Business and Trade Committee
Oral evidence: Post Office and Horizon – Compensation: follow-up, HC 477
Tuesday 27 February 2024
Ordered by the House of Commons to be published on 27 February 2024.
Members present: Liam Byrne (Chair); Douglas Chapman; Jonathan Gullis; Antony Higginbotham; Ian Lavery; Julie Marson; Andy McDonald; Charlotte Nichols; Mark Pawsey.
Questions 267-372
Witnesses
I: Carl Creswell, Director of Business Resilience, Department for Business and Trade; Mark Chesher, Partner, Addleshaw Goddard; Rob Francis, Partner, Dentons Solicitors; Sir Ross Cranston, Independent Reviewer, GLO scheme.
Witnesses: Carl Creswell, Mark Chesher, Rob Francis and Sir Ross Cranston.
Q267 Chair: Welcome to today’s session of the Business and Trade Committee, in which we will look at fast and fair redress for the sub-postmasters. Thank you very much indeed for joining us on this first panel as we try to get to grips with how the process is supposed to work and where the roadblocks are.
Before we begin our evidence session, I need to read out the sub judice waiver that has been granted to us by Mr Speaker. There are relevant legal proceedings relating to Horizon before the courts. In December 2022, Mr Speaker exercised his discretion in respect of matters sub judice to allow references to these proceedings, as they concern issues of national importance. That waiver is ongoing and applies not only to speeches made by Members on the Floor of the House, but to remarks by both Members and witnesses at today’s oral evidence session. Nevertheless, I urge Members and witnesses to exercise caution in what they say, and to avoid referring in detail to cases that remain before the courts. I also urge Members and witnesses to bear in mind that Sir Wyn Williams’ Post Office Horizon IT inquiry is ongoing.
Mr Creswell, perhaps I could start with you. Can you give us a sense of your role in the redress schemes?
Carl Creswell: Of course. Morning, everyone. I am Carl Creswell, the director in the Department for Business and Trade responsible for Post Office policy. Specifically, I am also the senior responsible owner for the GLO—group litigation order—compensation scheme, and I oversee the Post Office’s delivery of the Horizon shortfall scheme and the compensation for those with overturned convictions.
Chair: We will go very quickly through what everybody else’s role is, starting with Mr Chesher.
Mark Chesher: I am Mark Chesher. I am a partner at Addleshaw Goddard. I am the leader of the team advising DBT in relation to the GLO compensation scheme.
Rob Francis: Good morning. I am Rob Francis from the law firm Dentons. We have been appointed to be the claims facilitators for the GLO scheme.
Sir Ross Cranston: I am Ross Cranston. I am the independent reviewer, which essentially means I am the longstop, as it were—the final arbiter—in GLO claims.
Q268 Chair: Perfect. Thank you so much, everybody. Mr Creswell, who in the Department is making the final decision about GLO claims?
Carl Creswell: It depends on the nature of the claim, but I head a steering group that oversees the claims in the round. In particular, I, with my finance and legal colleagues, look at advice from Addleshaw Goddard on the complex claims. I do not sign off myself those £75,000 up-front offer claims that we discussed at the Committee when I gave evidence previously.
Q269 Chair: I am holding a draft offer letter. It is very long and pretty complicated. It basically provides to claimants a box—that is it. That is the summary of their claim. Who signs off the bottom line in these claims?
Carl Creswell: The actual number at the bottom of the claim?
Chair: Yes.
Carl Creswell: That is me and my colleagues in the Department, on the basis of advice. That is the initial offer that is then sent out by Addleshaw Goddard to the claimant’s lawyers.
Q270 Chair: What do you do to satisfy yourself that those claims are fair?
Carl Creswell: Ahead of the claim coming to me, the claimant’s lawyer has obviously sought lots of advice, if they need it, from accountants, medical experts and so on. The Post Office has also provided a lot of background documents to ensure that the claimant’s lawyer is in the best place to make as full a claim as possible. So before the claim comes to me, it has gone through that process, and a process of Addleshaw Goddard discussing the claim with that lawyer to ensure that there are not any gaps. It comes to me when it is a full claim that has been assessed by our external lawyers. I then look at it, with advice from my own internal DBT lawyers and finance team, and take a view.
Q271 Chair: How long does it take you to sign off one of these claims?
Carl Creswell: Often within a day.
Q272 Chair: But how many hours do you have to spend on each claim, just checking it is all in good order?
Carl Creswell: It depends on the complexity, but the standard claim could take me about an hour, based upon a conversation with my colleagues, who give me full advice.
Q273 Chair: An hour?
Carl Creswell: It depends whether I need to sit down with them and discuss it, or whether it is so straightforward that I can just respond by return. There is a balance here between speed, which we all want to achieve, and scrutiny. I also put a lot of weight on the advice that we get from Addleshaw Goddard, rather than trying to second-guess it with our own lawyers.
Q274 Chair: Of the claims that have been put on your desk to sign off and send to sub-postmasters, how many have you sent back because they just looked wrong?
Carl Creswell: I have raised questions to Addleshaw Goddard on five or six, I think, myself. My team, before they come to me, have probably raised more questions along the way—
Q275 Chair: But you just told us that you are the SRO.
Carl Creswell: That’s right—yes, absolutely—but I am answering for myself rather than for my whole team.
Q276 Chair: So you have only queried about 10% of the claims that have been signed off on the GLO scheme.
Carl Creswell: I think that is accurate. One of the reasons for that is that we have a process that includes appeals and an iterative process based on the design of the scheme, which we put together having consulted with the JFSA and Freeths and other claimant lawyers. The aim is to get prompt offers out to the claimants, and then we have the safeguards for claimants to challenge if they are unhappy with the offers that go out to them.
Q277 Chair: So hand on heart, speaking personally, you can say that every single one of those that has been sent, in your opinion, is fair.
Carl Creswell: I think that every one that has gone out is based upon—
Q278 Chair: That wasn’t the question. The question was: in your view, have you felt that every one of these that you have signed off was fair?
Carl Creswell: Yes, based upon the legal principles that underpin the scheme. I think that individual postmasters have different expectations about what is fair for them, so it is unfair for me to project my own view about fairness on to an individual postmaster. It is also true that different postmasters have different expectations, as claimants to any compensation scheme would, about what is a fair outcome for them. We have purposefully designed this in order to give the claimant an opportunity to raise concerns with their lawyers if they think that what has come to them is an unfair offer.
Q279 Chair: But you will know that there is no standard tariff that helps anybody really understand the case law in calculating the stress and inconvenience, for example. How are you making these fairness decisions yourself when there is no standard tariff and the case law is all over the place?
Carl Creswell: Quite a lot of the principles for the GLO scheme and, indeed, for the Horizon shortfall scheme are underpinned by legal precedent and specific cases.
Q280 Chair: But there is a wide variation, for example, in the amount of compensation that should be due for loss of reputation.
