Postal Services Bill

Memorandum submitted by Justice For Subpostmasters Alliance (JFSA) (PS 14)

The submission comprises of:-

o Introduction – who we are and why we came into existence

o Aim – the objectives of the Alliance

o Background Examples – offers a brief insight into subpostmaster problems relating to:-

o The Subpostmaster Contract

o Audits

o Suspensions

o Recommendations


Justice For Subpostmasters Alliance (JFSA) was established during November 2009. It is an entirely voluntary self-help group comprising of mainly ex-subpostmasters, a smaller group of serving subpostmasters and a number of professionals who are able to assist with their expertise. Since the introduction of Post Office Ltd.’s (POL) Horizon system during the late 1990’s, many individual subpostmasters in isolation have endeavoured to stand up to POL. Inevitably they have been crushed under the weight of their power and their endless funds underwritten by a Labour Government that allowed them to act with such impunity. This, when combined with the flat refusal to confront POL over the failures of its Horizon system by the so called representative body for subpostmasters, the National Federation of Subpostmasters (NFSP), is the reason why JFSA has been formed. We are still a small group with over a hundred active cases and roughly twice that number of serving subpostmasters who are following our developments. Yet our numbers continue to grow weekly as people discover JFSA and many more subpostmasters fall victim to the vindictive and punitive actions of POL. There is little doubt that when the true extent of the antics of POL are finally exposed the victims will number in the thousands.


Our aim is to bring to the attention of those in power the abusive and destructive manner in which POL have, and are still treating subpostmasters, and to seek to redress the many injustices that we have been subjected to by POL. We intend to highlight the miscarriages of justice that have been inflicted on subpostmasters by an organization that abuses its licensing power to criminally prosecute without providing evidence in cases of a civil matter.

The systemic faults of POL and its Horizon system are too numerous and too complicated to deal with in this brief submission. Though in order to offer some insight into the points and recommendations that appear at the end of this document, a brief outline of the background to some of these issues has been included.

Background Examples

The Subpostmaster Contract

The Performance and Innovation Unit report of 2000, "Counter Revolution: Modernising The Post Office Network" identified "The majority of sub-postmasters still work under a contract which can be traced back a hundred years". POL uses this contract, emanating from the Victorian era, to pursue subpostmasters through the courts in order to recover POL’s losses from their flawed Horizon system. Even with the introduction of the latest technology POL still rely on clauses such as "a Subpostmaster is responsible for all losses", originating from a contract from a time when the lighting was by oil lamp and the ledger was completed by quill and ink. They use such clauses to extract money from a subpostmaster, either from their salary or through the courts, should their flawed Horizon system decides it is owed. System errors are never considered (POL states it handles 2.4 billion transactions a year and this is without a single error), only the contract is used to recover any shortage. Yet the IT part of that system can be accessed and manipulated over a network without a subpostmasters’ knowledge or agreement, but it is only the subpostmaster who is made financially liable.

The few hundred Crown Post Offices left that are directly run by POL, they also use this Horizon system and during the financial year 2007/8 these offices lost £2.2m using this system, and whilst their staff are not treated as guilty until proven innocent, a subpostmaster is.


POL refers to it as an audit when they descend upon a subpostoffice, but the reality is, it is little more than a stock take. The POL staff that carry out these ‘audits’ can be anybody though we have yet to find a member of Institute of Internal Auditors or any other professionally recognized body in attendance. What makes them qualified to carry out an ‘audit’ of a subpostoffice? After all they hold a subpostmasters’ future in their hands and the least you should expect is a suitably qualified professional person to be involved, but they are not, and a subpostmaster is not allowed to bring in his own professional auditor to check the findings.

Then there is the matter of POL and their total failure to undertake routine ‘audits’ of subpostoffices. There are subpostmasters who have never had an ‘audit’ in eight years and post offices which turn over £5m every year that have never had an ‘audit’ for over 5 years, and they have to use Horizon, a system they are unable to gain full access to in order to check all the information they have entered into the system. Yet they are being held responsible for the accuracy of everything during this period.

A question often asked is why does POL not ‘audit’ all subpostoffices on a regular basis? Many people believe that they are well aware of all the faults in Horizon and the more post offices they ‘audit’ the more these faults will become apparent. After all, from the POL standpoint they don’t have to undertake ‘audits’ as they can rely on using the contract to pursue subpostmasters through the courts or deduct money from their wage packets to recover any shortfall due to whatever reason.


Should a subpostmaster begin to have problems and then find themselves suspended, they soon discover they have nowhere to turn to for support. Their salary is stopped instantly and they are treated as being guilty from the outset by POL. There is no independent adjudicator you can apply to, POL act as judge, jury and executioner in all matters. The National Federation of Subpostmasters, the so called representative of the subpostmaster have taken the decision that Horizon faults do not exist as POL has decided it has to be that way. When POL requests the subpostmaster to attend an informal interview they are not even permitted to take a solicitor, partner or anyone with them other than a Federation representative who is then not allowed to say anything.

The few examples given above really only scratch the surface of the problems facing subpostmasters trying to offer a service to their community. Through JFSA we will continue to raise these and many other points.


Regardless of the direction which lays ahead for the Post Office, there are, at the very minimum, a number of issues which should be addressed and included in any way forward.

o A full and complete independent IT audit of POL systems and support should be undertaken with its findings made public.

o An external independent adjudicator should be appointed to review cases and issues between POL and subpostmasters. The adjudicator should have the authority to demand documents from both POL and the subpostmaster and should be assisted by a team of skilled technical staff who are able to gain access and check any system or document that they deem necessary.

o A new subpostmaster contract should be produced to replace the Victorian template still in use today. Above all, it should reflect the introduction of new technology and address in detail where responsibilities, liabilities and boundaries lay. It should ensure that there is full and easy access to the records of transactions that a subpostmaster is being held liable for during the full term of that liability.

o There must be a legal or a contractual requirement for POL to undertake a full audit of all subpostoffices at least annually and by qualified staff.

o The licence to prosecute should be removed as a tool from POL and any prosecutions should be referred to the Crown Prosecution Service.

o Any external access to a subpostmasters Horizon terminals over the network should be accompanied by an automatically generated system log entry recording the details of the event which is then made available to that subpostmaster.

November 2010