Insufficient action on compensation, say MPs

The government has taken “insufficient action” to ensure people entitled to compensation as a result of the Post Office scandal have applied for it, a report has found.

The Public Accounts Committee of MPs, which has scrutinised payouts, noted that many of the wrongly-accused or convicted sub-postmasters were yet to receive “fair and timely” redress.

The committee revealed the government had no current plans to follow up with people eligible for compensation, after just one in five letters sent to sub-postmasters about compensation received a response.

The Department for Business and Trade said it had paid out more £1bn in compensation to date.

There are four main schemes that sub-postmasters can apply to for compensation, and individual eligibility depends on the circumstances of each case.

Between 1999 and 2015, more than 900 sub-postmasters were wrongly prosecuted after the faulty Horizon IT system made it look like money was missing from branch accounts.

Some sub-postmasters ended up going to prison, while many more were financially ruined and lost their livelihoods. Some died while waiting for justice.

The scandal has been described as the biggest miscarriage of justice in British legal history, but many victims are still waiting for financial redress, despite government pledges to speed up payouts.

The Department for Business and Trade said the PAC report was based on a “period before last year’s election”.

However, the committee said that while the report did scrutinise the annual accounts for the Department for Business and Trade from April 2023 to March 2024, while the Conservatives were in power, the report also reflected the record of the current government.

The report includes evidence heard in April this year and reflected some figures as recent as May.

The committee said:

• By March this year, the Post Office, which is owned by the government, had written to 18,500 people, regarding applications for the Horizon Shortfall Scheme (HSS), but the majority had not responded.
• The Horizon Convictions Redress Scheme (HCRS), which offers 800 eligible people a choice between applying for a £600,000 flat-rate settlement or the option to pursue a “full claim assessment”, had received 536 applications by May this year. Of those, 339 had chosen the flat payout sum. The report said the government had yet to receive any full claim assessment applications
• In relation to the Overturned Convictions Scheme, 25 eligible individuals out of 111 people had not yet submitted a claim. Some 86 had submitted full and final claims, of which 69 had been paid.

The PAC report said the government had “no plans for following up with people who are, or may be, eligible to claim under the schemes but who have not yet applied”.

It added the government did not yet have clarity on the value of claims expected through the HSS and HCRS schemes.

Latest figures showed a total of £1.039bn has been awarded to just over 7,300 sub-postmasters across all the redress schemes.

Sir Geoffrey Clifton-Brown, chair of the committee, said it was “deeply dissatisfactory” to find that the compensation schemes were still moving “far too slowly, with no government plans to track down the majority of potential claimants who may not yet be aware of their proper entitlements”.

“It is entirely unacceptable that those affected by this scandal, some of whom have had to go through the courts to clear their names, are being forced to relitigate their cases,” he added.

The committee has made several recommendations to the government with the broad message that every postmaster be made fully aware of the options for claiming compensation.

The Department for Business said: “We will consider the recommendations and work with the Post Office, who have already written to over 24,000 postmasters, to ensure that everyone who may be eligible for redress is given the opportunity to apply for it.”

Chris Head, who ran a Post Office in West Boldon, South Tyneside, was wrongly accused of stealing £88,000 and when the criminal investigation against him was dropped, the Post Office later launched a civil case.

He said the current compensation processes were not working.

“You have Sir Alan Bates, offered less than 50% of his claim… you have other people on the Overturned Convictions Scheme, who are the worst affected people… not been fully compensated.

“How can you tell people to come forward, to make a claim when the worst people affected are not being paid?”

The long-running public inquiry into the Post Office scandal, which has examined the treatment of thousands of sub-postmasters and sought to establish who was to blame for the wrongful prosecutions, will publish its final report on 8 July.

As part of its annual report, which was compiled in April this year, but covers the period from April 2023 to March 2024, the PAC also found that the government’s efforts to recover fraud losses incurred through the Bounce Back Loan Scheme introduced to help businesses recover from Covid-induced losses had been “largely unsuccessful”.

It said it was estimated at least £1.9bn had been lost to fraud through the scheme, with just £130m in payouts from lenders recovered, though it is unconfirmed how much of the amount related to fraud.

The report said the government had been “too passive by placing primary responsibility on lenders to recover losses”.

“As lenders’ losses are 100% underwritten by government, there is no commercial incentive to assist with recovery of taxpayers’ money,” it added.