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Cameron government knew Post Office ditched Horizon IT investigation

  • By Andy Verity
  • BBC economics correspondent

David Cameron’s government knew the Post Office had ditched a secret investigation which may have helped wrongly accused postmasters show their innocence, the BBC can reveal.

The 2016 investigation trawled 17 years of data to learn how typically, and why, money accounts on the Horizon IT system had been tampered with remotely.

Ministers have been advised an investigation was occurring.

But after postmasters started authorized motion, it was instantly stopped.

The secret investigation provides to proof that the Post Office knew Horizon’s creator, Fujitsu, might remotely fiddle with sub-postmaster’s money accounts – even because it argued in court docket, two years later, that it was unattainable.

The revelations have prompted an accusation that the Post Office could have damaged the legislation – and the government did nothing to stop it. Paul Marshall, a barrister who represented some sub-postmasters, stated: “On the face of it, it discloses a conspiracy by the Post Office to pervert the course of justice.”

Senopathy Narenthiran, referred to as Naren, one of many convicted sub-postmasters who joined the authorized motion, wiped away a tear as he discovered concerning the data which may have helped his case.

“By knowing all this, why do we waste all our time in the prison and separate from our family? I don’t know,” he advised the BBC. “I’m 69 years old – too old to go through all these things.”

Image caption,

Sub-postmaster Senopathy Narenthiran, who was sentenced to a few years in jail, wiped away a tear because the BBC outlined the brand new proof

The secret investigation was uncovered by a BBC evaluation of confidential government paperwork, obtained below the Freedom of Information Act, from a time in 2015 and 2016 when the Post Office was below rising stress to resolve sub-postmasters’ claims of injustice.

Hundreds of sub-postmasters had been prosecuted and jailed for money shortfalls which have been in reality brought on by the Horizon IT system. They had lengthy suspected that distant tinkering could have contributed to the issue.

The paperwork present how the key 2016 investigation – trying into Fujitsu’s use of distant entry from 1999 onwards – had come out of a assessment by former high Treasury lawyer Jonathan Swift QC. The Swift assessment had been ordered by the government, with approval from then-business secretary Sajid Javid.

It would conclude that it had discovered “real issues” for the Post Office.

Mr Swift had discovered a briefing for the Post Office board from an earlier assessment in 2014, carried out by auditors from Deloitte and codenamed Project Zebra, detailing how Fujitsu might change department accounts.

Having seen that proof, the Swift assessment stated the Post Office should perform an extra investigation into how typically and why this functionality was used.

Deloitte returned in February 2016 to start the trawl of all Horizon transactions since its launch 17 years earlier.

Ministers, together with Mr Javid, have been advised this new work was below technique to “address suggestions that branch accounts might have been remotely altered without complainants’ knowledge”.

But in June 2016, when sub-postmasters launched their authorized motion, the government was advised by Post Office minister Baroness Neville-Rolfe that the investigation had been scrapped on “very strong advice” from the senior barrister representing them.

There is not any proof within the paperwork that then-prime minister David Cameron knew concerning the investigation or that it had been ditched.

It meant that over two years, the Post Office had spent hundreds of thousands of kilos on three separate evaluations into distant entry – Project Zebra, the Swift assessment and the 2016 Deloitte investigation – whereas publicly claiming it was unattainable.

But all three have been buried by the Post Office. Neither the Swift assessment nor Project Zebra have been disclosed to sub-postmasters, depriving them of significant data that might have helped them in court docket; and the Deloitte investigation was halted earlier than it might ship its findings.

Project Zebra, the primary of the three evaluations, was described as a “desktop review”. The Post Office board had hoped it could give “comfort about the Horizon system” to them and others outdoors the enterprise who had considerations about it.

The consultants examined Horizon paperwork and talked to workers at Fujitsu and the Post Office to test how the system was functioning and whether or not it was attaining its targets.

Unredacted paperwork obtained by the BBC present that in April 2014, members of a sub-committee of the Post Office board mentioned Deloitte’s Project Zebra work.

The sub-committee included chief government Paula Vennells, common counsel Chris Aujard and Richard Callard, a senior civil servant on the government physique which owned the Post Office.

