Former Post Office chief executive Paula Vennells suggested “temptation” for subpostmasters to borrow money from tills was a problem and not the Horizon system, an inquiry has heard.
The probe into the Horizon scandal was told Ms Vennells made a “false statement” in a letter to former Conservative MP Oliver Letwin by saying that courts found in favour of the Post Office “in every instance” when prosecuting subpostmasters for theft or false accounting.
The inquiry was shown minutes of a meeting between Ms Vennells, former chair Alice Perkins and MPs such as Lord Arbuthnot in which she claimed a small number of subpostmasters had been “borrowing” money from the tills.
The minutes of the meeting read: “It appears that some subpostmasters have been borrowing money from the Post Office account/till in the same way they might do in a retail business, but this is not how the Post Office works.
“Post Office cash is public money and the Post Office must recover it if any goes missing.”
Speaking from the witness box at the inquiry on Wednesday, Lord Arbuthnot said of the meeting: “At the meeting of May 17 with Oliver Letwin and me, Alice Perkins and Paula Vennells both raised the problem of there being lots and lots of cash lying around in unexpected places.
“Whether this meant that they thought that that led subpostmasters into temptation and being inherently dishonest wasn’t entirely clear, but that was the issue they were raising I think.
“We never really got to the bottom of that, but that’s what she was talking about.”
Counsel to the inquiry Jason Beer KC then asked: “Did you or would you take from what is recorded as being said there that the issue, according to Ms Vennells, was with postmasters putting their hands in the till, rather than with Horizon?”
The former Tory MP replied: “Well it’s clearly possible that that might have happened in some cases, but if you don’t have a robust, to use the word, Horizon accounting system, you can’t be sure whether it has happened.
“So, I thought it might have happened in some cases, but to say that it happened in a lot of cases struck me as needing to be examined and tested.”
Mr Beer continued: “Would you agree overall that this is a fair summary: the problem is that a small number of postmasters borrow money from the till, the problem is not Horizon, every prosecution involving Horizon has found in favour of the Post Office, and not a single case existed whereon investigation the Horizon system was found to be at fault?”
Lord Arbuthnot replied: “Yes.”
In Ms Vennells’ 2012 letter to Mr Letwin, she denied issues with the Horizon system, claiming in that it had been “rigorously tested”.
She wrote: “The Post Office takes very seriously any perception that there is an issue with the accuracy of the Horizon system: there isn’t.
“The Horizon system has been rigorously tested using independent assessors and robust procedures.”
Lord Arbuthnot said he was not satisfied with the “brush-off” response he received from Ms Vennells after he raised concerns over subpostmaster complaints about the Horizon system.
During her time as managing director, Ms Vennells defended the Horizon system when it was queried by the former North East Hampshire MP, describing it as “robust”.
Ms Vennells, who was chief executive of the Post Office between 2012 and 2019, was formally stripped of her CBE following the Horizon scandal.
Lord Arbuthnot first learned of issues with the Horizon system from subpostmasters in his constituency, including Jo Hamilton, who was falsely accused of stealing £36,000 from the Post Office branch she ran in South Warnborough, Hampshire.
The Post Office has come under fire since the broadcast of ITV drama Mr Bates vs The Post Office, which put the Horizon IT scandal under the spotlight.
More than 700 subpostmasters were prosecuted by the Government-owned organisation and handed criminal convictions between 1999 and 2015 as Fujitsu’s faulty Horizon system made it appear as though money was missing at their branches.
Hundreds of subpostmasters are awaiting compensation despite the Government announcing that those who have had convictions quashed are eligible for £600,000 payouts.