Post Office told too much time spent on compensation

A SENIOR civil servant told a Post Office chairman it was spending too much money on delivering compensation schemes and the inquiry, newly uncovered letters reveal.

Tim Parker, its former chairman, was informed that costs remained “too high” and that the Post Office should work to deliver payments “at a lower cost” in a note outlining “strategic priorities” for the 2022-23 financial year.

The letter, which was sent following a Government spending review in 2022, was written by Sarah Munby, then permanent secretary in the Department for Business, Energy and Industrial Strategy (BEIS).

The payouts relate to claims the Post Office was handling from sub-postmasters affected by the Horizon scandal. More than 900 were wrongfully prosecuted when faulty Fujitsu software incorrectly reported shortfalls on sub-postmaster accounts for which they were then blamed.

The Government said the comments in the letter referred to the legal costs, rather than compensation costs.

Earlier this year, Ms Munby was forced to deny that she had told Mr Parker’s successor to stall compensation payments before the next general election.

In the letter to Mr Parker, released on Tuesday following a Freedom of Information request, Ms Munby recommended that the process for managing settlements be improved.

The process should also deliver “value for money for the taxpayer, whilst also respecting the limitations on claimants to produce evidence in many cases and the need to deliver fair outcomes for affected postmasters”, she said.

The Post Office should also “work with officials to explore ways in which these activities could be delivered differently, in particular to deliver redress in a timely manner and at a lower cost, alongside continuing to review legal costs and controls,” the letter states.

A Post Office spokesman said: “Our sole aim is that every victim receives, as soon as possible, the justice and redress that they have too long awaited. That has and continues to remain the primary focus for everyone who works across our remediation department.”

Mr Parker declined to comment.