“Rogue,” “cowboy,” and “rackets” aren’t typically the words one would associate with age-old institutions like the Post Office. However, journalist Nick Wallis‘ in-depth exploration in “The Great Post Office Scandal” is truly staggering and uncovers a potentially unscrupulous system. The situation, reminiscent of a Kafka novel, was portrayed in ITV’s groundbreaking drama, “Mr. Bates Vs the Post Office,” forcing establishments to take serious notice.

Since then, the UK government has brought the corporation in front of government committees, convictions have been quashed in Scotland, and the show finale was one of the most-watched ITV dramas in a decade. To say it has had an impact is probably the understatement of the century, given it has taken twenty years to get here. And Wallis has been at the media forefront reporting this devastating offence.

This quote from the film “Spotlight,” which also dealt with massive institutional abuse, is certainly akin to the Post Office Horizon situation. There are many questions raised about the significant oversight that occurred in this disaster for more than two decades. However, Wallis’ comprehensive investigation is an important read to get people relatively up to speed, given how expansive this misconduct has been. It has all the hallmarks of top-level corporate fraud, with the additional layer of being a publicly-owned organisation. So much so, Wallis also name drops a few major instances including the Enron, phone hacking, and LIBOR scandals. Indeed, the Post Office is worthy of the suffix “-gate.”

What was the Post Office scandal horizon system?

There is an entire cast of characters in this story, but Wallis examines how the Fujitsu Horizon terminal managed to make its way into thousands of stores despite having very obvious flaws. Described as the “largest non-military IT system in Europe,” he recounts conversations with insiders who stated it was “riddled with bugs and coding errors.”

The writer states, “Empires need construction workers, and jobs were easy to come by.” During the early 1990s, the information technology sector was bustling with intellectual talent. However, it was also a time when many individuals managed to secure positions they were not fully qualified for. The demand was high for various roles including coders, testers, and engineers specialising in systems and networks, as well as the standard positions in project management, sales, and marketing. Additionally, a significant number of mid-level executives, possessing limited understanding of their team’s activities, were able to sufficiently fake their expertise to maintain their roles.

In 1992, the aim was to reduce rampant fraud in the Post Office, which was caused by manual stock taking. As a result, the company attempted to automate this system by collaborating with the Japanese tech company Fujitsu. According to Wallis, “Between 1991 and 1992, £230m worth of order books were lost, of which £85m had been found to be fraudulently cashed.” The solution was a £1 billion contract. One of the main candidates was International Computers Limited, or ICL, and Fujitsu had taken an 80% stake in ICL with a view to outright ownership.

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Yet, it appears the challenges involved were seriously underestimated. It would need to automate 20,000 geographically scattered Post Offices, each conducting a variety of transactions, some unique to specific regions, and far more complex than those typically encountered in banks.

Creating, testing, and implementing a custom IT system of such magnitude was uncharted territory for both the government and Fujitsu. The task involved equipping all of these Post Offices with 40,000 terminals. Moreover, training 67,000 individuals, who possessed a diverse range of technical abilities, was essential to ensure they could efficiently distribute £56 billion in benefits to their 28 million customers annually.

Inside the tech disaster: coding errors and consequences

However, writing the code to make this system work reliably appeared to be completely beyond the tech corporation. Despite spending £10 million monthly, Fujitsu found itself unable to fulfil a renegotiated contractual commitment to showcase the ‘satisfactory, sustained’ performance of Horizon by mid-1997. The company struggled to make the system function effectively, even under controlled conditions.

Wallis spoke to Clint, who was a senior engineer and had vast experience in coding, on the condition of anonymity. “Everybody in the building by the time I got there knew it was a bag of shit,” Clint told the journalist. “Everybody. Because it had gone through the test labs God knows how many times, and the testers were raising bugs by the thousand, including category As.”

The author explains that software is created by people, and therefore, it can make errors. These mistakes in software coding, known as bugs, occur when developers inadvertently introduce flaws into the code that directs the actions of electronic devices. Even a single error in the code can cause a computer to malfunction or trigger a series of processes and sub-processes, potentially leading to significant consequences. This is the reason rigorous testing of software in various settings is crucial, pushing it to its limits to ensure reliability before it’s released for general use. Inadequate coding or insufficient testing can lead to computer crashes, and in extreme cases, may even affect the operation of planes that depend on such software.

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According to Clint, Horizon’s developers had spent the last couple of years “firing any old shit” into the message store as they changed and developed the product. Clint pointed out that such a scenario was highly risky. He noted that if a new data field was added to a message without updating the previous ones, it could lead to serious issues. The counting software might access an older message lacking the new data field, which could result in unpredictable behaviour of the application. This could lead to various problems, such as the application crashing, inadvertently sending incorrect information to unintended destinations, or applying incorrect values to transactions. On top of this, it might even result in numerical values being erroneously halved, doubled, or multiplied.

Knowing exactly what code is in your system is essential. “If the application’s not checking that the contents are correct, which they weren’t because they weren’t writing them properly, then the message store is completely corrupted with garbage,” Clint explains.

Clint concludes: “It was a prototype that had been bloated and hacked together afterwards for several years, and then pushed screaming and kicking out of the door. It should never have seen the light of day. Never.”

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The ex-BBC reporter clarifies that stock units typically correspond to, and fall under the responsibility of specific Horizon users. Whether it’s a counter assistant or a Subpostmaster, they would access a Horizon terminal to either self-assign or be allocated a stock unit, typically identified by labels like AA, AB, and so on. This stock unit is linked to an actual till tray that holds cash and stamps. Throughout the day, Horizon tracks and records all electronic transactions and movements involving these stock units, including incoming and outgoing transfers.

