1 Tuesday, 24 September 2024 2 (10.00 am) 3 SARFARAZ GULAM ISMAIL (continued) 4 Questioned by MR BLAKE (continued) 5 MR BLAKE: Good morning, sir. Can you see and hear me? 6 SIR WYN WILLIAMS: Yes, thank you very much. 7 MR BLAKE: Thank you very much. 8 Mr Ismail, we're going to stick to the topic of 9 culture and I'm going to ask you to begin with about two 10 different branches and your experiences in respect of 11 those, starting with Wibsey Bank branch. At 12 paragraph 51 of your witness statement, you told the 13 Inquiry that, after your election, you visited branches 14 to get feedback, and one of those branches was 15 a postmaster from Wibsey Bank, and they gave you some 16 feedback. Can you expand upon that, please? 17 A. Yes. So once I had been elected, for me to understand 18 feedback from a wide range of postmasters, it was very 19 important that I could relate and ensure I understood 20 what rural postmasters wanted, high street postmasters, 21 and town centre, different types of branches, strategic 22 partners also. Hence, I organised a visit with my own 23 initiative to Bradford, and I was accompanied by the 24 Area Manager, Mel Shepherd, and we visited a postmaster 25 at Wibsey Bank. We had an interesting conversation and 1 1 what he advised me was, "If I ask you to do something, 2 will you do this for me?" 3 I said, "Depends what it is. What are you 4 thinking?" 5 And he said, "When you go back to Board, when you 6 speak to the wider Executive, when you speak to the 7 powers that be within this organisation, tell them we're 8 not animals, we're postmasters. Please treat us 9 fairly", and that was a comment and a quotation that 10 I ensured I mentioned at several Board meetings and to 11 individuals on the wider Executive. 12 And what was very disappointing was I didn't see any 13 urgency, any interest, unfortunately, in addressing the 14 specific postmaster or the issues that may be affecting 15 them or concerning them and, for me -- and I've 16 mentioned this in my statement -- in 2018, I lost 17 a close friend, who was also a postmaster at the main 18 town centre office in Preston, and he was one of the few 19 individuals who practically held my hand when I first 20 became a postmaster, and the business did nothing. 21 The business wasn't even interested, to a point at 22 which, on the day of his funeral, nobody from the Post 23 Office attended. He was an active postmaster and there 24 was -- at one point, one of the staff members I spoke to 25 actually said to me "Well, I can't attend, it's my day 2 1 off. I've got annual leave". 2 And from seeing that in 2018, that was one of my 3 motivations to try to make a difference. Hence, why 4 I wanted to see -- have things actually changed, do 5 postmasters feel differently? And then to hear what did 6 at Wibsey Bank, it was tough, but I knew what my 7 starting point was to try and ensure I can make some -- 8 make a difference to this organisation. 9 Q. Moving on to another branch, the Yateley branch. You 10 described at paragraph 207 onwards in your witness 11 statement an issue with that particular branch. Can you 12 tell us about that? 13 A. This -- I was in shock, I was stunned to learn about the 14 situation that occurred in this branch. And the Voice 15 of the Postmaster group, an individual called Brent, who 16 forwarded an email to me that had been raised by this 17 postmistress, and she's again an active postmistress who 18 was working at the Yateley branch with her husband, and 19 he died all of a sudden overnight. And in trying -- 20 this business should be helping postmasters. What they 21 put her through, the conversations that I had with her, 22 she was in tears while she was talking to me. 23 Q. What was the specific problem that she faced when her 24 husband passed away? 25 A. So her husband was the postmaster and, as a business, we 3 1 cancelled the contract within ten days and we gave her 2 no justification for that. Instead, we provided data 3 that was very difficult for her to understand. She was 4 grieving, and the Post Office cancelled her contract, 5 made her life more difficult. And what was really 6 upsetting -- and this is a cultural test within the 7 organisation at that point for me, this was a really 8 important cultural test -- this case passed at least ten 9 individuals within the organisation, none of them took 10 accountability and the only point at which something 11 started to happen was when it came to me, and I then had 12 conversations with Tracy Marshall. 13 I also had conversations with Nick Read and, to be 14 fair to Nick Read and credit to him, I said, "Nick, you 15 need to have a conversation because she's not happy this 16 is what we've done", and Nick made time that very day 17 and called her. 18 So moving forward, in order to help her be in 19 a position to still be able to operate, I then had to 20 reach out to Martin Edwards and Paul Liddiard, who were 21 fantastic, in assisting this postmaster so she could 22 still stay open. Her business should have been the 23 least of her worries. The funeral of her husband hadn't 24 even happened yet and the Post Office was creating 25 another major issue and obstacle for her to go through, 4 1 unfortunately. 2 Q. I'd like to look at some correspondence. Can we please 3 turn to POL00448379, please. This is an email of 4 July 4 2023. Was this before or after it had been raised 5 internally with -- we see Nick Read is copied into this 6 email? 7 A. This is after that has happened. So once she's -- her 8 world has been torn apart -- and she felt very 9 vulnerable, this postmistress, may I add, and what the 10 business then did -- and this was part of a strategy 11 called Drop and Collect, and what happened was -- and 12 this wasn't specifically just for this postmistress. 13 The Post Office, in order to comply with the 11,500 14 requirement that Government has set for branches, has 15 a Drop and Collect strategy which came to the strategy 16 day in '21 and '22. 17 Now, there was challenge by myself and Elliot 18 because the radius wanted to be reduced and we also put 19 other conditions down, and the other conditions were 20 ignored, and the 0.5 radius was used in order to ensure 21 we hit 11,500. So what's happened in this scenario, 22 hence the email, was the Yateley postmistress has had 23 a customer coming in, informing her, "Why is the Post 24 Office opening other branch down the road? I thought, 25 after what you've been through, I thought you were 5 1 struggling". That's the conversation they that, and she 2 didn't know. 3 She then contacted her Area Manager who also said 4 they didn't know and, unfortunately, with the Drop and 5 Collect strategy, this was very, very common: 6 postmasters finding out by surprise that they wouldn't 7 necessarily be informed, unfortunately, and, like 8 I said, neither would the Area Managers. 9 Q. So that's the opening up of branches near existing 10 branches? 11 A. Yes, to meet the 11,500 criteria the Government -- 12 Q. So that's 11,500 branches? 13 A. Yes. 14 Q. You say here: 15 "I'm extremely disappointed after everything this 16 [postmistress] has been through, we have put this 17 communication out without informing her. 18 "This is unacceptable and she's fuming as it was 19 shown to her by a customer. 20 "The number of issues this [postmistress] has been 21 through shows we still have a very long way to go as 22 a business. We need to ask some serious questions about 23 our organisation and our people, are we really changing 24 the culture within our organisation? Are we trying to 25 be postmaster centric?" 6 1 I'd like to take you to the attachment, so that's 2 the announcement or the communication. We can find that 3 at POL00448788. I'll just read couple of passages. It 4 says: 5 "Dear Customer ... 6 "We are writing to inform you that, for reasons 7 beyond our control, Yateley Post Office had to close on 8 Thursday, 8 June 2023, and it reopened on Tuesday, 9 13 June 2023. The Post Office is temporarily operating 10 on reduced hours from Monday to Friday ..." 11 Then the next paragraph says: 12 "Additionally, the Outreach services at Datchet, 13 Crowthorne and Tudor Drive Outreach, operated by the 14 postmaster from Yateley Post Office, ceased from 15 Wednesday, 21 June 2023. Please accept my apologies for 16 the late notification on this occasion. We have 17 completed a review of the service provision in Datchet, 18 Crowthorne and Tudor Drive, and currently we are not 19 looking to open a replacement service at this time." 20 Is this the correspondence that was being referred 21 to? 22 A. No. 23 Q. This is a separate communication? 24 A. This correspondence was, once the postmaster had passed 25 away, in order to meet customer expectations, this was 7 1 the correspondence to inform day-to-day customers about 2 what's been going on. 3 Q. So there are two issues there -- 4 A. Yes. 5 Q. -- the one that you've referred, which was the opening 6 up of the branch -- 7 A. Yes. 8 Q. -- and this was the original correspondence -- 9 A. Yes. 10 Q. -- following the passing of her husband, which refers to 11 her branch having to close for reasons beyond the Post 12 Office's control? 13 A. Yes. The other correspondence for the Drop and Collect 14 would be different, yes. 15 Q. What was your view of this particular notification? 16 A. It's what we had to do to inform customers. I think 17 it's fine. Maybe it's a bit overcomplicated for 18 customers, I would have expected it to be simpler but 19 there's a lot that the business needs to learn about 20 communication. 21 Q. If we scroll down on this particular communication, it's 22 from somebody called Graham Brander. Are you aware of 23 Mr Brander's involvement in this matter? 24 A. No. 25 Q. Are you aware that Mr Brander was a witness in Phase 4 8 1 of the Inquiry and had been involved in the 2 investigations of Jo Hamilton, Julian Wilson and Lynette 3 Hutchings? 4 A. No. This goes back to the point -- sorry, to clarify 5 what I raised yesterday -- redeployment, recycling, 6 rejoining the gravy train; it's just not helpful. And, 7 again, I should have been aware but I've never been told 8 until today. 9 Q. Mr Brander was somebody who left the Post Office and was 10 rehired in 2019; were you aware of that or that process? 11 A. No, there's never been any specific communication to the 12 Board of who had left the business, what terms they have 13 left the business on, and why they've been rehired. 14 We've never, ever actually been given that from Legal, 15 HR, the People team. 16 Q. Seeing that and knowing now what you know, does that in 17 any way affect your views of the Yateley issue? 18 A. Highly inappropriate. He should not have been involved 19 and, if I had known this at the time, I would have 20 definitely raised that. 21 Q. Thank you. We're going to move on now to the topic 22 of -- 23 A. Sorry, just one other point. 24 Q. Yes, absolutely. 25 A. I'm not sure even the postmistress at this branch is 9 1 aware because, if they were, I'm sure they would have 2 raised it with me. 3 Q. Yes. I'm going to move on to the topic of prosecutions 4 and investigations. Paragraph 43 of your witness 5 statement, you've said that you received minimal and 6 cursory information regarding ongoing issues that the 7 Post Office has been dealing with. Can you briefly 8 assist us with that, with your views on that? 9 A. So, as part of my submission, I've included Board decks 10 from the beginning of my tenure as an NED, and some of 11 these decks were 811 pages, and they were -- some of the 12 decks included cases like Jo Hamilton, Bates, Lee 13 Castleton, and, as an economics graduate, for me to 14 appraise data, commercials, figures, no problem, all day 15 long I can do that. But I'm not a lawyer and not many 16 people on the Board are lawyers. So I don't think the 17 business did enough to equip NEDs, and other individuals 18 on the wider Executive who are also not lawyers, to be 19 able to appraise documents effectively. 20 Q. If we look at a slide pack, I think, from your initial 21 training, it can be found at POL00448401. This appears 22 to be a page from a UKGI training presentation; is that 23 right? 24 A. Yes. 25 Q. We see there, there are a few bullet points at the 10 1 bottom addressing the Historic Shortfall Scheme, the 2 Post Office IT Inquiry, and convicted postmasters. Did 3 you receive any significant training or background 4 information on those issues when you first joined? 5 A. No, and just to give you a bit more context, I think, 6 looking back now, from my observations at the time, that 7 there was an understanding within the wider Executive 8 and the Board that everybody knew about these issues, 9 and everybody doesn't: not many customers were even 10 aware until the ITV drama. So in hindsight, yeah, there 11 should have been better training but it was a very high 12 level overview of what we were provided. 13 Q. Thank you. That can come down. 14 On investigations policy, I'd like to look at 15 a document that relates to Project Birch. Can we please 16 turn to POL00423697, please. This is a KPMG review of 17 the Post Office's current investigations process and 18 it's dated 13 August 2021, so shortly after your 19 appointment as a Non-Executive Director. Do you recall 20 being provided with a copy of this? 21 A. No. It was in the bundle that you sent me but I don't 22 remember seeing this. 23 Q. You don't remember any significant discussion about its 24 contents? 25 A. No. 11 1 Q. Can we please turn to page 10 and we can see some of the 2 Executive summary and I'll just take you to some of the 3 key points. There's a current state assessment, it 4 says: 5 "[The Post Office's] decentralised model provides 6 individual business teams with the independence to 7 develop their own investigations framework, however 8 there is limited central oversight over these frameworks 9 and the policies and processes that have been adopted by 10 individual business teams. 11 "Whilst this model utilises the experience and 12 expertise of staff within the business teams it means 13 that across [the Post Office] there is no overarching 14 consistency over: 15 "how investigations are undertaken; 16 "the experience and qualifications of the 17 investigators; 18 "the application of investigation minimum standards 19 especially in relation to high risk cases; and 20 "the recording and reporting of investigations 21 data." 22 The final paragraph at the bottom there says: 23 "Currently investigations are often undertaken 24 within [the Post Office] from a contractual perspective 25 and there is little consideration at the start of 12 1 an investigation as to whether it could potentially 2 result in criminal, civil or disciplinary proceedings. 3 Early engagement with [Post Office] Legal would enable 4 proper consideration of criminal or civil standards or 5 consideration of when to liaise with [I think that's law 6 enforcement agencies]." 7 It then says: 8 "In addition, there is no overall central monitoring 9 of the investigations process and no visibility over the 10 overall investigations population. As a result [the 11 Post Office] have no comprehensive analysis over the 12 number or type of investigations it undertakes including 13 those that are high risk." 14 Then it sets out some issues with governance and 15 process. The first: 16 "Investigations are not conducted consistently 17 across [the Post Office] ..." 18 If we turn over the page, we see some more points in 19 bold: 20 "Lack of overarching governance and oversight over 21 high-risk investigations ... 22 "... no clear consistent triage process ... 23 "Lack of consistent monitoring and order over all 24 investigations ... 25 "There is no consistent approach to quality 13 1 assurance across the business teams ... 2 "There is limited evidence of 'lessons learnt' and 3 continuous improvement arising from investigations 4 across [the Post Office]." 5 Over the page, please. 6 "Business teams often use Area Managers and Line 7 Managers to conduct investigations ... 8 "There is a lack of training in respect of 9 investigations across [the Post Office] ... 10 "There is no consistent use of an investigations 11 case management tool across [the Post Office] ..." 12 Were you aware or were these matters brought to your 13 attention when you joined the Board or shortly 14 thereafter? 15 A. No. the investigations into postmasters are treated 16 differently, from what I've observed, and the 17 investigations into the wider Executive are treated 18 differently. In April '24, when I raised concerns into 19 the investigations into the CEO, the response I got from 20 Amanda Burton was the investigation -- I asked for very, 21 very simple parts of information, which was what's the 22 cost of the investigation and what were the 23 instructions? 24 And until today Amanda's never given that to me, 25 which was really disappointing, and she confirmed in 14 1 email the approach was more about protecting the CEO, 2 which I was disappointed because, when it comes to 3 a postmaster, as we've seen in the past and as we spoke 4 about yesterday, the approach is very, very different. 5 Postmasters can be suspended either, and when it came to 6 this specific document, as I've said, I would have 7 expected this to be brought to Board and I would have 8 expected some kind of benchmarking in terms of where we 9 were in our approach to try and ensure we did what the 10 report said. 11 But you don't know what you don't know, hence why 12 I couldn't challenge this, because I wasn't aware of it 13 unfortunately. 14 Q. So having sat on the Board when this was produced and 15 subsequently, are you not aware of any significant 16 discussion in that respect, in respect of those bullet 17 points, for example? 18 A. No. No. 19 Q. Can we please turn to POL00448320. This is a report to 20 the Board of September 2022, so a year later. This is 21 entitled "Post Office Investigations: Next Steps", and 22 this is addressing what's going to happen in respect of 23 prosecutions of individuals and the relationship with 24 Post Office Investigations Team. If we scroll down, we 25 can see under the "Executive Summary" it talks about how 15 1 the central investigations unit will be staffed and it's 2 the bottom bullet point I'd like to ask you about. It 3 says: 4 "Post Office has no appetite to pursue private 5 prosecutions. However, it is proposed that Post Office 6 Investigators conduct investigations into suspected 7 criminality and to report what has been evidenced to law 8 enforcement and prosecutors in all four nations of the 9 UK. The rationale being to act as a deterrent and to 10 seek financial restitution through the independent and 11 external criminal justice system." 12 Do you recall receiving this particular paper for 13 the board? 14 A. Not specifically, no. 15 Q. Do you remember discussions about Post Office 16 Investigators conducting investigations into suspected 17 criminality and reporting, thereafter, to law 18 enforcement? 19 A. No, and this is another example of there's so much 20 that's brought to the Board. This should be a key 21 issue, and it shouldn't be for noting, as the paper says 22 at the top. This should have been a discussion -- 23 Q. If we scroll up, we see there "Input Sought" and it's 24 a noting paper. 25 A. That's unacceptable. This should have been 16 1 a discussion. And it's, again, getting lost in the 2 noise because of how much information is brought to 3 Board, unfortunately. 4 Q. If we could turn, please, to page 4, we see the 5 recommendation there at 2.4. If we could just scroll up 6 slightly so we still have that table. It says: 7 "It is our recommendation that the minimum remit of 8 the investigation function is option 4." 9 If we look at the table above, option 4 10 investigations into Post Office and Post Office staff, 11 postmasters and postmasters' staff. So it includes 12 postmasters' staff: 13 "This would allow [the Post Office] to act in 14 determining facts relating to situations ranging from 15 allegations of theft or fraud by postmasters and/or 16 their staff using/misusing [Post Office] systems or 17 functions where either or both [Post Office] and the 18 postmasters are victims ..." 19 Just pausing there, in respect of the issue of 20 victims and the Post Office and whether it is a victim 21 or not, is that the kind of language that you've seen 22 being used in Post Office documents? 23 A. I've seen it being used in the documents that were 24 presented to me in the bundle for my evidence but, prior 25 to that, I was not sighted on them documents. 17 1 Q. We'll look at those documents shortly. 2 "... through to misconduct or process failings in 3 [the Post Office] and the subsidiaries. The Horizon 4 issue identified a failure to investigate beyond the 5 postmaster in determining culpability. Best practice 6 (and in some situations, law) requires that all lines of 7 inquiry to be followed, whether they point away or 8 towards the considered investigative hypothesis as it is 9 the truth that is sought, not that a case is to be made 10 against a selected individual. By investigating wider 11 than the postmasters ..." 12 It then says: 13 "... for example their staff, when relevant, we 14 demonstrate that [the Post Office] has learned from the 15 past and would seek to determine actual culpability, if 16 any, which is treating the postmasters fairly." 17 It's that reference there to "for example their 18 staff when relevant" that I wanted to ask you about. 19 Are you aware of any discussions taking place about the 20 extent to which the investigation should also look at 21 the actual underlying systems, so the Horizon system? 22 A. No. When I had my discussion in October '23 with JB and 23 Sarah Gray, there was no mention of the integrity of 24 Horizon, and it was a case of trying to work -- trying 25 to see what's actually going on, maybe trying to be 18 1 a bit fairer to postmasters, and there were some 2 prosecutions that happened due to the postmaster being 3 responsible but it was their team or their staff members 4 as a result, and that was the discussion that we had. 5 And, like I said, yesterday, I did want to follow 6 that up to get the tonality right and that never 7 happened. But, for me, looking at this document, if the 8 business wanted to learn from the past, there's 9 a line -- where's it gone? (Pause) 10 So I think the starting point should have been for 11 the entire investigation element to be external. That's 12 how you learn from the past. I don't -- from my 13 observations, what I've seen, discussions with 14 postmasters, I'm not sure this business can control 15 investigations -- investigations and investigators, 16 hence why, from my perspective, the right solution would 17 be to have an external third party deal with the all of 18 that. 19 Q. If we turn, please, to page 6, we see there at the top 20 it says: 21 "This paper asks the Board to note that the [Central 22 Investigations Unit] staff are to conduct criminal 23 investigations within the [Investigation Branch's] remit 24 and report these matters to police when appropriate and 25 in accordance with the CLEP." 19 1 As you said, it was a noting paper and you don't 2 recall any particular discussion about that at the 3 Board? 4 A. No. 5 Q. What is your view as to whether the investigators, or 6 even whether subpostmasters have access to sufficient 7 information in respect of investigations? 8 A. So, again, from what I have seen and my discussions with 9 postmasters, they are provided with data, and it's very 10 difficult to understand that data. Horizon is very 11 complex and translating that data into some form to 12 conduct an investigation is a challenge but then being 13 a normal postmaster and having to understand the way 14 it's written to defend yourself, again, is equally 15 difficult. And again, from discussions that I've had 16 with individuals, there is very limited visibility in 17 terms of investigations and material given. 18 Previously, and very recently, should I say, 19 individuals were not allowed a legal representative and 20 thanks to myself and Mr Jacobs we have pushed hard and 21 now individuals are allowed to have a legal 22 representative. It's unfair, it's unhelpful, and when 23 the business has got a starting point of defending 24 itself and not a neutral position, I think it's grossly 25 unfair. 20 1 We did challenge the investigations last year; have 2 you got the correspondence for that? 3 Q. We will probably get to that in due course. 4 A. Okay, fine. 5 Q. This particular Board report that we just looked at was 6 from September 2022. 7 A. Okay. 8 Q. You have said in your evidence and you've said in your 9 witness statement that it wasn't until after the ITV 10 drama that a number of Board members told you that they 11 hadn't understood properly the impact on subpostmasters 12 and how they had been treated. Can you give us some 13 examples of those kinds of conversations that you had? 14 A. So the January Board meeting is something I don't think 15 I'll be able to ever forget. It was a cultural 16 awakening for some of the Board members. The ITV drama 17 had happened and the Executive Team -- some of the 18 Executive Team, should I say -- came to that Board 19 meeting and it started with a discussion on the ITV 20 drama. And one of the individuals who mentioned how he 21 received threats that his children -- people hoped his 22 children would commit suicide, it was very 23 disappointing. The CEO received death threats. There 24 were so many things going on. 25 However, the Board acknowledged that they should 21 1 have done more to support the wider Executive and that 2 was a mistake on our part: hands up, no problem. 3 However, individuals on the Board and some of the 4 discussions that took place, some people thought it was 5 a dramatisation, what ITV did. However, myself and 6 Mr Jacobs at the Board meeting were pretty clear that 7 this is the reality, this is what subpostmasters go 8 through and the tonality, the way ITV delivered 9 an exceptional piece, was bang on. 10 Q. Were your views taken on Board in that respect? 11 A. I expressed them. I'm not sure if Board members did but 12 I definitely expressed them, and nothing's happened for 13 me to be able to say -- or some kind of a test, in terms 14 of okay, they definitely took it on Board. I'm sure 15 they heard what I had to say and what Mr Jacobs had to 16 say. 17 Q. Were any contrary views expressed at that meeting? 18 A. No, no. Not that I can recall, no. 19 Q. Sticking with investigations and criminal 20 investigations, can we please turn to POL00448616. 