Toxic culture, poor leadership: what Horizon inquiry has told us so far

The latest phase of the inquiry into the Horizon IT scandal , which held its last session on Tuesday, has hosted a parade of executives from the Post Office and software-developer Fujitsu, as well as government officials and ministers – all trying to account for what many call the worst miscarriage of justice in UK legal history.

After the previous tranche of hearings culminated in May with the tearful testimony of former Post Office chief executive Paula Vennells , June and July’s sessions have added to a picture of cover-ups, missed opportunities for action and a toxic culture of secrecy that protracted the plight of the hundreds of wrongly prosecuted branch owner-operators seeking justice.

So what have we learned from the evidence of the past two months, and what might happen next?

Tales of a ‘toxic culture’

Sir Vince Cable concurred with the verdict of lead campaigner Sir Alan Bates that Post Office bosses were “thugs in suits” . The former Liberal Democrat leader, business secretary from 2010 to 2015, recounted to the inquiry having to deal with “arrogant” middle managers before he became a minister.

Former Marks & Spencer chair Robert Swannell, who ran the agency that manages the government’s stake in the Post Office, UKGI (UK Government Investments), told the inquiry of a “toxic culture” of “incomplete curiosity”.

“The culture at the Post Office was shocking,” he said, recalling the “visceral reaction” he had when in 2019 a high court judge ruled against the state-owned body in the first stage of a lawsuit brought by Bates and 554 other branch owner-operators.

“By that I mean it was a closed, defensive culture that was not in the business of giving information,” he added.

The inquiry heard that in 2014 government officials and Post Office board members had expressed serious doubts about Vennells , who was CEO from 2012 to 2019 and resigned just before the organisation lost the Bates case.

One internal document described her as “not the optimal person” to lead the organisation, with reasons cited including an inability to work with “personalities that provide robust challenge to her”.

Neil McCausland, who held roles including senior independent director and interim chair between 2011 and 2016, described the Post Office as “very badly run and messy” and took a dim view of Vennells.

He said that when she was managing director, she “presided over a very sharp deterioration in profitability” and thought that as a leader she was “OK”, but that the “Post Office was a mess and what was needed was someone who was great”.

Tim Parker, chair of the Post Office between 2015 and 2022, was accused of a cover-up for not sharing with the board or government a key independent report that raised concerns about the accounting software and over whether the organisation had enough evidence to bring charges of theft. “It was simply the advice I received and I followed it,” Parker testified.

He argued there had been too much of a reliance on the advice of lawyers , one of whom told the Post Office to remove apologies from letters sent to post office operators and “maintain a more cold, procedural approach” to hold the line that the organisation was in no way to blame for accounting issues.

Dysfunctional relationship with politicians and state supervisors

The inquiry has laid bare problems with the oversight process between ministers, their officials and the Post Office, highlighting a failure of the state’s arms length governance structure to identify and halt the campaign of wrongful prosecutions.

A familiar refrain from ministers, who time and again showed at best a lack of curiosity and at worst a complete failure to intervene, was that they were either misled, lied to or were not provided with proper briefings relating to the Horizon scandal from their own officials and Post Office executives.

The Lib Dem leader, Ed Davey, postal affairs minister between 2010 and 2012, accused the Post office of lying to him, telling the inquiry it is now “pretty clear what they told my officials was not true” .

Lady Neville-Rolfe, postal minister for 14 months until July 2016, provided disturbing testimony highlighting the Post Office’s belief that it was not accountable to the merry-go-round of mostly short-lived ministers. The Conservative peer recalled a meeting with the Post Office where she said she felt “threatened” and that Post Office executives were intimating she should “watch out”.

Prior to Neville-Rolfe’s meeting, a member of UKGI, the body that manages government interests in state-owned assets and has a seat on the Post Office board, had tipped off the Post Office about Neville-Rolfe’s more combative position.

She provided a rare example of a minister who tried to get to the bottom of things, recommending Parker commission an independent inquiry that ultimately led to the damning report carried out by former top Treasury lawyer Jonathan Swift in 2016 .

Lib Dem Jo Swinson, who held the postal brief in two stints between 2012 and 2015, suggested some civil servants and government officials had “gone native”.

She recounted the “duplicitous” and “Orwellian” behaviour of those who were meant to be the government’s eyes and ears but failed to provide truthful and independent advice.

The view was echoed by Margot James, who held the postal brief from mid-2016 to early 2018, who said some staff had “gone rogue”.

However, like many ministers she failed to request or read some key reports or look into the credibility of the MPs campaigning on behalf of post office operators.

Horizon developer Fujitsu’s role

Bosses at the Japanese technology company may have formally apologised to the hundreds of wrongfully convicted post office workers and their families, even offering to stump up compensation when the inquiry ends, but some top executives still hold the belief that the faulty Horizon system is something of a victim in its own right .

Running against the grain of almost 200 days of testimony about failures at the Post Office and Fujitsu, where staff had the ability to remotely access and change the branch accounts of post office operators and where bosses knew of bugs as far back as 1999 , former chief executive Richard Christou told the inquiry he did not like how the reputation of the accounting software had been impugned by the scandal.

“I feel aggrieved that what I thought was a good system has been put into disrepute,” he told the inquiry, citing the Post Office rollout of Horizon as one of the company’s “major successes”. He added: “The real issue is the way the prosecutions were handled.”

However, it was one of his own, Gareth Jenkins, who over four days provided the inquiry with the longest and most damning testimony of all witnesses called.

The former Fujitsu engineer, who has admitted changing crucial court testimony at the request of the Post Office, was its star expert witness in the hundreds of criminal trials conducted by the organisation.

Jenkins, now part of a Metropolitan police investigation into possible perjury and perverting the course of justice, told the inquiry he knew as early as 2000 that Horizon had bugs and could be accessed remotely.

Prosecutions of post office operators effectively stopped only after Jenkins told Simon Clarke , a barrister who worked for a law firm advising the Post Office, about the bugs, which were not disclosed to defendants who could have used them to challenge their convictions.

Clarke told the inquiry he was “personally and professionally proud” that key legal advice he gave to the Post Office, saying there was therefore a major problem with its past prosecutions, effectively ended the organisation’s litigation campaign.

Post Office bosses, who did not disclose Clarke’s legal advice to board members or ministers, were not able to find another Fujitsu employee willing to be an expert witness.

What happens next?

The inquiry recommences in September with the seventh, and final, phase which will look at the current state and culture of the Post Office and whether it has lived up to its commitment of “full and fair compensation”.

The inquiry has sent out two anonymous surveys to 16,000 post office operators , every current operator in the UK as well as those part of financial redress schemes, urging them to share their experiences which will be presented as evidence.

The Post Office is taking the move to uncover its present day activities so seriously that Nick Read, chief executive since 2019, has temporarily stepped back from running the company to prepare for the final phase .

He said that in this “critical” last phase it was “vitally important that we demonstrate changes we have made and give confidence to the inquiry and the country at large that ‘nothing like this could happen again’.”

After taking over as chief executive, he pledged to overhaul the Post Office and “right the wrongs of the past”, but has also become embroiled in a reputational crisis of his own.

Former chief people officer, Jane Davies, has said Read repeatedly demanded pay increases from the government in an “obsession” with remuneration and previously accused him of bullying. An investigation by an independent barrister cleared Read on all counts of misconduct.

In April, the Post Office said Read had “the full and united backing of the board”.

The inquiry’s chair, Sir Wyn Williams, a former high court judge, has said that his final report will be published “as soon as is reasonably practicable” after the completion of evidence gathering.