1 Tuesday, 15 October 2024 2 (10.00 am) 3 MS HODGE: Good morning, sir. Can you see and hear us? 4 SIR WYN WILLIAMS: Yes, thank you very much. 5 MS HODGE: Thank you. Our first witness today is Mike 6 Young. 7 SIR WYN WILLIAMS: Yes. 8 MS HODGE: Please could the witness be sworn. 9 MICHAEL THOMAS YOUNG (sworn) 10 Questioned by MS HODGE 11 Q. Thank you. Please give your full name? 12 A. Michael Thomas Young. 13 Q. You should have in front of you a copy of your witness 14 statement dated 8 August 2024. 15 A. I do. 16 Q. That statement runs to 63 pages. Could I ask you, 17 please, to turn to page 58. 18 A. Yes. 19 Q. Do you see your signature there? 20 A. I do. 21 Q. Is the content of that statement true to the best of 22 your knowledge and belief? 23 A. It is. 24 Q. Thank you. Mr Young, I'm going to begin by asking you 25 a few questions about your professional background, 1 1 before we go on to deal with some of the substantive 2 matters dealt with in you statement. 3 Firstly, on leaving school, you joined the British 4 Army in which you served for 11 years; is that correct? 5 A. That is correct. 6 Q. After leaving the army you served as a police officer 7 for seven years, rising to the rise of Detective 8 Sergeant; is that right? 9 A. That is correct. 10 Q. Between March 1995 and February 1998 you say you worked 11 for Orange Plc; is that the mobile network provider and 12 Internet service provider? 13 A. It was at the time, yes. 14 Q. Forgive me, at the time, yes. You explain that you were 15 initially employed by Orange as an Investigations 16 Manager, responsible for fraud and security matters; is 17 that right? 18 A. Correct. 19 Q. You were later promoted to the Group Head of Security 20 Management; is that correct? 21 A. That's correct. 22 Q. Upon leaving Orange, you took up a role as the Chief 23 Information Officer and Vice President of International 24 IT for Verizon Business Solutions; is that correct? 25 A. That is correct. 2 1 Q. In that role, you were responsible for IT development in 2 the Europe, Middle East, Africa and Asia and Pacific 3 regions; is that right? 4 A. IT operations and development, yes, that's correct. 5 Q. Thank you. Before taking up your role at Verizon, had 6 you undertaken any formal training or obtained any 7 qualifications in information technology? 8 A. I have a diploma in security management. 9 Q. When did you obtain that? 10 A. I think that was whilst at Orange. I was studying for 11 a diploma in security management and that continued 12 after leaving Orange too. 13 Q. So far as that diploma is concerned, in security 14 management, what aspects of information technology was 15 covered, do you recall? 16 A. Most parts of cyber -- what we would know as cyber 17 security today. 18 Q. Thank you. You say you left Verizon in June 2006 and 19 after spending a year running your own consultancy you 20 joined BT in July 2007 as their Vice President of Global 21 Services; is that right? 22 A. That is correct. 23 Q. Dealing then with your employment at the Post Office, 24 you joined Post Office as Operations Director in August 25 2008, initially reporting to the Managing Director, Alan 3 1 Cook; is that right? 2 A. That's correct. 3 Q. You describe your responsibilities as Operations 4 Director as being to develop and manage at an executive 5 level the partnership and relationship with suppliers. 6 A. Correct. 7 Q. Is that how you saw your role at the time? 8 A. (The witness nodded) 9 Q. In your role as Operations Director you had a number of 10 direct reports, which included the Head of Change and 11 IS, which was responsible for overseeing technology, is 12 that right -- 13 A. That's right. 14 Q. -- as well as the Head of Security? 15 A. Correct. 16 Q. When you joined the Post Office, what did you understand 17 the remit of the Post Office Security Team to be? 18 A. It was an all-encompassing type mandate. It was all 19 areas of risk across the POL business. So making sure 20 that employees were aware of their security 21 responsibilities so, therefore, there was some form of 22 training for employees when they were brought on board 23 to the Post Office. That was supplied and supported by 24 the Security Team, right the way through to acting on 25 intelligence that may refer to security in the Cash 4 1 Vehicles in Transit arena, which was a very large part 2 of my operational remit, and right the way through to 3 investigations. 4 Q. When you say "investigations", can you clarify what you 5 mean by that: are you talking about criminal 6 investigations; did you understand that the Post Office 7 Security Team were responsible for investigating alleged 8 offences of fraud, theft and false accounting, for 9 example? 10 A. One aspect of John Scott, the Head of Security's, roles 11 and responsibilities was to look at criminal 12 investigations, yes. 13 Q. In your statement, you say that you were not responsible 14 for investigations into potential criminality within the 15 Post Office Network and that you had no involvement with 16 prosecutions or civil litigation. Given that you had 17 oversight of a team which conducted criminal 18 investigations, do you think that that's entirely 19 accurate to say that you had no responsibility for the 20 investigation into potential criminality within the 21 network? 22 A. I do. 23 Q. Who did you think was responsible at an executive level 24 for managing and overseeing the criminal investigations 25 carried out by the Post Office Security Team? 5 1 A. There was an overlapping responsibility managed via 2 Royal Mail Group for all criminal prosecutions across 3 the group and John was the -- John Scott, the Head of 4 Security for POL, was the lead into that. In my 5 introduction, when arriving at the Post Office, it was 6 made clear to me that that process did not need my 7 supervision or my line management because that had been 8 in place over a number of years, and I was told not to 9 get involved and to leave it with both Legal and that 10 RMG, Royal Mail Group, type framework. 11 Q. Who told you that? 12 A. Alan Cook, my boss, the CEO. 13 Q. Upon joining the Post Office, what did you understand to 14 be the relationship between the Post Office Security 15 Team and the Royal Mail Group Security Team and those 16 who had responsibility for criminal prosecutions? 17 A. As a former policeman, I knew that Royal Mail Group had 18 a means of prosecuting people because I'd seen them in 19 my police career involved in certain aspects of 20 prosecutions. What I understood from talking to John, 21 as an introduction to John, as one of my direct reports, 22 was how the process worked, because I asked questions, 23 in relation to what had been described to me by Alan 24 Cook. 25 So I had some sense of how it worked at Royal Mail 6 1 Group via my former career as a policeman and some of 2 the gaps in my understanding were either covered off in 3 the intro by Alan Cook or my introduction in my first 4 weeks of getting to know my team and, in particular, 5 John Scott as he told me about his roles and 6 responsibilities. And I knew that, in terms of 7 prosecutions within -- potential prosecutions within the 8 Post Office, that it was being handled under that Royal 9 Mail Group type mantle, with a strong emphasis coming 10 from the Legal Team. 11 Q. I wonder if we could please take a look at an email 12 chain that took place in 2011 between John Scott, your 13 Head of Security, you, Mr Young, and Rob Wilson, the 14 Head of Criminal Law team, and it bears the POL00019281. 15 Thank you. If we could scroll down, at the top we have 16 the last email in the chain. If we could scroll down, 17 please, to the bottom of page 2. 18 This is an email from, we can see, Rob Wilson. If 19 we just scroll up to the bottom of page 1, please, it is 20 said to be from Monica Thompson but seems to be sent on 21 behalf of Rob Wilson, Head of Security. This is 22 addressed to John Scott and copied to Susan Crichton. 23 As you'll see, you're later copied into the email. It 24 relates to a letter from a Member of Parliament 25 requesting that the Post Office discontinue the 7 1 prosecution of a constituent. It reads: 2 "Dear John 3 "Please find enclosed a copy of a letter dated 4 18 July received in today's post. You will see from the 5 associated summons the allegation in this case concerns 6 the theft of over £53,000. 7 "My current instructions are that not all of the 8 money has in fact been repaid. My understanding is that 9 a total of £18,104.75 has been paid and that in any 10 event despite the comments made in the letter that this 11 case in the public interest to prosecute. 12 "Bearing in mind this letter has come from an MP and 13 has been forwarded to the Chairman, I have copied the 14 correspondence to you and will be grateful if my 15 instructions could be confirmed in due course. 16 "If I can be of any assistance, please do not 17 hesitate to contact me ..." 18 So that penultimate paragraph, Mr Wilson is seeking 19 confirmation of instructions from John Scott; do you see 20 that? 21 A. Yes. 22 Q. If we scroll up, please. Thank you. So the second 23 email in the chain is from Mr Scott to you. We see 24 various other recipients copied, including Susan 25 Crichton, Head of Legal, and others. It reads: 8 1 "Mike. 2 "Please find attached a letter from the [Right 3 Honourable MP], in regards to Post Office Security 4 prosecuting one of his constituents ... and requesting 5 that we discontinue. 6 "The letter has been forwarded to the Chairman's 7 office [as we see below], so is likely to become a flag 8 case." 9 He says: 10 "I'll ensure that the case and prosecution is 11 reviewed and that any future action taken is appropriate 12 and proportionate, although you can see the initial 13 assessment from Rob Wilson below. 14 "We'll arrange a holding letter in the meantime ..." 15 My question is this: if you had no oversight of 16 these matters, why is it that in July 2011 Mr Scott 17 brings this to your attention and raises it with you? 18 A. So amongst my direct reports -- and there were number, 19 we've only covered two or three of them -- I made it 20 clear that anything that was likely to escalate to the 21 Board -- POL Board and the Royal Mail Group Board -- and 22 certainly anything that was coming from the shareholder, 23 I'd like to be copied in and made aware of. And I think 24 in part, John is making sure, on a rare occasion -- 25 a very rare occasion -- that he is standing true to that 9 1 instruction. 2 Q. Just to be clear, from this it's right to understand 3 that you were aware that your Head of Security, John 4 Scott, was giving instructions to the Criminal Law Team 5 about the conduct of cases; is that correct? 6 A. Well, I'm aware clearly through the disclosure of what 7 the Inquiry has brought forward. Having read that, I'm 8 aware of it in terms of the content. Was I aware that 9 John was doing something like that on a norm? The 10 answer to that is no. 11 Q. You did not know that at the time; is that correct? 12 A. No. 13 Q. Dealing then briefly with some changes in your job title 14 and your responsibilities during the course of your work 15 with the Post Office, you've said that in and around 16 April 2010, your job title changed to that of the Chief 17 Technology and Operations Services Director; is that 18 correct? 19 A. That is correct. 20 Q. That didn't result in any changes in your roles and 21 responsibilities; is that right? 22 A. Throughout my time, I think, at the Post Office, my 23 roles and responsibilities didn't change. 24 Q. I think you say you weren't happy with that title 25 though; is that right, and why is that? 10 1 A. My immediate answer to that would be I didn't think it 2 described quite what my job role was. My job role was 3 a small -- a small part of my job role was the IT, with 4 a CIO or an IT director, as we'd know them today, in 5 situ and managing that on a day-to-day basis. I had, as 6 we briefly covered earlier, responsibility for all of 7 the core programmes, change programmes -- and I'm not 8 talking about IT change here, I'm talking about changes 9 to the network, changes to the property portfolio -- all 10 of the change programmes reported to me at the executive 11 level with Neil Ennis, at the time, being my direct 12 report for that; I had CViT, the Cash Vehicles in 13 Transit. Post Office, I think, still remains the 14 largest mover of physical cash in the country. It's 15 a very, very large enterprise with depots right the way 16 through the UK, and some significant fleet that backs 17 that up on a day-by-day type basis; and then I had 18 a number of other elements that sat alongside that, so 19 it was quite a broad -- quite a broad remit. 20 And a small part of my time was spent on the IT, and 21 I've talked about that in my statement. It did grow 22 with Horizon Online but it still relied very heavily on 23 my direct report chain to keep me abreast of anything 24 that they thought I should be aware of, so that I could 25 lend my support and supervision at POL Board, at the POL 11 1 Executive Team, and across that large mandate. 2 Q. Now, a few months later in October 2010, you were 3 promoted to the job of Chief Operations Officer; is that 4 correct? 5 A. It is but, by way of an explanation, at the time when 6 Alan Cook left -- and for me, Alan Cook left relatively 7 quickly, to a point where I think most of the Executive 8 Team that were in situ didn't really have much of 9 an opportunity to say cheerio. As we all know David 10 Smith, former Parcelforce, came in as an interim 11 Managing Director and, at that time, you know, David -- 12 he didn't explain it to me, though I asked -- had 13 promoted or given Paula Vennells the title of Chief 14 Operating Officer. 15 You can't be an Operations Director and have a Chief 16 Operating Officer without some people drawing 17 conclusions and looking at how that all works together. 18 So I had the debate with David Smith, and he said, "What 19 title do you want because, you know, Chief Operating 20 Officer is Paula's and frankly that's done", and I chose 21 what I thought would best get me through, if you like, 22 in the interim. But it wasn't truly reflective of the 23 role, as I've described. 24 Much later on, as David Smith leaves the Post Office 25 and then goes into group to pick up a new role in Royal 12 1 Mail Group, Paula becomes the Managing Director. 2 I wasn't aware that that was going to happen but clearly 3 things had moved to a point where that took place, and 4 a little later down the road, Paula suggested that I've 5 then become the Chief Operating Officer. But through 6 that entire journey from Operations Director to Chief 7 Technology and Services Director, and even Chief 8 Operating Officer, my roles and responsibilities didn't 9 change. There was a significant programme that took the 10 best part of my final year at Post Office to complete, 11 which was essentially manage the negotiation on behalf 12 of the Post Office as it related to separation from 13 Royal Mail Group, and that was, you know, three or four 14 days a week to bring that to fruition over a 12-month 15 period. 16 And during that time, in that mainstay, that's when 17 I was the Chief Operating Officer. 18 Q. Thank you. So just dealing briefly, then, with the 19 circumstances of your departure. In March 2012, you 20 were informed by Paula Vennells, then Managing Director, 21 that you would not be sitting on the Board 22 post-separation, you say, and that your title would no 23 longer remain Chief Operating Officer; is that correct? 24 A. That is correct. 25 Q. You say you decided to leave at that stage as you 13 1 regarded that as a demotion? 2 A. It's difficult, in career terms, to go from one title, 3 to another title, to Chief Operations Officer, to then 4 go back to another title, which may very well have been 5 Operations Director. The mandate I'm going to presume 6 was not likely to stay the same. In fairness to Paula, 7 I had more than hinted that the separation negotiation 8 that I was undertaking was likely to be my last big 9 effort for the Post Office. So I think there were 10 a number of people that knew that it wasn't my intent to 11 say -- to stay. I think I'd given my all over four 12 years for Post Office and wanted to move on to something 13 different. 14 So when the dialogue took place in a one-to-one with 15 Paula, we rapidly, you know, came to an agreement on how 16 that might work. But, certainly, going from Chief 17 Operating Officer back to Operations Director, and then 18 some sort of restructure, which inevitably will have 19 taken -- would have taken place based on separation, it 20 would have seen less of a remit and, candidly, I wanted 21 to leave on a high, having delivered the Separation 22 Agreement and having that title. 23 Q. Just to bring that summary of your roles and 24 responsibilities at Post Office to a conclusion you, 25 ultimately left in April 2012; is that right? 14 1 A. I physically left in the second week of March but 2 contractually left, yes, around that date. 3 Q. I'd like to rewind then to when you first joined the 4 Post Office in 2008 and your knowledge and understanding 5 of the Horizon system that was in place at the time. So 6 the version of Horizon which was running in the Post 7 Office at the time you joined was Legacy Horizon; is 8 that correct? 9 A. That is correct. 10 Q. In your statement you make some general comments about 11 your attitude to Legacy Horizon. I wonder if we could 12 bring that up, please, at WITN11130100, at page 10, 13 paragraph 30, please. You say this: 14 "During my first three years I spent a lot of my 15 time visiting Post Office branches, getting a feel for 16 everyone's morale, and trying to see whether there were 17 strategies we could implement to help. Nothing in the 18 branches was reported to me that indicated that there 19 was something fundamentally wrong with Legacy Horizon or 20 Horizon Online. Still, to this day, I am unaware of 21 an identified part of the Horizon code that someone can 22 point to [to] show that Horizon is fundamentally flawed. 23 I believe an effective IT system requires not only good 24 technology, but that technology needs to be wrapped in 25 good processes and training for all users. Like any IT 15 1 system, they all have ..." 2 You've used the term "BEDs", that's bugs, errors and 3 defects; is that right? 4 A. (No audible answer) 5 Q. "... requiring fixes or updates." 6 Now, I just want to clarify, if I can, what it is 7 exactly that you're seeking to convey here. The first 8 comment you make, in effect, is that nothing was brought 9 to your attention in those early years that suggested 10 Legacy Horizon was fundamentally flawed; is that fair? 11 A. That's correct. 12 Q. But you knew from your previous roles that all systems 13 have bugs, errors and defects; is that right? 14 A. That stands true today with any system. 15 Q. Therefore, like any other system, you would have 16 expected Legacy Horizon to have some bugs that required 17 fixing; is that fair? 18 A. It's difficult to comment over something you're not 19 aware of. So if we just take a step back for a moment, 20 so on arriving at POL, I was taken through -- I think my 21 statement makes it clear -- about an hour's worth of 22 training and overview of Horizon and I was given 23 a fairly thorough brief by the then IT Director, 24 Mr Smith, or Dave Smith, on, you know, how it was 25 operating across The Branch Network, and, for those 16 1 people that know Horizon, an hour is not a great deal of 2 time. 3 So no one in the course of that introduction in the 4 model office, within what was then the headquarters of 5 Post Office, indicated any flaws with the system. 6 Operating issues, I want to be clear of what I mean by 7 that. So no one mentioned any BEDs but they did mention 8 blue screens and network-related issues in branch which 9 caused particular problems. But, as part of that 10 dialogue, I was also briefed on the fact that Horizon 11 Online, HNG-X, in other terms, had already been planned 12 for and was already contractualised with Fujitsu, so 13 it's replacement was already in swing with Fujitsu 14 already undertaking to write the code for that new 15 system. 16 So I arrive, I'm given a brief overview of Horizon 17 and an hour's worth of training in the model office via 18 the IT Director. I'm told how the contract works to 19 a degree, in very short measure, and I'm told that the 20 future of Horizon has already been embedded into 21 a contract that lasts until 2015. But Horizon Online 22 sought to deal with the operating issues that were felt 23 across a number of branches in the network. 24 But at no time in that dialogue was there any 25 mention -- I mean, the one that I think the Inquiry has 17 1 picked up on and I've seen since the Inquiry has come 2 about is the Callendar Square issue, as an example. No 3 one took me through that or made any indication that we 4 were suffering with any type of BED that was core to the 5 code of Horizon. And the fact that the network was very 6 expansive -- at that time, it isn't the size it is now, 7 it was 12,000/13,000 branches -- you know, if there were 8 significant issues in the Horizon code, they would have 9 aired themselves in some form or other in a more 10 expansive way across the entire network, and that 11 clearly wasn't the case when I arrived. 12 Q. You have mentioned, Mr Young, the Callendar Square bug, 13 which you say wasn't brought to your attention during 14 your early briefings on Horizon; is that right? 15 A. In the introduction, yes. 16 Q. Do you think you should have been told that there was 17 a known software bug in Legacy Horizon which was capable 18 of causing receipts and payments mismatches, of which 19 the Post Office was aware? 20 A. I'm hesitating only from the point of view that, clearly 21 in the eyes of the Post Office, certainly David Smith -- 22 it was in his rearview mirror and had long gone by the 23 time I arrived two years later. 24 Would I have expected to have been told? Had I been 25 in his shoes, I would have said that there was 18 1 a significant bug, it was addressed, this was the form 2 of it but, to date, since then, it's clean running. 3 I would have expected it but it didn't come. 4 Q. Dealing with what Mr Smith did say to you, you addressed 5 this at paragraph 41, please, if we could turn to that 6 on page 14. Thank you. You refer at the top to two 7 issues, those are the hardware issues to which you've 8 just referred -- the blue screen freezes and the ISDN 9 Internet connection -- and you say that the two issues 10 described were not linked to criminal prosecutions. 11 You go on to say: 12 "However, I was aware of complaints about the 13 integrity of Legacy Horizon by some of the 14 [subpostmasters]. I recall speaking to Smith ..." 15 That's David Smith, Head of Change and IS; is that 16 right? There are, of course, two David Smiths, so we 17 want to be clear that -- is that correct, you're talking 18 about him? 19 A. Yes, that is correct. It was confusing for me at the 20 time. 21 Q. You recall speaking to him about to him about the 22 allegations when you joined the Post Office. You say: 23 "From memory, I believe he assured me verbally that 24 there was nothing wrong with ... Horizon and nothing to 25 worry about (or words to that effect)." 19 1 I just want to explore with you briefly what you 2 understood Mr Smith to be saying about Legacy Horizon, 3 and I think there are two -- well, there may be more, 4 but two possible readings of this: one is that he was 5 telling you that there were no faults in Legacy Horizon, 6 which might explain the accounting errors about which 7 subpostmasters were complaining; another possibility is 8 he was saying that, like all systems, Legacy Horizon had 9 some faults but that these were being appropriately 10 managed. 11 What did you understand him to be saying to you at 12 the time: was it the first or second of these, or indeed 13 something else entirely? 14 A. So something slightly different. There wasn't 15 an in-depth discussion about some subpostmasters 16 complaining about Horizon. So, you know, it wasn't 17 a ten-minute/five-minute discussion around that, 18 I remember him saying that some subpostmasters have 19 historically complained about the system and I didn't 20 draw too much of a conclusion from that, other than 21 I thought it was related to both the ISDN issue the 22 network in branch, as well as the blue screen type 23 problems that occurred as part of that process. 24 So I asked -- I asked, "Are we talking about the 25 operational type issues that sometimes occur in branch?" 20 1 He said "Yes and no, some people blame the system when 2 they're caught out". And I asked, "What do you know 3 what you mean by caught out?" 4 "When they may be stealing from the branch", was 5 where the conversation -- I think where the conversation 6 went. But it didn't -- I didn't hang on that and, 7 candidly, neither did he. 8 Q. What you said here was that he gave you a verbal 9 assurance that there was nothing wrong with Legacy 10 Horizon. But does not follow that that's not entirely 11 consistent with what you yourself understood about IT 12 systems at the time, which is that they're all liable to 13 have some bugs, errors and defects and, in your words, 14 the issue is how you deal with that? 15 A. So at the time that Dave Smith was taking me through 16 that process in the model office, there were no issues 17 with the system from a code point of view. So there was 18 nothing suggested that a coding error was causing 19 problems in branches. I want to be clear about that. 20 So we didn't go down that route. I've made already 21 clear that he didn't mention the Callendar Square issue. 22 He largely emphasised the operational frailties of the 23 Legacy Horizon system, and talked to some postmasters 24 suggesting the system was at fault when they were 25 prosecuted for theft. 21 1 Q. Did you make any enquiries of Mr Smith about the 2 end-to-end processes which were in place to manage any 3 bugs, errors and defects that were detected in Legacy 4 Horizon? 5 A. We did that much later on in the practicalities. 6 This -- in my first weeks at the Post Office, there were 7 a number of people I had to see and be introduced to, 8 including at Royal Mail Group. So as I became more 9 familiar with the architecture, as I got to grips with 10 some of the contractual arrangements with Fujitsu, they 11 were pieces of work that were done over a number of 12 months, as you start to get a sense of your whole 13 mandate and what that means. It was a very, very big 14 mandate and there were lots of calls on my time. So 15 invariably some of this homework, for want of better 16 words, was as I've suggested: homework. You took it 17 home and ran through it with a fine-toothed comb. 18 Did I understand the way the Helpdesk and other 19 functionality worked around Horizon? In broad terms, 20 the answer to that is yes. 21 Q. So you say that that's a topic you dealt with a little 22 later, when you were dealing with practicalities. What 23 do you recall being told about the end-to-end processes 24 that were in place, within Fujitsu but also as between 25 Fujitsu and Post Office to investigate accounting 22 1 discrepancies? 2 A. To investigate what, sorry? 3 Q. Accounting discrepancies. 4 A. I don't think I ever, in those early days -- in fact I'm 5 trying to think across the stretch of the 4 years -- did 6 we -- I'm sure we're going to come to the Horizon Online 7 early pilot issues -- but I don't think I ever went in 8 to a conversation with Dave Smith, looking at the 9 end-to-end process, or with Fujitsu, where the start of 10 the conversation was about accountancy or data 11 mismatches because it had been made clear to me by both 12 entities, both Fujitsu, Dave Smith and the support 13 teams, that Fujitsu/Horizon, were all working within the 14 limits of the contract, and within the limits of the 15 SLAs. 16 And so no one was raising their hand to suggest we 17 had a -- I'll call it a code issue on Horizon, or 18 an anomaly that might relate to code, that might be 19 causing a mismatch in some form or other. 20 Q. You've just said that you were given assurances by 21 Fujitsu that there were no significant issues, coding 22 problems, that might lead to accounting discrepancies. 23 Who within Fujitsu gave you those assurances? 24 A. In order to answer that question, I think it's probably 25 best to frame how I elected to run the relationship with 23 1 Fujitsu, and I think my statement makes it clear but 2 I'll spell it out. I didn't have the time, candidly -- 3 the time it deserved, certainly -- to run down 4 everything in IT, that's largely why we had an IT 5 Director/CIO and a big team, a fairly sizeable team for 6 what essentially is an outsourced solution. It's 7 a service. The contract made it clear that we didn't 8 own the IP to the code and some of the conversations 9 I had with a Gavin Bounds or a Duncan Tait at Fujitsu 10 made that quite clear, "The code is ours. You own the 11 service because you pay for that but you don't pay the 12 code". I had a particular view on that but I can't 13 argue that the contract supported their stance. 