21 We're still in the same period. We're now on 4 January 22 at the bottom of this page into the next page. So 23 that's during the time of the Bates drama, I think it 24 may have finished perhaps that day. If we scroll down, 25 please, thank you. The bottom of this page into the 22 1 next. It's an email from yourself to Mr Bartlett. So 2 Mr Bartlett was the Head of the Investigation Team or 3 the Central Investigations Unit? 4 A. Yeah, he's an ex-police officer and he's the individual 5 responsible. 6 Q. You say: 7 "I was hoping to visit your team in Chesterfield ... 8 "Does this work for you?" 9 Can you give us a bit of background? Why were you 10 hopping to visit his team in Chesterfield? 11 A. For me, watching the ITV drama, obviously knowing what's 12 happened in the past and trying to get it right, I felt 13 that was my duty, as a postmaster NED, for me to ensure 14 the organisation is run properly, and this was a major, 15 major issue that needed to be resolved. And it was, 16 again, building on the conversation that we had, just to 17 try to help put the business in a better place. 18 Q. If we scroll up, please, we can see he responded to say: 19 "Unfortunately my team is dispersed all over the 20 country and is not based at Chesterfield. We do 21 sometimes go to Chesterfield for training days, etc, so 22 I'll let you know when the next session will be. 23 Alternatively, if you're happy to speak to the team on 24 Teams, then we can organise that very easily ... 25 "It would be really good to speak to you and the 23 1 team so thank you for offering to do this." 2 If we scroll up, that's 4 January. The top email, 3 I know it says the "1/6" but I think that's actually 4 6 January; is that right? 5 A. Yeah. 6 Q. It says: 7 "Thank you for your email, I am happy to work with 8 your suggestions and maybe it's better to speak to the 9 new team members early Feb? Also I'm happy to speak to 10 them team in person when your team are in Chesterfield, 11 let me know the dates several weeks in advance please." 12 Then you say: 13 "Lastly, did you have a think about our discussions 14 regarding investigations team when we spoke at Wood 15 Street?" 16 Can you assist us, what was the discussion at Wood 17 Street? 18 A. As I said yesterday, it was trying to get the tonality 19 right of what they are doing, getting postmasters 20 involved to ensure the Investigation Team is in the 21 right place, and watching the documentary and seeing how 22 people were treated, how postmasters were treated, 23 I felt morally it was my duty to try to get this in the 24 right place. 25 Q. So you had raised it with Mr Bartlett. That was 24 1 a drinks reception or something, was it? 2 A. Yeah, in October '23 with Mr Bartlett and with Sarah 3 Gray. 4 Q. Was there a response to this request? 5 A. No. 6 Q. Do you know why not; was there a discussion at all? 7 A. No. No. 8 Q. I'm going to turn to some correspondence relating to 9 a criminal investigation. Could we please turn to 10 FUJ00243203. Could we please turn to page 3. This is 11 correspondence between the Post Office and Fujitsu, 12 relating to an ongoing police investigation. This email 13 is sent by Simon Oldnall. Do you know Mr Oldnall at 14 all? 15 A. Yes. 16 Q. He's there as the Horizon IT Director? 17 A. Yes. 18 Q. So he's not part of the Investigation Team? 19 A. No. 20 Q. No. He has emailed Daniel Walton, who is the Head of 21 the Post Office Account at Fujitsu, so perhaps his 22 counterpart at Fujitsu, and he says: 23 "I understand from John [that's Mr Bartlett] that 24 there have been some challenges with supporting 25 an ongoing police investigation that involves a large 25 1 sum of money. 2 "I obviously understand broader context, but wanted 3 [to] reassure that [the Post Office] is supporting the 4 police investigation and offering any and all assistance 5 we can. Can I ask that you help with any conversations 6 that City of London police need to have with Fujitsu 7 Services Limited." 8 If we scroll up, we can see a response from 9 Mr Walton of Fujitsu. He says: 10 "As this is a legal matter, [Fujitsu Legal] are 11 communicating with the City of London Police. 12 "I am not involved in those communications, and in 13 any event, [Fujitsu] considers it inappropriate for Post 14 Office and [Fujitsu] to be discussing a police 15 investigation." 16 If we scroll, please, onto the first page, the 17 response from Mr Bartlett. Just before we get to the 18 response, were you aware this issue at this particular 19 time? 20 A. No. 21 Q. The response from Mr Bartlett is as follows: 22 "One of my team has gone back to City of London 23 Police to see how the contact you referenced below was 24 progressing as we have an open and objective engagement 25 with the [City of London Police] on this matter. 26 1 "[City of London police] has informed us that they 2 have not had any additional information nor contact with 3 Fujitsu after the single, exploratory and inconclusive 4 conversation. They left the conversation with the 5 feeling that they were indirectly being told that the 6 Horizon system was unreliable and so the case could not 7 progress. We really need to explore this as this is not 8 the nuanced impression Simon Oldnall has given me. 9 "As the potential victim in the case, [the Post 10 Office] would be grateful if you can provide me with 11 contact details for either the equivalent person in 12 Fujitsu (in the UK) to my role (ie in charge of 13 investigations, or perhaps the Head of Security if you 14 do not have a dedicated investigation team) or [the] 15 appropriate person in your UK Legal Team. I will then 16 pass [these] details on to [the City of London Police] 17 who are looking to have a trilateral conversation with 18 Fujitsu, [Post Office] and [City of London Police]." 19 Just before we get to the next paragraph, what is 20 your view in respect of what's said there about Post 21 Office being the potential victim in the case and 22 needing to liaise with Fujitsu? 23 A. I feel it reinforces what I've said, which is the 24 starting point of Post Office Limited when it comes to 25 investigations. Hence, why I just don't feel it's 27 1 appropriate for the business to be doing the 2 investigations. 3 Again, I wasn't aware of this until I received it in 4 my bundle. 5 Q. It then continues: 6 "It is impossible to overstate how important this 7 is: I need to advise both the police and [the Post 8 Office] as to the evidentially-established reliability 9 (or not) of data that is being used every day additional 10 establishing outcomes with Postmasters and, potentially, 11 to be presented to the criminal justice system by the 12 police and the three public prosecuting agencies. The 13 non-provision of relevant witness statements from [the 14 Post Office] and Fujitsu will rightly be interpreted by 15 the police and prosecutors as [the Post Office] and 16 Fujitsu not having faith in the reliability of the data 17 with the obvious outcome resulting. 18 "Look forward to hearing from you and thank you in 19 advance." 20 Would you expect this kind of an issue to come to 21 the Board? 22 A. Yes. It's -- as I've said yesterday, it's this 23 selective and filtering of information which is given to 24 the Board which is really disappointing. 25 Q. There's then some correspondence between Mr Patterson, 28 1 the CEO of Fujitsu Europe, and Mr Read, the Post Office 2 CEO. Can we please have a look at FUJ00243199. I'm 3 going to read from this later, 17 May 2024. So by this 4 time had the matter reached the Board? 5 A. No. 6 Q. This is a month later. 7 "I am writing to you directly in order to raise 8 serious concerns that have come to my attention which 9 indicate that the Post Office continues to pursue 10 enforcement against postmasters and it expects [Fujitsu 11 Services Limited] to support such action. 12 "To be clear, [Fujitsu] will not support the Post 13 Office to act against postmasters. We will not provide 14 support for any enforcement actions, taken by the Post 15 Office against postmasters, whether civil or criminal, 16 for alleged shortfalls, fraud or false accounting." 17 Then he addresses three topics, "in particular: 18 Criminal Investigations", and this is a reference to 19 that particular correspondence that we've just been 20 looking at: 21 "We have become aware of a recent investigation by 22 the City of London Police into a Post Office branch. 23 The approach of [Fujitsu] is to cooperate with the 24 police and any other third party exercising independent 25 investigative, prosecutorial, regulatory or judicial 29 1 powers. 2 "However, we are concerned by the behaviour of the 3 Post Office Investigation Team on this matter. That 4 team maintains an approach of Post Office as 'victim' 5 and requires [Fujitsu] to provide a witness statement as 6 to the reliability of Horizon data stating that without 7 such statement the case will not progress. For the 8 investigations team to act in this matter seems to 9 disregard the serious criticisms raised in multiple 10 judicial findings and indeed, exhibits a lack of respect 11 to the ongoing Inquiry." 12 What's your view about what's written there? 13 A. I think Fujitsu are right in what they are saying and 14 I find it disappointing that this was not discussed at 15 Board. 16 Q. The second point: 17 "Pursuit of Shortfalls from Postmasters: 18 "It seems that the Post Office may be continuing to 19 pursue postmasters for shortfalls in their accounts 20 using Horizon data. We would have expected that the 21 Post Office has changed its behaviour additional light 22 of the criticisms and is appropriately circumspect in 23 respect to any enforcement actions. It should not be 24 relying on Horizon data as the basis for such shortfall 25 enforcement." 30 1 Next, "Postmaster Redress": 2 "[Fujitsu] recognises that it holds Horizon related 3 information that may assist postmasters and post office 4 workers to appeal their convictions and/or seek 5 appropriate redress." 6 Over the page, if we look at the final paragraph, he 7 says: 8 "Based on what I have seen and heard in the Inquiry, 9 there is a significant behavioural and cultural aspect 10 to the Horizon scandal. As leaders of our respective 11 organisations, I believe we are both committed to learn 12 the lessons necessary so that this appalling scandal can 13 never be allowed to happen again." 14 Now, there is a response, and we can find that at 15 FUJ00243201; this is a response from Mr Read. Were you 16 consulted about this response? 17 A. No. 18 Q. Are you aware of the Board having been consulted about 19 the response? 20 A. No. Maybe with -- as said yesterday, because the Board 21 is tiered, maybe there was a discussion with the more 22 important Board members but certainly not with the Board 23 as a whole. And there were discussions with Fujitsu at 24 this time regarding a contract extension, so those 25 discussions definitely took place but this didn't. 31 1 Q. The letter says as follows, 30 May 2024: 2 "I write further to your letter ... in which you 3 make a number of concerning statements about postmaster 4 enforcement." 5 If we scroll down, the letter says: 6 "I would like to reassure you that Post Office has 7 invested significant time and resource effecting 8 cultural and procedural change across the business, 9 taking on board the court's findings and ensuring that 10 our postmasters' interests are central to everything we 11 do. I would be keen to talk to you further about these 12 changes as it appears from your letter that there are 13 some fundamental misunderstandings at [Fujitsu] about 14 Post Office's current day culture and activities." 15 He then addresses each of the points. 16 "Criminal investigations", he says: 17 "I can reassure you that Post Office is not now -- 18 and will not be in the future -- undertaking any 19 prosecutions against postmasters or any third parties as 20 the prosecuting body." 21 Over the page, please, thank you. He says: 22 "... in respect of enforcement, Post Office's 23 requests only relate to cases where our teams are 24 supporting criminal investigations or prosecutions 25 pursued by independent third parties, such as the police 32 1 or the Crown Prosecution Service." 2 So that's in line with the noting paper that we saw 3 earlier: 4 "In response to the specific case you raised, 5 potential criminal activities were identified in the 6 branch and Post Office therefore reported the matter to 7 the police. We have assisted with the police's 8 investigation, including providing supporting data from 9 the Horizon system. 10 "Naturally, it is vital to the police's 11 investigation that it can rely on the Horizon data it 12 has received. I am happy that you have confirmed in 13 your letter that [Fujitsu] will cooperate with the 14 police when it is exercising its independent 15 investigative powers as this case would require 16 a statement from [Fujitsu]. It is a matter for the 17 police and [Fujitsu] to determine the necessary content 18 of the statement." 19 He then addresses the other two matters. Very 20 briefly, "Pursuit of Shortfalls", he says: 21 "As you are aware, civil recovery of losses was 22 stopped by the Post Office in 2018 so Horizon data is 23 not currently being used for civil recoveries ..." 24 If we go over the page, we see there the "Postmaster 25 redress": 33 1 "The reliability of Horizon data is also central to 2 the compensation and redress schemes which Post Office 3 is currently delivering, to right the wrongs of the 4 past. I welcome your confirmations that [Fujitsu] will 5 provide Post Office with information ..." 6 Do you have any views on that response? 7 A. It's disappointing this letter went out the way it did, 8 and I think what this letter quite clearly shows is the 9 lack of control and oversight within this organisation, 10 where the CEO is implying a certain point, so we're not 11 prosecuting, but yet you've got investigators doing 12 investigating, and they are basically doing what we have 13 already seen previously on some of the other decks. 14 Q. I want to take you to an email that you sent to the 15 Chair of Post Office in June, so that is POL00448398. 16 So that correspondence from Mr Read was 30 May this 17 year. This is then an email unconnected of 14 June this 18 year, entitled "Postmaster Police Investigations", and 19 you raise a concern there that information hadn't come 20 to the Board relating to prosecutions; is that right? 21 A. That's correct. 22 Q. You say: 23 "There are some additional documents on Diligent 24 ..." 25 Diligent is a system that you can access Board 34 1 papers on; is that right? 2 A. That's correct. 3 Q. "... from a Board meeting on 23 October, regarding 4 police investigations and postmasters, which I feel need 5 clarifying." 6 Can you assist us with this email and what your 7 concern was? 8 A. So there was an item discussed at the October '23 Board 9 meeting regarding police investigations into potential 10 wrongdoings and how the investigations team, supported 11 by Legal, wanted to adopt a specific approach. So what 12 myself, Mr Jacobs and also Mr Tidswell, and other Board 13 members, all resisted saying, "No, we do not want to go 14 down this approach". And it was agreed for the 15 Investigation Team, so in this case JB, to come back 16 with what he was thinking in terms of some examples. So 17 as a Board, we could then appraise what's going on and 18 check the tonality. 19 Now, my alarm bells were ringing when I saw this 20 item had been closed. So for me, this created 21 misinformation within the wider Executive, based on 22 a decision that had not happened and, as my job as 23 an NED, I ensured I called that out, which is why I've 24 raised this with Mr Railton, and we have reopened this 25 item but I'm not sure if there's been any discussions 35 1 with CoSec or whoever took the minutes on the day as to 2 why such an incredibly important issue was closed when 3 it definitely was not closed. 4 Q. Why was it that in June 2024 you were looking into the 5 issue of police investigations? 6 A. There was no specific reason, as such. For me, 7 there's -- I'm always thinking about how to make the 8 organisation better, and just going through what I have 9 to do as a director, looking at the action logs, just 10 double checking things, were they closed? What's open? 11 Is it assigned to the right person and, when I saw the 12 action log and I saw that closed, that's when I thought, 13 "Oh, hang on a minute, this is not right, I don't 14 remember this being closed". I confirmed with 15 Mr Jacobs, "Do you remember this being closed?", and he 16 said no, as well. 17 And yeah, I sent -- I'm not sure if you've got the 18 attachment to this -- I did also send the minutes to 19 corroborate with what I have said here and Mr Railton 20 agreed that this is not what was agreed. 21 Q. By this stage, 14 June this year, had you been informed 22 about this correspondence between the CEOs of the Post 23 Office and Fujitsu? 24 A. No. 25 Q. Would it have been relevant to the issues that you're 36 1 raising here? 2 A. 100 per cent, yes. Just looking at the dates, it's such 3 a coincidence, but yeah. 4 Q. Do you know if Mr Read was aware of your concern that 5 was being raised here? 6 A. Maybe in hindsight I should have cc'd Mr Read in. But 7 I would have expected Mr Railton to have picked that up 8 as chair with Mr Read. 9 Q. Thank you. Can we turn to FUJ00243204. 10 SIR WYN WILLIAMS: Before we do that, Mr Blake can I just be 11 clear, Mr Ismail, about what you are saying about 12 Mr Read's letter, all right? 13 As I understand it, you are certainly saying that, 14 before Mr Read sent a letter like that to Mr Patterson, 15 there should have been some awareness of that or 16 a discussion of that at Board level, yes? 17 A. That's correct, sir. 18 SIR WYN WILLIAMS: I've got that point completely. What I'm 19 not sure about is whether you actually have an issue 20 with any of the contents of Mr Read's letter and, if so, 21 could you tell me what they are, and why you have those 22 issues. 23 A. Yes, for me the issues are the Post Office is just still 24 not seeing what everybody else is seeing, starting from 25 a victim's -- starting -- having a starting point as 37 1 a victim is unacceptable and, for me, Mr Read's letter 2 shows the disconnect that exists within the organisation 3 and how information just doesn't seem to be passed, and 4 the silo working mentality, unfortunately, is still 5 rife. 6 SIR WYN WILLIAMS: I'm playing devil's advocate now, all 7 right, so nobody should misunderstand me but, if 8 an alleged crime has been committed, like, say, theft or 9 fraud, then there is an alleged victim, all right, and 10 it can only get to the police if the alleged victim 11 makes some kind of report or investigation and then 12 reports it to the police. I think that must be right, 13 must it not? 14 So isn't inevitable that the victim -- or the 15 alleged victim, let's choose our words very carefully -- 16 must have a role to play at the very start of 17 an investigation, otherwise it never gets to the police. 18 A. That's correct, sir, but, as the Fujitsu letter stated, 19 the -- Fujitsu were happy to provide information based 20 on an independent third party verifying. Now, once that 21 happens, then, yes, I'm in agreement with you, but to 22 start from a position that echoes the past, I find 23 disappointing. 24 SIR WYN WILLIAMS: All right. So am I right in thinking 25 that your point is that, before Post Office reports 38 1 an alleged crime of, say, theft or fraud to the police, 2 it should instigate an independent investigation by 3 someone other than the police before referring it? 4 A. Yes. 5 SIR WYN WILLIAMS: Is that what you're saying? 6 A. Yes, sir. 7 SIR WYN WILLIAMS: All right. I understand. Thank you. 8 MR BLAKE: Thank you. 9 There's now further correspondence on 8 July from 10 Fujitsu. That's FUJ00243204. That's another response 11 from Mr Patterson, I'll read to you a few passage from 12 that. He says: 13 "I am glad that we both share a commitment to learn 14 lessons from the Post Office Horizon scandal and to 15 ensure that the appalling treatment of postmasters and 16 the miscarriages of justice that occurred, could never 17 happen again. That was my reason for writing to you." 18 In the next paragraph, he says: 19 "In simple terms, the Post Office is requesting that 20 [Fujitsu] give expert opinion evidence to be used in 21 criminal proceedings against postmasters and post office 22 workers. 23 "In your letter, you rightly note that the content 24 of any witness statement is a matter between the police 25 and [Fujitsu]. However, I consider it necessary to 39 1 address this issue with you because the request was made 2 by Post Office and because I consider the request to be 3 entirely inappropriate, particularly in the light of the 4 evidence being uncovered at the Inquiry. 5 "I enclose with this letter", and it's the email 6 chain we've just been looking at. 7 He says: 8 "Mr Bartlett continues the prior narrative of seeing 9 the Post Office as the 'victim' and requests a witness 10 statement to address 'the reliability of the Horizon 11 system and the admissibility of evidence produced from 12 it'. Mr Bartlett suggests that a failure to do this 13 would 'rightly be interpreted by the police and 14 prosecutors as [the Post Office] and Fujitsu not having 15 faith in the reliability of the data with the obvious 16 outcome resulting'. 17 "A witness statement from [Fujitsu] attesting to the 18 reliability of the Horizon system and of that from it in 19 criminal proceedings would amount to expert opinion 20 evidence. [Fujitsu] is incapable of providing expert 21 opinion evidence as it is neither independent nor has it 22 sufficient information to provide such an opinion. 23 "As the Post Office is well aware, there has been 24 and there continue to be bugs, errors or defects in the 25 Horizon system. Further, [Fujitsu] currently has and 40 1 previously had access to branch transaction records. 2 Your letter ... also acknowledges the existence of other 3 matters ... which could have operated to create innocent 4 discrepancies in branch accounts including '... miskeys, 5 or omissions when remitting cash of stamp stock based on 6 Horizon data ...' by end users." 7 It then refers to the Horizon system being reliant 8 on the "delivery of services by Post Office and third 9 parties". If we scroll over, he says: 10 "Based on the evidence which has been seen and heard 11 in the Post Office Horizon IT Inquiry, [Fujitsu] 12 considers that all of the matters mentioned above would 13 need to be investigated carefully by the Post Office and 14 the police, with the assistance of an independent 15 technical IT expert, and possibly also forensic 16 accounting expert, to ascertain proper explanations for 17 branch account discrepancies." 18 Just pausing there, we've seen in previous phases of 19 this Inquiry discussion about obtaining a statement from 20 an expert who can attest to the reliability of the 21 Horizon system. Are you aware of any discussions at 22 Board level about that topic? 23 A. No. 24 Q. "[Fujitsu] considers that only after such 25 an investigation has been undertaken could a meaningful 41 1 expert witness statement be made in subsequent criminal 2 proceedings which addresses the reliability of the 3 Horizon system and the relevant data produced. For the 4 reasons I have mentioned above, [Fujitsu] cannot provide 5 such a statement." 6 Then he addresses the topic of shortfalls. 7 I'll ask the same question that I've asked a number 8 of times: were you made aware of this communication? 9 A. No. 10 Q. We then have Mr Owen Woodley, acting CEO, responding on 11 23 July, could we please turn to FUJ00243209. I know 12 I've done a lot of reading, I'll just read a few 13 passages from this letter. He says: 14 "I write further to your letter of 8 July addressed 15 to Nick Read, and to thank you for coming to our offices 16 ... to meet with me." 17 The expert evidence point is addressed at the bottom 18 of this page. He says: 19 "Your letter said that Post Office was requesting 20 that [Fujitsu] give expert opinion evidence, to be used 21 in criminal proceedings against postmasters and post 22 office workers. That was not the case. As you rightly 23 say, [Fujitsu] is not able to provide expert opinion 24 evidence as it is not sufficiently independent for any 25 statements that it may provide to be deemed expert 42 1 evidence by the police or Crown Prosecution Service. 2 Post Office is aware of that and has not/would not 3 request that [Fujitsu] provides expert opinion 4 evidence." 5 He then says, about halfway down that first 6 paragraph: 7 "The police have raised questions regarding the data 8 and the Horizon system, and the AC&I Team ..." 9 That's what was the Central Investigations Unit, 10 I think; is that right? 11 A. Yes. 12 Q. "... referred the police to [Fujitsu] -- as [the Post 13 Office's] provider of the system -- to obtain answers to 14 those questions. The feedback they received in April 15 2024 was that the police had only been able to have one 16 conversation with [Fujitsu] at the time and the 17 investigation officer's impression from that 18 conversation was that they were indirectly being told by 19 [Fujitsu] that the Horizon system was unreliable. As 20 a result, the police told the AC&I Team that the 21 investigation could not progress." 22 He then says: 23 "In light of the feedback from the police", and he 24 discusses the discussion about the letters. 25 If we go over the page, one more paragraph that I'll 43 1 read. He says: 2 "We discussed that Post Office had used the word 3 'victim' [so he addresses this victim issue] in 4 correspondence with [Fujitsu]. We both acknowledged 5 that while this may be a legally and factually accurate 6 description, it does not reflect the change in Post 7 Office's attitude towards postmasters." 8 Does that reflect your own opinion? 9 A. Yes. 10 Q. Yes. Did you have a discussion with Mr Woodley about 11 that point? 12 A. No. 13 Q. No. 14 A. The first time I saw this letter was last week when 15 I received my bundle. 16 Q. "Naturally, there will be instances where Post Office 17 has to use the proper legal term to describe matters 18 [for example] in correspondence with or evidence 19 provided to the police or the CPS. However, alternative 20 language will be used when discussing these matters with 21 [Fujitsu], other third parties and in internal Post 22 Office correspondence." 23 Are you aware of any kind of cultural change taking 24 place at the Post Office in the matter that's described 25 here, in terms of the language used within the business? 44 1 Are you aware of any policies, for example, that the 2 Post Office shouldn't be referred to as a victim, save 3 for those circumstances identified here? 4 A. No. 5 Q. "I am very clear that our communications must reflect of 6 the cultural change in the organisation." 