Staff at the Post Office were rewarded with bonuses for recovering money from subpostmasters who were blamed for accounting shortfalls. However, when it came to paying for crucial evidence that could have cleared those accused of wrongdoing, the Post Office was reluctant to spend money.
During the recent hearing of the Post Office Horizon IT Inquiry, it was revealed that former Post Office investigator David Posnett and his colleagues received bonuses based on a performance score, which included the amount of money recovered from subpostmasters in deficit. This performance-based bonus system also applied to financial investigators and the Post Office security department responsible for investigating subpostmasters with unexplained shortfalls, often leading to theft or false accounting prosecutions.
Between 2000 and 2013, there were over 900 subpostmaster prosecutions that relied on evidence from the Horizon computer system used by branches for their accounts. It has since been proven that the system contains errors, bugs, and defects that could cause unexplained losses. Almost 100 subpostmasters have had their wrongful convictions overturned, while many others have suffered when they were forced to repay losses that were not their responsibility and only existed within the Horizon system.
Despite being willing to pay bonuses to staff for recovering money, the Post Office was hesitant to request the underlying Horizon data, known as ARQ (Audit record query) data, during investigations into subpostmasters who claimed losses were caused by the system. The Post Office was reluctant to use this information due to the costs involved, as there was a limit on how many requests it could make for free before having to pay Fujitsu for additional requests.
Posnett agreed that the Post Office was unwilling to request ARQ data because it would incur additional costs, and the Post Office limited the scope of requests to save money. The amount charged for exceeding the limit was not remembered, but it was suggested that it acted as a disincentive to seek ARQ data beyond the limit.
In 2019, subpostmasters took the Post Office to the High Court and successfully proved that the Horizon software was responsible for the unexplained errors. The judge in the case stated that audit data should have been sought in every case where a subpostmaster faced suspension or termination, and that the Post Office acted unreasonably by not seeking such data. The judge also criticized the commercial arrangements between the Post Office and Fujitsu, stating that they did not justify the failure to seek the audit data, which was the best evidence of what had occurred.
Posnett confirmed that the cost of ARQ data was a significant issue for the Post Office, as the company was focused on minimizing costs. This focus on cost reduction was also a factor in why the Post Office initially chose to acquire Fujitsu’s error-prone Horizon system.
The scandal was first exposed by Computer Weekly in 2009, and the public inquiry is ongoing.