14 So I found it, you know -- I managed the 15 relationship on the basis that I would deal with the top 16 tier management when there was an escalation and I would 17 clearly get closer to Fujitsu as it related to Horizon 18 Online, which was coming down the road, and build 19 a relationship on that basis. But I wanted the IT 20 Director/CIO to have responsibility for running the day 21 to day and the day-to-day end to end. 22 So, you know, the CIO and IT Director didn't have 23 responsibility for training; that largely settled with 24 our network branch colleagues. But they did have 25 responsibility for some of the Helpdesk and technical 24 1 type aspects of the service. And I wanted the IT 2 Director and the CEO to manage that because, candidly, 3 if I'd been in their shoes, that's the way I would have 4 wanted to run it. 5 So the way we had it framed very early on was that 6 I would basically ring the top echelon of Fujitsu if 7 leverage was required, to get things resolved, or to 8 talk through strategic type themes that the IT Director 9 and I were aligned to, but they were there to run the 10 relationship on a day-to-day basis, including any 11 operational impediments that may occur along the 12 journey. And I think the disclosure documents provided 13 as part of the Inquiry support that framework. 14 Q. The answer you have just given suggests that you weren't 15 ever given any direct assurances by employees of Fujitsu 16 as to the robustness or integrity of the code in Legacy 17 Horizon; would that be correct? 18 A. Let me apologise, I should have answered your question 19 because I went off at a slight tangent there. I think 20 you have seen it in some of the documents but, 21 certainly, I had a bullish relationship with Fujitsu, 22 I demanded excellence and, if I thought there were 23 shortcomings, I wasn't immune from making it quite clear 24 that I was unhappy and, again, taking the discovery 25 document process as a whole, I think that theme comes 25 1 through. 2 So I would regularly, where there was an operational 3 issue, if we go to Horizon Online as a classic example, 4 when I was made aware of the two Oracle issues, that we 5 know to be Oracle issues now and had to wait some time 6 to find them during the pilot, I'll use words my mother 7 would say: I gave Fujitsu pretty short shrift and said 8 "These need sorting out really, really quickly". And, 9 in between those times where there may have been 10 operational imperatives that we were dealing with, 11 change that went in badly, hardware failures that may 12 have happened in the data centre, I was constantly 13 asking the question, you know, "Does the system work the 14 way you would expect it to? The service seems to work 15 for us", et cetera, et cetera. 16 And, as the media played out around the integrity of 17 Horizon, those messages back to Fujitsu got sharper and 18 they got sharper. A lot of communication via the 19 telephone but also some communication, as you see in the 20 disclosure documents, by email and by letter, to ask 21 that very question and demand some sort of discovery 22 process over what, essentially, was two-thirds new code 23 in Horizon Online. 24 Q. With respect to you, Mr Young, I don't think you have, 25 in fact, answered my question which was -- and we'll 26 1 come to Horizon Online shortly -- but I understood your 2 evidence a short time ago to be that, so far as you were 3 concerned, you'd received assurances, both from David 4 Smith but also from Fujitsu, that Legacy Horizon was 5 operating fine. What I wanted to establish was whether 6 you were given any direct personal assurances by Fujitsu 7 concerning the operation of Legacy Horizon; do you 8 recall whether that is the case or not? 9 A. Two names that spring to mind in terms of that dialogue: 10 Stephen Long and Gavin Bounds. And it wasn't one 11 conversation; it was probably several over the tenure. 12 Q. From those individuals, you understood that all was 13 well? 14 A. I want to be clear. In the context of a conversation 15 with Fujitsu around where things were, I had, as part of 16 that conversation -- whether it was in their offices 17 visiting their sites, which I did periodically -- I had 18 a conversation as part of that process that asked about 19 the continuing integrity of Horizon Legacy and, even 20 after the delivery of Horizon Online, Horizon Online. 21 Q. Thank you. So if we move on, please, to the pilot of 22 Horizon Online. You explain in your statement that you 23 became aware of several bugs, errors and defects that 24 were identified, that is to say the fault/the problems 25 manifested during the rollout of the pilot; is that 27 1 correct? 2 A. Yes, that's correct. 3 Q. These faults had caused service interruptions and delays 4 which required the rollout to be paused; is that right? 5 A. That is correct. 6 Q. Now, you said on more than one occasion in your 7 statement that you were not concerned about the 8 existence of bugs, errors and defects per se, and that 9 the key issue for you was how they were being handled; 10 is that fair? 11 A. That's correct. 12 Q. I think you say that's particularly so in a pilot 13 period, where you might expect to experience more 14 problems, more faults, than in live operation? 15 A. Correct. 16 Q. Now, you explain in your statement that, for some 17 considerable time, Fujitsu were unable to identify the 18 underlying root cause of the problems that were being 19 experienced during the pilot; is that fair? 20 A. That is fair. 21 Q. You say that you were sufficiently concerned about the 22 situation that you considered rolling back the pilot and 23 reverting to Legacy Horizon; is that right? 24 A. That's correct. I did say that. I would like to point 25 out that a rollback would have been extremely difficult 28 1 and caused any number of problems. So a part of your 2 thinking when you're going through that process is, "Do 3 I cause more problems by rolling back than trying to 4 persist and roll forward?" And you're constantly 5 evaluating on what you're being told and the datasets 6 you've got to work with as a consequence. 7 But, certainly, had Horizon Online seen a more 8 elongated timeline around dealing with what we now know 9 as those Oracle bugs, we would seriously have had to 10 consider rolling back. 11 Q. Do you recall when it was that the Oracle bugs -- well, 12 obviously, I think you didn't know initially that there 13 were Oracle bugs. We'll come on to look at when that 14 was discovered but, when the problems first manifested 15 themselves in the pilot, do you recall precisely when 16 that was brought to your attention -- I say "precisely", 17 in terms of months? 18 A. I mean, through the disclosure via the Inquiry process 19 and the documents that were provided to me, March 2010 20 is around the time frame, so between February and March 21 a data mismatch was being aired and, as I understand 22 it -- and I knew it was small numbers -- in comparison 23 to the network as a whole, I think there were, at the 24 time, 62 affected branches. 25 Q. We'll come on to some of that detail shortly but in your 29 1 statement you say it was in March 2010 that you learnt 2 that the underlying root cause of the faults/the bugs, 3 were a fault in the Oracle database software. So that's 4 consistent with what you've just -- well, that's 5 slightly different, in the sense that March 2010 was 6 when the underlying root cause was identified. My 7 question to you was: do you recall how long it took 8 Fujitsu to identify that underlying root cause, from the 9 point at which it was brought to your attention that 10 these faults were manifesting to March 2010? 11 A. It was number of weeks, so can I be specific? No, but 12 it was number of weeks. In my world, it was too long, 13 and there was a lot of telephone communication from me 14 to the CEO at Fujitsu around, you know, where his sense 15 was on finding the issue and mitigating it. Again, as 16 you're evaluating the continuing rollout versus 17 a rollback, those conversations were pretty much 18 an imperative. There is no doubt about it that, from 19 the point it had been identified to the point that -- as 20 in "We've got an issue" -- to the point that we've got 21 "It looks like it's bug related" and some form of 22 potential resolution from Fujitsu, in my mind, it took 23 way too long, and not, in my world -- you know, in my 24 tech world, not the normal time frame for resolution 25 around a software bug. 30 1 I had a viewpoint that suggested, as it was coded 2 related, find the issue in the code and then someone 3 goes into that code and fixes it almost overnight. And, 4 as we know now today, digital systems are done that way 5 today right down to your iPhone. So I had a viewpoint 6 then that that should take days not weeks, and this took 7 too long. So I can't be specific about the date but my 8 general take at the time and I feeling I have now is 9 that it took way too long to address. 10 Q. I would like to ask you, I just wish to clarify, please, 11 what you say about these two bugs at paragraph 46 of 12 your statement. So that's at the bottom of page 15 and 13 over the page to page 16, please. If we could bring 14 that up. 15 You explain there that it was in March 2010 you 16 learnt that the faults causing the service interruptions 17 and delays during the pilot were two different Oracle 18 bugs, that being faults in the Oracle database software. 19 You then say this: 20 "The two Oracle [bugs, errors, defects] caused 21 a data mismatch; therefore, I still maintained that 22 there was nothing fundamentally wrong with the system." 23 Can you just please explain what you mean by that? 24 Why is it that there being a data mismatch meant there 25 was nothing fundamentally wrong with the system? 31 1 A. I've been in the technology world for a long time. 2 So -- and I've rolled out probably thousands of systems. 3 So I guess the point I'm trying to make, as part of that 4 process, is: when you're in a pilot, you're going to 5 have problems. I've never known a pilot in any rollout 6 of any system not have some sort of associated issues 7 with it. And, again, I'm going to make the point: today 8 you can be given a new phone and within weeks it will 9 have a software update. It's dealing, essentially, with 10 bugs that have come to light that weren't seen or hadn't 11 come to light in a test type process. 12 This was no different on Horizon Online. I knew 13 that, providing we could identify the nature of the 14 bugs, that we could address that software. It's still 15 in pilot. It's not in main rollout and, at the point 16 the bugs were found, rollout stopped. So, you know, I'm 17 in a place, as the executive in charge of IT, with my 18 CIO, we're in charge of a process that, if you like, is 19 half pregnant and we've got to work out what we do next, 20 and part of my worry was that we needed to have some 21 assurety from Fujitsu that they could deal with the bugs 22 once they'd identified them and that we could get back 23 into smooth running. 24 I look at that process, rightly or wrongly, but 25 certainly from my point of view and experience, I look 32 1 at that process as relatively the norm in rolling out 2 a pilot, and this was a pilot. It wasn't a great start 3 to a pilot, and there were lots of communications both 4 to the POL Board and my executive colleagues, and to 5 Royal Mail Group as a consequence. And there were 6 ramifications around some of that communication. But 7 I still felt relatively confident that having identified 8 the bugs, the mitigations would address it and we'd be 9 back to safe waters and, therefore, fundamentally, I had 10 faith in the system. 11 Q. Just to be clear, because the way it's written perhaps 12 could be read in a number of different ways but I think 13 what you're saying is that the mere fact that a bug had 14 caused a data mismatch did not, in itself, mean that 15 there was something fundamentally wrong with the system; 16 is that what it is you're saying? 17 A. That would be a better way of interpreting my answer, 18 yes. 19 Q. Now, I'd like, please, to look at some correspondence 20 that you had with Duncan Tait, who was then Managing 21 Director for the Private Sector Division at Fujitsu in 22 May 2010. That's FUJ00095658, please. 23 Thank you. This a letter from you -- we'll see when 24 we get to the bottom -- to Mr Tait, dated 10 May 2010. 25 It reads: 33 1 "Dear Duncan 2 "Recently, members of the Post Office Executive Team 3 met with some of our Group Executive colleagues to 4 review our current standing on our Fujitsu contract. 5 The purpose of this meeting was twofold, one to review 6 the current situation of the HNG-X Programme and, 7 secondly, to review the Fujitsu contract as a whole. 8 These types of review follow best practice and are 9 common within the Group where there is significant 10 reliance on a partner or a supplier." 11 You then say this, and this culminates in your 12 request for what you describe as an open-book approach, 13 you say: 14 "It was recognised during this review process that 15 our relationship with Fujitsu is of long standing, has 16 thus far proved fruitful to both parties and continues 17 to play a pivotal role in the successful delivery of 18 Post Office's products and services. There were several 19 areas where we believe there is room for improvement 20 that would allow us to follow best practice and further 21 reinforce confidence in delivery." 22 You then say this: 23 "There remains a concern that with the longer 24 running rollout of handling and the fact you are already 25 contractually realising our savings that this may be too 34 1 onerous and may be affecting the profitability of the 2 contract." 3 Just pausing there, what exactly did you mean by 4 that, the concern that Fujitsu were realising savings, 5 and -- 6 A. There was a significant saving to the Post Office for 7 rolling out Horizon Online, 50 million. It was 8 important to our cost base in the eternal endeavour of 9 the Post Office to get to self-supporting, and the 10 contract in place with Fujitsu had to not only deliver 11 Horizon Online but it had to deliver those efficiencies. 12 What I'm trying to convey, as part of that language in 13 there was I was worried that they had -- they didn't 14 have enough expert resources managing this important 15 programme. In other words, they'd leaned it out. In 16 order to realise efficiencies, they'd cut costs 17 themselves, and there weren't enough expert resources to 18 deal with the bugs or other related issues that may come 19 out from pilot. And I'm making that point as part of 20 that process, and I'm asking him to go open book, which 21 is rare, but it's -- it basically means, "Show me your 22 costs and your resource plan, so I can see what I'm 23 paying for". They're not duty bound to do that but 24 I thought it was a request worth putting to them. 25 I should emphasise that the issues related in the 35 1 early pilot brought, you know, concerns -- not 2 significant concerns, but certainly concerns -- both to 3 my executive colleagues and the Board, and later on at 4 Royal Mail Group Board when Alan Cook was presenting 5 where the Post Office was with its strategy. He had to 6 update the Board with regards to where HNG-X was in 7 terms of its rollout and, as a consequence of that, Alan 8 and I had a conversation around the outputs from our own 9 Executive colleagues, some of the questions that were 10 asked in the Royal Mail Group-type process at that Board 11 meeting, and we agreed that I would sit down with the 12 Group's CIO at Royal Mail Group, and the General Counsel 13 of Royal Mail Group, just to discuss the Fujitsu 14 contract, where things were and what we might be able to 15 do collectively at a group level to bring pressure to 16 bear on Fujitsu to take us through a successful pilot 17 and subsequent rollout. 18 There's a big risk both in terms of being able to 19 deal with customers in the branch network with this new 20 programme and also that 50 million in inefficiencies. 21 Q. Just to be clear, it was those discussions you just 22 described that led to the sending of this letter; is 23 that correct? We see that reference in the first 24 paragraph -- 25 A. I think in the three of us sitting down, I agreed that 36 1 I would take the overall concerns -- and we talked about 2 what those is might look like -- and write a letter to 3 Fujitsu. I probably ought to -- because it would 4 probably be helpful to, you know, to the Inquiry to 5 know, if they don't already -- Fujitsu -- we were 6 Fujitsu's major client in the UK, I think their biggest 7 client in the UK, certainly one of the top two. They 8 had an ambition, a significant ambition, to grow the 9 account into Royal Mail Group. If you'll note in some 10 of the communication between POL and -- from Fujitsu to 11 POL, it's usually someone that signs off with "Royal 12 Mail Group Account Executive", or whatever the case may 13 be, and the reality is, Royal Mail Group wasn't taking 14 anything in terms of a service from Fujitsu: it was POL, 15 and it was Horizon. 16 But there was a drive to seek further revenues from 17 Royal Mail Group, and my sitting down with the General 18 Counsel and with the CIO of Royal Mail Group and then 19 formulating this letter and making clear the type of 20 entities that had been involved in the formulation of 21 the letter was a way of applying pressure to them that 22 suggested, you know, again, in the interests of keeping 23 it short and candid, "Get your act together here because 24 if you have got ambitions with Royal Mail Group, we as 25 a whole are very unhappy and we need you to show us that 37 1 you are manned up with the right resources to deliver 2 what we expect you to do and we want some assurance that 3 you're also going to give us our efficiencies and" as 4 the letter further states, "we want some assurance that 5 the code around Horizon Online works as it should do". 6 Q. We see there, as you say, in addition to your request 7 for an open book, in the third paragraph, you say you'd 8 like access to Executive correspondence within Fujitsu 9 relating to a recent red alert. You go on to say: 10 "Additionally, we would like you to consider 11 bringing in a qualified independent party and asking 12 them to review and audit how the current programme is 13 run, as well as testing resource and skill levels both 14 on the programme ... and other key initiatives underway 15 at Fujitsu." 16 As you said just now, you explain in your statement 17 that the reason why you, in particular, I think, but 18 possibly others, felt it was necessary to request 19 an independent review was that you had concerns about 20 the quality of the code in Horizon Online; is that 21 correct? 22 A. Yes. It's one of the only times -- there may have been 23 one other time -- where I formally wrote a letter to 24 Fujitsu, rather than a phone call or even an email. 25 I wanted it -- you know, I wanted it to have a tone and 38 1 a feeling that it was Royal Mail Group Board, POL Board 2 and POL Executive challenging Fujitsu to step up to the 3 plate. 4 Q. Now, you don't receive a response from Mr Tait until 5 29 June 2010 and that comes into you by email. We can 6 see that at FUJ00096312, please. If we scroll down, 7 please, to the second page, we can see at the top the 8 date of the email, 29 June 2010, and the subject is 9 "Response to your letter". So that is the letter of 10 10 May we were just looking at a short time ago. He 11 says to you: 12 "Dear Mike, 13 "Thank you for your letter -- we have recently been 14 having similar meetings and have come to similar 15 conclusions in the governance area. We would like to 16 support your initiative and formalise into contract 17 a periodic ongoing senior level relationship review and 18 a more operational level board at which the current 19 governance relationships in the contract come together." 20 He then says that has been taken forward. If we 21 then look down, please, to the third paragraph, he says: 22 "Since your letter, I am extremely pleased with the 23 progress that has been made. We have located the source 24 of the troubles and taken steps to rectify the issues 25 and we have now recommenced the pilot. Currently 39 1 counters running on HNG-X stand at just under 20% of the 2 estate. We are now rolling out at about the maximum 3 levels originally envisaged with no further sign of the 4 problems that initiated our discussions." 5 He goes on to say: 6 "The cause of the issues [as you've already alluded 7 to] that delayed the High Volume Pilot was deficiencies 8 with the Oracle product code." 9 He says: 10 "Oracle has confirmed this and that the issue has 11 been resolved. I am sure this conclusion will have 12 restored your confidence in Fujitsu and both our teams' 13 ability to deliver this programme." 14 He then goes on to say this: 15 "As a result, I think it makes sense for our teams 16 to maintain focus on the remainder of the pilot and the 17 full rollout phase, as you appreciate, with all complex 18 major programmes there will be issues to deal with. At 19 this crucial phase, we can see no benefit and will not 20 be pursuing a third party review." 21 So, in essence, he rejects that proposal in your 22 letter of May 2010 to carry out a review. 23 We can see your response to him, please, at page 1. 24 You say this: 25 "Duncan 40 1 "Thank you for your response to my letter. 2 "It won't surprise you to learn that I am somewhat 3 disappointed that it took so long to formally reply to 4 my correspondence of 10 May and with the apparent 'sea 5 change' on approach to some of our concerns." 6 So you effectively then go on to say: 7 "My understanding from our weekly calls was that you 8 had taken advice from KPMG as to how you could go 'open 9 book' with us and therefore didn't foresee a problem in 10 doing so. On the issue of having a qualified 11 independent party audit to evaluate Fujitsu programme 12 execution, along with staffing levels and skills base, 13 I have been briefed that you had spoken to several 14 entities to pursue this endeavour. Indeed, I was told 15 you were close to agreeing terms with one of these. 16 Additionally, in our calls you will recall I had asked 17 whether there was a possibility of the Post Office 18 'owning' the Terms of Reference and again this was 19 something you were going to strongly consider. 20 "As it stands now, I feel I have been led down 21 a journey of a number of months, just so you can say 22 'no'. This does not reflect well on our relationship 23 and will not be well received in the next review." 24 It's quite clear, I think, from reading that email, 25 that you had understood from your conversations with 41 1 Mr Tait, firstly, that he was willing to undertake that 2 third-party review that you'd requested; is that 3 correct? 4 A. Yes. 5 Q. And that you'd felt that you'd been rather strung along 6 by him, to only be told many weeks later that it 7 wouldn't be taking place? 8 A. I was pretty angry at the response. 9 Q. Did you take any steps to escalate this issue and to 10 insist upon an independent review of Horizon Online at 11 that stage? 12 A. So certainly the POL Board, the Executive Team and Royal 13 Mail Group were aware of the interchange here, because 14 all those parties had played a part in bringing it 15 together. So what perhaps -- in order to be a little 16 bit more helpful, but perhaps what this letter and 17 response don't quite show is that there were two or 18 three phone calls that went between, you know, the 19 letter and the response. 20 Duncan and some of his team were of the view that we 21 had signed up to a service, and the service was working 22 in its given parameters within the contract -- and 23 I couldn't argue that -- and that Horizon Online was in 24 pilot and, again, his response of around 20 per cent of 25 the network starts to, you know, allude to that point. 42 1 I thought, candidly, that we had a better 2 relationship than that. I had known Duncan in my job 3 when I was at Horizon as the CIO there, and I thought he 4 would recognise what I was having to deal with, in terms 5 of the pressure around Horizon Online and the oversight 6 that the whole thing was under from Royal Mail Group 7 through to the POL Board and, therefore, I was expecting 8 a little bit more of a collegiate attitude from Duncan 9 than I got. 10 There were several calls where I make that quite 11 clear, and Duncan made clear that he didn't think there 12 was anything wrong with Horizon, there wouldn't be 13 anything -- isn't anything wrong with Horizon Online. 14 I was getting the line of "We run algorithms against the 15 code, we're looking constantly looking for anomalies, 16 you should take assurance from that", et cetera, 17 et cetera, et cetera. 18 And my response would be, "If you went open book and 19 demonstrated some often that, I'd be able to see it. 20 I can't naturally -- having taken so long to deal with 21 the two Oracle issues, I can't take you at your word", 22 and they were pretty strong conversations and, 23 ultimately, the only take away I took from those 24 conversations and from this interchange was that, you 25 know, "It's our IP and we don't want to share it. We 43 1 own the intellectual property rights around the code, 2 you've no right to see it, and you've no right, really, 3 to insist that we review our own code". 4 I didn't agree with that. I've never agreed with 5 that but it gives you a sense of where Fujitsu were in 6 their thinking versus where I was, and several of my 7 time, including, in fairness to Lesley Sewell, the CIO 8 at the Post Office. 9 You know, if there's one overriding message: don't 10 see this as a one-off letter and reply. There was a lot 11 of communication that sat round it at all levels and, 12 whenever the opportunity allowed, I would interject 13 with, you know, "We need to start looking at the 14 system". 15 You'll note, I do want to draw a conclusion in case 16 we don't get there, I do want to make a point. One of 17 the last documents I provide, just before I exit Post 18 Office, is a noting paper, I think, to the POL Board, 19 and then there's a POL Board -- there's two documents -- 20 where I actually ask, I think we're set for -- I'm sure 21 we'll get there but I think we're set for a proper 22 end-to-end review, and there were a lot of reasons 23 around that, but some of this was catch-up to that. 24 And then there's another point. Martin Moran, who 25 had been brought on to run the white label telecoms 44 1 product that Post Office was marketing at the time, sat 2 down with me -- it was another one of my objectives, to 3 sit down with Fujitsu, to use Fujitsu as a means of 4 taking their pricing power to get a great telecoms 5 contract out of BT. They're a big entity, so they'd get 6 better discounts and we were trying to move away from 7 Talk Talk. 8 But in the course of that dialogue, one of the 9 things that I pushed was, "If we do this telephony 10 contract with you, Fujitsu, I want the rights and the IP 11 to the code for Horizon", and I asked for that 12 specifically to be written in so that issue around the 13 IP of Horizon could be taken off the table. If I owned 14 those rights, I now have a right to look at my code 15 because I've got those now contractualised as a side 16 product from agreeing a telephony contract with you. 17 And Martin Moran makes that clear in one of the 18 Board papers that was in the discovery process. But the 19 point I'm trying to make is: that was me at that 20 negotiating table with Martin saying, "We'd like the 21 IP". I just needed that final segment to take away the 22 point of, "You don't own the IP. We own the IP, you've 23 got a service". 24 Q. Just to wrap up where we are at the end of June 2010, 25 you've been sufficiently concerned about the quality of 45 1 the Horizon code to request an independent review of 2 Fujitsu but Mr Tait, standing on his contractual rights, 3 has said, "It's not going to happen"? 4 A. Indeed. 5 Q. So moving forward, then, please, one month later, 6 questions are raised in the press about the integrity of 7 Horizon, in reporting by Channel 4; do you remember 8 that? 9 A. I do. 10 Q. That reporting prompted David Smith -- so a different 11 David Smith, this is the Managing Director of Post 12 Office -- to request an internal investigation into 13 complaints about Horizon; is that correct? 14 A. You're referring to the Ismay Report? 15 Q. Yes. 16 A. Yes. 17 Q. I'd like to please look at some correspondence relating 18 to that request and which ultimately flowed into what we 19 know is the Ismay Report. It bears the reference 20 POL00120481, please. Thank you. This is an email from 21 Mark Burley to you and Sue Huggins. Just to clarify, 22 what was the relationship, in terms of reporting, as 23 between you and Mark Burley? 24 A. Mark reported to Lesley Sewell. You know, David Smith, 25 the CIO or IT Director, has retired. I went out into 46 1 the marketplace to recruit a CIO that had financial 2 services experience -- that's where we were going with 3 some of our products and services set -- because 4 I didn't have it, and David Smith, the now retired IT 5 Director, didn't have it. So I went out and recruited 6 Lesley Sewell as part of that process. She was the 7 ex-Managing Director of IT for Northern Rock, the bank, 8 at the time. 9 So Mark Burley reported to Lesley and his job was to 10 rollout Horizon Online. 11 Q. Now, he addresses his email to you and Sue Huggins, and 12 it's not necessary to go through the full chain but it 13 originates with a request from David Smith essentially 14 raising a series of questions prompted by the proposed 15 Channel 4 report, and Mark provides some answers to 16 those and, in this email, we see some additional points 17 that he wished to draw to your attention and the 18 attention of Sue Huggins. I just wanted to scroll down, 19 please, to look at a couple of those points. 20 Now, he refers at point 1 to the fact that the 21 system has been designed to retain integrity, even when 22 it fails and he said this is important, "as we could 23 never claim the system does not fail". 24 That's a point he makes further down in the email. 