7 He then addresses the postmaster shortfalls point. 8 The very final letter on this is the response from 9 Fujitsu of 26 July, and I'd just like to take you to 10 that. That is FUJ00243211. This is a letter sent to 11 Mr Woodley. Is this also a letter you hadn't seen 12 before receiving it from the Inquiry? 13 A. Yes, I have not seen this letter before. 14 Q. He says: 15 "It is unfortunate that Nick was not able to attend 16 the meeting as discussed. The original purpose of 17 writing to Nick was to escalate, CEO to CEO the concerns 18 relating to certain behaviours within the Post Office. 19 It seems clear that the Post Office continues to have 20 significant cultural issues, sees itself as a 'victim' 21 with the enforcement and prosecution of postmasters 22 considered as a business as usual activity of 23 a commercial retail company. As I stated in my 24 correspondence to Nick and during our discussion, 25 Fujitsu finds the language and the suggested behaviour 45 1 unacceptable from Post Office investigators. 2 "I do not intend to engage further with the Post 3 Office on the matters I raised. We completely trust in 4 Sir Wyn and the Inquiry process which will examine the 5 extent of the Post Office change in Phase 7." 6 Aren't we back again to the school playground 7 a little bit here, with Fujitsu refusing to engage 8 further with the Post Office, and as seen in this 9 exchange of letters? 10 A. Yes, it does feel like that, yes. 11 Q. I mean, how would you describe the relationship between 12 the Post Office and Fujitsu, insofar as you're aware? 13 A. From the updates that we received as NEDs at Board 14 level, the relationship wasn't the best, and I can 15 understand that, and we both need to work together, for 16 the short-term, at least. And until we have our New 17 Branch IT System ready, there's no way of exiting the 18 relationship with Fujitsu. So it was a case of get on 19 with it and make it work for the postmasters up and down 20 the country. 21 Q. The impression that's given by this correspondence is 22 a real breakdown in the relationship between the two of 23 you; would you agree with that? 24 A. Yeah, I can see -- I can see why it does look like that, 25 yes. 46 1 Q. Would you expect a letter of this sort or the 2 correspondence that we've just been seeing to have been 3 addressed at Board level, in light of the relationship 4 between the two companies? 5 A. Yes. As Fujitsu is one of our biggest partners, I would 6 have expected that, yes. 7 Q. And has that seeming breakdown in the relationship been 8 addressed at board level to the best of your knowledge? 9 A. No, because it's not been raised. 10 Q. I'd like to ask you a few more issues on cultural issues 11 before we take our morning break. We're only taking one 12 morning break today but it will be 15 minutes long. 13 Equality and diversity issues you've raised in your 14 statement. You say at paragraph 25 that you've only 15 been invite to one equality, diversity and inclusion 16 meeting on 3 March 2022, despite being the EDI lead on 17 the board. Can you give us a little bit more detail on 18 that, please? 19 A. It's -- as I said in my statement, there's -- I was 20 appointed by Angela Williams as the lead when she was 21 the Chief People Officer, and I was only invited once, 22 and I'm not sure why. Some of the conversations I've 23 had -- so last month, for example, I had a conversation 24 with an individual of an ethnic minority, and just 25 a polite, "Hi, who are you", kind of conversation, 47 1 introductory conversation, and when I introduced myself, 2 he said to me, "Oh, I didn't know that you were on the 3 Board". 4 This organisation has a certain point where 5 individuals with diversity can get to and then, beyond 6 that, there is nobody, unfortunately. 7 Q. I'd like to take you to some emailed correspondence from 8 last summer. Can we please turn to POL00448378. 9 If we start on page 2, please. You have written 10 there to Jane Davies. So what was Jane Davies' 11 position? 12 A. She was the Chief Retail Officer -- no, she was the 13 Chief People Officer, sorry. 14 Q. Subject "Racism and employment practices". You are 15 writing to express your deep concerns about recent 16 issues regarding racism and employment practices at the 17 company: 18 "First, I was deeply troubled to learn from recent 19 articles that racism has been identified within our 20 business. As the D&I Board member, I am particularly 21 concerned that I was not informed of these issues until 22 a [postmaster] brought them to my attention. I believe 23 that we must address these issues head-on and ensure 24 that our company is a welcoming and inclusive 25 environment for all employees." 48 1 Sticking to that first point, what was the 2 background to that? 3 A. There was -- it's there on the article from the Computer 4 Weekly. So there was an article on the Computer Weekly 5 website regarding -- was it regarding a document? 6 Q. If we scroll down below the link, that might assist you. 7 A. Ah. So this was when individuals rang in to the call 8 centre in their time of need to report losses, and 9 people on the other side answering -- POL employees 10 answering calls were using the term "I've got another 11 Patel". 12 Q. You have also mentioned here an issue with the rehiring 13 of staff members. How does that tie into the equality, 14 diversity and inclusion issues that you're raising? 15 A. I think it reinforces what I have already said. 16 Q. What do you mean by that? 17 A. In terms of there's a specific make-up of individuals 18 this organisation hires and, by rehiring, we are never 19 deviating from that and, for me, what was clearly 20 evident, and I've raised on numerous occasions when 21 I started as an NED in early '21, throughout the 22 strategy days, to various individuals who joined the 23 organisation, the Post Office has to relate as 24 an organisation to the demographic of its postmasters. 25 There's got to be some kind of connection, so the 49 1 hierarchy, the middle management, the Board, everybody 2 understands what postmasters are going through, and 3 an example of this was -- and it's in my witness 4 statement -- in April '24, when there was three events 5 organised during the month of Ramadan, and I received 6 an email. Firstly, I wasn't invited, neither was 7 Mr Jacobs, to postmaster listening events, and we were 8 both shocked because we had postmasters saying to us 9 "What's the point of you two being on the Board? We 10 don't hear from you, we don't know what you're doing". 11 So on the not hearing from us, in November '21 12 Richard Taylor advised both of us not to communicate on 13 social media or with any other postmasters, which was -- 14 the way I certainly saw it was a lack of confidence in 15 our independence and what we're doing, and in trust. 16 Going back to the April '24, when these events were 17 organised, I raised the point that why we've not been 18 invited by the senior management. That was never 19 responded to. And my specific conversations at the time 20 with Tracy Marshall was "Okay, Tracy, if you want to do 21 these events throughout this period, just ensure that 22 you cater for individuals who are fasting. So please 23 have proper meals ready, ablution facilities, and mass 24 prayer facilities", and the response I got was "We don't 25 provide that." 50 1 And I challenged back and I said, "Well, that's -- 2 so then you're excluding postmasters". 3 And with my conversations with Mr Jacobs, he 4 confirmed to me as well, "Saf, I've got staff members 5 who will be fasting also, so I wouldn't be able to 6 attend". 7 So I don't think the business quite understood. 8 Now, common sense did prevail and Mr Woodley rightly, 9 once I have raised this with him, changed the dates to 10 afterwards. Now, the business was very keen to get them 11 events done before Phase 5 and 6 and -- rightly or 12 wrongly, but the timing just was not right. 13 Q. If we scroll up on this email, we can see Mr Jacobs also 14 responds. He says he had had recent reports from 15 an Asian colleague who complained to him that he was 16 talked down to by a team member on the Helpdesk that 17 handles transaction correction queries. When he 18 challenged and claimed it was inaccurate and asked to 19 organise a visit to visit the Cash Centre to see the 20 evidence, he claims he was repeatedly obstructed and 21 told to accept the transaction correction. 22 He would add: 23 "... having visited the Cash Centre and watched the 24 CCTV he was 100% correct -- despite the claim by [the 25 Post Office] that the matter had been reviewed by 51 1 a supervisor." 2 If we scroll up, we can see a response from 3 Mr Tidswell, who says he thinks there are a number of 4 strands here. First: 5 "There is highly disturbing evidence from the 6 Inquiry about historical racism." 7 That was the identification codes issue; do you 8 recall that? 9 A. Yes. 10 Q. Then there is a question about hiring practices: 11 "... to ensure that [the Post Office] is alert to 12 rehiring people who have a history at [the Post Office] 13 ..." 14 That's a matter we have already discussed today: 15 "There is the important need to ensure we have 16 a business today in which racism is not tolerated at any 17 level." 18 He says the report from Elliot about incidents is 19 very concerning. 20 Ms Davies, on the first page, at the top of the 21 first page, also says that: 22 "We have all been disturbed by this feedback ... and 23 it needs to be appropriately investigated and dealt 24 with. We are taking [steps], we should all get on 25 a call so we can update and agree appropriate steps." 52 1 Do you think that sufficient steps have been taken 2 in this regard? 3 A. No. 4 Q. Was there a conversation here where steps were agreed? 5 A. Not that I can recall, no. But I'm not sure how long 6 Ms Davies was in the business after this, but I would 7 have expected this to have been something -- an issue 8 that the People Team would have been taking seriously, 9 and I would have expected more than one individual to 10 take ownership of this. 11 Q. Thank you. Very finally before the break, the topic of 12 bonuses. Within your statement, at paragraph 68 to 75, 13 you address what you refer to as an "unhealthy and 14 unjustified obsession with bonuses and remuneration". 15 Can you assist us with what you mean by that? 16 A. So, from my observations throughout being on the Board, 17 there was clearly -- there is clearly a culture which is 18 bonus led. So, firstly, between January '23 and March 19 '23, there was an obfuscation of RemCo papers by the 20 wider Executive, which resulted in Bonus Gate in May 21 '23. Then we had recently discovered -- I had, should 22 I say -- that there was a RemCo pay grade over the last 23 six months. Being a Board member, I wasn't even aware 24 of this, so I challenged Amanda Burton, regarding this 25 specific RemCo pay grade, and in April '24, Amanda 53 1 responded saying how, since 2019, certain individuals 2 had received pay increases up to 30 per cent since 2019, 3 whereas the reality is postmasters on the frontline have 4 not had a real increase since 2015. My own businesses, 5 my income is a couple of per cent, my costs have gone up 6 by 18 per cent in the last two years, clearly showing 7 how the culture is driven specifically, it's a bonus 8 culture within this business. 9 Then there was some communication again in April 10 with myself, Amanda Burton and Mr Jacobs regarding STIPs 11 and LTIPs. So the management put forward 12 a recommendation or their LTIPs. And, like I said, 13 yesterday, until the bonuses are being paid and until 14 the reassurance is given when they are paid, morale is 15 a little low, which we've heard on numerous occasions at 16 Board meetings last year also. And the recommendation 17 put forward for the LTIP, which is long-term incentive 18 payment, was complaints against postmasters. And when 19 myself and Mr Jacobs saw that email, we read it a few 20 times, thinking "What? How can that be?" 21 And we then went back to Amanda, and informed her 22 "Why is the wider Executive putting forward a metric 23 that they're not even in control of; how does that even 24 make sense?" 25 So then as part of my role and good governance, 54 1 I went back to Amanda, and I've disclosed the email, 2 outlining key metrics that should be used. Firstly, 3 I don't believe this business should have any bonuses. 4 However, what I've been told is it's part of the 5 contracts that have been agreed. Now, if our hands are 6 tied, then surely the metrics need to be right, which 7 need to be connected to the realities of postmasters. 8 So what are postmasters receiving in remuneration? What 9 is going on in terms of the organisation, in terms of 10 profitability? What about cutting central costs? 11 So these were my counterproposals, and I did that, 12 and it was at the Board meeting in June '24 or July '24, 13 very recently, when I challenged back to Amanda advising 14 "When are we going to implement?" And Amanda Burton -- 15 and I was very disappointed with the response, it was 16 again the way I perceived it, protecting the wider 17 Executive to ensure bonuses are met. 18 All I was told was, "Sorry it's been agreed. We 19 have to stick with what we've got". 20 Q. It might be suggested that there is a tension there 21 between being a subpostmaster and being a member of the 22 Board and potentially a conflict when it comes to those 23 kinds of remuneration issues. What would you say about 24 that? 25 A. I'm not sure it is. I can see why it looks like there's 55 1 a conflict. It's about bringing the reality of doing my 2 duty as a director to life. So my responsibility is, 3 and my fiduciary duty is, to ensure the business is run 4 correctly and to ensure the taxpayer, the shareholder, 5 has value for money and also ensure postmasters, past, 6 present, future, are treated well and the business is 7 run in an effective manner. 8 So seeing this is culture and not calling it out, 9 I feel, compromises my responsibilities. So 10 I appreciate how it does look like a conflict but, for 11 me, my role as -- my moral duty in calling it out is my 12 first responsibility and that's what I was doing. 13 MR BLAKE: Thank you. 14 Sir, that might be an appropriate moment to take our 15 morning break? 16 SIR WYN WILLIAMS: Yes, of course. 11.40? 17 MR BLAKE: Thank you very much. 18 (11.26 am) 19 (A short break) 20 (11.40 am) 21 MR BLAKE: Thank you, sir. Can you see and hear me? 22 SIR WYN WILLIAMS: Yes, thank you, yes. 23 MR BLAKE: We're going to move on to a new topic and that is 24 the New Branch IT System. Could we please bring onto 25 screen your witness statement, that's WITN11170100, at 56 1 page 9, please. Thank you. If we scroll down the page 2 you've set out in your witness statement a number of 3 problems that you have faced with the current Horizon 4 system. At 31.1 you say: 5 "Horizon suffers from a lack of integration with 6 other systems ..." 7 If we move on to 31.2, I think you say that Horizon 8 systems are unnecessarily complex. 9 At 31.3, "not designing to cater for human error". 10 31.4: 11 "The daily and weekly reports are not easy to 12 analyse." 13 31.5: 14 "There are issues with Horizon incorrectly reporting 15 the sum of foreign currency being held in a branch." 16 If we scroll down, 31.6: 17 "... issues with Horizon failing to recognise the 18 reversal of transactions." 19 31.7: 20 "... experience of Horizon taking payments from 21 a customer twice ..." 22 Then: 23 "... incorrectly recording ATM transactions." 24 In principle, are you favour of a new IT system? 25 A. Yes. 57 1 Q. Thank you. That can come down. 2 The New Branch IT project was commissioned prior to 3 you joining the Post Office; is that right? 4 A. Yes. 5 Q. Who is responsible for that project? 6 A. So when initially joined the business, Jeff Smyth, was 7 responsible and, at some point, I think Zdravko Mladenov 8 and then more recently Chris Brocklesby. 9 Q. At paragraph 183 of your witness statement you say when 10 you first joined, the anticipated budget was 11 £280 million and that that is now in excess of 12 £1 billion; is that right? 13 A. Yes. 14 Q. What do you understand to be that main reason behind 15 that significant increase in cost? 16 A. There's a variety of different factors, firstly 17 I remember when 280 million was discussed at the Board 18 meeting late '21 and Mr Jacobs specifically questioned 19 Zdravko, saying "280 million, does that not sound too 20 cheap?" And her response was "Well, that's the costings 21 that we've got to for now". 22 But, as the project has evolved, there's been more 23 to deal with. As the Inquiry's evolved also there's 24 been more, for example, training and, on the first 25 Horizon -- the current system that we're using, should 58 1 I say -- the lack of training, the lack of 2 oversight/support. So, in order to address these 3 issues, to ensure the business doesn't make the same 4 mistakes as it has done in the past, the budget has 5 increased to ensure everything is incorporated for 6 positive implementation and a better experience. 7 Q. In your statement, you have raised number of issues, 8 starting with hardware being purchased and sitting in 9 storage. Is that relating to the NBIT project or is 10 that something else? 11 A. No, that's in relation to NBIT so, again, we were told 12 at Board that we had to decide on the purchase of this 13 hardware so, as a Board, we then authorised in late '23 14 for the purchase of 30 million, because we were 15 instructed we had to make a decision and -- in order to 16 be ready to have the goods delivered, for the 17 implementation of the new system. 18 And at the time, we were told we were getting a very 19 good deal, hence why we did it at a discount, 20 5 per cent, something along them lines. Then Zdravko 21 left the business, we had Chris Brocklesby, and now 22 we've got a new individual, Andy Nice, who's heading up 23 the new NBIT programme, and the recent Board discussions 24 that we have had has opened a totally different 25 conversation, and the conversation is as follows: are we 59 1 actually going to be ready for NBIT in the next two to 2 three years? It doesn't look like it. Hence, the 3 Fujitsu extension that we're looking for, which 4 I challenged in June '24, instead of going for 5 a five-year extension, to give the shareholder and 6 postmasters some reassurance that we want to get on with 7 this new IT system, go with a two years, plus one, plus 8 one, plus one, so we have a break. 9 Now, further investigating that's happened and part 10 of the strategic review that's been taking place, it's 11 clear that we are not ready; we will not be ready for 12 NBIT within the next maybe two/three years, hence why 13 buying this equipment was probably the wrong decision 14 when we did that, and this has been spoken about at 15 Board over the last few months and, again, I've not seen 16 any accountability taken for that decision yet. 17 Q. Who do you hold responsible for that decision? 18 A. The IT -- the individuals working within IT, and 19 obviously the wider Executive because everyone is aware 20 of what's been going on and what the business is trying 21 to do, in terms of implementing a new IT system. 22 Q. Is there a particular individual within the IT Team that 23 you consider should take accountability and 24 responsibility for that? 25 A. I feel it's a wider Executive issue because the decision 60 1 wasn't solely based on one issue. Everyone within the 2 wider Executive would have discussed that. 3 Q. Without going into legal advice, do you feel the Board 4 have taken into account matters that were raised by the 5 Inquiry in Phase 2 of the Inquiry, concerning the 6 original Horizon procurement and the difficulties that 7 were experienced? 8 A. I'm not sure they've -- the Board certainly has not been 9 told about these specifics in terms of Phase 2. Maybe 10 the wider Executive are probably more aware, I'm not 11 privy to that, so I couldn't tell you. 12 Q. You also raise that there are still a large number of 13 bugs in the new system. Can you briefly summarise that 14 for us? 15 A. Yes, so recently, since the Fujitsu conversation started 16 in June '24 at Board, we had to assess the commercials 17 in terms of a new renewal with Fujitsu and what's the 18 longevity, how many years tenure, et cetera. So, in 19 order to do that, there was an assessment made by the 20 new Chair on the current state of the NBIT programme 21 and, basically, we were so far behind, and the Board had 22 not been informed anywhere near to the level that it 23 should have with regards to making decisions. 24 Q. Are you aware of those issues with the bugs being 25 resolved? 61 1 A. Not yet, no. 2 Q. Do you feel that there is a sufficient grasp of the 3 issue? 4 A. The Board is aware that there are bugs, and I feel the 5 Board is waiting for the decisions from the strategic 6 review in order to then produce a plan in terms of what 7 needs to be addressed in a certain order. 8 Q. You've raised in your witness statement a number of 9 issues with the usability of the new system. That's 10 paragraph 185 of your witness statement -- I won't bring 11 it up on to screen unless you need to see it -- but 12 first you raise the issue of customer-facing screens. 13 Very briefly, what is that issue? 14 A. So currently, if a customer visits a Post Office, the 15 experience that a customer has is dependent on the staff 16 member serving them, so depending on the skill level, 17 capability, ability of the staff member. And it's 18 clear, so the better-trained, the better-informed staff 19 member gives the customer a better experience. 20 However, having a customer facing screen helps the 21 postmaster enormously because, firstly, it helps reduce 22 on a training level; secondly, from a governance and 23 compliancy level, we hit high marks; and, thirdly, the 24 overall journey, in terms of the customer choice, is 25 better because the customer can actually see what the 62 1 clerk -- the counter clerk is actually doing, and the 2 experience is already so complex. 3 So, for me, I felt it's a necessity and, again, so 4 did Mr Jacobs. And we were continually told "There's no 5 money for it", whereas -- again, we said "It's 6 a necessity", and maybe two or three occasions we were 7 told "No, sorry, we can't do this". 8 Q. The second issue you raise to do with dual terminal 9 log-ins. Very briefly, can you explain that issue? 10 A. Yes, so currently on Horizon, so a postmaster from 11 Burnley who raised this with me, he's just one of 12 a number on the existing Horizon, how it's very 13 difficult, if you're a -- if you're serving, you can't 14 afford to have an extra member of staff. So, if you've 15 got account customers you want to do them on the one 16 terminal, because you're the manager of the branch, and 17 then next to you you've asked another terminal, so you 18 can keep serving your customers. 19 So the customer experience is still okay and you can 20 still run your business and, unfortunately, on the 21 current system, the Post Office, with their rule by 22 exception, doesn't allow postmasters to do that. 23 Although they did, for a very short period of time. So 24 this is again another one of my concerns that I've 25 raised for the new NBIT system. This should allow 63 1 postmasters to operate effectively. 2 Q. A third issue you raise is an issue with the retail 3 sales facility. 4 A. Yes. So there's a lack of integration, currently, and 5 many postmasters need Horizon to provide a form of 6 taking retail sales and, again, the business seems very 7 reluctant to do that, and the business is very happy and 8 very comfortable saying, "Oh, we've got costs to pay for 9 card machines, if card payments are taken on our 10 terminals." 11 However, when postmasters have costs and postmasters 12 wifi is being used, the Post Office unfortunately 13 doesn't consider that, which is disappointing, hence me 14 raising that point. 15 Q. The fourth issue, a particular issue regarding stamps 16 stock balancing. Is that to do with the issue we spoke 17 about yesterday or is that a different issue? 18 A. No, this helps alleviate issues like that. So, again, 19 as I have said on numerous occasions, myself and 20 Mr Jacobs have been ignored on so many different issues 21 and this is another classic. Regarding the design of 22 NBIT, for us, as postmasters, for the wider network, we 23 want to produce something that's 2030 ready. We want to 24 reduce the risk for postmasters but also the risk for 25 Post Office and, as part of good governance, we felt 64 1 that the Post Office should start to consider, like they 2 do with the self-serving kiosks, printing postage 3 stamps. That reduces, overnight, the liability -- 4 an approximately £200 million liability that we have in 5 physical stamps stock. 6 In simple terms, a customer would come to the 7 counter, they post a letter, parcel, whatever they want, 8 and the Post Office clerk on the other side would print 9 a stamp, whether that's a first, second, it's 10 irrelevant. They would just print a stamp, either stick 11 it on for a customer; if it's a letter for tomorrow, 12 give the sticker to the customer, they can stick it on. 13 We currently do that and, unfortunately, there's been no 14 appetite to do that. 15 And it was late last year when the conversation 16 started with Chris Brocklesby, again, saying, "Why have 17 we not been informed? You're making decisions about 18 auto stock rem based on trying to correct stamp issues, 19 which is fine, to make postmaster's life easier, but why 20 are we not thinking about this when we're redesigning 21 a new system?" It reduces the time a postmaster has to 22 balance every week. So overall, controls, risk, 23 everything comes back in line. 24 Q. If I could take you to some board minutes, it's 25 POL00448789. This a meeting of 9 March 2023. If we 65 1 could turn, please, to page 5. It appears from these 2 minutes that you did have some influence on the Board or 3 an opportunity to feed back to the Board. If we scroll 4 down, we see there it says: 5 "The Chair noted that SI had had sessions in 6 relation to NBIT and queried what his response had been. 7 SI replied that he and EJ [that's Mr Jacobs] had had 8 a short demonstration of the development version ... of 9 NBIT and although not all functionality was operational, 10 good progress was being made and their experience was 11 positive. [He then] spoke to the simplification of the 12 system and the ease of training." 13 If we scroll down, we can see there's reference 14 there to you advising that you are still heavily in 15 favour of customer-facing screens, so that's the issue 16 we just spoke about. 17 A. Yeah. 18 Q. "... as part of NBIT and queried whether there was a way 19 to be more targeted with customer-facing screens." 