Carl Creswell: Yes, but it is classic within a compensation scheme to have a range of tariffs and principles to—
Q281 Chair: How do you decide which end of the range is fair?
Carl Creswell: I rely very heavily on the legal advice that we commission and pay for from Addleshaw Goddard.
Q282 Chair: But you have only challenged 10%.
Carl Creswell: Yes. The counter is that, if I were to come here and say that I challenge 100% of them and spend hours and hours on each claim, the pace would be much slower than it is. Since I last came to the Committee, we have seen a doubling of the number of offers that we have made and a significant increase in the number of claims that we have got in. Of the 478 people registered within the GLO scheme, we have received 106 full claims—this is the latest data from my team and it has been published—and we have made 104 offers, of which 80 have been accepted.
Chair: Let’s go back over those numbers with Charlotte Nichols.
Q283 Charlotte Nichols: Thank you, Chair. Mr Creswell, can you provide an update on how many claims have been submitted?
Carl Creswell: Of course, yes. We published data at the end of January. At that point, 58 full claims had been received, 52 offers had been issued, 41 had been accepted and 28 had been paid. That is what we set out in the memorandum that we sent to your Committee prior to today.
As of the end of last week—my team gave me the data last night—we have received 106 full claims, we have made 104 offers, and 80 of those have been accepted and 78 of those have been paid. That changes day to day and is moving quite rapidly.
In addition to the 106 full claims, Addleshaw Goddard have received 41 partial claims. So 147 of that 478 are in the system.
Q284 Chair: Could you say that again, please, Mr Creswell?
Carl Creswell: The last part?
Chair: Yes.
Carl Creswell: I was mentioning that we have received 106 full claims. In addition to that, 41 partial claims have been submitted to Addleshaw Goddard. The definition of a partial claim is where the lawyers look at it and think there are gaps in the evidence that prevent us being able to make a full and fair offer at this point. What they will classically do is issue a request for information back to the lawyers representing the claimant to say, “Do you have this document?” If the answer is no, then they aim to apply the benefit of the doubt.
Q285 Charlotte Nichols: Mr Creswell, how many people have taken up the up-front £75,000 offer?
Carl Creswell: Over 70 have taken that up.
Q286 Charlotte Nichols: The Government predicted that around one third of GLO claimants would take the up-front £75,000 offer. Based on take-up so far, was that prediction accurate?
Carl Creswell: To me, it still seems on the mark. We have had applications that number 95 for the £75k—so 95 out of the 478. I would expect over time more to take the £75,000, but perhaps not many more. If you ask me which side of it will it be, I would say it is probably going to be below a third, but not by much. It has been a really significant intervention that has allowed us to get money out to claimants much more quickly than we would have done without it.
Q287 Charlotte Nichols: Has the ability to make up-front offers allowed the Department to transfer processing resources to other more complex cases that require a full assessment?
Carl Creswell: Absolutely. However, we are dependent upon the claims being submitted to us. This is also true of the overturned convictions scheme that is being run by the Post Office. People will say, “You haven’t completed all of the payments.” The answer is, unfortunately, unless the claim is submitted, you cannot make the payment. So within that number that I gave you of the 80 accepted, there are some that are complex claims, but there is a much bigger proportion of the claims remaining that will be complex. It has been greatly beneficial for my team, and I think for Addleshaw Goddard as well, to be able to free up that resource to deal with the complex claims that we have both now and incoming.
Q288 Charlotte Nichols: Finally on this section, the Government have also said that claimants who previously accepted less than £75,000 will be topped up. Will this affect the speed of processing other claims?
Carl Creswell: No, we have dealt with it already. It took hardly any time at all. We know all the people. We have all the details. The number is very clear. We have topped up 28 claims—that is 28 people who had previously accepted lower than £75,000. They have all been topped up now to that number of £75,000. It has all been dealt with.
Charlotte Nichols: Thank you.
Q289 Chair: We still have a situation where we have 147 claims and partial claims in the system. The number of victims, potentially, is 472.
Carl Creswell: Well, 478 are registered. Overall, 492 people are eligible, but only 478 have registered.
Q290 Chair: So we have only got claims from one third of the potential victims.
Carl Creswell: Yes, but that is a significant increase on the last month. It is not that we don’t know who these people are and where they are. They have previously already submitted claim overview forms to set up the claims—
Q291 Chair: You will understand, though, that after everything we have been through, two thirds of victims still haven’t put in a claim—that is a concern.
Carl Creswell: Yes, but they are in the process. If you would like to analyse the process—as you were saying, you would like to get to the bottom of what is happening. I think you need to look at the process overall and say, “What is happening at each stage?”
How many disclosure requests has the Post Office dealt with? They have dealt with quite a large number—over 28,000 documents, and 55% of the branches within the scheme. You also need to look at how many accountancy and medical reports are being requested. This was part of the process that the claimants’ lawyers were keen on. I have personally signed off 326 accountancy expert requests and 300 medical expert requests. The Government pays for that, to help strengthen the claim for the claimant.
Q292 Chair: At this stage, what is your expectation as to what percentage of the potential victims will submit a claim?
Carl Creswell: Will submit a claim? I feel confident that a very large proportion will submit.
Carl Creswell: Will submit a claim? I feel confident that a very large proportion will submit.
Q293 Chair: What is very large proportion?
Carl Creswell: Well over 95%. The question is one of timing, of course.
Q294 Chair: Yes, but 95% is the goal? Or rather that is the expectation?
Carl Creswell: Well, my goal is 100%. That is why it was helpful to remove the August deadline through legislation in Parliament earlier in January, because of Sir Wyn Williams’ concern.
Q295 Chair: Do you have a view about when we will hit 95%?
Carl Creswell: My view, as per my Minister’s aim, is that we should do that for August, but that is very dependent upon claims.
Q296 Chair: Well, the Minister’s aim is to pay them all out by August; I am just interested in when you think all the claims will be in.
Carl Creswell: I would hope that we would have them in by early July. I do not know whether you would like to add anything to that, Mark?
Mark Chesher: I think that would be right—early July, in order to give us the 40 days.
Chair: Okay, thank you.
Q297 Antony Higginbotham: Mr Creswell, can I stick with you? I think we are all keen to understand what the final cost of this is going to be, and what has been budgeted and paid out so far. I think I am right in saying that estimates are due this week, so could you update us on the estimated total cost of the Horizon scandal, including how much has been spent so far and how much is budgeted into the future?
Carl Creswell: Overall, the provision that has been set aside for us to access from the Treasury’s reserve is around £1 billion—that is the total cost of compensation.
Q298 Chair: I want to check this, because in Mr Read’s letter to me it says £1.2 billion.
Carl Creswell: It is slightly over £1 billion; I don’t quite recognise £1.2 billion. I can write to you to clarify that difference, but broadly speaking, £1 billion is the expectation. Of course, that is dependent on the number of convictions that get overturned, and this is a point that seems to sometimes be misunderstood.
