1 Tuesday, 8 October 2024 2 (10.00 am) 3 SIR WYN WILLIAMS: Morning, everyone. 4 Mr Blake. 5 MR BLAKE: Thank you, sir. This morning we're going to hear 6 from Ms McEwan. 7 KAREN ANITA McEWAN (sworn) 8 Questioned by MR BLAKE 9 MR BLAKE: Thank you. Can you give your full name, please? 10 A. Karen Anita McEwan. 11 Q. Thank you very much. You should in front of you have 12 a witness statement behind tab A or tab A1. I'm going 13 to ask you to turn to that, please. Is that statement 14 dated 17 September this year? 15 A. Yes. 16 Q. Can I ask you, please, to turn to page 74. 17 A. Yes. 18 Q. Can you confirm that is your signature? 19 A. It is. 20 Q. Can you confirm that that statement is true to the best 21 of your knowledge and belief? 22 A. I can confirm. 23 Q. Thank you very much. That witness statement has the 24 unique reference number WITN11360100, and that will be 25 published on the Inquiry's website. By way of 1 1 background, you hold a first class honours degree in 2 psychology; is that right? 3 A. That is correct. 4 Q. You have 30 years' experience in specialist HR and 5 operational management roles for large organisations? 6 A. That's true, yes. 7 Q. Can you assist us with what specialist HR is? 8 A. Just years of experience, formal coaching and formal 9 training through businesses like Tesco, and my degree, 10 obviously, which is hugely relevant to my vocation. 11 Q. Thank you. You worked at Tesco from 1981 to 2016; is 12 that correct? 13 A. That's correct. 14 Q. Including, as UK People Director. Is that head of 15 a particular team, part of the management structure? 16 A. It was part of the operational management structure and 17 I led the People function for the UK, which was all of 18 the stores, distribution and support centres. 19 Q. In 2016 you moved to become Chief People Officer at 20 McColl's Retail Group; is that right? 21 A. That's correct. 22 Q. You moved up the ranks to become Interim Chief Executive 23 before it was purchased by Morrisons; is that right? 24 A. That's right. 25 Q. Most relevant for today's purpose, you became Chief 2 1 People Officer at the Post Office in September 2023? 2 A. I did. 3 Q. I want to start by looking at your induction. 4 Paragraphs 15 and 16 of your statement, you have said 5 that you didn't receive any formal induction or 6 training, and you took a number of actions yourself, 7 speaking to people. Can you assist us with why that 8 was? 9 A. I think at that time, obviously I reported directly to 10 Nick Read, who was the Chief Executive, and Nick was 11 extremely busy during that period. The People function 12 itself was not staffed very well, and people were under 13 a lot of pressure in that function and I just think 14 there was no time to do a formal induction process. 15 Q. If I could bring up on to screen your witness statement, 16 WITN11360100. If we could look at page 7, please. I'll 17 just read couple of sections from this page when it 18 comes onto screen. Thank you. It's page 7, 19 paragraph 21. You say there: 20 "I did not have sufficient understanding of the 21 context of the business and felt I should have been told 22 more about it before I started. I had not fully 23 appreciated the stress that the business and the 24 Executive were under, or that I was expected to, and 25 needed to, start work on an urgent basis to begin to 3 1 help to fix the issues the business was experiencing and 2 support the Executive Team. This meant that, whilst my 3 background and relative experience allowed me to move 4 into the role without difficulty, I did not have 5 a pleasant or comfortable introduction into the 6 business." 7 At paragraph 22 you also say, about halfway down 8 that paragraph: 9 "However, upon joining [the Post Office] it became 10 clear that the scale of my role was more significant 11 than I had anticipated. The level of expectation of my 12 working hours and visibility across the business, made 13 it necessary to take on a rental property in London to 14 be able to manage the demands of the business. This has 15 impacted my personal life." 16 Where did the original expectation come from, in 17 respect of the work that you would be required to do? 18 A. I wouldn't attribute that to any individual telling me 19 that; it was just apparent, given the experience that 20 I had had in other businesses, I could see that things 21 were less stable than I might have understood. It 22 didn't come from any individual; it was just my 23 understanding and my observations of the business at 24 that time. 25 Q. What was your first impression of how the business was 4 1 run? 2 A. Do you mean generally? 3 Q. Yes. 4 A. I didn't form an observation on how it was run initially 5 because I would have expected to have had time to 6 consider that and to have understood properly exactly 7 how things were working. I think specifically, in the 8 People function, it was chaotic. 9 Q. You had worked with Mr Read before at Tesco. How well 10 did you know each other; what was your relationship? 11 A. We had never worked together. We both were on 12 a management development programme in around 2002, 13 I think. From memory, we didn't work together, we had 14 a 12-week or so programme where we had got to know each 15 other as part of a group of about 16 people. After that 16 time, I didn't have any further contact with Nick at all 17 until I joined the Post Office, or just before. 18 Q. What was your initial impression of how he was running 19 the Post Office when you joined? 20 A. I felt initially the business looked like it was well 21 run and Nick's reputation was, as I knew it, from 22 someone of integrity, and he had experience and was 23 highly regarded in his role at Tesco. So that was the 24 impression that I brought to the business with me. 25 Q. In respect of the Chair, Mr Staunton, at that time, what 5 1 was your initial impression of Mr Staunton? 2 A. I'm afraid I didn't have a very good impression, 3 initially. 4 Q. Why was that? 5 A. I think until any personal encounter that I had had with 6 Mr Staunton, it was a general demeanour that I felt made 7 me and other people feel quite uncomfortable, in terms 8 of his behaviour, certainly in and around the office in 9 London. 10 Q. You say in your witness statement that "onboarding 11 wasn't typical of a large organisation"; what do you 12 mean by that? 13 A. That there was just no formal process. So it was 14 obvious that I would have to self-initiate that process 15 and get to meet with the people that I felt I really 16 needed to meet with, it just was unstructured and less 17 structured than I would have expected. There just 18 wasn't a formality to the process. 19 Q. Who was responsible for onboarding at that time? 20 A. I think primarily it would have been the Chief People 21 Officer but, as I joined, there was nobody in that role 22 and one of the existing team was being asked to step up 23 to cover that role, so the focus on that probably 24 wouldn't have been as one would have expected. 25 Q. Are you now responsible for that role? 6 1 A. I am. 2 Q. We've heard that your post was one that changed hands 3 a lot and you've addressed that in your witness 4 statement, you've given reasons for the pressures that 5 people were under in that team. One of the reasons you 6 say is that members felt undervalued. Can you expand on 7 that for us? 8 A. On initially joining, I was very keen to get as much 9 information about the culture of the business as 10 I could, and I asked the team very open questions, this 11 is the People Team, the people that I would have been 12 responsible for managing, effectively, in my role. 13 I just feel that they felt that the efforts they were 14 making and that they were putting into the business were 15 just not appreciated and they were finding it very 16 difficult to make progress, unsurprisingly, in the 17 circumstances. 18 Q. When you say the circumstances, do you mean the fallout 19 from the Horizon scandal, the Inquiry, or something 20 else? 21 A. Yes, definitely, but also just the lack of leadership in 22 that function at that time and the lack of attention 23 that the function had. 24 Q. The other reason you've given is that people were unable 25 to effect change in the business and you say "including 7 1 how performance was managed"; what do you mean by that? 2 A. I would say the biggest and most common thread of the 3 feedback that I had at the time from the people was that 4 they felt that there was performance in the business. 5 There were people who were not performing to the 6 standard that would have been expected or that was 7 necessary for the business at that period of time, and 8 they felt that there was not enough rigour, not 9 necessarily in the policy or the process, but that there 10 wasn't enough rigour in the application of those 11 processes so that people were held accountable for poor 12 performance or poor behaviours in the organisation. 13 Q. Was that something that was specific to that point in 14 time; do you think it was something that went back 15 further? 16 A. I would suggest that it was exacerbated by the issues 17 that the business had at that time but I suspect that it 18 had gone back further, probably due to the constant 19 change of people in my role, I would imagine. That 20 wouldn't have been helpful. 21 Q. Having worked in that role in a number of different 22 companies, is that something that's typical; do Chief 23 People Officers tend to move around a lot or is that 24 something that was a particular problem for the Post 25 Office? 8 1 A. Certainly not. I've only worked in two employers 2 previously, certainly not in either of those 3 organisations, and it wouldn't be typical, I would 4 suggest, in an organisation at the size and scale of the 5 Post Office, no. 6 Q. In terms of corporate memory, how did that present 7 itself when you first joined? 8 A. The Executive Team had also changed quite frequently and 9 it was difficult to get consistency in the information 10 that I was trying to get to understand about the 11 business to go about my job. So I would say it was 12 fragmented. There were certain parts of the business 13 that had had stability, and people were more confident 14 in those departments and those areas, and there were 15 other parts of the business where people were less 16 confident and there had been more change. 17 Q. I want to ask you about the scope of your role and the 18 limits to your role. Are you in charge of 19 recruitment -- 20 A. Yes. 21 Q. -- managing those who are currently in the business from 22 a Human Resources perspective as well? 23 A. That's correct, yes. 24 Q. Onboarding is something we've discussed. How about 25 other areas of the business: where do you see your role 9 1 as fitting in? 2 A. In terms of directly managing or in terms of having -- 3 Q. Yes, your responsibilities? 4 A. I would say the role of the Chief People Officer is to 5 lead the agenda on People across the organisation. So 6 that doesn't spend to postmasters but it extends to 7 anybody that works for and is contracted to work for the 8 Post Office. 9 SIR WYN WILLIAMS: I was going to ask you the direct 10 question. Presumably you focus on employees of the Post 11 Office; is that fair? 12 A. So my role focuses on employees but my view of the 13 role -- and I think this is very significant and really 14 very important -- is that the performance of people 15 employed by the Post Office in the organisation have 16 a direct impact on the relationship with, and the 17 confidence, and the trust with postmasters. So I see 18 the role as intrinsically connected to the postmaster 19 population, and I think that's extremely important but, 20 in terms of my direct responsibility, my direct 21 responsibility is for the colleagues of the Post Office. 22 MR BLAKE: Can we please bring on to screen POL00448785. 23 There's no real significance to this particular 24 document. It's just an example of something I'd like to 25 look at. This is a Board report of which you are named 10 1 as the author and sponsor and it relates to a contract 2 for PR services. Under the "Executive Summary" it says: 3 "As a result of events that have occurred since the 4 start of 2024 [the Post Office] has required 5 a substantial increase in services from Cardew ..." 6 Cardew is a PR firm; is that correct? 7 A. It is. 8 Q. First bullet point: 9 "... the increased public scrutiny that has arisen 10 and the knock-on impact this has had on [the Post 11 Office's] brand; and 12 "Cardew backfilling the vacancy left by [Post 13 Office's] departing Director of Communications." 14 To what extent does your role also involve the 15 obtaining of contract for services? 16 A. So at that period in time, there was no incumbent 17 Communication or Corporate Affairs Director and I was 18 taking some line management accountability for that 19 function to help and support the Executive and Nick, 20 who -- there was a lot of pressure in the business at 21 that time. 22 Q. We'll see, with you and with other witnesses, quite 23 a lot of expenditure on external firms. There will be 24 those who query why the Post Office considers it 25 necessary to contract out those kinds of services; 11 1 what's your view on that? 2 A. I understand that and I definitely understand that in 3 the context of this particular contract, and I think it 4 might be important to explain some of that context for 5 the Inquiry. 6 Q. Please do. 7 A. At that time, and this was a pre-existing contract that 8 was already in place and was actually due for retender 9 this autumn, actually this month coming, at that time -- 10 I think I'd referred to it elsewhere in my statement -- 11 the business was in significant distress, and not only 12 for the wider business but for the Communications Team 13 as well. It wasn't a normal time and, you know, the 14 events -- I think the media attention that the business 15 was under at that time, the challenges that we had, we'd 16 had a lot of -- again, a lot of leavers in the team. 17 It was important, I felt to get support for the team 18 but I was very conscious at that time that there had 19 been criticism in the media about the expenditure on 20 corporate affairs and on PR support for the business. 21 So I was acutely aware of that at the time of making 22 this decision. 23 I think when I extended the contract I was very keen 24 to point out to Cardew that the caveats for this 25 extension would mean that there would be as much focus 12 1 on internal communication for our colleagues and 2 postmaster communication because, at that time, the 3 business was being challenged on its employer brand, so 4 we were struggling to recruit senior positions, 5 certainly in my function specifically, because of the 6 brand of the Post Office at that time, frankly. And I'd 7 asked Cardew to ensure that there was as much focus, not 8 just on the Executive, that almost seemed to be less 9 important than the focus that we needed on internal and 10 postmaster communications, so they brought in some 11 specialist support to help with that as well. 12 Q. How is that going to work going forward? 13 A. Well, I think we're over that peak period of the volume 14 now, and we have recruited -- at the same time we 15 started a search in the market to replace the Corporate 16 Affairs and Communications Director. We have now 17 replaced that position. So I think there'll be more 18 stability and more consistency. 19 Q. Going back to the issue of induction, you've given 20 evidence about your own induction, you've personally 21 made changes to the induction process. You've set those 22 out at paragraphs 25 to 33 in your statement. You 23 address Horizon scandal training. Can you briefly 24 summarise what that involves? 25 A. It was just raising -- further raising awareness for 13 1 colleagues onboarding, pre-joining the Post Office, so 2 they had context and we set out a recommended reading 3 list and reference material for people to do on 4 a self-taught basis, prior to joining, but then 5 reinforce that training as people join. So there was 6 an online training module, which is available to 7 everybody, that raises awareness of exactly what 8 happened, right the way through from the judgments and 9 to subsequent actions that the business has taken. 10 Q. Was there anything addressing those topics before you 11 joined, in terms of training? 12 A. Yes, there was pre-existing training prior to my joining 13 I believe, yes. 14 Q. Have you seen that training? 15 A. I have seen it, yes. 16 Q. What was your view of the quality of it? 17 A. At the time that I reviewed it and in the context of the 18 business, I felt that more rigour was needed in terms of 19 the amount of material that people needed to read and 20 comprehend to properly understand their roles before 21 they joined. 22 Q. There's been quite a lot of focus in the Inquiry on 23 issues in the Legal Team and issues in the 24 Investigations Team. Is there any additional training 25 that's provided to the Legal Team or the Investigations 14 1 Team in light of their role in matters being 2 investigated by the Inquiry? 3 A. Not to the best of my understanding, no. 4 Q. Do you think it would be worthwhile having additional 5 training for those teams or do you think that the 6 process that you've already put in place is sufficient? 7 A. No, I think it may be worthwhile in doing further 8 training with those teams and any other teams that 9 require it. 10 Q. Moving on to the People Plan, can we bring up on to 11 screen POL00458453. What is the purpose of the 12 Strategic People Plan? 13 A. In this business, probably more than any others, it was 14 very important to get some formality and some structure 15 about the way that work was being conducted by the 16 People Team and I think I referred, and you asked me 17 earlier, about some of the reason for the chaotic state 18 of affairs, really, when I joined, and I think this came 19 down to the fact that there wasn't a clear plan for the 20 business or for that function, and it was important to 21 establish the function within the business to get 22 credibility and get belief in the work that the function 23 was trying to do, and I think it's extremely important 24 to have a plan, some focus and some measurable targets 25 and actions that I and my team can be held to account 15 1 for. 2 Q. Was this a plan that you personally implemented? 3 A. Yes. 4 Q. Can we please scroll through the plan. Over the page, 5 please. If we can continue going over and over, we can 6 stop on the final page, page 7. One matter that has 7 already been highlighted by Sir Wyn this morning is this 8 plan doesn't address subpostmasters, does it? 9 A. It doesn't. 10 Q. I think you've said in your witness statement that, and 11 you've said also this morning, that, in your view, 12 improving the culture within the Post Office will also 13 improve the experiences of postmasters. Can you just 14 expand on that and quite what you mean by that? 15 A. I think that's absolutely critical. I think -- it's 16 fairly all encompassing but I would say from onboarding 17 people properly, making sure that they're sufficiently 18 trained, making sure that they have awareness of the 19 issues and the wrongs of the past, making sure that we 20 have people that work for us that have the right 21 behaviours and the behaviours that are expected in 22 an organisation, and all of that gives people the 23 confidence and capability to do their jobs, and that's 24 fundamentally important in building trust with 25 postmasters. 16 1 So, whilst I don't have contractual responsibility 2 for that population, I believe that my role is to do 3 everything I can to make sure that the people in the 4 organisation are sufficiently capable. 5 Q. A counterargument to that might be that it cements 6 a them-and-us attitude between employees and 7 subpostmasters. Whose responsibility would it be to 8 develop a plan like this to improve the relationship 9 with subpostmasters? 10 A. Specifically, at a detailed level, the Retail Team and 11 the postmaster facing team would be very much involved, 12 but I believe it's the job of the Executive Team and of 13 the Chief Executive, as the ultimate owner, to ensure 14 that the postmaster relationships continue to be a focus 15 and priority for the business. 16 Q. Are you aware of a strategic plan, similar to the 17 Strategic People Plan, to address subpostmasters? 18 A. I haven't seen a plan but I know that there are efforts 19 in the business to do that, yes. 20 Q. Could we please bring up on to screen our YouGov expert 21 report, that's EXPG0000007. Did you see this evidence 22 being given in person or have you read the report? 23 A. I have read the report in my additional documents as the 24 preparation for the Inquiry. 25 Q. Can you turn to page 40 where it addresses certain 17 1 statements about the leadership Board at the Post 2 Office. If we look at the first two of those figures in 3 figure 28, we can see there that, in terms of the 4 statement that "Generally, Post Office Limited is trying 5 to improve its relationship with subpostmasters", 6 there's a net disagree figure of 51 per cent; and, 7 secondly, a statement "Generally, Post Office Limited 8 understands the concerns of subpostmasters", a very 9 strong net disagree of 74 per cent. 10 It seems as though there's quite a lot of work to do 11 there in respect of that relationship; would you agree 12 with that? 13 A. I would agree with that, yes. 14 Q. Is that something that you're aware of having been 15 discussed at Executive level? 16 A. Yes, definitely. It's a constant conversation. 17 I haven't seen those stats before but seeing them 18 highlights how much work there is to do. But yes, it is 19 discussed. 20 Q. What do you think can be done to fix that relationship? 21 A. There is a need for transparent communication and 22 I think in building any relationship of trust, that's 23 critically important, so there's more work to do there, 24 definitely in terms of talking about, you know, the 25 plans that the business has. Whether they're strategic 18 1 plans on proposition or whether they're plans to 2 generally support the postmasters, I think we can do 3 a better job of communicating those plans. 4 Q. Do those figures surprise you at all? 5 A. No. 6 Q. Having had conversations at Executive level, are they 7 figures that surprised members of the Executive Team? 8 A. I can only speak for my own perception, obviously, but 9 I would be surprised if the Executive Team didn't expect 10 there to be dissatisfaction from postmasters about the 11 relationship, yes. 12 Q. Thank you. That can come down. 13 I'm going to move on to the CEO position. The CEO's 14 appointment and CEO remuneration issues, do they fall 15 within your remit? 16 A. Not directly, no. So the CEO appointment is a matter 17 for the shareholder and the CEO remuneration is also 18 a matter for the shareholder, but I am a member of the 19 Remuneration Committee. 20 Q. In terms of the CEO appointment being a matter for the 21 shareholder, what role does the Chief People Officer 22 have in that? 23 A. Obviously I haven't experienced that particular role 24 being searched for at the Post Office because, 25 obviously, when I joined, Nick was the Chief Executive 19 1 and he was incumbent and has been in the role since I've 2 been here. I would expect to be consulted, from best 3 practice perspective, on how we would search for that 4 role in market. I would expect, given that I've now got 5 some experience at the Post Office, to be consulted 6 about what I saw to be the significant issues that 7 needed to be addressed in that role. So I guess I'm 8 saying I would expect to be consulted but not 9 necessarily involved in the decision making about the 10 appointment. 11 Q. Who would take those kinds of matters forward? Let's 12 say we've heard that Mr Read will, in due course, be 13 stepping back: who will take the new appointment of 14 a CEO? 15 A. I think that will be a matter for Nigel Railton, the new 16 Chair; Lorna Gratton, as a shareholder representative; 17 and Amanda Burton. 18 Q. We've heard quite a lot about the CEO's remuneration. 19 What is your view of the sufficiency of the CEO 20 remuneration to attract top talent? 21 A. It's quite difficult in terms of comparison, because 22 I think compared to the wider market in more commercial 23 businesses, which frankly are the businesses that I've 24 only had experience in, then currently the remuneration 25 is probably definitely not upper quartile, I would 20 1 expect. So it isn't significantly high, is what I'm 2 saying. I think, compared to obviously other 3 remuneration packages in the public sector, there might 4 be a different view of that. 5 Q. That's quite similar evidence to the evidence given by 6 Amanda Burton, two extremes, but if the Chair looking at 7 recommendations for the future, ensuring that the Post 8 Office has the best people leading it, what is your view 9 of the remuneration package? 10 A. I would agree with the statement, firstly, that it's 11 important. It's critical that the Post Office has the 12 right leadership team to take it forward. I would 13 consider it possible to recruit somebody capable and 14 proficient at the current level of remuneration but 15 I would also expect that there will be other candidates 16 probably that we would want to approach and that would 17 be suitable candidates that may not want to come to the 18 Post Office, due to their view of the remuneration. 19 I think it's a job that one has to want to do because 20 there's a public service to be done and I think that's 21 very important as well. 22 Q. Can we please turn to POL00448641. This the 23 investigation report that was carried out by Marianne 24 Tutin, a barrister, in relation to complaints made or 25 raised by Ms Davies. We've addressed it previously, 21 1 we're addressing it and Ms Davies has been named because 2 she's been previously named, for example, in a Select 3 Committee. We're not going into great death in relation 4 to each and every allegation but I want to go to two 5 matters that arise, and the first is relevant on this 6 issue. You were the commissioning Executive in relation 7 to this report; is that correct? 8 A. I wasn't initially the commissioning Executive. 9 Somebody else was the commissioning Executive and due -- 10 as the investigation started, due to a conflict issue, 11 I was asked to take on the role of the commissioning 12 Executive once the investigation was under way. 13 Q. What did that involve? 14 A. I was part of a panel of -- oversight panel of the 15 investigation, along with Amanda Burton and Lorna 16 Gratton. 17 Q. Thank you. If we could turn to page 5, please. We're 18 going to stick to the CEO pay position and that is 19 allegation 2.10. The allegation was that Mr Read 20 bullied Ms Davies in relation to the messages he sent in 21 relation to his dissatisfaction with his pay. The 22 analysis is on page 15. If we could turn to page 15, 23 I'll just read a few paragraphs from that analysis. 24 Ms Tutin finds that: 25 "Mr Read did not bully Ms Davies in respect of the 22 1 message he sent her concerning his dissatisfaction with 2 his pay in January 2023." 3 She says: 4 "Mr Read had been dissatisfied demonstrably with his 5 remuneration package for some time, with numerous 6 attempts being made by former Chairs of [the Post 7 Office] to seek an improved package from the government. 8 Ms Davies, Mr Read and Mr Staunton discussed the topic 9 intensively during the first two months of Ms Davies' 10 employment in particular. Mr Read suggested that he 11 would resign or take action unless matters improved, 12 with increasing frequency and feeling, during January 13 2023. 14 "From Ms Davies' perspective, I appreciate that she 15 must have felt under pressure to improve his pay, given 16 the intense focus this issue received and Mr Read's 17 increasingly strong suggestions that he would leave [the 18 Post Office] or take action. That said, some of that 19 pressure may well have been self-imposed by Ms Davies in 20 her desire to succeed where her predecessor, 21 Ms Williams, had seemingly failed. 22 "Mr Read's messages were, at timetables, demanding, 23 impatient and irritable, which he may wish to reflect 24 upon. However, they were, on balance, not of 25 an offensive, aggressive or humiliating nature. They 23 1 were not of that severity. Furthermore, Mr Read 2 explained to Ms Davies that his dissatisfaction with pay 3 pre-dated her time at [the Post Office] and he did not 4 blame her for the situation. Mr Read spoke to others, 5 including Mr Staunton, about his dissatisfaction with 6 his pay in similar terms. There was no 7 'finger-pointing' at Ms Davies." 8 If we scroll over the page we can see the 9 recommendation. She says: 10 "Nevertheless, [the Post Office] will no doubt wish 11 to ensure that the future Chair is aware of the history 12 of requests made to the government in respect of 13 Mr Read's pay to ensure that his expectations are 14 managed appropriately moving forward." 15 Has that recommendation taken place; have you had 16 discussions with the Chair? 17 A. I haven't had any personal discussions with the Chair. 18 I would imagine that Amanda Burton would have taken that 19 up. I haven't discussed it with the Chair. 