20 The response was that: 21 "... postmasters self-funding customer-facing 22 screens was another option. AC [AC was Mr Cameron] 23 noted that one of the advantages of NBIT was that it was 24 much quicker and cheaper to make changes in the future; 25 we did not wish to invite delay and change the scope 66 1 now. [You] queried whether funding for customer-facing 2 screens could be applied as part of the next funding 3 submission." 4 Looking at that and looking at your experiences, do 5 you feel that you have been listened to at Board level 6 in respect of the NBIT system? 7 A. Clearly not. There's been a certain tunnel vision 8 approach to just get off Horizon, especially with 9 everything that's been going on, and that's led, 10 unfortunately, to the business trying to do this very 11 quickly, which is not necessarily the right way. 12 Just to give a bit more context to these minutes, 13 myself and Mr Jacobs met with one of the individuals 14 working on the Horizon Programme, and what they showed 15 us was two very simple transactions, and this was very 16 early on. The transactions we were shown were how to do 17 a return and how to post an item, and we were shown what 18 to expect from a back office perspective. It wasn't 19 working yet and, for us, as proactive postmasters, 20 myself and Mr Jacobs, this was revolutionary because it 21 would help us -- it would transform the way we run our 22 businesses and how we serve our customers. So, for us, 23 it was definitely the right approach that we were using. 24 However, it was a very, very simple model. 25 And I'm not sure people appreciate how clunky and 67 1 how big Horizon currently is, and how even a simple 2 screen is such a big upgrade. So for us to see new 3 technology was massive, and one of the big plus points 4 for us was the printers, which, compared to what we've 5 got now, the thermal printers, saving so much time, so 6 much money for the shareholder. 7 Q. Thank you. I'd like to move on now to a number of 8 reports to the Board, recent reports to the Board, and 9 I'm going to start with something that is called the 10 Teneo report. Can we please turn to POL00448624. This 11 a Board pack for a meeting on 4 June this year. Was 12 that a meeting that you attended? 13 A. Yes. 14 Q. Can we please turn to page 109. There was a strategic 15 review that was carried out, and this is an update for 16 the Board by a company called Teneo; are you aware of 17 the background to this report? 18 A. Yes. The -- one of the conditions that Mr Railton 19 insisted on, upon his interim appointment, was to ensure 20 a strategic review is done, and that should be done 21 specifically by Teneo. 22 Q. If we scroll over, we can see the background. It says 23 there: 24 "Post Office Limited has invited Teneo to carry out 25 a comprehensive Strategic Review of the business and 68 1 develop a clear plan for the future. 2 "The Post Office faces a range of challenges, 3 including", and it sets out various challenges. 4 The final one of those is: 5 "Need for technological overhaul of core systems, 6 with substantial delays and overspends on Horizon 7 replacement." 8 That's in line with, I think, what we've just been 9 talking about? 10 A. Yes, correct. 11 Q. Was this well received, this report? 12 A. Yes, it's the beginning of a new journey, is the way the 13 Board was looking at this, and the business, to be fair. 14 So yeah, the starting point now, how we execute is the 15 challenge. 16 Q. If we scroll over the page, it has a set of key 17 questions. One of them is "Fit-for-Purpose Technology", 18 and the questions it asks is: 19 "How will technology support the future operations 20 of the Post Office? 21 "How do we ensure new systems (eg Horizon 22 replacement) are fit for purpose and futureproof? 23 "How should we partner with suppliers to achieve 24 this? 25 "How can technology be leveraged to remove 69 1 inefficiencies and human error?" 2 In your view, are those matters now being taken 3 seriously by the business? 4 A. It depends on what the findings are once the review has 5 been conducted, and the implementation. I think it's 6 a bit premature for me to give you a response for that. 7 Q. Could we please turn to minutes of a Board meeting from 8 4 June this year, that's POL00448648. We can see there, 9 Mr Railton is now Interim Chair by this stage, although 10 we, if we scroll down, we can see that, given his recent 11 appointment, it says that Mr Tidswell would act as Chair 12 at that particular meeting. 13 A. It was Mr Railton's first meeting, hence he asked 14 Mr Tidswell, "If you don't mind". 15 Q. Thank you. Can we please turn to page 4, and we're 16 looking about halfway down page 4. So we've just seen 17 that IT is going to be a big issue in the future and 18 something that the company is currently getting to grips 19 with. We see there: 20 "SJ was discussing the position on the reporting of 21 procurement risk exceptions between ARC and the Board 22 with LC as there seemed to be some inconsistency. 23 "ACTION The Chair queried whether IA or an external 24 needed to be engaged to conduct review of procurement 25 governance." 70 1 Then there is a reference. 2 A little further down, just at the end of that 3 bullet point, it says: 4 "[Mr Railton] and SJ agreed that IA needed to 5 undertake a review of procurement governance." 6 Can you assist us with what the issues are relating 7 to procurement governance, however brief? 8 A. Procurement currently is a bit of a mess within the Post 9 Office, so I've heard the Head of Procurement, as I've 10 mentioned in my statement, say in May '24, the Board is 11 risk averse and, at the following Board meeting 12 I mentioned this, advising that someone needs to have 13 a conversation with Procurement. The Board is not risk 14 averse: if incomplete information is provided, it's very 15 difficult for the Board to make the right decision. 16 Then we had a situation earlier this year, June '24, 17 where procurement basically made a mess of the spend on 18 the new NBIT system. It went over 50 million so we had 19 to then get retrospective approval. 20 Prior to this, towards the end of last year, again 21 earlier this year, there's been issues regarding 22 procurement. There was one point raised brilliantly by 23 Brian Gaunt, one of the NEDs, when he advised, with the 24 conversations he's had, that Procurement were trying to 25 agree contracts for 10 years, which is outside the norm, 71 1 in terms of commercial terms. 2 The average is five years but they were trying to go 3 for 10 years, just to avoid doing Procurement again. 4 Hence, why I say Procurement is a mess, within the Post 5 Office. And it's a procurement-led kind of approach 6 which is not helpful, not a commercial, common sense 7 approach, and this is creating wasted funds for the 8 taxpayer on numerous occasions, unfortunately. 9 Q. Where do you say responsibility for that lies? 10 A. That's, again, Procurement but also the wider Executive 11 because they're all in it together. Everyone has to be 12 working towards the same goal. Issues like this should 13 be dealt with way before they get to the Board and, 14 again, it's in my evidence, the Belfast exit programme. 15 What a disaster that was. The business wasted just 16 under £35 million to -- again, part of the NBIT 17 journey -- to move on to a cloud-based system, being 18 told constantly, "We've got to do this, we've got to do 19 this", and then being told "Oh, Amazon said we can't do 20 this". 21 The only thing we got from the 34.8 million that we 22 spent, which was abandoned in January '23, was a new 23 air-conditioning system for our Belfast data centre. So 24 it was extremely disappointing and, again, showing 25 a lack of accountability on that side, on procurement, 72 1 to deal with issues going forward to ensure we don't 2 make the same mistakes again. 3 Q. Thank you. Two further reports have been obtained in 4 the last summer, two reports from Grant Thornton. The 5 first is called a Board Effectiveness Report and the 6 other is a Governance Review. Can you briefly tell us 7 the background to obtaining those two reports? 8 A. So Mr Staunton, before leaving, commissioned these 9 reports and, from my understanding, because of what the 10 business had been through due to Bonus Gate and other 11 issues that were arising, he wanted to have an external 12 organisation involved and produce a framework to ensure 13 governance and compliance is implemented in the right 14 way, obviously looking at the issues we've got. So that 15 process started in October '23. 16 Then, obviously, Mr Staunton left towards the end of 17 January '24, and early February -- around February, 18 sorry, should I say, the first draft of the Grant 19 Thornton report was produced. And, again, you've got 20 the emails when myself and Mr Jacobs challenged back 21 because the first draft was highly critical. And 22 I remember conversations being had where certain NEDs 23 said it was unhelpful, and the response myself and 24 Mr Jacobs sent was, "So that's a good starting point. 25 Let's just get on with what they have advised us to do". 73 1 However, the report was then, certain parts, redone. 2 But the -- 3 Q. Very critical of who: individuals, the company? 4 A. The way it was written was probably -- the way it was 5 written, it was more critical than how it is now. 6 Q. At whose request were the changes made? 7 A. I'm not sure who specifically instructed Grant Thornton 8 to rewrite certain parts. I'm not privy to that, 9 unfortunately. 10 Q. Was anybody, in particular, calling for changes to be 11 made? 12 A. I remember the UKGI rep saying that. I also remember 13 the interim Chair, Ben Tidswell, also saying it was 14 unhelpful. 15 Q. Unhelpful for who: a public audience or an internal 16 audience or simply that it was not well drafted? 17 A. The words used were "unhelpful". In terms of what 18 context, you'd have to ask them. 19 Q. Thank you. Can we look at the first of those, that's 20 POL00446476. This is the Board Effectiveness Review, 21 dated 19 June 2024. If we turn over the page we can see 22 the background. It says: 23 "The purpose of this review is to provide 24 an independent analysis of the [Post Office] Board's 25 effectiveness against the requirements of the UK 74 1 Corporate Governance Code", et cetera. 2 Then it says: 3 "The Report has been collated from common themes 4 identified during our point-in-time assessment of the 5 Board and its Committees, through key findings and 6 survey output taken from our Governance Review ... 7 meeting observations, interviews with Board members and 8 additional document review with fieldwork concluded mid 9 May 2024." 10 If we look at page 43, it has, I think, your name. 11 You were somebody who was interviewed as part of this 12 project -- 13 A. That's correct. 14 Q. -- is that right? Thank you. Can we turn back, then, 15 please to page 8. It sets out there the key findings. 16 First: 17 "Lack of clarity on the purpose of the Board, with 18 the shareholder relationship inhibiting the Board's 19 effectiveness due to perceived interference in [the Post 20 Office's] work and limited visibility around the 21 longer-term funding and objectives of the organisation." 22 Is that a finding that you agree with? 23 A. Yes, it's very difficult, being the Post Office and 24 having your shareholder, the Government, and funding 25 being given in limited amounts. So asking for X million 75 1 and then small amounts being given, it's very difficult 2 to have a plan in place. 3 Q. Number 2: 4 "Low levels of trust and team identity ..." 5 Three-quarters of the way down number 2 it says: 6 "Equally, there are some views expressed of 7 a two-tier Board in operation, where decisions are taken 8 outside of the formal Board structure without proper 9 debate, and not all [Non-Executive Directors] have the 10 same visibility on Committee papers and minutes ..." 11 Is that something you agree with? 12 A. That's correct, yes. 13 Q. Those are matters you have already addressed -- 14 A. Yes. 15 Q. -- in your evidence. 16 Number 3, "No unifying purpose and strategy"; do you 17 agree with that? 18 A. Yes. 19 Q. Number 4, "Lack of succession planning"; what's your 20 view on that? 21 A. Yes. We've -- we had discussions regarding succession 22 planning and -- in private NED-only sessions, and it was 23 clear the lack of talent that existed within the Post 24 Office to take over if senior individuals had left the 25 business. And an example was when Martin Kearsley was 76 1 about to leave the business, we were looking for 2 somebody, and at the time the CEO advised the NEDs that 3 the second in command, Ross Borkett was too junior. 4 And this was -- Martin left probably last year, 5 I can't remember the exact dates. Now, regarding Ross, 6 there was a discussion had earlier this year who was 7 going to succeed Martin. He was stepping in interim, 8 and the discussion that took place was, obviously, the 9 CEO advised that he was too junior and wouldn't possibly 10 be taken seriously. 11 So we were thought -- certainly myself and Mr Jacobs 12 were under the impression that we were looking for 13 someone more senior to do the banking aspect because 14 it's massive; it's 50 per cent of the Post Office's 15 business now. And we find out a few months later that 16 Mr Borkett has been appointed as Head of Banking so we 17 were shocked. 18 Now, that again, highlights the lack of succession 19 planning. 20 Q. If we move to number 5: 21 "Team process and meeting discipline. Rolling 22 agendas, chairing of meetings and presentations of 23 information from the Exec of the Board all require 24 focus." 25 Is that something you agree with? 77 1 A. That's correct. 2 Q. Number 6, "The people agenda from culture through to 3 reward needs ownership at Board"; is that along the 4 lines of the evidence that you've been giving yesterday 5 and today? 6 A. Yes. 7 Q. Can we please turn to page 16. This is priority C, 8 "Leadership capacity, composition and succession". 9 I just wanted to ask you about the penultimate bullet on 10 the left-hand side. It says: 11 "That [the Post Office] did not anticipate an issue 12 with corporate memory until recently in terms of 13 managing multiple simultaneous [Non-Executive Director] 14 rotations points to poor succession planning processes. 15 As such the Board should keep a line of [sight] over the 16 output and debate with the NomCo in terms of its [terms 17 of reference]." 18 Again, is that the same kind of issue about 19 succession planning, this time relating to Non-Executive 20 Director rotations? 21 A. Yes, and this was a point that myself and Mr Jacobs 22 raised, and it's also a point I raised with Amanda 23 Burton before -- sorry, it was a point that was raised 24 with Amanda Burton, not by myself but by the -- by Henry 25 Staunton and Jane Davies, again, on corporate memory and 78 1 if you're going to be the chair of RemCo, you should be 2 well versed on at least the last 12 to 18 months of 3 what's been happening in that Committee, and I was 4 really disappointed when I raised the questions about 5 salary increases and she wasn't aware. 6 So, again, reinforcing the point of a lack of 7 corporate memory within the organisation, unfortunately. 8 Q. If we could turn to page 19 please, and that's 9 Priority D, which addresses issues of culture. They say 10 there, on the left-hand side, the first two bullet 11 points: 12 "Trust is lacking between Board members, exacerbated 13 by the perception that there appears to be a two-tier 14 Board with some [Non-Executive Directors]/[Independent 15 Non-Executive Directors] excluded from certain 16 decision-making, which is carried out informally by 17 a subgroup of the Board." 18 Is that very much in line with the evidence you've 19 been giving? 20 A. Yes. 21 Q. "The Postmaster [Non-Executive Directors] can, 22 understandably, become very exercised at issues 23 affecting the postmaster community, and can on occasion 24 be seen as 'activists' rather than contributing fully as 25 'part of the team'." 79 1 What's your response to that? 2 A. I can see why the report says that because we saw on the 3 correspondence yesterday that individuals on the Board 4 thought we were shop stewards and union reps. 5 However, for me, if we hadn't been blocked in 6 November '21 continually, regarding communication to the 7 wider Postmaster Network, and within the business -- 8 people still don't know we were there and still are 9 there, within the Post Office employee circle -- I think 10 that would have helped reduce some of the frustrations 11 massively. 12 Q. Can we turn to the second report, that's POL00446477. 13 This is the governance review. If we turn over the page 14 we can see the background to that. It says there: 15 "In accordance with the Statement of Work dated 16 12 October 2023, we present our report ... on the 17 effectiveness of the governance practices at Post Office 18 ..." 19 So the work was commissioned on 12 October 2023. 20 It's taken quite a considerable time to produce, and are 21 some of the reasons for that, as you've said, because 22 some of the report was originally provided in draft and 23 was subject to revision? 24 A. Yes, but also the individual, ie Mr Staunton, who 25 commissioned the report, was exited from the business. 80 1 So there was no continuity as such, following through. 2 Q. Thank you. If we turn to page 7 we can briefly go 3 through the key findings. I'll again do what I did with 4 the previous report and we'll just take you to those 5 headline points. 6 "Key findings 7 "One of the most pressing areas to address to 8 improve the impact of governance design is 9 a purpose/cohesive strategy at the Group level, which 10 sets direction and ambition. 11 "[First] The lack of a unifying purpose and 12 group-wide strategy between [the Post Office] and the 13 Shareholder." 14 Is that something that you agree with? 15 Q. Second, "Conflict around the role of the shareholder 16 versus the Board"; again, are you able to give your 17 views on that particular point? 18 A. I agree. 19 Q. "Leadership capacity", it says that: 20 "... POL is currently affected by ongoing and 21 upcoming Board rotations, which ... impact leadership 22 ..." 23 Do you agree with that? 24 A. Yes, sir. 25 Q. Fourth, "Decision making forums at Enterprise level pack 81 1 lace and do not enable accountability"; what's your view 2 on that? 3 A. As I said yesterday, unfortunately, in this business, 4 the lack of decision making and the pace at which things 5 go through, it's very, very difficult to do something 6 quickly. It's like moving ten oil tankers all chained 7 together at the same time. It's really hard. 8 Q. Number 5, "Culture -- a lack of trust, accountability 9 and performance management"; is that something you agree 10 with? 11 A. Yes. 12 Q. Looking at those two reports, is there anything there 13 that stands out in particular for you as a concern with 14 regards to the Post Office? 15 A. I think it's disappointing that investigations are not 16 part of the key findings and, in hindsight, after we've 17 what we've seen today and what was in my bundle, I would 18 have expected there to be a specific section on 19 investigations, being such a sensitive issue. 20 Q. Thank you. That can come down. 21 The very final topic that I'd like to ask you about 22 is your involvement with subpostmasters. Could we 23 please have a look at POL00448370. This is an email 24 exchange from quite early on in your time as 25 a Non-Executive Director. You email Mr Taylor and you 82 1 say: 2 "Hope all is well, both myself and Elliot need some 3 comms out [as soon as possible] as many [postmasters] 4 think we are doing nothing. 5 Can we have a chat next week ..." 6 He says: 7 "Of course, happy to discuss ... 8 "I can speak on a call after the Board meeting ... 9 "Let me know what suits ..." 10 Can you explain the concern that you had at this 11 point in time? 12 A. For myself and Mr Jacobs, it felt like a tokenist 13 gesture in terms of putting us on the Board and 14 basically stifling us in terms of communication. We 15 wanted to talk to postmasters, we wanted to bring this 16 business closer together. We were all going through 17 a really tough time but, unfortunately, we were just not 18 given the opportunity; we were not trusted to speak to 19 the postmaster community, unfortunately. 20 Q. Can we turn to POL00448389. Moving on in time, this is 21 now to April this year. If we look at the bottom of 22 this page onto the next page, you are emailing the 23 Non-Executive Directors, and you say: 24 "I would like to bring to your attention an issue 25 regarding the postmaster events. We have recently 83 1 received invites with very short notice, which is 2 a disappointment on the part of our retail team. Once 3 again, the team has failed to keep the Board up to date 4 and also [needs] me and Elliot informed about these 5 Postmaster Listening events to ensure [Postmaster 6 Non-Executive Directors] are present." 7 Can you assist us with your concern there? 8 A. This is in relation to what we discussed prior to the 9 break: the events that were organised during the month 10 of Ramadan. 11 Q. Yes. 12 A. So this all part of that conversation. 13 Q. Do you feel that you are being sufficiently kept in 14 touch with events relating to postmasters? 15 A. No. 16 Q. If we could turn on to POL00448391, moving on to the 17 next month, 1 May 2024. Let's start on the bottom of 18 the second page, please. It's an email from Tracy 19 Marshall to you and Mr Jacobs. She says: 20 "I'm writing to ask for your help please with the 21 ongoing [Non-Executive Director] recruitment campaign. 22 You may have seen in Martin Roberts' email yesterday 23 that we've taken the decision to extend the application 24 window ... This is as a result of ... feedback from 25 postmasters. 84 1 "The other piece of feedback received is that 2 postmasters want to understand a bit more about the role 3 itself from your perspective ..." 4 So they want you to address them in respect of the 5 recruitment drive. 6 If we go, please, over to the first page, there's 7 a response from you. At the top of the page, please, 8 top of page 1, you say: 9 "Over the past three years, we have been 10 significantly hindered from engaging with Postmasters at 11 the desired level due to a lack of response from the 12 Retail Engagement and Comms teams, despite repeat at the 13 time requests. Additionally, we are firmly opposed to 14 the way in which the replacement process is being 15 handled which we have both been vocal about. 16 Specifically with regards to the lack of continuity, 17 corporate memory, and effective postmaster oversight 18 that will be lost in the handover process." 19 There seem to be two issues there, one is a general 20 concern about the engagement you're allowed to have with 21 postmasters and the other is actually about the 22 replacement process itself. Can we take each of those 23 in terms? If we start with the first, what is the 24 concern that's expressed there about being able to 25 engage with postmasters? 85 1 A. Sorry can you just repeat your question? 2 Q. Yes, sorry. It's a little noisy. We'll just wait for 3 the noise to die down for a second. Thank you. 4 So the first issue there -- oh, no, the noise is 5 back again. We'll just wait a moment. 6 Sorry, sir, there's some building work above us and 7 it's slightly disruptive. 8 SIR WYN WILLIAMS: It's a continuation of what was happening 9 yesterday, I take it. 10 MR BLAKE: Possibly worse. 11 SIR WYN WILLIAMS: Right. 12 MR BLAKE: Let's see if we can plough through it. 13 There is a first concern that you are being hindered 14 from engaging with postmasters. Briefly, can you assist 15 us with how you are being hindered with engaging with 16 subpostmasters? 17 A. So, as I've mentioned previously in November '21, when 18 Richard Taylor advised both myself and Mr Jacobs not to 19 have any communication on social media with any 20 postmasters, number 1; number 2, when I was out visiting 21 postmasters on my own time, my own initiative, again, 22 I was told that Regional Managers and individuals higher 23 up were uncomfortable with me going out on my own and, 24 for me, that was getting a flavour to ensure that 25 I bring back to the Board to do a better job; regarding 86 1 postmaster events, continually, myself and Mr Jacobs 2 were not invited, and I'm not sure why. 3 Regarding the second part of your question, we had 4 an initial conversation with Tracy Marshall, Martin 5 Roberts, Shaun Kerrison -- I'm not sure if Shaun 6 Kerrison was in the room but Tracy was definitely there 7 and Martin Roberts were there, and the discussion was 8 how to have -- what should the criteria be to bring 9 a new -- bring the new Postmaster NEDs? 10 And myself and Mr Jacobs put together -- we 11 recommended a certain criteria on the call to them and 12 that was totally ignored, and then the advert went out 13 with something totally different. 14 So for myself and Mr Jacobs, it was very 15 disappointing. We will leave the Board, when our time 16 is due, no problems with that whatsoever. However, all 17 the corporate memory information that we've built, we 18 want to give it to individuals, firstly, who are 19 capable; secondly, who can hold the business to account 20 with the right level of scrutiny. That's all we wanted. 21 But, again, we were totally ignored in what we 22 suggested. 23 MR BLAKE: Thank you, Mr Ismail. Those are all of my 24 questions. 25 Sir, we have some questions from our own Mr Jacobs. 87 1 SIR WYN WILLIAMS: Right. 2 MR BLAKE: I'll hand over to him. 3 SIR WYN WILLIAMS: Fine. 4 Questioned by MR JACOBS 5 MR JACOBS: Thank you, Mr Ismail. I represent a large 6 number of subpostmasters -- is that better. Thank you. 7 I represent a large number of subpostmasters and 8 I have a number of questions for you. 9 As part of the Post Office Board, have you been 10 informed of the Government's plans for the future of the 11 Post Office? 12 A. Not yet. No. Sorry, can you hear me? 13 Q. Yes, I can, yes. Can you hear me? 14 A. I'm trying to. I'm -- 15 Q. If I need to speak up, let me know. I know there's some 16 noise in the background. You say "not yet". Are you 17 expecting to hear? 18 A. My assumption is once the strategic review has taken 19 place, there will be some serious discussions about the 20 future of the Post Office. I did have a conversation 21 with Johnny Reynolds a few weeks ago, at the opening of 22 Banking Hub in his constituency, and the conversation 23 was very positive, and one of the first points Johnny 24 Reynolds made was to resolve redress for postmasters and 25 to ensure current postmasters are treated fairly and 88 1 postmaster remuneration is reflective of the efforts 2 that are being put in. 3 Q. Normally, we would expect the owner of a very large 4 institution such as this to have a three or a five or 5 a ten-year plan with the direction of travel for the 6 future of the Post Office; is that the sort of thing 7 that you're expecting to happen? 