25 At point two, he refers to three cases of which he 47 1 is aware: Cleveleys, Castleton and Alderley Edge. 2 These goes on to say this at point 3: 3 "None of the subpostmasters dismissed for 4 discrepancies have -- to my knowledge -- produced any 5 hard evidence. However in the past [Post Office 6 Limited] hasn't always tabled the evidence from the 7 audit logs." 8 Now, dealing with that first point, as to the fact 9 that subpostmasters hadn't produced hard evidence that 10 accounting discrepancies for which they'd been held 11 liable had been caused by faults in Horizon, with your 12 police officer's hat on, did you think it was right that 13 the burden of proof would rest on subpostmasters to show 14 that Horizon was at fault in causing these accounting 15 discrepancies? 16 A. No. 17 Q. Did that stand out to you at the time as an issue; do 18 you recall? 19 A. Did that -- can you repeat that, please? 20 Q. Sorry. Did that jump out at you at the time as 21 a problem, that subpostmasters were being required to 22 produce evidence, that the onus was on them to do so? 23 A. I don't know, to be honest, at the time. You know, 24 I refreshed my memory, I guess like most witnesses, when 25 the discovery documents were given to me. So when I was 48 1 refreshing my memory, did that spring out to me, but did 2 I know the Inquiry was ongoing? The answer is yes. But 3 I'm not sure whether I did at the time or not, I just 4 don't recall. I suspect it probably did. 5 Q. If it did, what, if anything, would you have done about 6 that? 7 A. I didn't do anything, I don't think. I -- you know, 8 it's just a suspicion. To your point, my previous 9 employment as a police officer would have taken me down 10 that road. It's not, by no means, an excuse but when 11 you're inundated with 300 or 400 emails a day and you've 12 got the world before you in terms of what you've got to 13 deliver, you can't pick up on every nuance in an email, 14 if I'm being candid. 15 Q. He goes on to say at point 3, we've looked at: 16 "... in the past POL hasn't always tabled the 17 evidence from the audit logs." 18 Was that something that you were aware of at the 19 time? 20 A. No. So it's through a number of iterations of emails 21 that, again, were part of the disclosure, or I start to 22 piece together, you know, since the Inquiry has been 23 underway just how some of these things were coming to, 24 you know -- were coming into being. How some of the 25 prosecutions were working through. I'm not trying to 49 1 avoid it; candidly, I didn't know that that's what we 2 were doing. 3 Q. What Mr Burley appears to be conceding at this point is 4 that, although postmasters hadn't been able to prove 5 that the discrepancies are caused by Horizon, Post 6 Office hasn't bothered to check whether that's, in fact, 7 the case -- sorry, in every case, it isn't the case that 8 Post Office has checked that the audit -- 9 A. One or the things that I -- sorry. 10 Q. No, sorry. 11 A. One of the things I'm aware of within the Fujitsu 12 contract is the retrieval of data from Fujitsu was 13 a cost service, it was an additional cost type service, 14 and there was -- as part of the contract that 15 I inherited, there was a set sum put to one side to draw 16 data from Fujitsu, as and when, and then when you 17 exceeded that amount in a given year, you then paid 18 more. 19 So I'm not sure whether that point is related to, 20 you know, we don't do it in every prosecution because 21 there's a cost associated to it and it's not required. 22 I didn't -- I simply, when I read that part of the 23 email, I didn't know we had got down to audit logs. In 24 fact, it wasn't until later on, and some of that through 25 the Ismay report, that I took on board the point that 50 1 some subpostmasters were being done for false accounting 2 as opposed to theft. And, you know, from my policeman 3 days I understand the difference between both and the 4 proof of evidence that's required to prove both. 5 So I gradually got to realise the system is playing 6 a more integral part in the prosecution process than 7 I perhaps originally might have known in my first year 8 of service at the Post Office, as an example. 9 Q. You attribute that understanding to reading the Ismay 10 Report; is that right? 11 A. Some of it but there were -- you got -- the best way of 12 describing it is you got glimpses of it perhaps in 13 a Board meeting, in an executive meeting, where 14 a particular prosecution was being talked about because 15 it had raised a flag in some form or other. You're not 16 party to the conversation, other than you're a set of 17 ears around the table and you pick up a little bit of 18 what might be going on. 19 As you do that, you start to see the email flow 20 where some of this starts to eke itself out. You're 21 starting to get a better sense of what is happening. 22 And then, of course, the Ismay Report is the first time 23 for me, personally, you sit there and you start to see 24 a large component of that talking about, in some detail, 25 some of the prosecutions and the nature of those 51 1 prosecutions, and the sensitivity, as such, was such 2 that I didn't, other than through -- with Lesley Sewell, 3 I didn't pass to anyone else in my DR team because 4 I thought it was very sensitive -- very sensitive data. 5 But it's through a drip-drip-drip type process that 6 you start to get a sense of what's being done on the 7 prosecution side because I wasn't being told, and 8 I wasn't seeking -- because I'd been told not to -- via 9 John Scott or Susan Crichton or via the Royal Mail Group 10 process, which is even further away from where I might 11 sit. 12 Q. So is it right to understand that, from reading the 13 Ismay Report, you understood, firstly, that Horizon data 14 was being used by the Post Office to support and to 15 evidence, for example, an offence of false accounting in 16 the prosecutions that were being brought against 17 postmasters? That is to say that data from Horizon had 18 a role in the prosecutions brought against 19 subpostmasters -- 20 A. Yes. 21 Q. -- and that you also understood that the integrity of 22 that data was therefore essential to the safety of those 23 prosecutions; would that have been apparent to you from 24 reading Mr Ismay's report? 25 A. Yes, and I do think my statement does say in some part 52 1 that having a statement from a distinguished engineer or 2 someone from Fujitsu that talks about data that's under 3 their management, even with an audit log, is, you know, 4 in my view, not independent. I would have expected to 5 see, in prosecutions of this nature, an independent 6 expert commenting on Horizon data and audit logs. It 7 felt a little -- as you're drawn into it from the edges, 8 it felt a little like poachers turned gamekeepers, and 9 it didn't fit well with me as a former police officer. 10 It wasn't truly independent. 11 Q. Just to be clear, are you saying that you understood 12 from Mr Ismay's report that Fujitsu were providing 13 expert evidence in support of -- 14 A. I understood that there was some -- I can't remember if 15 it was directly from the Ismay Report but it's on that 16 drip-drip-drip type basis. One of my conclusions was 17 that some of the evidence that was being provided around 18 Horizon and consequent prosecutions wasn't, in my 19 opinion, an independent expert that knew the system and 20 therefore could talk to it to any great degree. It was 21 someone in Fujitsu and, for me, that's not independent. 22 Q. Having identified that as a concern, did you raise that 23 with anybody within the Executive Team of the Post 24 Office or indeed raise concerns with your Head of 25 Security, who was giving instructions to the Criminal 53 1 Law Team? 2 A. I just -- I can't recall. The likelihood is no. I was, 3 you know, I was clearly told "Let the process be the 4 process". 5 Q. I'd like to briefly look at what you say your reaction 6 was on reading the Ismay Report. That's at paragraph 92 7 of your statement, please. You say this: 8 "The Ismay Report confirmed that the system was not 9 flawed. The report analysed some of the more 10 high-profile prosecutions that were highlighted in the 11 media, and his report determined that the information 12 and evidence used in these cases were reliable. At the 13 time, the Ismay Report solidified my view that there was 14 not a technical problem with Horizon." 15 Now, that report was sent to you in August in 2010; 16 is that right? 17 A. It is. 18 Q. So that's really barely a month or less than two months 19 after your exchanges with Mr Tait have concluded, rather 20 unsatisfactorily, concerning a review of the code of 21 Horizon Online. It might be thought surprising that you 22 took such great comfort from the Ismay Report, given the 23 extent of concerns you had about Horizon Online and its 24 code? 25 A. So the reason I took comfort from the Ismay Report was 54 1 I had very few levers that I could pull, contractually 2 or otherwise, with Fujitsu. There wasn't anything 3 I could see, and when I talked to my direct report team, 4 the specifics of those, candidly, that might be working 5 in Service Delivery, Lesley, those that might be working 6 in other aspects of IT, that have sight of some of the 7 end-to-end Horizon-type pieces, when I talked to them, 8 they were in a place where the system was doing what it 9 needed to do, and prescribed -- as per described by the 10 contract. 11 And every time there was something new, either laid 12 out in the media or otherwise, I would do that round -- 13 I would do that round robin. Invariably there would 14 also be a call or an email that would go in to Fujitsu, 15 Duncan/Gavin Bounds/whoever, usually one of those two -- 16 to ask questions. 17 And so I sit here, you know, despite the backwards 18 and forwards communication with Duncan saying "This is 19 all I can do, I can't see anything happening on the 20 system as we're now going into main rollout, and 21 actually the feedback from The Branch Network is really 22 positive. I'm not sure what we do next, with regards to 23 Horizon". So I want to make that point. 24 Then the Ismay Report lands, and I saw the Ismay 25 Report as a next best endeavour, if you can't get into 55 1 the code or an end-to-end investigation around the 2 system itself. So -- and I drew from it, as my 3 statement makes clear, some comfort that, in Product 4 Branch & Accounting, in Chesterfield and -- you know, 5 I knew Rod Ismay fairly well, as well as I knew anyone 6 at the Post Office, I found him to be quite balanced and 7 a fair-minded individual, I took some confidence from 8 his analysis of the whole thing. 9 And it didn't take any -- it didn't mitigate all of 10 my concerns but it gave me a boost that, okay, we're not 11 seeing anything on the system, my DR is not seeing 12 anything on the system, the challenge and response 13 process written or otherwise with Fujitsu says that the 14 system is fine now we're through the Oracle type 15 problems, okay, we're in a better place. It also gave 16 me a window into some of that prosecution type piece. 17 So I did, I drew some comfort from that. Did I have 18 something in the back of my mind that, you know, would 19 say, you know, are we ever going to get to a point where 20 we can, you know, get into that code? Then the answer 21 is, you know, it was always there. So I think it should 22 be. But I was always keeping a close eye, via Lesley 23 and the team, on where the system was systematically, 24 and there was nothing in that process that would draw 25 you to a conclusion, having dealt with the Oracle bugs, 56 1 that there was a problem. 2 And Ismay's report was more or less saying the same 3 thing to a degree, but adding other parts to the 4 process: training, the process itself and then the 5 prosecution type -- small window into the prosecution 6 type piece. 7 So it gave me some measure of comfort going forward, 8 despite the backdrop from the Duncan Tait interplay on 9 looking at the system in detail. 10 MS HODGE: Thank you, sir. That may be a good time to take 11 our morning break, I'm conscious we've been going for 12 an hour and a half now. 13 SIR WYN WILLIAMS: Yes, by all means. So what time shall we 14 resume? 15 MS HODGE: Shall we resume at 11.45, please? 16 SIR WYN WILLIAMS: Yes, fine. 17 (11.30 am) 18 (A short break) 19 (11.45 am) 20 MS HODGE: Good morning, sir -- yes, still the morning. 21 Good morning, sir. Can you see and hear us? 22 SIR WYN WILLIAMS: Yes, I can thank you. 23 MS HODGE: Thank you. 24 Mr Young, I'm going to move on now, please, to 25 another topic, concerning your knowledge of a bug we 57 1 know as the receipts and payments mismatch bug. You say 2 in your statement you first became aware of this bug in 3 February 2011 and you attribute your discovery of it to 4 a conversation you had with Lesley Sewell, who, by then, 5 had taken over from David Smith as Head of Change and 6 IS; is that right? 7 A. Yes. 8 Q. Forgive me, you're nodding but, for the purposes of the 9 transcript -- thank you. 10 A. Yes, I have been warned. I should have realised that. 11 Yes. 12 Q. You also refer to an email you received from Mr Ismay, 13 which you describe as downplaying the issue; is that 14 right? 15 A. Yes. 16 Q. I wonder if we could take a quick look at that, please. 17 It's FUJ00081545. Thank you. If we could scroll down 18 to the very bottom, please. It's page 4. Thank you. 19 This is dated 18 February 2011, the subject "Receipts & 20 Payments Issue", from Mr Ismay to you, reading: 21 "Mike -- please find attached the paper from Fujitsu 22 that I referred to. 23 "In particular please see the last 2 [paras] of 24 page 1 and the trial balance on page 13." 25 This suggests that there may have been a prior 58 1 conversation with Mr Ismay; do you recall whether you 2 spoke to him orally about the issue? 3 A. I agree, it does intimate that but I can't recall it. 4 Q. When you say in your statement that he downplayed it, is 5 that a fair reading, do you think, of this short email 6 exchange? 7 A. Well, it's the feeling I had, so yes. 8 Q. Do you recall reading the report that was attached to 9 his email? 10 A. No. 11 Q. Do you think that you would have read it at the time you 12 received it? 13 A. Yes. 14 Q. I wonder if we could pull it up, please, just to see if 15 you recognise it. I believe it is POL00188387. Do you 16 recognise that document as something which you read at 17 the time? 18 A. I do. 19 Q. Mr Ismay alerted you to the last two paragraphs on 20 page 1. If we could scroll down to those, please. This 21 is in relation to the cause of the problem. It reads: 22 "The problem occurs as part of the process of moving 23 Discrepancies into Local Suspense. 24 "When Discrepancies are found when rolling an SU 25 ..." 59 1 That is presumably a stock unit, is that what you 2 would have understood that to be a reference to, SU? 3 Not sure? 4 A. I don't know what "SU" stands for. 5 Q. So: 6 "When Discrepancies are found when rolling an SU 7 over into a new TP ..." 8 Do you know what "TP" stands for? 9 A. I don't know what that is either. 10 Q. "... then the User is asked if they should be moved to 11 Local Suspense. Should they Cancel at this point the 12 Discrepancy is zeroised in the Local Cache ..." 13 Do you know what was? 14 A. Yes, a cache is a data depository, so ... 15 Q. "Note that there is no corresponding Balancing 16 Transaction generated in the Local Cache and so the 17 Local Cache is in an Unbalanced state." 18 So that's obviously quite a technical report. If we 19 go back to the email chain we can see you that some 20 discussion with a Will Russell. If we could return to 21 FUJ00081545, please. Thank you. That's at the bottom 22 of page 3. Thank you. 23 So, following on from Mr Ismay's report, you write 24 to Will Russell, later the same day, saying you want to 25 sit down with him and possibly several others to: 60 1 "... understand these latest issues on Horizon and 2 where we are with them. This is very important as there 3 is a lot of media interest in Horizon at the moment." 4 You say: 5 "What would be helpful is if you could send me 6 a written summary on what the integrity issues are and 7 what has been done about them." 8 Why is that request being directed to Will Russell 9 at that stage? 10 A. I don't know. I can't be sure what Will's role is. 11 I can't remember what his job description was. Clearly, 12 he was in the mix on this but, being able to describe 13 what his actual job role was and how that related to me, 14 I can't. 15 Q. If we just scroll up, please, we can see at the bottom 16 he was Commercial Advisor; does that assist you? 17 A. (No audible answer) 18 Q. So he emails then, if we go to the top of his email, 19 I believe it's later the same day. If we scroll up to 20 the -- no, this is two days later, so 2 February. 21 Mr Russell emails you back to say: 22 "Mike, 23 "I will pull you together a summary on Monday. 24 "The issue Rod refers to, and outlined in the paper, 25 was an issue that occurred in September 2010, post Go 61 1 Live of HNG. The issue was not encountered interesting 2 testing, model office or pilot, and came to light in 3 live through Fujitsu alerting. As per the normal 4 process, Fujitsu reported the issue into the SD live 5 Service Desk once the discrepancies were identified by 6 the HNG system. SD pulled together a team of 7 stakeholders to assess the issue and track through to 8 resolution, this included; Fujitsu, [Product and Branch 9 Accounting, IT and Change], Security, Network and 10 Legal." 11 Just pausing there, what this appears to show, what 12 Mr Russell told you at the time, was that several months 13 before you'd been notified about the existence of this 14 bug, it had been reported to stakeholders in IT and 15 Change and Security for which you had oversight; would 16 you agree? 17 A. Yes. 18 Q. Do you know why there was an apparent delay of many 19 months in bringing this bug to your attention? 20 A. I don't, no. 21 Q. Do you recall the context in which the integrity issues 22 were raised with you by Mr Ismay and Ms Sewell in 23 February 2011? 24 A. Well, I think I've said in previous evidence that 25 I first became aware of them in March. So February -- 62 1 the February and March time frame. So why this didn't 2 reach me before then, I've no idea. 3 Q. Sorry, my question was: when it did come to your 4 attention in February, do you recall the context as to 5 why or whether there was any background to that specific 6 issue being raised with you at that stage? 7 A. No. Just that it was a bug. 8 Q. So Will's email goes on to say: 9 "This issue affected 62 branches and a PEAK was 10 raised and quickly closed by Fujitsu. The issue only 11 affected branches that followed a set sequence of button 12 depressions, and this sequence was not a normal action 13 that branches would have followed. The resultant error 14 arising from the unusual events caused the receipts and 15 payments line on the branch accounts to mismatch 16 (eg they were not as equal as they should be). This can 17 be seen in the reports in the attached document." 18 He goes on to say: 19 "Letters to branches had been prepared, and signed 20 off by Legal, and the team were looking to issue these 21 shortly, as we need to communicate to the branches 22 involved what has happened. However, these letters have 23 been held back, pending Rod's intervention." 24 He then says this: 25 "Fujitsu are confident that they can show and prove 63 1 that nothing has been lost on the system, as events have 2 been generated to show what has happened for each 3 individual branch. However I have escalated the 4 concerns into Fujitsu at senior level." 5 Now, in your statement you say that, to you, the 6 receipts and payments mismatch bug echoed the complaints 7 from JFSA about reconciliation issues; is that correct? 8 A. That's correct. 9 Q. Was that something that occurred to you at that time 10 that it was brought to your attention or was this 11 something that you've reflected on in hindsight? 12 A. In time. Not at the time. 13 Q. Sorry, that didn't occur to you at the time? 14 A. No. 15 Q. It has since? 16 A. Yes. 17 Q. Is that because the bug was capable of causing 18 a discrepancy to appear in the subpostmaster's branch 19 accounts? 20 A. Yes. 21 Q. Why do you think it is that that didn't occur to you at 22 the time? 23 A. It's pilot, and I would expect bugs to occur. I took 24 some -- if you look at the second sentence down in that 25 email: 64 1 "This issue was not encountered during testing, 2 model office or pilot and came to light [through] live 3 through Fujitsu alerting." 4 So that algorithmic approach to looking for the data 5 and looking for anomalies highlighted the issue, and 6 that gave me -- you know, that gave me some sense of 7 confidence that we had the right countermeasures in, 8 even in early pilot, to find any anomalies -- let's call 9 them anomalies, as opposed to bugs. 10 So I took some confidence from that as it was aired. 11 And, in essence, in the description given to me by 12 Fujitsu on how they managed the day-to-day code to look 13 for anomalies, this proved that they were capable of 14 doing it, and that gave me some confidence. 15 Q. Did you discuss the bug with your Head of Security at 16 the time it was brought to your attention? 17 A. I don't recall. What I would say is, generally, when we 18 were firefighting some of these issues in pilot, we 19 invariably came together as a team. So when I ran my 20 management teams, we all came together. Was John -- can 21 I categorically say John Scott was aware of this level 22 of detail? I can't. But he certainly will have been 23 aware that there were bugs in the early rollout of HNG-X 24 and he'll have been aware that there will have been 25 a mismatch too. 65 1 Q. Your response, Mr Young, was that this was a bug 2 identified in pilot. What Mr Russell's email suggests 3 is that it wasn't identified during testing, model 4 office or pilot and that it had come to light in the 5 live running of Horizon Online. Can you see that in the 6 second paragraph to which I referred you? 7 That's what he told you at the time; is it your 8 evidence that that is incorrect? 9 A. Well, my view of that was it was the new system not the 10 old one and you're suggesting that it was the old system 11 in the run-up to the new system. 12 SIR WYN WILLIAMS: Well, I don't think that's correct, 13 Mr Young. I was confused by your answer. What this 14 document says to me -- and please contradict me if I've 15 got it wrong -- that this manifested itself after 16 Horizon Online had been rolled out and it had not 17 manifested itself in the testing process, if I can put 18 it in that way. Having manifested itself, Fujitsu then 19 dealt with it because they discovered it. Now is that 20 the proper reading of this document? 21 A. Well, my immediate answer to that, sir, is I'm not sure. 22 So I'm just running that through and reading this again. 23 SIR WYN WILLIAMS: Yes, if you would, please. 24 A. The drilling noise isn't helpful. 25 It's the 62 branches that cause me to think about it 66 1 because, in my view of the original Oracle issues in 2 Horizon rollout, it was 62 branches that were impacted. 3 So it can't be that we've got two 62 branches impacted. 4 That's the anomaly. 5 SIR WYN WILLIAMS: I follow that point. So, on the 6 assumption that the Oracle defect is a different problem 7 to this, you're pointing out that there's a huge 8 coincidence in two defects, I'll call them, affecting 62 9 branches and, therefore, you're querying whether, in 10 fact, there's just one defect; is that it? 11 A. That's it, yes. 12 SIR WYN WILLIAMS: Right. Okay. But I think you'd agree 13 with counsel that the second paragraph, read as 14 a paragraph would certainly suggest that this happened 15 after the rollout and not in testing? 16 A. I agree that that second paragraph sounds like that's 17 the case. 18 SIR WYN WILLIAMS: Yes. 19 A. I'd like to make a point, because it may be where 20 counsel is coming from, if that is the case, as in we're 21 past pilot and Horizon Online is in play, properly 22 online, and Legacy is condemned to history, this would 23 be something new to me. 24 SIR WYN WILLIAMS: Right. All right. 25 MS HODGE: Just to be clear, when you say this would be new 67 1 to you, as in at the time it was brought to your 2 attention, you didn't understand this to be a bug that 3 had been detected in the live operation of Horizon 4 Online? 5 A. After main rollout, yes. 6 Q. That seems surprising, given what Mr Russell said to you 7 in this email in terms, that this has been discovered in 8 the live operation of the system? 9 A. I would make the point that, again, in the discovery 10 process, looking at the documents, particularly those 11 where I have to report some of the issues around where 12 we are with Horizon and the subsequent rollout, and so 13 on and so forth, including operational failures and 14 change failures, I don't think there's anything in those 15 reports that talks about a bug or a data mismatch bug, 16 in that time frame after rollout. And I would have been 17 obliged to notify the Board and the Executive Team that 18 that was the case. 19 Q. So what you're saying is, by reason of the fact that you 20 did not notify the Board of this bug, it follows, in 21 your view, that you can't have understood it to be a bug 22 that was affecting the live operation or had affected 23 the live operation of Horizon Online? 24 A. Past pilot, yes. 25 Q. Can we look, please, at a little later in the chain. 68 1 I think it must follow from what you've just said that 2 you accept that you didn't bring the bug to the 3 attention of the Senior Executive Team of the Post 4 Office; is that correct? 5 A. Well, not if this is a pilot, which I think is the way 6 it's being read. I agree that second paragraph suggests 7 something in main roll -- it's done and it's now the 8 live system, then end-to-end and everyone's on it. 9 I won't have done that if I haven't been told that 10 there's a bug in the main rollout. So no, I won't have 11 notified anyone. That doesn't suggest that Lesley or 12 part of the team generally will have done that. It 13 follows on that, usually, something of this nature also 14 would end up very quickly from me on Duncan Tait's radar 15 screen. And there's nothing in the disclosure process, 16 and nothing I recall, that would suggest I had 17 conversations with him about a bug after Horizon Online 18 was delivered in full rollout. 19 So if I don't know, I can't tackle the vendor, 20 I can't inform, as I normally would, my executive 21 colleagues in the POL Board and, more importantly, in 22 main rollout, this would have been classed as a major 23 incident. Despite the fact that it's only 62 branches 24 that are impacted, this would have caused a major 25 incident report and there's nothing I've seen in the 69 1 disclosure process and nothing I recall that indicates 2 a major incident process has kicked in, beyond those 3 that I have described as part of the pilot. 4 Q. Now, your evidence, as I understand it, is, because you 5 didn't report it, you must have understood at the time 6 that it was a bug that had been detected in pilot. Now, 7 an alternative hypothesis is this: that you were 8 notified in February 2011, as evidenced by this email, 9 that a bug had been detected in the live operation of 10 Horizon Online and you simply failed to bring that to 11 the attention of your more senior colleagues? 12 A. No, you misunderstand me. I was aware of two Oracle 13 bugs and those Oracle bugs were eventually identified 14 and mitigated by Fujitsu as part of the pilot, and they 15 were part of a major incident process. They went to the 16 both Boards: POL and Royal Mail Group, and essentially 17 necessitated that letter to Duncan Tait that we've 18 already gone through. I'm saying I didn't know about 19 this other bug, if indeed that is the case -- I'm not 20 suggesting you're wrong but I'm not suggesting I'm wrong 21 either -- if indeed there was one in September, I'm not 22 aware of it, and certainly no one escalated it to me. 23 This email reads to me like the catch-up on payments 24 to subpostmasters, that they can keep the money they may 25 have made, as about this and we'll take the writedown in 70 1 the Post Office. I thought this, the way I read this 2 was that this was the catch-up following those two bug 3 related issues in rollout, not anything else. 4 Q. Do you accept, Mr Young, that's not what the email says 5 in terms? 6 A. Do I accept, sorry? 7 Q. That that's not what the email says. It says this was 8 a bug detected in September, in the live operation of 9 Horizon Online. It appears it wasn't reported to you, 10 as you say, in September but it is here being brought to 11 your attention in February 2011? 12 A. Yes, I do accept that; post-Go Live Horizon Online. 13 Q. Now, if that is correct, that is to say that in February 14 2011 it was brought to your attention that a bug had 15 been detected in the live operation of Horizon Online, 16 which caused discrepancies in the branch accounts of 62 17 Post Office branches, is that something which you ought 18 to have bought to the attention of your Head of 19 Security, who had responsibility for overseeing the 20 investigations of suspected offences of fraud, theft and 21 false accounting? 22 A. Had I known, the answer to that is, yes. 23 Q. Had you known what, Mr Young? 24 A. I'm making the point that I didn't associate what this 25 says to a new bug post-rollout of Horizon Online. 71 1 Q. Let's go on a little bit please in -- 2 A. So I want to make the point that that's really clear. 