrian Montagu and his colleague, describes Capture as “an accident waiting to happen”, and “totally discredited”.

It concludes that “reasonable doubt exists as to whether any criminal offence has taken place”.

It also states that the software “is quite capable of producing absurd gibberish”, and describes “several insidious faults…which would not be necessarily apparent to the user”.

All of which produced “arithmetical or accounting errors”.

Sky News has also seen documents suggesting the jury in Pat Owen’s case may never have seen the report.

What is clear is that they did not hear evidence from its author including his planned “demonstration” of how Capture could produce accounting errors.

Pat Owen was convicted of stealing from her Post Office branch in 1998 and given a suspended prison sentence.

Her family describe how it “wrecked” her life, contributing towards her ill health, and she died in 2003 before the wider Post Office scandal came to light.

Her daughter Juliet said her mother fought with “everything she could”.

“To know that in the background there was Adrian with this (report) that would have changed everything, not just for mum but for every Capture victim after that, I think is shocking and really upsetting – really, really upsetting.”

The report itself was served on the Post Office lawyers – who continued to prosecute sub-postmasters in the months and years after Pat Owen’s trial.

‘My blood is boiling’

Steve Marston, who used the Capture software in his branch, was one of them – he was convicted of stealing nearly £80,000 in September 1998.

His prosecution took place four months after the Capture report had been served on the Post Office.

Steve says he was persuaded to plead guilty with the “threat of jail” hanging over him and received a suspended sentence.

He describes the discovery of the report as “incredible” and says his “blood is boiling” and he feels “betrayed”.

“So they knew that the software was faulty?,” he says. “It’s in black and white isn’t it? And yet they still pressed on doing what they did.

“They used Capture evidence … as the evidence to get me to plead guilty to avoid jail.

“They kept telling us it was safe…They knew the software should never have been used in 1998, didn’t they?”

Steve says his family’s lives were destroyed and the knowledge of this report could have “changed everything”.

He says he would have fought the case “instead of giving in”.

“How dare they. And no doubt I certainly wasn’t the last one…And yet they knew they were convicting people with faulty software, faulty computers.”

The report is now with the Criminal Cases Review Commission, the body investigating potential miscarriages of justice, which is currently looking into 28 Capture cases.

A fundamental piece of evidence

Neil Hudgell, the lawyer representing more than 100 victims, describes the report as “hugely significant”, “seismic” and a “fundamental piece of evidence”.

“I’m as confident as I can be that this is a good day for families like Steve Marston and Mrs Owen’s family,” he says.

“I think (the documents) could be very pivotal in delivering the exoneration that they very badly deserve.”

He also added that “there’s absolutely no doubt” that the “entire contents” of the “damning” report “was under the noses of the Post Office at a very early stage”.

He describes it as a “massive missed opportunity” and “early red flag” for the Post Office which went on to prosecute hundreds who used Horizon in the years that followed.

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“It is a continuation of a theme that obviously has rolled out over the subsequent 20 plus years in relation to Horizon,” he says.

“…if this had seen the light of day in its proper sense, and poor Mrs Owen had not been convicted, the domino effect of what followed may not have happened.”

What the Post Office said

Sky News approached the former Chief Executive of the Post Office during the Capture years, John Roberts, who said: “I can’t recall any discussion at my level, or that of the board, about Capture at any time while I was CEO.”

A statement from the Post Office said: “We have been very concerned about the reported problems relating to the use of the Capture software and are sincerely sorry for past failings that have caused suffering to postmasters.

“We are determined that past wrongs are put right and are continuing to support the government’s work and fully co-operating with the Criminal Cases Review Commission as it investigates several cases which may be Capture related.”

A Department for Business and Trade spokesperson said: “Postmasters including Patricia Owen endured immeasurable suffering, and we continue to listen to those who have been sharing their stories on the Capture system.

“Government officials met with postmasters recently as part of our commitment to develop an effective and fair redress process for those affected by Capture, and we will continue to keep them updated.”

Energy bill discounts of £150 will be extended to another 2.7 million households to help with fuel costs this winter.

It brings the number of households eligible for the Warm Home Discount up to just over 6 million, including 900,000 families with children, the Department for Energy Security and Net Zero (DESNZ) said.

The changes mean every bill payer on means-tested benefits will qualify, removing the high-cost-to-heat threshold in the current regulations.

It follows a government consultation on expanding the one-off payment to more people struggling with fuel poverty.

Prime Minister Keir Starmer said: “I know families are still struggling with the cost of living, and I know the fear that comes with not being able to afford your next bill.

“Providing security and peace of mind for working people is deeply personal to me as prime minister and foundational for the Plan for Change.

“I have no doubt that, like rolling out free school meals, breakfast clubs and childcare support, extending this £150 energy bills support to millions more families will make a real difference.”

The Conservatives criticised the move, saying the announcement will only cut bills for a quarter of households.

Andrew Bowie, the acting shadow energy secretary, criticised Labour’s green energy drive, claiming that it would increase bills for most people.

“Kemi Badenoch and I have been clear that net zero by 2050 is impossible without bankrupting Britain and making hard-working families worse off,” he said.

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Typical yearly energy bills are expected to fall by £129 from July, Ofgem has said.

However typical bills under the July to September 2025 price cap will still be 42% higher than in winter 2021/22, according to a House of Commons research briefing.

The Warm Home Discount scheme was introduced by the coalition government in 2011 to help people on low incomes with their fuel bills.

Adam Scorer, the chief executive of National Energy Action, said today’s announcement is “hugely positive news” but is “far from sturdy”.

“The rebate has only increased by a meagre £10 during a period in which energy bills have gone up by £500 a year and there is no clarity on the programme beyond the end of March next year,” he said.

“This announcement is good news for this winter, but the government needs to come up with a longer-term plan for providing deeper support in future for people who cannot afford a warm and healthy home.”

The US central bank has made no change to interest rates and warned the world’s biggest economy will see less growth and higher inflation due to tariffs.

The Federal Reserve, known as the Fed, held rates despite President Donald Trump calling its chair, Jerome Powell, a “stupid person” on Wednesday.

“Maybe I should go to the Fed. Am I allowed to appoint myself at the Fed? I’d do a much better job than these people,” Mr Trump said.

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Despite appointing Mr Powell himself in 2017, Mr Trump has expressed anger towards the Fed chair at multiple points in the past for not bringing down borrowing costs through interest rate cuts.

In his own address to reporters, Mr Powell declined to hit back.

The tariff effect

But Mr Trump’s signature economic policy of tariffs – taxes on imports – was again forecast to cause higher inflation and lower economic growth in the US.

The Fed’s predictions for inflation were upgraded to 3.1% for 2025 from 2.5% in December, while the outlook for US economic growth was downgraded to 1.4% from 2.1% in December.

The effect of those extra taxes on imports will take time to work its way through the system and show up in prices on shelves, the Fed chair said.

An uncertain outlook

While the level of uncertainty peaked in April, when Mr Trump announced many of his tariffs, and has since fallen, it remains elevated, Mr Powell said.

The exact impact of the levies is unclear and depends on the levels they reach, he added.

Many of the country-specific tariffs have been paused for 90 days, which is currently due to end on 8 July.

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Despite this, the economy is in a “solid position”, Mr Powell said.

Interest rates were kept at 4.25%-4.5%. Unlike the UK, the US interest rate is a range to guide lenders rather than a single percentage.

A slowdown in the US economy can have an impact on the UK as the US is its largest trading partner.

On Thursday, it’s the turn of the UK central bank, the Bank of England, to make its latest interest rate determination, with no change also expected.