8 A. I am, once the strategic review has been concluded, sir. 9 Yeah. 10 Q. Thank you. 11 Now, I'm going to ask you about Board awareness of 12 survey results. Gavin Ellison gave evidence yesterday; 13 do you recall that? 14 A. Yes. 15 Q. You might have been outside the room when he did so. 16 Have you read the YouGov report that has been provided 17 for the Inquiry? 18 A. I have been sighted. 19 Q. So you'll know, won't you, that approximately 1,000 20 current subpostmasters responded? 21 A. Yes. 22 Q. 70 per cent say they suffer from screen freezes; 23 68 per cent loss of connection; 57 per cent say they've 24 experienced unexplained discrepancies; and 65 per cent 25 of subpostmasters surveyed experienced these types of 89 1 issues at least once a month. You're aware of that? 2 A. Yes, I can relate to that, yes. 3 Q. I know that you've said that you have experienced 4 similar things in your own branches, haven't you? 5 A. That's correct, sir. 6 Q. Do you know if the Post Office Board or senior 7 Executives, before this survey came out, were aware of 8 the huge dissatisfaction amongst subpostmasters with how 9 the Horizon system is working and how they're still 10 being treated by the Post Office? 11 A. So what -- firstly, a simple answer to your question is: 12 I'm not sure they are aware. The Board certainly is 13 not, to the level at which YouGov broke things down and 14 specific points, and a survey is as useful as the 15 questions you ask. 16 Q. Yes. 17 A. So what's telling is the questions that are being asked 18 in the postmaster surveys and the Post Office employee 19 surveys, and if there's consistency applied, then 20 there's specific data to cross-reference against, and to 21 produce a plan to implement. And I feel, once the 22 current Board has sight of the YouGov results, they will 23 put them forward and hopefully produce a plan. In terms 24 of current and existing bugs, we were never provided 25 with any specific detail. All we were told at Board 90 1 level is, "There's a number of bugs, we have fixed X 2 amount of bugs". That's the only detail. 3 Q. This theme in your evidence about the Board not being 4 told what's going on by the Executive, it feeds into 5 previous employee survey results, doesn't it? 6 A. Yes, sir. 7 Q. You say at paragraph 125 of your statement, in relation 8 to 2023 employee survey results, that the poor results 9 were not accurately reported to the Board? 10 A. That's correct, sir. 11 Q. Do you think, then, that the Executive are deliberately 12 downplaying the scale of problems relating to 13 subpostmaster dissatisfaction? 14 A. I don't think it's just subpostmaster dissatisfaction. 15 The Executive, wider Executive, is cherrypicking what 16 issues they want to bring to Board, which is not 17 helpful. 18 Q. What do you think can be done or ought to be done about 19 this cherrypicking tendency? 20 A. There has to be more oversight within this business, and 21 the best placed individuals to provide the right level 22 of scrutiny are existing and previous postmasters 23 because they understand the business. 24 Q. That brings me on to the next topic I wanted to address 25 with you. Could we then go to POL00448394, please. 91 1 This is, while we're waiting for it to come up, an email 2 from Elliot Jacobs to you, dated 28 May 2024, and Nigel 3 Railton is also copied in, and it's entitled "Discussion 4 Document"; are you familiar with this? 5 A. Yes, this was a discussion document that I did and, for 6 me, it was my views to set the new Chair up for success. 7 Q. It's helpful because it follows on from what you've just 8 been saying because you say that this captures your 9 thinking and aims for the future, particularly after 10 some of the evidence from the former -- the Chief 11 Executive that was given in the Inquiry. Just looking 12 at the second paragraph, you say that there should be 13 a Committee called the "PM Advisory Committee", and this 14 committee should have a clear mandate and terms of 15 reference, bring together voices from across the 16 postmaster community, meet four to six times a year and 17 aim to educate and guide senior POL members on the 18 impact of proposals and strategies. What members do you 19 have in mind? 20 A. Proactive postmasters. So obviously groups who 21 represent postmasters. This organisation it's such 22 a fascinating and fantastic institution. It has a wide 23 range of stakeholders, but I don't feel having every 24 single stakeholder on the Postmaster Advisory or 25 Postmaster Council, whatever we want to call it, is 92 1 helpful because, as I've said previously, making 2 decisions and -- is very difficult. 3 The lack of pace within the organisation is clearly 4 evident and we don't want to do any more to jeopardise 5 any further lack of pace and decision making. So 6 producing a specific committee with individuals, where 7 accountability can be made for specific projects, 8 I think its really, really important and the way 9 forward. 10 Q. Okay, thank you. Which senior Post Office officials 11 ought to be informed or educated by this committee? 12 A. So, for me -- maybe I should have been a little bit 13 clearer. I feel it's important for the senior 14 individuals to be on the committee as well -- 15 Q. I see. 16 A. -- to connect better. There's no point having 17 a committee without these individuals because whatever 18 is discussed then can't be implemented. So for example, 19 the Chief Finance Officer, the CEO, the Chief Retail 20 Officer, these individuals would be on this type of 21 committee and, currently, with the scenario that we're 22 in, the Transformation Officer as well, would be 23 important. 24 Q. Your proposal is, reading through the document: 25 "It should have the authority to call upon senior 93 1 POL members to explain and challenge what is working and 2 what is not." 3 Are you talking about senior Executive members who 4 would be invited to come and be challenged? 5 A. Correct: held to account. 6 Q. Held to account. You also say: 7 "It should also provide [some] overwatch on 8 [postmaster] investigations." 9 Just on that point, you've told us yesterday that 10 investigations had been rebranded "branch assurance 11 visits" -- is that right -- 12 A. Yes. 13 Q. -- and that there are difficulties with the postmasters 14 that are ongoing in relation to understanding data, 15 individuals until recently weren't allowed 16 representation -- 17 A. Yes. 18 Q. -- and you talk about the business being the victim and 19 investigator, so it's not neutral, and the problems with 20 tonality. Do you think that this sort of oversight by 21 an advisory committee would resolve these issues? 22 A. I think there's different strands to that. Firstly, 23 it's got to be an external body that does 24 investigations. 25 Q. Right. 94 1 A. Because I, for one, don't have the confidence, 2 especially after what I've been sighted on, within the 3 internal Post Office Investigations and Legal Team, for 4 a fair hearing. Number 1. 5 Number 2, the advantage this oversight brings is 6 there's certain situations that can happen in a Post 7 Office branch. For example, a customer comes to 8 deposit -- comes to the counter to deposit £1,000, 9 and -- sorry, to withdraw £1,000, and, in error, you 10 press the deposit button. So I've given the customer 11 1,000, and I've deposited 1,000. This is a very easy 12 mistake to make. The buttons look very similar and 13 they're next to each other. 14 Now, for a postmaster or a postmaster council 15 advisory committee, if a postmaster explains that issue 16 and they're an active, live-serving postmaster, they can 17 understand that. However, an external body may not 18 necessarily grasp that as quickly in terms of how simple 19 and easy an error it is to make. 20 Q. Okay. So you think investigations should be conducted 21 externally? 22 A. 100 per cent. 23 Q. There are three points that you raise at the 24 conclusion -- I think it's Mr Jacobs who raises it -- 25 but you say that this is something that you put 95 1 together? 2 A. The discussion document I put together. 3 Q. Okay. 4 A. This was an email following on from my discussion 5 document -- 6 Q. One of the points that's made is the lack of automation 7 is "shocking", is what's said. Can you explain that 8 problem and why is it shocking? 9 A. So we joined the board in June '21 and, within a few 10 months, we made it very clear to the business that we 11 need automation, our costs are going through the roof, 12 our customer journeys are poor, they can be better, they 13 should be better. The self-serving kiosks that we 14 currently have are not good enough, they are not doing 15 what they should. In terms of the new QR codes, some of 16 them don't work. They were only processing old returns. 17 And, unfortunately, this was just ignored and -- until 18 October '23, when a paper was brought to the Board by 19 Martin Roberts regarding automation, and to be clear, 20 this was done on the back of some of our strategic 21 partners saying, "We may leave the relationship with the 22 Post Office unless this issue is resolved." 23 So the wider Executive ignored the two postmaster 24 NEDs who have been requesting this, and information 25 about this, and some kind of innovation to help ease 96 1 customer journey. However, when it came to strategic 2 partners, they were keen to start the conversation. 3 Q. Right. Okay. You talk about a point of candour. 4 A. Yes. 5 Q. To what extent does the Board lack candour; is that the 6 point? 7 A. I think it -- that's more from my observations based on 8 the testimony of Paula Vennells and what she was 9 mentioning. And again, for me, as an NED, being 10 proactive in trying to make this organisation better, 11 hence why I mention that point. 12 Q. Okay. I just want just a quick query. You mentioned 13 strategic partners. Can you just confirm what that 14 means? 15 A. So strategic partners are organisations such as WHSmith, 16 Morrisons, Co-Operative, ASDA, organisations who have 17 large -- a large number of branches with us and, again, 18 it's in my evidence where a survey was conducted of 19 strategic partners and also of postmasters, which was 20 brought to the July '24 Board meeting. And again, the 21 like-for-like comparison was not helpful. 22 There were approximately just under 200 strategic 23 partners interviewed, whereas over 1,000 postmasters 24 interviewed, and the image and the narrative being 25 portrayed by the retail team was "Here, look here, the 97 1 strategic partners are very happy but these postmasters 2 are not". 3 And then it was only once there was some scrutiny by 4 the Board, which is when clarity was provided, in terms 5 of numbers and, again, just to add a point on to 6 semi-related to automation, up until Andrew Darfoor 7 mentioned about a digital strategy last year, the Post 8 Office did not have a clear digital strategy, which was 9 disappointing. 10 Q. That's helpful. Finally, you say: 11 "... the lack of Corporate Memory is a major 12 problem -- sighted by [the former Chief Executive] 13 Vennells too and still a lesson unlearned ..." 14 It goes on to say: 15 "... we risk losing the learnings and experience int 16 he desire to replace positive challenge. No NEDs other 17 than Saf and Elliot in situ, with many not looking to do 18 a second term." 19 Are you saying that there should be an element of 20 continuity so that this committee isn't just for a fixed 21 term and and then they all change? 22 A. Sorry, can you repeat the question? 23 Q. Are you saying that the committee needs to have people 24 on it that are longstanding members, so -- 25 A. The advisory committee? 98 1 Q. Yes. 2 A. Yes, so again, I'm not saying someone should be 3 a permanent fixture, not at all. However, in order -- 4 it's clear, what -- the Inquiry has produced some clear 5 issues that this organisation has, and one of them is 6 imbalance of power, another is materiality in relation 7 to postmasters. But the other, with regards to the Post 8 Office, is corporate memory. And in order to move 9 forward, move on, and as my mum would say to me, "be 10 a better person today than you were yesterday", in order 11 to do that for this organisation, we have to learn from 12 the lack of corporate memory that we have. 13 And for me, not having individuals in place who are 14 aware of what's happened in the past, even in the short 15 term, over the last few years, not having that kind of 16 continuity is very disappointing because I can't see how 17 we can learn from the past if we don't have that. 18 Q. My final point is: I understand that you presented this 19 proposal to the Board; is that right? 20 A. I provided this discussion document to the Chair -- 21 Q. Yes. 22 A. -- and then it was in the Chair's hands, and I'm not 23 sure whether the Chair has presented it or not but, for 24 me, it was my duty to set the Chair up for success. 25 Hence -- 99 1 Q. So is it your evidence that this hasn't been responded 2 to yet? 3 A. We've had a discussion, I have had a discussion, and so 4 did Mr Jacobs, regarding this document, and the response 5 that I received from Mr Railton was the strategic review 6 will be addressing these points. So again, it's 7 premature for me to say whether each point has been 8 addressed yet. 9 MR JACOBS: Thank you. I just need to check if I have any 10 more questions for you. I haven't. Thank you, that's 11 all I have. Thank you. 12 MR BLAKE: Thank you, sir. 13 SIR WYN WILLIAMS: Is that it, Mr Blake? 14 MR BLAKE: Yes, unless you have any questions, sir? 15 Questioned by SIR WYN WILLIAMS 16 SIR WYN WILLIAMS: Well, actually, just one. 17 I've understood that there are, in round figures, 18 11,500 branches. That's a goal, I think, that the 19 Government set. When the survey was sent out, it was 20 sent out to approximately 6,500 postmasters or 21 subpostmasters. Can I take it that the reason for the 22 difference is that there are some large partners, like 23 supermarkets, et cetera, who run many branches? 24 A. Yes, sir, but there was, from what I have seen -- and 25 again, when the Post Office conducts internal surveys, 100 1 they are promoted to be filled in and responded back to. 2 Regarding your survey, the NFSP pushed your survey being 3 filled and so did the Voice of the Postmaster. I didn't 4 see -- 5 SIR WYN WILLIAMS: No, I wasn't asking that. 6 A. Okay. 7 SIR WYN WILLIAMS: At first sight, it seemed a little -- 8 A. Yes. 9 SIR WYN WILLIAMS: -- unusual that there was 6,500 10 postmasters but 11,500 branches. I was simply, I think, 11 understanding that that's because many of the branches 12 are run by large organisations? 13 A. Yes, sir, but there are also postmasters with multiple 14 branches also. So -- 15 SIR WYN WILLIAMS: Sure. 16 A. -- again -- 17 SIR WYN WILLIAMS: So that's the reason? Fine. 18 A. And, from my experience, the number of postmasters is 19 approximately 7,000, so you weren't that far off. 20 SIR WYN WILLIAMS: Right. Thank you. 21 Well, we'll end on that happy note, Mr Ismail. 22 Thank you very much for making a very detailed witness 23 statement and for giving evidence both yesterday and 24 today. I'm grateful to you. 25 THE WITNESS: Thank you, sir. 101 1 MR BLAKE: Can we come back at 1.50, please, sir. 2 SIR WYN WILLIAMS: Well, I was going to ask you, are we 3 managing the time for Mr Elliot this afternoon? I mean, 4 that's still giving us an hour for lunch, isn't it? 5 MR BLAKE: Absolutely. 6 SIR WYN WILLIAMS: Yes, that's fine. Good. 7 MR BLAKE: Thank you. 8 (12.50 pm) 9 (The Short Adjournment) 10 (1.50 pm) 11 MR BLAKE: Good afternoon, sir, can you see and hear me? 12 SIR WYN WILLIAMS: I can but only faintly, Mr Blake. 13 MR BLAKE: This afternoon we're going to hear from 14 Mr Jacobs. 15 SIR WYN WILLIAMS: It's still not quite right. 16 MR BLAKE: I think my microphone has been turned on. 17 SIR WYN WILLIAMS: Now, it's right. 18 MR BLAKE: We're going to hear from Mr Jacobs this 19 afternoon. 20 ELLIOT MARC JACOBS (sworn) 21 Questioned by MR BLAKE 22 MR BLAKE: Can you state your full name, please? 23 A. Elliot Marc Jacobs. 24 MR BLAKE: Mr Jacobs you should have in front of you 25 a witness statement, dated 15 August this year; is that 102 1 right? 2 A. Yes. 3 Q. That witness statement has the unique reference number 4 WITN11180100. Can I ask you to turn to the final 5 substantive page, that's page 29. Can you confirm that 6 that is your signature? 7 A. I can. 8 Q. Can you confirm that that statement is true to the best 9 of your knowledge and belief? 10 A. It is. 11 Q. Thank you very much. That witness statement will be 12 published on the Inquiry's website shortly. Just by way 13 of background, you've said in your statement that in 14 1998 you purchased a stationery company called Universal 15 Office Equipment; is that right? 16 A. Yes. 17 Q. You established an online business-to-business 18 stationery division; is that correct? 19 A. Yes. 20 Q. In 2014 you negotiated a franchise agreement with the 21 Post Office? 22 A. Yes. 23 Q. That's grown over time and you now have eight stores, 24 mainly in North London? 25 A. North London and Hertfordshire. 103 1 Q. Thank you. When you say eight stores, is that eight 2 branches of the Post Office? 3 A. Correct. 4 Q. You set out in your statement various other positions 5 you've held but, for today's purpose, it's relevant that 6 you are a Non-Executive Director of Post Office and have 7 held that position since 2021; is that correct? 8 A. That is correct. I also operate a Bank Hub. 9 Q. Thank you. In terms of the Non-Executive Director 10 position, you applied, having seen an advert in a Post 11 Office circular; is that right? 12 A. Yes. 13 Q. We heard a bit about the process. I won't go over again 14 the basic process but you in your statement have 15 addressed an issue upon standing again for the position. 16 You didn't satisfy criteria this time round. Can you 17 assist us with what that criteria was? 18 A. So the important part of it was around corporate memory. 19 I was conscious that both Mr Ismail and myself had fixed 20 terms and we had become -- although not expected when we 21 joined, we were already the oldest standing non-execs on 22 the Board and for us both to depart simultaneously would 23 be a lack of corporate memory that this organisation so 24 desperately needs. And so, having tried to express the 25 importance of having some sort of, you know, different 104 1 approach to the way we were going to be offboarded 2 I took the decision that I wanted to stand again in 3 order to try and keep that corporate memory going, if 4 I wasn't going to be able to provide a decent level of 5 transition. 6 Mr Ismail and myself met with members of the 7 Postmaster Engagement Team to discuss the approach to 8 appointing the next round of NEDs for postmasters. They 9 listened and then decided upon a series of criteria that 10 don't really provide any relevance to the role but, in 11 fact, would favour a postmaster with less expansive 12 business. 13 Q. So you have eight branches. Is it more likely that 14 someone with a smaller number of branches would satisfy 15 the criteria? 16 A. Correct. 17 Q. Do you know why that criteria was introduced? 18 A. No. 19 Q. Do you think it was intended to ensure a different type 20 of subpostmaster to yourself and Mr Ismail joined the 21 board? 22 A. I can't say what they were thinking. I think, from my 23 view, we provide a robust challenge that perhaps is more 24 of a robust challenge than they thought they would get 25 and perhaps the hope was that by having someone with the 105 1 need to devote more time to their smaller operating 2 business, that they might not get so much oversight. 3 Q. In terms of your original appointment and your training 4 and experience, you've said at paragraph 35 of your 5 statement that the Board hadn't considered the 6 infrastructure and training required to support 7 Postmaster Non-Executive Directors; can you expand on 8 that, please? 9 A. We were the first and, although I've held non-executive 10 roles before, in significantly less complex businesses 11 than this one, I think Post Office underestimated the 12 need to train us properly. The training was intense, 13 but limited, and didn't really set us up for success, 14 nor was there ongoing advice and guidance around 15 managing conflicts, making certain that we had the right 16 support going forward. I think they were learning on 17 the job. 18 Q. Do you feel that the role was something that Post Office 19 genuinely wanted to have? 20 A. Yes. 21 Q. Do you think that it is still a role that the Post 22 Office genuinely wants to have? 23 A. That's harder to answer. I would say: in part. 24 Q. What do you mean by that? 25 A. Again, I think a lot of good has come out of us being on 106 1 the Board. I think the comments I've received from 2 other Non-Execs, from members of the Executive and from 3 the Chief Executive, Nick Read, was that he, both openly 4 and in public and privately, has said to me that the 5 rigour we bring, the challenge we bring, the real-world 6 experience we bring, is greatly appreciated, and has 7 made a significant difference to the way the Board 8 operates but I do wonder whether -- having read some of 9 the comments in the bundle you've provided, whether 10 everyone feels that way. 11 Q. Is there anyone in particular who you feel doesn't feel 12 that way? 13 A. Well, I think the readout from the meeting with Minister 14 Hollinrake sort of implies quite a bit. 15 Q. What does it imply to you? We saw it yesterday, so we 16 don't need to bring it up onto screen. 17 A. I was disappointed to read how Mr Ismail and myself were 18 perceived, certainly not how it happens in real life, 19 and that we would be perceived in that way, I think, is 20 disrespectful to the effort that we've made. 21 Q. Do you think it was caused by any particular incidence? 22 A. I think there's a difficult balancing act, as a non-exec 23 and as a postmaster. I've always sought to find the 24 balance and Mr Ismail and myself are aligned in many 25 ways because we are postmasters but we are from 107 1 different viewpoints and we agree on much but we don't 2 agree on everything. 3 But I can understand how some people on the Board 4 may see that, in us fighting and discussing and debating 5 actively for postmasters, both present and past, that 6 they may feel that we are bringing a level of postmaster 7 interaction that they didn't expect. 8 Q. We've seen in some documents reference to an oversight 9 committee or the creation of some sort of other body. 10 A. Mm. 11 Q. What are your views on that? 12 A. I think the engagement of postmasters and all 13 stakeholders are fundamental in making the Post Office 14 right for the future. I don't think the word 15 "oversight" is necessarily right. You can get caught up 16 in the descriptive terms, but I do think that bringing 17 experience and knowledge to the heart of Post Office is 18 what it's about, but it needs to enable Post Office to 19 move swiftly and effectively, and with knowledge from 20 all parts of the business. 21 Q. You commented on the training you received. Was there, 22 in your view, sufficient training in respect of the 23 historic issues that the Inquiry's investigating? 24 A. Not at all. 25 Q. What kind of training do you think should be 108 1 implemented? 2 A. I think, for a start, to understand where we're going, 3 you have to understand our past and, for me, when 4 I joined the Board, I think it's fair to say that I did 5 not understand the depth and scope of what had happened 6 in the past. I, like many postmasters, had been told, 7 "There's a few people who were found guilty but it's 8 okay, they were guilty", and what I learned after 9 joining the Board and being prompted by some of the 10 community of postmasters that I began to connect with 11 was that there was an entire story I didn't know. 12 I took the time to read the Nick Wallis book, which 13 was both shocking and incredibly informative. 14 I listened to the podcasts. I had read some of the 15 documents from the court case and case studies, and 16 I basically did my own groundwork to find out what we 17 had done and how it had happened and, frankly, the ITV 18 drama should be standard practice for everybody to read 19 and watch, because that really sets it up absolutely 20 right. 21 Q. What did you feel of the knowledge of those around you 22 on the Board; did they have a similar state of 23 knowledge? 24 A. So the Board has changed a lot whilst I've been there, 25 as I say, Mr Ismail and myself were the longest standing 109 1 NEDs. So there's been quite a change on the Board. 2 When I joined, some of the Board members had been there 3 for quite some time and I'm sure they had some of that 4 corporate memory. The people who are on the Board now 5 have all been there just a matter of months or years and 6 I don't believe they've that the immersion that perhaps 7 they should. 8 Q. In terms of committees, you've said at paragraph 55 of 9 your witness statement that Mr Staunton wanted the 10 Postmaster Non-Executive Directors on more committees 11 but there was push back against that. Can you tell us 12 a little bit more about that including where that 13 pushback was coming from? 14 A. Mr Staunton was very pro-postmaster I would say, he 15 wanted this to be very postmaster centric, he wanted to 16 drive forward an agenda of putting the postmaster at the 17 centre of the Post Office, which we'd talked about for 18 quite a long time but hadn't quite executed. He was 19 keen to have us involved in some form of postmaster 20 council, or whatever terminology you wish to use, and 21 was keen to see both Saf and I extended, as well as 22 additional postmasters brought onto the Board. 23 Q. Where was the pushback against that coming from? 24 A. I don't know precisely, but elsewhere. 25 Q. You've said also in your statement that no Postmaster 110 1 Non-Executive Directors sit on the Remediation 2 Committee; do you know why that is? 3 A. I don't know why but that is true. 4 Q. Could we please turn to POL00448396. This is an email 5 we've already seen from today from Amanda Burton to 6 Mr Ismail and yourself, and she says: 7 "Hi Saf and Elliot, I know you requested more 8 information about the annual bonus scheme and the 9 long-term bonus scheme. I had thought you had access to 10 all the papers but now I have done some digging, I have 11 covered you don't. I have suggested that Rachael takes 12 this up with the Nigel as I for one would be happy for 13 you to see everything on Diligent." 