3 Had I known this was a bug, we're past -- it's in -- 4 Horizon Online is in and it's running and we've got 5 a payment mismatch. This is in addition to the two 6 Oracle bugs and we're in this situation where there's 7 another bug that's been, let's call it illuminated, and 8 it's caused this issue miraculously across the same 9 sized branch network, okay. Like I said, this would 10 have caused a major incident review and it would have 11 caused an update to the POL Board and to Royal Mail 12 Group, as a consequence. 13 I would have sat down with my direct report team to 14 talk about the input to those the various reportings, to 15 ensure that we are all aligned and we had the right 16 messaging in place, that it was accurate. I don't 17 recall going through any of that at all and I don't see 18 anything in the disclosure process to me, as part of the 19 Inquiry, that indicates that other than this email. 20 Q. You say, Mr Young, it would have caused a major incident 21 review and that, because you haven't seen one, it must 22 follow that it wasn't a fresh or a new bug. But what we 23 can see, the explanation that Mr Russell gives, is that 24 Fujitsu reported it to the Service Desk, and the Service 25 Desk notified relevant stakeholders. 72 1 So is that not the way in which this bug was brought 2 to the attention of the Post Office? 3 A. Yeah. 4 Q. Could we please look at a slightly later email chain -- 5 SIR WYN WILLIAMS: Before we do, can I just ask you, this 6 email begins with a reference to the writer pulling 7 together a summary on Monday; do we have that document? 8 MS HODGE: Sir, I don't believe we do but what we do have is 9 another email exchange about, I think, a further 10 briefing that took place. 11 SIR WYN WILLIAMS: Fine. 12 MS HODGE: That's the one to which I propose to take the 13 witness. 14 SIR WYN WILLIAMS: Yes. That's fine, Ms Hodge, yes. 15 MS HODGE: So it's POL00029611. Thank you. If we scroll 16 down, please, it's an email from Will Russell, dated 17 4 March 2011. It's addressed to Lesley Sewell, your 18 direct report as Head of IS and Change. 19 So this is a couple of days, probably about ten days 20 or so, after Will's email to you. He updates Lesley: 21 "Quite a lot of info here but I will outline what we 22 agreed on this issue." 23 There are Word documents attached, he says, and the 24 Word documents attached are letters going out to 25 branches on Monday. These have been approved by Legal, 73 1 Product and Branch Accounting and SD. He says: 2 "I ran Mike G, Mike Y, and Andy M through the detail 3 last week. We have agreed to write off the losses and 4 repay the gains via subpostmaster pay. We have 5 a document from Fujitsu on what happened. This 6 [includes] audit trail and shows what happened for 7 a branch, as well as events generated and logged by 8 Fujitsu, plus what the branch saw on their reports. 9 I am just awaiting clearance from Network (Anita Turner) 10 re how to approach NFSP (propose to finalise that on 11 Monday for 62 branches affected as shown on Excel 12 spreadsheet)." 13 If we just scroll down, please, the penultimate 14 paragraph reads: 15 "Both Mikes ..." 16 By which presumably Mr Russell is referring to Mike 17 Granville and you, Mr Young? Is that a fair -- 18 A. It's either Mike Granville or Mike Moores, the CFO, and 19 me. I agree it's me. 20 Q. You agree that it's you in this context? 21 A. Yes. 22 Q. That being because he's referred to a previous 23 discussion with the two of you and with Andy: 24 "Both Mikes were keen we use this as a positive, 25 eg Old Horizon would not have picked this up, yet the 74 1 logs in Data Centre and Event alerting meant we picked 2 this up, and we can demonstrate through reports what 3 happened. We can generate reports for each branch if 4 challenged." 5 So what this indicates, does it not, is that you 6 approved the decision to write off the losses and repay 7 the gains via subpostmaster pay, that was something you 8 discussed and approved at the time? 9 A. I agreed with it yeah, I did. I wouldn't say 10 "approved". That would probably go through Mike Moores. 11 Q. Forgive me. There's also a reference in the paragraph 12 beginning "Matt Hibbard". It reads: 13 "Andy Mac has taken action from Mike Y to ensure we 14 maintain closer links with [Product and Branch 15 Accounting]/Rod." 16 Do you recall why it was that you gave an action to 17 Andy to maintain closer links with Product and Branch 18 Accounting and Rod Ismay, as a result of what had 19 occurred? 20 A. I mean Andy was in charge of Service Delivery, so trying 21 to make sure that Andy and Rod Ismay were aligned, and 22 continued to be aligned, in Service Management would not 23 be an alien thing. 24 Q. Were you concerned that to maintain closer links because 25 this hadn't been brought to your attention in September 75 1 2010? 2 A. I don't know, is the answer to that. The other thing 3 that's thrown me, as part of this, you know, pilot 4 versus post-Horizon Online, is the same process was 5 applied then around the losses and the repay of gains to 6 the 62 branches in pilot. So there were gains made and 7 the subpostmasters were allowed to keep them, and the 8 losses, which I think amounted to about £20,000, the 9 Post Office took. So -- and, you know, I'm not 10 suggesting it's wrong. All I'm pointing out is, if 11 you're reading it, there's a lot of similarities to this 12 and the exact same issue, or the bug issue that we had 13 in pilot. 14 Q. If we look a little further down at the final paragraph, 15 Mr Russell says: 16 "We are writing to branches, and following up with 17 call from to NBSC/[Product and Branch Accounting], with 18 walkthrough of the detail as required. We have 19 commitment from Fujitsu to visit any branches to run 20 them through what happened ... We have had receipt and 21 payment mismatches before, so this is not something new 22 to manage, albeit this issue was very complicated in how 23 it was reported, and evident to the branch." 24 That would tend to suggest, would it not, this was 25 a fresh issue that was being raised? 76 1 A. I agree. 2 Q. Now, you say in your statement that, so far as the 3 reporting of this particular matter was concerned, you 4 considered that it was the responsibility of Rod Ismay, 5 as Head of Product and Branch Accounting, to bring this 6 information, by which I understand you to mean the 7 existence of the bug, to the attention of Susan 8 Crichton? 9 A. To what, to Susan Crichton? 10 Q. To Susan Crichton; is that correct? 11 A. In terms of the financial aspects and the fact that it 12 was going to involve allowing subpostmasters to keep the 13 upside and the Post Office to take the downside, yes. 14 I think what you're alluding to is: because it questions 15 the integrity of Horizon, did I see it as Rod's -- Rod 16 Ismay's responsibility to keep Susan Crichton aware that 17 there's been an issue that now would play into that 18 integrity? The answer to that is clearly yes. 19 Q. Why did you consider it was Mr Ismay's responsibility to 20 bring that to the attention of Ms Crichton? 21 A. He has clearly been -- he has clearly been dealing with 22 it. What I don't know from this outlay, and I've not 23 seen from this outlay, is how the issue was resolved 24 from Fujitsu, and I've not seen anything in the 25 disclosure document that articulates that, and that's my 77 1 problem with the whole process. 2 There's nothing in the disclosure process that's 3 revealed any communication to Fujitsu at a senior level. 4 There may have been some documents that I'm not copied 5 on or seen, and there's nothing that's come back the 6 other way. So -- and yet, dealing with a bug of this 7 nature, both sides have -- POL and Fujitsu will have 8 been aware of the sensitivities, which is why it would 9 have been raised up to the flag, and you'd expect to see 10 something that that travels by way of communication 11 between the two entities, and I haven't seen that. 12 I haven't been copied on or seen anything in relation to 13 that. 14 Q. Now, bearing in mind that Mr Ismay, in early February, 15 has escalated this matter to you, why did it rest on his 16 shoulders to then take it forward and bring it to the 17 attention of Legal? 18 A. I don't know. You'd have to ask Rod that. More 19 importantly, I would have expected a Lesley -- I would 20 have expected, in normal practice, Lesley would have 21 raised this with me and I may very well have said to 22 Lesley "Please go see Susan", because of the point 23 around the question marks it leaves around integrity. 24 And I would have also put an action plan together to say 25 how do we approach this from Fujitsu and what is it 78 1 we're going to do about it? Yeah. 2 Q. So far as you are aware, were there any systems in 3 place, whilst you were in your role, to ensure that 4 information about the operation and integrity of Horizon 5 was routinely communicated to those who had 6 responsibility? 7 A. Can you repeat the question, please? Certainly the 8 beginning part. 9 Q. So far as you were aware, were there any systems in 10 place to ensure that information about the operation and 11 integrity of Horizon was communicated to those within 12 Post Office who had responsibility for conducting 13 criminal investigations? 14 A. Well, I've described it, because it went to everyone. 15 So major incidents, if you're really alluding to was 16 Susan Crichton aware of any major incident like a bug on 17 the system, as this might suggest, then the answer to 18 that is she's part of the Executive Team and the POL 19 Board. She'll have seen the major incident report. And 20 the same with the briefs to the POL Board. If there was 21 any, let's call it "discontinuity" in the operation of 22 Horizon in the branch network that may have affected 23 footfall, may have affected revenues, whatever the case 24 may be, that would have been reported either through 25 noting, or in some other way, written to the Board, and 79 1 Susan sat on the Board. 2 Q. So is your evidence that the systems in place to 3 disseminate this information were perfectly adequate; is 4 that what you're saying? 5 A. Yes, and there were examples of that in some of my 6 documents. 7 Q. I'd like to move on, please, Mr Young, to I think what 8 will be our penultimate topic, that relates to your 9 knowledge of what's described rather loosely as "remote 10 access". You deal with this at paragraphs 52 to 54 of 11 your statement. I wonder if we could bring that up, 12 please. 13 Now, just before we look at what you say in those 14 paragraphs, I think you say that, as a matter of 15 generality, you would have expected there to be some 16 form of remote access to a system such as Horizon from 17 your prior experience in working in IT; is that right? 18 A. There is in every system but yes. 19 Q. But you say that, specifically in relation to this 20 system, you did not know that Fujitsu could insert, edit 21 or delete transaction data or data in branch accounts 22 without the knowledge or consent of subpostmasters, 23 managers or assistants, nor that such action could not 24 leave a robust audit trail. 25 From where had you obtained that understanding, 80 1 please? 2 A. It's come from a number of arenas. So having spent time 3 around the Helpdesk, having spent time with Fujitsu in 4 their offices, where they support the Horizon product 5 and spent time with my own team, I'm aware of what the 6 process was. And access into the system remotely -- so 7 remotely might be, you know, from the offices in Fujitsu 8 through to where the system resides in a data centre, 9 you know, you're not -- there's not a cable, you're 10 doing a remote access, you're doing that knowing that 11 there is a full audit log, right down to the keystroke 12 of everything that happens at that point and then there 13 is a checksum process that goes through, that can't be 14 changed. It's very, very secure, to ensure that, if 15 anything does go wrong or if there is a disagreement 16 over what happened, that log can be used -- that audit 17 log can be used to describe the actions that were taken, 18 right down to the keystroke. 19 But my understanding of how the whole end-to-end 20 support process worked was that, at the point 21 a subpostmaster was having a problem in branch, and it 22 required some form of reset, some form of change to the 23 data, though I don't think that happened very, very 24 often, it was done with the permission of the -- it was 25 meant to be done with the permission of the 81 1 subpostmaster, and that audit log was to stand true over 2 that whole process. So, of course, the Second Sight 3 investigation has proved that that wasn't always the 4 case. 5 I do want to make the point because I've heard the 6 language in the Inquiry having seen some of the other 7 evidence that's been given: for me, backdoor access is 8 an access that's usually attributed to the person that 9 has written the code and he or she uses it as a quick 10 entrance into the data or into the code in order to 11 change something almost on the fly, and the summary is 12 it's usually not an auditable process. Okay? 13 And I'd like to think that modern day systems -- and 14 I would include Horizon Online as part of that 15 process -- was much more robust than that. So where 16 someone is dealing with the code that may have 17 ramifications to a subpostmaster or The Branch Network 18 as a whole, they're testing it first and validating it, 19 and when they're accessing it through, there are 20 a number of parties that have oversight to that process. 21 It's clear, through some of the evidence process that 22 I've seen in the Inquiry that that level of due 23 diligence frankly was missing. 24 And the basic one that subpostmasters would worry 25 about is, if I am asking for support and someone is 82 1 having to remote in and fix it, okay, they should be 2 doing that with my authority and my purview as to what 3 they're doing. And, at the end of the exercise, my 4 agreement that they've done it. And then the access 5 should conclude. Okay? 6 Again, I think there have been examples given where 7 that's not been the process that's been followed 8 through. But that's the process I understood from 9 a Post Office -- you know, and Fujitsu, "Let's help the 10 subpostmaster because there's an issue". 11 Q. So I just want to be clear, you've given evidence about 12 your understanding at the time and what you've learnt 13 subsequently in the Inquiry. At the time you were in 14 post, you understood that, firstly, remote access was 15 possible because it had to be for a system such as 16 Horizon, correct? 17 A. Yes. 18 Q. Secondly, that if it was used or if changes were made to 19 data, they would be done with the consent of the 20 postmaster? 21 A. Yes. 22 Q. Thirdly, that there would be a clear audit trail to 23 evidence any such remote access? 24 A. An uncorruptible audit trail. 25 Q. Now, it came to your attention in 2011 that there were 83 1 concerns about the system controls in place in relation 2 to privileged access rights; is that correct? 3 A. Following the Ernst & Young audit report, yes. 4 Q. What did you understand to be the nature of Ernst & 5 Young's concerns about those privileged access rights? 6 A. There were several, so one, I think, talked about some 7 of the change control type process which should be -- 8 you know, from an operating point of view, should be 9 really tight. But the one I think my statement latches 10 on to and talks about, is the user access/privilege 11 access type process. So that identified what I thought 12 were some fairly rudimentary issues, right? So not -- 13 and, again, my statement says the same thing, you 14 know -- not the type of issues you would expect a blue 15 chip technology company like Fujitsu to have in play. 16 Now, I'm sure part of the process, from the Fujitsu 17 point of view might be, you know, we were moving from 18 Horizon to Horizon Online and things had to change quite 19 quickly and we were still playing catch-up. I don't 20 hold to that, candidly, I think privileged access in all 21 its various facets needs to be buttoned down throughout, 22 and it's clear from the Ernst & Young report that wasn't 23 the case. And it's also clear that there were one or 24 two super-users that had access to everything, and that 25 that wasn't supervised in the way I would expect it to 84 1 be. It might have an audit log associated to it but it 2 wasn't supervised. 3 There were, as an example -- and I do make this 4 point in my statement but I'll make it here again -- in 5 most corporates now, when you're deploying 6 a multiplicity of systems, you have an automated process 7 that's tied to the exit of an individual from a company. 8 Even through HR, you have a process that where you may 9 have someone suspended and suspended from your back-end 10 systems, that there's an automated process that takes 11 their rights, their log-in rights, password and log-in 12 rights, to certain systems away. Maybe forever, maybe 13 for a set point in time. 14 And some of that -- the sophisticated ones cover 15 leaves of absence when people are on holiday, and so on 16 and so forth, just to apply an additional layer of 17 security. I was surprised, from the Ernst & Young 18 report, that they didn't have anything like that in play 19 and, when I became aware of the output, via Lesley and 20 via Ernst & Young, there were a lot of phone calls with 21 Fujitsu as to why some of the basics on security 22 management with privileged access were missing. 23 Q. Did you consider at the time that the inadequate 24 controls over privileged access had implications for the 25 integrity of the data process by Horizon? 85 1 A. Yes, I considered that, yes. 2 Q. Now, bearing in mind that you believed all privileged 3 access rights were audited, did you give any 4 consideration to requesting a full audit of privileged 5 access rights be carried out by Fujitsu? 6 A. Well, we again, it's in the disclosure process, we set 7 up an Audit Board that was going to audit following 8 through on the audit report from Ernst & Young, to 9 ensure that we got those issues resolved as quickly as 10 possible. And I deliberately made a push via Lesley, 11 who is very competent, to get that done and marshal it 12 under her leadership, which she did. I think, by the 13 time we got to the end of October of that year, and it's 14 reflected in the Board paper, we had addressed that 15 privileged access type issue. 16 Q. I think it would be fair to say that that was a forward 17 looking approach, that is to say that you wished to shut 18 down or to reduce the extent of privileged access rights 19 which Ernst & Young had raised concerns about. 20 What I'm asking you about now is a backward looking 21 review, so bearing in mind you know that subpostmasters 22 are complaining about discrepancies in their accounts, 23 and you're conscious that, from Ernst & Young's audit, 24 that privileged access rights have been granted to 25 a much broader number of employees than they should 86 1 have, and you're also concerned this has data integrity 2 implications. Did you consider at the time that there 3 might be a necessity for a backward looking review of 4 how privileged access rights had been used and what 5 implications that might have for the complaints being 6 made by subpostmasters? 7 A. The reason I'm hesitating is my sense is -- and it's 8 upon a review with Fujitsu, you know, in a visit -- that 9 they had it reasonably buttoned down, certainly better 10 than the E&Y type report might suggest, on Horizon, 11 Legacy Horizon, but I believe the shift to Horizon 12 Online and some of the dynamics associated with that may 13 have caused some of what we saw in the Ernst & Young 14 report. Did I look back at the time as I'm doing 15 Horizon Online? You know, if I'm being candid, I've got 16 a whole wealth of stuff I've got to deliver against. 17 I'm not getting into the weeds of what would be other 18 people's responsibilities. 19 Might I have -- in hindsight, and knowing where we 20 are today, might I have taken a step back from 21 everything else I was doing and said, "Hold on a minute 22 here, we need to look at privileged access?", the answer 23 to that is yes, but hindsight is a wonderful thing. 24 Q. I'm conscious of the time. What I'd like to do, 25 Mr Young, is just seek some brief clarification on 87 1 a number of points with you relating to your sort of 2 knowledge and awareness of discussions around private 3 prosecutions. So at paragraph 111 of your statement -- 4 I wonder if we could bring that up, please, page 36 -- 5 you say this: 6 "Occasionally, in [Board] meetings, discussions 7 regarding prosecutions would be had between the Chair, 8 the [Managing Director, Alan Cook or David Smith], 9 [Paula] Vennells, and Susan Crichton, General Counsel. 10 I did not have anything to contribute and did not stray 11 into these discussions, as I had no direct knowledge of 12 responsibility for or involvement in these cases." 13 What I'd like to do is test if your recollection of 14 that is correct. We have reviewed the minutes of the 15 Post Office Board and we haven't found evidence of your 16 attendance, beyond an original meeting in 2008. Do you 17 think you're right in recollecting that these matters 18 were discussed in your presence at Board level by these 19 individuals? 20 A. So I want to be clear about the point I'm trying to make 21 there because, based on the question that was poised to 22 me in the preparation of the statement, I cannot say 23 that I was at a Board meeting and didn't hear a side 24 conversation or some element of a conversation that 25 might be associated with -- let me draw an example -- 88 1 you know, the Legal Counsel having an issue with 2 a particular prosecution. 3 And there may have been, on occasion, a passing 4 conversation between, you know, the Legal Counsel, Alan 5 Cook, or Paula, or whatever the case may be. 6 Now, if you're there, I can't say -- I didn't 7 listen. They were partial conversations. They 8 weren't -- there was never, in my view, anything done of 9 any great note -- which is an anomaly, candidly -- 10 around prosecutions in Board papers. It was never 11 a topic of conversation that the Board or the Executive 12 Team at the time would get their chairs round and talk 13 to, to some degree, some familiarity that Susan, or the 14 General Counsel, whoever it may have been at the time, 15 may have chosen to brief the Executive on. 16 But I am aware, and that's why it's in the 17 statement, that there were, you know, one or two 18 occasions where something may have been said and, 19 because you've got nothing to contribute, you know, you 20 switch off in those types of conversations and they're 21 relatively sensitive and confidential by nature, but 22 anything minuted -- I mean, in fairness to both Alan 23 Cook and certainly Dave Smith, anything said according 24 to an agenda in the Post Board was minuted. If it 25 wasn't minuted, it wasn't an agenda item. 89 1 Q. On the topic of prosecutions, you say in your statement 2 that the Post Office should have stopped prosecuting 3 subpostmasters after they'd received Second Sight's 4 Report. Does that reflect your view as to the timings 5 of this, that is to say that, once Post Office was in 6 possession of that report, the prosecutions should have 7 stopped? What I want to ask you is, why do you date it 8 to the Second Sight Report and not, for example, to the 9 discovery that you had in February 2011 of a bug which 10 could cause accounting discrepancies? 11 A. So a code issue, a bug issue, can get resolved. You've 12 got some aftermaths that you've got to resolve and some 13 of which we've talked about. But the issue that I think 14 makes the difference from the Second Sight Report is, my 15 understanding, from what I've learnt, not having seen 16 the report but certainly seen their evidence, is they've 17 found that Fujitsu -- Post Office, Fujitsu, largely -- 18 had an -- you know, there was an -- potentially 19 an unauditable access into the system. At the point you 20 don't have an audit log that you can validate, you've 21 lost your evidential trail, if you're relying on the 22 data in Horizon. 23 There may have been other prosecutions that didn't, 24 but the point I'm trying to make is, you know, where 25 largely Horizon is featured as the evidential layer for 90 1 a prosecution, at the point you've lost integrity around 2 access via Fujitsu, to help the Post Office, without the 3 subpostmaster being present to say, "Yes or no", and 4 without an audit log that validates what has happened, 5 then you've lost integrity. 6 And my understanding from looking in on some of what 7 Second Sight said -- because I was deeply interested in 8 where their investigation went because, candidly, 9 I think I started that process off -- but I was also, 10 you know, interested in what our Distinguished Engineer 11 at Fujitsu said around auditable logs. And there is 12 clearly a window there where it's not nailed down the 13 way it should do and, therefore, you cannot 14 categorically say that data was altered with the 15 subpostmaster's permission at each and every stage. 16 So you've lost integrity and, at the point you've 17 got that, you can't prosecute against it, in my view. 18 Q. Now, you say in your statement that you began to 19 question the integrity of Horizon after you received 20 a further call from -- forgive me, you've mentioned 21 an earlier call but you received two calls from Computer 22 Weekly, asking you to comment on Horizon's integrity; is 23 that correct? 24 A. That is correct. 25 Q. The second of which you can date to late 2011, early 91 1 2012; is that right? 2 A. Yeah, it's somewhere in a three to four-month window, 3 yes. 4 Q. Which you say coincided with significant negotiations 5 over the separation of Royal Mail Group and Post Office? 6 A. Yes. 7 Q. It's to that second conversation that you date your 8 significant concerns about Horizon's integrity; is that 9 fair? 10 A. I want to just give you a sense where I was at this 11 point in time because I think that's pertinent to where 12 we are. So I'm working three or four days a week on 13 separation. The nearer you get to separation, you're 14 now writing a contract between you and Royal Mail Group, 15 and it wasn't easy aligning, you know, your own 16 Executive Team with Royal Mail's Executive Team, and 17 there was a lot of toing and froing, to be candid, and 18 we -- the team that pulled that together with a little 19 bit of help from me, you know, did a good job because it 20 stood the test of time for 10 years. 21 But I want to make the point that it was -- in the 22 last three or four months of my service at Post Office, 23 I lived and breathed delivering that contract. It was 24 probably every working hour that I could apply to it. 25 So I'm in the negotiation when my phone rings, just 92 1 as we're finishing up. I excuse myself, I go into 2 an anteroom and it's a journalist from Computer Weekly, 3 right? So it's been a bad day. So I take the call, 4 it's quite a courteous call and, in fairness to the 5 journalist whose name I can't remember, he says in 6 summary the JFSA now has a much larger group -- and it 7 was, it was hundreds -- of subpostmasters that are 8 disputing the integrity of Horizon and, more 9 importantly, they're engaging with lawyers -- later on 10 it was established that it was Shoosmiths -- to start 11 pulling together a case -- you know, to take a case to 12 court. 13 I emphasise what I had right the way through and 14 still believed, at that time: that Horizon, in my view 15 worked as prescribed, I didn't see any issues. There 16 was maybe a chosen few words I'd used, which have been 17 repeated in Private Eye and elsewhere. 18 But, nonetheless, that's what I did. I finished the 19 call up as courteously as I could. It couldn't have 20 lasted more than five minutes. And to the point I think 21 you're now alluding to, I was -- I'd got to the point 22 where, frankly, I'd had enough. And I rang Duncan Tait 23 up -- you know, it's like a continuous drib drab with 24 Fujitsu -- and just said, "Look, I've just had this call 25 with Computer Weekly, this is where he says things are. 93 1 This is reflecting badly on all of us, your brand and 2 our brand in POL, and we need to address it, and there's 3 no two ways about it, Duncan, you know, we're going to 4 have to investigate this system thoroughly". 5 Now, I'm conscious at this point that there are -- 6 and you'll ask me who and I won't be able to name 7 them -- but there were one or two people saying at the 8 point you do that you now question past prosecutions and 9 other bits of -- but I'd got to the point where, you 10 know, the wealth of subpostmasters that appeared to have 11 been affected and the media outlay that was now coming 12 more and more to the fore, where I felt we needed to be 13 much more proactive and, albeit I was dispirited by 14 Duncan's reply to my letter, I had continued to knock on 15 that door and more or less got the same apply each and 16 every time. 17 Every time there was a media outlay, I used it as 18 a mechanism to say, "Are we sure about the system, are 19 you sure you won't have look at it". You know, we'd had 20 those conversations. This time around, I'd got to 21 a point where I'd had enough and said, "We're going to 22 do it and, more importantly, I want your support". And, 23 in fairness to Duncan, he took a minute or two to think 24 about that and calmly replied "Okay, I think you're 25 right". And I said, which was an important point, 94 1 rightly or wrongly -- I said, "I'm expecting Fujitsu to 2 pay for this audit but I want it to be under Post 3 Office's leadership", and he agreed to that. 4 As soon as I'd finished that call, I rang Paula and 5 repeated the conversation I had with Computer Weekly and 6 the conversation I had with Duncan, and she said, 7 "Right, okay then". I said, "I've got to get you into 8 other room with Duncan, so we can take this forward". 