People compare the £160 million that has been paid out so far to 2,700 claimants with the £1 billion figure. There is no way that we could have paid out £1 billion by this point, because that figure is modelled on how many convictions are overturned. The Government’s step recently—as discussed in the House yesterday—to overturn lots of convictions through legislation will enable us to do that, and I personally think we will end up spending more money on compensation overall than that £1 billion figure, which was modelled at an earlier stage.
Q299 Antony Higginbotham: How much more?
Carl Creswell: I do not know for sure. We are discussing that with the Treasury.
Q300 Antony Higginbotham: And this is all taxpayer’s money?
Carl Creswell: Yes.
Q301 Antony Higginbotham: Every penny of it comes from normal taxpayers. It is not coming out of a separate Post Office pot of money that it has made; it all falls on normal taxpayers. You can understand why there is some nervousness about not knowing the full figure at this stage.
Carl Creswell: Yes. One point of clarification: within that figure there is a contribution that the Post Office made up front for the Horizon shortfall scheme. The Government asked it to put forward a proposal to sell its telecoms business, which it did. It used the revenue from selling its telecoms business to cover part of the costs of the Horizon shortfall scheme, and the Government has taken on the cost. Part of that £1 billion figure came from the Post Office selling its telecoms business.
Q302 Antony Higginbotham: Do you think it is appropriate for the Post Office to pay bonuses to its executive team while the taxpayer is footing that bill?
Carl Creswell: I absolutely think it is right for the Post Office to pay bonuses to its executive team—that is a classic part of what you would expect from a public corporation. The question that has been debated quite hotly, including within this Committee, is whether it was right to pay bonuses on the back of a mis-statement in the accounts and a view that Sir Wyn had endorsed the executive team’s performance in relation to the inquiry. Was that appropriate? No.
Q303 Antony Higginbotham: I am talking about moving forwards. Do you not think that bonuses should be tied to performance on doing justice by the sub-postmasters? If the timelines are not hit, or it goes over budget because the Post Office has not properly dug into its records, would it be appropriate to pay bonuses?
Carl Creswell: I think it would be good to have a mix of different objectives that link to bonuses for companies such as the Post Office. There are postmasters around the country delivering services day in, day out, so to skew the targets solely towards redressing the past would be a misjudgement in my view. But including that within the basket of indicators that drive bonuses seems very sensible to me.
Q304 Antony Higginbotham: If I could change tack very briefly, there have been lots of reports that Ministers and officials have asked us to go slow on compensation payments. Is that your understanding, as the official in charge of Post Office policy in Horizon?
Carl Creswell: You would have thought that someone would have mentioned it to me if that were the intent. Not at all. I worked very closely with Sarah Munby; she and I worked with the Treasury to secure the funding needed for the schemes that I have mentioned—the overturned convictions scheme and the GLO compensation scheme. Every conversation that I have had with her, with Ministers and with other senior civil servants in other parts of Government has been about how we can pay out this money more quickly. So no, that assertion is completely incorrect.
Q305 Antony Higginbotham: So based on your conversations with Ministers and other officials, is the approach to stick with the current plan at the current speed, to go faster or to go slower?
Carl Creswell: It is definitely to go faster, and Minister Hollinrake was clear about that yesterday. He also announced a couple of specific interventions that are targeted at speeding things up. One was the idea of topping up overturned conviction payments to £450,000 for those people who choose to stay within the full assessment process. That is intended to target the incentive to encourage more OC claims to be put forward. I know you will be talking to Mr Hudgell later, who probably has his own perspective on that. I think that is a useful idea that has come from claimant lawyers and Sir Gary Hickinbottom. The other one is the GLO making a payment of 80% of the offer to the individual claimant. Again, that is an idea that has come from a postmaster who has been talking to my Minister about his own experience within the GLO scheme and how we could improve it for them, and that is something that we are looking to do. Both of those will help on the incentives. I think the phrase that the Minister used yesterday was, “Every day we are looking at ways to speed up the compensation.” I am not sitting here claiming that we are going as fast as we should be. We definitely need to speed things up, and I am pleased that the Committee is looking at it, and we will engage with your recommendations.
Q306 Antony Higginbotham: Finally, and very briefly, you are in charge of Horizon and Post Office policy. Were you aware of the letter that the chief executive, Nick Read, sent to the Justice Secretary in advance? Did you put any pressure on the chief executive to send that letter?
Carl Creswell: Not at all.
Q307 Antony Higginbotham: Were you aware of it in advance of it being sent?
Carl Creswell: No. It appeared in my inbox and I read it.
Q308 Jonathan Gullis: Mr Creswell, you said to Mr Higginbotham that you felt it appropriate that bonuses were paid to executives and gave reasons. Mr Read told this Committee that he accepted that the Post Office had not known since 2005 where shortfalls paid by victims of Horizon—the sub-postmasters and sub-postmistresses who sold all their assets and belongings—had gone. They had been lost in the accounting of the Post Office. How has the Department addressed that? Do you still therefore believe that it is right that the taxpayer financially picks that up, when bonuses are potentially being paid with the shortfall funding from sub-postmasters and sub-postmistresses themselves?
Carl Creswell: I was answering a question about whether bonuses should be paid now and into the future. I stand by what I said earlier, which was that you do need to incentivise executive teams in corporations, and the Post Office is a public corporation. I cannot really comment on the past. I do not know whether what you said is accurate about whether shortfall money was or was not used in relation to the payment of past bonuses. The Department has set up the independent inquiry, run by Sir Wyn Williams, and we await his views on all these issues, which I think will be quite material about what happened and who knew what, when.
Q309 Mark Pawsey: I want to stick with Mr Creswell, if I may, and follow the points that Mr Higginbotham was asking about—the compensation and where it comes from. My understanding is that, of the two schemes, the Horizon shortfall scheme would be paid from the Post Office’s existing resources, but the group litigation order payments would come out of general taxation. Is that right?
Carl Creswell: That is absolutely correct on the GLO scheme. Obviously, the GLO group reached an agreement in December ’19, and that was funded solely by the Post Office, but that is separate and historic. The GLO at the moment is coming from general taxation and it is coming from the Treasury. On the Horizon shortfall scheme, as I mentioned earlier, first of all, the contributions to that came from within the Post Office, through the sale of its telecoms business and so on, but that is only up to a point. I think that beyond a certain figure it then fell to the Government and Treasury to cover the remainder of those compensation costs, and that is what we are still paying now. Can I also mention one other thing, just for completeness? We are also paying some of the administrative and legal costs to support the Post Office’s work on these schemes, to the tune of £150 million in this financial year and the next.
Q310 Mark Pawsey: We have already heard that the total budget is something in the order of £1 billion to £1.2 billion. I think many of our constituents would be astonished to find that they, as taxpayers, are having to contribute this money because of the bad decisions of the management running the Post Office, maybe their inefficiency in their role, or in many cases, perhaps, even their wrongdoing. Do you think the public understand the implications for them of this bad management of the Post Office?