20 Q. What's your view of the relationship with government and 21 having to ask the Department for Business or the 22 Secretary of State to improve the pay of the CEO? 23 A. I think, having come from other corporate businesses, 24 where we still would have to answer to shareholders, 25 that is in keeping with my experience. I think it's 24 1 important that there is strong governance and rigour 2 around how executive pay, as well as the Chief Executive 3 but including the Chief Executive, is managed. So it's 4 important. I -- there are occasions where I feel that 5 we don't maybe have as much autonomy as we ought to have 6 to make decisions regarding pay at a more junior level, 7 but I think at the level of the Executive and the Chief 8 Executive it's important that that is in place and that 9 that rigour is applied, yes. 10 Q. When you say at a more junior level, who do you have to 11 obtain authorisation from in respect of the pay of more 12 junior employees? 13 A. So that's determined by threshold of the value of the 14 pay, as opposed to the individual. So it's individuals 15 over a certain level we have to seek approval for, which 16 is mainly confined to the Executive and the Senior 17 Leadership Team. 18 Q. What change would you make to that? 19 A. I don't think there are any further changes to make to 20 that at the moment but, if we did want to go outside of 21 those parameters, for example, if we were looking for 22 somebody new to come into the business, we might have to 23 get approval for that but there aren't any current 24 changes in plans for that team of people. 25 Q. While we're on this report, if we could perhaps turn 25 1 back to page 5. I'll address this now just because 2 we're on the report, and I don't want to have to return 3 to the report but, if we scroll up to the top, we have 4 the allegation relating to Mr Staunton. It's allegation 5 2.7: 6 "During a meeting on 25 January 2023, Henry 7 Staunton, former Chair, referred to women as 'pains in 8 the arses' and at the same meeting, said of one 9 candidate for the RemCo Chair position, words to the 10 effect of 'she doesn't look coloured, where does she 11 come from?' and in view of her age referred to the same 12 candidate as a 'girl' (when other women were referred to 13 as 'ladies') ..." 14 If we please could turn to page 12 and 13 there's 15 the analysis of that allegation. As I said, this isn't 16 the forum to investigate the particular allegations but 17 I'm looking at the business's response to the findings 18 of this report. Ms Tutin sets out the allegations there 19 at 27. At 28 she says: 20 "Mr Staunton's remarks were discriminatory on 21 grounds of race and sex, and therefore not in accordance 22 with the Dignity at Work policy. The remarks go well 23 beyond his characterisation of them as potentially 24 'politically incorrect' statements." 25 She sets out her reasoning below. If we could 26 1 please turn to paragraphs 29 and 30, those are passages 2 I'd like to look at. Paragraph 29 says: 3 "Consideration should be given as to whether 4 quality, diversity and inclusion training should be 5 offered to Non-Executive Directors, including the future 6 interim or permanent Chair. Alternatively, such 7 training could be a mandatory requirement for any 8 [Non-Executive Directors] involved in external or 9 internal recruitment processes, where they are acting as 10 a representative of [the Post Office]." 11 Just pausing there, is that something that falls 12 within your area of responsibility? 13 A. Yes, it does fall within my area of responsibility. 14 Q. Is it something that you have taken steps to address? 15 A. Yes, I have. 16 Q. Can you briefly summarise the steps that you have taken 17 in that regard? 18 A. So we have, after several months' search, actually we 19 have just appointed a specialist in EDI for the 20 business, which I felt was critical, who reports into 21 the Talent and Capability Director, who is ultimately 22 responsible for this area and will be producing training 23 for every member of the Post Office team, including the 24 Non-Executive Directors and the Board. 25 Q. Thank you. Paragraph 30 says: 27 1 "I was also concerned by remarks made by Mr Staunton 2 in respect of his outdated view of the Speak Up process 3 and investigations (the latter of which he said, 4 notably, were a 'cancer' in the organisation), and the 5 impact such views can have on workplace culture. It was 6 very troubling that those remarks were made by the 7 (then) Chair of an organisation that is grappling with 8 the most serious of institutional failings. In looking 9 for a new Chair, it should be a key consideration for 10 [the Post Office] and [the Department for Business] to 11 assess whether prospective candidates have good 12 experience of helping to foster a workplace culture in 13 which any concerns relating to [for example] EDI, 14 discrimination or whistleblowing can be raised openly 15 without fear of intimidation or retribution." 16 The current Chair is only an Interim Chair; is there 17 a process ongoing for the recruitment of a new Chair? 18 A. I believe there is a permanent -- or there will be 19 a permanent process being run, yes. 20 Q. In respect of paragraph 30, are those areas within your 21 area of responsibility? 22 A. Not strictly for the recruitment of the Chair but this 23 is one of the areas that I would expect, obviously, to 24 have some involvement in, given my previous experience, 25 yes. 28 1 Q. Are you aware of that process or anything similar having 2 been undertaken in respect of Mr Railton before he was 3 appointed? 4 A. I'm not aware of that taking place, no. 5 Q. Thank you. That can come down. 6 At paragraph 164 in your witness statement, you have 7 said that Mr Staunton had asked you to close down the 8 investigation. Can you assist us with your account in 9 respect of that, please? 10 A. Yes, he had asked me previously, or talked to me 11 previously about investigations more generally in the 12 business. So I was aware that he had a dim view of the 13 processes, and he did, in a comment to me, also use the 14 terminology that it was a "cancer in the organisation". 15 Specifically related to the investigation into Jane 16 Davies, he asked me to close down the investigation and 17 do everything that I possibly could to make sure that 18 that was -- that that happened. 19 Q. Close down the investigation into Mr Read, into himself, 20 or more broadly? 21 A. So, at the original time, there were several 22 conversations about this. At the initial conversation, 23 the investigation as we knew it only related to Mr Read 24 because the -- some of the comments had not been 25 particularised until the Employment Tribunal claim was 29 1 laid. Then the claims were particularised and I became 2 aware that they pertained to Mr Staunton, yes. So, at 3 that time, he was asking me to close down the 4 investigation into Nick Read. 5 Q. From your understanding and from what you heard and saw, 6 were you of the belief that he understood that the 7 investigation was also into his own conduct? 8 A. So, certainly after November, when the Employment 9 Tribunal claim was particularised, then yes, I was of 10 that belief. 11 Q. Did you have any specific conversation about the 12 investigation into him with Mr Staunton? 13 A. So he didn't refer -- Mr Staunton didn't refer to his 14 own investigation or the elements that extended to him, 15 specifically, but he did persist in asking me to close 16 down the investigation and it was my belief at the time 17 that the motivation to do that was not as I had been 18 told by Mr Staunton. 19 Q. What do you mean by that? 20 A. So he -- sorry, Mr Staunton said that it was in respect 21 of his concern about Nick Read's wellbeing, and I didn't 22 believe that to be true. 23 Q. What opinion did you have? 24 A. Sorry, could you repeat the question? 25 Q. What was your view? 30 1 A. My view was that that request was self-serving on 2 Mr Staunton's behalf. 3 Q. Did you hear Mr Staunton's evidence to the Inquiry? 4 A. Yes, I did. 5 Q. What is your view now? 6 A. My view remains the same. 7 Q. Thank you. I'm going to move on to the Group Executive 8 and the Senior Executive Group structure. 9 SIR WYN WILLIAMS: Just before you do -- I don't want 10 details -- but it follows from what you said, I think, 11 that Ms Davies brought an Employment Tribunal claim 12 against the Post Office, presumably? 13 A. Yes. 14 SIR WYN WILLIAMS: Has that been concluded? 15 A. No, it hasn't, I think -- 16 SIR WYN WILLIAMS: Fine then, I won't -- 17 A. My understanding is that it is filed but not yet heard, 18 sir. 19 SIR WYN WILLIAMS: Right, that's fine. Let the Employment 20 Tribunal do its work. 21 MR BLAKE: In respect of the Group Executive, you have 22 identified issues with the Group Executive before it 23 became the Senior Executive group. In paragraph 77 of 24 your witness statement, you have said that it was 25 untypical of senior leadership groups that you've been 31 1 part of; can you expand on that for us, please? 2 A. I would say specifically the lack of experience and 3 particularly in the context that the Post Office had at 4 that time. So training, experience and, whilst -- 5 I think I say this in my statement -- whilst there was 6 not a shortage of commitment, it was a matter of 7 capability. 8 Q. Where in particular were the problems? 9 A. I would say particularly in the retail-facing functions. 10 But it wasn't confined to that. It wasn't confined to 11 just one individual; it was a general view that I held. 12 Q. Is that the function that interact with subpostmasters? 13 A. Yes, it is. 14 Q. What would you say is the cause of that problem? 15 A. I think it's largely down to selection of the individual 16 for the role against the requirements of the role. So 17 there probably was a shortfall in terms of experience or 18 capability of the individuals in the job, and then, as 19 a business, we probably didn't react quickly enough to 20 some of the areas of underperformance that had started 21 to appear and manifest, particularly given the 22 circumstances that happened earlier this year. 23 Q. Who in particular was failing in that regard? 24 A. So it would be the direct leaders of the people in 25 question, the Executive Team. Ultimately, of course, 32 1 the Chief Executive has accountability for performance 2 in the organisation. I would say, though, that for the 3 year before I joined -- I know I have repeated this 4 several times -- but the lack of having strong People 5 representation in that group is undoubtedly going to 6 have consequences on the performance in the 7 organisation. 8 Q. I know you've said that it isn't just individuals but 9 I think we're getting the impression that there is 10 certainly at least an individual who, in your view, was 11 underperforming; who was that individual? 12 A. It was the Chief Retail Officer. 13 Q. Who was that? 14 A. It was Martin Roberts. 15 Q. Thank you. You've also given the example of being asked 16 to give an opinion on a matter which was not within your 17 area of expertise; are there other examples of failings 18 in that regard? 19 A. For me individually, no. I recall one example, I think, 20 of abstaining from a decision because I felt that 21 I wasn't qualified to do so but it's my belief that, at 22 that time, there was a reluctance for people to not say 23 when they didn't understand, and feel obliged to make 24 a contribution to things that they maybe weren't 25 necessarily qualified or had the experience to 33 1 contribute to. 2 Q. At paragraph 79 of your statement, you said that members 3 of the wider management population felt they couldn't 4 trust the Group Executive; can you expand on that for 5 us, please? 6 A. Yes, I think intuitively -- and this is not factually 7 based, but intuitively when I started, I detected that 8 that was the case, and I ran a couple of sort of 9 voluntary forum groups, not all of the representatives 10 from the senior leadership population came, but they 11 were quite well represented, and I did several of them 12 over my first few months, and members of that team told 13 me that at the time, and members of my own team had also 14 said the same thing. So there was consistency in what 15 I was being told. 16 Q. Were there particular individuals who they felt they 17 couldn't trust? 18 A. So there weren't -- they didn't cite particular 19 individuals. It was the -- it was kind of commonly 20 referred to as the GE, as it was at that time, the 21 General Executive Team. 22 Q. I think you've said that was quite a big team at that 23 time -- 24 A. Yes. 25 Q. -- is that right? You changed the structure. Was it 34 1 instigated by you, the change of structure, to the 2 Senior Executive Group? 3 A. So I think, before I joined, Nick and Owen Woodley, who 4 was the Deputy Chief Executive, had been considering 5 whether or not the structure was right anyway, but 6 I would say, on joining, and having conversations with 7 Owen, and probably having a fresher perspective, would 8 have instigated the action that we then took, yes. 9 Q. What were the principal structural changes to the group? 10 A. We narrowed down the group, which may seem odd, given 11 that the business was under pressure at the time, and it 12 was quite complicated, but to speed up the 13 decision-making processes, it felt important to confine 14 that group, the most senior in the organisation, to the 15 people that had the relevant skills and experience to do 16 those jobs. 17 So we thinned the group quite substantially and we 18 were also at that time -- it wasn't the only reason but 19 we were also, at that time, concerned about the 20 bandwidth of the Chief Executive, of Nick, in terms of 21 the number of direct reports that he had but also the 22 size of the job that he had to hand as well and, as 23 I said, it wasn't the only consideration, but it was one 24 of the considerations. 25 Q. Looking at the problems that you identified with the 35 1 original group, if we take the lack of deference to 2 Subject Matter Experts as one of the complaints, has 3 that been overcome by these structural changes? 4 A. Yes, it has, yes ... I think, as always, the dynamics 5 and the behaviour of a group running a business has to 6 be constantly under review, and we have to have the 7 right checks and balances in place to make sure that 8 that is the case, but I feel confident that it's far 9 better than it was when I joined, yes. 10 Q. Taking the other issue, the lack of trust, has that 11 issue been resolved? 12 A. Trust is a very difficult thing to measure, of course. 13 Yes, I think to a great extent it has, and from the 14 conversations that I've since had with the senior 15 leadership population, I think they feel more confident 16 that the behaviours of that group, the Executive Group, 17 are in keeping with what they would expect and I think 18 that has given people confidence that that change has 19 definitely been made, yes. 20 Q. Can we please turn to POL00446673. This is a "Strategic 21 Executive Group Report" of 1 May this year. It has you 22 down there as the sponsor of the report. Can you assist 23 us with the background of this report, please? 24 A. Yes, this the full report pre-the Board report of the 25 colleague engagement survey that was taken earlier this 36 1 year. 2 Q. Are you aware of issues as to whether sufficient 3 information was passed to the Board based on this 4 report? 5 A. So I feel very confident that this report, and the 6 report that went to the Board, is what would consider to 7 be best practice, and that's what I've been told since. 8 So I'm confident in the quality and in the 9 comprehensiveness of the information that was given to 10 the Executive and to the Board. 11 Q. Did the report accurately reflect the results of the 12 surveys, for example? 13 A. Yes, yes it does. 14 Q. If we could turn over the page, please, we have the 15 headline results there. I am just going to read couple 16 of them. Paragraph 3 says: 17 "The overall outcome report was shared with the 18 Strategic Executive Group on 23 April 2024. It has also 19 been shared with the 'Create New Confidence' Leadership 20 Team group." 21 Can you just assist us with who the Create New 22 Confidence Leadership Team group are or what their 23 purpose is? 24 A. This is -- at the start of the year, after changing the 25 Strategic Executive Group, we wanted to give the Senior 37 1 Leadership Team some key focus areas to work on and this 2 was one of the focus groups, so they were the group that 3 were responsible for giving us ideas and communicating 4 the survey but giving ideas in terms of further 5 improvements, yes. So they were a cohort group within 6 the existing management population. 7 Q. If we scroll down, please, I'd like to look at 4(d). It 8 says: 9 "The level of strain felt by senior colleagues at 10 Post Office is substantially different to the level of 11 strain felt by more junior colleagues and this is 12 impacting their wellbeing. The predominant descriptions 13 of the culture for junior colleagues are 'friendly' and 14 'supportive', whilst for senior colleagues they are 15 'bureaucratic' and 'political'. The barriers which have 16 the highest impact on strain have decreased for junior 17 colleagues, whilst increasing for senior colleagues. 18 Proximity of senior colleagues to governance processes 19 is likely a cause of strain and job and [organisational] 20 design should be reviewed for senior colleagues." 21 Can you summarise for us what the issue here is? 22 A. There's quite a lot to summarise here, I am just trying 23 to think of how can I best say this as succinctly as 24 possible. So I think the comments on bureaucracy apply 25 to the levels of process that those people have to apply 38 1 to get change executed in the business or to make things 2 happen and the political behaviour, my belief is that 3 would refer back to the references to the general 4 Executive Group in terms of the political behaviour 5 there, maybe. 6 But I think it's really centred around how difficult 7 it is, the processes that the team have to go through to 8 get things done. 9 Q. It seems as though the solution might be changes to the 10 job and organisational design; is that something that 11 has taken place? 12 A. It's something that's in the process of taking place, 13 yes. 14 Q. How do you foresee that happening? 15 A. So I think there needs to be more clear lines of 16 accountability and demarcation between responsibilities, 17 so people are very clear on the elements of their role, 18 which are within the confines of what they're 19 responsible for, and that there's clarity, but also that 20 we have roles that are duplicative in the business as 21 well, and that causes confusion and also gets in the way 22 of getting things done. 23 So I think there's a need to organise work better, 24 simply put, and to have the right people in the right 25 jobs. 39 1 Q. Who's taking that forward? 2 A. That's my responsibility to take forward. 3 Q. Do you have a timeline for implementation? 4 A. We -- we're doing the work at the moment to -- I mean, 5 constantly evaluating the structure of the business, 6 like, I guess, in any other business, but we're sort of 7 specifically looking at that over the next -- we've 8 started and we're looking at that over the next few 9 months, yes. 10 Q. Can we please turn over the page and look at (f). (f) 11 says: 12 "Poor internal communications are driving a lack of 13 colleague confidence in both Post Office and senior 14 leadership. 43% of colleagues suggest that the one 15 thing they would do to make Post Office a better place 16 to work is to either 'improve internal communication' or 17 'be more honest and transparent'. In most businesses, 18 suggestions to make the business a better place to work 19 tend to centre on improving pay and benefits or 20 improving progression opportunities, so the overwhelming 21 feedback on communications at Post Office suggests this 22 is a real area of opportunity." 23 Can you assist us with that? 24 A. It's surprising that it's so important. So I think that 25 paints the picture of what people's expectations of us 40 1 are as a leadership team, and is giving us very clear 2 signposting, and emphasising the need to communicate, 3 I think with colleagues and with postmasters. So 4 I think it's very important that we take heed of that. 5 Q. Are you aware of work that's ongoing in that respect? 6 A. Yes, work has definitely started in that respect. 7 Q. Can you point to any concrete steps that you think will 8 change that concern? 9 A. We have regular, every Wednesday, we have a regular 10 communication that Nick, in the past, has led, and now 11 Neil Brocklehurst has taken over from, where we do 12 a weekly communication on business performance, changes 13 that we're making, there might be issues on some 14 elements of the People Plan that we want to communicate, 15 or colleague wellbeing, for example, and they're 16 attended physically with the people that are in the 17 office and then there's a broadcast. 18 Then every four weeks we do a fuller, more 19 comprehensive meeting, again led by the Executive Team, 20 and, at that point, people are able to ask questions of 21 the Executive Team or each other, frankly, and most 22 recently -- and this has been a really positive step 23 forward -- we've had postmasters as well attending those 24 meetings and speaking to the Post Office team and the 25 Post Office colleagues about their life as a postmaster. 41 1 Q. Is that something that's formal, that's going to happen 2 every so often? 3 A. There's a plan to make it happen regularly and often, 4 and to do more in that respect as well. 5 Q. Does that have a particular name, the group that met 6 with the subpostmasters? 7 A. We haven't -- I don't think from memory -- sorry -- 8 there may be, I'm not familiar with it having a name but 9 I think there's a strong intent -- and our Director of 10 Corporate Affairs and Communications is taking 11 responsibility for making that happen. 12 Q. Thank you. That can come down. 13 At paragraph 99 of your witness statement, you have 14 said that there's a perception that the organisation is 15 not as open as it could be; is that a perception or is 16 that reality? 17 A. There is definitely work to do, so I think there is 18 a sense of reality but I also think that -- yeah, sorry, 19 I think it is a reality, yes. I think we could be more 20 open. 21 Q. To take an example, Calum Greenhow of the NFSP has given 22 evidence to the Inquiry about a meeting on 29 May this 23 year. I think you were present at that meeting; is that 24 right? 25 A. I've been present at a couple of meetings. If they're 42 1 the meetings that I think you're referring to, yes, 2 I have been present definitely with him at a meeting, 3 yes. 4 Q. He has suggested that information was given to him about 5 the new NBIT system but that didn't mention a number of 6 concerns that we've heard about at this Inquiry, about 7 the quality of the NBIT build and about cost. Do you 8 think those meetings with the NFSP have been as candid 9 as they should have been? 10 A. Apologies, I don't recall that specific conversation 11 happening, I'm afraid, at that meeting at all. I think 12 I can talk confidently about the intent going into those 13 meetings, and I know Nick had asked the whole of the 14 Executive to try where we possibly could to sort of show 15 representation, and generally to meet and listen to the 16 views of the Voice of the Postmaster, and the NFSP, and 17 the CWU. So we all attended for that reason. 18 So I think the intent going in there definitely 19 would have been to have open dialogue and to take 20 constructive challenge from those groups of people about 21 how we could better run the business. But I can't 22 recall the specifics of that meeting, I'm sorry. 23 Q. I appreciate that NBIT is not your area of 24 responsibility but, looking at NBIT; do you think that 25 there is sufficient transparency about the future in 43 1 regards to that system, from what you've seen and heard 2 within the business? 3 A. I think, because of what I've seen and heard, and 4 listening to the view from postmasters and other people, 5 I think there is definitely opportunity to improve the 6 openness and transparency of the progress, yes. 7 Q. I'd like to turn to an anonymous letter. Can we please 8 bring up on screen POL00448411. This is a letter that 9 you will have seen, it's from a group of people who have 10 called themselves Post Office whistleblowers. It was 11 sent to a number of people, including the Chair, Members 12 of Parliament and the Inquiry. 13 In the third paragraph it says: 14 "Since March [the Post Office] has conducted 2 15 opinion surveys, one directed at postmasters, the other 16 at [Post Office] employees. Both results are shocking 17 and serve to demonstrate that the culture within [the 18 Post Office] is significantly worsening (despite 19 [Mr] Read confirming in a Parliamentary committee 20 meeting in January that 'improvements in culture were 21 being made'). This is not true. We are deeply 22 frustrated that despite several requests to see the full 23 results, we are being denied access." 24 Is this something that fell within your area of 25 responsible? 44 1 A. So the postmaster survey, not, but the colleague survey, 2 yes, that's within my area of responsibility. 3 Q. Are you aware of this specific allegation? 4 A. I wasn't aware until I saw this in preparation for the 5 Inquiry very recently. I didn't know that that was the 6 allegation. 7 Q. Can you speak to it at all in terms of whether you're 8 aware of any requests to see the full results and not 9 being granted? 10 A. Yes, I attended the Board meeting to present the results 11 on the colleague survey and, at the same time, the team 12 that were responsible for the postmaster survey also 13 attended at the same meeting. So I happened to stay for 14 the whole session, which was very comprehensive. We 15 covered the detail of the postmaster survey -- this is 16 not the YouGov survey, sorry, this is the internal 17 survey -- and the colleague survey, in detail with the 18 Board. 19 We'd also covered both of those same things at our 20 Executive Group meeting beforehand and we have fully 21 communicated the results, certainly of the colleague 22 survey -- I can speak with conviction to that element -- 23 through the business at every level, and we've been very 24 comprehensive, so we haven't sanitised any of those 25 results. We've provided full and comprehensive detail 45 1 to every business leader, to then share with their -- 2 onward share with their teams. 3 We have protected anonymity in the smaller groups 4 from the verbatim comments but, frankly, the verbatim 5 comments roll up into the themes of the survey anyway, 6 so there's no chance of any ambiguity about the results 7 of the survey. 8 Q. Thank you. 9 The letter then goes on to raise a concern about 10 people being managed by Mr Read. If we scroll down, we 11 can see a complaint about those who are said to have 12 conflicts of interest and we'll get on to Project 13 Phoenix and the Past Roles Project shortly. If we go 14 over the page, please, there's just something that's 15 said about you that I'd like to give you an opportunity 16 to respond on. It's the second paragraph. I think 17 we're going to actually have a version of this that 18 doesn't have the redactions on but it doesn't matter for 19 today's purpose. It says: 20 "Who are the new executives coming on board too? 21 Karen McEwan is well known to Read; they worked together 22 and have kept in touch over the years. How she got 23 appointed within weeks of her predecessor departing, 24 tells us this is another cover up and Read is simply 25 surrounding himself with his 'own' type." 46 1 How would you respond to that allegation? 2 A. I mean, it's totally untrue. As I said, I was on 3 a management development programme with Nick 20 years 4 ago. We genuinely have had no contact since, and that 5 is particularly of relevance because, at the time that 6 I was at McColl's, Nick was at the Nisa group and there 7 could have been an opportunity then, given that I was 8 an executive member of the team at McColl's, for us to 9 have contact and, even at that point, we didn't make 10 contact at all. I had no contact with him. 11 Coincidentally, I had written an email to Nick the 12 week before I got approached by MBS Executive. I had no 13 idea there were any vacancies in the Post Office 14 leadership team but, by mutual contact from Tesco 15 suggested to me that I wasn't working at the time and 16 that I would be very helpful to Post Office in some way, 17 shape or form, and that I should contact Nick, and 18 suggested that I contacted him. I wrote him an email, 19 and I actually said in the email, "I'm not sure whether 20 you'll remember me". I didn't even know that Nick would 21 remember who I was, 20 years later. 22 So to read that my appointment was less than cloaked 23 in integrity is disturbing. So I was approached 24 formally -- I was interviewed formally as a candidate 25 for that job genuinely, and I had had no contact with 47 1 Nick over that time. 2 I also don't know that it would have been 3 problematic if I had been in contact with Nick. 4 I wouldn't -- I wouldn't have been ashamed about that 5 and it certainly wasn't a cover-up but, genuinely, we 6 hadn't been in touch for a 20-year period. 7 Q. Thank you very much, that clarifies that matter. Can 8 that letter please come down. 9 Moving on to Non-Executive Directors. What is your 10 view, if you have one, on the balance between the number 11 of executives and the number of Non-Executive Directors 12 on the Board? 