Whichever public relations consultant was responsible for the blurb that seeped from the pages of the last annual report of the Post Office, they had a fine sense of irony.
It is lyrical in its praise of postmasters. “Our postmasters have an unrivalled relationship with their customers. They not only connect our customers with essential products and services, but also often go beyond the call of duty at the heart of their communities and support customers in a way few other businesses can,” it says.
Could these be the same people that Post Office Ltd hounded through the courts, had wrongly committed to jail, generally wrecked their lives and desperately tried to avoid paying compensation when the rampant injustice became glaringly obvious? Yes, they could.
As the unedifying row raged between business secretary Kemi Badenoch and Henry Staunton, the Post Office chairman she very publicly sacked, it seemed that the brutally wronged postmasters were nowhere near the centre of their focus. Staunton’s allegation that he had been told to go slow on agreeing financial settlements enraged Ms Badenoch, something which it seems is relatively easy to achieve. She flatly denied it, as did the senior civil servant whom Staunton cited. However, looking at the tortoise-like speed of settlements, Staunton would appear to have circumstantial evidence on his side. The fact that the offer to Alan Bates, now a national hero following the TV drama, was derisory is hardly indicative of a wish to get the whole Horizon scandal settled as quickly as possible.
Ms Badenoch originally claimed that Staunton had to go because of the need for a change of culture. Since he had only been in place since late 2022 and Post Office’s problems go back much further, that did not sound convincing, so she threw allegations of bullying into the mix. The Business Secretary seems to have a somewhat flexible attitude towards accuracy of almost Johnsonian proportions. It has been particularly apparent in her reporting of the trade deals she has negotiated. In her view, they will be transformational whilst most analysts struggle to find significant benefits. But she knows her audience: the right wing Conservatives who admire someone who shoots from the hip. Everything she does now is about her campaign to be the next leader of the Conservative Party. It is a safe bet that she will not find many postmasters within that electorate.
She appears to have misjudged what a tough opponent she was taking on in Henry Staunton. But after a long and highly successful career in business, he has a reputation to protect. The row may have simmered down temporarily but could easily erupt again, maybe even heading to court.
But what it, and the Horizon scandal itself, have highlighted are the deep flaws in the structure of the Post Office. No publicly quoted company could ever have got into such a dreadful mess over such a long period of time. As soon as the prosecutions began to mount, directors would have demanded explanations. Shareholders would have looked at the escalating bill and called for executives to pay the price and leave.
Post Office Ltd, however, is no normal company. It is a typically British fudge and it doesn’t work.
Originally, Post Offices and the Royal Mail were part of the machinery of government but, in 1969, the joint businesses became a statutory corporation. This sounds very solid and businesslike but, in practice, it seems to mean that no one is fully accountable for what it does.
The government solved that issue for Royal Mail by floating the business on the stock market but Post Offices Ltd remained a statutory corporation. It only has one shareholder, the government, which, simplistically might be interpreted as it being a nationalised industry. But no, the UK turned against nationalised industries, in some cases with good reason after terrible inefficiencies.
The statutory corporation structure, however, appears to be the worst form of non-governance. More effective governance would have ensured a risk register that flagged up problems with Horizon before they became endemic. It would have fostered a board that asked difficult questions about why so many previously loyal and effective postmasters were being deemed crooks. Instead the boardroom culture seemed to be one of unquestioning acceptance.
According to Post Offices Ltd, the person sitting atop the structure, thus with responsibility for its workings, is the secretary of state for business and trade. It would be fair to say that successive secretaries of state do not seem to have put this near the top of their list of concerns. Given the extent of their responsibilities, it would be reasonable for them to delegate to the Post Office minister but, until recently when the current holder of the appointment, Kevin Hollinrake, really had no option but to get involved, ministerial involvement has been scant.
The single shareholder, the government, is represented on the board but does not appear ever to have been fully engaged. Given that the role must be about protecting the government’s interests, it seems extraordinary that Post Offices Ltd had the same auditors, Ernst and Young, from 1986 to 2019. It is generally assumed essential to change auditors regularly so that fresh eyes might land on issues: a mounting £1 billion bill for compensation could have set alarm bells ringing rather sooner than they did.
Such a dilatory approach to accounts appears symptomatic of Post Offices. No one on the board or in government felt responsible.
Even in an age when snail mail is fast going out of fashion, the Post Office has a really important role as an arm of government. So let’s ditch the fudge and take ownership seriously.