Carl Creswell: I think two things about that. I think that the ITV drama and documentary were both excellent. The documentary gets talked about less than the drama, but it is truly excellent. I think that the public mood is rightly very much behind the postmasters. The question of who contributes towards the costs overall, taxpayer or someone else, is still very much a live one. You discussed this with Paul Patterson from Fujitsu at the hearing that I attended last month. I think the idea of Fujitsu contributing towards the costs, rather than it falling solely on the taxpayer, is very sensible. They seem open to that.
Q311 Mark Pawsey: How are discussions with Fujitsu going, in terms of getting them to contribute because of the errors and failures that they created?
Carl Creswell: The principle has been established through your discussions with Fujitsu. We are in contact with Fujitsu, but we are not currently negotiating with them to settle a figure. We are in contact with them, but we are engaging with the Horizon IT inquiry. The company has said they will look to reach an agreement, but we have not done so yet—I see that you are looking at me in a slightly quizzical fashion.
Q312 Chair: Why have you not started talking money with Fujitsu?
Carl Creswell: We are talking to them about the principle, but we have not sought to try to agree—
Q313 Chair: But the principle is agreed. What about the pound notes?
Carl Creswell: I think there is a question about when the best point would be to agree a sum. If we were to agree a sum of money now, and then the Horizon IT inquiry were to find something material that could affect that negotiation, I think it would be wrong of us, on behalf of the taxpayer, to reach a pre-emptive agreement. The situation might change because of the inquiry. Do you see what I mean?
Q314 Mark Pawsey: Is there a fear that Fujitsu might decide to leave the UK, for example, in order to avoid any obligation that they might have created for themselves?
Carl Creswell: That does not seem in tune with the conversations that we, Cabinet Office and others have had with Fujitsu. I think the comments from Fujitsu HQ have been very clear that there is an issue to address.
Q315 Mark Pawsey: So there is a strong commitment, as you understand it?
Carl Creswell: As I understand it, absolutely.
Q316 Mark Pawsey: When Mr Read gave evidence to this Committee, he told us that the Post Office, in the absence of the Horizon scandal, was already a difficult business to manage, with people moving their banking and other activities online, putting pressure on the Post Office itself. How do you think the Post Office recovers from this?
Carl Creswell: I suppose there are two parts to that. Do I agree that it was a difficult business to run? Yes, I used to be responsible for the retail sector for four years. I think that, like many other retailers, the Post Office has had a difficult time on the high street, and consumer behaviours are changing. That is why Mr Read was appointed to the role, because of his retail experience, to help to grip some of those problems. It is accurate to say that there are challenges, but not insurmountable challenges, or challenges different from other retailers across the UK.
As for how the company recovers, in my mind the best way is to deal with the legacy of the past as quickly as possible. From what I have seen across the country, the brand is still strong. Post offices are loved, thanks to the work of their postmasters across the country. They need to deal with the past, and then there are questions about the future. That is actually what Sarah Munby, the permanent secretary for BEIS, was raising with Henry Staunton when she had that famous conversation.
Q317 Mark Pawsey: Does the management time expended on Horizon and the amount of cost going into it from the Post Office’s own resources help or hinder the Post Office when it comes to getting on with running an efficient business across the country?
Carl Creswell: I think the opposite, the counterfactual—if you were to take all this off the Post Office and absolve it of any responsibility for cleaning up the mess it caused—would not be fair. The Government have put in extra money—£150 million—to support the company to ensure that it does not erode the core business. My view—and that, I think, of Ministers, too—has always been that the Post Office has a responsibility to help to deal with the legacy of the past.
Q318 Chair: Can we just get the numbers then, Mr Creswell? In the current financial year, what is the budget for redress for the Horizon shortfall scheme?
Carl Creswell: I am afraid I do not have those statistics to hand.
Q319 Chair: Okay. The GLO compensation scheme?
Carl Creswell: That is very dependent upon how much money we pay out. So far, we have paid out £34 million.
Q320 Chair: What have you said to Treasury about how much you expect to pay out on this scheme?
Carl Creswell: Across the whole of the—
Chair: No, just on the GLO compensation scheme.
Carl Creswell: Yes, but do you mean within this financial year or across the two financial years?
Chair: We can have both if you like.
Carl Creswell: Across the two financial years, our estimate is more than £100 million. As I say, we have paid £34 million. The Treasury does not tie us to very fixed amounts that have to be spent in each financial year, because that would be a brake on spend. We have that flexibility because we are drawing from the reserve. If we could get that £34 million paid out so far—
Q321 Chair: So you have got end-year flexibility?
Carl Creswell: Exactly, but end-year flexibility in the sense that we can bring forward spend.
Q322 Chair: What is the forecast for overturned convictions?
Carl Creswell: Thirty-five million has been paid out on that so far—I don’t have a forecast for that overall. There was a provision set out in the BEIS accounts that totalled £600 million.
Q323 Chair: Okay. Estimates from your Department are being produced this week. Currently, when we look at the public information, it is almost impossible to detect exactly how much budget is being provisioned for which scheme, and whose budget line that lives on. Can you write to us this week to set that out clearly?
Carl Creswell: I am very happy to do so. We wrote to you in November, via the Minister, and set out quite a lot of those points. Hopefully you have seen that letter.
Q324 Chair: We have seen that letter, but I’m afraid it does not provide clarity about how much budget is provided for each of these three schemes, and in which financial year.
Carl Creswell: Fine. I’m very happy to do that this week.
Chair: Parliament would like that information.
Carl Creswell: Of course.
Q325 Ian Lavery: The scheme has a 40-day target. I think it has already been suggested that 70% of the cases have met the target, but obviously 30% have not. Can you tell the Committee why that is the case, and what you are doing to try to achieve 100% of the cases within that 40-day period?
Carl Creswell: Of course. It is a very good question. When I last came to the Committee, I said that it was a stretching target, which indeed it proved to be, for the end of January. As you say, that showed an outturn of 70% against that 90% target. We never aimed for 100%, because we recognised that some of the claims are more complex, so that was the target we set. I asked my team for the most recent data yesterday: we have now moved to 85% against that 90% target. So we are still failing, but we are closer to the target now than we were. That reflects the fact that, early on, we were getting some of the processes up and running, and I think some of the early cases—some of them quite high profile—have legitimate reasons for saying that their claim took too long. However, we are now speeding up quite significantly.
Q326 Ian Lavery: What are you doing to improve that?
Carl Creswell: We have already taken quite a few steps—
Ian Lavery: What are those steps?