9 She asked for his phone number, I gave her the phone 10 number and my presumption -- again, I'm still doing 11 separation and I'm writing down the contract -- is that 12 there was some form of telephone call between the two of 13 them, which I know took place because I think in Paula's 14 evidence she suggests there were phone calls that took 15 place. 16 But that's how I left it and, you know, that's why 17 my belief is, carrying that through to June when Second 18 Sight are brought on Board, from when I left in March, 19 you know, it was clearly followed through and my noting 20 paper in March to the Board, you know, before I left, 21 March 2012, talks about a full evaluation of the system 22 and that it should be a shared process between ourselves 23 and Fujitsu with execs from both companies, and it talks 24 about what that might mean. 25 I expected that to expand, and the one thing I think 95 1 that still hasn't happened and should have happened, in 2 my view -- and I know this is a long-winded answer -- 3 okay, you can't look at the system in isolation. Right, 4 the system is one thing and certainly the code needs 5 reviewing to see what anomalies there are and the 6 practices they apply to keeping that code where it needs 7 to be, but you need to look at the process mapping that 8 sits round that system and the training that's applied 9 to the Branch Network and the use of that system. I see 10 too often, even today, with digital systems, where 11 people buy a digital system and somehow expect the 12 digital system to make their life easier, without 13 changing the process that they have, and that all three 14 need to work in perfect harmony: process, training, 15 system. 16 And, in my view, from an investigation point of 17 view, it should have been a big hitter like Ernst & 18 Young, okay, that came in and vetted everything because 19 I still don't think that's happened. 20 Q. Finally, Mr Young, you say that in your conversations 21 with Mr Tait, in which you raised, I suppose, what was 22 a further request for an independent review of Horizon, 23 you pointed out that damage was being done to the brand 24 of the Post Office and to Fujitsu. Was that your 25 principal concern, damage to the brand, rather than the 96 1 injustices that might have been caused to postmasters? 2 A. It was both. It was a conglomerate of a lot of things. 3 I think this was hurting a lot of people: 4 subpostmasters, clearly, former subpostmasters, and 5 subpostmasters. But, as I think my statement alludes 6 to, you know, I was very conscious that the one thing, 7 I would say about the Post Office is it has a lot of 8 long-term employees. It has people that have worked 9 20/30, in some cases occasionally, 40 years in the 10 company. To have this backdrop, this Inquiry backdrop, 11 and where we are today, you know, clearly, you know, 12 impacts those people too that have given -- you know, 13 everything they can to the job that they've done day in 14 and day out for 30/40 years, and I was conscious of that 15 type of portfolio. 16 There's some very loyal people across the Branch 17 Network and in headquarters and, amongst the support 18 teams, that were trying to do the best job they could 19 and this was going on in the background and people were 20 talking about it in the way they are today and, you 21 know, if you go to a party and say, "Who do you work 22 for?" And it's the Post Office, you know, that backdrop 23 doesn't really reflect their time in the job, over the 24 years they've been working for the Post Office, and the 25 same for the Branch Network. 97 1 It's left a litany of bad press behind that, you 2 know, some people probably deserve but others don't, and 3 I was conscious of that too. 4 MS HODGE: Thank you, Mr Young. I have no further 5 questions. 6 Sir, there are some questions from Core 7 Participants. I think those are likely to take us 8 beyond 1.00, but I'm sure that Mr Young would like to 9 finish his evidence. So it may be that if we canvas how 10 long those are likely to take, you can take a view as to 11 whether you'd be willing to take a slightly later lunch 12 break. 13 SIR WYN WILLIAMS: Yes, yes. So who wants to ask questions, 14 and how long are you going to take? 15 MS PATRICK: Sir, for the Hudgells team we have around 16 25 minutes. 17 MS PAGE: I'm afraid similar time from me as well, sir. 18 MR STEIN: Sir, on behalf of Howe+Co, five minutes. 19 SIR WYN WILLIAMS: Right. Well, let's use those few minutes 20 up to lunchtime to hear Mr Stein's questions and then 21 I think it's inevitable we'll have to have a break for 22 lunch. 23 So your five minutes could go to ten, Mr Stein, but 24 not longer than that. That's what it boils down to. 25 MR STEIN: Thank you very much. I will try to keep to -- 98 1 well, I will not just try; I will keep within the 2 strictures. 3 Questioned by MR STEIN 4 MR STEIN: Mr Young, my name is Sam Stein, I represent 5 a large group of subpostmasters who have all been 6 affected by this scandal and a number of them were 7 involved in the GLO, that's the High Court litigation. 8 Okay? 9 Now, your evidence, as far as I can understand it, 10 has been this, and can I just summarise it: that when 11 you came into the Post Office, you were told that, 12 largely, the operation of the investigation and 13 prosecution section was being dealt with by a team and 14 that you shouldn't really interfere. That's a summary, 15 a paraphrase of what you said; is that about right? 16 A. Yeah, I think the words used were "You don't need to be 17 part of it". 18 Q. Yes, and, secondly, in similar lines, when you were 19 thinking about the question of what is Fujitsu up to, 20 regarding the operation of the system and its coherence 21 or its integrity, you were told, well, that's up to 22 Fujitsu because Fujitsu owns the data, and owns the 23 source code, and that therefore they're in control of 24 that; again that's about right, is it? 25 A. Well, they don't own the data. The data was always 99 1 going to be the Post Office's, if it's generated by 2 branch. But they certainly owned -- they owned the code 3 of the system. 4 Q. Right, and the sense we get from your statement is that 5 it was only towards the end of your tenure, your years 6 at the Post Office, did you start to gain some concerns 7 regarding the system and, therefore, you wrote 8 a document to the Board, which was a noting document to 9 the Board, which was to say, "ought to be reviewed"? 10 A. Yes. 11 Q. Okay. Now, you've been asked a number of questions by 12 Ms Hodge about the mismatch bug, can we call it that, 13 just as a simple short version of it? 14 A. Yes. 15 Q. You've explained that, regarding the mismatch bug, and 16 this is what you put in your statement: you thought that 17 it had arisen in the testing environment, rather than 18 the full rollout, yes? 19 A. No, the testing environment is one thing. Just to make 20 sure we're all talking about this in the -- 21 Q. Remember how little time I have. 22 A. In the pilot, right, you've tested it. You think it's 23 fit for purpose. You're now running a pilot over -- in 24 waves. You run a pilot and then you go to the next 25 wave, next wave and then, before you know where you are, 100 1 there's a sitdown and "Let's now go out into main 2 rollout". 3 Q. So let's make matters as simple as possible: you did not 4 think it was a bug that was operating in the live 5 environment. That's what you say throughout your 6 statement, that's as you've given your evidence 7 originally to Ms Hodge, yes? 8 A. Yes. 9 Q. Right. So, by the time, in fact, in February 2011, 10 you're being made aware of this mismatch bug, did you 11 realise that it was important, particularly as against 12 the growing clamour in the public sphere, regarding the 13 reliability of Horizon? 14 A. It's the -- having listened to the -- you know, the 15 evidence and, more importantly, having, you know, looked 16 at that summary that talked about February 2011, if 17 in -- if it's not a -- because I'm a -- like I said, 18 there were certain facts that had symmetry to pilot: the 19 62 branches, the way the outfall was dealt with, the 20 gains were kept by the postmasters, the debts were 21 managed and kept by the Post Office, exactly the same 22 process, it would appear, have been carried out on both 23 mismatches but it's why I thought they were one and the 24 same. 25 Q. Did you think that the mismatch bug at the time, in 101 1 2011, when it was raised with you, was important as 2 against the growing clamour regarding the integrity of 3 the Horizon system in the public? 4 A. Well, clearly the answer to that would be yes. 5 Q. Right. Can we go then go, please, to FUJ00081545. It 6 should come up on the screen, and if we can go to 7 page 4, please, on the system, that would be very 8 helpful. 9 If we scroll up, please. Right. Stop there, 10 please. 11 Okay. So we can see here, this is from you, 12 18 February 2011, 7.58 in the evening, and it's to 13 Mr Russell and Mr McLean, and it says: 14 "Will 15 "I need to sit down with you and possibly several 16 others just to understand these latest issues on Horizon 17 and where we are with them. This is very important as 18 there's a lot of media interest in Horizon at the 19 moment." 20 Then you're asking: 21 "What would be helpful is if you could send me 22 a written summary on what the integrity issues are and 23 what's been done about them." 24 Okay? So we can see that, at that point in time, 25 there was no doubt in your mind that this wasn't just 102 1 important: this was very important, as against the media 2 issues that were current at that moment; do you accept 3 that, Mr Young? 4 A. Agreed. 5 Q. Right. Now, let's try and work this through. There was 6 no mention in the document where, just before leaving 7 Post Office, you say to the Board that there needs to be 8 a review of the system. There's no mention of the 9 mismatch bug in that document? 10 A. No, there's not, no. 11 Q. There's no reference by you to the Board of this very 12 important issue as against a lot of media interest going 13 on at the time. There's no reference by you to the 14 Board of this very important issue either, is there? 15 You don't take it up to the Board? 16 A. No, there's not, and equally, there's no reference to me 17 via Fujitsu or via Lesley or via my own team with that 18 regard. 19 Q. So shall we just look at your own levels of personal 20 responsible to start off with -- 21 A. Okay. 22 Q. -- because you appeared to be the person that people are 23 going to. They're saying, "Mike, look, there's this 24 problem, and it's a problem in the live environment". 25 Now, if we're talking about personal responsibility, 103 1 you're someone that talks a fair bit in your statement 2 and your evidence about your experience, both in 3 background, in the armed forces, then the police and 4 then in systems and operations. Now, this is being 5 relayed to you as being an important issue in the live 6 environment outwith the Post Office. It was your 7 responsibility to take this to the Board, wasn't it, 8 Mr Young, and you didn't carry that out? 9 A. Yes. 10 Q. You also were aware that there was an implication, you 11 must have been aware that there was an implication with 12 bugs in the system, the live system, that this could 13 impact upon investigations, and police cases that were 14 being considered, and cases that were being taken 15 through the court. You mentioned a couple of times 16 that, with your background police experience, things 17 were of interest to you on occasions, and you used that 18 experience to analyse matters. You must have been aware 19 that this was going to go to and implicate issues that 20 were related to police cases; it's true, isn't it, 21 Mr Young? 22 A. Possibly, and the only reason I'm hesitating to give 23 an affirmative to that is I probably was looking at this 24 purely from an IT standpoint, but does it have 25 implications around those people that have been 104 1 prosecuted? The answer is yes, I understand that. 2 Q. You did nothing about that either? 3 A. Can we just take a step back? 4 Q. Well, did you or did you not do something about that, 5 Mr Young? 6 A. I'd like to take a step back, if that's all right? 7 Q. I'd prefer you to answer the question but I'll let you 8 have your step back. 9 A. I will answer your question, if I can take a step back, 10 all right? 11 I thought this was tied to, and I'm wrong, clearly, 12 having gone through this now, I thought this was tied to 13 the original Oracle bug, which I thought had been dealt 14 with. Clearly, that's not the case. I'm going to come 15 back to the point I made before because I don't want 16 that to get lost. Usually -- and I don't know of any 17 other occasion, potentially, where this may have 18 occurred -- usually, when something like this happens, 19 a major incident is generated. 20 That's not by me. That's by the people operating 21 the system and they sit both sides of the fence, in IT 22 and in Fujitsu, and, at the point a major incident comes 23 out, the Executive Team and the Boards get those major 24 incidents, along with me, at the same time. That's 25 missing. 105 1 Also, what's missing is any sort of executive 2 overlay from Duncan, Gavin Bounds or anyone in Fujitsu, 3 out of courtesy to me. That's missing too, okay? 4 So I am sat there, I think at the time, seeing this 5 as part of the original Oracle issue. It clearly isn't, 6 okay? Is it a miss by me? In answer to your question, 7 the answer is yes. Had I known that it was a new bug, 8 managed in the same way, in all its various facets, and 9 miraculously appearing to affect 62 branches like the 10 original one did, I would have had phone calls both to 11 Fujitsu and to my Board colleagues. 12 But there is a process that sits in IT from 13 a Service Delivery and IT point of view, that doesn't 14 need me in the link. If Mike Young is away on leave or 15 ill, it doesn't all fall flat on its face. There are 16 processes and procedures that kick in that allow this to 17 get escalated with all of the backdrop of how it's come 18 about and what's being done about it. I don't see any 19 of that in this, or in the disclosure process. That's 20 the only point I'm trying to make. So do I accept -- 21 SIR WYN WILLIAMS: Can I summarise this, otherwise it won't 22 be five minutes, it'll be 15? 23 MR STEIN: Yes, sir. 24 SIR WYN WILLIAMS: The position is that you would have 25 expected that, one way or another, this should have got 106 1 to the Board. You were one possible means of getting it 2 to the Board but there were others, the reality is it 3 didn't get to the Board; is that it, in summary? 4 A. From the disclosure documents, yes, sir, that's the 5 case. 6 SIR WYN WILLIAMS: Thank you. 7 MR STEIN: So the position is, Mr Young, you and others all 8 failed to do your job properly as regards to this issue; 9 is that fair? 10 A. No. 11 Q. Okay. 12 A. I've said why it's not fair. 13 SIR WYN WILLIAMS: All right, thank you. 14 MR STEIN: The last question on this. The document I asked 15 to go on the screen says this: 16 "I need to sit down with you and possibly several 17 others just to understand these latest issues ..." 18 So, in fact, that reply, written by you, tells us 19 that these were the latest issues; they weren't the 20 previous issues. You knew these were separate to the 21 earlier ones, didn't you, Mr Young? 22 A. I'm not disputing that when I read that now but, in the 23 happening, in the operation, that's what I was seeing. 24 I was seeing something related to the original Oracle 25 bugs -- 107 1 MR STEIN: No further questions. 2 A. -- so I don't dispute that point. 3 SIR WYN WILLIAMS: Right. Thank you. So we'll break for 4 lunch now. 5 Before we do, Ms Hodge, are you taking this 6 afternoon's witness as well? 7 MS HODGE: I am sir, yes. 8 SIR WYN WILLIAMS: So let's just have a minute of 9 an overview. We're obviously going to run significantly 10 into this afternoon still with Mr Young. So where does 11 that leave the next witness and the length of time that 12 that witness may take? 13 MS HODGE: I don't expect the witness to take anything like 14 as long as we've taken with Mr Young, in that I have 15 some questions for him but I can cut my cloth, and 16 I don't think there are a lot of questions from Core 17 Participants. 18 SIR WYN WILLIAMS: Can I ask Core Participants to confirm or 19 contradict what Ms Hodge has just said about their 20 questioning? 21 MR STEIN: From our point of view, I think that's right, 22 yes. Thank you, sir. 23 MS PATRICK: From ours too, sir. I think most of the 24 questions we wanted to cover are going to be covered by 25 Counsel to the Inquiry. 108 1 SIR WYN WILLIAMS: Right. Ms Page or Mr Henry? 2 MS PAGE: I'm just having a very quick look. Mr Henry is 3 not in the room and was going to deal with this witness 4 but I've just looked at the Rule 10 and I can confirm 5 that we don't have questions. 6 SIR WYN WILLIAMS: Right. Fine. Well, that's fine. 7 I'm prepared to sit, you know, reasonably this 8 evening to finish the witness but, as you all know by 9 now, by about 4.45, my powers to concentrate are waning, 10 shall we say. So I hope everyone will bear that in 11 mind. 12 So we'll start again at 2.00, yes? 13 MS HODGE: Yes. Thank you, sir. 14 (1.02 pm) 15 (The Short Adjournment) 16 (2.00 pm) 17 MS HODGE: Good afternoon, sir. Can you see and hear us? 18 SIR WYN WILLIAMS: Yes, I can, thank you. 19 MS HODGE: Thank you. 20 SIR WYN WILLIAMS: Who is going first? 21 MS HODGE: I believe it's Ms Page. 22 Questioned by MS PAGE 23 MS PAGE: Mr Young, you were Chief Operating Officer when 24 you left POL in April 2012 with Lesley Sewell Head of 25 Technology, one of your direct reports, yes? 109 1 A. Yes. 2 Q. Yet you take no responsibility for the Horizon scandal; 3 is that right? 4 A. We all have a part to play in that tier around tech. If 5 the tech doesn't work as described and has caused the 6 failures that it's caused, then yes, we've got some 7 responsibility, and that includes me. 8 Q. But you said that it was really other people's fault for 9 not telling you of the problems with Horizon, just like 10 Paula Vennells said that it was your fault for not 11 telling her. 12 A. I highlighted -- other than the last bug, which is 13 a misnomer that I'll have to come to terms with, 14 I highlighted all the issues we had with Horizon. As 15 we've heard, I challenged Fujitsu with regards to 16 looking at the system. I was reminded that it was 17 a service, we didn't own the IP. I think some of the 18 work I did got us to a point where we could demand it 19 because we would own the IP. I think I did, you know, 20 everything I could. 21 Paula's response was based, as I understand it, on 22 a conversation we had after the first Computer Weekly 23 call. Now, I actually left in the second week of March 24 2012 and Paula was there seven years later. So 25 I thought -- 110 1 Q. She has her own -- 2 A. -- that the construct that I put in place per my 3 comments before the lunchtime break, allowed the 4 business to pursue, in hand with Fujitsu, a proper 5 investigation of the three elements I talked to: the 6 process, the training and the system itself. 7 Q. Well, let's go back a little bit and what you say about 8 the chain of command in 2010. You've told us in your 9 witness statement -- no need, I think, to go to it -- 10 that after David Smith moved to Royal Mail Group in 11 October 2010, you say he continued to actually have 12 oversight of the Post Office and, in particular, 13 Ms Vennells continued to report to him until around 14 April 2011, yes? 15 A. That's my understanding, yes. 16 Q. What was the degree of oversight as far as you 17 understood; are you talking daily, weekly, monthly 18 interventions? 19 A. Between? 20 Q. Between Ms Vennells and Mr Smith. 21 A. I don't know, genuinely don't know. 22 Q. How do you know that she was still reporting to him? 23 A. It's a good question. I think some of that -- I can't 24 remember how but some of that has some through the 25 disclosure process and some of that has come through not 111 1 talking with Paula but with other executives within POL, 2 the suggestion being that she had some handover with 3 Dave Smith and, as a consequence, he was a mentor/coach 4 as she went through this process. And I think my 5 statement talks to -- and down the road, Moya Greene 6 took on that more of that mantle. 7 Q. Can we then just look at what Mr Smith says about your 8 involvement in the background to the Ismay Report. If 9 we could bring up his evidence, please. It's 10 INQ00001128. 11 When we get there it's page 19, internal numbering, 12 page 76. Mr Smith said that there were no terms of 13 reference for the Ismay Report but, in effect, he said 14 that you were one of a few people who was giving 15 Mr Ismay instructions. So, if we look at the right-hand 16 side of this page -- sorry, yes, the right-hand of 76 -- 17 it's an answer that he gives, a large answer in the 18 middle of page 76: 19 "I think the structure at the time was that Mike 20 Moores -- actually it was Mike I had charged with 21 writing the report, and that between Mike and myself and 22 Mike Young and Sue, we go back to that conversation, we 23 agreed that it would be appropriate for Rod to carry out 24 the actual activity, and Mike, myself and Mike Young, 25 all at various times, did have conversations with Rod to 112 1 sort of set the tone of what we wanted and expected to 2 come back and also to help and review his progress. 3 That was more the two Mikes than myself but the three of 4 us -- it wasn't just one conversation, it was a set of 5 conversations." 6 Then summarising that, the question is: 7 "So your evidence is that Mr Ismay was getting 8 instructions from would be people at multiple times?" 9 Would you agree with that? 10 A. I don't recall giving any instructions. I was asked 11 questions and I responded to those questions but 12 I didn't give instructions to Rod or to anyone else. 13 I actually saw the preparation of that statement going 14 across the whole tech team, not just me, but I responded 15 to questions as and when they came across my desk. 16 Q. Let's go a little bit further down, then, see what else 17 Mr Smith says. At page 22, internal pages 87 to 88, on 18 the left, Mr Stevens quotes from his witness statement, 19 and it says: 20 "'At the time, I do not think that we thought that 21 there was any merit in commissioning a further report by 22 an IT expert or forensic accountant or similar to test 23 the reliability of Horizon as the report was clear-cut 24 in its position. There was nothing in it which 25 suggested we should investigate Fujitsu or Horizon 113 1 further.'" 2 Then he asks: 3 "Who was the 'we' when you say that?" 4 "Answer: I'm talking about a combination of the 5 Post Office Senior Management Team." 6 Then further down: 7 "Paula Vennells, Mike Young, Mike Moores." 8 So, again, that's suggesting you were part of 9 a small group of people responsible for what was going 10 to happen both in the Ismay Report and what was going to 11 happen as a result of the Ismay Report; do you dispute 12 that? 13 A. That's the way it reads, yes. 14 Q. Do you agree with what he says there? 15 A. Yes. 16 Q. All right. Well, let's just look at the right-hand 17 side, and this answer, the large-ish answer in the lower 18 half: 19 "... the fundamental piece was that we believed that 20 the system was tamper proof so the Fujitsu position that 21 was laid out was quite clear. We had not seen in any of 22 the recent cases any issues that would suggest a problem 23 and, in fact, a few weeks later, as we now know wrongly, 24 but at the time, we saw the Seema Misra case as a test 25 of the Horizon system, and it had come through that, and 114 1 so those were the fundamental reasons." 2 Was the Seema Misra case part of the reasoning for 3 not pursuing an independent report? 4 A. I don't know. As I alluded to this morning, I wasn't 5 privy to the prosecution case, for want of better words, 6 the case prepared against Seema Misra. What little 7 I got in terms of prosecution data came via the Ismay 8 Report in itself. 9 Q. Well, this is rather different, isn't it? What he's 10 suggesting, Mr Smith, is that, actually, in the 11 aftermath of the Ismay Report, when "we", the management 12 team that he has set out on the left-hand side of the 13 page, when "we" were considering whether or not to take 14 further action, whether the Fujitsu system was tamper 15 proof, whether it needed a forensic accountant or 16 similar to test that, one of the reasons not to do that 17 was that the Seema Misra trial had tested the Horizon 18 system and the Horizon system had come through that 19 test. So he's suggesting you were part of those 20 discussions. 21 A. So I can categorically say that's not the case. 22 Q. Let's look at the email chain that we've already looked 23 at, the Mark Burley email chain. POL00424359. This is 24 a slightly different version of the same email chain, 25 which has a little bit more in it. If we could scroll 115 1 down, please, to page 4, you'll recognise this from the 2 version that we saw earlier today. It's an email from 3 Mark Burley to you and Sue Huggins with various others 4 copied in. In Mr Burley's paragraph 2, he refers to the 5 three cases that he's aware of, and I'd just like to 6 pick up on the Castleton case, middle of the paragraph: 7 "Castleton where we presented a copy of the audit 8 log to the subpostmaster's solicitor who promptly agreed 9 there was no substance to the SPMR's claim and advised 10 him to settle the debt. The solicitor was sacked by the 11 subpostmaster who proceeded to court, lost the case and 12 liability of £300,000 but declared himself bankrupt. 13 The judge decided there was 'no flaw' in the Horizon 14 system and 'the logic of the system is correct' and 'the 15 conclusion is inescapable that the Horizon system was 16 working properly in all material aspects'." 17 You will have known, won't you, that what goes on 18 between a solicitor and their client is privileged, 19 wouldn't you? 20 A. Indeed. 21 Q. So that summary there was nonsense, wasn't it? There 22 was no way Post Office could know what Castleton's 23 solicitor said to Castleton, was there? 24 A. Potentially, yes. 25 Q. Was this malign rumour part of the commonplace lazy 116 1 assumptions that Post Office Management made about 2 subpostmasters, that they were dishonest or incompetent, 3 that sort of baseless rumour mongering? 4 A. Within the Post Office or within the executive? I mean, 5 frame it. 6 Q. Well, within your knowledge. 7 A. Look, I've seen this played out in the Inquiry before. 8 I can honestly say not that I'm aware of. Was there 9 a -- to further just make a point, was there a view that 10 Horizon was secure and working as it should do? Yes. 11 And did people feel, including myself, that we should 12 defend it because we had no other datasets to suggest 13 otherwise? The answer to that is yes, too. 14 But I can't say there was a deliberate stream of 15 guidance, advice, however you want to term it, coming 16 from wherever, to -- you know, to do untold things to 17 the subpostmasters that might be going through or about 18 to go through a prosecution. That's not something that 19 I am aware of. 20 Q. Let's turn, then, to the Misra trial again, and if 21 I could have POL00169170, please. This is the famous 22 bandwagon email, which was sent around after the Misra 23 trial, and what we see in this version of it is your 24 name as one of the people copied in. Can we scroll 25 down, please. There we are. The email from Marilyn 117 1 Benjamin in the bottom half of the page is the bandwagon 2 email, and we see here that it has been forwarded from 3 David Smith, that's the manager David Smith, to you, 4 Mr Ismay, Mr Moores and Ms Vennells: 5 "Rod 6 "Brilliant news. Well done. Please pass on my 7 thanks to the team. 8 "Regards 9 "Dave." 10 This was Post Office using a criminal trial for 11 improper collateral purposes, wasn't it? 12 A. That's not the way I see it. I actually think what Dave 13 Smith was trying to do was thank people for their 14 efforts to see it through. Now, we can argue about 15 whether it was right or wrong; that's the way I saw it. 16 I did nothing with that email. I think the intent 17 was -- the way I read this email from Dave Smith, the 18 intent was I was to pass my thanks on potentially to 19 John Scott. I didn't. I read through it and I left it 20 as it was. But I do think -- and I did see Dave Smith's 21 evidence -- I do think, you know, it's not a great 22 message, personally. 23 Q. Could we have your witness statement up, please, at 24 page 35, paragraph 110: 25 "Further, I was not involved in the prosecution of 118 1 Seema Misra. I only became aware of this case after 2 seeing the Channel 4 programme and reading the Ismay 3 Report. I was not copied on the initial email dated 4 21 October 2010 regarding the conviction of Seema Misra. 5 (Email from Rod Ismay to Jarnail Singh [et cetera]). 6 I was not aware that as a result of a successful RMG/POL 7 prosecution a pregnant lady was imprisoned." 8 That's not correct, is it? 9 A. No, on reflection, having looked at that discovery 10 document, the answer would be no. In fairness the email 11 doesn't talk about her personal circumstances but I take 12 your point. 13 Q. Do you think you've made any other self-serving errors 14 of that nature in your evidence? 15 A. It's not self-serving, genuinely not self-serving. 16 Q. What about the recollection of the second Computer 17 Weekly call and your subsequent very detailed 18 recollection of your conversation with Duncan Tait; is 19 that a little bit self-serving, Mr Young? 