Hence, the Post Office was using the shaky electronic data produced by Horizon to wrongfully charge its own Subpostmasters with crimes which simply did not exist.

Why the Post Office may have behaved the way it did: the history

Wallis explains why the Post Office may have behaved in such a heavy handed way. He notes that the Post Office has been the fabric of the nation for centuries. He indicates that this could be due to its “proximity to power.” Interrupting or defrauding Post Office business comes with severe penalties.

The book then delves into the lesser-known aspects of the Post Office, particularly its specialised investigative unit. Wallis notes, “For most of the last three centuries, the Post Office has maintained a specialised investigative unit,” which remarkably predates the police force. This unit, known as the Post Office Investigation Branch or ‘IB’, was historically feared for its authority, where postal workers caught in misconduct could face draconian punishments, including hanging. HE highlights how the IB’s role evolved over time, from catching highwaymen and robbers to collaborating with security services in the twentieth century to identify mail from subversives.

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The IB carried out a number of clandestine operations during the twentieth century. Wallis writes about the secretive process where “suspicious letters…would be picked up by IB security staff” and examined discreetly to aid government intelligence efforts. This revelation of the Post Office’s involvement in covert operations showcases the other sinister dimension of the institution.

He also illustrates the gradual shift in the Post Office’s activities, particularly after the abolition of the office of Postmaster General in 1969 and the subsequent rebranding and restructuring efforts. Wallis effectively portrays how the Post Office, transitioning from its previous grandeur, began to focus more on internal regulation, keeping a vigilant eye on its vast network of employees.

In the 21st century, the Post Office maintained a strong stance against internal theft and fraud. Wallis points out the intensity of this approach: “A five page document informing the public about the activities of RMG Security stated bluntly, ‘Those who steal must expect to be detected and prosecuted.’” This hardline stance, along with the complexities of managing a network of Subpostmasters who were not official Post Office staff, presents a nuanced challenge that the institution had to navigate. After all, as British historian Lord John Dalberg-Acton said: “absolute power corrupts absolutely.”

What happened in the Post Office scandal?

Consequently, instead of rolling back these expensive devices, the default was to believe that they worked at any cost. And the cost was high. Wallis interviewed dozens of innocent Subpostmasters over the course of ten years, who were criminally prosecuted by the Post Office, some of whom were sent to prison. He writes: “They were put at the mercy of an organisation stuffed with managerial incompetents, who exercised their responsibilities with a toxic mixture of prejudice and indifference.”

And it is staggering to read. Each case is disturbingly similar. A Subpostmaster will find there is a discrepancy in their receipts, stating that they owe money. When calling up the helpline, they are told to “make good” and essentially pay back money to balance the false deficit. When it begins to spiral out of control, the Post Office sends in their own henchmen to suspend the teller and then charge them with fraud. The Subpostmaster then has the responsibility to pay back tens of thousands of pounds, and many times, go to court, plead guilty, and end up in prison with a conviction. Lather. Rinse. Repeat.

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There are hundreds of stories like this, with people losing all of their life savings, their reputations, their homes, and several people even lost their lives. And with it comes severe health problems thanks to high levels of stress. The ITV show “Mr. Bates Vs the Post Office” humanised this supposedly complex situation, allowing the world to see the severity of this truly unbelievable scandal.

In the book, Wallis also briefly touches upon the observation that Asian Subpostmasters appeared to receive far more punitive sentences compared to their white counterparts. In a revealing footnote, he writes: “A suspicion which has continued to grow. I have not yet been able to properly investigate this in any quantifiable way, but from my anecdotal experience, non-white Subpostmasters generally seem to have received harsher sentences than their white counterparts for similar crimes. It is an area requiring proper academic investigation.” This statement highlights a concerning trend and underscores the need for thorough academic research to delve deeper into this disparity.

Exposing institutional failings

Adding up the numbers, there have been 766 convictions since 1999 until 2021, along with an additional 104 convictions without specific dates. Intriguingly, the total number of convictions in the six years before the introduction of Horizon was 46. In the six years following its introduction, there were 330, marking a sevenfold increase. According to Wallis, the Post Office and government have already spent, or committed to spend, around half a billion pounds fighting, investigating, mediating or compensating campaigning Subpostmasters. That’s before any of those with quashed convictions get the full amount due to them.

Wallis stresses the many times in which the Post Office refused to disclose key evidence through legal processes – a fundamental requirement in cases. He writes: “An attempt to abuse the legal process in this way is almost unthinkable. But it happened, and it wasn’t just a badly trained Post Office employee acting alone.”

Forensic accountant Ron Warmington said that it was “pretty obvious that the Post Office investigation approach was designed around asset recovery rather than seeking the truth. It was all about recovering money, which was pretty bloody awful as far as I was concerned, and it just didn’t comply with anything I’d ever come across before.”

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And the Horizon system is still in place. In fact, the Post Office has paid Fujitsu over £95m to extend the Horizon contract until the end of 2025.

It’s difficult to think about the challenges that the Post Office personally faced, especially considering their decades-long refusal to acknowledge the situation. Often, when reading an investigation that seems one-sided, it’s easy to criticise the book for a lack of balanced reporting. However, in this case, Wallis frequently exposes the general disregard and shocking attitudes of key figures within the institution. His revelations are so striking that many MPs, government officials, and even judges have found the behaviour of these individuals truly bewildering. This story, unusually for reality, features clear heroes and villains. Reflecting on the likelihood of any individuals being formally censured or punished for their roles in causing, perpetuating, or trying to cover up the Great Post Office Scandal, the journalist remarks, “I’m not going to hold my breath.” And neither will I.

You can follow the Post Office Horizon IT public inquiry for more information.