14 Can you assist us with what the difficulties were in 15 obtaining information prior to this email? 16 A. So the Post Office Board covers a very wide remit of 17 work, and within the work on the non-execs we are also 18 assigned to various other committees that then report up 19 to the Board, such as the Audit and Risk Committee, the 20 Remuneration Committee, the Nomination Committee, 21 there's lots of different committees. Each of these 22 committees has a remit and a chair, and, if you're not 23 on that committee, you don't have access to the data, 24 information or notes that are made to that committee. 25 You just get the read-out from the Chair at the Board in 111 1 a sort of two-minute update, for want of a better word. 2 When this came about and as a result of this 3 communication, Nigel Railton, who is the current interim 4 Chair, took the decision -- I think excellently -- that 5 two things would happen: first, that all committee 6 documents would be open to all members of the Board, and 7 any Board member could attend any committee as 8 an observer at any time. I think that's an excellent 9 improvement. 10 Q. We know that in 2021 and 2022 there was an inquiry 11 metric in respect of the bonus scheme? 12 A. Yes. 13 Q. Were you aware of that, did you have any involvement in 14 that? 15 A. No, I don't sit on RemCo. 16 Q. Again, you say you're not aware of the reason why you 17 don't sit on RemCo. Has anything been communicated to 18 you as to whether it would be a good or bad idea for you 19 to sit on that committee? 20 A. Well, I assume it's potentially because being 21 postmasters they felt there may be a conflict but you 22 would have to take that up with someone else. I would 23 have accepted the offer to be on RemCo, were it offered 24 to me. 25 Q. You would have accepted the offer but do you think it 112 1 would be a good thing or a bad thing? 2 A. I think it would be a 'thing'. I think for us to be on 3 any committee is good thing. I don't think there should 4 be anywhere in this organisation where a stakeholder 5 with such an important aspect within the business 6 shouldn't be involved. Now, how you balance that 7 against making certain that there is no conflict, is 8 important but I don't think there's necessarily conflict 9 when you think about the wages and bonuses that you're 10 paying staff members who should be delivering the 11 quality of service to the entire business. 12 Q. In terms of Board papers themselves, at paragraph 45 of 13 your witness statement, you've said that: 14 "The Post Office has a tendency to blend accurate 15 data with inaccurate data" -- 16 A. Yeah. 17 Q. -- "meaning the true picture of a project is often 18 skewed." 19 A. Mm. 20 Q. Can you give us an example of that? 21 A. Some of the documentation that's given to Board is 22 weighty but light on information. The quality of the 23 Board papers has been up and down, over the course of my 24 time on the Board, and I'm quite detail orientated and 25 conscious of making certain that information I'm given 113 1 is full and accurate. And there have been times where 2 we've been given information on which we are to form 3 an opinion which latterly is seen to be not the entire 4 picture. 5 Q. Where does that come from? 6 A. The briefings we're given are insufficient or are 7 lacking in complete data. 8 Q. Is that from a particular team, or every team, some 9 teams? 10 A. It's not unique to one team. 11 Q. Is there a team in particular that you have in mind? 12 A. Well, when I think of examples of the situation, I'd be 13 thinking of some of the data out of the retail team, and 14 I'd also be thinking about things like Past Roles and 15 Phoenix. 16 Q. We'll get on to those in due course. 17 Communicating with subpostmasters. Could we please 18 bring up on screen our expert report from YouGov, it's 19 EXPG0000007. If we turn to page 39, we saw when we went 20 through this report, if we scroll down slightly, that 21 a large number of subpostmasters are aware what there 22 are Non-Executive Director Subpostmasters: 72 per cent. 23 But then if we scroll down, we see there it says: 24 "Despite high awareness of [subpostmasters] being 25 appointed to the Board ... a majority (57%) disagreed 114 1 that the [subpostmasters] serving on the Board share in 2 with them, while only approximately 15% agreed." 3 Can you assist us with what you see as the reason 4 for that? 5 A. Well, we were told specifically -- we were told 6 specifically that we were not to communicate directly 7 with postmasters through social media or when we asked 8 for the Communications Team to provide briefing notes 9 that we could share or stuff that they felt was 10 appropriate for us to put into the public domain, 11 nothing was given. 12 Q. Who asked you? 13 A. Sorry? 14 Q. You said you were asked: who by? 15 A. That would be the former Head of Communications, Richard 16 Taylor. 17 Q. Do you know why you weren't allowed to share that 18 information? 19 A. Well, obviously, we have a balancing act between the 20 confidentiality of being a Non-Exec Director, which 21 I absolutely respect. We also have the need to provide 22 our postmasters with confidence that we're there doing 23 the job we were elected to do, and I think "elected" is 24 an important part of this. We are the only members of 25 the Board elected by anyone and we stand there not only 115 1 as representatives of postmasters but we stand there to 2 do the job of a non-exec, like all the others. But we 3 also have this duality of making certain that we inform 4 and make certain postmasters understand that we are 5 driving the agenda forward and making certain that 6 change happens. 7 Q. You've said that the former Head of Communications was 8 not in favour of you communicating with 9 subpostmasters -- 10 A. Well, I wouldn't say he was -- I wouldn't say -- sorry 11 to cut across you. 12 Q. Absolutely. 13 A. I wouldn't say he was unfair; he just didn't do 14 anything. 15 Q. Has that position changed? 16 A. Well, we haven't been provided with any other type of 17 briefing note since, so I would say probably not. 18 Q. You've mentioned in your witness statement the Voice of 19 the Postmaster, also the NFSP, Communication and Workers 20 Union; are you encouraged to speak with any of those 21 three organisations? 22 A. So, more recently, the recently appointed interim Head 23 of Communications has engaged all of those parties, and 24 both Mr Ismail and myself, in discussions face to face, 25 in the same room, around tone of voice and how to 116 1 communicate with postmasters. So very, very recently in 2 the last few weeks we have seen a shift but that's since 3 the new appointment of this interim person. 4 Q. You've mentioned in particular the Voice of the 5 Postmaster and you've said that they have more members 6 than the NFSP? 7 A. They do. 8 Q. What is the future plan for the relationship between the 9 Voice of the Postmaster and the Post Office, as far as 10 you're aware? 11 A. So the NFSP has a contracted relationship with the Post 12 Office, which you'll be aware of. The Voice of the 13 Postmaster is a cooperative group of postmasters who 14 have come together to create a voice for postmasters. 15 I believe we should engage with all parties at all times 16 and get the widest breadth of views that we can from our 17 community. I don't believe there's a clear strategy for 18 what that is right now. 19 Q. Do you have any views as to the effectiveness of the any 20 of those organisations vis à vis each other? 21 A. Well, the Voice of the Postmaster a voluntary 22 established business where people put in their time for 23 the love of doing it. I always think that's a great 24 place to begin. I can't say I've had huge experience 25 with the NFSP. I know Calum from my work on the Covid 117 1 recovery group with him but, beyond that, I haven't had 2 a lot of interaction with them. 3 Q. Thank you. I'm going to move on to a separate topic 4 now, and that's an investigation that was carried into 5 you and your business, and you've detailed that in your 6 witness statement, but we'll go through a number of 7 different documents. 8 You say at paragraph 19 of your statement that you 9 received a call from the Chair, Henry Staunton, in March 10 2023. Can you assist us with what was said on that 11 conversation? 12 A. Yes, I don't think it was a call, I think he asked me to 13 pop into his office after a Board meeting and he said to 14 me, "Elliot there's a query on your account. I don't 15 know what it's about. Could you have a chat with Ben 16 [Ben Foat, the Head of Legal], just see what it is and 17 sort it out for me", and I was like, "Sure, no problem". 18 Q. Did you speak to Mr Foat at that point? 19 A. Absolutely. 20 Q. What did Mr Foat say? 21 A. He said he would get someone in his team to contact me 22 and walk me through the query. 23 Q. Did he give you any detail as to what the concern might 24 be? 25 A. No. 118 1 Q. Can we please turn to WITN11180101 and we'll start at 2 the penultimate page, page 5, at the bottom of page 5. 3 This is an email to you from Andrew Morley who is 4 a Senior Investigations Manager, and he says as follows, 5 this is 14 March last year: 6 "I am employed by [the Post Office] as a Senior 7 Investigations Manager within the Central Investigations 8 Unit and I have had reason to conduct an investigation 9 into alleged discrepancies at post offices within the 10 Universal Office Equipment group. I would now like to 11 arrange to interview you in connection with the alleged 12 discrepancies and to this end please can you provide 13 your availability", and he sets out the dates there. 14 At this point, so 14 March, on receiving this email, 15 had you received any other paperwork in relation to this 16 investigation? 17 A. Not to my knowledge. 18 Q. Were you aware, at this stage, whether it was a criminal 19 investigation, a civil investigation, a professional 20 misconduct investigation or some other investigation? 21 A. No. 22 Q. We're going to return to this email chain but perhaps we 23 can just bring onto screen the Project Birch report, 24 that's POL00423697. 25 If we turn page 10 of that report, it's a report we 119 1 saw with Mr Ismail earlier today. In the bottom 2 left-hand side here of this document -- do you recall 3 this document ever being discussed at the Board, this 4 report? 5 A. I do not recall it, no. 6 Q. It's a report by KPMG and they say as follows: 7 "Currently investigations are often undertaken 8 within [the Post Office] from a contractual perspective 9 and there is little consideration at the start of 10 an investigation as to whether it could potentially 11 result in criminal, civil or disciplinary proceedings. 12 Early engagement with [Post Office] Legal would enable 13 proper consideration of criminal or civil standards or 14 consideration of when to liaise with [law enforcement 15 agencies]." 16 So that report was dated 13 August 2021, so a couple 17 of years before your investigation. Do you think that 18 by the time it came to your investigation, that lesson 19 had been learnt? 20 A. It wouldn't seem so, on the basis of the emails sent. 21 Q. If we could return, please, to the emails. That is 22 WITN11180101. If we could go back to page 5. In the 23 middle of page 5 you respond to Mr Morley and you say: 24 "Thank you for your email. 25 "I assume this is related to the query raised by Ben 120 1 Foat with me. 2 "As I explained to Ben I would be happy to assist 3 you in your enquiry", and you give your availability. 4 If we scroll up, please. Mr Morley responds: 5 "Thank you for your prompt response and I can 6 confirm that the interview is in connection with the 7 matter about which Ben spoke to you about recently. In 8 line with your available I have arranged an interview 9 ..." 10 He says: 11 "The interview will be conducted by myself and John 12 Bartlett who is the Head of the Post Office 13 Investigation Branch. Please find attached a letter 14 from John explaining in some detail the format of the 15 interview and the areas we wish to cover." 16 We will return again to this email chain but let's 17 have a look at that letter. It's WITN11180102. It's 18 dated 15 March and this is the letter from Mr Bartlett 19 to you. He says: 20 "My name is John Bartlett. I am the head of the 21 Central Investigation Unit within Legal, Compliance and 22 Governance at the Post Office." 23 Were you aware of Mr Bartlett before receiving this 24 letter? 25 A. I don't know. 121 1 Q. It says: 2 "Andrew has been investigating shortfalls at Post 3 Office branches within the Universal Office Equipment 4 group and has invited you to a voluntary investigative 5 meeting on 5 April 2023 at [the Post Office's] offices 6 ..." 7 Did you understand this to be a meeting or something 8 more formal? 9 A. Well, I've run my business for 26 years and, over 26 10 years, you get queries between a supplier and 11 a customer, which is the relationship that one would 12 assume I have with Post Office, in many respects, and 13 when that sort of thing happens, normally I'd know, 14 an accounts department might contact you, they might 15 send you some documents to review. You'd go back to 16 them and query some things and you'd find a resolution. 17 Maybe you'd have a meeting to discuss it in a, you know, 18 professional and normal business manner. This did not 19 feel like that. 20 Q. "Subjects to be discussed", the first is "Shortfalls", 21 and he sets out there some shortfalls that he says have 22 been identified. He says at the bottom there: 23 "We would like to discuss with you this mounting 24 shortfall, understand what you think caused them, and 25 identify any reasons for not continuing to engage with 122 1 the PAST team." 2 Who are the PAST team? 3 A. I don't remember what the acronym stands for, we have 4 a lot of them in the Post Office, but they're basically 5 the accounting support team of some sort. I don't 6 remember. 7 Q. Had you been told by the PAST team that they were 8 passing on the matter to the Investigation Team to carry 9 out an investigation? 10 A. No. I hadn't had any communication with them in some 11 time. It turned out through the investigation that 12 they'd been writing to an address that isn't my Head 13 Office and they never phoned me or emailed me. I also 14 was at the Post Office Headquarters regularly for Board 15 meetings. I have a personal assistant at the Post 16 Office headquarters, because of my non-exec role, and 17 I'd been in meetings with Ben Foat repeatedly. No one 18 ever came to me and said, "Elliot, there's a query, 19 could you have a chat with them". 20 Q. Second issue is a potential conflict of interest. 21 Briefly, what's the allegation there? 22 A. I later found out it related to the signature of 23 a declaration to do with any connected activity between 24 myself and Post Office Limited. 25 Q. Something that potentially Post Office would have been 123 1 aware of when you became a Non-Executive Director? 2 A. As a Postmaster Non-Executive Director, I thought it was 3 inherent in the name but, yeah. 4 Q. Over the page, please a further issue with Directors' 5 declarations; can you summarise very briefly what that 6 issue was? 7 A. This was the point made, I believe, that there was 8 a form to do with director remuneration. Obviously my 9 company provides the services. I do not personally 10 provide the services of my post offices and, therefore, 11 when I completed the form, I signed it as having no 12 other direct income. I latterly found out that the 13 correct approach to that would have been to declare the 14 companies for which I'm a director and have revenue, but 15 I was given no guidance by the Company Secretary on 16 this, I was given a form and told -- and it was part 17 completed -- and I was told to sign it, and I did it in 18 the best faith but, in hindsight, I did it wrongly. 19 Q. If we scroll down we can see there's a section on 20 "Conduct of the meeting", so they're providing you with 21 certain documents and we'll get on to the discussion 22 between you and the investigators in respect of those 23 documents: 24 "I wish to reiterate that your attendance at this 25 investigative meeting is entirely voluntary." 124 1 Again, is it a meeting or is it an interview? 2 A. I've never been in a meeting that looked like this one. 3 Q. "If you chose to attend you may, of course, leave at any 4 time you wish, or you may choose not to answer some or 5 all questions. This is not an 'under caution' 6 interview; it is an opportunity for both you and the 7 investigators to discuss the three areas identified 8 above in order to increase our understanding of what has 9 happened. 10 "In attendance at the meeting will be myself and 11 Andrew. If you wish, you may be accompanied by 12 a friend, or a National Federation of SubPostmasters 13 representative, or a colleague, or a legal 14 representative. However, your companion will not be 15 able to answer questions on your behalf." 16 Do you have a view on that position? 17 A. Yes. 18 Q. What is that view? 19 A. Again, taking my experience as a longstanding 20 professional in the business world, I can't imagine any 21 other situation where a Chief Executive of one company 22 would visit an organisation it works with, bring 23 representatives to the room and not be allowed to let 24 them speak on their behalf. I think that's highly 25 wrong. 125 1 Q. Are you aware of the reason behind it? 2 A. No. 3 Q. It then continues: 4 "We would like your permission to audio record the 5 meeting. This is to ensure that we can give our full 6 attention to the discussion rather than taking lengthy 7 notes. An audio recording also provides the best record 8 of a meeting which avoids mistakes or misunderstandings. 9 We will ensure that you have a copy of the recording as 10 soon as practicable after the meeting." 11 If we can please go back to the email 12 correspondence, that's WITN11180101, and can we please 13 turn to the bottom of page 3. You say as follows: 14 "I have begun reviewing the documents you have sent. 15 "To begin, can you supply the 44-page PDF statement 16 in Excel format, broken down by branch so we can review 17 this in a format that enables us to look at data 18 properly. The document you have provided is not in date 19 order, and contains no explanation or notes for each 20 line." 21 Can you assist us with the issue there? 22 A. Have you ever tried to analyse a 44-page pdf? It's 23 impossible. It's impossible. The level of data we were 24 given was frankly a disgrace. 25 Q. It continues: 126 1 "Please provide line detail including the reason for 2 each ..." 3 Is that transaction correction? 4 A. Yes. 5 Q. BD? 6 A. I'm not sure, actually. I think it might be some sort 7 of bank deposit or something like that. I'm not sure 8 what a BD is. 9 Q. And the TP? It's not a test! 10 A. I'd need a bigger book than this! And the TP, that's 11 the trading period. 12 Q. Thank you: 13 "... (and the [trading period] in which is occurred) 14 so that this can be properly reviewed. Please include 15 original transaction data." 16 To get an idea, can we understand how big a business 17 is your business; how many transactions take place? 18 A. So to put it into scale, over the 10-year period or 19 nine-year period that this data related through, my 20 branches would have handled maybe somewhere in the order 21 of £1 billion worth of transactions. I have somewhere 22 in the order of 35 terminals/40 terminals, maybe, plus 23 self-serve kiosks, a huge amount of data, none of which 24 can be interrogated either locally or remotely by me, 25 except to print out a till receipt from the terminal 127 1 it's on, which would be like getting a till receipt for 2 your shopping and then trying to wade through it. 3 One afternoon of receipts for that alone could 4 perhaps run to a length of printout that could be 5 25 metres long. 6 Q. You then say: 7 "Additionally, the attached file cannot be 8 accessed -- please provide access to where [the] file is 9 stored or an actual jpg copy." 10 Do you recall what that issue was? 11 A. There was a link to a file which was on a secure server 12 that I couldn't access. 13 Q. If we scroll up, please, to the top of page 3. The 14 response: 15 "Account statements and letters were sent to 16 [an address]. I can confirm that I have a copy of each 17 email which I will access in a few moments and will 18 forward on to you. 19 "Can I respectfully suggest that you address the 20 rest of your requests below to the Post Master Support 21 Team ..." 22 So that's what "PAST" stands for: 23 "... as per the letters/emails sent to you at the 24 time of the occurrence by PAST in which they offered to 25 work with you to understand the discrepancy." 128 1 So am I right to understand that here the 2 investigator has received a query from you and the 3 investigator is directing you to contact a different 4 team to obtain the underlying information? 5 A. Yes, and what concerned me here was that he decided that 6 he wants to do an investigation without actually having 7 the data himself to provide, which I thought was 8 bizarre. 9 Q. Could we scroll up, please. I think you've expressed 10 that to him. You say: 11 "As you must have fully reviewed and collated this 12 data in order to form your review so far, I would assume 13 this must be something you have to hand. 14 "It will surely be quicker for us both for you to 15 provide me with your working documents (which I assume 16 must contain the data I have requested) and not delay my 17 investigation than me start from scratch with another 18 department." 19 If we scroll up, please, to page 1, the response 20 from Mr Morley. He says: 21 "I have now had an opportunity to with the PAST. 22 They will generate an Excel version of the 44-page 23 Account Statement ... to which you refer. The 24 spreadsheet will be broken down by branch and in date 25 order. [They] will provide commentary for transaction 129 1 corrections, however, due to the number of outstanding 2 [transaction corrections] since 2019 this is no small 3 ask and will take some time to collate. I will be in 4 touch again once I have received the document from the 5 team." 6 What's your view about what's said there? 7 A. Well, again, how do you investigate something and decide 8 you want to call me in without having done the work 9 before? 10 Q. He says: 11 "Earlier this afternoon I forwarded you a copy of 12 the emails previously sent to you by PAST. Please can 13 you acknowledge receipt." 14 Were those the emails that you've said went to 15 an address that wasn't your -- 16 A. The emails went into my junk because they come from 17 a random server at Post Office and the server detected 18 that they were random communications with no 19 personalisation and it went into my junk mail, which 20 I never saw. The letters that they sent, they sent to 21 one of my branches and they were not addressed to the 22 postmaster. They just looked like a statement of 23 account. 24 Q. He then says: 25 "I have reattached the JPEG screenshot of the 130 1 Partnership Portal", and goes on to detail that issue. 2 If we scroll up, please, to the top of page 1, you 3 say: 4 "I am surprised that you have been able to form 5 a fully rounded opinion, sufficient to make some of the 6 very serious accusations in your prior communications 7 without carrying out a full and detailed review of the 8 data? 9 "The amount of distress and worry and this has 10 caused me since your email letter this week has been 11 significant." 12 Can you assist us with your feelings at that time? 13 A. It was incredibly stressful, and you have to put into 14 context for this the fact that, as a Non-Exec Director 15 and postmaster, who had immersed himself in prior -- not 16 previous -- not long before this, in really 17 understanding what we did as an organisation to 18 postmasters before, the fear and worry this caused me in 19 terms of it felt like the past repeating itself. 20 Q. You've said: 21 "I have been available on the phone ... on which 22 I regularly receive calls from all manner of departments 23 in Post Office every single day ... so what number they 24 have been calling I have no idea! As you can see from 25 are communications so far -- when I am contacted, I deal 131 1 with things -- rapidly." 2 Can we please turn to WITN11180103, and can we start 3 on page 2, please. There's continuing correspondence 4 about disclosure. You email Mr Morley and you say: 5 "I will await your proper and fully disclosures and 6 will then take the matter under advisement." 7 This is 20 March: 8 "In addition, you have provided a highlight section 9 of Board minutes -- can you please specify the 10 accusation being made for the avoidance of doubt and the 11 evidence on which you are relying in this regard?" 12 So we saw the original accusation in that letter 13 from Mr Bartlett. You have been provided with 14 a highlighted section of Board minutes. Did you 15 understand the allegation that was being made against 16 you? 17 A. Not fully. It wasn't clear. They'd highlighted 18 a section of Board minutes, if I remember rightly, that 19 referred to conflicts, and it basically said, "No 20 conflicts". What I later found out, obviously, is that 21 my job title wasn't sufficient for people to know that 22 I was a postmaster. 23 Q. Was the expectation that every time you went to a Board 24 meeting you would declare that you were a subpostmaster? 25 A. It is exactly what I do now. 132 1 Q. Yes. Then, as you say, is that not in your job 2 description, job title? 3 A. It is in my job title, yes. 4 Q. If we go to the first page, there is a response from 5 Mr Morley. The response is as follows: 6 "I do not intend to enter into pre-interview 7 protected correspondence regarding advance disclosure 8 which I am under no legal obligation to provide and is 9 provided on this occasion out of courtesy in order that 10 you can have a high level understanding of the topics we 11 wish to cover, which are set out in the letter from 12 Mr Bartlett. Further detail regarding [the Post 13 Office's] concerns will be provided during the 14 interview." 15 What do you understand by "pre-interview protected 16 correspondence"? 17 A. I have no idea. 18 Q. There is now a reference to it being an interview, 19 rather than a meeting. Was that distinction clear to 20 you at that point? 21 A. It felt like that was what it was going to be from the 22 start. Again, this is not the way businesses behave 23 typically, in my experience. 