20 A. No, I was angry. So I remember it implicitly because 21 I knew what it would mean and it was me almost 22 passing -- you know, passing the ability to get the 23 system investigated onto the -- what would be, after 24 separation, the CEO of the Post Office. And I have made 25 the point -- there were a number of points to that and 119 1 one of them was we didn't own the IP and, every time you 2 knocked on Fujitsu's door, you know, "You bought 3 a service, we're in the parameters of the service". And 4 it wasn't until quite late in the year that we had 5 secured the IP through the broadband contract. 6 So there were a number of actions that add 7 credibility to the action that happened after that call. 8 Q. Well, let's go to some communications with Parliament. 9 I'll just actually go to one and perhaps give some 10 references for others in the interests of time. 11 POL00417094. If we could scroll down a little, 12 please. There's a lot of Mikes in this email chain, it 13 gets a bit confusing but this first Mike is actually 14 a draft directed to Mike Whitehead from Mike Granville. 15 It says to Mike Whitehead: 16 "In response to you query: 17 "The system is based on a user log-in, and all 18 actions have to be endorsed by the user. POL cannot 19 remotely control a branch's system. Any technical 20 changes by Fujitsu that impact the system have to go 21 through clearance processes which would prevent any 22 amendment to existing data. The independent audit file 23 is in place and can show all the system activity, down 24 to a single keystroke, in a particular branch." 25 So that was a draft. If we scroll up, Mike 120 1 Granville wants to run it past you, Mike Young. So he 2 sends it to you and he says: 3 "If it is helpful re your meeting with Paula -- 4 please see below my draft response to BIS ..." 5 So do you know what became of that; are you aware 6 that that then did actually go as far, as we can tell, 7 to Mike Whitehead at BIS, that formulation about remote 8 access? 9 A. I don't know. Like you, I would presume it went to 10 where it was meant to go. 11 Q. As I say, I wouldn't take you to it but in POL00120561, 12 we see a further briefing which includes that wording. 13 It goes again to you, it covers various issues to do 14 with the Seema Misra trial, it talks about the very 15 robust stance that Post Office wanted to take, did take, 16 continued to take and that BIS took up, therefore, with 17 Ed Davey following his meeting with Sir Alan Bates. 18 Now, you were obviously aware that these very robust 19 lines were going to Parliament, weren't you? 20 A. Well, I'm -- clearly, I'm aware of that. So as my 21 statement said, I didn't sit down. The only MP I sat 22 down with, which was an introductory meeting to the Post 23 Office, was with Ed Davey, and a number of the execs 24 were invited and that meeting lasted an hour and, as my 25 statement says, it didn't cover Horizon. Where I may be 121 1 asked by someone, in this case from regulatory, or maybe 2 from PR for a sanity check around a statement, in this 3 particular case, audit controls on the data, you know, 4 I'll provide that. 5 I'm responding to an internal response. I never had 6 a direct conversation with a Member of Parliament or 7 with representatives of the Government that later on 8 joined the Board. 9 Q. Did you not feel that, as Chief Operating Officer with 10 technology in your remit, it was your responsibility to 11 make sure that what was said to Parliament was 12 absolutely accurate? 13 A. Yes. 14 Q. Yet you didn't, did you? 15 A. Why? 16 Q. This was not accurate, was it? The EY findings are not 17 mentioned here, are they? 18 A. No. 19 SIR WYN WILLIAMS: Well, to be fair -- 20 MS PAGE: To be fair, actually -- 21 SIR WYN WILLIAMS: -- (unclear). 22 MS PAGE: Quite, I withdraw. Thank you, sir, and 23 I apologise. 24 But you didn't bother to find out did you? 25 A. Bother to find out what specifically? 122 1 Q. Whether this was accurate. 2 A. I thought it was accurate. 3 Q. On the basis of what you'd be told by Fujitsu? 4 A. Yes, and what my own team thought was in place. 5 Q. Well, let's look at what happened further on down the 6 line because in November 2011 you were still giving the 7 same sort of robust lines to Parliament. POL00295067. 8 If we scroll down a little, please. As we can see, this 9 is from 18 November 2011. If we stay on the email from 10 Rod Ismay to you, if you're willing to take it from the 11 subject line "Parliamentary Questions about Horizon", 12 that's what we're dealing with. In the middle of the 13 first paragraph: 14 "It remains consistent with our robust stance but is 15 a more concise set of words." 16 Then if we scroll up to your reply: 17 "Sorry not to have got back to you sooner, been 18 stuck in MDA negotiations all day." 19 So that confirms that at this point in time you're 20 very strongly tied up with that: 21 "I'm okay with the approach and the wording." 22 So, by this time, you are aware of the EY reports, 23 you are aware of issues growing and yet you're still 24 content with this robust stance to go to Parliament. 25 A. I'm trying to work out the point. So are you pointing 123 1 to the fact that E&Y had raised some issues associated 2 with user and privilege access because I didn't see 3 anything in the EY report that. Talked about audit 4 logs, checksum datas and keystrokes. So I'm trying 5 to -- I want to answer your question but I'm trying to 6 see what bent there is to it. 7 Q. Well, at this point you've told us this morning that 8 you're starting to have some concerns about Horizon and 9 yet you're content for the robust position, the same 10 kind of robust language that's been going back now since 11 the previous year and you don't see any need to revisit 12 that approach? 13 A. So maybe your interpretation and mine are slightly 14 different but there was always a nagging doubt, okay, at 15 the point that you've got more and more subpostmasters, 16 you know, it grew, as we all know, in the JFSA, saying 17 the system was wrong. 18 If you didn't have that nagging doubt, okay, then, 19 you know, you've got a bit of a problem. So it acts 20 almost as a conscience check. I'm going to go back to 21 what I said and maintained, right. I saw nothing in the 22 Horizon system beyond what was in rollout, and then some 23 of the change activities and the hardware failures that 24 suggested Horizon was doing anything but what it was 25 prescribed to do, and it certainly was within its SLAs, 124 1 and where there were failings, okay, they were 2 highlighted. 3 The issue associated with privileged access worried 4 me, right? I've no doubt about that because I thought 5 that might be better policed, but it was addressed in 6 a relatively short timescale. It's only with the 7 hindsight of this Inquiry and some of what I've learnt 8 from the Second Sight Report that, you know, I now know, 9 through that benefit, that some of the audit logging, as 10 I might have perceived it, okay, isn't -- wasn't as 11 locked down as best practice would indicate and it was 12 open to abuse. 13 Q. But you tell us that, by the time you had that second 14 call with Computer Weekly, you were getting concerned 15 and, thereafter, you were determined to make sure that 16 there was a review of Horizon? 17 A. So one of the reasons why I was getting concerned is 18 there was more of this. There was more a push from, you 19 know, executives and from the Government Shareholder to 20 respond to letters they had had from some of their 21 parishioners, in which case must have been 22 subpostmasters, okay, and I was having to underwrite 23 some of that. And I did that quite deliberately because 24 I wanted to take the pressure off Lesley, so she could 25 do her job, which was the day-to-day management of the 125 1 system. 2 At the point that you're having the conversation 3 with Computer Weekly, towards the end of 2011, you're at 4 a point where you're being told: litigators have been 5 appointed and there's now hundreds of subpostmasters. 6 Right? Did my mindset change at that point? The answer 7 is yes. Did my mindset significantly before then? The 8 answer is no because I couldn't point to anything on the 9 system. I still wanted something from Fujitsu that told 10 me the system, right down to a code level, was working 11 properly, and the response I got was, "It's a service, 12 our algorithms aren't bringing up any anomalies". 13 I mean, I'm not sure where else you'd like me to go 14 because the heat, if we can call it heat, is coming from 15 Parliament through parishioners and it's coming through, 16 you know, the media. 17 Q. Let's just go to one last document, please. It's 18 POL00338400 and this relates to the letter that you 19 signed off on to go to Private Eye, following their 20 article. 21 A. Yeah. 22 Q. If we start, please, at page 2. 23 If we scroll down a little bit we can see the 24 content of your letter, and it's the bit that starts: 25 "Sir, the Post Office takes meticulous care to 126 1 ensure the Horizon computer system in branches 2 nationwide is fully accurate at all times." 3 We probably don't need to go through it all because 4 it's very much the line that was being taken by Post 5 Office at that time but, if we scroll up, we can see 6 that it's a debate about whether or not to send that 7 letter. It goes to Paula Vennells from David Simpson, 8 it goes to Susan Crichton, it goes to Mike Granville and 9 someone called Rebekah Mantle. Various other people are 10 copied in, including obviously you, Kevin Gilliland, Sue 11 Huggins, Rod Ismay. 12 Now, if we then go a little further up we see that 13 Paula Vennells responds to everyone and then you say in 14 the email above that that you're happy with the letter. 15 You and Susan have spoken about it and you're both 16 comfortable with it. 17 If we then go further up again, we see that Rod 18 Ismay has forwarded it to Angela van den Bogerd, and he 19 says: 20 "... thanks for our time this afternoon. [This is 21 the] response to Private Eye ..." 22 He attaches a pdf. If we scroll all the way up, 23 just for completeness, we can see that he also sends the 24 Private Eye pdf. 25 Now, what's interesting about the various people 127 1 copied in on that is that an email -- which I won't 2 bring up for the benefit of time but which is 3 a well-known email now -- the Lynn Hobbs email, in which 4 she talks about the fact that Fujitsu does have the 5 capacity to go into branch accounts and amend the data, 6 that email from Lynn Hobbs went to pretty much all of 7 those people who I've just read out. They all therefore 8 knew that the claim that Horizon had no backdoors was 9 not correct, and they were all in on this email chain in 10 which it's proposed that you write a letter to Private 11 Eye saying there's absolutely nothing wrong with 12 Horizon, it's all perfect. 13 Do you feel that you were being set up here? 14 A. No. I do want to -- I don't. So I had been asked 15 I think, once or twice before to put my name to 16 a statement that said the system is secure, in a set of 17 words, so I wasn't surprised when the Private Eye 18 article came up that I was being asked to do the same. 19 So I want to make sure, because I said this earlier 20 on in my evidence this morning, a backdoor -- we have to 21 be careful about how we use our language -- a backdoor 22 is for me and it is for most people in tech -- 23 Q. We all heard your explanation. 24 A. Right, well, then there was no backdoor, okay, and 25 everything, as far as I was concerned, at this point, 128 1 and even when I left, was an auditable checksum log, 2 okay, that was uncorruptible and no one could get into 3 it. So that was the case up until the day I left and 4 the only time that that changed in my viewpoint was when 5 I was seeing some of the outputs from the Inquiry and 6 particularly the comments from Second Sight. 7 Q. But you also told us that, when you had that second call 8 with Computer Weekly, that was when your concerns 9 started to really mount -- 10 A. And I've explained why. 11 Q. -- and you've explained why. You also explained that 12 one of the reasons that your concerns mounted was that 13 the firm Shoosmiths had hundreds of people that they 14 were now acting for, yes? 15 A. Yes. 16 Q. If we could scroll down to the bottom of page 3, 17 please -- 18 A. Can I just -- on the Shoosmiths issue, it wasn't the 19 fact that I was worried about the lawyers finding 20 something. I want to be clear about that. It was 21 the -- these were hundreds of subpostmasters that had 22 grouped together and now were bringing in lawyers, 23 presumably at their own expense, to pursue this. So it 24 brought real -- for me, it brought real -- it suggested 25 there was a real dynamic around having had system 129 1 issues. Okay? So the numbers growing and the 2 postmasters themselves bringing in a high-end law firm 3 to fight their fight suggested, you know, this wasn't 4 a group of disgruntled subpostmasters that just wanted 5 to blame the system as an out, potentially, this was -- 6 Q. They were taking it seriously? 7 A. -- something very different and, on the basis of that 8 notable difference, that's why, you know, I went back 9 to -- I didn't ask for permission, I went back to Duncan 10 and said, "No, we're going to have to do this". 11 Q. Let's just look at the email at the bottom half of the 12 page from David Simpson to the same addressees I read 13 out earlier, you're copied in, and this is about the 14 letter that you're about to write to Private Eye. 15 If we pick it up: 16 "The names of the subpostmasters featured are very 17 familiar and the claims made against Horizon are the 18 same ones we've seen many times before. The article 19 also mentions Shoosmiths and a possible legal action the 20 firm may bring -- but Shoosmiths have been saying the 21 same thing since the early part of the year. 22 Disappointingly -- but perhaps not surprisingly -- 23 Private Eye has not run in full the very short statement 24 we sent to them." 25 So at this point, Mr Young, you are on notice that 130 1 Shoosmiths have taken up the cause of the subpostmasters 2 and yet you are willing to have your name put to the 3 letter to Private Eye. You have just explained to us at 4 length why it is -- 5 A. Yeah. 6 Q. -- that Shoosmiths made your concerns more heightened. 7 Are you sure you are not suffering from more 8 self-serving memories here, Mr Young? 9 A. (The witness laughed) I just recall the phone call and 10 I recall that feeling that this thing had moved to 11 another level and we needed to change our -- you know, 12 we needed to change our perspective on having the system 13 looked at. 14 Q. Thank you. 15 A. So, you know, putting the two together, that's just 16 where my head was at. 17 MS PAGE: Thank you. 18 SIR WYN WILLIAMS: Ms Patrick? 19 Questioned by MS PATRICK 20 MS PRICE: Thank you, sir. 21 Mr Young, my name is Angela Patrick. I act for 22 a number of subpostmasters who were convicted and have 23 since had their convictions quashed. You might be glad 24 to hear I only want to look at two topics and, if we can 25 start with the Ismay Report. You've gone over that at 131 1 length this morning with Ms Hodge, and again just now 2 with Ms Page. 3 There's only one section I really want us to look at 4 but I just want to clarify what you've said. Now, in 5 early summer 2010, you'd been chasing Fujitsu, without 6 success, to ask for an independent third-party review of 7 Horizon Online, hadn't you? 8 A. Yes. 9 Q. By the summer, Ms Page took you to the email thread 10 again, you knew that the then Managing Director, David 11 Smith, had been asking questions following the Channel 4 12 journalism reporting, and that you had been looped into 13 that process. 14 A. Yes. 15 Q. You've told us that you were particularly assured on 16 reading the Ismay Report? 17 A. Sorry? 18 Q. You were particularly assured on reading the Ismay 19 Report? 20 A. I was. It gave me some confidence around the system. 21 Q. Indeed. Now, you would have read that about I presume 22 August 2010, I think it was finished? 23 A. I wouldn't be able to tell you, but I would imagine as 24 soon as it was circulated I was reading it. 25 Q. Indeed, and that would have informed your approach, 132 1 going forward, having been assured, having read the 2 Ismay Report, I assume that would have informed the tack 3 you were taking going forward? 4 A. Yes. 5 Q. Now, the Inquiry has looked at the detail of the report 6 with Mr Ismay and lots of other witnesses. I don't want 7 to go into the nitty-gritty, I want to look at one part, 8 and if we could bring it up it's at POL00026572. The 9 part I want to look at is on page 19 and, if we could 10 scroll to the bottom of the page, I'd be very grateful. 11 We see there is a part there on media. This part 12 deals with the "Independent Review and Audit Angles". 13 I don't want to look at all the detail but you can see 14 that there in front of you but you can see in the first 15 paragraph there: 16 "POL has actively considered the merits of 17 an independent review. This has been purely from the 18 perspective that we believe in Horizon but that a review 19 could help give others the same confidence that we 20 have." 21 Now, the bit that I really want to look at is on the 22 next page, so if we could scroll over, I'd be very 23 grateful. If we could stop, it's that first paragraph 24 at the top which the Inquiry has seen a number of times 25 before. Can you see that there, Mr Young? 133 1 A. I can. 2 Q. Yes: 3 "It is also important to be crystal clear about any 4 review if one were commissioned -- any investigation 5 would need to be disclosed in court. Although we would 6 be doing the review to comfort others, any perception 7 that [the Post Office] doubts its own systems would mean 8 that all criminal prosecutions would have to be stayed. 9 It would also beg a question for the Court of Appeal 10 over past prosecutions and imprisonments." 11 Now, we've heard a lot about reading things with 12 your former policeman's hat. Did the inclusion of that 13 section and your reading of that section cause you any 14 concern? 15 A. Let me answer it this way. So it wasn't going to 16 dissuade me from pushing Fujitsu to have an independent 17 review of the system. So -- and indeed, it didn't. So 18 it was -- you know, Duncan may allude to the fact that, 19 you know, it usually came up in our conversations, 20 certainly when we were face to face, or it was a long 21 conversation, or when there was a media output, you 22 know, I would run the ground again around potentially 23 looking at the system. 24 So I wanted to get to a point where I'd got Fujitsu 25 to agree and I've no doubt, if I brought that ticket 134 1 back to the Post Office as a request from me and them, 2 we would have some persuading to do with those that sat 3 doing the prosecutions. But, you know, I was tackling 4 it one bridge at a time. 5 Q. Just pausing there, what you've said this morning, we 6 know pre-Ismay Report, you've given that in evidence, 7 from the start of your role you knew that the Royal Mail 8 Group and Post Office as part of that had been pursuing 9 individual prosecutions? 10 A. Yeah. 11 Q. When you read this, did it cause you any concern? 12 A. Well, I recognise, I think the point you're trying to 13 make -- recognise -- the point you're asking me to 14 recognise -- do I recognise that this potentially shuts 15 the door on being even handed with regards to a review 16 on Horizon, basically saying, if you do go down that 17 particular road, we're going to have to go right the way 18 back through all the prosecutions and -- I recognise 19 what that means. I am -- I'm saying it wasn't changing 20 my approach with Fujitsu. So yes, I recognise that. 21 Q. Okay, and you've given evidence, you were pushing in 22 summer 2010. I want to look on to the second issue now, 23 and I want to move forward to Shoosmiths, and you've 24 gone over it a little bit again just now with Ms Page. 25 So we're whizzing forward to back end of 2011 and 135 1 the time the Post Office received number of letters of 2 claim from a number of subpostmasters, including Julian 3 Wilson. Mr Wilson died before his conviction could be 4 quashed and we represent Mrs Karen Wilson, his widow, 5 who is a Core Participant in this Inquiry. 6 I want to look at what your statement says -- and 7 you don't need to turn this up, you can if you want to, 8 it's at page 44, for the record it's WITN11130100, and 9 I want to look at page 44, starting at paragraph 143. 10 You say: 11 "Regarding proposed litigation, I was not aware of 12 the proposed Shoosmiths litigation until it was 13 mentioned via the second Computer Weekly call, where 14 they indicated that the JFSA instructed lawyers [and 15 there's a little bit of a grammatical issue there]. 16 Computer Weekly did not refer to the litigation as the 17 Shoosmiths litigation." 18 You go on: 19 "During my tenure, I was unaware that the Post 20 Office took any particular approach to legal privilege, 21 how to manage confidential communication, and the 22 retention of documents generally and as it related to 23 the issues raised by the JFSA about Horizon or any 24 potential litigation ... I personally did not take any 25 legal advice." 136 1 Then the last paragraph: 2 "In late 2011 [this is paragraph 145] and early 2012 3 I was not involved in the potential litigation against 4 POL from [subpostmasters]. I did not have any 5 involvement or knowledge of the issues of litigation 6 until the second Computer Weekly call (as mentioned in 7 paragraph 143 above). During that time, I was focused 8 on the Separation", and so on. 9 You've already talked about this a little with 10 Ms Page. 11 Now, you've repeated again that the second call from 12 Computer Weekly, that's what changed your perspective, 13 yes? 14 A. Yeah, it was a combination of a lot of things but that 15 one call got me to a point where enough was enough, we 16 needed to do something, yes. 17 Q. It was after that call that you remember calling Duncan 18 Tait? 19 A. Yes, immediately after. 20 Q. Okay. Can we look at one document, please, for now. 21 It's POL00294928. If we can go to the bottom of the 22 second page of that document I'd be very grateful. 23 Can you see that there, Mr Young? There's an email 24 at the very bottom. I want to look at that first. Can 25 you see it? 137 1 You can see there's an email there from Paula 2 Vennells, at 13.48 on 20 October 2011. Can you see 3 there the heading, the subject matter of the email, 4 "Horizon independent assessment"; can you see it? 5 A. Yeah. 6 Q. Yes, and she writes: 7 "Lesley, excuse me if I missed it -- did you get 8 back to me re confirmation as to how robust/reliable 9 [Pinterest] ..." 10 We think it might be Pintest. 11 A. It is Pintest, yes. 12 Q. "... (is the right name) were? Ie what other type of 13 validation work they have done on this scale/for whom? 14 "Also when do we expect the results? 15 "Kevin has heard today the BBC may be going for more 16 coverage." 17 We can see that's copied to you, isn't it, Mr Young? 18 A. It is. 19 Q. I just want to look at another document to see where we 20 are on this date because the Inquiry knows that, on that 21 day, a Royal Mail Group lawyer circulated direct advice 22 on legal privilege. So if we could look at that, it's 23 POL00176467, please. If we can go to page 2, and stop 24 there. 25 Now, the Inquiry has seen this email a lot of times 138 1 and I don't want to spend a lot of time on it. But can 2 you see there there's an email from Emily Springford? 3 A. I can. 4 Q. You can see the date there, 20 October, same day as the 5 email we just saw and, shortly after that email, so it's 6 at 3.51; can you see that? 7 A. Yeah. 8 Q. Yes. You can see it goes to Ms Sewell, she's on the top 9 line of the addressees, and also, if we look at the 10 second line, it goes to you, doesn't it, Mr Young? 11 A. It does. 12 Q. You can see there what the subject matter says. It's 13 the JFSA claims, disclosure and evidence gathering. 14 It's headed "Privileged and confidential", it says: 15 "Dear all, 16 "As you are aware", suggesting there has been some 17 conversation in the business before that email, doesn't 18 it? 19 A. Yeah. 20 Q. Yes: 21 "... [Post Office] has received", and it goes on to 22 talk about the letters of claim, the substance of the 23 claim being relative to training, to support, to their 24 use of the Horizon system and the Horizon system itself. 25 I'm sure you've seen this document, I think it's 139 1 been provided to you, she goes on to advice on document 2 preservation, document destruction and matters of legal 3 privilege. 4 Now, do you recall this email being sent to you, and 5 legal professional privilege being drawn to your 6 attention for the circulation to your team? 7 A. I don't recall. So you're right, I did get this via 8 disclosure from the Inquiry. I didn't recall this email 9 and I think part and parcel of that rationale was, you 10 know, no change. Let me explain myself by that comment 11 or those comments. I mean, essentially, I think what 12 this is saying is, in relation to Horizon, its integrity 13 or otherwise, nothing was to be deleted or disposed of 14 and all matters related to that were to be kept. And 15 that was, you know, that was normal practice anyway. 16 But I take your point. That was my interpretation of 17 the letter. 18 Q. So I mean, this is -- by this time, we're in 2011, 19 you've been talking about an independent review, the 20 year before, of Horizon Online, albeit. You've been 21 involved in the press coverage. Do you accept that, at 22 least at this point, in October 2011, you would have 23 known that there was litigation in contemplation? 24 A. Yeah. That said as such, yes. 25 Q. If we can turn back to the document we were just looking 140 1 at I'd be very grateful. It's POL00294928, please. 2 If we go back to that last email at the bottom of 3 page 2, we can start there. Now, if we scroll up we can 4 see Ms Sewell replies. If we scroll up a little bit 5 further, so we can see the header, thank you. 6 We can see Ms Sewell replies, and she replies later 7 that afternoon at 5.39, and can you see that there 8 you're copied in, Mr Young, aren't you? 9 A. Yeah. 10 Q. But she also copies in Emily Springford and Hugh 11 Flemington, doesn't she? 12 A. She does. 13 Q. She changes the subject matter to "Legally privileged 14 and confidential". Now, the Inquiry has seen the advice 15 we just turned up. Part of the advice is, if you're 16 talking about these matters, can you copy in Legal and 17 can you head it "Legally privileged and confidential". 18 Now, she writes to Ms Vennells, in her reply: 19 "Fujitsu have reviewed who they will use for the 20 review of HNG-X and as such will not be using Pen Test 21 Partners as they had originally intended. They have now 22 in engaged with KPMG to complete the review, which they 23 expect to take two months. 24 "There is a meeting tomorrow with Legal to discuss 25 the scope and timing of this review." 141 1 Now, before we go up to the answer that comes next, 2 this is October 2011. Was there a plan at this point to 3 have an independent assessment of Horizon commissioned 4 by Fujitsu? 5 A. Well, this would suggest there was. 6 Q. It would suggest that, given it's an exchange involving 7 both Ms Vennells and Ms Sewell, and copied to you, that 8 that plan was known both to the IT Team and to the 9 executive, wouldn't it? 10 A. It suggests that. What I would say is I'm trying to 11 correlate the call to Duncan after the Computer Weekly 12 piece and the time frame here. They may very well be in 13 the same time frame. But I, you know, I'm copied in 14 and, undoubtedly, I would have read it. 15 Q. Indeed. 16 A. But I'm -- and the reason why it is worth making the 17 point, the reason why Lesley has come to the fore to do 18 this, my suspicion, she will have to speak for 19 herself -- was that I'm out finalising the MDA on 20 separation and, therefore, she's now taking the lead 21 with Fujitsu. But your point, yes, it would suggest 22 that. 23 Q. But just looking at what Ms Vennells is saying for 24 a moment. Ms Vennells is writing to Ms Sewell and you 25 and she's expressing her view she wants to know what's 142 1 going on with this Horizon independent assessment, isn't 2 she? You're nodding, Mr Young. You have to say "yes" 3 or "no" for the recording. 4 A. I'm -- can I read it? I'm conscious that we've got 5 a stenographer. So I just -- 6 Q. In that case, just to be absolutely -- not this part, if 7 we can go back to Ms Vennells' original email, that's 8 what I'm talking about. Her original email at the very 9 bottom, which she heads, "Horizon independent 10 assessment", and then she says she wants to know who's 11 doing it, doesn't she, how robust and reliable they 12 are -- 13 A. I can read that, yes. 14 Q. -- and she wants to know what other kind of validation, 15 what they've done, what scale and by whom, doesn't 16 she -- 17 A. Indeed. 18 Q. -- and when can we expect the results, and she says, "We 19 know the BBC is going to have some more coverage". 20 So she wants to know because she knows there's going 21 to be more press coming up, doesn't she, and she wants 22 to know what the lay of the land is? 23 A. It would appear so. I mean, Paula will have to talk to 24 what she meant by the email. But I take your point in 25 the chain -- in the change of -- let's call it 143 1 clarification or subject, she's put it under, later on 2 she puts it understanding legal privilege. I take your 3 point. 4 Q. So if we can scroll up just to the next stage in the 5 conversation, we can see the longer reply at, if we keep 6 going. Thank you. Stop. We can see Ms Vennells' 7 replies to you the next day, Friday, 21 October -- can 8 you see that Mr Young -- 9 A. I can. 10 Q. -- early in the morning. She says: 11 "This is very high profile. We have had lawyers' 12 advice about how mails etc are now handled ... so what 13 is happening here? 14 "Why do Fujitsu think they can change the test 15 company after they have to told us who they are using? 