The subsequent month, Deloitte submitted its full report and in June it wrote a briefing for the Post Office board, which outlined two separate methods Fujitsu might alter department accounts. Extracts from the board briefing are quoted verbatim by the Swift assessment however the briefing itself has not been launched.

It stated the auditors had discovered that authorised Fujitsu workers with the suitable database entry privileges might use faux digital signatures or keys to delete, create or amend knowledge on buyer purchases that had been electronically signed by sub-postmasters. Fujitsu workers might then “re-sign it with a fake key”.

Deloitte stated Fujitsu workers had additionally been in a position to appropriate errors utilizing an emergency course of referred to as a “balancing transaction”, which might “create transactions directly in branch ledgers”.

It famous the method “does not require positive acceptance or approval by the sub-postmaster”.

Yet the findings of Project Zebra have been by no means disclosed to investigating accountants Second Sight who, since 2012, had been publicly tasked by the Post Office with trying in to sub-postmasters’ claims.

The Post Office continued to assert for an extra 5 years that it was unattainable for distant tinkering by Fujitsu to change money balances in Post Office department accounts.

In 2015, it lied to BBC executives because it sought to stop the printed of the primary Panorama expose of the scandal, briefing them that there was “simply no evidence” that distant tinkering by Fujitsu might have induced department losses.

The paperwork which have now been analysed by the BBC reveal that following the Panorama broadcast, Post Office minister Baroness Neville-Rolfe wrote to the incoming chairman, Tim Parker, asking him to present the considerations about potential miscarriages of justice his “earliest attention” and take any obligatory motion. Business Secretary Sajid Javid permitted the letter.

Mr Parker stated he would undertake a assessment of the Horizon system and “various claims that sub-postmasters had been wrongly prosecuted as a result of faults in the system”, in response to a briefing despatched to Mr Javid on 20 November 2015, which was closely redacted within the launched paperwork.

Mr Parker appointed Jonathan Swift QC and barrister Christopher Knight. They have been so involved concerning the implications of the Project Zebra paperwork, they stated it was “incumbent” on the Post Office to learn how typically these two technique of altering department accounts had been used, “in the light of the consistent impression given that they don’t exist at all”.

The Swift assessment, dated 8 February 2016, famous that the Post Office “had always known” concerning the balancing transaction functionality.

It additionally stated the Post Office could also be obliged by legislation to indicate the paperwork to postmasters who have been searching for to overturn their convictions.

In response to a suggestion within the Swift assessment, Deloitte was requested inside days to return to the Post Office to hold out a full unbiased assessment of Horizon, following up on its work on Project Zebra.

The mammoth and costly job was to trawl again by all of the transactions since Horizon started working – work which was anticipated to take three months.

In a letter of 4 March 2016, Post Office chair Tim Parker wrote to Baroness Neville-Rolfe concerning the Swift assessment’s findings and proposals. That included informing her about Deloitte’s follow-up work.

He stated it could “address suggestions that branch accounts might have been remotely altered without complainants’ knowledge” and assessment “security controls governing access to the digitally sealed electronic audit store of branch accounts”.

He added that he had “commissioned independent persons to undertake the necessary work”, and in a later briefing knowledgeable the minister that this was Deloitte.

The letter didn’t explicitly point out Project Zebra or Deloitte’s earlier findings about how department accounts might be remotely altered.

In April, the Post Office notified the government that the sub-postmasters had begun their group authorized motion towards it. Baroness Neville-Rolfe and Mr Javid have been despatched a briefing, updating them on the investigation’s progress and discussing how the authorized motion would have an effect on it.

The briefing, despatched earlier than a gathering with Mr Parker, was closely redacted when it was launched below a Freedom of Information Act request. But it stated Mr Parker was on observe to finish the follow-up work by the top of May and would replace Baroness Neville-Rolfe on its progress.

However, the paperwork seen by the BBC reveal that in June, Deloitte’s three-month investigation was instantly stopped simply earlier than it might be accomplished.

On 21 June 2016, Tim Parker advised Baroness Neville-Rolfe he had taken the choice on the recommendation of an unnamed senior barrister for the Post Office.

He advised her the detailed work being carried out by Deloitte was “complex, costly and time consuming” however that good progress had been made. “I had hoped that by now I would be in a position to draw my investigation to a close,” Mr Parker wrote.