13 A. So, in terms of the number, it feels appropriate and 14 it's in keeping with my previous experience. 15 Q. Thank you. In respect of the Postmaster Non-Executive 16 Directors, do you consider that that works, in 17 principle? 18 A. That the role works? 19 Q. Yes. 20 A. I think it's fundamentally important and it definitely 21 works, insofar as both of those individuals give a good, 22 honest, representation of issues mattering most to 23 postmasters. So I do, I think the role is invaluable, 24 and I think, in other organisations, other Boards should 25 work hard to take the same principles. 48 1 Q. Do you have any concerns about any conflicts of interest 2 in that respect? 3 A. No. 4 Q. Are there other ways in which you consider that 5 subpostmasters or subpostmaster experiences can be built 6 in to the business in some way? 7 A. Yes, so we have a Postmaster Experience Director, who is 8 a recent appointment, and he's a serving postmaster, and 9 he's doing really well in bringing to life the issues 10 that are live and happening for postmasters and, in 11 fact, he's been instrumental in bringing the postmaster 12 to the meetings that I was referring to earlier. So 13 that's a role that I think we should continue to heavily 14 focus on and heavily champion, and I think, as 15 an Executive Team, it's very, very important that we 16 have a close and trusting relationship with him and that 17 he feels he's able to talk to us and tell us about 18 issues that he might be experiencing in getting things 19 done in the business. I think that's really important. 20 Q. Do you know who instigated that role? 21 A. Sorry? 22 Q. Do you know who instigated that particular role, the 23 Postmaster Experience Director? 24 A. I'm not entirely sure who did, no. 25 Q. And that's Mr Eldridge? 49 1 A. It is, yes. 2 Q. Are you aware how he manages to balance working as 3 a subpostmaster with also taking on this role at the 4 Post Office? 5 A. So every conversation encounter that I've had with him 6 he's very positive and he's never said that he's not 7 able to cope with that, and I think he seems really 8 capable and he's got a really good, both commercial 9 background and a postmaster background. So I'm 10 confident that he would tell me if he wasn't able to 11 balance it and he does seem able to do that, yes. 12 Q. Is he in some way supported by a team at the Post Office 13 or does he attend on his own? 14 A. I think he wants to retain a degree of independence, 15 I think but, also, he would be supported by the Retail 16 Team, and I think he has a good relationship with them, 17 yes. 18 Q. Perhaps we could bring up on to screen POL00458458. 19 I think this was the advertisement or job description 20 for that role. If we could scroll over, please, and if 21 we could look at page 5, if you could scroll down, 22 there's a section there that says: 23 "Where does this role fit with the rest of the 24 team?" 25 Can you assist us with that, please? 50 1 A. In terms of whether this is -- happens in practice or -- 2 Q. Yes. 3 A. Yes, so that is as I see it in practice, yes. 4 Q. So who holds the other roles? 5 A. So the Engagement Director role is held with Tracy 6 Marshall and the Group Chief Retail Officer was Martin 7 Roberts but, obviously, we've made the changes to that 8 function so, temporarily, Pete Marsh is stepping up as 9 interim cover for the Chief Retail Officer role. 10 Q. You've previously in your evidence expressed some 11 concerns about the previous holder of that role. Do you 12 have confidence in the new individual who holds the 13 role, or is stepping up to the role? 14 A. Yes. 15 Q. Thank you. I'm going to move on to another topic but 16 that might be a moment to take our morning break? 17 SIR WYN WILLIAMS: All right. What time shall we resume? 18 MR BLAKE: If we come back in 15 minutes, so 11.35. Thank 19 you. 20 (11.17 am) 21 (A short break) 22 (11.36 am) 23 MR BLAKE: Thank you. 24 I'm going to move on to cultural issues. 25 Paragraph 70 of your witness statement, you have 51 1 referred to the Behaviours Framework that was launched 2 and I'd just like to bring up onto screen, if I may, 3 your statement WITN11360100, page 24. Is the Behaviours 4 Framework something that you are responsible for? 5 A. When I consider the formulation of it and the 6 communication, yes. In terms of overall accountability 7 I think the behaviours are the responsibility of 8 everybody in the business. 9 Q. Thank you. If we could bring up page 24 of your witness 10 statement, please. It's paragraph 71. You say at 71: 11 "One of the four key behaviours is 'own the 12 outcome', which I am confident will help drive the 13 changes in ownership and accountability we need to see. 14 The other behaviours are 'be curious', 'move it forward' 15 and 'back each other', all of which are critical to 16 cultural change." 17 To a group of lawyers that sounds like a lot of 18 words and not much else. Can you assist us with really 19 what that means in practice? 20 A. Yes, I appreciate that that doesn't read literally. 21 I think "owning the outcome" means for people to take 22 responsible and accountability, which is obviously 23 critically important, given the history of the Post 24 Office, to take their job seriously, to fulfil it to the 25 best of their capability, and to make the decisions and 52 1 own the consequences of decisions that they take. 2 In terms of "be curious", this is particularly 3 relevant because the Post Office has been accused of, 4 and understandably so, a lack of curiosity, a lack of 5 seeking to find the truth. In any circumstances, even 6 when seeking the truth is difficult, it's very important 7 that everyone in the organisation asks questions, feels 8 comfortable to question people, particularly when 9 they're more senior, actually. 10 "Moving it forward" is the acknowledgement that 11 sometimes good is better than perfect and what I mean by 12 that is there is sometimes -- I think that sometimes 13 stifles performance, so people feel that everything has 14 to be perfect and everything is going to be scrutinised, 15 and rightly so in some cases, but it does sometimes 16 hinder progress, and we wanted to encourage people to 17 feel that they were giving their best and their best was 18 good enough. 19 And "backing each other" is fairly straightforward 20 but that means to support each other through times of 21 difficulty and challenge. 22 Q. Issues of culture are quite difficult to monitor. Is 23 there a way in which achieving those behaviours can be 24 monitored? 25 A. Yes, we're taking that extremely seriously. So rather 53 1 than a series of words -- and I appreciate when you see 2 this in a statement and on a piece of paper, it can look 3 like a halfhearted time promise, but we are -- we're 4 very serious about it. So right the way through from 5 ensuring that all of these four behaviours are embedded 6 in our recruitment practices, for example. 7 So we've got some -- a framework to help people who 8 are interviewing, to seek out these behaviours and to 9 make sure that the people that we recruit to the Post 10 Office have the right values and the right behaviours, 11 and actually, that's arguably as important, if not more 12 important, sometimes, than the technical expertise, if 13 we have the right people, particularly on curiosity, for 14 example. So we're building it into the recruitment 15 practices and processes that we have. 16 We are building it into progression through the 17 business. So I think in the past I refer to people 18 maybe ending up in jobs that they weren't totally 19 capable of doing. That's critically important and, even 20 if that means letting people down when they think 21 they're going to be capable but they're not, whether we 22 have to have more scrutiny as an organisation on that. 23 So as well as subject matter expertise, we'll be looking 24 for these behaviours, and identifying those behaviours 25 and individuals before we promise anyone a bigger job, 54 1 a bigger pay package and more responsibility, as these 2 are the individuals leading an organisation in a hugely 3 and very critical time of change. So very important. 4 Q. That can come down. Thank you. 5 In terms of culture towards subpostmasters, we've 6 seen in evidence the letter from Mr Read to the Lord 7 Chancellor in January 2024, regarding the potential 8 exoneration of subpostmasters. Is that a letter that 9 has been discussed with you at all? 10 A. Is it possible to remind me, so I can see -- 11 Q. I don't have the number to hand but it's a letter in 12 which Mr Read set out the number of appeals that the 13 Post Office was likely not to contest as against the 14 higher number of those that would be contested. If it's 15 not something that you're aware of -- 16 A. It's not something that I remember at all, sorry. 17 Q. -- that's absolutely fine. Can we in that case, please, 18 turn to POL00448653. 19 A. Apologies, I've got a completely blank screen. Is that 20 normal? There's nothing happening on my screen, it's 21 completely black. 22 Q. Has it changed now or is it still black? 23 A. There's nothing here. 24 MR BLAKE: Sir, we may need to pause for a moment while 25 somebody has a look at it. It might just be a matter of 55 1 turning it on. I'm not sure where the switch is there, 2 I'm afraid. (Pause) 3 SIR WYN WILLIAMS: It was working before the break? 4 THE WITNESS: It was working perfectly before. It was 5 working up until a few seconds ago. 6 MR BLAKE: Perhaps we can take a five-minute break. 7 SIR WYN WILLIAMS: We can. Do you actually want to us go in 8 and out? Everybody else can go out if they want to but 9 all this coming and froing, I think I'll just sit here, 10 if it's only five minutes. I'll conduct an experiment 11 as to whether you can resist talking to each other. 12 (Pause) 13 A. I'll let you know if can't see anything properly but at 14 the moment I've got the screen back, thank you. 15 Q. Could we please then turn to POL00448653, and that's 16 what we know as the Project Pineapple email, over the 17 page, please. Was this something you saw around about 18 mid-January of this year? 19 A. Yes, it is. 20 Q. If we could scroll down, please, I'd just like to take 21 you through a few of the complaints that were set out in 22 this email just to see whether any of those fall in your 23 responsibility and what has been taken forward and what 24 hasn't. 25 So if we start with the first paragraph, there are 56 1 the concerns expressed regarding Mr Taylor and a feeling 2 by management, and even members of the Board, that still 3 persisted that those postmasters who have not come 4 forward to be exonerated were guilty as charged. 5 That's a similar complaint to the complaint about 6 the letter that I was asking you about that you hadn't 7 seen. 8 A. Yes. 9 Q. In respect of that particular allegation, not just 10 against Mr Taylor, but a broader allegation that 11 subpostmasters are seen as guilty as charged who haven't 12 come forward to be exonerated, are there any steps that 13 you personally have taken in that regard? 14 A. I mean, obviously, as a member of the Executive Team, 15 I take that very seriously and it definitely isn't 16 a feeling or -- it's just definitely not something that 17 I'm familiar with at my time in the Post Office. I've 18 never heard -- never heard that and I don't believe -- 19 to the best of my knowledge, I don't believe that 20 anybody that I work with in the organisation feels that 21 that's true, that that's the case at all. 22 Q. If we look at the second paragraph, there's a complaint 23 there about Mr Roberts and certain members of his team. 24 I think you've mentioned Mr Roberts already. Is that 25 a matter that you have personally taken forward? 57 1 A. So the subsequent investigation into this complaint was 2 handled by a member of my team, yes. 3 Q. Is Mr Roberts still in the organisation? 4 A. No, he isn't. 5 Q. Thank you. Is that a result of action that has been 6 taken? 7 A. No, it isn't, it's ... 8 Q. The next paragraph is a complaint about the power 9 wielded by Mr Foat, General Counsel. Is that something 10 that you have personally been involved in? 11 A. This particular part of the statement wasn't totally new 12 to me because Henry Staunton had mentioned this 13 previously when I was having a conversation with him 14 about the investigatory processes that were in place at 15 the time. So I think that sentiment was not as much as 16 a surprise as some of the other elements of the letter. 17 Q. Is it something that you have looked into and is it 18 something you feel action needs to be taken or has been 19 taken? 20 A. So I -- yes, we are and have looked into it. Every 21 element of this was subject to a very thorough 22 investigation, so we've broken this down and have 23 investigated on all of the matters. As I said, this 24 view that was held at the time about Ben Foat was 25 something that I was definitely familiar with, though -- 58 1 Q. Is it something that you have taken any actions in 2 respect of? 3 A. I think the action that I am and have taken is more 4 all-encompassing action to improve the culture in the 5 business more generally and to ensure that the Executive 6 and management and everybody lives to the values and the 7 behaviours. We haven't -- I haven't specifically taken 8 any action in respect of Ben Foat, no. 9 Q. If we scroll over the page, please, there's another 10 complaint there regarding Postmaster Non-Executive 11 Director membership on all committees, including RemCo; 12 what's your view of that? 13 A. I think Amanda Burton referenced it in her evidence. 14 I think it is helpful to have representation of all 15 Non-Executive Directors at some of the committee 16 meetings, yes. 17 Q. In terms of RemCo, I think you've said -- are you 18 a member or do you just attend -- 19 A. I don't have any voting accountability but I attend the 20 meetings. I am responsible and accountable for 21 preparing the papers for that meeting. 22 Q. In your view, would Postmaster Non-Executive Director 23 membership of that committee be helpful or unhelpful? 24 A. It would be helpful. 25 Q. Thank you. Could we please turn to POL00448599 and 59 1 we're now looking at the fallout from the sharing of 2 that Project Pineapple email. If we scroll down to the 3 bottom of the page, Mr Foat has emailed Nick Read and he 4 says: 5 "The Project Pineapple email contained very serious 6 allegations of which I have not been aware. Given the 7 circumstances, I would be conflicted." 8 Do you know what the context of this email is? 9 A. How I read it at the time, and looking at it now, my 10 belief -- but I don't know this to be the case but 11 I think you'd have to ask Ben Foat, but my belief here 12 is that there are inferences made about his conduct and 13 his treatment of postmasters which, when he read the 14 email, were the first time that he had been made aware 15 that there were -- there was a perception that there 16 were any allegations against him. So I think the point 17 he's making here is that he didn't know but now that he 18 does know, clearly he wouldn't be -- we wouldn't be able 19 to carry on with the investigation because he would be 20 in a position of conflict. So I think that's the point 21 that he's making. 22 Q. Thank you. He says: 23 "Karen and Ben T -- it would be helpful to have 24 a conversation with you." 25 Did you have a conversation with Mr Foat about the 60 1 Project Pineapple issue? 2 A. Yes, I did have the conversation on the day that the 3 email came out, yes. 4 Q. Can you assist us with what was discussed? 5 A. So he was -- Ben, sorry -- was very distressed. 6 I think on that day and at that time there was a lot 7 of anxiety in the business, and particularly with the 8 individuals that had been -- had been in receipt of the 9 email and who were named in the email. Because of the 10 sensitivity, at that time, Owen Woodley and I decided 11 that we would take responsibility and take control of 12 the situation, effectively, and therefore we were the 13 only two members of the Executive that were in contact 14 with people and we sort of divided responsibility, 15 effectively, to call those people to try and -- (1) to 16 try to settle them down, bearing in mind that we'd got 17 to worry about business continuity, and there was 18 already -- I mean, that period in time was our most 19 critical period of time, and we were all very concerned 20 about people's wellbeing but also about running the 21 business. 22 So I had the conversation with Ben and he was very 23 distressed. 24 Q. Did you speak to the Subpostmaster Non-Executive 25 Directors around this time? 61 1 A. I did but not immediately. So I think it was at the 2 beginning of the following week. I think this happened, 3 from memory, on a Friday, and I was in contact with Ben, 4 I remember, on that day and then, subsequently, Martin 5 Roberts over that weekend. And I spoke to Saf -- 6 I don't think I -- I don't recall speaking to Elliot but 7 I spoke to Saf on -- very early in the beginning of the 8 following week, yes. 9 Q. Thank you. Could we please turn to POL00460000. This 10 is the investigation report that was carried out by 11 Nicola Marriott into this particular issue. Was this 12 something that you commissioned or asked to be carried 13 out? 14 A. Yes, so at the time of the Project Pineapple email, the 15 middle of January, it was clear that, once the dust had 16 settled and we had made sure that the people that were 17 named were as composed as they could be, it was obvious 18 that we needed to take some action, and we decided at 19 the time that Nicola Marriott would be the most suitable 20 person. She's extremely experienced and very thorough 21 and has a very good perspective of the criticality of 22 postmasters in the business as well, which I thought was 23 important. 24 So she would understand, probably better than 25 anybody, the need for a kind of very rigorous approach 62 1 to the investigation. So she set about doing that work 2 in the beginning of February, yes. 3 Q. Can we please turn to the bottom of page 15 and we can 4 see the summary of her findings. She says: 5 "There is a consistent theme of lack of effective 6 communication and updates into the Board sufficient for 7 Saf and Elliot to fully understand some of the issues 8 raised, how they are being handled and in some instances 9 why things have taken so long." 10 If we scroll down: 11 "Based on this investigation, I do not believe there 12 is a toxic culture towards [postmasters] still prevalent 13 within Post Office or that there is an intentional 14 attempt from current employees to prevent the 15 [Postmaster Non-Executive Directors] from having access 16 to relevant information. However, I can understand why 17 some of the situations outlined by Elliot and Saf could 18 be perceived in this way and the recommendations will 19 address the need to improve flow of information to the 20 Board as well as clarify the scope of the [Postmaster 21 Non-Executive Director] role including what is 22 appropriate in terms of engagement outside of the Board 23 with subsequent engagement on this to all relevant 24 stakeholders." 25 The reference in that conclusion in not believing 63 1 that there is a toxic culture towards postmasters still 2 prevalent within the Post Office, do you think this 3 investigation was sufficient to have reached that 4 conclusion? 5 A. I would say, in reading and analysing that particular 6 line again, that is quite an all-encompassing statement, 7 yes. I think -- trusting that Nicola will have had the 8 best intention in doing this investigation, I think from 9 the interviews she conducted and the people that she 10 spoke to, I think she's there, from the best of your 11 knowledge, stating what she believes to be right. But 12 I think it would be impossible, with hindsight, from the 13 extent of that investigation, to be able to make that 14 comment with conviction, like I say. 15 Q. We've seen recently, for example, the investigation into 16 Mr Jacobs and correspondence from an investigator to him 17 as part of that investigation; did you hear that 18 evidence? 19 A. No, not specifically but I am aware of it. 20 Q. Do you think that there are still potentially wider 21 cultural issues that might mean that, in fact, to some 22 extent, there is a toxic culture towards postmasters 23 still prevalent in some aspects of the business? 24 A. Not to the best of my knowledge but I do believe that 25 there is still a lack of capability in the organisation 64 1 that needs to be addressed, and I believe that there 2 is -- there are also still issues with the 3 infrastructure and the operating model of the Post 4 Office, which I think I talked earlier about 5 accountability being in the right places. I don't think 6 that's helpful and I do also think that maybe the 7 communication isn't as transparent as it could be, not 8 for any malicious intent but either because of those 9 capability issues or because people are still worried 10 about the consequences of saying things that may be 11 controversial or admitting that things are not right. 12 So I do think that there is a -- still that -- that 13 feeling within some members of the Post Office colleague 14 population, yes. 15 Q. Thank you. At paragraphs 153 to 157 of your witness 16 statement you have raised an issue and you say it wasn't 17 minuted as part of that investigation. Can you assist 18 us, insofar as you're able to, with what that issue is? 19 A. If I could just wait for that to come up. I can't see 20 it at the moment, sorry. 21 Q. Ah, would you like to see your witness statement? 22 A. Yes, please. 23 Q. WITN11360100, paragraph 153, that's page 52. We can't 24 look into the truth or otherwise of what was said to 25 Parliament but if you're able to assist us with what the 65 1 broad allegation was that you say was not minuted as 2 part of that allegation. 3 A. Sorry, yes. I'll just remind myself. 4 Q. 153 to 157. 5 A. This relates to one of the two -- I was asked about 6 whistleblowing complaints in the business and this 7 relates to one of the two whistleblowing complaints that 8 I was aware of at the time of writing my statement, yes. 9 Q. So it wasn't minuted so as to protect the identity of 10 the whistleblower or for some other reason? 11 A. Sorry, could you repeat that? 12 Q. I think your witness statement suggested that there was 13 intentionally something not minuted within that 14 investigation. 15 A. No, that wasn't -- 16 Q. Perhaps that's -- 17 A. That wasn't what I was intending, no. 18 Q. That's fine. Perhaps we can then mover on to Project 19 Phoenix and Past Roles. That can come down, thank you. 20 Did you understand the difference between Project 21 Phoenix and Past Roles at the beginning? 22 A. Do you mean in the beginning of my time at the Post 23 Office? 24 Q. If they were both ongoing at that time, yes? 25 A. They were both ongoing and, no, I didn't immediately 66 1 understand the issues -- the differences, sorry. 2 I understood what was broadly being looked into but 3 I didn't immediately understand the differences, no. 4 Q. When did you become aware of the differences between the 5 two? 6 A. So I had started asking questions about it because it 7 obviously related to extremely important matters, and 8 I felt that I should be aware of them, and I'd asked 9 questions, probably from not long after I joined, 10 probably at the end of October, and I established 11 a broad understanding. At that time, I wasn't 12 accountable for the work, but I got a broad 13 understanding, and I did quickly understand the 14 differences between those two groups of people, yes. 15 Q. I think you've said in your witness statement that Past 16 Roles was moved to sit within your domain by December 17 2023; is that correct? 18 A. I think it was around -- I couldn't remember exactly but 19 I'm sure it was -- as we came from the Christmas break 20 into the New Year, kind of the end of December, yes. 21 Q. Why was it moved within your domain and where did it 22 come from originally? 23 A. So originally, Owen Woodley had executive accountability 24 for it and then there was a couple of people that were 25 set up to do the operational work, yeah. 67 1 Q. Why did it move to you? 2 A. Naturally, there were investigatory matters which 3 related to colleagues that worked in the business so, 4 therefore, from an accountability perspective it would 5 make sense for it to sit with me but also, I think I was 6 probably, with respect to Owen, I was probably better 7 qualified to take the executive responsibility. 8 I probably had more experience in that particular area 9 than Owen did at the time. So we discussed it, and 10 agreed that it would be better to sit in my area. 11 Q. How about Project Phoenix? 12 A. No, so Project Phoenix was with John Bartlett's team, 13 the Assurance & Complex Investigations team. 14 Q. Do you think that the division between the two is 15 appropriate? 16 A. Do you mean the division in Project Phoenix between 17 myself and that unit or do you mean the division of Past 18 Roles and Phoenix, sorry? 19 Q. Both. 20 A. Both. So yes, in terms of the division of the two 21 subject matters because they are distinctly different. 22 Ultimately, I think it's important for me to be 23 connected and brought in on some of the matters relating 24 to Project Phoenix because, after all, they relate to 25 Post Office colleagues who have a contract with the 68 1 business. 2 Q. Are you sufficiently brought in? 3 A. Yes. 4 Q. Can we turn to POL00448308. We're going to start by 5 looking at the Past Roles Project, we'll then move on to 6 Phoenix. These are the terms of reference that the 7 Inquiry has seen before. I'm not going to spend a great 8 deal of time on it but the first sentence there refers 9 to the Past Roles Project being established after the 10 Inquiry's compensation hearing in December 2022. Are 11 you aware of why that was the particular trigger for 12 this work? 13 A. My understanding is because of the judgments, that that 14 initiate the work, as ... 15 Q. Sorry, what do you mean? 16 A. So the -- I think from the -- this is a recollection, so 17 I think it's from -- as a result of the judgments that 18 the team set up to look into this matter. 19 Q. Do you know why the Inquiry's own compensation hearing 20 might have been a trigger? 21 A. I don't know, I'm sorry, no. 22 Q. If we turn over the page, please, we see the risks that 23 are said to emerge, and this is a matter I've dealt with 24 with other witnesses. They're set out there: 25 "... (i) Criticism of employees (say on social 69 1 media); (ii) Undermining the integrity of the work being 2 performed (for example, giving rise to conflict or the 3 perception of conflict); (iii) Undermining postmaster of 4 the public confidence in the work being performed by 5 [the Post Office], or the specific team." 6 Do you consider those risks to be an accurate 7 reflection of the risks, and in that order? 8 A. In that order, no, I obviously can't speak to this 9 confidently because I wasn't here at the time. I think 10 all of them are considerations. The biggest risk of 11 changes in this particular unit, where most of these 12 people were employed, would be the slowing of 13 compensation for postmasters. So I think that probably 14 should have been the number 1 issue here. 15 Q. Thank you. Thank you. Can we please turn to 16 POL00448615. This is a Group Executive report, the 17 title is "Past Roles Review" dated 17 January 2024. 18 Could I please ask you to turn to page 7. I wonder 19 whether you could assist us with this. We've heard 20 evidence that it was originally, or certainly Mr Jacobs 21 thought, that he was originally going to be sitting on 22 this panel. We see there Mark Eldridge's name as 23 Postmaster NED. Can you see us with that at all? 24 A. Obviously I wasn't there at the time of setting up this 25 panel, so I don't -- I wasn't aware, actually, that that 70 1 was the case. Sorry. 2 Q. If we could please turn to page 11. Mr Eldridge, does 3 he sit on that panel? 4 A. Yes, he does. 5 Q. Paragraph 3, this is another passage that I've read to 6 other witnesses, it says there, in terms of key themes 7 for communications: 8 "In carrying out this work we are acutely aware of 9 the duties we owe to our colleagues, and the views of 10 our trade unions. We also recognise that, in the vast 11 majority of cases, employees who have performed such 12 roles in the past will have carried out their duties 13 according to the instructions given to them by the 14 business at the time, and in the belief that Horizon was 15 robust." 16 Do you consider that to be appropriate? 17 A. So I think, in seeing some of the thematic evidence that 18 I've seen over my time in the Post Office, relating to 19 kind of the mistakes that have been made on culture, it 20 isn't surprising to see the reference to the fact that 21 colleagues were acting under instructions from more 22 senior people. That isn't surprising. 23 It's very difficult to comment. I wasn't obviously 24 here when these terms of reference were -- 25 Q. This is a report from January 2024. 71 1 A. Oh, sorry, right, okay. 2 Q. If we take a step back and look at the Past Roles Review 3 and the work that's being carried out, do you think that 4 there has been sufficient focus on the risk it actually 5 poses to subpostmasters and, for example, those claiming 6 compensation and redress, rather than, for example, the 7 risks to current employees? 