24 Q. He said: 25 "I am seeking in advance of the interview your 133 1 agreement to the recording of the interview which of 2 course will provide the most accurate record, enables 3 a more natural conversation and is less time consuming 4 than the alternative and therefore, has to be in the 5 best interests of all concerned. If you agree to the 6 recording then you will be provided with a copy of the 7 recording post-interview ... If you are not in agreement 8 to the recording of the interview then we will have to 9 revert to contemporaneous notes, which are very time 10 consuming and with the best will in the world provide 11 a less accurate record. You should be advised that if 12 you elect to go down the contemporaneous notes route, 13 then we will have to extent the length of the interview 14 considerably and based upon my experience of such 15 interviews I think it would be wise to allow 6 hours for 16 the interview." 17 What do you understand by that paragraph? 18 A. I thought it was a shocking way to write to anyone. 19 There were a few things there. Firstly, I sit in Board 20 meetings pretty much every month and we have notes taken 21 by the CoSec. The meeting doesn't go any slower and 22 they are not recorded in any other way than by someone 23 typing as we go. But the inference here was "Do it our 24 way or it'll be three times harder". 25 Q. Thank you. That can come down. On 5 April 2023, you 134 1 attended the interview. Can you describe for us that 2 experience? 3 A. Well, leading up to the interview it was incredibly 4 stressful and I have to put into context here, I am 5 fortunate: I run a reasonable sized business, I have 6 an amazing support team, I have people who are capable 7 of interrogating data to a standard that I personally 8 can't do. I have a very good team around me and even 9 they had to work incredibly hard to understand the 10 information we were given. 11 Going into a meeting which was clearly set up, 12 whatever they say about it being optional or advisory or 13 whatever, it certainly didn't feel like that and, from 14 the tone and the stance of those communications, it 15 definitely felt as though, if I didn't turn up, things 16 would be worse. 17 I went in there, armed as best I could with the 18 information had gathered. I was concerned for my 19 reputation, I was concerned for my business. I know 20 what we'd done in the past and this felt like that. And 21 so I was incredibly nervous going into the room. 22 I chose to take my brother with me, as someone who could 23 bear witness but not speak, and I'm glad I did that, 24 because that really helped. 25 Q. At paragraph 24 of your statement, you said that the 135 1 interview was similar in style to a formal police 2 interview. 3 A. Yeah. 4 Q. In what way? 5 A. Well, again, if I compare it to a normal business 6 meeting, you'd have a conversation, you'd discuss some 7 documents, you'd find where the issue was, you'd take 8 some actions to go forward with, and you'd follow up. 9 This was not that. This was an interview that was being 10 recorded with the dictating machine in the middle of the 11 table; evidence was presented, and it was called 12 "evidence" and it was numbered, much the same as your 13 documents here, in a way that felt very much like 14 a police interview; it was being conducted by ex-police 15 officers; and, whilst the tonality may have had a layer 16 of warmth and friendliness, it certainly felt very 17 different from any other business meeting I'd ever 18 attended. 19 Q. In that email from Mr Morley, he says: 20 "Further detail regarding the Post Office's concerns 21 will be provided during the interview." 22 A. Mm. 23 Q. Were there documents that were presented to you during 24 interview that you hadn't seen before -- 25 A. Absolutely. All of them. 136 1 Q. The next day, the auditors attended, I think you've 2 said, your Post Office: was that every branch, some 3 branches, the headquarters? 4 A. Well, they call them assurance visits now. They're the 5 same people. 6 Q. Where did they co? 7 A. Wherever they like. 8 Q. In terms of your own post offices, where did they go? 9 A. They go into the post office; they shut my post office 10 branches to do the audit. 11 Q. Every branch? 12 A. All of them. 13 Q. I think you've said that there was an issue regarding 14 stamps that arose during that audit. 15 A. Mr Ismail referred to this earlier. Prior to this 16 audit, in one of my branches, I'd been contacted by 17 a department at the Post Office who had instructed my 18 team leader -- in each branch I have someone who runs 19 the branch on a day-to-day basis -- they'd instructed 20 them to do a series of entries onto Horizon to make 21 adjustments to our stock, and these adjustments were 22 unsupported by any data, and when I challenged back and 23 said, "Could you provide the evidence to support these 24 changes you want to make on my account because, if 25 I make these changes I will have a loss in branch", that 137 1 never got followed up. 2 When they came to do the assurance visit, as it's 3 now called, I was instructed, though I hadn't been told 4 prior, that the lead person had been instructed at the 5 end of the audit to make adjustments onto Horizon by 6 logging on with their own log-in and making adjustments 7 to my stock position, which would cause a far 8 significant change in my balance and, therefore, a loss 9 in my branch. I said to them, "That doesn't seem like 10 the right thing to do", and I was basically told they 11 were doing it anyway. 12 Q. So to get the sequence correct, you had an interview 13 with investigators. The next day, the assurance visit 14 takes place. They're presumably checking your accounts 15 for matters relating to the interview but, at the same 16 time, is this a separate issue that they are making 17 adjustments to your account in relation to stamps? 18 A. No, I think there's three things here. There's the 19 historical discrepancy that they are claiming has 20 occurred on the central account, some of which occurred 21 a long time ago for various circumstances, no doubt 22 we'll get to that shortly; a second part, which was to 23 do an assurance visit, which I assumed was because they 24 wanted to make certain what I'd said I had in the branch 25 matched what I had in the branch, which it pretty much 138 1 did; and the third part was a previously uninformed 2 adjustment that they intended to make, which they did in 3 multiple branches. It wasn't just done to me, either, 4 it was done to about 30 different postmasters, 5 I believe. 6 Q. Looking back at that experience, what is your view about 7 the conduct that took place on that occasion? 8 A. Well, historically, we were going in the backdoor and 9 changing stuff; here, we were walking in the front door 10 and doing it. 11 Q. Did somebody talk you through those changes that were 12 being made? 13 A. They told me they were going to make them but they told 14 me at the time they were going to make them. I didn't 15 get a chance to challenge or see any data. I was told 16 that I could dispute them, which I obviously did. 17 Q. We will look at the formal withdrawal of the allegations 18 in a moment but, in broad terms, how was agreement 19 ultimately reached with the Post Office? 20 A. So when the process shifted from them realising that 21 I wasn't perhaps as the guilty party that they had in 22 their mind, because I assume that's what the visit to my 23 branches was to verify, things seemed to relax a little. 24 They passed the matter over to the team based in 25 Chesterfield led by Mel Park, and that absolutely 139 1 changed the situation. 2 When it came out of the investigations department 3 and was being run by Mel's team -- Mel is an accountant 4 with commercial experience from prior -- it was -- 5 I wouldn't say a breath of fresh air but it was a proper 6 business conversation. Myself and my Group Operations 7 Director, we travelled up to Chesterfield and met face 8 to face with the team up there, we met with Mel and 9 three or four of her team. We sat down in a room like 10 proper businesspeople, discussed matters, discussed 11 about what could that have occurred, went through the 12 data, and we worked together as two teams working as one 13 for probably the next, I don't remember, four to six 14 weeks, and we were able to resolve the vast majority of 15 the queries on account, which ended up not being 16 an issue at all. 17 Q. Do you know why it didn't go to that department to begin 18 with or did it go to that department to begin with? 19 A. To the best of my knowledge, I was never contacted by 20 Mel Park prior to that. I had never spoken to Mel Park 21 prior to that. 22 Q. Let's look at the correspondence when the matter is 23 closed. Can we please turn to POL00448303. If we start 24 on page 2, please. The interview was 5 April 2023. If 25 we look here, we can see an email from you to Melanie 140 1 Park on 16 January 2024. You say: 2 "I still await the finalised reporting on our 3 account and also the written confirmation of the 4 withdrawal of the investigation. 5 "You will appreciate that whilst I am keen to 6 commence payment of any liability, I would like [the 7 Post Office] to keep its side of the process so that we 8 can ensure that we are all aligned around the position." 9 If we scroll up, please. Ms Park says: 10 "Apologies I will talk to the Legal Team today to 11 see why this hasn't been done." 12 If we scroll up there is a response from yourself 13 to -- in fact, it's not a response. You forward the 14 matter to the Chairman and you say: 15 "Henry 16 "Below you'll see correspondence from between myself 17 and Mel Park regarding the fact that [your] trading 18 account has yet to be updated with the removal of the 19 invalid claims of losses nor a letter of withdrawal of 20 the investigation to be issued. 21 "Who is responsible. Legal. Again. How are Legal 22 in the way of all things progress and good in this 23 business? Proof, if proof was needed, that their 24 fingers are in every part of the pie affecting our 25 ability to get work done to such a level that it is 141 1 frankly beyond belief." 2 Now, putting aside your own investigation, because 3 you're referring here to legal again, what was that 4 other concern that you had regarding the Legal 5 Department? 6 A. Well, the business is incredibly hamstrung by legal in 7 many, many ways. In all aspects, Legal get into the 8 mix, whether it's an HR issue, an operational issue, 9 they run the Investigation Team. They're everywhere. 10 Q. What was your concern in relation to your own 11 investigation? 12 A. I wanted a letter confirming the matter was closed. 13 Q. If we up we can see Mr Staunton's response. He says: 14 "Dear Both, 15 "This is completely unsatisfactory -- I was under 16 the impression after talking to one of the 17 [Non-Executive Directors] handling this (Lorna?) that 18 the report was wrapped up many weeks ago. I understand 19 the tremendous upset you (and Saf in the case of his 20 investigation) have been subjected to. This requires 21 an investigation. I have sent a filenote of the views 22 of our Postmaster [Non-Executive Directors with regards 23 to] Ben Foat." 24 Is that the Project Pineapple memo? 25 A. No. No, I don't think it is. 142 1 Q. Is that the further memo that we've seen prior to 2 a Board meeting? 3 A. Possibly. I'm not sure. 4 Q. "We should see tomorrow whether our [Non-Executive 5 Director] colleagues should take action. I told Andrew 6 yesterday that all of the [Group Executive] and FOUR 7 Main Board Directors had been investigated. He was 8 incredulous." 9 What do you understand by that sentence? 10 A. Well, as I say, the Investigations Team and Legal are 11 everywhere, and I've never sat on a Board where more 12 than half of the Board have been investigated for 13 something. It's continuous and it's very hard to get 14 anything done without being investigated or without 15 having Legal stop you doing it. 16 Q. Do you think that in some way there is some 17 hypersensitivity or overadjustment because of what 18 happened in the past at the Post Office, and that might 19 listen why the Legal Department are so involved in 20 matters within the company? 21 A. Possibly. 22 Q. Can you think of another explanation? 23 A. We just have a lot of lawyers. 24 Q. In terms of numbers, personalities, individuals; what's 25 the concern? 143 1 A. All of that. I mean, we have, you know, a lot of 2 lawyers doing a lot of things, but Legal are responsible 3 for more than just drafting contracts and compliance. 4 They seem to be -- you know, investigation sits within 5 Legal. I would have thought investigations would sit 6 better in HR. You know, the parameters within which 7 Legal operate seems to be unclear and sometimes I'm not 8 sure who's running the business, whether it's Legal or 9 the business. 10 Q. Let's turn to the letter that withdraws the accusations. 11 Can we please turn to WITN11180104. It's 8 February 12 this year: 13 "As you're aware, the Assurance & Complex 14 Investigation Team ... at [the Post Office] conducted 15 a fact-finding investigation with your assistance." 16 Did you understand that to be a fact-finding 17 investigation? 18 A. No. 19 Q. "I am writing to you to inform you that this matter is 20 closed from the perspective of A&CI." 21 Was it open in respect of some other department, as 22 it was closed in their respect? 23 A. Not that I'm aware of. 24 Q. "The matters centred on two main themes: 25 "1. Did you, in your capacity as a Non-Executive 144 1 Director ... make false, misleading or incomplete 2 declarations on a 'Remuneration form or Directors and 3 Other Key Management Personnel' ... 4 "2. Did you, through your ownership of UOE, fail to 5 address or service shortfall debt owed to [the Post 6 Office] accrued by [your company]. 7 "In respect of the first matter, our findings are 8 that the training and advice you were provided in 9 relation to the completion of this declaration was such 10 that it was unreasonable for you to know whether your 11 financial position with [the Post Office] should or 12 should not have been declared." 13 So it seems an acceptance there that it would have 14 been unreasonable for you to have been aware. 15 A. Correct. 16 Q. "Therefore A&CI has recommended that this matter should 17 not be taken further. We have also recommended to the 18 Corporate Secretariat that the instructions, training 19 and advice to future potential directors is improved in 20 respect of this declaration. This has been logged with 21 Group Assurance for them to monitor the changes in 22 approach." 23 A. That has been carried out. 24 Q. Thank you. 25 "In respect of the second matter, I understand that 145 1 you have for some time now been liaising directly with 2 Central Operations Director, Melanie Park, to address 3 the shortfalls at your branches and to reach a mutually 4 agreed outcome. Now that this arrangement has been 5 agreed, A&CI can close the fact-finding investigation. 6 "I can, therefore, confirm that our fact-find in 7 relation to these matters is now closed. I would like 8 to take this opportunity to thank you for your patience 9 and cooperation in this matter." 10 What's your view of this letter? 11 A. It was late coming. I was pleased to receive it. 12 Q. Have you discussed any crossovers between the way that 13 you were treated in this investigation and other 14 investigations that the Inquiry has heard about with 15 other directors, or with anybody else within the 16 company? 17 A. I spoke directly to Ben Foat, who the team reported in 18 to, and I said to him "You've got to look at way this 19 works. Having experienced it myself, we have not learnt 20 sufficiently how to treat postmasters properly. There 21 are horrific echoes of the past. The terminology, the 22 approach, you've got to learn from this and I'm happy to 23 sit down with anyone you like and share my experience so 24 you get it from my side". 25 Q. Taking your own case as an example, how do you think 146 1 investigations should be carried out? 2 A. I think you start with the premise that there's a query. 3 Can we work together to resolve this query from 4 an operational perspective? Investigations should deal 5 with when that becomes obvious as more than just 6 a query, and there's some sort of criminality, or 7 attempted fraud, or something, you know, significant 8 that is out of the norm of normal business. To assume 9 that it requires the level of investigation -- sorry, 10 "fact-finding" -- that they suggest and yet not provide 11 that documentation to the other party, immediately and 12 fully, so that they can offer suggestions as to what the 13 issue might be, seems at odds with a partnership 14 relationship. 15 Q. To what extent do you see the issue as cultural rather 16 than structural? 17 A. Yes, I think it's a bit of both. 18 Q. How would you change it? 19 A. I think the terms of reference for the Investigations 20 Department needs to be reviewed; the approach and style; 21 the use of what are clearly confrontational styles of 22 messaging need to be adapted; and it should be -- there 23 should be more parity between the two relationships. 24 It's a big challenge in the Post Office that there is 25 this imbalance of power, and you can call them optional 147 1 meetings, or whatever you want to call them: they are 2 clearly not optional if you're a postmaster. 3 Q. We saw the Project Birch report and those 4 recommendations. Are you aware at all of those 5 recommendations having been taken forward? 6 A. There was a document presented to Board for noting which 7 you brought up on screen earlier today with Mr Ismail, 8 which was the attempt by Post Office, I think, to adopt 9 some of those. The execution is a little lacking. 10 Q. Are you aware any in-depth discussions of the way 11 forward? 12 A. Not sufficiently. No one asked for me to share my 13 experience with them within the Investigations Team. 14 Q. Has there been any discussion about looking at the 15 Horizon system as part of the work carried out by the 16 investigators? We saw the document with Mr Ismail 17 before that referred to, for example, investigating 18 those who worked for subpostmasters, but that document 19 didn't seem to address the issue of actually digging 20 down to any root causes of any problems. Is that 21 something you've discussed in any depth at Board level? 22 A. I don't understand the question, sorry. 23 Q. Part of this Inquiry has been looking into a lack of 24 investigation into the root causes of a problem that 25 might be traced to the Horizon system itself. 148 1 A. Yeah. 2 Q. In fact, there has been evidence where there have been 3 cases where the Post Office has said there has been 4 a loss but, in fact, the loss itself has not been 5 investigated as to whether the Post Office has in fact 6 received a loss. 7 A. Mm. 8 Q. Has there been discussion at Board level about that 9 aspect of the investigation process? 10 A. At Board level, the majority of discussions around 11 discrepancies, as to how they're referred to, relates to 12 the line item in the P&L on a monthly basis. The way of 13 handling those discrepancies has come up a few times in 14 different guises but, currently, there is no clear 15 strategy on the way forward for that. 16 Q. I'm going to take you to one more document before we 17 take our mid-afternoon break, and that's another 18 document that we've seen today. It's FUJ00243203. This 19 is the correspondence with Fujitsu in relation to the 20 use of, or provision of, evidence in a criminal 21 prosecution. This is 19 April 2024, so soon after your 22 own investigation. 23 Do you, having read this, consider it appropriate 24 for the Post Office Investigations Team to be contacting 25 Fujitsu in this way? 149 1 A. So I believe this relates to a matter where the City of 2 London Police have decided there is a case that requires 3 investigation. I think that's wholly different from 4 a situation where the Post Office is checking its own 5 homework. The level of rigour that I believe and trust 6 the City of London Police to work to is a standard 7 I think we would all agree should be of the very highest 8 and I trust that, if the City of London Police require 9 information, that there is good cause for it. 10 In those circumstances, I think it's only right that 11 our Investigations Team should work to provide the 12 information for our law enforcement people to do their 13 job and the question here really is, I think: can we 14 rely upon Horizon as a point of reference in those 15 situations? 16 Clearly, Fujitsu do not wish to be associated in 17 that regard and it's clear from their letters. But 18 I think also those letters, you have to look into 19 context of the time, and that was the moment at which 20 Fujitsu were either on the brink, or were just about to 21 apologise for their part in this. But also, it's the 22 conversation between two CEOs trying to protect their 23 side of their businesses. 24 So I think that, for me, sitting on the Board as 25 a non-exec, the important thing that I wanted from our 150 1 Investigation Team before they passed anything over to 2 City of London Police, or any other police force, was 3 that if we believed there was a criminal act that has 4 happened and we're being asked to provide evidence, that 5 evidence should come to Board first, be approved as 6 appropriate and then be released, because it doesn't 7 happen that often that it presents a problem for the 8 Board to look at it a few times a year, and then make 9 judgement that the data is sufficient and right that we 10 can pass it forward. 11 Q. That dispute that we saw in the correspondence between 12 Mr Patterson and Nick Read, was that something that was 13 raised with you or in discussions with members of the 14 Board at all? 15 A. So Mr Read had regular discussions with the CEO of many 16 partner businesses of the organisations that we work 17 with and would update the Board regularly on his 18 discussions with them, but we wouldn't get the minutiae 19 or a copy of correspondence. I wasn't aware of this 20 matter and I wasn't aware that Fujitsu were taking the 21 line that they were. I believe that the tone of 22 communication between the two organisations shifted when 23 Owen Woodley engaged with them and seems to be less 24 fractious now. 25 Q. Do you see a way forward for the two organisations to 151 1 work together? 2 A. I think we have to. It's essential. 3 Q. Do you think it's achievable? 4 A. I don't own the relationship; it would be hard for me to 5 answer. 6 Q. In light of the correspondence that you've seen, do you 7 think that there are issues, significant issues, that 8 need to be overcome in that respect? 9 A. Well, I think you can look at two letters from two CEOs 10 in a moment in time and draw conclusions, but it's 11 a moment in time. I don't believe that Fujitsu and Post 12 Office are unable to work together. 13 MR BLAKE: Thank you. 14 Sir, that might be an appropriate moment to take our 15 mid-afternoon break. 16 SIR WYN WILLIAMS: Certainly. 17 MR BLAKE: Can we come back at 3.15, please. 18 SIR WYN WILLIAMS: Yes. Fine. 19 MR BLAKE: Thank you very much. 20 (3.00 pm) 21 (A short break) 22 (3.15 pm) 23 MR BLAKE: Thank you, Mr Jacobs, we're going to address 24 a few different topics now, starting with the Horizon 25 system itself. If we could bring onto screen your 152 1 witness statement, WITN11180100, and it's paragraph 17, 2 page 5. You set out there a number of issues that you 3 have with Horizon. Is it right to say that you started 4 using Horizon when your franchise first began in 2014? 5 A. Yes. 6 Q. Let's go through briefly those issues that you've 7 raised. The first is that: 8 "It is not a visual, user-friendly system. The 9 system is primarily text based and there are few command 10 prompts. 11 "[Second] It is difficult for postmasters to analyse 12 data and correct potential inaccuracies on the system. 13 It then takes significant effort and often a manual 14 review of transactions to investigate a potential 15 error." 16 Does that tie into one of the issues you raised with 17 your investigation and the access on information? 18 A. Yes, there are two parts there, firstly the 19 investigation being as discussed, but also out the back 20 of that, the lessons learned from my side was we now 21 have our own manual checks that's done in every branch 22 on every till, every day, off Horizon to verify our 23 balances. 24 Q. I think you've said in your witness statement that you 25 do that because of concerns that you have with the Post 153 1 Office's tolerance for error; is that right? 2 A. Well, the tolerance is zero. 3 Q. What's your concern in that respect? 4 A. There is no system that can be wrong 0 per cent of the 5 time. 6 Q. Looking at (c): 7 "Postmasters that run multiple branches cannot 8 obtain a global view of data and are required to be 9 physically present at the relevant Post Office to 10 interrogate data ..." 11 So you run a number of different branches but there 12 is no way of drawing all often your data together? 13 A. No, there is no central access that's available in real 14 time. You can get delayed information weeks or days 15 later, potentially, depending on the time of the month, 16 using a system called Branch Hub, but this has limited 17 data, and you can't drill individual transactions. The 18 only way to get individual data or analysis on an error 19 is to drive to the branch, walk in the front door, print 20 it out and then, by hand, wade through a printed report. 21 There is no Excel export or anything like that. 22 Q. Then (d): 23 "The Horizon IT System is effective as a functioning 24 till, but it is not sufficiently sophisticated to manage 25 and analyse a modern business as a professional 154 1 postmaster." 2 Is that along the same lines as you've just been 3 describing? 4 A. Indeed. The rest of my business all operated on 5 a software platform that I can drill and analyse 6 everything, and this is nothing like that. 7 Q. Can we go to our expert reports, that's EXPG0000007 at 8 page 19. Page 19 sets out the issues experienced with 9 Horizon in the last 12 months, the postmasters have 10 experienced. Are these issues that are familiar to you, 11 at all? 12 A. They would be familiar to every postmaster. 13 Q. Looking at these issues, and also the issues that you've 14 highlighted in your witness statement, do you consider 15 that they are sufficiently well known within the 16 business? 17 A. Explain the question, sorry? 18 Q. You're aware of them because you are a subpostmaster, 19 and you operate branches. Those who completed the 20 Inquiry's survey are aware of them because they are also 21 subpostmasters. Do you think that that information, 22 those messages, reaches the upper levels of the company? 23 A. No. 24 Q. What's the issue there? 25 A. They never touched Horizon. 155 1 Q. Does one have to personally use Horizon to understand 2 those issues or is there a way of communicating that to 3 the Board or to Executives that you don't see happening? 