Carl Creswell: The £70,000 has been very beneficial, I must admit. That has allowed us to get payments out very quickly. We have also been working with Addleshaw Goddard on some of our processes to ensure that when claims come in and there are questions on the partial claims that I mentioned earlier, the RFIs—the requests for information—go back to the claimants’ lawyers as quickly as possible. As I was describing earlier, there needs to be throughput throughout the system, and we need the full claim before we can then properly process it.
Q327 Ian Lavery: You mentioned the complexity of it; there are complex cases. That’s basically the reason why you perhaps aren’t meeting a higher target. Can you give the Committee a bit of a flavour of what a complex case actually is?
Carl Creswell: Of course. I often get asked, “Why didn’t you just pay one sum for everyone within a scheme?”, but the answer is that all the compensation schemes that I know have that range of different experiences that we are trying to compensate for. Across the cohort of postmasters, there are some who were in prison for 14 or 15 months, and others who had a shortfall that they managed to pay back and then continued to work. There were some who moved on to another job and ended up earning more than they did in the Post Office, and others who never worked again. That is an example of the range of different experiences. That is why we see a range of complexity across the different circumstances. It might be helpful if I bring in Mark to give some examples around that complexity, without, obviously, naming any names.
Mark Chesher: Yes, I cannot go into detail on individual cases, but it is exactly that: there are very different experiences, and very different issues are raised. Some postmasters were close to retirement, while others were much younger. We are looking at questions such as, “Can they work going forward through to retirement?” For some claimants, that will mean 20 to 30 years, potentially, of working life that they still have. Some postmasters have medical expert reports to support the fact that they can’t necessarily do a stressful job, as the Post Office was for them, but can physically work full time and could do another job that would mean that taxpayers are not funding their earnings, effectively, through until retirement. However, there are others where they just cannot work any more, and we need to calculate a payment that will see them through to retirement. It is those sorts of issues.
I would add that these claims are complex. I have worked on a number of schemes and arrangements where we are looking at compensation, from PIP breast implants, which is fairly simple and requires no medical evidence or forensic account, right through to some very complex pharmaceutical damage claims that were settled with involvement from the Department of Health and where a lot of medical and scientific evidence is required. Those processes all take time. They start off slowly and typically last at least two years—the breast implants cases, for example. Some last a lot longer, up to four or five years. This is definitely a scheme where we are moving at pace now. We are trying to find ways to move faster, but effectively we have been at the beginning stage of getting through a lot of issues, which we are resolving now or have resolved. That then stands us in good stead to accelerate through to the end of the process.
Q328 Ian Lavery: I am not sure if that is a really good analogy, comparing the Post Office compensation claims to breast implants. I am not sure if that is what we should be doing here today, to be perfectly honest. It is not really about complexity; it is about the claims that are outstanding—the 30% that have not accepted. It is obviously the people who have impacted the most by the whole sorry saga—people who have mental health problems, people who will not get employment in the future, people who cannot manage employment. It is not about complexity, because, as you mentioned Mr Chesher, you are used to dealing with cases of that nature. Future loss of earnings, pain and suffering—that sort of stuff is what you are used to. So it is not about it being complex. It is basically run-of-the-mill legal issues. I am not sure why it is being suggested that these are really complex cases, as the fact of the matter is that they are not complex; they are just people who have been impacted, made worse by what has happened. Mr Bates suggested that if a £1,000 fine was imposed for each day over the 40-day period, that might speed things up. What is your view of that?
Mark Chesher: We are all working collaboratively with the claimants’ lawyers, but as Mr Creswell has explained, the speed of the overall scheme is governed by how fast the claimants can put their claims in. That is what we are trying to work through to make sure the end-to-end process is as fast as possible. I am not sure that there would be any added incentive on us or on DBT if a fine or some sort of penalty was levied on anyone in that process if the target was not met. I go back to what Mr Creswell said: it was a stretching target and we are trying to meet it. We have accelerated, and I think we should be judged at the end of the process on whether we have achieved that target of 40 days for 90%.
Q329 Chair: To be fair, we are making those judgments now. Can you tell us how many people you have working on it please?
Mark Chesher: At the moment we have a team of 15.
Chair: Fifteen?
Mark Chesher: Fifteen, yes, including eight qualified lawyers and seven staff supporting that.
Q330 Chair: Can I have slide 2, please? This is the GLO process map. We have said that potentially 478 people could apply. You have said that you have 147 claims or partial claims in. Part of the problem, we have been told, is that the Post Office disclosure at step 1 is too slow. For how many of the 478 individuals covered by the scheme have disclosure reports now been issued?
Carl Creswell: 55% have been covered with disclosure reports so far.
Q331 Chair: 55%? Why on earth is it only 55%?
Carl Creswell: The amount of disclosure material coming from the Post Office is coming in more quickly than the number of claims that are coming to us, or than some of the other steps, such as medical advice and forensic accountancy reports. So far, the feedback we have had from claimants’ lawyers has been that the start of the process with the Post Office was not quick enough—
Chair: It still isn’t quick enough.
Carl Creswell: The data I believe is coming through—you may want to discuss this with the Post Office later—
Chair: We will.
Carl Creswell: From our point of view, we feel that the Post Office has sped up and is on plan.
Q332 Chair: It must have been going pretty slowly before.
Carl Creswell: They certainly have a lot still to do.
Q333 Chair: When is it going to get from 55% to, for example, 100%?
Carl Creswell: Is that April, June time? Yes.
Q334 Chair: Right, so you are inviting us to believe that you are going to get 100% of the disclosure reports issued by April/June—you have eight qualified lawyers working on this—and we are going to get all the claims settled by the middle of August.
Carl Creswell: It is important to be clear who is doing what within the process, which is why I hope the process map gives a sense of that. All of that work—analysing the disclosure—does not fall to Addleshaw Goddard. They process the claims when they have been submitted. The purpose of the disclosure is to allow people such as Freeths—
Q335 Chair: Sorry to interrupt, Mr Creswell, but as you know, once the disclosure report is issued to a former sub-postmaster or sub-postmaster, they then have to rally together a whole load of further information and put that evidence to you when they submit that claim in step 3. If you have not even issued them the disclosure report, there is no way that you are going to get all of the claims in by April, May, June.
Carl Creswell: I have quoted to you the statistics that show the progress we have made so far. I feel confident that the Post Office is on track to deliver.
Q336 Chair: Let me put the question a different way. Are you now satisfied with the speed with which the Post Office is issuing the disclosure reports at step 1?
Carl Creswell: I would like every step of this whole process to go more quickly.
Q337 Chair: The question was: are you satisfied with the speed?
Carl Creswell: Yes I am, overall, because this is a chain of different—
Q338 Chair: You think step 1 is going fine now. You are happy with it.
Carl Creswell: I personally am, but I will be interested to hear other people’s evidence today.