8 A. I think in my time here and in all of the conversations 9 that I have had, both of those things have been 10 a consideration, so it is true to say that that the 11 concern that people, looking at our progress with this, 12 might have, subpostmasters and members of the public and 13 other people, is relevant and it has been relevant to us 14 as well as the impact on the colleagues in the business, 15 yes. 16 Q. Could we please turn to POL00448864. These are the 17 minutes of a Group Executive meeting from 13 March this 18 year. I'd just like to read to you a passage or a few 19 paragraphs that relate to the Past Roles Project. They 20 can be found on page 3, please. If we scroll down, we 21 can see the heading "People" and "Past Roles". Is this 22 something you spoke to or you -- 23 A. So I sponsored the work. Nic Marriott and Simon 24 Recaldin came in to do the presentation. 25 Q. Thank you. I'm just going to read to you a few passages 72 1 and just ask you a few questions going along. So "SR" 2 is Mr Recaldin and "NM" is Ms Marriott: 3 "[Simon Recaldin and Nicola Marriott] spoke to the 4 paper which set out a recommendation on the approach to 5 be taken in relation to the Past Roles Review and 6 staffing in the Remediation Unit in the light of the 7 change in operational context and political 8 environment." 9 Do you know what's meant there by the operational 10 context and political environment? 11 A. Yes, my understanding, and the conversations that I'd 12 had with Nic before she came into present this paper 13 were that the -- it was quite difficult at the time, 14 amongst other things, to determine the workload 15 requirement and, therefore, the workforce planning for 16 the Remediation Unit, because things were changing quite 17 frequently. At this particular time, I think this was 18 in the time of the mass exoneration and the change to 19 the schemes, as well. So, what she's speaking to here 20 is the changing environment but also the difficulties 21 faced by that team at the time and the workload. 22 So operational, in the sense that there was more 23 pressure, more work, and some of the political decisions 24 that had been taken at that time, which changed the work 25 of the -- of that unit. 73 1 Q. The third bullet point says: 2 "It had been agreed that an independent panel would 3 be established to validate the approach to the activity 4 and while it had decision making authority it was able 5 to recommend potential outcomes, as follows: 6 "No further action 7 "Reallocation of workload or activities 8 "Redeployment 9 "Additional assistance for employee wellbeing 10 "A formal employment process in limited 11 circumstances, [for example] where an individual in 12 a high risk role unreasonably refuses to accept 13 redeployment or cooperate with the business." 14 So the Past Roles Project here is looking at those 15 who had previously been involved in issues that the 16 Inquiry is looking at and who are still working for the 17 Post Office -- 18 A. That's right. 19 Q. -- and these are the options that are being presented or 20 were presented for, for example, not taking action, 21 redeploying, et cetera; is that a fair summary of that? 22 A. That's exactly right, yes. 23 Q. Thank you. 24 "[Ms Marriott] noted that public perception aside, 25 no direct conflicts had been found and none of the risks 74 1 outlined within the [terms of reference] of the Past 2 Roles Review had materialised and that ongoing 3 uncertainty was causing upset (with mental health 4 absence as a result in some cases)." 5 Do you know what's meant there by "none of the risks 6 outlined in the terms of reference had materialised"? 7 A. I can't remember and I don't know specifically but -- 8 no, I'm sorry, I can't remember. 9 Q. It says: 10 "Colleagues were rated 'RED', however, if they were 11 identified as giving rise to a perceived risk in terms 12 of undermining the integrity and independence of 13 remediation and redress work being done and in those 14 cases, redeployment had been recommended. 15 "Since the review had been undertaken, there had 16 been a significant increase in late applications and the 17 [Remediation Unit] work driven by current external 18 scrutiny and the heightened awareness that was 19 generating, organisational design delays had meant 20 an increase in colleagues who were deemed as 'RED' and 21 there [was] no clarity yet on the Government's role in 22 relation to redress going forward and associated 23 processes and procedures." 24 Are we to understand that, by March 2024, following, 25 for example, the ITV drama, there was an increase in the 75 1 number of people who were claiming redress and the 2 Remediation Unit was under great pressure, work 3 pressure? 4 A. Yes, that's correct. 5 Q. The concern in the business, it appears -- and correct 6 me if I'm wrong on my reading of this -- is that the 7 work that was being undertaken in relation to the Past 8 Roles Project, potentially redeploying people from the 9 Remediation Unit, would cause problems in that regard? 10 A. That was one of the balancing decisions that we had 11 actually, yes, and it was very difficult to pinpoint 12 exactly what the workload and, therefore, the workforce 13 requirements of the team were. It was quite difficult 14 to pin that down and that's, I believe, one of the other 15 reasons it's led to it taking longer than it should have 16 taken. 17 Q. "[Simon Recaldin and Nicola Marriott] noted the 18 implications arising from a reduction in headcount and 19 the risks posed to redress claim processing times. 20 "The recommendation to the SEG, therefore, was to 21 take a 'many to few' approach to redesigning the 22 organisational structure within the [Remediation Unit]. 23 The approach would see the number of 'RED' employees 24 reduce and the appointment of new recruits to undertake 25 work at a different (lower) grade, albeit the transition 76 1 would need to be done over time to help mitigate the 2 risks to redress claim processing times." 3 Can you assist us with what the suggestion is there, 4 please? 5 A. So I think we were acutely aware that the last thing we 6 could do was slow down compensation and, therefore, 7 changes to the structure in that Unit, taking away 8 people that, notwithstanding the perception of their 9 involvement in work that is of interest to the Inquiry 10 and had led to postmaster prosecution, that they had 11 experience and knowledge and we already had a gap in 12 corporate knowledge that was essential not to slow down 13 redress, and that was the forefront of our mind. 14 Q. So were you balancing out a risk: on the one hand you 15 had a risk that those who were previously involved in 16 issues being examined by the Inquiry would still be 17 employed within the Remediation Team; but, on the other 18 side, you had potential delay if they were to be 19 redeployed elsewhere? 20 A. Yes, absolutely. 21 Q. "It was recommended that the creation of a separate 22 independent function should continue to be explored and 23 initially in discussion with Government, as the make-up 24 of any such function would depend on final decisions on 25 the Government's role in relation to redress going 77 1 forward." 2 We saw the Government's role being mentioned at the 3 very top of the page, as well. Is there, at this point 4 in time, a movement at the Post Office towards trying to 5 put redress in the Government's hands, rather than in 6 the Post Office's hands? 7 A. So I'm aware of -- I mean, I'm not involved in those 8 conversations, so I can't confidently speak to them but 9 I do know that those conversations have been ongoing, 10 and are another factor in us not clearly -- or haven't 11 clearly been able to determine the resource requirements 12 of the unit. So I think we're working blind to the 13 decisions that might happen outside of our control, 14 really, and assuming a business as usual approach to 15 ensure continuity of compensation, the best that we can 16 do. 17 Q. It says: 18 "... as the make-up of any such function would 19 depend on final decisions on the Government's role in 20 relation to redress going forward. 21 "[Ms Marriott] noted that while she stood behind the 22 recommend, she would wish to emphasise that no conflicts 23 had been found, nor had any risks materialised; the 24 issue was one of perception. On this basis, 25 [Ms Marriott] would personally advocate for 'no further 78 1 action'." 2 So we have a "many to few" approach and we have 3 a "no further action" approach; can you talk us through 4 those two different possibilities? 5 A. So the "no further action" would be exactly as it says 6 there. I mean, we would just -- we would do nothing, 7 effectively, with any of the people that worked in the 8 Remediation Unit. They would continue in their role and 9 they would stay as it is. Nothing would be any 10 different. The "many to few approach" would be 11 a restructuring, reorganisation approach that -- it's 12 a redundancy, effectively. This is a Post Office 13 terminology that I wasn't -- I only became familiar with 14 very recently but the "many to few" approach is the 15 decreasing or diminishing of a business unit and, 16 therefore, the compulsory redundancy that would be 17 associated with that. 18 That's the terminology for it. So it goes from, 19 I think, the extreme of doing nothing at all to making 20 people in that business unit redundant on a compulsory 21 basis. 22 Q. "[Mr Recaldin and Ms Marriott] left the meeting so that 23 the SEG could discuss the recommendations. 24 "The SEG discussed the difficult trade-offs at play, 25 with the majority voting for the 'many to few' 79 1 recommendation." 2 Then it has a footnote. If we scroll down, we can 3 see the footnote. It says: 4 "NR, CB and KS voted for Option 3, 'many to few'; OW 5 voted for Option 2, 'no further action'; [you] abstained 6 on the basis Option 3 ['many to few'] had the majority 7 vote." 8 Can you assist us with what your view actually was 9 at that time? 10 A. So my view at the time, and the reason for not 11 abstaining, was to delay the process any further. My 12 view at the time was we just needed to do something and 13 it was clear that it had already taken too long. So 14 I had a strong view that something did need to be done, 15 therefore I wasn't firmly of the view that nothing 16 should happen. I could see that clearly something had 17 to happen, yes. 18 Q. The decision was taken for option 3, "many to few". 19 Does that mean the team was made smaller in size, or 20 what happened? 21 A. So this was the recommendation that was then taken to 22 the Board, which was why it was so important at this 23 meeting that we got a decision because I think, by now, 24 it was -- correct me if I'm wrong, but I think this was 25 the middle of March -- 80 1 Q. Yes. 2 A. -- and because the conversation had been circling around 3 for a long time, and because we were all acutely aware 4 of the internal impact and the internal perception, let 5 alone the external perspective of not doing anything, it 6 was becoming critical. And I think this was the meeting 7 pre-the Board meeting and, at the Board meeting, we were 8 going to get the final decision and permission to move 9 ahead and execute the plan that we are now, actually, as 10 I speak, we are now in the process of executing. 11 We're not taking a compulsory redundancy approach, 12 but we have resolved with a mixture of voluntary 13 redundancy approach and then a ring-fence where we'll be 14 removing people from the Remediation Unit so they will 15 be reporting in a separate unit. But we've got a period 16 of time that's really critical so we can hand over -- 17 and I mentioned earlier that they have subject matter 18 experience which is critical to compensation, and we 19 don't want to lose that experience and knowledge. 20 So there will be a transition period where -- over 21 three months or so, where that knowledge could be 22 transferred properly so the work can still progress. 23 Q. So is the current position arising from this discussion 24 and the subsequent Board meeting that people are being 25 replaced within the Remediation Unit and, if so, do you 81 1 see any risks to the prompt payment of compensation and 2 redress to subpostmasters arising from that? 3 A. I'm confident that we cross-functionally have all of the 4 right plans in place. It is critical that there is this 5 handover period and whilst people might expect it to 6 happen very quickly it's critical that it doesn't happen 7 any quicker -- it takes as long as it needs to take to 8 ensure that knowledge transfer happens and only at that 9 point will those people move away from the unit. So 10 I think if that isn't enacted, then there is a clear 11 risk that there's a knowledge gap. 12 And it has been really difficult to establish the 13 specific resource requirements for that unit because of 14 the change in -- for example, the change to the schemes, 15 and what that might mean and I think that drives the 16 need to be constantly monitoring the resource 17 requirements in that unit. So I think we're working 18 closely as a People Team with Simon Recaldin and his 19 team to ensure that he has -- as a Subject Matter 20 Expert, that he has exactly what he needs to continue to 21 run the function. But the redress and the speed of 22 compensation is at the forefront of my mind and 23 everybody's mind that's dealing with this object. 24 Q. Could we please have a look at POL00458447. This is 25 a separate issue that appears to have been happening at 82 1 a very similar time as these discussions. So if we look 2 at these discussions at the Group Executive level of 3 13 March this year, this is emailed correspondence from 4 8 March. Could we turn over the page, please. 5 It relates to a grievance that had been raised in 6 respect of Mr Recaldin around this time. We don't need 7 to go into the detail but we have there, in the 8 paragraph beginning with the word "whilst", it says: 9 "Whilst I do not believe escalation is required to 10 the misconduct policy in relation to Simon, the 11 investigation does raise concerns about the 12 effectiveness of his performance and a number of further 13 actions are now needed to get to the bottom of and 14 correct issues that are likely present within the 15 function including ineffective OD ..." 16 Can you assist us with what that means? 17 A. Sorry, yes, that's "organisation design". So the way 18 that the unit is structured. 19 Q. "... and lack of resourcing plan as well as cultural 20 issues arising from an 'us and them' mindset within the 21 leadership team." 22 Can you assist us with the concerns that are being 23 raised there? 24 A. Sorry, can I just take a minute to remind myself of this 25 paragraph? 83 1 Q. Absolutely. (Pause) 2 A. So there were a couple of issues. So the original 3 complaint that had been initiated was regarding the 4 disproportionate number of people that were incumbent 5 Post Office colleagues, vis à vis the number of 6 contingent workers, so contractor workers, and that's 7 why I'm referring here to the set-up of the business 8 unit and the function. And it was clear that there was 9 a need to have a better resourcing plan and I've spoken 10 to the kind of volatility and the challenges relating to 11 that. 12 But it was really important that we were clear -- so 13 that we could help Simon and team -- we were clear about 14 exactly what was needed in that function to run of the 15 contribution scheme process effectively. And, at that 16 time, I offered some support with one of the People 17 Team, who had expertise in both organisation design and 18 resourcing to help Simon and the team to have more 19 effective plans. 20 Q. That was in March of this year. Do you think that the 21 team now, the Remediation Unit, has sufficient 22 resources, sufficient expertise, sufficient quality 23 individuals, to address the issues of compensation and 24 redress? 25 A. Did you say the Remediation Unit? Apologies, I didn't 84 1 hear -- 2 Q. Yes. 3 A. -- the first part of your statement. Would you mind 4 repeating your question? 5 Q. Do you think, looking at the issues being raised as at 6 March this year, by the present time, do you think 7 sufficient has been done to ensure that that unit has 8 sufficient people, sufficient quality, sufficient 9 expertise in respect of compensation and redress? 10 A. So I think in terms of the people required, as far as 11 all of us can tell now, we are in a much stronger place 12 in terms of resourcing requirements. I think, as you 13 previously asked me about the moving of people in the 14 Past Roles population, and that potential knowledge 15 loss, I mean, as long as we mitigate for that, I think 16 that the people operationally that are doing the job are 17 capable and I think we have enough people. I think it 18 is a moving feast because of the changes to schemes and, 19 as long as we can keep on top of those changes, I think 20 that that will be helpful. 21 We are supporting Simon and the team, so there are 22 other members of the leadership team that are also 23 helping in this function in this unit as well to ensure 24 that we've got the right level of capability there. 25 Q. Looking at the concerns that are raised here regarding 85 1 ineffective OD, lack of resourcing plan, and cultural 2 issues, to what extent do you consider those may have 3 impacted negatively on the speed of compensation and 4 redress? 5 A. I don't think we've found any evidence that that has 6 happened at this point in time but I think, in answering 7 the question as best as I'm able to answer it, if the 8 design of the function and the way that the function and 9 the people within in it are working together is not as 10 good as it should be and not best practice, then that 11 has the potential to be ineffective and, in this case, 12 obviously what we're asking this unit to do is make 13 compensation payments. So I think it has the potential 14 for it to have had an effect but we're not aware that it 15 has. 16 Q. Are you aware of anybody looking into those matters 17 further? 18 A. Yes. So this is a constant point of discussion and the 19 operation of this is a constant point of discussion and 20 focus, and our recently appointed Group General Counsel, 21 that's accountable for this area, is very focused on it 22 so him and the team are giving this a lot of attention. 23 Q. Thank you. 24 SIR WYN WILLIAMS: Can I just try to understand the scale of 25 what we are talking about. First of all, in terms of 86 1 the approximate numbers of people who have been working 2 in the Remediation Unit but, in inverted commas, "it's 3 now thought appropriate that they should not be". 4 A. Yes. 5 SIR WYN WILLIAMS: How many actual numbers are we talking 6 about? 7 A. The actual number -- and it's taken quite a long time to 8 get to this point -- sorry for my deliberation, but the 9 actual number is 27 people. 10 SIR WYN WILLIAMS: Right, okay, and that's out of 11 approximately how many? 12 A. Approximately 110, but that's approximate. 13 SIR WYN WILLIAMS: Right, okay, so I've got that. So far as 14 the schemes with which the Remediation Unit is 15 concerned, following this Inquiry, we'll know that on 16 occasions I've been struggling to keep abreast of the 17 various schemes that have come into existence. The Post 18 Office Remediation Unit, does it deal with -- I believe 19 there are now four schemes? 20 A. Yes, I believe there are four. 21 SIR WYN WILLIAMS: So it deals with all of them? 22 A. Yes. 23 SIR WYN WILLIAMS: Right, fine. 24 A. Four, but there are more than four schemes. So, to the 25 best of my understanding -- I'm definitely not the 87 1 expert here but I'm pretty certain it's four, yes. 2 SIR WYN WILLIAMS: All right. Let me name them, so that I'm 3 sure I'm on the ball. There's what I'll call the first 4 one, the shortfall scheme. That was the first one in 5 time? 6 A. (The witness nodded) 7 SIR WYN WILLIAMS: Then there was a scheme when people's 8 convictions started to be quashed by the Court of 9 Appeal? 10 A. (The witness nodded) 11 SIR WYN WILLIAMS: We've called it the Overturned 12 Convictions Scheme. 13 Then there was a scheme to provide further 14 compensation to members of the GLO -- 15 A. Yes. 16 SIR WYN WILLIAMS: Now, there is a scheme to compensate 17 those people who have been, I use the word "exonerated" 18 by act of Parliament? 19 A. Yes. 20 SIR WYN WILLIAMS: Is that it or are there more that I'm 21 missing? 22 A. There's also a process, a Post Office Process Review 23 Scheme. I'm sorry, I'm definitely not the Subject 24 Matter Expert but there is a scheme about -- 25 regarding -- yeah, the -- I think it's the process -- 88 1 SIR WYN WILLIAMS: We've got lots of people -- 2 A. Apologies, somebody more qualified than me should answer 3 that question. Sorry. 4 SIR WYN WILLIAMS: That's fine. We'll get to the bottom of 5 it. But I'm right, at least, that there are four at 6 least -- 7 A. Yes. 8 SIR WYN WILLIAMS: -- and there may be at least one more. 9 A. Yes. 10 SIR WYN WILLIAMS: Fine. All right. 11 MR BLAKE: Moving on now from Past Roles to Project Phoenix, 12 we've heard a suggestion in evidence, I think, from 13 Mr Staunton, suggesting that Project Phoenix was allowed 14 to go into the long grass by Mr Foat. What's your view 15 on that? 16 A. Can I answer that question in two parts, if I might, 17 because it might be easier for me to answer. So at the 18 time of Mr Staunton making that accusation, Ben Foat was 19 not responsible for that unit so, therefore, by nature, 20 wasn't responsible for the investigations. So I think 21 that was an error made by Mr Staunton. I don't think he 22 understood the structure of the business at that time 23 but Ben Foat wasn't actually responsible. 24 In terms of the perception that it had been kicked 25 into the long grass, I think there was just process 89 1 failings and communication failings, and I don't think, 2 to the best of my belief, that anybody had intended to 3 kick that into the long grass. It's hugely complicated, 4 and it's just not straightforward. 5 Q. What is your view on whether people should be suspended 6 while they're being investigated, rather than continuing 7 to work within the business? 8 A. Specifically in relation to Project Phoenix or -- 9 Q. Yes -- 10 A. -- or are you saying generally? So my view on 11 suspension is that it's a necessary form of action when 12 an investigation is taking place. I think the bar on 13 suspension is now far higher than it was, and obviously 14 we're bound by sort of ACAS guidelines, which is that 15 the -- generally, we would use suspension where 16 an investigation was going to be a brief period of time. 17 I think in the case of Project Phoenix, the decision was 18 taken not to suspend for that reason because I don't 19 think -- I wasn't there at the time but -- so -- the 20 best of my understanding, and I know to be the case, the 21 decision was taken not to suspend because we didn't deem 22 that it would be a brief period of time and a brief 23 investigation. 24 That being said, with hindsight, I do think it may 25 have been better to have made suspensions in this case, 90 1 yes. 2 Q. Are you able to assist us with whether you think 3 sufficient progress has now been made in relation to 4 Project Phoenix? 5 A. So, yes, I do believe that sufficient progress has been 6 made and, internally, we are confident -- again, this 7 isn't necessarily right -- within my remit but I do know 8 and I'm associated with the programme and quite close to 9 it, so I'm sure that we're going to be concluding our 10 processes by the end of this year, the end of the 11 calendar year. 12 Q. Why are you sure about that? 13 A. I just know that that's how far the investigations have 14 progressed so I'm clear, I'm kept update about that 15 regularly. 16 Q. Are you able to assist us with the current position, as 17 things stand as at today? 18 A. So the current position is that there are three 19 colleagues that are in scope as part of this process. 20 I'm not sure whether the Inquiry is aware of that, but 21 that is factually accurate. And we have conducted full 22 investigations into the allegations, bearing in mind 23 that the colleagues involved here were subject to 24 specific allegations of wrongdoing, so there's been 25 a thorough internal investigation, which has been 91 1 conducted by the Assurance & Complex Investigations 2 team. 3 They are at the almost concluding part of that 4 investigatory process into the individuals that are in 5 the scope currently. 6 Q. Thank you. There's one final document I'd like to ask 7 you about before moving to questions from Core 8 Participants, and that's POL00448788. This is a letter 9 that was drawn to the Inquiry's attention by Mr Ismail, 10 although he wasn't aware of the author of this letter. 11 This is a letter, if we scroll down, from Graham 12 Brander, who it has there listed as the Network 13 Provision Lead. 14 Are you aware that Mr Brander investigated Jo 15 Hamilton, Julian Wilson, Lynette Hutchings and others? 16 A. No, I wasn't aware. That's the first time that I've 17 come across this. I wasn't aware, no. 18 Q. Thank you. That particular document can come down? 19 Are you aware of individuals who formerly worked for 20 the Post Office being rehired. Mr Brander, for example, 21 was rehired in 2019; is that something you were aware 22 of? 23 A. Not at all, no. 24 Q. Do you have any concerns that there are those who are 25 actively working at the Post Office, in roles relating 92 1 to subpostmasters or relating to investigations, who do 2 bear some responsibility for what has happened in the 3 past? 4 A. So I'm not aware of any individuals but I am of the 5 strong belief that, if there had been any allegations of 6 any form of wrongdoing by any individuals then, of 7 course, it would have been completely inappropriate for 8 them to be working at the Post Office. 9 Q. Are you aware of anybody who is working at the Post 10 Office? 11 A. So, save for the people that are in the population that 12 are a matter of our investigations for allegations of 13 wrongdoing specifically, no, I'm not aware of any -- 14 SIR WYN WILLIAMS: So you're aware of three people, 15 effectively? 16 A. Yes, I am. 17 SIR WYN WILLIAMS: Yes. 18 MR BLAKE: Thank you, sir. Those are all of my questions. 19 I know that Mr Stein has some questions. I think that 20 may be it. 21 Questioned by MR STEIN 22 MR STEIN: Ms McEwan, my name is Sam Stein. I represent 23 a large number of subpostmasters and I've got a few 24 questions for you. 25 Could I start, please, with your own statement. Can 93 1 I take you to your statement which you should have, it's 2 WITN11360100. Within your statement, Ms McEwan, I'm 3 going to be asking you a question directly about 4 paragraph 212, if you go to that. 5 A. Is it possible to have this on screen -- 6 Q. Hopefully it will go on to the screen. 7 A. -- so I can refer to it? 8 Q. Paragraph 212, please. Thank you. So, we orientate 9 ourselves on the paragraph, you say at the beginning 10 there: 11 "At my interview, when discussing Al's absence ..." 12 The "Al" being referred to there is Mr Cameron; is 13 that correct? 14 A. Yes, sorry, yes. 15 Q. "Nick", that's Mr Read? 16 A. It is. 17 Q. "... Nick also informed me that there had been 18 complaints regarding Al's behaviour but did not specify 19 what had been alleged. He also told me that 20 a conversation had taken place between him and Al in 21 early 2023 regarding Al making an 'exit' from the 22 business, as the relationship between them had broken 23 down due to a longstanding employment dispute ..." 24 Then it then finishes: 25 "Al had then been off work due to ill health and was 94 1 not engaging with the business." 2 Help us understand this, many years before this 3 interview, you had worked with Mr Read; is that correct? 4 A. Yes. 5 Q. I think 20 years ago you've said? 6 A. Yes, but to clarify, we hadn't worked together. So we 7 came from very different parts of the business and, as 8 you'll appreciate, Tesco is a huge employer, 300,000 9 people, I think, in the UK. So we had never worked 10 together. We just happened to be on a leadership 11 development programme together. 12 Q. Right. That's helpful. Thank you. 13 My question, though, relates to the appropriateness 14 of this discussion at an interview. This is before 15 you're employed at the Post Office. You're being given 16 information regarding Al, Mr Cameron, which is that 17 there had been complaints about his behaviour, 18 unspecified complaints, and that there had been then 19 a difficulty, the relationship breaking down between 20 him, Mr Read and Mr Cameron. 21 A. (The witness nodded) 22 Q. Should those sorts of matters be discussed in interviews 23 prior to employment? 24 A. So for context, I think this came from the -- I was 25 asking questions about the set-up of the Executive Team 95 1 and the strength of the team. I was aware that there 2 was not a CFO in place, and obviously that's a critical 3 leadership position, and I was concerned that -- 4 I wanted to understand and I obviously wanted to do my 5 own due diligence before joining the business, so it was 6 important that I understood the context and the 7 operating context of the leadership team. So I think 8 I'd asked questions about the whole team, and that's 9 where the conversation came about. 