Post Office row civil servant backs Badenoch over compensation
THE senior civil servant at the heart of the Post Office row denied she told the organisation’s former chairman to stall compensation after she was named for the first time.
Sarah Munby had been accused by Henry Staunton, the former Post Office chairman, of telling him that “now was not the time for dealing with long-term issues”, which he took as an instruction to put payments on the back burner.
Yesterday afternoon, Ms Munby hit back, saying “it is not true I made any instruction ... to delay compensation payments”.
In an extraordinary move, she made public a four-page long memo on her memory of the meeting with Mr Staunton
when she was permanent secretary at the business department.
“I am able to give you the very strongest reassurance… that I did not at any point suggest to Mr Staunton, or imply to him in any way whatsoever, that there should be delay to compensation payments for postmasters,” she wrote.
“I did not believe they [compensation payments] should be delayed and no minister ever asked me to seek delays.”
She also revealed that Mr Staunton had suggested closing a number of Post Office branches to save money, and that he was in favour of pay rises for senior executives. Sources close to Mr Staunton still insist he understood from the conversation that “long-term issues” included the compensation payments to victims of the scandal.
However, they admit that his notes were not verbatim.
The source said: “This was a note that Mr Staunton sent himself subsequent to the conversation. It was never intended to be verbatim.”
They added: “The two big levers which the board had to improve the financial position of the Post Office were the Horizon Replacement system and the compensation for sub-postmasters.
“That was the context in which the conversation took place and can not be understood in any other way.”
On Monday, Ms Badenoch, the Business Secretary, told MPS there was “no evidence” to support the claim and accused him of spreading “made-up anecdotes”. But in the Commons yesterday, Rishi Sunak declined to repeat her allegation that Mr Staunton had been telling lies. In a note outlining her position, Ms Munby, now permanent secretary at the Department for Science, Innovation and Technology, said: “It is not true that I made any instruction, either explicitly or implicitly, to Mr
Staunton to in any way delay compensation payments. I did not.
“Neither Mr Staunton’s note, nor the contemporaneous note that my office made, suggest otherwise. In fact, no mention of delaying compensation appears in either note ... Mr Staunton originally said there had been a direct instruction. Since he located the file note this seems to have moved to a suggestion of some sort of implied instruction. Such a claim is also not supported by the notes and did not take place.”
Ms Munby said the meetings were to discuss Post Office operational funding, not compensation funding. She said these two areas of spend were separately ringfenced, and it is factually wrong to suggest that cuts to compensation would have improved the Post Office’s financial position.
And she said Mr Staunton had never raised with her or anyone else any of these claims at any point in the last year, until his Sunday Times interview. Further notes released yesterday, which were undated but understood to have been written immediately after the meeting, read: “SM (Sarah Munby) agreed that challenge is significant and that politics around POL make this an even trickier problem to solve, the timing of agreeing a longer term solution this way is also very difficult.”
The memo also stated Munby had “flagged” the relationship with the Treasury was “difficult” and “[Treasury] view will always lean towards the ‘begging bowl’ type scenario.”
Meanwhile, the Liberal Democrats called for a Cabinet Office investigation into whether Ms Badenoch broke the Ministerial Code by claiming in Parliament on Monday that Mr Staunton’s comments were “completely false”.
‘I did not at any point suggest to Mr Staunton that there should be a delay to compensation’