Fear Post Office may17 go bust over scandal
Bailout warning as postmasters sue
THe Post office faces a fight for survival as an IT scandal could cost it an estimated £1billion.
Thousands of sub-postmasters are expected to claim compensation payouts after being wrongly accused of theft, fraud and false accounting.
The state-owned PO announced last week it had made a £307million loss and faced multi-million pound payouts to branch managers who were sacked and prosecuted after money appeared to go missing from accounts.
PO bosses were told that Horizon computer terminals may be to blame – but pursued prosecutions anyway.
The IT blunders left some postmasters in jail. An independent inquiry is due to start quizzing bosses, including ex-chief executive Paula Vennells, in May. She was in charge of the PO at the time of the scandal.
The 11,500-branch PO fell into the red after paying a £58m settlement with 557 postmasters and setting aside £153m in case another 2,400 sue. The Government has promised to help out.
But the PO’s long-delayed annual accounts to the end of March 2020 make it clear its future as a going concern is far from certain. They warn of the potential cost of claims that exceed sums guaranteed by the Government – and of civil claims if convictions are overturned.
The alert came as 42 former subpostmasters took their battle to the Court of Appeal last week.
Dozens more appeals may follow. Alan Bates, of the Justice for Sub-postmasters Alliance, said: “At the end of the day when the final cost of everything involved is accounted for, it could easily have cost a billion pounds.”
In his foreword to the firm’s accounts, Post Office chief executive Nick Read says that, with government support, it will still be able to provide essential services across the network.
He said: “We have started on the long journey to reset our relationship with postmasters and change our culture.”
An expert on PO finances said the Government would not allow the network to close and that, at worst, the company could borrow money from the City on the basis that, under normal conditions, it usually makes a profit.
A PO spokesman said the company had apologised for “historical failings” and taken action to ensure redress for those affected.
I lost my job..everything
EX-POSTMASTER Lee Castleton was made bankrupt after the PO took him to court over a supposed £25,000 account shortfall.
He lost his job and had to pay £296,000 in costs – yet it was a faulty IT system to blame all along.
The father of two said: “I asked them to check the system and they kept telling me there was nothing wrong. I lost everything.
They had a court order against me for £321,000 to recoup £25,000.”
Former stockbroker Lee, 52, bought a sub-post office in Bridlington, East Yorks, in 2003.
He is now an electrician and hopes to recoup some costs.
Lee added: “So many people have suffered. Those individuals who caused this to happen need to be investigated and punished.”