10 I think, in terms of the appropriateness, there 11 would be -- I would hope that Mr Read would have known, 12 from knowing me 20 years before but also knowing by 13 reputation, that my integrity is extremely important and 14 that I would never have divulged that out side of the 15 conversation that we'd had and the confines of that. 16 And the only reason I have done now is because I've been 17 asked specific questions by the Inquiry, so I've had to 18 make that in my statement, but I -- that conversation 19 was in the -- in a trusted conversation between me and 20 Mr Read before starting work. 21 Q. I'll ask my question again. Should such matters be 22 discussed prior to employment? 23 A. I think possibly not. 24 Q. Can I move, then, on to a different document, please. 25 This is a document for a Board meeting, which is this 96 1 year, 27 February. If I've got the document reference 2 right, it's POL00447854, page 1. 3 It's a Board report that's being discussed, 4 a three-year People Plan and people structure. So 5 POL00447854, page 1. Ms McEwan, again it should go on 6 the screen. Grateful. If you can scroll down the page, 7 please, under "firstly", if we look at those two 8 paragraphs, you see where it says, "Executive Summary", 9 "firstly", and then "secondly". Probably the easiest 10 sentence to look at is under "Secondly": 11 "... a Strategic People Plan has been developed, 12 focusing on three strategic priorities -- colleague 13 experience, capability and inclusion -- to 'create 14 a great place to work for all'. The high-level plan is 15 shared with the Board in this paper for noting and 16 discussion." 17 If we wish to, we can go up the page, I don't ask 18 for that, but this is a document presented to the Board 19 for February 2024, this year, which is for noting only, 20 essentially saying that this what is happening, we are 21 developing this paper, three-year plan. 22 Now, you've discussed this briefly with Mr Blake. 23 But where this says "to create a great place to work for 24 all", in fact the plan doesn't mention subpostmasters. 25 I can't even find the word "subpostmaster" used at all 97 1 within that plan. Help us to understand how such a plan 2 that is meant to create a great place to work for all 3 doesn't even refer to subpostmasters? 4 A. So this is a question that I have been asked before, 5 understandably so. So the extent of my remit is to the 6 colleagues that work at the Post Office but I'm acutely 7 aware, and very focused, on my role in providing 8 a strong, capable, collective of people that work at the 9 Post Office so that they can do their best for 10 postmasters, and I discussed this very point with the 11 Postmaster Non-Exec Directors. 12 So before I took this plan to the Board, I consulted 13 with Saf and Elliot because I was keen to make sure that 14 the work that I was going to do through the plan would 15 make a difference for postmasters and, at that point, 16 Elliot actually pointed out to me that it didn't 17 explicitly say "postmasters". 18 I think we're intending, in the statement, a great 19 place to work and, originally, we just had it as 20 "a great place to work", with a full stop. We've said 21 "for all" because, by reference, that means anybody that 22 is associated with the Post Office, we want it to be 23 a great experience and a great culture for everybody, 24 and that means for everybody, irrespective of the jobs 25 that they do. So I think it's implicit. 98 1 I understand it's implicit, and we are making real 2 efforts to extend some of the work we're doing through 3 this plan to subpostmasters. For example, we've had 4 several meetings recently where we've talked about the 5 leadership -- sorry, the Behaviour Framework that 6 I spoke to earlier. We've started to talk to the 7 postmasters about how that hopefully will make 8 a difference to them for the future and we've had quite 9 positive feedback from that, and something like our 10 service training, we're running a programme of inclusive 11 customer service training. We feel that that could 12 easily be extended to the postmaster population, and we 13 want to be able to do that. So it's not explicit but 14 I'm conscious that it isn't explicit and, as I said, 15 there is a reason for that. 16 Q. The Postmaster NEDs, I think they were the ones that 17 came to you and said that there's a problem with this 18 plan that it doesn't mention subpostmasters; isn't that 19 right? 20 A. Sorry, could you repeat? 21 Q. Did they come to you and make that point, did they say 22 to you, "Ms McEwan, this doesn't mention 23 subpostmasters"? You didn't elicit, you didn't go to 24 them and say "I'm terribly sorry about not mentioning 25 subpostmasters", did you? 99 1 A. No, I did go to them. It was my full intent to consult 2 them thoroughly before I took this paper and the plan 3 anywhere, and they are my biggest, most significant 4 stakeholder. So I did consult them and I did ask the 5 question. 6 Q. Is there a three-year People Plan and People structure 7 for subpostmasters and branch employees? 8 A. Not to the best of my knowledge, no. 9 Q. Was the possible inclusion of mention of subpostmasters 10 and staff at branches discussed with Angela Wolfenden, 11 who is the external people and organisation design 12 consultant who conducted the review? Was the 13 possibility of mentioning them even by exclusion, by 14 saying that this is not meant to directly refer to those 15 individuals, was that discussed with Ms Wolfenden? 16 A. So I'm not aware whether it was discussed or not. 17 I think, with hindsight, as confident as I am about the 18 intention of the People Plan and the spirit that we want 19 to go about this work, I think with hindsight it would 20 be entirely appropriate and helpful maybe to reference 21 specifically in future documents that, whilst I don't 22 talk about subpostmasters and postmasters directly, the 23 work that we're doing is absolutely focused on improving 24 the relationship and definitely improving trust and 25 communication with them. 100 1 Q. Because you say -- and other people have said this -- 2 that the pressures of the scrutiny of this Inquiry, and 3 cases and investigations, have impacted upon people 4 within the Post Office so that people -- are you okay -- 5 so people are concerned about the way their behaviours 6 may be viewed. We understand that but this still seems 7 to be excluding subpostmasters rather directly, doesn't 8 it? 9 A. So arguably, in the work that I'm doing, I don't think 10 that there is exclusion. I think far from it. I think 11 I've -- I'm very acutely aware of the need for the 12 connectivity between the culture of this organisation 13 and what it best does to serve postmasters. So every 14 part of our plan is intending to do that. 15 Q. In that case I'll take you to a different document 16 POL00458463. So that's POL00458463. Ms McEwan, that's 17 the "Our Behaviours" plan, okay? So "Our Behaviours" 18 plan. This one is July '24. Was this one drafted 19 inhouse or was that one also outsourced? 20 A. So we drafted it in consultation with a management 21 consultancy business that we were working with as part 22 of the ethos programme that had been set up before 23 I started. So it was a collaboration between the 24 Executive of the Post Office, including the whole team, 25 and this company. 101 1 Q. Page 5, please, of that document. Now, we've just seen 2 under the banner heading "Creating a great place to work 3 for all", if we can expand it on my screen -- it's very 4 small, I don't know whether it can be widened 5 slightly -- onto "How and when to use these behaviours", 6 thank you. If we can scroll down, please, to the 7 "Employee engagement survey", there we go. 8 So this is under that heading and descriptions: 9 "Including questions related to behaviours and 10 employ surveys to gauge impact on overall engagement, 11 cultural alignment and colleague satisfaction." 12 Then if we just go up one, please, from there 13 "Recruitment and selection": 14 "To support what it takes to be successful at Post 15 Office, we will align our behaviours to our recruitment 16 and selection processes. The definitions will provide 17 a solid benchmark when hiring." 18 Now, this plan does mention colleagues including 19 subpostmasters but it appears to be directly impactful 20 for employees; is that correct? 21 A. The -- so, yes, the intention is to provide a framework 22 for the employees. I described in the past, for 23 example, there's been a lack of curiosity in the 24 organisation. It's really important that we correct for 25 that and we address it. So I think, yes, but by nature, 102 1 it would -- would relate to postmasters. 2 Q. Thank you. Now, you've come to the Post Office with 3 a huge range of experience, background, longevity of 4 employment at Tesco and other companies. Is there 5 a similar People person with your type of experience for 6 the -- I think it's 7,000 individual branch 7 subpostmasters, and presumably a larger number also of 8 employees; is there somebody that's got your background 9 experience and ability to provide the focus within the 10 organisation for those people? 11 A. Sorry, do you mean currently employed in the Post 12 Office? 13 Q. Yes. 14 A. Not to my knowledge, no. 15 Q. You've mentioned that there is a subpostmaster who has 16 been brought in to try to provide an insight into 17 subpostmasters. But that subpostmaster, unless I'm very 18 wrong, doesn't have your sort of background and 19 experience; is that correct? 20 A. Has a different background and experience, but yeah, but 21 not from a -- probably from a cultural expertise 22 perspective, no. 23 Q. Just moving then slightly sideways to whistleblowing and 24 the policies that are in place currently. Now, the 25 whistleblowing policies I won't look at in detail with 103 1 you, but they're not incorporated into subpostmaster 2 contracts. So there is a policy and that policy, 3 essentially, if we wanted to look at it, says that 4 subpostmasters' whistleblowing comments will be received 5 by the Post Office -- 6 A. (The witness nodded) 7 Q. -- although, essentially, the Post Office doesn't have 8 to look at those because of legislation essentially 9 doesn't take into account contractors or non-employees. 10 A. (The witness nodded) 11 Q. To assist subpostmasters, would it be of benefit to them 12 if the whistleblowing policy was incorporated directly 13 into their contracts, so that there will be 14 a contractual obligation to ensure that that is adhered 15 to? 16 A. Yes, I would hope that -- and probably hope isn't enough 17 but I would hope that the work that we're doing to 18 ensure that people -- everybody, postmasters and 19 colleagues in the organisation -- understand the 20 benefits of having that policy and how to utilise it, 21 I think is really important but I think it's possible 22 that we shouldn't over-rely on that, I think. So yes, 23 it may be helpful. 24 Q. Lastly, you, amongst other individuals within the Post 25 Office, have taken part in meetings with subpostmasters 104 1 that have been affected by the scandal? 2 A. Yes. 3 Q. I think you've taken part in number of those meetings, 4 including travelling to Belfast; is that correct? 5 A. I haven't been to Belfast but I have been to several 6 meetings. 7 Q. Right, okay. Where did you go in your meetings? 8 A. So my meetings have been virtual, actually, so I've done 9 three meetings and they've all been virtual but I have 10 done three of the meetings, yes. 11 Q. I'm grateful. 12 Just to finish my questions for you, Ms McEwan, can 13 you comment on the personal impact, emotional impact, 14 that those meetings have had on you? 15 A. Yeah, I've found the meetings to be personally 16 distressing and hugely insightful. I think probably 17 less important the impact they had on me but more the 18 impact that what's happened in the past has had on those 19 people and their families. I found them incredibly 20 difficult but hugely insightful, and very helpful to me 21 in my role at the Post Office. 22 MR STEIN: Excuse me one moment. 23 Thank you, Ms McEwan. 24 THE WITNESS: Thank you. 25 MR BLAKE: Sir, I think those are all the questions. 105 1 Questioned by SIR WYN WILLIAMS 2 SIR WYN WILLIAMS: Right. I'm not sure that I should be 3 asking this question, because I'm not sure I've got the 4 expertise to evaluate where I'm going, but I will ask 5 it. 6 In this rather unusually structured organisation, 7 where you have direct employees but you have postmasters 8 who are now, if they weren't in the past, certainly now, 9 said to be absolutely central to the business, shouldn't 10 they be under the function of someone called a Chief 11 People Officer? 12 A. Do I think -- sorry, can you just say the last bit of 13 the question, again? Sorry. 14 SIR WYN WILLIAMS: Yes, you've got direct employees, 15 obviously. 16 A. Yeah. 17 SIR WYN WILLIAMS: But you've got other people who are 18 contractually, in legal terms bound to the Post Office 19 but acknowledged to be central to the business -- 20 A. Yes. 21 SIR WYN WILLIAMS: -- the postmaster -- 22 A. Yes. 23 SIR WYN WILLIAMS: -- and you've got someone called a Chief 24 People Officer and, to my rather naive way of thinking, 25 that means that someone is performing functions in 106 1 respect of all the people in the business. 2 A. Yes. 3 SIR WYN WILLIAMS: So my question is: shouldn't the Chief 4 People Officer have specific functions in relation to 5 postmasters? 6 A. Yes. 7 SIR WYN WILLIAMS: So if I were to recommend that, you 8 wouldn't think I'd gone mad? 9 A. I wouldn't. I'd wholeheartedly agree. 10 SIR WYN WILLIAMS: Right. Thank you. 11 A. We are starting to do work though, we are -- 12 SIR WYN WILLIAMS: No, I follow -- 13 A. We're making progress but there's much more to do. 14 SIR WYN WILLIAMS: It just struck me, you know, from 15 Mr Blake's questions and Mr Stein's questions, and there 16 seemed to me to be an elephant in the room, so I thought 17 I'd bring out the elephant. 18 THE WITNESS: Thank you. 19 SIR WYN WILLIAMS: Right, thank you. 20 MR BLAKE: Thank you, sir. 21 SIR WYN WILLIAMS: That's it, Mr Blake? 22 MR BLAKE: It is. 23 SIR WYN WILLIAMS: Yes. Well, thank you very much for your 24 assistance to me this morning. I'm very grateful. 25 MR BLAKE: Shall we come back at 2.00, sir? 107 1 SIR WYN WILLIAMS: Certainly. 2 (1.01 pm) 3 (The Short Adjournment) 4 (2.00 pm) 5 MR BLAKE: Good afternoon, sir. This afternoon we're going 6 to hear from Mr Railton. 7 SIR WYN WILLIAMS: Yes. 8 NIGEL RAILTON (sworn) 9 Questioned by MR BLAKE 10 MR BLAKE: Thank you. Can you give your full name, please. 11 A. My name is Nigel Railton. 12 Q. Thank you very much. Mr Railton, you should have in 13 front of you a witness statement -- 14 A. I do. 15 Q. -- dated 30 August this year; is that correct? 16 A. Yes, it is. 17 Q. Can I ask you, please, to turn to the final substantive 18 page, that's page 33. Can you confirm that that is your 19 signature? 20 A. It is my signature. 21 Q. Is that statement true to the best of your knowledge and 22 belief? 23 A. Yes, it is. 24 Q. That witness statement has a URN of WITN11390100, and 25 that will be published on the Inquiry's website shortly. 108 1 By way of background, you are a qualified 2 accountant; is that correct? 3 A. Yes. 4 Q. You started life, working life, in the railway industry; 5 is that right? 6 A. Yes. 7 Q. You worked at Black & Decker, and then Daewoo Cars? 8 A. That's correct. 9 Q. You joined Camelot in 1998 as Head of Finance? 10 A. Correct. 11 Q. You held various positions at Camelot before becoming 12 their CEO from 2017 to 2023; is that correct? 13 A. That is correct, yes. 14 Q. You currently hold a number of Non-Executive Director 15 positions -- 16 A. Mm. 17 Q. -- as well as being Chair of something called Argentex 18 Group, which is a Financial Services Company; is that 19 correct? 20 A. That's correct. 21 Q. Relevant for today's purpose, you are current Chair of 22 Post Office, or Interim Chair of the Post Office, and 23 you were appointed on 24 March this year; is that 24 correct -- sorry, 24 May this year. 25 A. 24 May is correct, yes. 109 1 Q. In terms of your appointment, you've set out in your 2 witness statement that you were approached by the then 3 Minister Hollinrake in February this year; is that 4 correct? 5 A. That's right, yes. 6 Q. Then you were formally appointed by the then Secretary 7 of State Badenoch? 8 A. Yes. 9 Q. Did you know either the Minister or the Secretary of 10 State? 11 A. No, I did not. 12 Q. Do you know why you were approached? 13 A. I don't know why I was approached, I imagine because of 14 my experience with Camelot. 15 Q. Did you work with their department when you were at 16 Camelot? 17 A. No, it was a different department. Camelot -- the 18 National Lottery, is governed by DCMS, so a different 19 department. 20 Q. Do you know if it was a competitive process -- 21 A. I do not -- 22 Q. -- where interviews or anything along those lines -- 23 A. I do not. 24 Q. Did you have to submit a CV or -- 25 A. Yes, I had to submit a CV. I must say, the -- whether 110 1 it was the interview or the amount of meetings I had, 2 I had many, many meetings with the Department of 3 Business and Trade, UK Government Investments, the 4 Postmaster NEDs, so lots and lots and lots of meetings. 5 Q. Prior to your appointment? 6 A. Yes. 7 Q. Thank you. Do you know if it was or is expected to 8 become a permanent position? 9 A. I don't know. I mean, clearly, the Post Office needs 10 a chairman and -- well, I've not had any conversations 11 yet about whether this, you know -- when a permanent 12 chairman will be put in place. 13 Q. Have you been told how long it is expected to be 14 an interim position? 15 A. Yes, it was 12 months from 24 May to 24 May next year. 16 Q. Thank you. To what extent, so far as you're aware, was 17 your IT experience at Camelot relevant to your 18 appointment? 19 A. I don't think it was, actually. I'm not sure. 20 Q. Was there something in particular that you achieved at 21 Camelot that you consider most important for this 22 particular role? 23 A. Well, I think, you know, the National Lottery operates 24 at enormous scale, 44,000 retailers, systems that have 25 to balance to the penny every day, operate with absolute 111 1 integrity, and we changed the systems in the UK a couple 2 of times, and in other markets. So I think the size of 3 the challenge, in terms of the Horizon replacement for 4 the Post Office in particular, I think my experience was 5 relevant, and is relevant. 6 Q. In terms of the composition of the Camelot Board, and 7 comparing that to the Post Office Board, do you consider 8 that, on joining the Post Office, that there is 9 sufficient relevant expertise amongst Board members? 10 A. I think there's some very good Board members. I think 11 the Board members we have are excellent, actually but 12 there are some gaps, and we've just finished doing 13 a Board Skills Matrix assessment, and there are clear 14 gaps in technology. There is no expertise on the Board 15 in terms of technology. There is no expertise in the 16 Board in terms of business transformation, and also 17 I think we're lacking in kind of Civil Service/ 18 Government expertise. 19 Q. Can you assist us with what steps are being taken to 20 fill those gaps? 21 A. Yes, we're actively recruiting now. We've had a number 22 of applications for the technology role, and the 23 business transformation role. In fact, we had about 150 24 applications for the technology role. So it's proving 25 popular. 112 1 Q. Was that something that you implemented, that you 2 identified and came up with a solution, or is that 3 something that was already in train? 4 A. No, it's -- I think conversations were happening at the 5 Board in terms of the skills that were missing, but it's 6 something that I implemented. 7 Q. One thing that you have said in your witness statement 8 is that, when people join the Board, they discover it 9 involves a lot more work than anticipated. Is that just 10 because of the Inquiry and the historic matters or do 11 you see that as a broader issue? 12 A. I think it -- it's a broader issue. I think the 13 governance within the company is not working as 14 effectively as it could, so I think too many matters, 15 quite frankly, go to the Board. I think too many 16 matters go to Non-Executive Directors to deal with on 17 a virtual daily basis, particularly around people. But 18 I do think it's temporary. 19 Q. I think you have said that you were told that it was 20 going to be a two days a week position to be chair. 21 Realistically, how long do you spend in that role? 22 A. Much more than that. I'd say five days a week, not 23 constantly five days a week but pretty much the 24 equivalent of five days a week. 25 Q. Is that sustainable? 113 1 A. It is for the short term, yes. 2 Q. When do you envisage the workload will reduce? 3 A. I think the key event is the implementation of the 4 strategic review that we're doing now, number 1, and, 5 number 2, when we fully implement the recommendations 6 from the Grant Thornton report and have the governance 7 within the Board and the company operating effectively 8 and efficiently. 9 Q. How long do you imagine that's going to take? 10 A. Hopefully about three months. 11 Q. Three months. Thank you. 12 I'd like to start by looking at the briefings you 13 received on becoming Chair. Can we please bring up onto 14 screen your witness statement, that's WITN11390100. 15 If we could start, please, on page 5. The bottom of 16 page 5. Thank you. If we scroll down, thank you. If 17 we could continue scrolling over the page, please, we 18 see there, in paragraph 12, at the bottom, in terms of 19 the Horizon System -- sorry, if we scroll down slightly 20 more -- you say: 21 "My understanding is that the same technical issues 22 and concerns [the ones that happened in the past] do not 23 apply to the current build." 24 Paragraph 13, you say: 25 "I had a session with the Post Office technical 114 1 teams as part of my induction. This covered the Post 2 Office's IT system at enterprise architecture level. 3 I asked [several] questions about Horizon and associated 4 business processes and controls and came away assured 5 that what has happened in the past in the IT system 6 cannot happen now." 7 Can you just assist us with who provided you these 8 briefings? 9 A. It was Simon -- sorry, I'm struggling with the names. 10 It was a former CTO and senior members of the technical 11 team. Forgive me, I can't think of the names. Chris 12 Brocklesby and his team, effectively. 13 Q. Thank you. Could we please bring onto screen our YouGov 14 expert report, that's EXPG0000007. Can we turn to 15 page 19, please. You're aware of the circumstances of 16 the YouGov report and how we obtained the results? 17 A. Yes, I am. 18 Q. Yes. Current subpostmasters were questioned, and these 19 are their responses, with regards to issues that they've 20 experienced with Horizon in the last 12 months: 70 per 21 cent experienced screen freezes; 68 per cent loss of 22 connection; 61 per cent issue with PIN pad; 57 per cent 23 experienced unexplained discrepancies. 24 If we please turn to page 28, we see there 25 "Frequency of experiencing an unexplained discrepancy 115 1 since January 2020", and we see 17 per cent experienced 2 unexplained discrepancies a few times a month; 18 per 3 cent at least once a month; 21 per cent once every two 4 to three months. 5 If we turn over the page, please, we can see how 6 discrepancies have been resolved, and 74 per cent of 7 those who had experienced discrepancies said that they 8 resolved those discrepancies themselves or using their 9 branch's own money. 10 In light of those findings, do you think that you 11 have been properly briefed about the current state of 12 the Horizon system? 13 A. The briefing I had, by its very nature, was very high 14 level, very high level, and we continue to look, and the 15 team continue to look at discrepancies in particular and 16 the operation of Horizon. You know, the Horizon system 17 is available 100 per cent of the time. This gets 18 reported to the Board. The number of defects is quite 19 low now, I'm told, through the data we get at the Board, 20 and I was under the impression that the dispute 21 resolution button now was dealing with most issues, but 22 clearly this data doesn't support that. 23 What we want to do and what we will do is now work 24 through the dispute resolution process and the 25 end-to-end process of how these discrepancies are 116 1 arising because I think it's a function of three 2 things -- it's a function of the system, of cash and of 3 stock -- and I think we need to look at it end to end, 4 rather than just looking at the system. And Neil 5 Brocklehurst, who is now the acting CEO, we've talked 6 about that. We want to do that with postmasters. 7 Q. Do you feel that the current experience of 8 subpostmasters in using the Horizon system is properly 9 understood at those levels within the business? 10 A. I don't know. 11 Q. Has there been a discussion about this report and the 12 results? 13 A. Yes. We've talked -- well, the Executive Team have 14 talked about these results and, clearly, I think two 15 things spring out from the results: it's really 16 disappointing that this is still happening and somewhat 17 surprising. But what it does do, it allows us to now 18 take these findings and look at them in the context of 19 the strategic review that we're finishing and make sure 20 that the plan we're coming up with addresses them, and 21 also, of course, resetting the NBIT programme. 22 Q. We'll get to the NBIT programme but, looking back at 23 your witness statement again and it says, "My 24 understanding is that the same technical issues and 25 concerns do not apply to the current build", and we saw 117 1 on screen there all of those similar issues to the ones 2 that we heard about during the Human Impact Hearings and 3 during other stages of this Inquiry. Do you think that 4 the business has a sufficient grip on those issues? 5 A. Well, I think the issues that -- on one of the previous 6 slides about screen freezes and, you know, systems do 7 freeze from time to time and systems do have issues. 8 The important thing is making sure the control 9 environment is adequate to deal with issues as they 10 arise and that the technical teams have got the proper 11 controls and support around them. 12 Q. If we turn back, please, to page 19, it wasn't just 13 screen freezes, "Unexplained discrepancies", 57 per 14 cent, it seems like quite a high proportion of 15 subpostmasters experiencing not just discrepancies but 16 unexplained discrepancies. Do you think for the 17 business has a sufficient understanding of those kinds 18 of issues? 19 A. Based on that 57 per cent, no. 20 Q. Your predecessor, Mr Staunton's, evidence was to the 21 effect that problems with Horizon were obvious to him 22 when he started. Is that a conversation that you've had 23 with Mr Staunton at all? 24 A. No, I've not spoken to him at all. 25 Q. Moving on to the issue of strategy. Strategy is 118 1 something that is mentioned in your witness statement 23 2 times. It sounds great, but can you assist us with what 3 it actually means? 4 A. Of course. When I was doing my due diligence before 5 accepting to become Interim Chairman, it became very 6 obvious to me that there was no strategy for the Post 7 Office at all and there hadn't been for a number of 8 years, and I think that's what -- one of many problems 9 but one of the big problems is causing a lack of 10 direction in the organisation. So one of my 11 preconditions with the former Secretary of State is 12 that, if I did agree to join, if she wanted me to join, 13 is that I was able to conduct a thorough strategic 14 review to look at the future of the business. 15 And, in doing a strategic review, you look at all 16 elements of the business and, over the last four months, 17 we've done that and last week the Board signed off 18 a plan for the future for the Post Office but, more 19 fundamentally, for postmasters, and we've passed that 20 plan to the Government now for review and approval. 21 Q. If we could please turn to POL00448624. This is 22 a meeting of the Board of Directors, 4 June 2024 but 23 it's actually a document within this pack that I'd like 24 to take you to. It's page 109. 25 Is this where things began in terms of developing 119 1 a strategy? 2 A. Yes. 3 Q. It is a firm called Teneo that was instructed by the 4 Post Office. Were you involved in instructing Teneo? 5 A. Yes. 6 Q. Why Teneo? 7 A. I'd worked with Teneo in the past as part of the 8 turnaround of the -- of Camelot and the National Lottery 9 in 2017. I was very impressed with them, in terms of 10 their ability to get to grips with things pretty 11 quickly, and I thought that these would be an ideal 12 company to help us pull a plan together for the future. 13 Q. We've seen in the Inquiry, especially in recent years, 14 a large number of external reviews and reports. We've 15 seen Grant Thornton, Ernst & Young, Accenture, now 16 Teneo. Why do you think Teneo is the one that's going 17 to work? 18 A. Well, I say that I'd worked with them before on a number 19 of occasions, actually, and the quality of the 20 individuals that they offered to work on this was really 21 high. And, again, you know, we've now finished the 22 review, we've now got the plan and I can assure this 23 Inquiry that the quality of the plan is very, very high, 24 in my opinion. 25 Q. I think you've said you've handed it over to Government, 120 1 the final review or final plan; is that a Teneo document 2 or Post Office document? 