Q339 Andy McDonald: I would like to come back to that schedule in a moment, but arising from some of the previous questions, may I return your attention to Fujitsu? We didn’t get anything from you. Fujitsu came here saying “mea culpa” and there were lots of expressions of sorrow and commitments, but what are you doing to nail them down? You won’t talk about money, but what about the principles? We expected further progress to have been made on that discussion, even if it is around ballpark percentages in terms of the ultimate bill to the taxpayer. Where are you with that discussion? It is an important matter.
Carl Creswell: As I was saying earlier, I think the principle of the moral obligation has been stated. We are in contact with Fujitsu, but I am afraid that we have not at this point achieved what you say you think we should do.
Q340 Andy McDonald: I think you have to further and better particularise that from this moment onwards. You have got to get something from them that is meaningful. At the moment, an apology is very nice to hear, but ultimately, in terms of the payout from the taxpayer, it is meaningless. From this Committee, could you please go away and get some hard edges on that?
On a similar matter, returning to the issue of the bonuses, you talked about bonuses being a proper way to pay. These postmasters were prosecuted, I believe, under the Theft Act. I don’t know whether it was for obtaining money or a pecuniary advantage by way of a false instrument, but within the Post Office’s own accounts and executive, in the way they conducted themselves, they did exactly the same. The difference between the postmasters and the board is that the postmasters were not guilty, and the executive board members were. What are you, in your position, doing to seek legal advice on why those people have not faced prosecution thus far?
Carl Creswell: I am not here to be an apologist for the past. I am very much dependent upon the Horizon IT inquiry that is being led by Sir Wyn Williams to look at those issues. He is best placed; he has powers to compel people to give evidence and documents, and then to produce an assessment of what went wrong and what should be done on the back of his recommendations. My focus, because I am responsible for overseeing the Post Office now from a policy perspective, is on what the targets are now and going forward.
Q341 Andy McDonald: So we wait for Sir Wyn Williams—that’s the answer. What about this business of how long a claimant should expect to wait between first offer and the conclusion of the first facilitation phase—between steps 4 and 5? How long should they expect to wait?
Carl Creswell: We have set 40 working days between step 1 and the assessment and offer—from once we get the full claim in up to stage 4. We have not yet taken any claims through the Dentons-panel-Sir Ross process. Rob, would you would like to come in, given that you—
Q342 Andy McDonald: Please come in, but what should the timescale be on that? And the conclusion of the independent panel—what should the timescale be there?
Carl Creswell: Is it okay if I bring in Mr Francis?
Andy McDonald: Please do.
Rob Francis: It will depend on the claim. Obviously, there are more complex claims that will require a slightly longer period for negotiations and we will assess on a case-by-case basis, but broadly speaking, for step 4—sorry, step 5—on the slide, I would estimate about five weeks, but we are reviewing it throughout that five-week period. Some cases will be close to the parties agreeing terms; everyone will be relatively content, and we’ll be able to settle those quickly. With others, it will become clear they need to go through to the independent panel, because the parties are too far apart.
Q343 Andy McDonald: So five weeks there. What about from independent panel to independent review?
Rob Francis: Broadly speaking, I would say, for the independent panel, that is likely to take around—well, from the start of the claim being submitted, you’re likely to talk it up to about six months to the end of the first panel, but there are the intervening steps for that. You have the facilitation; it then will go to the panel for a preliminary view, and that preliminary view will then help the parties to see if they can agree—
Q344 Chair: Sorry, Mr Francis, did you say six months?
Rob Francis: Yes, but those stages are the 40-day period for the offer, a facilitation period where we are running sessions trying to get the parties to agree terms—I would expect a lot of these claims will settle at each of these stages. We then have a preliminary view from the independent panel—again, hoping that we can get the parties to agree settlement terms—before a binding decision is reached.
Q345 Andy McDonald: So around 40 days has now gone into six months. Have I got that right?
Rob Francis: No, sorry, that is not what I am saying—I’m sorry. What I am saying is that the 40 days is for the offer. Then there are a number of subsequent stages, and we would expect the vast majority of these claims to be settled, but if your question was at what point we get a binding decision from the panel, because we have all those stages—
Q346 Andy McDonald: Well, if it is going to drag on, isn’t Alan Bates’s suggestion a good one, in terms of the 40 days to get to first offer? If there was a £1,000-a-day penalty, it wouldn’t half concentrate their minds, wouldn’t it, to get through the rest of the phases? If you were late getting to that point, it would encourage—it would put the principles of incentives into this timescale. Has he not got a point?
Carl Creswell: May I come in on that? I don’t think there is a problem with the 40 working days target at the moment—our performance against that. I would like to take away that point about—
Q347 Chair: There is a problem: you are not achieving it.
Andy McDonald: There is, because only 70% are getting an offer.
Carl Creswell: No, that’s not what I said. It was 85%, against the 90% target, so we’re failing, but—
Q348 Andy McDonald: Sir Ross, would this work? Would it be a sensible thing to do to introduce that incentive opposite the 40-day first offer?
Sir Ross Cranston: I am not sure about the penalty, but you could certainly escalate cases if you reached a timeline—in the law, we often have deadlines, limitation periods and so on—so it could jump up to the next stage. The difficulty with that is that the case may not be properly considered, but could I just say that from the point of view of the panel—I spoke to the three leading KCs the other evening—we are ready, willing and able to deal with cases, but we have not seen any. We will turn them around quickly once they get to us, if they get to us, but it may be that a lot do not get that far—one would hope that they don’t—because reasonable offers have been made. That is absolutely crucial in terms of time—reasonable offers have to be made. It goes back to the Chairman’s point: they have to be full and fair. If I could emphasise this principle, Mr McDonald, full and fair is crucial because it is an overarching criterion. This is not just legalistic analysis. You have to provide a full and fair offer.
Q349 Andy McDonald: I get the point, but I was a claimant lawyer for 30 years—I think Mr Chesher has been looking after defendants for that period—so I am familiar with the principles of schedules and counter-schedules, exchanging. Wouldn’t that landing on your desk be a damned sight quicker to get to a situation where the parties have produced that sort of exchange with each other, and you could come to a view? Wouldn’t that be a more sensible way to get it on to your desk as the independent reviewer?
Sir Ross Cranston: Possibly. Another approach might be a fast-track approach, where you do not have the complex analysis that is currently being undertaken. You might have a fast track—I think Mr Hartley from Freeths will talk to you about this—where instead of getting an expert medical report, you simply rely on the medical records and the GP’s letter, say, or you do not have full forensic accounting but something else. There is a possibility of putting cases into different categories in terms of monetary compensation, so there are ways that you can think of.
Q350 Andy McDonald: I urge caution on fast-tracking and medical records being the determinant of what the damage actually is. That is a real worry for me.