16 Why is there a meeting to discuss scope and timing -- 17 when it was asked for 6 months ago and the scope must 18 have already been agreed when Pen Test were appointed? 19 "And re 'timing in another two months' -- Lesley, 20 the last comms you and I had was that we'd have it in 21 a couple of weeks! 22 "This is unsatisfactory -- it looks as though it is 23 not being taken seriously and [we] don't know where the 24 accountability lies -- in POL or in Fujitsu?" 25 The next part: 144 1 "A Class Action legal case against [Post Office] 2 would be hugely negative reputationally, it could cost 3 us a lot of money and this verification, which 4 presumably could be of enormous help is not even off the 5 blocks? 6 "I don't understand. 7 "How can it be independent if Fujitsu are choosing 8 and swapping suppliers? Is that sustainable evidence in 9 court -- independently verified by a company they 10 choose? KPMG are a good company -- are they qualified 11 to do this? And do they have initiation with Fujitsu? 12 "Finally, I know everyone is working very hard but 13 I'm a bit disappointed that I found out only by asking 14 as a result of potential BBC coverage. 15 "With this going on, I could have easily sent a note 16 in response to a Board query, saying not to worry 17 because there's a verification under way and the results 18 are due any day soon! It doesn't help our IT 19 credibility if I am on the back foot with what's going 20 on." 21 Now, she's sent that to you, Mr Young. It has come 22 from your Managing Director. Can I assume you would 23 have read it? 24 A. I don't recall it but, yes, if it was sent to me I would 25 have read it. 145 1 Q. At this point, she is plainly aware of the possibly 2 devastating impact of litigation challenging the 3 integrity of Horizon, isn't she? 4 A. The email suggests that, yes. 5 Q. She was treating this, her original message about 6 an independent assessment, as significant and, in fact, 7 she says "potentially of enormous help", isn't she? 8 A. Yes, she is. I want to make a point here because I -- 9 SIR WYN WILLIAMS: Well, hang on a minute. This is getting 10 a little too long-winded. What is the endpoint of this 11 line of questioning, Ms Patrick? 12 MS PATRICK: Sir, if I can just ask the next question, it 13 might help. 14 SIR WYN WILLIAMS: Fine. 15 MS PATRICK: We don't see a response. We haven't seen 16 a response from you, Mr Young, but, if we scroll up 17 we'll see a message from Ms Vennells. Again: 18 "Mike, I've realised I sent this to you and it was 19 intended for Lesley. 20 "But actually as her boss, would you mind looking 21 into. (Also, watch the tone", and she speaks about it 22 sounding cross while she's on holiday. 23 Now, we haven't seen a response but, having perhaps 24 in error raised this with you rather than Ms Sewell, did 25 you pick up the phone to Ms Vennells and talk about this 146 1 independent assessment and its relevance to the 2 litigation? 3 A. Right, first of all, it was where I was going to go. 4 I'm in a blind spot here. So I have no idea what 5 this -- I can see what it's about but I have no idea 6 about what the content has been between Fujitsu and Post 7 Office, what Lesley may have had by way of dialogue with 8 Paula and then what Lesley may have had with dialogue 9 with Fujitsu and vice versa. So I'm -- it was sent to 10 me in error, I saw it in the disclosure process, okay, 11 and I still don't know what it's about. 12 At the point I respond to Duncan and Paula after 13 that Computer Weekly meeting, I'm straight back into 14 finishing off the MDA on separation, which is why 15 I suspect -- I can't confirm but it's why I suspect 16 Paula was using Lesley to talk to Fujitsu and air out 17 the possibility of a full review of the system. 18 I had done a telephone introduction of sorts, 19 certainly spoken to Paula and Duncan and said, "You two 20 guys need to meet", and Paula had as much opportunity as 21 Lesley to reach for the phone and speak to Duncan or the 22 management team in Fujitsu to seek the clarity. So I'm 23 a bit bemused that I'm being asked about something I've 24 not really been involved in before that, up until that 25 initial call to Computer Weekly, and I don't have the 147 1 answers for you. 2 Q. You don't have the answers. I'm asking you if you did. 3 A. No. 4 Q. Now, what we know is that you were pushing for 5 an independent review the year before. We know that 6 this ended up in your inbox, and it's your evidence 7 that, between this point in October 2011 and in March 8 2012, by the time you leave, there's been no progress. 9 Nothing done to push forward this independent code level 10 review that you thought might be needed and that might 11 have been covered in your conversation with Duncan Tait, 12 and which ought to have been paid for by Fujitsu. 13 Nothing had happened, had it? 14 A. By the looks of it, no. 15 MS PATRICK: Okay. Thank you very much. We don't have any 16 other questions, Mr Young. 17 SIR WYN WILLIAMS: Is that it, Ms Hodge? 18 MS HODGE: Yes, sir. That concludes the questioning of 19 Mr Young. 20 SIR WYN WILLIAMS: Right. Well, Mr Young, first of all, 21 I owe you an apology for saying publicly that the 22 Inquiry could not trace you when that was palpably wrong 23 because they had traced you and you'd been in 24 communication with them. But I appreciate that that may 25 have caused you unnecessary distress, so I apologise for 148 1 that. 2 Secondly, thank you for your witness statement and 3 giving evidence today. 4 THE WITNESS: Thank you. 5 SIR WYN WILLIAMS: Right. What next, Ms Hodge? 6 MS HODGE: Sir, I propose a short ten-minute break -- 7 SIR WYN WILLIAMS: Yes. 8 MS HODGE: -- and then we can resume with Mr Oldnall and do 9 our very best to complete his evidence today. 10 SIR WYN WILLIAMS: All right. Jolly good. Thank you. 11 MS HODGE: Thank you. 12 (3.01 pm) 13 (A short break) 14 (3.14 pm) 15 MS HODGE: Hello again, sir. Can you see and hear us? 16 SIR WYN WILLIAMS: Yes, I can and I'm sorry if I kept you 17 waiting a few minutes. 18 MS HODGE: No, thank you, sir. 19 Our next witness is Simon Oldnall. 20 SIR WYN WILLIAMS: I'll just go out of view for a moment or 21 two while I locate my hard copy of his statement. I'll 22 be with you in a second. (Pause) 23 MS HODGE: Thank you. Please can the witness be sworn. 24 SIMON GEOFFREY OLDNALL (sworn) 25 Questioned by MS HODGE 149 1 MS HODGE: Please give your full name. 2 A. Simon Geoffrey Oldnall. 3 Q. Mr Oldnall, you've provided four statements to the 4 Inquiry, the first of which was a corporate statement, 5 which addressed a Teach-In session provided to the 6 Inquiry when it was constituted in non-statutory form; 7 is that correct? 8 A. That's correct. 9 Q. Your second, third and fourth statements you've given in 10 response to questions directed to Post Office Limited; 11 is that right? 12 A. That's correct. 13 Q. My questions to you today will be focused mostly on 14 actions and events which have occurred since you joined 15 the Post Office in December 2020 but before we turn to 16 that, please, I'd just briefly like to go through the 17 formality of confirming each of your statements. Do you 18 have a copy of the statements in front of you? 19 A. I do. 20 Q. Thank you. If we deal with them in date order, can we 21 begin with your first statement to the Inquiry dated 22 20 July 2022, which bears the reference WITN03680100. 23 Do you have a copy of that in front of you? 24 A. I do. 25 Q. That statement, I believe, runs to 20 pages, including 150 1 its exhibits. Could you turn to page 15, please. 2 A. Yes. 3 Q. Do you see your signature there? 4 A. I do, yes. 5 Q. Is the content of that statement true to the best of 6 your knowledge and belief? 7 A. It is, yes. 8 Q. Your second statement, please, dated 30 April 2024. 9 That bears the reference WITN03680200. 10 A. Yes, that's correct. 11 Q. You have that before you, thank you. That's a long 12 statement running to 276 pages. Could I ask you, 13 please, to turn to page 255. 14 A. Yes. 15 Q. Do you see your signature there? 16 A. I do, yes. 17 Q. Is the content of that statement true to the best of 18 your knowledge and belief? 19 A. It is, yes. 20 Q. Thank you. The third statement, Mr Oldnall, bears the 21 reference WITN03680300. That's dated 2 September 2024; 22 do you have that in front of you? 23 A. I do, yes. 24 Q. That's 46 pages in length. At page 41, do you see your 25 signature? 151 1 A. Yes, I do. 2 Q. Thank you. Is the content of that statement true to the 3 best of your knowledge and belief? 4 A. It is, yes. 5 Q. Thank you. Your fourth statement, which you gave 6 recently on 9 October 2024, it bears the reference 7 WITN03680400. It's seven pages long, your signature at 8 page 6, please. 9 A. Yes. 10 Q. Is the content of that statement true to the best of 11 your knowledge and belief? 12 A. Yes, it is. 13 Q. Thank you. You are currently employed as the branch 14 Technology Director at Post Office Limited; is that 15 right? 16 A. That's correct, yes. 17 Q. Before joining the Post Office, you worked, you say, for 18 20 years in the private sector for consultancy and 19 technology companies in the delivery of technology 20 change programmes? 21 A. Yes, that's correct. 22 Q. Prior to that, you were employed as a civil servant for 23 10 years in the Department for Work and Pensions, 24 including its predecessors? 25 A. That's correct, yes. 152 1 Q. Thank you. As we've discussed already, you joined the 2 Post Office in September 2022 (sic). Your original 3 title was Horizon IT Director; is that right? 4 A. That's correct, yes. 5 Q. Subsequently changed to Branch Technology Director -- 6 A. In April this year, that's correct. 7 Q. -- in April this year. What was the reason, please, for 8 the change in your title? 9 A. It was a broadening of my scope, it encompassed not only 10 Horizon but also a number of related technology elements 11 within the branch. 12 MS HODGE: Thank you. 13 SIR WYN WILLIAMS: I think you may have said, Ms Hodge, 14 "2022", but was it 2020 or 2022? 15 A. 2020, sir. 16 SIR WYN WILLIAMS: Yes, fine, okay. I may have misheard you 17 but I just wanted to be clear about that, thank you. 18 MS HODGE: One area of your responsibilities is the 19 management of the Post Office Branch Technology Team; is 20 that correct? 21 A. That's correct, yes. 22 Q. Now, you say in your statement the team is comprised of 23 various subteams; is that right? 24 A. That's correct. 25 Q. One of which is named Remediation and Change. 153 1 A. The Remediation Programme was a programme within my team 2 scope, yes. 3 Q. Could you please just briefly describe the role of that 4 team? 5 A. That team was set up in response to driving the 6 remediation activities that would address the findings 7 made in the Horizon Issues Judgment. 8 Q. You also describe in your statement another subteam 9 known as Security Risks and Investigations; is that 10 correct? 11 A. That's correct, yes. 12 Q. What's the role and function of that team? 13 A. That's effectively looking at where we need to support 14 issues with Horizon and making sure that Horizon remains 15 secure and reliable. 16 Q. Can you describe the nature and extent of liaison 17 between your Branch Technology Team and the Network 18 Crime and Risk Support Team. 19 A. We effectively provide data to that team. That's 20 probably about the extent, and that data is normally 21 provisioned through what's called the ARQ process. 22 Q. That's the principal extent of your -- 23 A. That's the principal extent of our interaction, yes. 24 Q. Would it be fair to characterise a key part of your role 25 upon joining the Post Office as to embed and ensure 154 1 changes were made in the aftermath of the Group 2 Litigation? 3 A. Yes, very much so. That was my initial scope. 4 Q. You were appointed approximately ten months after the 5 Horizon Issues Judgment was handed down; is that right? 6 A. That's correct. 7 Q. What impression did you form upon joining the Post 8 Office as to the progress which had been made in 9 responding to the issues raised in that judgment? 10 A. I think my initial impression was that fairly limited 11 progress had been made by that point. I think the CIO 12 at that time had started to put in place the mechanism 13 to address the judgment findings but there had been 14 probably little substantive progress at that stage. 15 Q. What did you understand to be the reasons why limited 16 progress had been made in that 10-month period? 17 A. I don't think those reasons were particularly made clear 18 to me. By the time I joined, we had appointed 19 an independent audit firm that would help us understand 20 where we were currently but that work hadn't really 21 substantially started by that stage. 22 Q. That firm was KPMG; is that correct? 23 A. No, initially the firm was BDO, we later changed that to 24 KPMG. 25 Q. So that change took place during your tenure; is that 155 1 right? 2 A. Very shortly afterwards, yes. 3 Q. You explain in your statement that KPMG produced a draft 4 report in December -- so a couple of months after you 5 joined -- in which they noted that, in particular, no 6 progress had been made in relation to privileged or 7 elevated access controls within the Horizon environment, 8 is that correct -- 9 A. That's correct, yes. 10 Q. -- and that the Post Office used limited controls around 11 remote access. 12 A. (The witness nodded) 13 Q. I think you say you made that one of your key priorities 14 upon -- 15 A. Absolutely yes. 16 Q. -- taking on responsibility for this area. 17 You also say in your statement that, in parallel 18 with that audit work that was ultimately commissioned 19 from KPMG, the Post Office was setting up a Forensic 20 Investigation Team within the IT function -- 21 A. (The witness nodded) 22 Q. -- to support the response to the Common Issues Judgment 23 and the Horizon Issues Judgment. Is that the Security 24 Risk and Investigations Team that you -- 25 A. Yes. 156 1 Q. Is that one and the same? 2 A. That's correct, yes, that's one and the same. 3 Q. I think you say it was recognised in August 2020 that 4 capabilities were quite limited in that respect? 5 A. They were, yes. 6 Q. They've since been scaled up, is that -- 7 A. We have improved that capability, yes. 8 Q. Now, during your tenure as Head of Branch Technology, 9 you have been required to deal not only with historic 10 Horizon issues but also current issues; is that fair? 11 A. That's correct, yes. 12 Q. Do you consider you have sufficient resources to manage 13 both of those workstreams in parallel? 14 A. Yes, we effectively separated looking at historical and 15 remediation activity into a programme, whilst I created 16 a business as usual team to deal with the ongoing and 17 current management of Horizon. 18 Q. So dealing firstly with the remediation aspect, 19 a programme was launched in late 2020; is that right? 20 A. That's correct, yes. 21 Q. That coincided, I think, broadly with the draft findings 22 from KPMG; is that -- 23 A. Yes, it did. 24 Q. -- and built upon those? 25 A. It did. They were the basis for the programme. 157 1 Q. In your statement you say there were, in effect, three 2 principal phases to that Remediation Programme. 3 A. (The witness nodded) 4 Q. Would it be fair to say the first constituted what might 5 be thought often as quick fixes, which could be dealt 6 with fairly swiftly and at limited cost? 7 A. Yes, they were things which we should just get on with 8 and do fairly rapidly and quickly, yes. 9 Q. You say that one of those was a pilot of a new dispute 10 mechanism for subpostmasters to improve the end-to-end 11 investigation processes. Can you describe that please 12 in a little more detail? 13 A. Yes. We effectively looked at the process whereby 14 postmasters could flag concerns to us around 15 discrepancy. This was done in conjunction with changing 16 a button on Horizon to make sure there was some way that 17 postmasters could report those discrepancies to us, that 18 then was backed off to a process, whereby we would look 19 into that discrepancy and work with postmasters to 20 understand what had happened. 21 Q. That's a process that sits outside the trading and 22 balancing -- 23 A. Effectively, yes. 24 Q. -- function. You say that with the support of Fujitsu 25 you resolved 62 historical defects that were present in 158 1 Horizon? 2 A. Yes, we looked at the historical defects that were 3 highlighted in the judgment, and we went through them 4 methodically and checked whether they could be present 5 in the current version of Horizon and we tested and had 6 KPMG verify that testing, to ensure that they were no 7 longer present in the system. 8 Q. I think the third example you explain that the Update 9 Horizon Technology Team -- that was part of your 10 remediation, team, was it -- 11 A. Yes. 12 Q. -- designed a new process for managing current defects 13 in the system; is that correct? 14 A. That is correct, yes. 15 Q. I would just like to ask you briefly about that process, 16 so the processes you have in place for managing current 17 defects. So there are two aspects to this. You've 18 introduced new process and resource for capturing bugs, 19 errors and defects during testing; is that correct? 20 A. That is correct, yes. 21 Q. Where and how is that testing of Horizon performed 22 please? 23 A. So that testing is Post Office led. We have created 24 a Test Team within Post Office. This is led by test 25 professionals and we effectively have created an overall 159 1 testing approach that we don't just accept code and put 2 it into live. We test it, we ensure that we test it 3 against what's called a regression pack, and we give 4 a level of assurance that, actually, when we make 5 a change to Horizon, we don't introduce new bugs, errors 6 or defects. 7 Q. So that code is provided to you by Fujitsu -- 8 A. It is, yes. 9 Q. -- is that correct? You're performing testing, 10 including regression testing, on the code -- 11 A. (The witness nodded) 12 Q. -- before it's released into the live environment? 13 A. That's correct, yes. 14 Q. Can you please explain what systems do you now have in 15 place to monitor and detect defects in the live running 16 of the Horizon system? 17 A. There are number of steps we take. Obviously, if issues 18 are reported to us, we investigate and investigate 19 whether that is as a result of a defect. We have 20 a process whereby when a defect is reported to us, we 21 very rapidly convene a process around that defect and 22 determine what the impact might be, whether it is what 23 we describe as poor user experience or whether in fact 24 it's something that might impact the branch. If it's -- 25 all those defects are then reported out. Normally 160 1 within 48 hours to the branch, we would publish the list 2 of those defects and we engage with a broad range of 3 stakeholders to ensure that that impact is understood 4 and then prioritised for fixing. 5 Q. In your statement, you say this about the reporting of 6 defects: 7 "Where a direct is detected in the live system it 8 will be reported to the IT Service Desk." 9 That assumption being by a postmaster, is that -- 10 A. It can be by a postmaster or it can be by anybody who 11 determines there's a defect, yes. But, normally, we'd 12 expect the end user potentially to find that defect but 13 other ways do exist. 14 Q. You say that analysts in the IT Service Desk are 15 provided with knowledge-based articles about the 16 identified defect. Who produces those, please? 17 A. They're produced by my team. 18 Q. They can refer to those when they are dealing with 19 issues raised with them that might relate to the bug. 20 Do you have any systems in place to monitor the calls to 21 the Service Desk to ensure quality assurance in relation 22 to the application of those knowledge-based articles? 23 A. There are number of measures around the IT Service Desk 24 and its performance that's reporting out. It's 25 a separate part of the technology team, it's not 161 1 directly part of my team, but there are number of 2 systems in place to monitor the IT Service Desk and the 3 performance of the IT Service Desk, yes. 4 Q. I think, essentially, what you say in your statement is 5 this is now a process which is led and owned by the Post 6 Office, rather than by Fujitsu as it was -- 7 A. That's correct, yes. 8 Q. You've said that the new testing processes identify 9 approximately four new defects every month? 10 A. I think four might be the current number of defects we 11 have, yes, so it is a very small number of defects 12 currently. 13 Q. In the live environment? 14 A. Correct. 15 Q. You have systems in place to notify postmasters of 16 those? 17 A. We too. We utilise number of communication channels, 18 including Branch Hub and bulletins out to postmasters, 19 yes. 20 Q. Now, you discuss in some detail the third phase of the 21 Remediation Programme, which you explain was launched in 22 mid-2022; is that correct? 23 A. That's correct, yes. 24 Q. This addressed some of the more tricky issues that 25 required both greater funding on the one hand but also 162 1 cooperation from third parties? 2 A. That's correct, yes. 3 Q. You say that one key aspect of this phase related to 4 making improvements in the provision of transaction and 5 branch accounting data to subpostmasters -- 6 A. That's correct. 7 Q. -- addressing a problem identified in the Horizon Issues 8 Judgment concerning their access to branch accounting 9 data on their own system? 10 A. The direct access to branch accounting data by 11 postmasters, yes. 12 Q. You say that there was a significant initiative planned 13 to remedy that problem but that the Post Office hasn't 14 been able to deliver that change into Horizon; is that 15 correct? 16 A. That's correct, yes. 17 Q. Why is that? 18 A. Ultimately, that solution was dependent on another 19 technology programme, which was our migration away from 20 our physical data centres in Belfast. So the technology 21 that would have enabled us to get that data much more 22 readily available to postmasters was dependent on that 23 other programme, which was ultimately cancelled. 24 Q. Now, I think you make quite clear in your statement 25 that, firstly, it was regrettable that that couldn't be 163 1 taken forward, particularly because the purposes of the 2 initiative was to give postmasters greater transparency 3 over their own accounting data. 4 What I'd like to ask you now relates to the approach 5 that is taken or has been taken in the course of the 6 last year in relation to the recovery of Horizon 7 shortfalls. Can you assist us, what is the Post 8 Office's current position in relation to the recovery of 9 shortfalls shown by Horizon? 10 A. I believe the current position is that we do not recover 11 shortfall unless the postmaster agrees with the reason 12 for that shortfall. 13 Q. I wonder if we could take a look, please, at 14 POL00448362. Is this a document with which you're 15 familiar? 16 A. Not immediately, sorry. 17 Q. If we scroll down, please, to page 3, so it's called 18 "Loss Recovery Update". The document itself doesn't 19 have a date but the metadata suggests its date is 20 2 August 2024. 21 A. Okay. 22 Q. It provides this by way of background, it says point 1: 23 "Following the recommendations made in the Group 24 Litigation Order and Common Issues Judgment, in 2018/19 25 [Post Office Limited] ceased action to recover 164 1 Established Losses from [postmasters]. This activity 2 has been on hold since this time, except where 3 a postmaster both agrees to pay the established loss and 4 proceeds to repay." 5 So that's consistent with your understanding as to 6 the current position. However, it goes on to say: 7 "To support implementation of associated [Common 8 Issue Judgment] recommendations, a new team (Network 9 Monitoring and Support) and target operating model was 10 set up in April 2021, its purpose being to support 11 [postmasters] to review and resolve discrepancies mainly 12 found during their trading period balancing process." 13 It goes on at point 3: 14 "The process to review a discrepancy and identify 15 the cause is formally documented and regularly assured 16 by the Assurance and Complex [transaction] Team." 17 What is your understanding as to the role and 18 purpose of that team and your liaison, if any, with it? 19 A. So that is the team, I believe, that's led by John 20 Bartlett. That team, as the title suggests, would 21 provide assurance over a number of investigation-type 22 activities. So, in this context, I would suggest they 23 are probably looking at the way that the discrepancy has 24 been looked at by the Network Support Team, as opposed 25 to anything else. 165 1 Q. Now, you said earlier -- it may be a question of 2 terminology -- but the extent of your cooperation with 3 what we discussed earlier as the network crime -- let me 4 get my reference correct. 5 Yes, the Network Crime and Risk Support Team, that 6 you provide ARQ data to that team following a request to 7 Fujitsu Services. 8 A. (Unclear) -- the ARQ process. 9 Q. Do you provide any support to the Assurance and Complex 10 Investigations Team in analysing that data to explain 11 what the underlying cause of a discrepancy might be? 12 A. I don't recall that we provide particularly regular 13 support. We would probably, on request, if asked about 14 a particular defect or a particular issue with the 15 system, we would provide that support. 16 Q. Do you think that the analysis of, for example, ARQ 17 audit data is something which would probably fall within 18 the ambit of your team, bearing in mind their expertise 19 and their technical knowledge? 20 A. We can certainly support that analysis. We don't 21 habitually carry out that analysis though. 22 Q. Do you think you should? 23 A. We could. 24 Q. So we paused there to say that the process of reviewing 25 the discrepancy and identifying the root cause rests 166 1 with John Bartlett's team, the Assurance & Complex 2 Investigation Team, as they're known: 3 "This includes looking at Horizon transaction data 4 to ensure Horizon acted as expected and is therefore 5 unlikely to be the cause of the discrepancy." 6 It goes on to say there are a number of possible 7 outcomes: writing off a balance of below minimum value; 8 writing off the cause as not being established; 9 correcting with a transaction correction if the cause is 10 due to a processing error; or establish that the loss 11 has arisen, on the balance of probabilities, due to 12 negligence, carelessness or error. 13 What points 5 and 6 make clear is that, as indicated 14 above, if the postmaster, in a sense, disagrees with the 15 analysis as the underlying root cause, then the Post 16 Office essentially would leave the matter there. 17 A. Correct, yes. 18 Q. But it goes on to make a series of recommendations. 19 I just want to establish with you your knowledge in 20 relation to those, and what enquiries were made of you. 21 If we could please scroll down to page 4. Thank you. 22 So it lists number of options and recommendations, 23 identifies there are risks associated with each one. So 24 the second point: 25 "Each of these options give rise to risk(s) below 167 1 ..." 2 The first being that the Post Office is not adopting 3 a consistent process for postmasters, presumably 4 because, if someone agrees, they pay up but, if they 5 don't, they do -- 6 A. That's correct, yes. 7 Q. -- and, therefore, you've got a difference in treatment, 8 which isn't based on the Post Office's own analysis as 9 to the underlying cause of the discrepancy? 10 A. Correct. 11 Q. Secondly, that the policy position is unclear; thirdly, 12 that there's significant reputational risk for the Post 13 Office; fourthly financial risk; fifthly that there's 14 a risk to the relationship with the Post Office's 15 shareholders, as the approach may be non-compliant with 16 the guidance around managing public money. What would 17 you understand the concern there to be? 18 A. I would be speculating but I would imagine, given the 19 guidance around the spending of public money, given that 20 Post Office already received a subsidy from Government 21 and that funds a number of activities, I would imagine 22 that that risk is being called out as potentially 23 non-compliant but I'd be speculating. 24 Q. 6, a concern that some of the options might be likely to 25 embed improper financial behaviours and practices in the 168 1 network of postmasters, if there are no sanctions or 2 proper consequences for failing to follow the proper 3 policies and procedures? 4 Finally, the Post Office might be failing in its 5 duty of care to postmasters? 6 So those various risks, some to Post Office and some 7 to postmasters. Then, please at page 5, please. Thank 8 you. So here, under "Actions", we see the 9 recommendation that: 10 "... the Post Office begins to recover losses 11 through civil action or deduction from remuneration 12 (where necessary), following an agreed process and the 13 approval of an external, independent board. All other 14 options give rise to significant [postmaster] and [Post 15 Office] risks across a range of factors." 16 Were you aware of that recommendation? 17 A. I believe I'm aware of some of this activity, yes. 18 Q. If we scroll down to the bottom of page 6, please. So 19 these are under the heading "Actions", listed against 20 various stakeholders in the business, and we see against 21 "Technology" you are named, and the action is to: 22 "Confirm that as of today the data can be relied 23 upon to commence the loss recovery process (noting that 24 part of the process is to check Horizon)." 