3 A. It's a Post Office plan, so the Post Office team worked 4 with Teneo to come up with a plan. 5 Q. Will there be a version of that plan that you can share 6 with the Inquiry in due course? 7 A. Yes, of course, if the Inquiry wants to see it, then 8 it'll be provided through the normal channels. 9 SIR WYN WILLIAMS: Just to check I've got it right, the Post 10 Office Board has now approved a strategic review -- 11 plan, sorry, plan? 12 A. That's correct, Sir Wyn, yes. 13 SIR WYN WILLIAMS: The next step is for the shareholder to 14 approve it? 15 A. Yes. 16 SIR WYN WILLIAMS: What is your expectation about the 17 timescale over that process? 18 A. I have been pleasantly surprised at how quickly the 19 Government are reacting to this. 20 SIR WYN WILLIAMS: Right. 21 A. I anticipate, but can't commit to, getting a decision in 22 a week or two. 23 SIR WYN WILLIAMS: Right, okay. 24 MR BLAKE: As at today, is there any aspect, even as high 25 level as you like, that you're able to share with the 121 1 Inquiry in respect of overall strategy and direction of 2 the Post Office? 3 A. Yes. My going in hypothesis to this whole review was 4 that we needed to do two things: we needed a new deal 5 for postmasters, not just economically but in terms of 6 operationally; and, secondly, we needed to reverse the 7 polarity of the Post Office. And what I mean by that is 8 to put the postmasters at the centre, not the current 9 centre being at the centre, with the current centre 10 actually becoming, if you like, a service function 11 properly to the postmasters and, as I say, I can't go 12 into the detail because it's subject to Government 13 approval and is commercially sensitive because it 14 affects colleagues but what I can tell you is that we 15 have achieved those two objectives through the plan: 16 a new deal for postmasters and a change in the polarity. 17 Q. I'd like to take you through a number of other reports 18 that have been obtained in recent years or reviews or 19 exercises, and to get your view as to whether they've 20 been addressed or not. 21 The first I'd like to bring on to screen is 22 POL00448681. These are exit interviews that occurred 23 before you took up your role. These are exit interviews 24 and the information, I think, was gathered by Ernst & 25 Young. It says, "Confidential -- for the Attention of 122 1 the Chairman and the GCPO". Is this a document that you 2 have received before being provided with it by the 3 Inquiry? 4 A. No. 5 Q. We'll go through some of the detail but is some of the 6 detail information that was provided to you before this 7 document was provided to you by the Inquiry? 8 A. I can't recall. I did read this document yesterday when 9 I received it, so I'm able to offer views on it, if you 10 would like. 11 Q. "[Non-Executive Director] Exit Interviews ... 12 "The following summary is the result of 3 interviews 13 carried out virtually on ... 1 March 2023." 14 So some time before you joined the company. 15 "The three interviewees were Carla Stent, Zarin 16 Patel and Lisa Harrington who have been in as a [Post 17 Office Non-Executive Director] role for between 3 and 7 18 years." 19 Could we turn over the page, please. I'd just like 20 to test this alongside your own personal impression on 21 joining the Company. 22 A. Mm. 23 Q. "Leadership and Teamwork/Culture." 24 The results from their exit interviews are 25 summarised as follows: 123 1 "There are questions on how well set up the [Group 2 Executive] leadership team are for a business 3 turnaround -- specifically questions were raised about 4 the capability, the teamwork and the interactions with 5 the Board/[Non-Executive Directors]. Notwithstanding 6 the external pressures and constraints, governmental 7 changes/politics/shareholders, and competitor landscape 8 etc, there was a strong suggestion that the levels of 9 respect, trust, and 'enterprise first' thinking within 10 the [Group Executive] and also between the Board and the 11 [Group Executive] are a barrier to business success that 12 warrants further explanation." 13 Is that something that you have experienced since 14 joining the company? 15 A. Not exactly. I think -- the Group Executive, I mean, 16 was quite thin on the ground when I joined. We had no 17 CFO because the former CFO was on long-term sick, no 18 General Counsel. So quite large gaps in the team but 19 that's not something I particularly recognise. 20 Q. The second paragraph is explained, I think that's 21 a reference to Mr Cameron. The third paragraph: 22 "With the context of the current enquiry especially, 23 there was a clear concern over whether lessons had/were 24 being learned and applied to prevent something similar 25 happening in the future. Concerns were clear about the 124 1 lack of time/energy that leaders had, but also the 2 apparent underlying lack of trust/respect between 3 leaders and the lack of accountability (healthy support 4 and challenge)." 5 Again, is that something that you have come across? 6 A. I've certainly come across the lack of accountability. 7 Q. Can you give us an example of that, please? 8 A. I don't think I can give specific examples, it's just 9 a theme that I'm seeing, and the way I'm seeing it 10 manifest itself is with the amount of materials that are 11 going to the Board. So I've listened to other witnesses 12 give evidence and I think talk about the Board being 13 overwhelmed with information, and that's something 14 certainly that I saw immediately. And I think the 15 reason that ties into accountability is people are not 16 making decisions, and are deflecting everything upwards 17 through the governance structures in the organisation, 18 so that lands at the Board. 19 Q. Thank you. Can we go over the page, please, and over 20 the page again. Can we go to number 3, please. The 21 feedback there is: 22 "The Board is not really listened to. The Exec is 23 under real pressure and it is not sure they know how to 24 get the most out of the [Non-Executive Directors]. 25 "There is not enough clarity on the role and 125 1 expectations of the [Non-Executive Directors]/Board." 2 Slightly further down, it says: 3 "I am not sure we have the right calibre of team at 4 [executive] level, and therefore there is more chance 5 the [Non-Executive Director] gets involved in detail 6 when they shouldn't. Turnarounds need strong leaders 7 and leadership; with courage, energy and will to drive 8 change, and who can help the organisation believe." 9 What are your views on that; have you experienced 10 any of those concerns? 11 A. I think it's part of the same -- the same issue. When 12 we talk about turnarounds, I think what we're talking 13 about now is implementation of the new plan that comes 14 from the strategic review and, clearly, you need leaders 15 with, you know, great leadership abilities. The thing 16 that we need to do is, once we've that the leadership 17 review hopefully approved, we'll look at the skills that 18 are required to implement that, we have an interim team 19 at the moment that are strong, and we will consider what 20 permanent roles we need in order to implement the plan. 21 But I do think the relationship between the 22 Non-Executive Directors and the Executives, certainly in 23 the few months that I've been here, is quite healthy. 24 Q. Number 4 relates to the Board being risk averse. If we 25 scroll down, it also says: 126 1 "It feels as though we are a bit of a rubber stamp 2 on things." 3 Can you assist us with your views on that? 4 A. Well, I don't think the Board is risk averse; I think 5 the Board does its role properly in terms of considering 6 risks appropriately. If the rubber stamp relates to how 7 we work with Government departments, then I can assure 8 you I will not work in that way. I'm an independent 9 Chairman and we will operate as an independent Board. 10 Q. Have you taken any steps, so far, that can demonstrate 11 that? 12 A. Yes, with the strategic review, where suggestions were 13 made that we might want to, you know, not be quite so 14 aggressive with the strategic review, in terms of the 15 things we wanted to implement and I refused to concede 16 and said "No, we're going to, as an independent Board, 17 come up with a plan which we think is the right plan for 18 the Post Office". 19 Q. What do you mean by "suggestions were made"? 20 A. Just in terms of the level of funding that's required. 21 Q. Who by? 22 A. It was just by officials that I spoke to in different 23 departments in Government, and it wasn't official 24 direction, let me be clear, this was just suggestions, 25 because I think a lot of decisions are driven by what 127 1 the Treasury will fund, so what one tends to get is 2 advice in terms of what the Treasury might accept. But 3 I'm not prepared to do that. I mean, the thing is my 4 remit and our remit is to come up with the right plan 5 for postmasters, you know, for a new deal and to reset 6 the -- you know, and to change the polarisation. 7 So I couldn't do that if I'm hampered, so we've come 8 up with what I believe is the right plan. 9 Q. We've heard some evidence of a begging bowl mentality, 10 whereby the Post Office have to beg the Treasury for 11 money to achieve any change or to achieve anything that 12 they want to achieve; is that your experience? 13 A. Not exactly. I think all of these examples of Treasury 14 short-term funding all come from the same problem: lack 15 of strategy. So because things have, you know, been 16 short-term, each decision has been a short-term 17 decision, it's therefore necessitated short-term funding 18 from the Treasury, and I don't know which one started 19 first, whether it was the Treasury saying "You can only 20 have money for three months", in which case short-term 21 decisions are made or, in fact, short-term decisions 22 were made that led to the Treasury funding it 23 short-term. But what I do know is the antidote to this 24 a proper strategy that is properly considered, funded 25 and implemented. 128 1 Q. You don't have to give us the figures involved but does 2 the strategy that you're going to be presenting or you 3 have presented, does that have a figure in mind that 4 will resolve the various issues? 5 A. Yes, it's fully costed, it's fully planned out. We know 6 exactly what we need to do. 7 Q. Thank you. Number 5: 8 "Overall, for a variety of reasons (capability, 9 energy ...) the leadership probably isn't strong enough 10 for the demands the organisation is facing. Nick (and 11 the Exec) are the fixers, not the cause of the Horizon 12 situation, but his and their ability to remain rational 13 and focused is really being tested by his/their 14 attachment to the serious nature of the historical 15 issues and this is depleting energy and bandwagon for 16 the transformations. 17 "The Board and the Exec need to be better at 18 supporting each other. The level of teamwork is poor. 19 The Public Inquiry process is consuming and draining the 20 [Group Executive's] energy needed for the turnaround. 21 Be really clear and aligned on the messages for the 22 shareholder [regarding] the challenges ahead." 23 Do you consider that there is sufficient energy 24 currently to achieve those objectives? 25 A. Yes, I think so. I think the interim people that were 129 1 brought in recently have injected new energy into the 2 business. 3 Q. Where have they been brought into? 4 A. Well, three individuals came from my team at Camelot, 5 and Preetha, who is with us today, came from John Lewis 6 and Heathrow Airport. 7 Q. Thank you: 8 "There is a genuine concern that the Board are held 9 accountable for stuff that we don't actually have the 10 authority to decide on. 11 "Having learned from the [Postmaster Non-Executive 12 Directors] it shows how 'out of touch' our execs are. 13 They are not connected enough to the commercials and 14 definitely not in touch with the customer." 15 In your view, is the role of Non-Executive 16 Subpostmaster something that you would wish to continue; 17 do you think it's useful; or do you think some other 18 model might be appropriate? 19 A. I think it's, in answer to your question, absolutely 20 vital. One of the reasons that I agreed to join was the 21 conversations I'd had with Saf and Elliot and, in 22 particular, I had an amazing conversation with them for 23 an hour and they asked for my help based on my Camelot 24 experience, which is one of the real reasons I joined. 25 Q. Can we scroll down, please. It says: 130 1 "There is no obvious successor to Nick other than 2 D(CIO) ..." 3 I'm not sure who that is but it says: 4 "... but he is far too stretched and needs to focus 5 on the platform. For the next 12 months there is a need 6 for someone who will perform a CEO [business as usual] 7 role (COO/CEO designate) given much of Nick's focus and 8 time will be spent on the [Inquiry]. 9 "There are some 'warning lights' around the way work 10 is proceeding on the new platform ..." 11 We'll get on to the new platform. 12 A. Yes. 13 Q. In terms of the CEO role, we know that Mr Read is going 14 to be stepping down; are you involved in succession 15 planning? 16 A. I will be. I will be. 17 Q. Do you know if anything has taken place so far in that 18 regard? 19 A. No, not yet. I need to -- once this evidence session is 20 over, I need to turn my attention to speaking to UKGI 21 and DBT to start that process. 22 Q. Irrespective of names, what kind of skills are you going 23 to be looking for? 24 A. I think the skills that we need are the ones that are 25 going to be determined by the strategic review. I think 131 1 we need people with strong leadership teams; understand 2 how to work with an organisation that supports 3 an amazing social purpose; digital skills; retail 4 skills; and technology skills. So quite a broad remit. 5 Q. Do you think such a person (a) exists and (b) would be 6 happy to join the Post Office at the level of pay? 7 A. Yes and yes. 8 Q. Can we scroll down to number 9, please: 9 "What advice would you want to share with the 10 Chairman? 11 "Complete a great handover involving new and 12 outgoing [Non-Executive Directors] and extending to the 13 other Board members. 14 "Give clear and frank messages to the shareholder 15 (to help everyone internally and externally) appreciate 16 the situation [Post Office] is in ... and the ambition 17 moving forwards. 18 "Be decisive over the team. Have we got the right 19 CEO for a turnaround? 20 "Are there too many [Non-Executive Directors] ... 21 There doesn't feel like enough camaraderie in the Board 22 ..." 23 What is your view about the balance between 24 Executives and Non-Executives at Board level? 25 A. Well, we have no -- apart from Nick, who has resigned, 132 1 we have no Executive Directors on the Board at the 2 moment. So that's something we need to address. So we 3 need the CFO to be a Board member and the acting CEO, 4 and that's something we're working on at the moment. 5 Q. Can we scroll down, please, to number 11: 6 "Given that the [Post Office] is in need of 7 sustained transformation -- commercially and culturally, 8 (so it is set up to compete and be successful in the 9 market) there are questions about the fit of the Board 10 level [Group Executive] leadership. 11 "How well suited are they to drive of the 12 turnaround?" 13 Much the same as we've already been looking at. 14 A. Yes. 15 Q. There's a concern there raised between the relationship 16 between Mr Read and Mr Cameron. Do you think there is 17 sufficient trust at Executive level and Board level in 18 the organisation? 19 A. It's difficult for me to answer that question, given 20 I've only been here a number of months but, certainly at 21 Board level, I found a really high level of trust 22 between Board members. 23 Q. Thank you. The second document I'd like to look at is 24 something called "Group Assurance Chairman Update". 25 That can be found at POL00460606. This document is 133 1 dated 16 May this year, so it pre-dates your 2 appointment, or your formal appointment, but you are 3 listed as an attendee of this meeting. 4 It's POL00460606. Thank you. 5 Are you able to assist us with the background to 6 this document? 7 A. Yes, I was -- even though my official appointment was 8 24 May, I did start on 1 May with my induction and, 9 I have to say, I had a very comprehensive induction 10 programme that I worked through with the teams, and this 11 one was on 16 May which was my introduction to Sarah to 12 take me through how assurance worked. 13 Q. Can we scroll down and look at paragraph 4. It says 14 there: 15 "Adopted a tactical and heavily manual approach to 16 Assurance due to the following gaps: 17 "a. No common universe definition and/or coverage 18 for [Post Office] activities ... 19 "Even IA do not have a comprehensive universe and 20 they were not assessing the sustainability and/or 21 impacts of the actions implemented for Issue 22 judgments -- a major cause of divergence between their 23 outcomes and ours!!! 24 "SNOW our GRC tool cannot be relied upon for 25 completeness and/or accuracy, with a lens of both risks 134 1 and controls. This view has been communicated to both 2 RCC and ARC." 3 Then it says: 4 "So what? We had no choice to build our own Excel 5 based universes. 6 "Common Issue Judgment -- 365 lines; 7 "SPMP Integrated Assurance & Risk Universe -- 509 8 lines." 9 Am I right to understand from this that, as part of 10 their group assurance function, they were reviewing, for 11 example, the implementation of the Common Issues 12 judgment and had to do that on an Excel document? 13 A. I believe that's what the document says, yes. This was, 14 as you can imagine, quite a lot of detail for 15 an incoming Chairman to absorb, and in couple of weeks. 16 Q. Stepping back, and just trying to remember that meeting, 17 what were the key concerns that were raised at this 18 meeting? 19 A. I think more generally, that the kind of control 20 universe or the control framework within the Post Office 21 was perhaps not as efficient as it could be, and what 22 I mean by that is that Assurance, Risk and Compliance 23 were all separate, as was Audit, and it seemed to me 24 that things were operating in silos and it would be much 25 better to put some things together to get a common view 135 1 of how the control framework should work. 2 Q. If we scroll over the page, they set out their key 3 issues and significant concerns. They say, "All of 4 these are easily fixable". One is "Lack of 5 accountability and consequence management": 6 "This is the single root cause of all issues in [the 7 Post Office]." 8 Is that something you agree with? Is that something 9 that's been taken forward? 10 A. I think I agree with it, actually. I think we said -- 11 I said earlier there was a lack of accountability. 12 I think there was a lack of consequence management and 13 the reason say that is, when I look at some of the risks 14 that come to the Audit and Risk Committee, that are 15 moving quarter by quarter and not being resolved or 16 moved forward, I think that's an example. 17 Q. So the risks are being identified at Board level but 18 aren't being resolved; why is that? 19 A. I think no, the risks are being identified within the 20 business and escalated through the Audit Committee to 21 the Board and, previously, they were not moving at 22 sufficient pace in terms of mitigation and resolution. 23 The reason for that is the sheer volume of priorities in 24 the business at the moment. 25 Q. Can you see that being resolved and, if so, how? 136 1 A. Well, focus on the key priorities, number 1. I think 2 we've now very clear on what the key priorities of the 3 business are. Would it be helpful to describe those? 4 Q. Yes, briefly. 5 A. Well, you know, quite clearly there's two number 1 6 priorities: one is assisting this Inquiry with its 7 important work; and the second one is speeding up 8 mediation payments. 9 Our third priority is the strategic review, having 10 that approved by Government, implementing it as soon as 11 possible; fourthly, implementing the findings from the 12 Grant Thornton review in terms of governance, that's 13 something I'm hoping to have in place very quickly; and 14 then, finally, deciding what to do next with the NBIT 15 programme. 16 They're our kind of five priorities. 17 Q. Thank you. We'll just go through a few more of these 18 key issues and then we'll move actually onto the Grant 19 Thornton report and your reflections on that. 20 A. Okay. 21 Q. The second is "Closed mindset -- Capability and 22 Competence": 23 "Lesson of the past at an inherent level are not 24 imbibed in the DNA of [the Post Office]. 25 "Many seniors have a myopic lens on their role. 137 1 "Many are afraid to make decisions, therefore so 2 many committees. 3 "Newly created Leadership Team has excluded line of 4 defence -- Most illogical considering lessons of the 5 last and themes arising from the Inquiry." 6 Can you assist us with your understanding of that 7 and whether that is being resolved. 8 A. It is being resolved. I mean, I have to be honest, 9 I don't quite understand some of that. The one 10 I certainly recognise is that many in the business are 11 afraid to make decisions. There is a fear culture and, 12 basically, what that means in practice is that many 13 decisions are escalated and eventually arrive at the 14 Board. 15 Q. I think we see that under "Governance", number 3. 16 I think the third point there says: 17 "Despite [the Post Office] significant issues, 18 Board/ARC seem afraid to intervene or challenge overtly 19 for management to course correct." 20 Does that feed into that concern or is that 21 a separate concern? 22 A. No, it's part of the same concern where too much is 23 coming to the Board and I can assure you that I am 24 course correcting that. 25 Q. Then "Operational level", it says: 138 1 "... Disparate, illogical, and non-existent [versus] 2 good or even basic practice 3 "Responsible person is not a [Subject Matter Expert] 4 in this field." 5 We have already heard evidence this morning about 6 a problem within the business those who were being asked 7 for their opinions were not the Subject Matter Experts 8 and perhaps a lack of a lack of Subject Matter Experts 9 being asked their views; is that something you 10 recognise? 11 A. Not particularly. I think context is important. So I'd 12 imagine, at an executive level, asking non-Subject 13 Matter Experts their opinions on things is sometimes 14 healthy because you get good debates. So it's not 15 something I particularly see. 16 Q. Thank you. Let's move on to the Grant Thornton review, 17 please. You've said in your statement and you've said 18 just now that there is a structured programme to 19 implement their recommendations; can you assist us with 20 what that involves and who is responsible for that? 21 A. So the Company Secretary is working through that at the 22 moment. So, as a Board, we agreed a plan. So of all 23 the actions in the Grant Thornton review -- and of 24 course there are many -- we have a plan to implement all 25 of those things and we're working through that, some of 139 1 which we can implement before the strategic review is 2 agreed and some afterwards. 3 So the ones that we can kind of get on with -- and, 4 by the way, what I should say is that I thought the 5 Grant Thornton report was excellent. I mean, it's all 6 pretty much basic good governance but it was excellent 7 in terms of its detail. 8 So we're implementing everything we can, and then 9 those things that we need to wait for the strategic 10 review to be approved, we'll implement immediately 11 afterwards. 12 Q. Thank you. Can we please turn to POL00446477 and that's 13 the Grant Thornton report. 14 The key findings are on page 7 and perhaps we can 15 turn to those, please. 16 The first one, "The lack of a unifying purpose and 17 group-wide strategy between [the Post Office] and its 18 shareholder", is the strategic review the solution to 19 that? 20 A. Yes. 21 Q. Second, is there anything else, other than the strategic 22 review that you'd point to address that issue? 23 A. No, but I think what the strategic review allows us to 24 do is have a proper conversation with Government 25 departments as to how the relationship should work but 140 1 at least we have a strategy as a start point of the 2 conversation. 3 Q. Number 2, "Conflict around the role of the Shareholder 4 versus the Board", that's one area we've heard quite 5 a lot of evidence on, the relationship between the Board 6 and UKGI and the Department for Business. What do you 7 see as the Board doing in respect of conflicts in that 8 relationship? 9 A. I haven't particularly seen this but that may be because 10 of the approach that I've taken, that we are 11 an independent Board and we will make our decisions 12 with, you know, input from Board members that represent 13 the shareholder, but we'll make our independent 14 decisions nonetheless. So I haven't really seen that, 15 I think I can understand from history where this might 16 have arisen but, again, I think the answer to this is to 17 have a clear strategy agreed with Government. 18 Q. How do you see cultural issues being addressed between 19 the UKGI and the Post Office? 20 A. I don't currently see cultural issues, actually. 21 I think what we have to get to is a common goal, which 22 is a new deal for postmasters that I talked about, and 23 we have been working through achieving that common goal 24 and I have to say that I feel supported. 25 Q. In your view, the role of a UKGI Non-Executive Director, 141 1 does that work on the Board? So somebody who, for 2 example, spends all of their time on the Post Office, 3 has greater knowledge of Post Office affairs than 4 perhaps other Non-Executive Directors? 5 A. I think it depends on the individual. I think it can 6 work. I think with the wrong individual it might be 7 difficult but it -- certainly, from my experience, 8 I think it works. And it's not unusual. I mean, when 9 I was at Camelot we had shareholder representatives on 10 the Board, that 100 per cent owned the company and we 11 made it work. And, if you embrace it properly, you can 12 really make it -- you know, turn it to your advantage, 13 in terms of having somebody that can go back to the 14 shareholder that really understand the business 15 requirements. 16 Q. Number 3, "Leadership capacity". Are there any specific 17 plans in place that you can point to to address that? 18 A. Yes. So structure follows strategy. So once the 19 strategy is approved, we have a clear structure that 20 we're going to populate with clear skills that are 21 required. 22 Q. Can you assist us with what that means in plain English, 23 please? 24 A. Well, in plain English, we understand what the structure 25 is trying to -- sorry, the strategy is trying to 142 1 achieve. We will need organisation structure to support 2 that and an operating model. So, you know, what roles 3 do we need? Clearly, we need a CEO, clearly we need 4 a CFO, but what other types of roles and what types of 5 individuals and what types of experience will we need? 6 And we'll populate that from the start point of 7 implementing the plan, with the revised operating model 8 of how the business has to operate. 9 Q. Are there likely to be more people recruited to senior 10 roles? 11 A. Possibly. And -- sorry, if I can just clarify that. It 12 depends on the definition of senior role. Do we need 13 perhaps more people at an Executive level? Probably. 14 But there are lots of layers of senior roles in the Post 15 Office and I think that's unusual. 16 Q. Sorry, it's unusual for there to be so many people in 17 senior positions? 18 A. Yes. 19 Q. Thank you. Number 4, "Decision making forums at 20 Enterprise level lack pace and do not enable 21 accountability". Have there been any changes insofar as 22 that is concerned, as far as you're aware? 23 A. Well, this is something that I and the Executive are 24 currently looking at as part of the whole governance 25 redesign. We have to re-engineer the governance to make 143 1 sure the business, first of all, is taking 2 accountability and has the right decision making 3 ability, and making sure the various levels of 4 governance work, which currently, at the moment, to be 5 frank, they don't because too much comes to the Board. 6 Q. Fifth, "Culture -- a lack of trust, accountability and 7 performance management". How do you envisage that can 8 be overcome? 9 A. I think culture is a really interesting topic and I know 10 one that this Inquiry has considered from various 11 different dimensions but I think it starts with purpose. 12 And I think, you know, can the culture be improved in 13 the Post Office by doing certain things better -- and 14 I think Karen this morning talked about some of the 15 things that she's doing -- yes. But I think that to get 16 a true step change in culture requires a resetting of 17 the purpose, which again a strategic review does and 18 I think a resetting of the purpose allows them to get 19 the right behaviours in place, and culture will follow. 20 Q. What is that purpose, so far as you see it? 21 A. The social value, the purpose of the centre of the Post 22 Office is to support postmasters to support the 23 communities that they serve. 24 Q. In your view, knowing what you know from the past, do 25 you think that there has been or is about to be some 144 1 sort of step change in that? 2 A. There will be a step change. There will be a step 3 change but it'll be through the strategic review when we 4 reposition the -- change the polarity of the business 5 and go back to first principles around purpose. And 6 I did this at Camelot. When I took over as CEO in 7 Camelot, belief in the Executive Team was 35 per cent, 8 which is not dissimilar, actually, to the scores we've 9 seen for the Post Office, at 36 per cent, I think. 