Former Post Office CEO Paula Vennells was awarded bonuses worth hundreds of thousands of pounds in her final year at an organisation that has now been forced turn to the government for a payout to clean up some of the mess left after her departure.
Vennells left the Post Office in 2019 just prior to a damaging High Court judgment, which slammed the management of the company that punished subpostmasters for mistakes made by its own computer system. She took over £400,000 in pay and bonuses with her.
According to the Post Office financial results for 2019/20, she took salary already earned in the year she left of £21,250, plus benefit payments amounting to £6,137. In August 2019, she received a payment from the organisation’s long-term incentive plan of £245,000, along with a short-term incentive plan bonus of £143,820, for performance in the financial year 2018/19.
During the seven-year period she ran the company, the Post Office prosecuted subpostmasters and blamed them for unexplained accounting shortfalls.
The Post Office Horizon scandal, as it is now known, was first made public by Computer Weekly in 2009. It saw the Post Office blame subpostmasters for unexplained losses, which were actually caused by computer errors (see timeline below). Those individuals were forced to pay the money back and many suffered criminal prosecution for financial crimes.
Alan Bates, a former subpostmaster and victim in the Horizon scandal, set up the Justice for Subpostmasters Alliance (JFSA) in 2009 to campaign for those affected.
“The payments [to Vennells] are inhumane in a way,” he said. “She has put hundreds, if not thousands, of people through absolute hell through her incompetence running the Post Office for years.”
Bates also led the subpostmasters’ legal battle against the Post Office, which culminated in the 2019 High Court victory that ruled the Horizon IT system was at fault. Despite press coverage and pleas from subpostmasters, Vennells stuck to the company line during her tenure, that Horizon did not have errors that could cause accounting shortfalls. The case has subsequently been described as the biggest miscarriage of justice in British legal history.
But in 2019 the High Court judgment said that the Post Office was wrong to blame subpostmasters and that it had been oppressive in its tactics to get subpostmasters to pay back apparent shortfalls.
While at the Post Office helm, Vennells earned millions of pounds. She stepped down just before the judgment and the government has been left to bail out the Post Office, which owes huge sums of money to subpostmasters affected by the Horizon scandal.
After being forced to admit it was wrong, the Post Office set up a compensation scheme, which 2,400 subpostmasters have applied to join. The Post Office has set aside £153m towards what is known as the Historical Shortfall Scheme settlement
Earlier this month the government said it would pay the compensation owed to subpostmasters to prevent the Post Office failing as a business.
The Post Office was also forced to pay the subpostmasters that defeated it in court £57.75m. After legal costs to the 550 subpostmasters were taken out, they were left with only about £11.5m, a tiny proportion of their combined losses, never mind compensating them for their suffering. One subpostmistress who was wrongly convicted of theft was sent to prison and lost her livelihood, but received only £8,000.
The subpostmasters who are part of JFSA currently have a case with the parliamentary ombudsman, to establish the role of the Department for Business, Energy and Industrial Strategy (BEIS) in the scandal and ask government to pay compensation to the 550 JFSA claimants. They say the department failed in its duty to oversee and regulate the Post Office, allowing it to wrongly prosecute subpostmasters for unexplained accounting losses, rather than investigating possible computer errors.
As part of its appeal to the ombudsman, JFSA is demanding £300m as part of the complaint to recover the huge costs incurred in the court battle, which exposed the government-owned Post Office’s role in a scandal that ruined lives.
Vennells, however, walked out of the Post Office and straight into the role of chair at the Imperial College Healthcare NHS Trust, one of the biggest trusts in the NHS. She was forced to step down this year following pressure because of her involvement in the Horizon scandal. She currently holds non-executive director roles at retailers Morrisons and Dunelm
Nobody at the Post Office or in government has been held to account for the scandal. Today (24 March 2021), responding to a question put to him at Prime Minister’s Questions by Conservative MP Lucy Allan, Boris Johnson said those responsible for the Post Office IT scandal should be held to account.
Allan asked Johnson: “Does the prime minister agree with me that for justice to be truly done, those responsible for this failure and its cover-up must be held to account. Does the PM agree that heads should roll?”
Johnson said he understood the strong feelings on the issue. “Yes we do want to learn lessons, yes we do want to make sure the right people are held to account for what happened and that the Post Office never repeats mistakes like this,” he said.