4 A. I think it's hard to realise how archaic the system is 5 unless you have the privilege of using it, and I think 6 what Mr Ismail and myself bring to the Board is that 7 level of real-world experience where we can share the 8 realities of operating within this -- the confines of 9 this system and other processes that we have in the 10 organisation, this just being part of that. But I think 11 that more could be done to immerse senior leaders within 12 the business, and Board members, in understanding how 13 hard it is to run a branch. 14 Q. In terms of the Horizon replacement, the NBIT system, 15 when do you realistically think that that will be 16 implemented? 17 A. I would suggest you speak to the Head of Technology. 18 Q. Do you have any concerns about the implementation? 19 A. It's late. Very late. 20 Q. Do you have any concerns over and above the delay? 21 A. Yes, I think that it's very important we don't just get 22 a Horizon replacement. This business doesn't need 23 a replacement for Horizon; it needs a fit-for-purpose 24 computer system that will be capable of managing the 25 business 20 years from now, 15 years from now, because 156 1 whatever we built from now, is going to have to last 2 beyond the decade. 3 Q. Is that properly understood at Executive level or Board 4 level? 5 A. I think it's beginning to be but, at the moment, it's 6 often referred to as Horizon replacement; it's not. New 7 Branch IT is not a great name for it but it's a better 8 description of what its needs to be. 9 Q. I'm going to move on now to Project Phoenix and Past 10 Roles. I've dealt with that in great detail with 11 Mr Ismail so we'll skip through a number of documents 12 relatively quickly but, if you want to take time over 13 any of the documents, please do say. If we start, 14 please, with POL00448615. This is a Group Executive 15 report on the Past Roles Review, dated 17 January 2024. 16 Can we please turn to page 6. In your witness 17 statement, I think you've said that you originally were 18 lined up for a role in this work -- sorry, it's over the 19 page, page 6. Can you assist us with that? We have 20 here, for example, Mark Eldridge listed as the 21 Postmaster Non-Executive Director? 22 A. Well, in the original daft that I was sent, I was 23 assigned as the Postmaster NED to that committee. 24 Q. What happened to that? 25 A. The process went through a number of different 157 1 iterations and the final constitution of the group 2 didn't include me. 3 Q. Are you aware of any reasons for that? 4 A. It wasn't communicated to me directly. I was led to 5 believe that it could be because I was a postmaster and, 6 therefore, might be conflicted. 7 Q. Who is Mr Eldridge then; is he not a postmaster? 8 A. He is indeed a postmaster. He is the Postmaster 9 Director. 10 Q. So why is it that his name is there and yours isn't? 11 A. You'd have to ask the Chair of the panel, I suppose. 12 Q. What reason do you think it is? 13 A. I don't know, if I'm honest. Mark's role within the 14 business is more executive. I'm non-executive. 15 Everyone else on that committee is executive. Perhaps 16 it was felt that it was an executive committee rather 17 then a non-executive committee. 18 Q. Do you think that the concerns that you've raised in 19 respect of that project has played a role in any way? 20 A. I don't believe we'd have moved forward in the way we 21 are now moving forward if myself and Mr Ismail had not 22 been very forceful and repeated in our requests to get 23 this sorted. 24 Q. Can we please turn to POL00448309. This is just one of 25 the emails that we've been through. We've been through 158 1 a great deal of correspondence on the Phoenix and Past 2 Roles issue. This is an email from yourself sent on 3 10 February 2024, and you say: 4 "It does however seem odd that not a single one is 5 suspended whilst this is ongoing? Why is that? We seem 6 to suspend people on a regular basis when investigations 7 are ongoing? Why not on this matter?" 8 What is your concern in relation to the suspension 9 or lack of suspension of individuals? 10 A. So I've had the privilege to attend this Inquiry on 11 a number of days and see other witnesses give evidence, 12 some of whom were involved in investigations in the 13 past, some of whom remain in the organisation today, and 14 I don't understand how you can change the culture of 15 an organisation and those people still be taking a wage 16 from the business. So it was my view that, whether or 17 not we could deal with that now, because the Inquiry is 18 going on, or whether we should wait until the Inquiry 19 ended, these people had to be not within the business on 20 a daily basis and, if the only way to deal with that now 21 was to suspend them on full pay, I would rather they 22 were paid and sat at home than be in the organisation 23 creating a culture that isn't fit. 24 Q. Where do you draw the line between particular named 25 individuals, individuals who were in particular roles, 159 1 et cetera? 2 A. So you made an example this morning of someone who had 3 reappeared in a different role in a communication at 4 a post office that had been closed. Part of the problem 5 of the organisation is, up until recently, it didn't 6 know who or when people who were in the business 7 currently may have been involved in the past behaviour 8 of the organisation, and so the Phoenix/Past Roles 9 process was about understanding who we have in the 10 organisation, what they were doing in the past when we 11 made such terrible decisions, and what are they doing 12 now, and is -- what's the risk? 13 Now, there are some people, and Phoenix, it latterly 14 turns out -- because again we talked earlier about Board 15 communication, Phoenix and Past Roles were only ever 16 referred to as Phoenix at the Board, up until recently, 17 when they were more clearly defined as two separate 18 projects, but Phoenix is designed to identify what were 19 known as the "reds", the reds being people who are very 20 high-risk category 1 people, involved in investigations 21 who, you know, are -- clearly, should not be in the 22 organisation, as opposed to people who were perhaps 23 employed by the organisation at the time when we were 24 doing these things, but were not directly involved. 25 They may have been in a completely different department. 160 1 They might even have worked in one of our directly 2 managed branches at the time and now are in a position 3 of leadership. 4 That's totally different to someone who was directly 5 involved in investigations. So, for me, that's the 6 first distinction, and I don't believe we should blanket 7 remove everyone who was there on the date, but we need 8 to understand who works for us and what was their role 9 in the past, and if it was to do such wrong things, they 10 have no place in this organisation -- yesterday, today, 11 or tomorrow. 12 Q. Can we please look at POL00448297. This email we've 13 just seen is February, moving to 19 April. We saw this 14 document either yesterday or today: 15 "Over the past couple of days, a number of 16 [postmasters] have been in compact with Saf and I in 17 regard to recent statements at the Inquiry by current 18 employees who are still in the business and were 19 involved in the Horizon scandal." 20 You say: 21 "We are regularly told that the review is underway 22 and must be done carefully to ensure accuracy in 23 decision making -- which I fully understand. But to 24 date we have not received any information on a single 25 employee who has been suspended or dismissed as a result 161 1 of this ongoing review which started nearly 2 years ago 2 but still remains incomplete." 3 What's your view as to the pace of these 4 investigations? 5 A. That they weren't moving. 6 Q. Are they moving now? 7 A. They are, but not sufficiently quickly, in my opinion. 8 Q. Who do you consider to be responsible for that lack of 9 pace? 10 A. Well, it's been incredibly difficult, because we've 11 had -- I lose count -- I think it's five or six Chief 12 People Officers whilst I've been at the organisation, 13 which is very hard to build culture, very hard to build 14 a process. And where something like this is being 15 managed, I believe by the People Team now -- Karen 16 McEwan, who is copied in on this email and is the 17 current Chief People Officer, has taken up activity on 18 this at a far better pace than previously. But I think 19 without the push -- and continuous push -- from me and 20 Mr Ismail, and others on the Board, then it would just 21 be going at a slow pace. 22 Q. Why has there been such great turnover in terms of the 23 People Officers? 24 A. Well, there was -- one of them went on maternity leave; 25 one was an interim cover for maternity leave, that 162 1 person then did a short-term interim role and left; we 2 had another one that joined, and she had her contract 3 terminated for performance, I believe; and we've had 4 gaps between them, as well; and now Karen has been with 5 us -- I'm not sure how long, maybe -- nearly a year, 6 perhaps. 7 Q. Do these signify any wider problems within the business 8 in terms of retention, in terms of consistency and 9 handover? 10 A. Well, in an organisation of any size, the People Team is 11 fundamental in building -- not only assisting the CEO to 12 deliver the culture change that you want to deliver but 13 also in helping to build out the skill and capability 14 and the second-tier leadership, so that you have 15 continuity and capability as you continue to grow and 16 evolve your business. Not having a Chief People Officer 17 or a People Team that was under, you know, a steady 18 leadership, obviously has affected our ability to make 19 change, I think. 20 Q. We saw yesterday a couple of documents that seemed to 21 put a lot of emphasis on the duties owed to employees, 22 and that was given, perhaps, as a reason for not 23 suspending people. 24 A. Mm. 25 Q. Are you aware of the emphasis being placed on care to 163 1 employees over and above wider issues? 2 A. I'm aware of the suggestion. It doesn't stack, for me. 3 You know, suspending someone and sacking someone are 4 very different and you're not making a judgement on 5 their guilt by suspending them whilst you investigate. 6 Q. Is it your current view that there should be a move 7 towards suspension? 8 A. Well, I'd like to see us move towards removing anyone 9 who is classified as Phoenix. 10 Q. Moving on to Project Pineapple and, again, we've seen 11 these emails quite a lot, so we'll move through them 12 quite rapidly. Can we first turn to POL00448302, and 13 it's page 4. Page 4 is the note of the conversation. 14 I think I can actually clarify the date now. It seems 15 to have been sent by Henry Staunton on Sunday, 16 14 January. 17 A. Mm-hm. 18 Q. If we scroll slightly above, we can see a further email 19 from Mr Staunton, saying: 20 "Dear Both, 21 "Thank you for your time today." 22 A. Mm. 23 Q. So it does seem as though the date actually of that note 24 and that conversation is 14 January; is that your 25 understanding? 164 1 A. It was definitely the weekend. I think it was a Sunday 2 night, yeah. 3 Q. Thank you. You've confirmed, if we scroll up onto the 4 second page, that it was a fair reflection of your 5 discussion, and then you add further detail. 6 A. Yes. I mean, it was designed as an internal aide 7 memoire, rather than some, you know, document that would 8 be released for general public review. 9 Q. When it was provided to those beyond the Non-Executive 10 Director teams, what was your view of that? 11 A. It was a mess. 12 Q. Were you aware that it was going to the CEO? 13 A. I think the intention was that Mr Staunton would share 14 it with the non-execs first. To be clear, Henry had 15 a conversation with the two of us, and this was off the 16 back of Richard Taylor being shared in the press about 17 some recording of him making comments about postmasters 18 all being guilty. But we'd had a conversation with 19 Henry, and Henry was very conscious of this two-tiering 20 of the Board and said, "Look, I don't want there to be 21 silos of information. I want this to be a flat Board, 22 and part of that is to make certain that the other NEDs 23 know what we've talked about. Do you have any problem 24 with me sharing it with the NEDs so that they're on the 25 same page as you, and get a sense of what we've talked 165 1 about?", and we were like, "Absolutely, no problem". 2 And I think the intention was, once the NEDs were 3 aware, we'd share it with the Chief Executive, Nick 4 Read. 5 Q. Did you ever intend for it to be shared with Ben Foat or 6 Martin Roberts? 7 A. Not in its format, though the content was true. 8 Q. If we turn, please, to POL00448383. If we start on the 9 third page, we see the email there from Mr Staunton, 10 confirming that it had been sent on. 11 There's reference there, I think, to an apology. 12 Was there an apology to you from Mr Read? 13 A. So I spoke with Mr Read after the incident occurred, and 14 Henry had said to me, "Give Nick a call. Let's sort 15 this out. You know, he's very apologetic for what's 16 happened". And so I gave Mr Read a call: he didn't 17 apologise, in so many words, no. 18 Q. If we turn to the first page, please, we see there you 19 say: 20 "[You] strongly echo Saf's view on this. 21 "The release of the confidential briefing note to 22 the very people we have highlighted in the document is 23 a horrendous breach of trust." 24 You then go on to say: 25 "Your description of these three men [that's John 166 1 Bartlett, Ben Foat and Martin Roberts] as 'untouchable' 2 in our call earlier today was worrying enough ..." 3 Just pausing there, what did you understand the term 4 "untouchable" to be a reference to? 5 A. So we had had a Non-Executive Director-only meeting and 6 Nick Read was in the meeting for the first part of it, 7 during which we were talking about many things, and 8 Mr Read made reference to the Investigations Team and 9 the others who were around that -- so Foat and 10 Roberts -- being "untouchable" because he couldn't deal 11 with anything with them; he was under investigation at 12 the time, so was Henry, and, at this point, I don't 13 think I'd received my release, so I was under 14 investigation as well, and I think there were others on 15 the Board under investigation, as well. Jane Davies was 16 under investigation. The list was quite lengthy. 17 Q. Could the Board properly function during that period? 18 A. It could carry out its Board functions in terms of its 19 day-to-day Board roles, but when it came to dealing with 20 specifics around any investigation or seeming to get in 21 the way of any investigation, clearly that was -- 22 everyone was conflicted, so it became difficult. 23 Therefore, they were untouchable. 24 Q. Can we turn to POL4448301. This is, again, a message 25 from Mr Staunton. This is the reference there at the 167 1 end to Nick being under huge pressures, and was very 2 apologetic. Were you aware of Mr Read being under huge 3 pressures at that point in time? 4 A. January was an incredibly high-pressure month for the 5 Post Office. It was, you know, 14 days since the 6 Mr Bates vs The Post Office broadcast, which had, 7 I think, surprised the Post Office how strong the 8 feeling nationally had been, and the output from that 9 was incredibly intense on Mr Read and others, but 10 particularly on Mr Read. I think he was called to 11 a Select Committee around this time as well. 12 Q. Was it a surprise to you? You've said that the Bates 13 drama was a surprise to the company. 14 A. Mm. 15 Q. As a subpostmaster, was it a surprise to you? 16 A. Sadly not. 17 Q. Were there others on the Board who it had not come as 18 a surprise to, so far as you were aware? 19 A. I think seeing something portrayed in the drama brings 20 to life what you've read or what you've heard in a way 21 that is indescribable, and I think the reaction from the 22 public just shows the truth of what happened. And 23 I think everyone on the Board felt a much deeper sense 24 of a need to get this right, and it just elevated 25 everything in terms of making certain that things moved 168 1 forwards. So I think the two things that have made 2 a massive difference over the last few years have been 3 the Inquiry, which has been both helpful and 4 challenging, and the drama, which has been incredibly 5 powerful. 6 Q. Can we please turn to POL00448514. This is again 7 an email that we saw yesterday with Mr Ismail. I'll 8 just take you to the second page -- over the page, 9 please. It's the email from Mr Roberts, where he says 10 that he would now ask that you please put in writing the 11 apology and retract all the allegations and statements 12 presented in the email that he was copied in on. 13 Why, in your view, have things broken down so badly 14 that there is this bickering at the highest levels of 15 the Post Office? 16 A. When I met with Mr Roberts, which was a few days prior, 17 I think -- the day before this email, actually, it was 18 30 January -- we'd had a very positive and collaborative 19 conversation. Saf and I met with him together, face to 20 face, we shook hands at the end. It was a good meeting 21 and I think we all left thinking that we had settled the 22 boat. 23 And I was surprised to receive this email, but 24 I understood where it came from. Mr Roberts had been 25 very stressed and concerned by the comments we'd raised. 169 1 He shared that with us in the meeting, and I think, 2 reputationally, he felt he'd been damaged and this was 3 him requesting that restoration of reputation. 4 Q. I think you say on the first page that, essentially, 5 while you would have put it differently, the substance 6 of your complaint remained the same; is that right? 7 A. Yes. The filenote that Henry wrote was a rapid-fire 8 internal document. Were it to have been shared as 9 a performance review, I would have drafted it 10 differently. 11 Q. Can we please turn to POL00448384. We went through the 12 drafting process with Mr Ismail yesterday or this 13 morning in relation to the points below this. If we 14 scroll down, we can see "Key Agenda Items for Upcoming 15 Board Meeting". We understand, I think, that 16 Mr Staunton was dismissed shortly after this. 17 A. Yes. 18 Q. If we scroll up to the top, we can see Mr Staunton had 19 said: 20 "Elliot, I think you were going to raise a number of 21 these issues with Nick. His responses would help Saf 22 finalise his note. 23 "How would you like me to take this forward?" 24 Can you assist us with how that matter was taken 25 forward? 170 1 A. I think Henry was dismissed before we could actually 2 take this any further forward, as my memory recalls. 3 Q. Did you discuss it with Mr Read? 4 A. No. 5 Q. Why not? 6 A. In my call with Mr Read I was quite surprised by his 7 reaction to my call. I was expecting -- well, if I had 8 made the error that he made in forwarding a confidential 9 document to a party that shouldn't have seen it, I would 10 have been very humble and apologetic, offered to put it 11 right if I could, try and broker some sort of situation 12 with the people who had been forced to read something 13 out of context. But Mr Read didn't offer any of those 14 things and, in fact, suggested it was Henry's fault for 15 forwarding it in a unsecured format, along with other 16 documents, that caused it. 17 And it so threw me, his response, that I was -- 18 I didn't think there was any point in discussing it 19 further. 20 Q. What do you think was behind that response? 21 A. You would have to ask Mr Read. 22 Q. Is it once again bickering at the top level, is this 23 Mr Read and Mr Staunton? 24 A. It's interesting because Mr Read and Mr Staunton have 25 a lot of like history, they're both retailers from 171 1 successful careers and, on the face of it, I thought 2 they had a pretty good relationship, but I'm not sure 3 that it ended up that way. 4 Q. The final substantive topic that I'm going to deal with, 5 very shortly, is the Grant Thornton report that we saw 6 earlier today. I won't take you through those 7 reports -- we've already been through them -- but what, 8 for you, is the most important message from those 9 reports? 10 A. The Grant Thornton report? 11 Q. Yes. 12 A. So the Grant Thornton report was produced on the request 13 of Henry Staunton when he was Chair, and Henry was very 14 keen to get governance back in line with where it needed 15 to be. The Grant Thornton report, in its initial draft, 16 was very damning of our governance capabilities, and 17 rightly so. It was softened a little bit in the 18 redraft, I think, because it was felt to be awkward and 19 difficult and I think it raised very important issues, 20 which are at the heart of what this Inquiry is trying to 21 get to the bottom of. 22 Q. Who was responsible for pushing forward changes to that 23 report? 24 A. Well, at the time, Mr Staunton had been dismissed. We 25 had an interim Chair, and it fell to the interim Chair, 172 1 Ben Tidswell, to lead the activity on that. I'm not 2 sure of all of the elements but my understanding was 3 that Ben Tidswell, and I would expect probably the CEO 4 and Lorna Gratton were involved in those discussions. 5 I was less involved in that. 6 Q. Thank you. Finally, is there any matter that we haven't 7 addressed or any particular recommendations that you 8 consider are appropriate that we haven't addressed today 9 that you would like to raise? 10 A. I think the Post Office is an amazing organisation with 11 great people within it but it isn't living up to what it 12 should be. It works best if it's given a clear 13 prescription, and it needs this Inquiry to give it its 14 prescription. It can be a great organisation but we're 15 not there yet. 16 MR BLAKE: Thank you. 17 Sir, there are no questions from Core Participants, 18 so unless you have any questions, sir? 19 Questioned by SIR WYN WILLIAMS 20 SIR WYN WILLIAMS: It's really out of curiosity, more than 21 the likelihood that I need precise answers from you, but 22 could we go back to the investigation that took place in 23 relation to your branches, simply to fill in a gap that 24 I think should be filled. 25 By my reckoning, we've had evidence from you of the 173 1 interview -- I'll call it an interview -- on 5 April and 2 then the audit which took place on 6 April. Then we 3 have kind of jumped to January the next year. 4 A. Yes. 5 SIR WYN WILLIAMS: Well, I mean, I'd just like you to tell 6 me briefly what actually happened. 7 A. Thank you, sir. 8 So between the audit -- post-audit, they then passed 9 the work over to the team at Chesterfield, who then 10 worked with us on -- 11 SIR WYN WILLIAMS: Sorry to stop you. When you say "they", 12 you mean the two investigators who had interviewed you, 13 yes? 14 A. Yes, sir. 15 SIR WYN WILLIAMS: So that I can sort of trace this in the 16 way I want to, essentially, am I right to infer that 17 they did that because of the answers that you gave them 18 in the interview, or did something else happen? 19 A. I would assume that to be the case. I was never told 20 why, but I wasn't asked back for a second interview, no. 21 SIR WYN WILLIAMS: Okay, right, so interview is over, audit 22 is over. Presumably you raise a dispute part about what 23 had happened over the stamps? 24 A. Yes, and the other balances, yes. 25 SIR WYN WILLIAMS: Yes, and then the next thing that happens 174 1 is that a different team is looking at it? 2 A. Yes, and we went through with that team, line by line, 3 forensically over 44 pages of what was a pdf file, and 4 dealt with them line by line by line. 5 SIR WYN WILLIAMS: That's what you meant when you were 6 describing what must have been a series of meetings, 7 I guess, which were much more like business meetings 8 rather than interviews? 9 A. Indeed. 10 SIR WYN WILLIAMS: Okay. That took the better part of the 11 rest of the year, yes? 12 A. No. I don't recall the exact period but I think the 13 whole thing was wrapped up probably by September, but it 14 took until the next year for someone in Legal to issue 15 me a letter saying that they'd closed it. 16 SIR WYN WILLIAMS: Yes. So you are, I think, asking me to 17 accept that it all having been wrapped up as between the 18 businesspeople, if I can put it in that way, by 19 September, whatever it was -- 20 A. 2023. 21 SIR WYN WILLIAMS: -- the delay thereafter was in getting 22 Legal to sign it off. 23 A. Well, it was -- I think it would be fair to say that the 24 company required it to go through a number of governance 25 steps because they didn't want it to be seen as, you 175 1 know, a non-exec getting something signed off unfairly, 2 or improperly. It required a number of layers of 3 approval. Those layers of approval were achieved but 4 the document never got written, and I think it was just 5 it went round the loop a few too many times and got lost 6 on the way. 7 SIR WYN WILLIAMS: All right. So it's perfectly 8 understandable that justice was being seen to be done, 9 as well as being done, in your particular instance, so 10 I follow that. 11 So, overall, would you say that taking, what is it, 12 seven or eight months to resolve it from the point of 13 the audit was reasonable or unreasonable in the 14 particular circumstances prevailing? 15 A. I think it was an incredibly long period of time to wrap 16 something up. If you can come next day for an audit, it 17 shouldn't take seven months to write a letter. 18 SIR WYN WILLIAMS: Right, okay. Thank you for filling in 19 the gaps, Mr Jacobs. 20 THE WITNESS: My pleasure, sir. 21 SIR WYN WILLIAMS: That's all I have, Mr Blake. 22 So in the absence of any further questions, it just 23 remains for me to thank you very much for making your 24 witness statement and for giving evidence this 25 afternoon. I'm very grateful to you. 176 1 MR BLAKE: Thank you, sir. 2 There's one small bureaucratic matter that have to 3 deal with and that is one witness statement from Phase 3 4 hasn't yet been read into the record and I just want to, 5 for the purposes of the transcript, confirm that 6 a statement has been provided by Penny Thomas and that 7 can be found at WITN00960100, and that is now in 8 evidence in the Inquiry. 9 SIR WYN WILLIAMS: Thank you very much, Mr Blake. 10 MS PRICE: Thank you. 11 SIR WYN WILLIAMS: So we won't be sitting tomorrow but we'll 12 resume at 10.00 on Thursday, yes? 13 MR BLAKE: Yes, that's with Mr Greenhow. 14 SIR WYN WILLIAMS: Yes. Thank you all very much. 15 MR BLAKE: Thank you. 16 (3.53 pm) 17 (The hearing adjourned until 10.00 am 18 on Thursday, 26 September 2024) 19 20 21 22 23 24 25 177 I N D E X SARFARAZ GULAM ISMAIL (continued) .............1 Questioned by MR BLAKE (continued) ............1 Questioned by MR JACOBS ......................88 Questioned by SIR WYN WILLIAMS ..............100 ELLIOT MARC JACOBS (sworn) ..................102 Questioned by MR BLAKE ......................102 Questioned by SIR WYN WILLIAMS ..............173 178