10 When I left, assisted by some of the people that are 11 currently assisting me at the Post Office, it was at 96. 12 Q. How do you see yourself as achieving that? 13 A. Pardon me? 14 Q. How do you see yourself as achieving that? 15 A. I think it's the same steps. It's about having a plan 16 that goes back to the purpose of the Post Office and 17 a new deal for postmasters, a change in polarity, having 18 the right people operating in the right way, behaving in 19 the right way to the right values. Culture follows. 20 Q. Are there any concrete steps outside of your own 21 strategic review that you can draw to the attention of 22 the Chair that you consider would change the culture in 23 the Post Office? 24 A. I know that the Executive Team at the moment are working 25 hard to try to change the culture and I think we -- 145 1 incremental changes can be made, you know, where people 2 start to -- I mean, people do -- many conversations 3 I hear about postmasters. So that's good thing. But 4 I think rather than just incremental change, I think we 5 need wholesale change, and that will come through the 6 strategic review. 7 Q. I'm getting quite a few answers that are just looking 8 forward to the strategic review. It would be helpful 9 for the Inquiry to know at least some steps that you 10 have in mind to change something so fundamental as 11 culture. 12 A. I can't really tell you the things that I'll do in the 13 next month or two because I'm the Chairman and it's 14 really a role for the Executive but I know that Neil 15 Brocklehurst and the Exec Team, and Karen, are focused 16 on this. So I think, yes, we can change the culture, 17 and perhaps we can change behaviours in the short-term. 18 What I'm talking about is truly embedded culture, that's 19 what I'm really talking about. It will only come 20 through the step change that's right allowed through the 21 strategic review. 22 Q. Are we to expect something fundamental to change as 23 a result of the strategic review? 24 A. Yes. 25 Q. Thank you. The fourth document I'd like to ask you 146 1 about is an anonymous letter that we've seen already 2 today. It's POL00448519. Was this a letter that came 3 to you very early on in your time at the Post Office? 4 Is it a letter you saw very early -- 5 A. Yes. 6 Q. I won't go through it again. If we turn over the page, 7 we can go just see there is something addressed to you, 8 penultimate paragraph, that says: 9 "Mr Railton, please look at the above and 10 investigate. If you can, you should engage with some of 11 the past employees (particularly [Mr] Staunton and 12 [Mr] Cameron). Our view is that those who have left 13 under a cloud are the ones telling the truth." 14 Is that something that you've personally 15 investigated; are there conversations that you have had? 16 A. I haven't spoken to Mr Staunton or Mr Cameron, no. When 17 I received this letter, and I think it was dated four 18 days after I officially started, I took advice from the 19 SID, and I went through this and stepped through it 20 because I thought it was also a useful learning 21 experience for me to understand what happened in the 22 past. I was assured -- and we put it into the proper 23 investigation process. 24 What came back was that the vast majority of all of 25 these claims had already been investigated and there was 147 1 one or two that required a bit more investigation, which 2 happened very quickly and through the proper process, 3 and this basically included no further action. 4 Q. Thank you. That can come down. 5 I'd like to now move on to the topic of NBIT. 6 You've said in your statement, and it's a paragraph 7 we've already been over, that you have been told that 8 what has happened in the past in the IT system can't 9 happen again now. Are you familiar with the Inquiry's 10 hearings in Phase 2 of the Inquiry that looked at the 11 original procurement of the Horizon system? 12 A. I'm not, I'm afraid. I'm sorry. 13 Q. Could we please turn to POL00460593. This is an email 14 from Mr Bartlett to you dated 27 June this year. It'll 15 come up on the screen in a moment. I'd just like to 16 take you through it. He's identified a number of 17 different investigations that, at that point in time, 18 were ongoing, relating to the NBIT system. 19 A. Mm. 20 Q. I'd like to take you through each one of those. Before 21 I do, what were you told initially about the progress of 22 the NBIT scheme? 23 A. As part of my induction, I was told that the programme 24 was on track and progressing well. I struggled to 25 reconcile that to another briefing I'd had that the 148 1 project was now going to cost 1.2 billion against 2 a budget of 180 million, and deliver in 2028 against 3 an expectation of 2024. So the two things were in 4 conflict for me. 5 Q. Why do you think that is? 6 A. I don't know. I don't know. I think perhaps it was 7 people were confident about the revised plan, whereas my 8 reference point was the original plan. So perhaps that 9 was the reason for the improved confidence in the 10 revised plan. 11 Q. Do you think you were being given correct information 12 initially? 13 A. It's very difficult to assess because I was really new, 14 and I was presented with a lot of data and a lot of 15 information. So it's difficult for me to answer that 16 question. I imagine people were presenting me with the 17 data they thought was relevant. 18 Q. I'll just have a read through this and I'll take you 19 through each of the allegations. Mr Bartlett says: 20 "Nigel, when Sarah and I met with you to brief you 21 on A&CI's work, we discussed Project Willow2 and the 22 Speak Up reporting we have periodically received over 23 the last year that gave us a qualified insight into the 24 NBIT programme. You asked for a brief on the topics 25 being reported to us. Claire Hamilton, the Speak Up 149 1 Team Manager has helpfully prepared the below which 2 I hope is a useful summary. 3 "Willow2 4 "This is a two-strand substantive investigation 5 relating to concerns raised by multiple Speak Up 6 reporters concerning NBIT. Pinsent Mason and Grant 7 Thornton have been commissioned by [Post Office] to 8 investigate these two allegations: 9 "Allegation One: 10 "That certain [Post Office] staff were aware of 11 problems with the NBIT system and that progress reports 12 to senior stakeholders including Nick and the [Group 13 Executive] may not have been reliable. 14 "In April 2024, further information received in 15 relation to the upward passing of information and 16 decision making at senior level in respect to known 17 errors in the NBIT system. 18 "It is to be determined if high severity defect 19 information that was channelled upwards in an email to 20 SteerCo prior to rollout may have been deliberately 21 misleading." 22 Are you able to assist us with the status of that 23 investigation at all? 24 A. I'm not, I'm afraid. I'm not. 25 Q. "Allegation Two: 150 1 "That two senior engineers 'pressured' two IT 2 security/assurance personnel to disable or waive infosec 3 checks in NBIT's specifications to save time in the 4 project's rollout (Comment: [Grant Thornton] are 5 focusing on evidence/testing this and understanding the 6 specific impact if it did occur)." 7 So it seems the second allegation is that something 8 was disabled in order to save time. 9 A. Mm. 10 Q. Something in -- 11 A. I think both of these investigations are ongoing but, 12 certainly, what I'll also say is that these allegations 13 raised my interest in whether or not the programme and 14 the project was going in the right direction. 15 Q. I mean, this is June this year. 16 A. Mm. 17 Q. Have you been provided with a substantive update in 18 relation to any often these projects, any of these 19 investigations? 20 A. No. 21 Q. Is that of concern to you? 22 A. Perhaps it should be but I've been more concerned with 23 making sure we understand what's happening with the 24 project and I think some of these things perhaps explain 25 why the project is over-spent and late but I haven't 151 1 chased up on the progress against the allegations, but 2 I will after this session. 3 Q. "General concerns relating to NBIT team/activity raised 4 via Speak Up. 5 "The following are grouped themes of various 6 information passed by a variety of reporters to Speak Up 7 over the last year that discuss NBIT: 8 "Behaviours 9 "Behaviours and activities were driven by timescales 10 linked to bonuses rather than delivery of quality and 11 reliability, ie perverse incentives (comment: this is 12 now several months old so unsure if this is still 13 occurring but it is corroborated in the Willow2 14 investigation). 15 "Mirroring very senior staff behaviour (Zdravko and 16 Gareth Clarke), there was poor or lack of effective 17 communication between key staff around governance of the 18 programme. 19 "[Third] Active discouragement by senior NBIT staff 20 relating to the use of Speak Up channels (comment: one 21 allegation was made relating to detriment resulting from 22 Speaking Up (an offence under the PIDA if proved) -- 23 this was investigated and no grounds found to support 24 the concern)." 25 So there seems to be a result in relation to the 152 1 final bullet point. 2 A. Mm. 3 Q. But, in relation to those first two, are you aware of 4 any results from those investigations? 5 A. I am not at this stage, no. 6 Q. If we scroll down, "Accenture": 7 "Collective confidential reports received raising 8 concerns/issues about Accenture and conflicts of direct 9 awarding by CB ..." 10 That's Mr Brocklehurst? 11 A. Brocklesby. 12 Q. Brocklesby, sorry: 13 "... with CB being ex-Accenture, without anyone 14 looking at the bigger mapping picture of key positions/ 15 activity held/performed by Accenture." 16 Are you aware of any developments in that regard? 17 A. It's all part of our review. I think we are too reliant 18 on Accenture. 19 Q. I think this possibly feeds into the final section, if 20 we scroll down. There's a section there on "Reliance on 21 third parties generally": 22 "Need to be setting the conditions for [the Post 23 Office] to be ready to run the system once rolled out 24 which includes [Post Office] staff gaining relevant 25 skills, understanding and knowledge during the design 153 1 and build programme. Concerns are being raised that 2 [the Post Office] has become reliant on third parties 3 and so [Post Office] staff are not going to be able to 4 effectively take over during the end transition. 5 "The matter of cost of third parties is also being 6 raised as a significant concern -- this is being 7 compared to the NHS being reliant on Locum Staff, 8 therefore not having the monies to continue as [business 9 as usual]." 10 Is this something you received an update on or 11 investigation into? 12 A. I recognise it and it is something that we are actively 13 thinking about how do we do differently. So, to this 14 point, to this point, 80 per cent of all people all 15 staff working on the NBIT replacement are contractors. 16 Only 20 per cent are permanent. And, of course, when 17 you only get contractors working on things like this, 18 they're, by their nature transient and you don't, you 19 know, we keep information and skills, and they are 20 generally expensive which is why we need to reset the 21 whole programme. 22 Q. Is this part of the strategy review or is that 23 a separate issue? 24 A. No, it is part of the strategic review. So we need 25 to -- would it be useful if I give a little of my 154 1 thought in terms of the background to this? 2 Q. Absolutely. 3 A. So the first thing I ask myself is: how did we ever get 4 to a position where we're building a system internally? 5 And from doing some research, going back to 2021, 6 I think there were two decisions that were made that 7 were fundamentally the wrong decision with the benefit 8 of hindsight: one was the objective to get off Horizon, 9 which is different than building a system for the 10 future; and the second one was the decision to build 11 inhouse. And I think we'll -- you know, people in the 12 room will all be -- you know, have heard the horror 13 stories of tying to build things inhouse, IT systems, 14 particularly if you haven't got all the components in 15 place to do so and the right conditions. So I think, 16 based on my assessment, that this was always set up to 17 fail in the first place. 18 And, you know, building an old Horizon system can 19 never be the right thing to do. So what we need to do 20 as part of reset is to think about what do we need to 21 build? And clearly we need to build a system for the 22 future. Now, I'm hopeful that much of the technology 23 that's been built to date we can reuse but we have to 24 build to the outcomes of the strategic review. And to 25 give an example of that, we need to, for example, build 155 1 to the bank's requirements and what the banks need, 2 rather than just building old technology. 3 So that's what we're going to do. 4 Q. When is that achievable by? 5 A. I don't know today but I will know soon. So we have 6 a team of people now looking at this and, within the 7 next two to three months, we'll have a firm view on what 8 we need to build, how we need to build it, how much it's 9 going to cost, and when it'll be delivered by. 10 Q. Are we talking five years, ten years? 11 A. No, no, it'll be -- our objective is to do it -- if you 12 think about the prior objective which was 1.2 billion in 13 2028, it'll be before 2028 and it won't cost 1.2 billion 14 add we'll have far more certainty that it will be 15 delivered. 16 Q. What do you currently see as the main issues with the 17 NBIT system? 18 A. The NBIT design? 19 Q. Yes. 20 A. I think the main issue is we're building the old Horizon 21 system, which -- now, the moment that decision was made 22 in 2021, it was out of date because Horizon was, you 23 know, Horizon is out of date. We need to build for the 24 future. That's number 1. I think the main other issue 25 is building it inhouse. There must be a better way. 156 1 Q. In respect of Horizon, as it currently is operated by 2 Fujitsu, can we please turn to POL00448864. This is 3 a meeting of the Group Executive. It's before your 4 time, 13 March 2024 but we'll see how it leads into 5 a subsequent meeting that you were involved in. 6 If we could please turn to page 6, we have there 7 a section on "Fujitsu Extension", and it says: 8 "[Simon Oldnall] spoke to the paper which set out 9 the current position on the discussions to date 10 (including with Government) on the continuation of 11 Support Services for the Horizon platform by Fujitsu 12 beyond March 2025, when the current contract was due to 13 end. 14 "The extension was proposed to cover the intervening 15 period before the rollout of NBIT. 16 "While discussions were ongoing, Fujitsu had not yet 17 made any commitment to continuing the support and 18 against the context of the current external scrutiny, 19 was unlikely to do so without the express support of the 20 Government." 21 Just pausing there, I know this wasn't a discussion 22 that you were party to. What do you understand by that? 23 A. By support of the Government? 24 Q. Yes. 25 A. My understanding is that Fujitsu wanted the Department 157 1 of business to ask them directly to extend the contract, 2 rather than it coming from the Post Office to ask them 3 to extent the contract. That's my understanding. 4 Q. Do you know the reasoning behind that at all? 5 A. I don't. I can only imagine it might help their 6 discussions in going back to Japan to get approval for 7 this, but I'm speculating. 8 Q. "Subject to the position being settled, funding for the 9 contract extension formed part of the SPMP business 10 case." 11 So it looks as though, in March 2024, the Post 12 Office was looking to extend the Fujitsu contract beyond 13 March 2025, and I'm going to take you to a Board meeting 14 in which you were present, that's POL00448648. Was this 15 your first Board meeting, 4 June? 16 A. Yes, and I was an observer at this meeting. 17 Q. If we scroll down, we can see there, it says: 18 "... [Nigel Railton] opened the meeting. Given the 19 very recent appointment of [Nigel Railton], the Board 20 agreed that [Ben Tidswell] preside as Chair of the 21 meeting." 22 Can we please turn to page 11. It's the bottom of 23 page 11, bottom half, "Horizon continuity of service 24 update", and there's a discussion there about the future 25 of Fujitsu and Horizon: 158 1 "[Simon Oldnall] spoke to the paper outlining the 2 proposal for a 5-year exit plan for Fujitsu. 3 [Mr Oldnall] advised that the Board were being asked to 4 include in the strategy a stage where if NBIT was not 5 completed within the term of the extension that the 6 Company would put in place an alternative approach to 7 supporting the Horizon platform to make sure that 8 Fujitsu was still able to exit at the 5-year point. SJ 9 queried what the alternative approach would constitute. 10 SO advised that the Horizon platform could be brought 11 inhouse or procurement taken for external support for 12 the platform. [Mr Oldnall] estimated that it would be 13 18 months to 2 years when a decision would need to be 14 taken on this point ..." 15 So as at your first Board meeting, it appears that 16 there was discussion about maintaining Horizon beyond 17 the contracted date but either bringing it inhouse or 18 having another firm support Horizon; is that a correct 19 summary of that? 20 A. Yeah, well, I think the extension of Fujitsu for up to 21 five years had been the conversation that had been 22 ongoing for a while and, to be clear, an extension of 23 Fujitsu is absolutely necessary to keep going. I'm not 24 sure whether the conversation was about an extension 25 beyond the five years or not but, certainly, at the same 159 1 meeting, a conversation about potentially bringing 2 elements of the Horizon platform inhouse I recall was 3 discussed. 4 Q. "[Mr Jacobs] queried whether we should we not be working 5 towards this scenario. CB advised that a high level 6 plan and cost to execute had been presented however the 7 team did not want to go down that path at present given 8 the commitment Fujitsu was requesting. 9 "[Here we have you querying] whether there were any 10 termination points proposed in the extension. 11 [Mr Oldnall] replied that there were not, and CB 12 contributed that there were core services that would be 13 provided for the entire term however there were certain 14 services that could be terminated." 15 Can you assist us with that discussion? 16 A. Yes, I was just -- I found it surprising that we were 17 committing to a five-year contract when our objective on 18 the old plan was to be on our own system by 2028. So 19 I was just questioning whether or not break clauses 20 needed to be in the contract to allow us flexibility. 21 Q. We then have an action point: 22 "[You] queried the maximum cost for the contract 23 extension. SO replied and advised that he would check 24 the cost if all services aside from the core services 25 were removed." 160 1 I think that's Mr Ismail: 2 "... queried why the extension was not proposed for 3 3 years given the programme build was tracking to 4 complete in 2026. CB advised this was proposed in order 5 to provide some contingency. [Mr Ismail] tested this 6 further and pointed out the risk of the Company being on 7 a new platform yet still paying service fees to Fujitsu. 8 CB reiterated the point in respect of seeking 9 a contingency." 10 We then have, over the page, you again querying 11 whether you can negotiate a break clause, so that's the 12 point, I think, you've just raised. 13 A. Yes. 14 Q. Mr Woodley advising that the team could take this away 15 and look at a five-year extension with a three-year 16 break: 17 "[Mr Ismail] noted the communications on the 18 extension needed to be executed with precision in 19 relation to postmasters and the public. CB advised that 20 he understood this ..." 21 Then we have "ACTION": 22 "[Mr Railton -- so you] asked for a session with SO 23 to discuss what owning the source code encompassed ..." 24 Can you assist us with what's meant by owning the 25 course code in the discussion that took place there? 161 1 A. Yeah, I think that perhaps owning the source code is 2 perhaps not the best description of the conversation 3 that we were going to have. It was really trying to 4 understand what the team actually meant by insourcing 5 Fujitsu. Because that can be many things. And I was 6 a little confused, so I was trying to understand there 7 what that actually meant in practice. Was it all of the 8 source code, with all of the systems, all of the 9 processes? That's really what that was relating to. 10 Q. Is there a possibility that, at some point after the 11 conclusion of the contract with Fujitsu and before the 12 NBIT system, in some -- somehow, the Post Office will be 13 taking responsibility for the Horizon system itself? 14 A. I think -- well, it's a possibility, yes. But we have 15 to extend the contract. We have no choice. We need 16 optionality to be able to get out of the Fujitsu 17 agreement at the appropriate time for both parties. We 18 are looking at all options in terms of how to bring, 19 effectively, the functionality that we currently have by 20 using the Fujitsu system within our control. 21 So I think the wrong description is bring it 22 inhouse. I think perhaps a better description is 23 developing something that we can use ourselves. 24 Q. What's the difference between those two descriptions? 25 Sorry. 162 1 A. Well, just bringing Fujitsu inhouse just suggests that 2 we're going to take everything Fujitsu do, in terms of 3 processes, data centre and everything, and just bring it 4 inhouse and basically manage what they do now. What 5 we're looking at a blend to say "Look, are there some 6 things that Fujitsu do today that make sense to continue 7 and we don't have to change?" I think an example I give 8 is, you know, the interfaces we have with the banks, for 9 example, and they have. They work currently, there 10 would be no point in rebuilding those, so that's 11 something we might keep. 12 Equally, we might want to change some of the 13 infrastructure or, you know, some of the Transaction 14 Processing elements of it. 15 Q. If we scroll down: 16 "The Board RESOLVED that: 17 "Subject to seeking a 3-year break provision, the 18 proposed strategy for an extension of up to 5 years of 19 the Horizon Support contract with Fujitsu from 1 April 20 2025 until 31 March 2030 be and is hereby APPROVED; and 21 "The inclusion of a binding commitment to Fujitsu 22 that an alternative approach to supporting the Horizon 23 platform through commencement of a programme to 24 insource/reprocure elements be activated if there is not 25 sufficient time within the term extension to fully 163 1 migrate from Horizon to NBIT be and is hereby APPROVED." 2 Can you assist us with what the present position is, 3 in relation to that? 4 A. The conversations with Fujitsu are ongoing. 5 Q. We've seen, in the YouGov report, for example, and in 6 evidence that the Inquiry has heard, of issues still 7 being experienced by subpostmasters in relation to their 8 use of Horizon. Is it possible, is it likely, that 9 subpostmasters are going to be using that same system 10 into 2030? 11 A. It is possible. I don't think it's likely and certainly 12 our intention and the intention of the new team is to 13 move away from Horizon to a new system that can 14 deliver -- I'm sorry to go back to the strategic review, 15 but a system that's fit for the future, as soon as 16 possible. But to do that in a way that doesn't disrupt 17 postmasters' activities. 18 MR BLAKE: Thank you. 19 Sir, that might be an appropriate time to take our 20 mid-afternoon break. 21 SIR WYN WILLIAMS: Yes. 22 MR BLAKE: Can we come back at 3.35, please. 23 (3.16 pm) 24 (A short break) 25 (3.35 pm) 164 1 MR BLAKE: Mr Railton, we spoke before the break about 2 Horizon potentially continuing for another five or 3 potentially even more years, and also the possibility 4 that certain aspects may come inhouse. What do you 5 envisage so far as Prosecution Support, in those 6 circumstances? 7 A. From Fujitsu? 8 Q. Well, from Fujitsu, yes. 9 A. I don't know. 10 Q. Have you seen the recent correspondence, between Mr Read 11 and Fujitsu, regarding their involvement in Prosecution 12 Support? 13 A. I was provided with some documentation, I think, on 14 Thursday. 15 Q. Yes. 16 A. Which was an exchange between Nick Read and Fujitsu this 17 year. That's the correspondence you're referring to, 18 yes -- 19 Q. It is, yes, is that something that had been brought to 20 your attention before this Thursday? 21 A. Not particularly. Clearly, I enquired when I received 22 the documentation and my understanding is it's 23 information that's required by the Met Police and the 24 City of London Police into an investigation that 25 involves organised crime and that's why they approached 165 1 us and Post Office -- we went to Fujitsu and asked them 2 as well to help provide this data. But that's as far as 3 I am aware of the situation. 4 Q. Perhaps we can bring onto screen some of the 5 correspondence. I won't take you to all of it because 6 we have dealt with it with other witnesses, but can we 7 please turn to FUJ00243204. This is the letter from 8 Fujitsu, from Mr Patterson to Nick Read. If we scroll 9 down, there's a reference there to Mr Bartlett's letter 10 or email, and that's a document that we've seen and 11 a document that was also in your pack. 12 A. Mm. 13 Q. It says: 14 "Mr Bartlett suggests that a failure to provide 15 a witness statement would 'rightly be interpreted by the 16 police and prosecutors as [the Post Office] and Fujitsu 17 not having faith in the reliability of the data with the 18 obvious outcome resulting." 19 Mr Patterson says: 20 "A witness statement from [Fujitsu] attesting to the 21 reliability of the Horizon system and of data from it in 22 criminal proceedings would amount to expert opinion 23 evidence. [Fujitsu] is incapable of providing expert 24 opinion evidence as it is neither independent nor has it 25 sufficient information to provide such an opinion. 166 1 "As the Post Office is well aware, there have been 2 and there continue to be bugs, errors and defects in the 3 Horizon system. Further, [Fujitsu] currently has, and 4 previously had, access to branch transaction records. 5 Your letter of 30 May 2024 also acknowledges the 6 existence of other matters (beyond the Horizon system) 7 which could have operated to create innocent 8 discrepancies in branch accounts including '... 9 mis-keys, or omissions when remitting cash or stamp 10 stock based on Horizon data ...' by end users." 11 He then goes on to say: 12 "... the Horizon system is reliant on the delivery 13 of serviced by Post Office and third parties ..." 14 Over the page, please: 15 "Based on the evidence which has been seen and heard 16 in [the Inquiry], [Fujitsu] considers that all of the 17 matters mentioned above would need to be investigated 18 carefully by the Post Office and the police, with the 19 assistance of an independent technical IT expert, and 20 possibly also forensic accounting expert, to ascertain 21 proper explanations for branch account discrepancies. 22 [Fujitsu] considers that only after such 23 an investigation has been undertaken could a meaningful 24 expert witness statement be made in subsequent criminal 25 proceedings which addresses the reliability of the 167 1 Horizon system and the relevant data produced. For the 2 reasons I have mentioned above, [Fujitsu] cannot provide 3 such a statement. 4 "As to your comments regarding the pursuit of 5 shortfalls, [Fujitsu] will continue to deliver its 6 contractual obligations including reporting promptly and 7 transparently branch impacting incidents. It is for the 8 Post Office to work with postmasters to understand and 9 resolve branch account discrepancies fairly and 10 promptly. The improvements you mentioned to your 11 discrepancy investigation processes I hope will allow 12 for this to happen. You say in your later that Horizon 13 data is not currently being used for civil recoveries 14 from postmasters. This is reassuring. For the 15 avoidance of doubt, [Fujitsu] will not support the Post 16 Office in the event it pursues civil recoveries from 17 postmasters." 18 Do you understand from this and from the discussions 19 you have had, that the current position is that Fujitsu 20 will not provide a witness statement for criminal 21 prosecutions, even if requested to do so by the police? 22 A. I'm not sure that's entirely correct. I understand that 23 they will provide it if the police ask them. That's my 24 understanding of the situation. I do find some of the 25 comments made by Fujitsu here quite strange, actually, 168 1 given that we and postmasters rely on the system. We 2 have a system of controls to give us all comfort that 3 things are working with integrity. But I am speaking to 4 Paul on Thursday, so I will test this with him. 5 Q. In respect of not supporting the Post Office in the 6 event it pursues civil recoveries, is that your 7 understanding that that is the current position? 