“However, given the High Court proceedings to which I refer above, Post Office Limited has received very strong advice from Leading Counsel that the work being undertaken under the aegis of my review should come to an immediate end… I have therefore instructed that the work being undertaken pursuant to my review should now be stopped.”

In response to the BBC’s questions, Mr Parker stated he had “sought and acted upon the legal advice he was given”, however stated it could not be acceptable to remark additional whereas the general public inquiry into the Horizon scandal was ongoing.

Baroness Neville-Rolfe advised the BBC she had stated publicly that she had instructed the Post Office chairman to fee an unbiased assessment, however declined to remark additional whereas the inquiry was ongoing. Mr Javid additionally declined to remark due to the general public inquiry.

In his High Court judgment on the finish of the sub-postmasters’ authorized motion in 2019, decide Sir Peter Fraser discovered the Post Office’s defence declare – that Fujitsu couldn’t insert transactions in department accounts – was “simply untrue”. He stated the Post Office had “expressly denied” that distant entry was potential “and that denial is now shown to be wrong”.

The barrister who represented a lot of wrongly prosecuted sub-postmasters, Mr Marshall, advised the BBC it regarded as if the Post Office had conspired to pervert the course of justice.

“The important feature of all of this is that in 2014, it appears that the Post Office board was alive to the true position – that remote access by Fujitsu was possible,” he stated.

“And yet the Post Office board was responsible for maintaining and advancing the Post Office’s defence to the sub-postmasters’ claim in 2019 – that it was impossible. That was false – and, it would appear, known to be so.”

Image caption,

Sub-postmasters’ victory within the High Court in 2019 paved the way in which for a lot of to overturn their convictions on enchantment

Paula Vennells, the previous chief government of the Post Office, didn’t reply to the BBC’s requests for remark. Chris Aujard, then Post Office common counsel, and Richard Callard, the civil servant who represented the government on the board, declined to remark whereas the general public inquiry was ongoing.

UK Government Investments (UKGI), the government physique which owns the Post Office, addressed what the board knew about these successive evaluations and investigations in a gap assertion in 2022 to the continued public inquiry into the Horizon scandal.

It stated there was no indication within the minutes of the Post Office board assembly in June 2014 that the board had obtained the Project Zebra briefing. UKGI stated Mr Callard “does not recall ever receiving such a briefing”.

The assertion stated the board had not requested for a replica of Deloitte’s full report on the time of Project Zebra. UKGI stated the board had been given an government abstract by the Post Office common counsel Chris Aujard, which was “focused on Deloitte’s approach to the review but importantly did not set out its findings”.

It stated the board had additionally by no means obtained the 2016 Swift report, nor been briefed intimately on its findings. The assertion stated Tim Parker didn’t ship Swift’s full report back to the Post Office Board and that his letter of 4 March 2016 to Baroness Neville-Rolfe didn’t clarify how critical the Swift assessment’s findings have been.

The revelations uncovered by the BBC additionally elevate critical questions for the general public inquiry by Sir Wyn Williams, as as to whether it’s adequately scrutinising what the government knew concerning the Post Office’s inner investigations.

In UKGI’s 2022 assertion to the inquiry, there was no reference to Tim Parker’s letter to Baroness Neville-Rolfe of 21 June 2016, notifying her he was calling off Deloitte’s investigation.

In 2018, two years after finishing his assessment, Sir Jonathan Swift, previously First Treasury Counsel – the highest civil lawyer at Her Majesty’s Treasury – was appointed to be a High Court decide. He obtained a knighthood in the identical 12 months.

However, within the checklist of upcoming witnesses on the Williams inquiry, his identify is absent.

Timeline: What ministers knew and when

June 2014: Deloitte submits a briefing for the Post Office board on Project Zebra, outlining how Fujitsu can alter department accounts or change data of transactions remotely.

10 September 2015: Business Secretary Sajid Javid approves a letter from Post Office minister Baroness Neville-Rolfe to Post Office chair Tim Parker, urging him to take “any necessary action” about Horizon, after a Panorama whistleblower reveals how Fujitsu can remotely alter postmaster’s accounts.

21 June 2016: In a letter, Mr Parker tells Baroness Neville-Rolfe that within the mild of the sub-postmasters’ group authorized motion, on “very strong advice from leading counsel”, the investigation by Deloitte has been instantly stopped. It by no means completes its work.

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