25 Do you recall being asked to confirm that -- 169 1 A. Yes -- 2 Q. -- that Horizon data can be relied upon to support the 3 loss recovery process? 4 A. Yes, I do recall that, yes. This is part of a working 5 group and from memory, now, this paper was sent to me 6 I think probably around the time I was on annual leave 7 but yes, I do recall. 8 Q. Can you assist as to when that was in terms of 9 timescale? 10 A. It would have been somewhere around the summertime, 11 so -- 12 Q. Over the course of the summer? 13 A. (The witness nodded) 14 Q. Do you recall what you said when you were asked? 15 A. I don't believe I actually have actioned this as yet, 16 but what I will probably have to do is commission 17 a piece of work to effectively meet that action. 18 Q. So that one, so far as you're concerned that's an action 19 that's pending? 20 A. Correct, yes. 21 Q. I wonder if we can go on to look at an email chain 22 concerning the support that might be provided by the 23 Post Office and Fujitsu to a police force investigating 24 suspected criminal conduct. That chain dates from April 25 of this year, and it bears the reference FUJ00243203? 170 1 If we scroll down to the bottom of page 4, please. 2 Apologies, if we go up, thank you. We see this is 3 an email from you, if we scroll up a little further, 4 please. We see it is addressed Daniel Walton. Can you 5 confirm his role and your liaison with him? 6 A. Yes, so Dan Walton is the Fujitsu lead for the Post 7 Office Account. 8 Q. It's copied to John Bartlett? 9 A. (The witness nodded) 10 Q. So the title "Support to City of London Police 11 Investigation". It reads: 12 "Dan 13 "I understand from John that there have been some 14 challenges with supporting an ongoing police 15 investigation that involves a large sum of money. 16 "I obviously understand broader context, but wanted 17 reassure that [Post Office Limited] is supporting the 18 police investigation and offering any and all assistance 19 we can. Can I ask that you help with any conversations 20 that City of London Police need to have with Fujitsu 21 Services Limited." 22 Now, what is the nature of your involvement, if any, 23 with investigations carried out by Post Office Limited 24 Investigation Team, and any subsequent referral to the 25 police? 171 1 A. Yes. My role in this email chain was effectively 2 Mr Bartlett reached out to me, as I manage the Fujitsu 3 relationship on a day-to-day basis, and he asked me to 4 impress onto Fujitsu the need to cooperate with City of 5 London Police, and that was the extent of my engagement 6 in this conversation. 7 Q. Now, bearing in mind that the Post Office hasn't, for 8 some time, sought to recover losses from postmasters 9 unless they agreed to repay them, did it strike you as 10 odd; were you at all concerned to be asked to lend your 11 support to this particular process? 12 A. Not particularly, no. My understanding from Mr Bartlett 13 was that this was -- this wasn't a simple case of 14 a postmaster that we were, in some way, pursuing over 15 a loss; that this was a much larger and very much 16 a police matter. 17 Q. So the crucial difference here being, so far as you are 18 concerned, this is an investigation which has been 19 managed independently by the police? 20 A. That's correct, yes. 21 Q. Now if we could just scroll up, please, thank you. 22 Mr Walton responds to your email? 23 A. (The witness nodded) 24 Q. Saying this: 25 "Hi Simon 172 1 "Thank you for your message below. 2 "As this is a legal matter, [Fujitsu] Legal are 3 communicating with the City of London Police. 4 "I am not involved in those communications, and in 5 any event, [Fujitsu] considers it to be inappropriate 6 for Post Office and [Fujitsu] to be discussing a police 7 investigation." 8 What did you make of that suggestion that it was 9 somehow inappropriate for there to be any discussions 10 between the Post Office and Fujitsu concerning 11 an ongoing police investigation? 12 A. I think my immediate reaction was probably something of 13 confusion, given that my request was simply to my 14 counterpart in Fujitsu to ensure that Fujitsu cooperate 15 with police. So probably slightly confused by the 16 response but, nonetheless, that was Fujitsu's response. 17 Q. If we scroll up, please, we can see Mr Bartlett responds 18 to Mr Walton, and copies you in. We'll come to the 19 point shortly but, essentially, he says to Mr Walton 20 that one of his team has gone back to the City of London 21 Police to see how the contact you reference below was 22 progressing and have an open and objective engagement on 23 this matter: 24 "[City of London] has informed [the Post Office] 25 that they have not had any additional information nor 173 1 contact with Fujitsu after the single, exploratory and 2 inconclusive conversation." 3 He said: 4 "They left that conversation with the feeling that 5 they were indirectly being told that the Horizon system 6 was unreliable and so the case could not progress. We 7 really need to explore this as this is not the nuanced 8 impression Simon Oldnall has given me." 9 Now, you obviously were copied into that email. 10 What did you understand Mr Bartlett to be saying there 11 and what is this nuanced impression that you had as to 12 Horizon's reliability? 13 A. From memory, the conversation with Mr Bartlett was very 14 much around the fact that we obviously used Horizon data 15 in a number of contexts, both through the ARQ process 16 where we retrieve that data, and so I think I was again 17 confused by Fujitsu's position that the system was 18 unreliable, given that, obviously, they provide that 19 system to Post Office, it's our core trading platform, 20 and we rely on the data within that platform for 21 a number of purposes. 22 Q. Do you have any sense as to why Fujitsu are taking that 23 position in this correspondence? 24 A. I don't have an immediate view on why they've taken that 25 position. I can only speculate that it was probably 174 1 the -- an unwillingness to be involved in any kind of 2 prosecution of postmasters, which I can understand. 3 Q. So moving on briefly, you discussed the ongoing 4 relationship between Fujitsu Services and Post Office in 5 your statement and you comment that one of the concerns 6 raised in the Horizon Issues Judgment was the extent of 7 the Post Office's reliance upon Fujitsu, and I think 8 you've described -- forgive me, you're nodding, and I'm 9 conscious that -- 10 A. Apologies, yes. I'll say, yes, when -- 11 Q. But I didn't ask you a question, in fairness: is that 12 correct? 13 A. That is correct, yes. 14 Q. Thank you. You describe number of steps which the Post 15 Office has taken to improve its oversight of Fujitsu. 16 We've discussed some of those already: regression 17 testing, for example, to check the quality of code; and 18 then also the developing your own capability for 19 monitoring and alerting capacity issues in relation to 20 performance of the system; and network statistics, 21 transaction processing, through what's called 22 an AppDynamics tool? 23 A. AppDynamics, yes, that's correct. 24 Q. I think one of the areas you've sought to address in 25 particular, because you've made it a priority, is 175 1 privileged access. But you state there have been some 2 issues in relation to that -- 3 A. (The witness nodded) 4 Q. -- and the extent of cooperation you've received. Can 5 you explain those, please? 6 A. Yeah, we have made significant improvements around the 7 privileged and remote access process and I think it's 8 important to differentiate between privileged and remote 9 access. So we have tightened up particularly the 10 process whereby there's a role that I believe was 11 referenced in the Horizon Issues Judgment called APPSUP, 12 where specifically that process now has very tight 13 controls around it where it requires input by three Post 14 Office employees, and the knowledge and consent of 15 a postmaster before we use that role. 16 We've also improved our reporting around privileged 17 access, so elevated or privileged access and the use of 18 that, and that is now reported and scrutinised monthly 19 through what's called the Information Security 20 Management Forum. 21 We have identified there's still additional 22 improvements we'd like to make to that reporting but it 23 is a significantly improved position to that which KPMG 24 found when they looked at this in 2020. 25 Q. I think you sought to review Fujitsu's management of 176 1 privileged access and, indeed, to ensure there's 2 an ongoing audit of that? 3 A. (The witness nodded) 4 Q. Have you found that Fujitsu have been cooperative in 5 that process? 6 A. So in terms of -- there has been number of audits we've 7 carried out, a number of audit activities. We did 8 commission an independent piece of work via Deloitte. 9 It was commissioned thorough our internal audit process 10 but, effectively, we had an external provider and 11 Fujitsu's cooperation with that particular audit didn't 12 go to the extent we would have liked. However, there is 13 an annual independent audit, particularly around the 14 controls around the Horizon system that's carried out by 15 Ernst & Young, EY, and Fujitsu fully cooperated with 16 that particular audit and we are currently reviewing 17 this year's output from that audit. 18 Q. Forgive me, when was that audit concluded? 19 A. It was actually completed slightly late this year in 20 September this year. 21 Q. In September but you found that cooperation in that 22 was -- 23 A. Yes, there was full cooperation with that. 24 Q. I'd like to move on, please, to another topic, which 25 you've mentioned already. This is ARQ or audit data in 177 1 Horizon. You explain in your statement you're not 2 involved in the day-to-day practicalities, that is to 3 say the raising of requests and the processing of those 4 requests; is that right? 5 A. That's correct, yes. 6 Q. You say that process is managed by the Network Crime and 7 Risk Support Team? 8 A. That is correct, yes. 9 Q. Why does the responsibility for that process sit within 10 that team? 11 A. I think it's an historic thing, effectively. They've 12 been the conduit to access that process. That will 13 change over time but I think it's probably just 14 an historical piece at this stage. 15 Q. Where do you think that process ought to sit -- you say 16 it's likely to change. Do you think it will better sit 17 elsewhere in the -- 18 A. The process will change as we move away from the current 19 Horizon audit solution, to the inhouse Post Office 20 solution that we're building currently, where, actually, 21 the process will become much more self-service. So at 22 the moment it's very, very manual, you fill in a form, 23 it's transmitted, you get the data back. We're 24 currently building a solution whereby people who require 25 that audit data will be able to access it much more 178 1 directly. 2 Q. Although you're not involved in the day-to-day 3 practicalities you have explained that, because you're 4 responsible for managing Post Office's contractual 5 relationship with Fujitsu, you have, on occasion, been 6 brought in to deal with these issues relating to ARQ 7 data; is that right? 8 A. That's correct, yes. 9 Q. You explain that when a request is raised of Fujitsu, 10 Post Office is, in effect, exercising a contractual 11 right over which you have oversight, and that you've 12 been involved in managing discussions with Fujitsu, for 13 example, in relation to the reimbursement of the costs 14 associated with remediation requests; is that -- 15 A. That's correct, yes. 16 Q. So under the current processes, I think a great many 17 requests were made by the Remediation Unit; is that 18 right? 19 A. That's correct, yes. 20 Q. In order to investigate historic shortfalls? 21 A. That's correct. 22 Q. Do you know which other parts of the business are 23 currently involved in making requests for audit ARQ 24 data, Fujitsu and for what purpose? 25 A. I think the next sort of second biggest user is probably 179 1 the Branch Support Team who investigate discrepancies in 2 branch, and they probably consume the vast majority of 3 other requests. Some requests come directly from my 4 team, where we want to look at audit data as well but it 5 is largely Remediation Unit, and the Branch Support 6 Team. 7 Q. Why would your own team be seeking audit data for 8 an investigation? 9 A. If a postmaster has flagged a problem with us, we will 10 look at all sources of data, and so we will look at 11 audit transaction data, we will look at data we've 12 extracted from a particular Horizon counter. We look at 13 number of sources to make sure there isn't a problem 14 with Horizon. 15 Q. That would be, would it, to investigate a reported bug, 16 error or defect? 17 A. A bug, error or defect, effectively, yes. 18 Q. When that data is extracted, whether by -- presumably if 19 it's extracted by your team, you would analyse that 20 data? 21 A. We would look at that data, yes. 22 Q. If it's extracted by the Branch Support Team, they would 23 be responsible for analysing it? 24 A. That is correct, yes. 25 Q. I'd like to ask you some very brief questions about 180 1 changes which Fujitsu Services proposed to the ARQ 2 request form; do you recall that? 3 A. Yes, I do, yes. 4 Q. So I think it was in mid-to-late May this year -- 5 A. (The witness nodded) 6 Q. -- that Fujitsu submitted -- well, I think they 7 instructed that ARQ requests should henceforth be made 8 on a form which contained two new mandatory questions; 9 is that correct? 10 A. That is correct, yes. 11 Q. Can we just bring a copy of that up, please. It's 12 FUJ00243223. 13 Thank you. So at the top, we see under the heading 14 "Mandatory", firstly the first question: 15 "Is this request related to either (i) the 16 investigation of or (ii) action being taken or intended 17 to be taken by the Post Office against a postmaster or 18 Post Office worker in connection with a potential fraud, 19 theft, breach of contract or any other potential 20 impropriety which is suspected to have occurred at 21 relevant Post Office branches?" 22 So seeking an answer yes or no to that. 23 Secondly: 24 "Will this information be used to support either 25 a postmaster or a Post Office worker to achieve 181 1 financial redress, including under the combination 2 schemes such as the Horizon Shortfall Scheme established 3 or administered by either the UK Government or the Post 4 Office, for action ... taken against them by the Post 5 Office?" 6 Again, a yes or no answer. 7 Now, this came to you to deal with; is that right? 8 A. It was escalated to me to have a discussion with 9 Fujitsu, yes, as you say, Fujitsu effectively 10 unilaterally imposed these questions upon Post Office. 11 Q. Why was there objection on the part of Post Office to 12 answering what, on the face of it, appeared some quite 13 straightforward questions as to the purpose to which the 14 information would be put? 15 A. I think we felt particularly the first question was 16 very, very broad; the second question, Fujitsu were well 17 aware of why we were requesting lots and lots of data 18 around redress. So, overall, we didn't feel the 19 mandatory changes were necessary. 20 Q. In relation to the first question, you say that you were 21 concerned it was unduly broad. On the face of it, it 22 seems to be quite narrowly focused to investigations or 23 actions to be taken in relation to specific -- suspected 24 criminal activity. Would it -- why would it be 25 difficult for Post Office to confirm whether the request 182 1 had been raised for that reason? 2 A. Well, I think the second leg of the question actually 3 talks about action being taken or intended to be taken 4 by the Post Office against a postmaster: Post Office 5 doesn't take action against postmasters. So it doesn't 6 really stand even as a question and then it goes on to 7 talk about any other Post Office worker with a potential 8 fraud, breach of contract. It felt very broadly worded, 9 and not actually relevant to the way Post Office 10 operates today. 11 Q. As you've said a short time ago, the Post Office is 12 designing its own audit store for Horizon, enabling 13 storage of audit data for all branch transactions within 14 the Post Office, is that correct -- 15 A. That is correct, yes. 16 Q. -- and that the process of retrieving data from that 17 would henceforth be carried out by the Post Office. 18 That's the intention, is it? 19 A. That's the intention, yes. 20 Q. Presumably Post Office will continue to use ARQ data 21 once it's brought inhouse for investigations into the 22 cause of discrepancies, is that -- 23 A. Absolutely, yes. ARQ, effectively, is the process to 24 retrieve audit data. So, yes, we will continue to use 25 audit data in support of a number of activities. 183 1 Q. What steps do you intent to take to ensure the accuracy 2 of that data is maintained for its use in investigations 3 and for related prosecutions, if that be the case? 4 A. So the solution with designing it, it's designed with 5 a similar level of rigour around an audit solution for 6 similar systems to Horizon. So, although it uses more 7 modern technology to the current, very physical storage, 8 it will maintain the same levels of integrity, 9 effectively, in the ability to audit how that data was 10 retrieved and found. 11 Q. Thank you. Sorry, that can be brought down, thank you 12 very much. 13 There's one final topic I'd like to raise with you, 14 Mr Oldnall, relating to the New Branch IT programme. 15 Now, that's not a programme over which you have direct 16 management responsibility; is that right? 17 A. That's true. Yes, that's correct. 18 Q. But is it right that it's one of the programmes you 19 sponsor under your -- you said that you have 20 responsibility for sponsoring number of change 21 programmes. 22 A. I have number of change programmes. New Branch IT 23 specifically refers to the replacement of the Horizon 24 counter software. Within my remit, I have things like 25 the new portable counter device and the new self-service 184 1 device but not the replacement of the Horizon counter 2 device -- of the Horizon counter software, as such. 3 Q. That's not to say that you don't have any awareness or 4 understanding of the issues that have been encountered 5 by the programme; is that right? 6 A. That's true. Yes, that's correct. 7 Q. So you say in your statement that it was initially 8 proposed that the New Branch IT programme would be 9 deployed in a manner that would enable Post Office to 10 exit its contract with Fujitsu by March 2025. 11 A. That's correct. 12 Q. Is that correct? But due to delays in the development 13 and rollout of the system, the deployment is now not due 14 to start until June 2026. Firstly, is it your 15 understanding that the system is currently still on 16 track to be deployed in June 2026? 17 A. I believe we're currently at a stage where we're 18 reviewing the current plan for the replacement of 19 Horizon and I think as others' evidence have given that 20 that review is live right now, to work out what that 21 plan might look like. 22 Q. What do you understand to have been the reasons for the 23 delay, the historic delays, in the programme, which 24 caused the original timetable to be relapsed? 25 A. So I've obviously seen a number of documents that have 185 1 been shared with me. I think there's been number of 2 issues around probably technical complexity, wanting to 3 ensure that the product itself is fit for purpose, and 4 so going through quite extended levels of testing and, 5 ultimately, I think building up an understanding of 6 a system that is quite diverse in its product nature, 7 has taken much longer than potentially Post Office 8 originally anticipated. 9 Q. To your knowledge, has the provision of sufficient 10 funding been an issue in achieving a design and 11 a solution that is fit for purpose? 12 A. I'm aware of some of the funding discussions and have 13 been involved in some of the funding discussions. 14 I think, as others have talked about, the iterative 15 nature of funding a programme of that scale probably 16 hasn't been particularly helpful but I also am aware 17 that the initial estimates for how much it would cost 18 replace Horizon have greatly increased, yes. 19 Q. Now, we know from other witnesses that concerns have 20 been raised internally within the Post Office and 21 particularly through the Post Office's internal Speak-Up 22 process. 23 A. (The witness nodded) 24 Q. Are you aware of the nature of those concerns that have 25 been raised? 186 1 A. From the documentation, I think, that's been shared with 2 me, I've seen some of those, yes. 3 Q. Sorry, when you say that's been shared with you, do you 4 mean by the Inquiry? 5 A. By the Inquiry, yes, sorry. 6 Q. But, absent that, it wasn't something of which you were 7 aware in your role as -- 8 A. I was broadly aware of some concerns that had been 9 raised, particularly around the level of defect in the 10 new system, but not very specifically. 11 Q. What can you tell us about -- 12 A. I was broadly aware that there were concerns around the 13 volume and the levels of defects that were present in 14 the system and particularly the -- I'm going to 15 characterise it as the enthusiasm to get the new system 16 out there, potentially. Some of those defects were not 17 being controlled and managed in the way that I would 18 particularly have liked. 19 Q. Did that cause a personal concern to you, to learn that 20 there was pressure to roll out a system with outstanding 21 bugs and defects? 22 A. At a personal level, yes. We've spent quite a large 23 amount of time over the last four years trying to build 24 confidence and making sure that Horizon doesn't have 25 a volume of defects in it. So yes, rolling out a system 187 1 that has a higher level of defects, it would definitely 2 cause me concern, yes. 3 Q. Now, obviously, that was a concern reported to you. Did 4 you have any knowledge as to whether there was any merit 5 or that there was any substance to that complaint? 6 A. Not directly, no. 7 Q. From where in the organisation did you understand the 8 pressure to be coming to get the system rolled out, even 9 if it had outstanding defects? 10 A. I couldn't specifically say from where in the 11 organisation. I know, obviously, there's -- as you've 12 highlighted, the ambition was to have this rolled out by 13 initially 2024 and then 2025. 14 Q. Are you personally concerned that the Post Office might 15 be repeating the mistakes of the past in its handling of 16 this particular programme? 17 A. At a personal level, yes, I would be concerned if we 18 didn't face into those defects. I think the opportunity 19 that is being taken now is to take a step back and 20 ensure that the NBIT programme does deliver to the kind 21 of standard that our postmasters expect. 22 MS HODGE: Thank you very much, Mr Oldnall. I have no 23 further questions for you. 24 A. Thank you. 25 Questioned by MR STEIN 188 1 MR STEIN: Mr Oldnall, a couple of questions. There's 2 a document which I'll ask to go on the screen. I just 3 want to ask you when you were first made aware of this 4 document, okay? 5 A. Yes. 6 Q. So that's the question. FUJ00243199. 7 A. Thank you. 8 Q. Sir, this is -- can I call it the "Fujitsu/Patterson 9 letter", 17 May this year. 10 Now, I think, Mr Oldnall, you should have had this 11 within the documents you had from the Inquiry. 12 A. Yes. 13 Q. My question is not about when you got it through the 14 Inquiry: my question is when you got this document, if 15 you did, through your workplace? 16 A. Yes, I did. So Mr Walton alerted me this letter was 17 coming. I think I received a copy around about the 18 weekend it was issued, via Mr Brocklesby. 19 Q. Right. Did this trigger a discussion internally about 20 where this letter should go to? In other words, should 21 it go to Legal, and if so, what their opinion of it was 22 and, in relation to police investigations, whether the 23 police should be kept informed of it and, indeed, other 24 parts of the system? 25 A. The discussion I was aware of internally was certainly 189 1 led by Legal. I think the discussion I was involved in 2 was more around what would be Post Office's response to 3 the content of the letter. 4 Q. Right. Did you have any dealings directly with 5 Mr Patterson or a subordinate of Mr Patterson's about 6 the content of this letter -- 7 A. Not directly -- 8 Q. -- considering your Fujitsu relationship? 9 A. Correct. Not directly, no. 10 Q. Does that mean one of your team did? 11 A. No. So my interaction with this letter sort of started 12 and ended with Mr Walton telling me the letter was 13 coming, and that was it. 14 Q. Okay. The letter itself is from Fujitsu, obviously who 15 runs the system, and it's saying, you know, "Don't rely 16 upon our system". That seems to have quite an effect 17 upon the sorts of projects that you're engaged in? 18 A. It does. I think I've used the word "confusing", 19 a couple of times in my evidence so far today. I found 20 that particular letter quite confusing because, on one 21 hand, you're right, it says "Don't rely on our system", 22 which is an interesting position for a supplier and not 23 one I've experienced in my career; but, equally, says, 24 "Please use our data to sought redress". So it is 25 somewhat confusing. 190 1 Q. Have you got to the bottom of this letter yet? 2 A. Not me personally, no. 3 Q. No. Has anyone? 4 A. I believe and I've seen, obviously, there's been 5 an exchange of letters in this same thread. 6 Q. All right. Next question, slightly different. So can 7 I take the framing of a Post Office branch that's 8 experiencing shortfall, and I'm going to deliberately 9 use the figure of £115. I will come to the reason why 10 I'm using £115 in a moment, all right? 11 So I'm a subpostmaster at a branch and I can see on 12 my Horizon system that there is a shortfall of 115. 13 Okay? 14 A. Mm-hm. 15 Q. All right. Now, we know that the R&D button will 16 trigger certain events within the Post Office system. 17 That there will be, putting it shortly, 18 an investigation, yes? 19 A. Yes. 20 Q. Yes, okay. We also know that, if I'm the subpostmaster 21 and I call up the Helpline and say, "Look, I've got this 22 figure, I don't understand it. What's going on? It's 23 a shortfall, £115", then as well, that should also 24 trigger some type of investigation, yes? 25 A. Yes, correct. 191 1 Q. Right. What if I pay off the shortfall without 2 notifying the Post Office, either via the R&D button or 3 the Helpline? Is there a way that the systems that you 4 are aware of can identify that I in my branch, with that 5 shortfall, have essentially identified the shortfall and 6 then paid it off, without notifying you through the two 7 ways I've just identified? 8 A. So the system would identify -- if this is being done at 9 the trading period -- 10 Q. Yes. 11 A. -- so somebody has settled to cash, effectively, or 12 settled by cheque. 13 Q. Yes, which is why I'm using the figure of 115. You'll 14 probably be able to explain why in a moment. 15 A. I assumed why. Then, yes, we would be able to identify 16 that that settled to cash had happened. What we would 17 not be able to identify is why. So we wouldn't be able 18 to understand that the postmaster went, "Actually, £115, 19 I remember that. I did that wrong", as opposed to "I've 20 no reason why that's happened". 21 So for us to get into the £115, we would need the 22 postmaster to press the R&D button. 23 Q. Right. So the sheer fact that a subpostmaster 24 identifies 115 as being the shortfall and then pays it 25 off using cash, which is the reason for using 115 as my 192 1 example, doesn't, in fact, of itself, trigger a Post 2 Office investigation? 3 A. Not an investigation as such, no. I think you'll 4 probably hear from Melanie Park tomorrow, where they 5 talk about they do look for patterns -- 6 Q. Yes. 7 A. -- and they do look to go, "Okay, that branch is 8 regularly doing that, let's go and talk to them and see 9 whether they need any additional help and support". 10 Q. The reason why I've used the figure 115 is? 11 A. I knew you were going to ask me that, Mr Stein. 12 Apologies, I can't remember. 13 Q. Well, it's because what the system does also is it 14 accounts for cash in terms of the notes that's used. 15 I used 115, so that we've got 20s, 10, 5 -- 16 A. You've got a mixture of notes. 17 Q. -- and that, therefore, there's a way of actually 18 understanding that the system has had that cash input if 19 you wanted to do it. 20 A. You jogged my memory, Mr Stein. Thank you. Yes. 21 MR STEIN: No further questions. Thank you, Mr Oldnall. 22 THE WITNESS: Thank you. 23 MS HODGE: Sir, I think that's all the questions we have 24 from Core Participants. 25 SIR WYN WILLIAMS: Right. 193 1 Well, thank you very much, Mr Oldnall, for producing 2 four witness statements, one of which is extremely 3 detailed and two of which are quite detailed. I am very 4 grateful to you for doing that work and I expect you're 5 quite glad that your time in the witness box was 6 comparatively short. But, anyway, thank you very much. 7 THE WITNESS: Thank you, sir. 8 SIR WYN WILLIAMS: Right. We'll resume again at 10.00 9 tomorrow morning. 10 MS HODGE: Yes, sir. Thank you. 11 (4.12 pm) 12 (The hearing adjourned until 10.00 am the following day) 13 14 15 16 17 18 19 20 21 22 23 24 25 194 I N D E X MICHAEL THOMAS YOUNG (sworn) ..................1 Questioned by MS HODGE ........................1 Questioned by MR STEIN .......................99 Questioned by MS PAGE .......................109 Questioned by MS PATRICK ....................131 SIMON GEOFFREY OLDNALL (sworn) ..............149 Questioned by MS HODGE ......................149 Questioned by MR STEIN ......................188 195