Finally from me on this issue, there is this whole business about a full and fair settlement. If we have these figures, are we not in danger of settling claims at an undervalue where there is damage to that person’s career, their life, their family and their loss of home? Certainly, on a £600,000 payment out, that might be sufficient to buy back the house that they lost in the first instance. Where in this system is the evidence about exemplary and aggravated damages for the most heinous crimes committed under the auspices of the state through the Post Office that this country has ever known? Why is that not writ large in this scheme to ensure that we deter people from ever going there again by mistreating people in that way and that they are punished? This was born of malice; people deliberately set out to cause this. That is what has caused the outrage in the country. Where is the reflection of aggravated and exemplary damages in this scheme?
Sir Ross Cranston: I would come back to full and fair, because it is not simply what the calculations will produce in some cases; it is full and fair, and it takes into account all that. That was the approach that I recommended, and which was adopted with the Lloyds HBOS fraud scandal. It is the sort of approach that was adopted with the contaminated blood inquiry. In those sorts of cases, where people have suffered huge harm over a long period by wrongs, there is something more than simply coming up with the calculation you would have produced as a claimant lawyer in your schedules. In some cases, full and fair means going beyond that.
Q351 Julie Marson: I want to quickly check a couple of figures that I do not think have come out yet. Mr Creswell, how many claimants have rejected their first offer?
Carl Creswell: At the moment we have six claims that are rejected. Previously there were nine and then people agreed, so the number goes up and down. The latest data that I received yesterday was that there are six. That compares with 80 who have accepted. That does not mean that all those will go all the way through to Sir Ross, of course.
Q352 Julie Marson: No, I understand. Thank you. Mr Francis, how many claimants are in the first facilitation phase?
Rob Francis: At the moment we have the figures that were mentioned in the sense of everything that has come through with the first offer, so we have those. I will come back to you on the exact number for the first facilitation period.
Julie Marson: Thank you.
Q353 Ian Lavery: Mr Chesher, could you explain why an individual claimant might think that the offer they received is not acceptable? Can you give a flavour of that?
Mark Chesher: Yes, I think I can. Essentially there are two elements that we are looking to compensate. One is the financial loss, which is relatively straightforward to calculate: the shortfalls they had to repay themselves, and the losses resulting from that; losses resulting from any suspension or termination of their employment; and any losses that their associated businesses suffered. That is a monetary calculation that is relatively straightforward.
The more difficult element to value is the compensation for personal damage, personal injury, loss of reputation, harassment, distress and inconvenience. Those sorts of elements do not necessarily translate, in any human sense, to a figure, but we have to come up with a figure. The law has to come up with a figure as a proxy for that distress, inconvenience and damage. There, we are looking at case law and at things such as the Judicial College guidelines on general damages for personal injury.
There is a wealth of information out there that you can use to compare your claim with. We look where we can for analogous cases, either within the scheme or outside the scheme. Sitting in a claimant’s position, there will be times when you will be disappointed with the crude number that is given to the totality of what you went through. That is, unfortunately, the nature of how these claims work. It is how claims work going through the courts. It is about trying to translate that one thing to the other, and it is comparing apples and oranges.
Carl Creswell: We have had some feedback from a claimant who was dissatisfied with their offer. They said that it would be helpful to spell out the reasons for a big difference between claim and offer in more depth. That is something that we are implementing, because we recognise that just receiving the numbers without proper explanation of that difference can be immensely frustrating for the individuals. We are looking to improve some of those communication points.
Q354 Ian Lavery: It does seem that there are people who have received offers that a lot of people believe are absolutely derisory compared with what they went through, which you have explained, Mr Chesher. Lots of people cannot work again. Lots of people lost every single thing they had. People lost relations. People lost their husbands to suicide. To receive a derisory offer at this stage is absolutely unreal. You cannot imagine how these people must feel. I will not get into any individual cases, but there have been high-profile cases where high-profile individuals have been made an offer that is approximately 20% of what they thought they deserved. There are huge issues on that. How can they be reconciled?
Mark Chesher: I know exactly which case you are referring to, so it is very difficult for me to comment on that. What I will say is that that is the classic case that should go through the process of facilitation and, ultimately, it may well fall to—
Q355 Ian Lavery: Tell me: what would you say to somebody who you offered 20% of a huge claim to if they just said, “Hey, you can go and stuff it. This is not acceptable after what we have been through”? What reaction would you have to somebody who responded in that way because these people are hurt, you know? It has destroyed their families, you know? It has destroyed everything they ever had. These are people who worked hard. They were not paid a fortune. They invested in the post office and were treated really, really badly. They thought that compensation was coming forward after all these years—for it then to be so derisory is an absolute insult. That is what it is. It is not trying to give them the finances that they might need to draw a line under it and move forward—quite the opposite; it is a huge kick in the pants. How will you deal with that?
Carl Creswell: May I come back in on that?
Chair: Briefly, because I am going to bring in Douglas Chapman.
Carl Creswell: Okay. I would say that I am sorry for any impact that we have had on people who feel that the offer through the GLO scheme is derisory. The stats I gave you earlier show that 80% of the offers have been agreed. We should not necessarily be judged by the ratio between how much was asked for and how much was offered, because a lot will depend on the approach taken and how much has been requested by individuals.
Q356 Chair: Nevertheless, it would help the Committee if you could provide us with a spreadsheet of anonymised data that sets out the following: first, how much was claimed; secondly, what the initial offer was; and, thirdly, what the final figure was that was agreed, where agreement has been reached. Is that okay?
Carl Creswell: I think that sort of data would help your analysis, so I am happy to take that away. Obviously, the anonymisation is important for the individuals, but you would not expect to see—
Chair: Exactly.
Q357 Ian Lavery: I wonder if Sir Ross could answer a very simple question. As well as being the reviewer for the GLO scheme, you have told the compensation advisory board about fundamental issues with the Horizon shortfall scheme. Can you tell us about these issues?
Sir Ross Cranston: What I discussed with the advisory board was whether the HSS award should be reviewed along the lines of the Lloyds inquiry I did, which was enormously complicated and took time and money. I said maybe the best approach is to have an appellate system like the GLO system, so I recommended that. We do not have time to go into the details. I understand from what the Minister said yesterday that the Department is giving serious consideration to that. That would allow HSS people who are unhappy with what they got to go through this sort of process that we have in GLO, so you would go to a panel and ultimately to a reviewer. Just to say, going back to Mr McDonald, there is a provision for exemplary damages where there is a prosecution—I should have mentioned that.
Q358 Ian Lavery: Sir Ross, are there any barriers for claimants in the scheme’s guides and principles that probably make it extremely difficult for claimants to claim the compensation they think they likely deserve?
Sir Ross Cranston: Before I signed on the dotted line, I made various recommendations to change the principles. To give the Department credit, it did change a lot of them. In terms of “full and fair”, they put that right up the top. There were other changes in terms of my role, which was expanded. One thing I am not too sure whether it has been taken forward is raw transparency. This is where it comes back to you, in a way, in terms of providing information to you. I think the transparency is very important.
Ian Lavery: Mr Creswell is nodding there, so maybe that is a lesson that could be learned from what Sir Ross is saying.
