Post Office scandal spreads as faults suspected in older accounting software

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The UK government has pledged to compensate more postmasters after finding that Post Office software used before the scandal-hit Horizon IT system could also have been faulty.

The Capture accounting software developed by the Post Office may have falsely created financial shortfalls when it was installed in the 1990s, according to an independent report commissioned by the government.

People were sacked and prosecuted on theft and false accounting charges, or made up the shortfall with their own money, according to postmasters who worked at Post Office branches and contributed to the report.

“Just like Horizon, Capture contained bugs which may have caused shortfalls,” business and trade minister Gareth Thomas said on Tuesday.

“It’s a disgrace that many diligent, honest, hard-working people running our Post Office branches should have endured such terrible financial and personal distress. The government is determined to support them and their families both now and long into the future so that fair redress is paid.”

The findings threaten to deepen the public outcry over the state-owned Post Office and increase how much the government must set aside to compensate those who were wrongly accused and convicted while working in its branches.

The government’s pledge was made on the final day of a separate public inquiry into the Horizon scandal, following revelations that more than 900 Post Office branch managers had been convicted in cases based on faulty data from Horizon, which the Post Office is still struggling to replace.

Compensation costs for the Horizon scandal, which came to widespread public attention following a TV drama in January, are expected to total about £2bn.

The Capture report by consultancy Kroll found there was “a reasonable likelihood” that the software, which was used in up to 13.5 per cent of Post Office branches before being replaced by Japanese group Fujitsu’s Horizon system in 1999, created shortfalls for postmasters.

It did not, however, reach conclusions on criminal convictions reported by postmasters.

The government conceded that it could be difficult to corroborate claims given how much time had passed since Capture was used, the loss of evidence and uncertainty about how many people used it.

But it said the Post Office, which came under fire for pursuing private prosecutions during the Horizon scandal, had indicated it held information on prosecutions during Capture’s use, adding that the government had asked the company to review its records “urgently”.

The Post Office said: “We are determined that past wrongs are put right and are searching Post Office records for any evidence relating to the use of Capture software in the 1990s to support the government’s work.”