8 A. I think so. 9 Q. We can see a response from Mr Woodley. That's 10 FUJ00243209. Mr Woodley responds to that 11 correspondence. If we scroll over the page, he explains 12 in that paragraph there, the final section of the first 13 paragraph: 14 "The feedback they received in April 2024 was that 15 the Police that only been able to have one conversation 16 with [Fujitsu] at that time and the investigation 17 officer's impression from that conversation was that 18 they were indirectly being told by [Fujitsu] that the 19 Horizon system was unreliable. As a result, the Police 20 told the AC&I Team that the investigation could not 21 progress." 22 Over the page, I'm just going to read to you a few 23 relevant passages. It says at the top of that page, "To 24 get the right checks and balances" -- this is under the 25 heading "Criminal investigations and prosecutions". 169 1 A. Right. 2 Q. "To get the right checks and balances in any of these 3 investigation processes, data will be required from the 4 Horizon system along with analysis of any bone bugs, 5 defects or errors in the system at the relevant time 6 period. Thank you for confirming that such data will be 7 provided in line with contractual obligations and in 8 cooperation with law enforcement agencies." 9 It then addresses the postmaster shortfalls and 10 Mr Woodley, in the final sentence of that first 11 paragraph, says: 12 "... I was concerned about your statement that 13 [Fujitsu] would not support the Post Office in the event 14 it pursues civil recoveries from Postmasters. 15 "While Post Office does not currently take civil 16 recoveries action to recover established losses from 17 Postmasters, this may be necessary in future to 18 establish a fair, transparent and consistent approach to 19 recoveries. Critically, this would only be undertaken 20 in the future with the wide endorsement of the 21 Postmaster community and robust independent assurance." 22 Before I ask you about this, I'd just like to turn 23 to the response from Mr Patterson. That's at 24 FUJ00243211. 25 We've seen this letter, so I won't go over the first 170 1 paragraph but, in the second paragraph, he says: 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 "You will recall that I have state publicly Fujitsu 7 does not wish to extend the contract with the Post 8 Office and your letter has reinforced the challenges we 9 have as an organisation with continuing to do business 10 with the Post Office. As agreed some months ago with 11 Nick, we wish to continue to prioritise the necessary 12 work on exit and the Post Office has tired an external 13 person who starts in August to take responsibility for 14 this. While there have been several workshops to scope 15 out the 5-year request, your statement when we met 16 regarding a 2-year request needs rapid attention from 17 the Post Office. Dan Walton has arranged an initial 18 meeting with Neil on 25 July, to address his technical 19 questions and there is a workshop with the other Post 20 Office personnel to update Dan on the 2-year 21 requirements." 22 Is there, in your view, an impasse between the Post 23 Office and Fujitsu currently? 24 A. I think when I step back and read this correspondence, 25 there's certainly a breakdown in the relationship. 171 1 I think that's evident. I think there has been 2 an impasse. But I'm hopeful now that we can 3 breakthrough that impasse with Neil Brocklehurst as now 4 the acting CEO, working with Paul Patterson at Fujitsu 5 to now break this and come up with something that's 6 sensible for Fujitsu and sensible for the Post Office 7 and postmasters because we have to continue with the 8 system, post-March. We have no choice. 9 Q. What is your view, having seen this correspondence? 10 A. My view on -- 11 Q. Of the nature of the relationship between Fujitsu and 12 the Post Office? 13 A. I think it's strained. 14 Q. What's your view on the approach by Fujitsu as set out 15 in this letter? 16 A. I think it's quite defensive. I think they are clearly 17 making statements for the benefit, I think, of this 18 Inquiry perhaps. I don't know, I'm not close to it. 19 But I also understand from others that Paul is a very 20 reasonable guy and Fujitsu are very reasonable as 21 a company and I'm hopeful that, with the right 22 conversations, we can find something that works for both 23 organisations. 24 Q. If you move away from Fujitsu, in the way we've already 25 discussed today, prior to the start of NBIT, to some 172 1 extent, what is the plan for assisting the police or 2 assisting in civil recoveries? 3 A. I don't know the answer to that question, I'm afraid, 4 but clearly we would -- any design that we have for the 5 use of, you know, the Fujitsu system or components of it 6 or NBIT, we'll have to make sure we can comply with our 7 legal obligations to provide data and information as 8 required. 9 Q. Because there's going to be a number of years, possibly 10 five, possibly more, in which the Horizon system is 11 still going to be used. How do you see the Post Office 12 as overcoming issues and being able to provide evidence 13 to criminal prosecutions and undertake civil recoveries? 14 A. On the first element of that -- of the question, our 15 intention is not to stay on Fujitsu for another five 16 years and certainly not beyond. I think our objective 17 is to move away from the Fujitsu system, as soon as 18 reasonably possible, and put in place the right system 19 for the future. 20 I need to go away and consider this more. It's 21 quite a lot to consider here but, you know, we will as 22 an organisation make sure we comply with, you know, the 23 requests from the police, particularly on things such as 24 we discussed this afternoon about, you know, issues that 25 have been raised from the City of London and the Met 173 1 Police. I think what we need to do is come up with 2 a sensible compromise and sensible solution, working 3 with Fujitsu, and I'm confident we can. 4 SIR WYN WILLIAMS: I am seeing this at the moment very much 5 with a criminal lawyer's hat on, all right -- 6 A. Yes. 7 SIR WYN WILLIAMS: -- as opposed to the relationships 8 between you and Fujitsu. But there are two possible 9 scenarios that I just want to ask you to consider with 10 me. The first is that, completely independently of the 11 Post Office, the police obtain information which 12 suggests that a crime has been committed against the 13 Post Office, and we'll say it's a financial crime of 14 some sort -- 15 A. Yes. 16 SIR WYN WILLIAMS: -- which will require financial 17 investigation, right? 18 A. Yes. 19 SIR WYN WILLIAMS: So they come to the Post Office and say, 20 "We have this information, we want to investigate. This 21 is what we want from you". In my mind, the answer is 22 obvious, "Here it is". 23 A. Agreed. 24 SIR WYN WILLIAMS: Right, because you are currently not in 25 the business of prosecuting anyone. 174 1 A. That's right. 2 SIR WYN WILLIAMS: That's correct, isn't it? 3 A. That's correct, and the Post Office will no longer 4 prosecute ever again anybody. 5 SIR WYN WILLIAMS: So it's simply a question -- not 6 a question -- it's simply the Post Office being asked to 7 cooperate with the police investigation, and I would 8 have thought the answer would always be, "Yes"? 9 A. Absolutely. 10 SIR WYN WILLIAMS: Right. The second scenario is that you, 11 the Post Office, come into possession of information 12 which suggests that a crime has been committed against 13 the Post Office -- 14 A. Mm-hm. 15 SIR WYN WILLIAMS: -- forget whether it's a postmaster or 16 any other person, but you have the initial information. 17 My understanding so far is that, in those circumstances, 18 your own Investigation Department would investigate 19 whether or not such an offence may have been committed. 20 A. I think that's the start point, from my understanding. 21 SIR WYN WILLIAMS: Sure, fine. Then they would get to the 22 point where they would, for these purposes, conclude 23 that there is evidence to support an allegation of 24 a crime? 25 A. Yes. 175 1 SIR WYN WILLIAMS: Now, my understanding -- and this is 2 where I want your confirmation about it -- is this: that 3 at that point it would actually be a Board decision as 4 to whether or not a report was made to the police of 5 that suspicion, in effect? 6 A. That is correct and I know this -- 7 SIR WYN WILLIAMS: That's your understanding as well. 8 A. Yeah, it is my understanding and I think it's correct. 9 SIR WYN WILLIAMS: That's correct. 10 A. I think there was some debate about whether or not this 11 moved away from the Board, from correspondence that I've 12 read. 13 SIR WYN WILLIAMS: Exactly so. So I've got it right. So 14 let us assume that the Board says "Yes, on the basis of 15 what you tell us, we think this should be reported to 16 the police". 17 A. Yes. 18 SIR WYN WILLIAMS: Thereafter, as I see it, as a criminal 19 lawyer, the process becomes identical to scenario 20 number 1: the police become the investigators and you 21 simply cooperate with whatever they ask you for? 22 A. Exactly, exactly. 23 SIR WYN WILLIAMS: Right. Now, you're not Fujitsu but can 24 you think of any reason why any company which is asked 25 for information by the police, short of something being 176 1 incredibly commercially sensitive or something like that 2 for the moment, but in the normal run of cases, why they 3 wouldn't just say, "Yes, Detective Inspector Williams, 4 since you've asked me for that information, I'll go and 5 get it and provide it for you"? 6 A. I find it odd. 7 SIR WYN WILLIAMS: Right. Okay, thank you. 8 MR BLAKE: Moving on to our final topic, and that's 9 compensation and redress. 10 A. Yes. 11 Q. You have advocated for that work to move to within the 12 Department for Business. How do you envisage that 13 working? 14 A. To be clear, I've advocated that the Post Office don't 15 do redress. Where it goes to is not my decision but 16 basically my position since I joined was that the Post 17 Office should not be dealing with redress and payment of 18 compensation. For reasons that I think some people 19 don't trust the Post Office still. 20 I've had conversations with various officials and 21 those conversations continue. So I don't yet have 22 confirmation that it will move it, but I'm hopeful it 23 will at some point. 24 Q. One of the complaints about compensation and redress is 25 that it's taking too long. Won't that just slow things 177 1 down yet further and kick it down the road? 2 A. One of my objectives and one of the team's objectives is 3 to speed things up, at I think having two organisations 4 dealing with basically the same thing but having two 5 organisations, cannot be the most effective way of doing 6 something. I also was interested in the conversation 7 this morning about redress and how the team works and 8 I've spent quite a lot of time with Simon Recaldin, 9 talking about how we can speed this up, and I think we 10 can automate far more, is one of my -- that's one of my 11 objectives now, given, post-my giving evidence today, to 12 go back and work with the Executive Team and see how we 13 can speed things up by automation. 14 I don't know but I can't understand why everything 15 is so manual. I think there's better ways of doing 16 things. 17 Q. Can you give us an idea of what you mean by automation 18 in terms of compensation or redress? 19 A. Sure, of course. Well, at the moment, as I -- and this 20 is my understanding because I haven't been into the real 21 kind of detail on this, but we have a whole bunch of 22 people -- I think Karen talked this morning about 110 23 but, I think there's more when you look at the wider 24 team, who are manually accessing databases or old 25 database information to look for shortfalls and that 178 1 takes time and people, and it's very difficult to scale 2 a process that requires people. And we know that, you 3 know, hopefully we'll have more and more postmasters 4 coming forward with claims. 5 So I think the way to think about scaling it is to 6 automate that process. There must be a way of taking 7 an historic database and writing database queries and 8 programs that can get this information for us very, very 9 quickly, so we can turn these things around much more 10 quickly. So that's my objective. 11 I need to now talk to the team and people who 12 actually know how to do this but, at a logical level, 13 that would seem sensible to me. 14 Q. The final document I'd like to look at this afternoon is 15 BEIS0000793. This a briefing for the then Minister 16 Hollinrake in April this year. It's a briefing for his 17 meeting with Nick Read. 18 A. Mm. 19 Q. If we could turn over the page, please, there's 20 a section at the bottom of that page on background that 21 addresses your appointment. It says: 22 "Background: Nigel Railton accepted the role of 23 Interim Chair following a conversation with [the 24 Secretary of State] last week. [The Secretary of State] 25 has previously provided Mr Railton with her priorities 179 1 for Post Office which include (i) intensifying existing 2 workstreams to address [the Post Office's] historic 3 failures, (ii) support cultural transformation and 4 improving [Post Office's] capacity, capability and 5 resilience at all levels, and (iii) enabling the future 6 success of [the Post Office], including through 7 effective financial management and deliver of NBIT." 8 First of all, are those still the Secretary of 9 State's priorities, even though we have a new Secretary 10 of State? 11 A. Broadly, yes. 12 Q. Can you assist us with how it has changed? 13 A. I think on the "intensifying existing workstream to 14 address POL's historic failures", there's particular 15 reference to speeding up remediation and compensation 16 payments. 17 Q. Thank you, because that was going to, in fact, my 18 question, which is where does compensation and 19 remediation fit within those priorities. 20 A. Yes, I mean, I think this is a summary, actually, of 21 the -- there's a couple of sub-bullets for each one. 22 Q. Thank you. Have you spoken to the current Minister 23 regarding compensation and redress? 24 A. I've spoken to the current Minister, yes. We talked 25 about whole a lot of topics, and yes, I did. I did. 180 1 Q. What is your view as to whether Government is providing 2 the issue of redress and compensation with sufficient 3 attention and support? 4 A. I think they are. I've spoken to the Minister, I've 5 spoken to the Secretary of State. I've made my position 6 very clear in terms of how I think this needs to evolve 7 and they've been very supportive. 8 MR BLAKE: Thank you. 9 Sir, those are all of my questions. There are some 10 questions from Mr Jacobs. Do you, sir, have any 11 questions before? 12 Questioned by SIR WYN WILLIAMS 13 SIR WYN WILLIAMS: Just before you ask your questions, 14 Mr Jacobs. 15 Obviously, Mr Railton, you've raised the prospect 16 that, over the course of the coming weeks, I think, 17 given the way you put your evidence, there would be 18 likely information about your strategic plan which would 19 be of considerable interest to the Inquiry. 20 A. Yes. 21 SIR WYN WILLIAMS: So we need to work out a mechanism for 22 the Inquiry to be kept up to date, effectively, yes? 23 A. Yes. 24 SIR WYN WILLIAMS: Obviously, I know you're the Chair and 25 therefore a very important figure but, if you can't 181 1 commit to things while you're sitting in the witness 2 box, that's fair enough. But what I'd like to be in 3 a position to get agreement about is that -- well, as 4 I see it, the next step is approval or otherwise by the 5 Government. 6 A. Yes. 7 SIR WYN WILLIAMS: So, obviously, I would like to be 8 informed, maybe there will be a great public 9 announcement, so I won't need your assistance but, if 10 there isn't, I would like the Post Office to tell the 11 Inquiry what the position is once the Government say 12 whatever they're going to say -- 13 A. Certainly. 14 SIR WYN WILLIAMS: -- and I'll be asking the Government to 15 tell me as well, so it won't be just the Post Office. 16 It may be that that will provoke the need for 17 a Rule 9 Request, which I'm sure you know what that is 18 and a pretty quick answer to it, if the statement isn't, 19 obviously, self-explanatory. So, again, I'd like your 20 cooperation in seeking to ensure that this could happen, 21 because what I don't want to happen is for the Phase 7 22 hearing to finish more or less on time, as I'm pretty 23 sure it's going to, and then for events to be occurring 24 while I'm trying to make sense of what I'm going to say. 25 A. Yes. 182 1 SIR WYN WILLIAMS: So I'm really asking for your cooperation 2 in feeding the Inquiry information as soon as you can -- 3 A. Yes. 4 SIR WYN WILLIAMS: -- in respect of the strategic plan and 5 all that flows from it, all right? 6 A. I can assure you of my cooperation and commitment to do 7 that. 8 SIR WYN WILLIAMS: Fine. Thank you. 9 Mr Jacobs? 10 Questioned by MR JACOBS 11 MR JACOBS: Thank you, sir. I ought to say we've had 20 of 12 our clients asking for me to ask the question you've 13 just asked, so I don't need to ask it. 14 SIR WYN WILLIAMS: Well, I've stolen your thunder, 15 Mr Jacobs, and I apologise. 16 MR JACOBS: I'm afraid my voice isn't so great, so if you 17 can't understand me or understand me then let me know. 18 A. I can certainly hear you. 19 Q. Good. Thank you. In relation to the plan, the 20 strategic review plan, we understand that once the plan 21 was drafted, Post Office didn't go back to the National 22 Federation of SubPostmasters or to subpostmasters to ask 23 them if they were content with the proposed plan, 24 whether they objected to proposals or had proposals that 25 they wanted to be included. Why didn't Post Office ask 183 1 for feedback or properly consult subpostmasters on this? 2 A. I think we did consult with subpostmasters and the 3 various Federations in groups to get their input to the 4 plan. 5 Q. Yes. 6 A. So we got their input. We talked to lots and lots of 7 people to get their input, and I think I can understand 8 people's concerns, but I doubt there's anything in the 9 plan that, when we announce it, people will not want us 10 to do or not be happy with. 11 Q. Don't you think you should have sent the plan at least 12 to the Federation and asked for feedback on the 13 proposals or any counterproposals, as a consultation, 14 part of the consultation exercise? 15 A. Perhaps, but perhaps that stage -- we can do that once 16 the Government agree to the fact that this is a plan 17 that's sensible and we can then consult with them at 18 that point before we implement it. 19 Q. Thank you. I want to ask you now about restorative 20 justice. 21 In your statement at paragraph 56, you say you 22 believe that you met postmasters recently on 18 June. 23 A. And subsequently. 24 Q. We've heard evidence from Ms McEwan today that such 25 meetings had been profound and impactful. Is that how 184 1 you found your meetings? 2 A. I found them, yes, really, really helpful. 3 Q. You say that a new deal and full engagement with the 4 postmasters is fundamental and that's how you would like 5 to see things going forward? 6 A. Yes. 7 Q. Can you confirm whether the new deal, which I understand 8 is part of the strategic review, whether that 9 incorporates any wider restorative justice proposals for 10 subpostmasters? 11 A. Not -- it doesn't really deal with compensation, it 12 deals with the new and economic model and new ways of 13 working going forward. 14 Q. Okay, I'll expand on that. Of course, you've only been 15 around in office since May this year. 16 A. Yes. 17 Q. In December 2022, Howe+Co, who instruct me, set out some 18 proposals for wider restorative justice in written 19 submissions and Mr Stein, King's Counsel, raised them at 20 a hearing on 8 December 2022. 21 I just want to ask you whether, as Chair, you're 22 aware of whether there are any proposals for any ongoing 23 psychiatric and counselling support for subpostmasters 24 and their families? 25 A. I'm afraid I'm not aware. I'm not aware of that. 185 1 Q. What about bursaries to assist with retraining of 2 subpostmasters and for the education of their children 3 whose education was disrupted by the scandal? 4 A. Again, I'm afraid I'm not able to answer that question. 5 I will say that I believe that the remediation process 6 and compensation has been widened. 7 Q. What about a tangible memorial scheme to mark the 8 miscarriage of justice and sympathetically record the 9 experiences of subpostmasters; has that been -- 10 A. I'm sorry, I'm really not familiar with this at all. 11 Q. Okay. Finally, are there any proposals for local 12 initiatives to restore the reputation of subpostmasters 13 within their local communities? 14 A. I think there's certainly an objective to restore the 15 Post Office brand. How far that stretches to local, 16 I don't know, at this point. 17 Q. The proposals that I've just listed out were put to this 18 Inquiry in submissions in December 2022. Do you accept 19 that the plan that you speak about in your statement, 20 the new deal for postmasters, should include such 21 measures as a matter of principle, Mr Railton? 22 A. I think, as a matter of principle, yes, yes. But 23 I think I just need to think about it. In principle, 24 yes; in practice, how that would work? 25 Q. Is that something that you are prepared to consider, 186 1 going forward, or that Post Office are prepared to 2 consider? 3 A. Well, the Post Office, I'm sure, will consider that, 4 yes. 5 Q. Moving on. I want to ask you about the Standard 6 Subpostmasters Contract. 7 A. Yes. 8 Q. Perhaps we could just have part of that on the screen. 9 So it's POL00000254, and then going to page 32 of that 10 document. That's section 12 of the Standard 11 Subpostmasters Contract. Page 32. So if we could then 12 scroll down to paragraph 20, do you see at paragraph 20, 13 "Post Office Duties"? 14 A. Yes. 15 Q. "Post Office Limited shall ..." 16 Then if we scroll down to 20.3: 17 "... properly and accurately effect, record, 18 maintain and keep records of all transactions effected 19 using Horizon ..." 20 Now, these are the new terms that have been put into 21 the contracts after the Common Issues judgment of Lord 22 Justice Fraser. 23 A. Mm. 24 Q. My question for you is: does this mean that the 25 mechanism exists within Post Office now for monitoring 187 1 and identifying shortfalls on Horizon terminals? 2 A. Yes, as far as I'm aware. Yes. 3 Q. So Post Office are able to identify, track down and 4 monitor shortfalls? 5 A. Yes, and we have a process that does that. 6 Q. If we could then move further down to paragraphs 20.4 to 7 20.7. Again, Post Office will: 8 "... properly and accurately produce all relevant 9 records and/or explain all transactions and/or any 10 alleged apparent shortfalls attributed to the 11 subpostmaster; 12 "cooperate in seeking to identify the possible or 13 likely causes of any apparent or alleged shortfalls 14 and/or whether or not there was indeed any shortfall at 15 all; 16 "seek to identify the causes of any apparent or 17 alleged shortfalls, in any event; 18 "disclose possible causes of apparent or alleged 19 shortfalls (and the cause thereof) to the subpostmaster 20 candidly, fully and frankly ..." 21 I hope I haven't read those too quickly. 22 A. No, I've read them. 23 Q. So these subclauses say that the Post Office will seek 24 to identify possible or likely causes of shortfalls. Do 25 you accept, then, that Post Office has a facility to do 188 1 this: it can identify and it can do this? 2 A. Yes, so we have a process -- and, forgive me, this is my 3 understanding based on information I've been given, but 4 we have a process now where people can put any shortfall 5 into dispute. It then goes into a process that's 6 administered by a team in Chesterfield that looks at 7 what's caused the shortfall. But the open -- the 8 proposition of it is that the postmaster is not at 9 fault. That's really important. 10 That's the start point and it's for the process to 11 identify where any shortfall may have been caused, and 12 it may not be Horizon. I think, as mentioned in these 13 clauses, it could be a stock shortfall, you know, that 14 the wrong stock has been sent, a cash shortfall. It 15 could be many reasons. One thing we do want to do is we 16 want to get more postmasters involved in reviewing these 17 processes to make sure that they're comfortable with 18 them. 19 Q. So the process really is that the postmaster has to 20 identify the shortfall first; it's not a case of Post 21 Office actively looking for problems in the Horizon 22 system? 23 A. No, I think -- the shortfall will appear on the system, 24 I think, but predominantly through a postmaster logging 25 a dispute. 189 1 Q. You were asked by Mr Blake about the position between 2 Post Office and Fujitsu, and there's a letter -- we may 3 not need to turn it up because you've answered on the 4 subject -- that Mr Patterson wrote to the Chief 5 Executive on 17 May 2024, to Mr Read, and he says in it: 6 "To be clear, FSL will not support the Post Office 7 to act against subpostmasters. We will not provide 8 support for any enforcement actions taken by Post Office 9 against postmasters, whether civil, criminal, for 10 alleged shortfalls, fraud or false accounting." 11 So the position is that Post Office are 12 contractually bound to identify and resolve the 13 shortfalls. 14 A. Mm. 15 Q. How can Post Office fulfil these obligations without 16 support from Fujitsu? 17 A. I don't know. I mean, that's quite a technical 18 question. I think one of the issues that the Post 19 Office has right now is they don't recover any 20 shortfalls, and haven't for quite a period of time. But 21 I think we need to think about how we can get the 22 business back on a proper footing. So I'm afraid 23 I don't know the answer to that question but I'll 24 certainly take it away and think about it. 25 Q. Thank you. Finally, from me, at about 2.10 this 190 1 afternoon Mr Blake took you to the YouGov survey -- 2 A. Yes. 3 Q. -- that has been prepared at the request of this 4 Inquiry. We know from Ms Burton's evidence last week 5 that there was a Board meeting about this on 6 24 September; is that right? 7 A. Yes. 8 Q. You were at that meeting, were you? 9 A. Yes. 10 Q. You will no doubt know, then, that the Executive summary 11 says that 92 per cent of the 1,000 postmasters who 12 responded -- approximately 1,000 -- experienced some 13 form of issue with the Horizon system in the last 14 12 months, and 98 per cent of those who experienced 15 discrepancies reported shortfalls and, worryingly, the 16 most common resolution was for them to use branch money 17 or resolve it themselves. 18 So isn't it right that the subpostmasters are still 19 paying for Horizon-generated shortfalls from their own 20 funds; do you accept that? 21 A. Well, that's what the report says, so therefore I have 22 to. I think we need to go away and investigate this 23 again and look at it. As I say, the report was 24 disappointing, surprising and, as I say, we need to go 25 away and work out exactly what is happening again. But 191 1 that's certainly not the intention of the Post Office 2 for that to happen. 3 Q. It follows, doesn't it, that the need to identify and 4 resolve Horizon shortfalls, not least because of your 5 contractual obligations but also because of what 6 subpostmasters are experiencing on the ground, is 7 a matter of huge concern today, isn't it, Mr Railton? 8 A. Yes. 9 Q. Are you able to say what steps you're able to take, as 10 Interim Chair, to try and drive this issue forward and 11 resolve it? 12 A. Well, we're going to take the survey, and we've already 13 got a lot of activities under way. I think the best way 14 to resolve this -- and I'll talk to the Acting Chief 15 Executive about this -- is to get a number of 16 postmasters to work with us to review the processes end 17 to end because we can say repeatedly that we have 18 confidence in the processes but, until they do, then 19 I don't think we're going to resolve this. 20 MR JACOBS: Well, thank you. Your answers have been 21 helpful. I'm just going to ask if I need to ask you 22 anything more. 23 No, I haven't any further questions. 24 THE WITNESS: Thank you for the questions. I appreciate it. 25 MR JACOBS: Thank you. 192 1 MR BLAKE: Thank you, sir. I think those are all the 2 questions. 3 SIR WYN WILLIAMS: Thank you, Mr Railton, for your witness 4 statement and for your evidence this afternoon. I'm 5 very grateful to you and grateful too that I may hear 6 from you further, so to speak. 7 THE WITNESS: Thank you. 8 SIR WYN WILLIAMS: Mr Chapman isn't here, is he, from the 9 Department? 10 MR BLAKE: No. 11 SIR WYN WILLIAMS: I take it, so that I'm not going off on 12 a false trail, it's the Department for Business and 13 Trade that -- 14 A. Yes. 15 SIR WYN WILLIAMS: Yes, fine. So is anyone here from the 16 Department? Anyway, if they are following remotely, 17 they will know that I would expect the same cooperation 18 from them as I've been assured I will get from 19 Mr Railton. So thank you all very much. 20 THE WITNESS: Thank you. 21 SIR WYN WILLIAMS: 10.00 tomorrow morning. 22 (4.13 pm) 23 (The hearing adjourned until 10.00 am the following day) 24 25 193 I N D E X KAREN ANITA MCEWAN (sworn) ....................1 Questioned by MR BLAKE ........................1 Questioned by MR STEIN .......................93 Questioned by SIR WYN WILLIAMS ..............106 NIGEL RAILTON (sworn) .......................108 Questioned by MR BLAKE ......................108 Questioned by SIR WYN WILLIAMS ..............181 Questioned by MR JACOBS .....................183 194