Carl Creswell: Yes, I agree.
Q359 Douglas Chapman: Just on the back of the previous question, Sir Ross, you mentioned the statement made yesterday in the House. Was there anything in that statement that you thought would help speed up and move things forward in a positive way? Do you think the Minister can actually deliver on some of the promises that were made in the statement?
Carl Creswell: Certainly the fixed-sum offer and putting that up front is very valuable, but it all comes back to making good offers to start with, coupled with possible procedural changes. One of the recommendations was that issues of principle should come to the panel and then to me. That doesn’t seem to have happened. There are issues. I think Mr Gullis raised an issue of principle, which might be a general issue of principle affecting other people—generic cases—so there are a number of procedural changes that can be made. What the Minister said was of course welcome, but it is high level, and he said he was taking away a number of things as well. We watch and wait for the Department to consider it and for the Minister to make another statement.
Q360 Douglas Chapman: More generally, the Post Office has been involved in all these matters, from redress right through to compensation and so on. Should the Post Office itself be taken out the whole mix, so that we can actually have a completely independent look at what the compensation scheme delivers?
Sir Ross Cranston: That has nothing to do with the GLO scheme because the Post Office is not involved, but of course the advisory board has recommended that it thinks that that is a way forward.
Q361 Jonathan Gullis: Mr Creswell, obviously there has been a lot of speculation in the media regarding Henry Staunton. I just want to quicky ask you—someone who is in the Department—whether you were under the impression that people would resign if Mr Staunton had not been removed from the office.
Carl Creswell: Yes, I was told that explicitly.
Q362 Jonathan Gullis: By a number of individuals or just one?
Carl Creswell: By one individual, on behalf of two members of the board. The complaints about Mr Staunton’s behaviour came to me. I had a phone call with Mr Tidswell, who is going to give evidence to you later. He is the senior independent director on the Post Office board, and his job is, among other things, to hold the chair to account. It was he who contacted me, and indeed he did say, as you suggested, that the level of anxiety about Mr Staunton’s behaviour was such that we might see resignations from the board.
Q363 Julie Marson: I will follow up with Mr Creswell. Have you worked with a lot of chairmen of arm’s length bodies during your career?
Carl Creswell: I have, yes. My background includes helping to set up the Competition and Markets Authority and the Institute for Apprenticeships and Technical Education, and sponsoring ACAS, Citizens Advice and other bodies. My background is quite full of that sort of arrangement, yes.
Q364 Julie Marson: Given your experience, how would you describe Mr Staunton’s performance as chairman?
Carl Creswell: I have never heard of anything like the allegations that were made to me by Ben Tidswell when he phoned me, and I have never seen anything like the behaviour, since that article was published in The Sunday Times, of someone who has taken what has happened and talked about it in the way in which he has.
Q365 Julie Marson: What signs did you see, in your experience, that you were not comfortable with? Did you feel there were signs that he wasn’t up to the job?
Carl Creswell: I was first aware of the investigation into the whistleblowing allegations in November last year. I hadn’t been aware that he was being investigated until then. I note he has said that there was no investigation, but there is, and it is still ongoing. Prior to that, concerns had been raised with me by the UKGI shareholder executive about some aspects of the chair’s performance in terms of his grip on his brief, and whether he was alert in meetings and so on. I was aware of those broader concerns, but I regarded them as less serious than the allegations that then came to me in early January.
As I say, there were two key allegations from my point of view that were influential in the decision by the Secretary of State on dismissal. One was around the chair allegedly trying to stop a whistleblowing investigation into his conduct, which, given the history of the Post Office and the Horizon scandal, struck me as particularly serious. The second was around the chair trying to stop a public appointments process to recruit the new senior independent director, because, unfortunately, Mr Tidswell is coming to the end of his term and is moving on. That role is there, as I said, to hold the chair to account. Again, it struck me that trying to bypass the public appointments process that the Minister wanted to strengthen the board—to stop that without consulting the Government as shareholder—was a step that seemed inappropriate.
Julie Marson: Thank you.
Q366 Mark Pawsey: In the light of what you have just told us, Mr Creswell, what do you think that says about the recruitment and appointment of Mr Staunton in the first place?
Carl Creswell: As I was saying, I didn’t have initial concerns about Mr Staunton when he joined the board. I think he has a lot of background in the retail sector—
Q367 Mark Pawsey: I am more bothered about the process that put him in the position in the first place.
Carl Creswell: I think it is hard for me to judge. Any people who have been close to the Horizon scandal over a number of years will have encountered concerns about whether people like the Government, people like UKGI, act when concerns are raised with them. This is rightly a matter for the Post Office Horizon inquiry. I have been struck by the number of commentators who have queried why the Government took this action in relation to the chair. To my mind, it is evidence of the Government actually taking a stronger perspective when they hear about things that aren’t working.
Q368 Mark Pawsey: In any business, if somebody hasn’t performed in the way that was hoped, there are questions about the recruitment process. My question was: what does it say about the recruitment process?
Carl Creswell: It is hard for me to draw many conclusions. You would experience this in any matter of employment, and this isn’t strictly speaking employment; it is an appointment process. If things don’t seem to be working, you should correct course, and that is what has happened. [Interruption.]
Q369 Chair: There are chairs at the front, Minister, if you would like a ringside seat.
That draws the first panel to a conclusion. Thank you very much to all of our witnesses. Mr Creswell, you told us that you are personally signing off the claims that are made under the scheme. Some of those claims can be signed off in an hour or less. You told us that you still think that the process needs to be sped up, that it is not going fast enough. You have not been able to tell us the budgets of the different schemes, but you will write to us with that information. I am sorry that you have not been able to table that before us.
You have been able to tell us that you are still failing against the timescales that you have set. You have only eight lawyers working on processing the claims, and 55% of the disclosure reports have been issued and 45% have not. That implies that 215 disclosure reports are still required to be issued, and Mr Francis has just told us that it could take up to six months to process the claims. You are not going to hit the deadline of mid-August for getting all the claims settled, are you?
Carl Creswell: I would like to go away to work on that six-month date with Dentons, because as Sir Ross was saying, I do not see a reason why it should take that long. Fast-tracking some of the questions of principle to the panel and to Sir Ross should allow us to move forward. My current assessment is that we should be able to hit August with a fair wind, but a number of factors are outside our control. You are right to identify the pace of disclosure as—
Q370 Chair: You cannot absolutely guarantee us that that mid-August deadline will be hit.
Carl Creswell: That is why the Minister has described it as an aim. With the legislation, we also took steps to remove the hard deadline—
Q371 Chair: But you cannot guarantee that mid-August will be the end of this for the GLO applicants.
Carl Creswell: We are doing everything we possibly can—
Q372 Chair: That is not the question. I know you are doing everything that you can, but you cannot guarantee mid-August.
Carl Creswell: No.
Chair: That concludes this panel. Thank you very much to the witnesses.