Government’s £600,000 offer to Horizon scandal victims was ‘political’

The Post Office was not consulted on the government’s decision to offer £600,000 to wrongly convicted subpostmasters – a move described by the company’s head of financial redress as a “political” decision.

During the latest Post Office scandal public inquiry hearing, Simon Recaldin – in charge of overseeing the compensation schemes run by the Post Office – also said the Post Office expects to have paid £650m in financial redress by March next year and that the final bill will be about £1.4bn.

Recaldin was questioned about a government announcement in July this year, in the aftermath of ITV’s dramatisation of the scandal, when ministers revealed that all wrongly convicted subpostmasters would be offered a payment of £600,000 in financial redress. This could be accepted as a final settlement or those affected could continue with a full claim for more. About 900 former subpostmasters and branch staff could be eligible for the payout.

Recaldin said he supports the proposal, but told the inquiry the Post Office was not consulted on the offer. “I think the £600,000 opportunity was brilliant, it was an inspired idea in terms of how to speed up redress,”  he said. But he questioned how the policy was “imposed on the Post Office”.

“The government had not consulted the Post Office. I was told about it in a quarterly shareholder meeting and was advised it was going to happen the next day,” he told the inquiry. He said the announcement was “shrouded in secrecy” in terms of its launch with the Post Office expected to operationalise, manage and push the offer through.

The decision came directly from business and trade secretary Jonathan Reynolds, which Recaldin said, “is one of the reasons we think it was kept under wraps, because it had to make an impact, a positive impact.”

Recaldin said he did not want to get into politics of the decision, but told the inquiry that “there are elements in [the £600,000] announcement” and the additional funding in the last week’s Autumn Budget “that are political.” Chancellor of the Exchequer Rachel Reeves revealed an increase in compensation funding to £1.8bn, from the previous estimate of £1.2bn.

“I find myself in a really difficult position around that because the politicians are taking the opportunity, which is their right, to give themselves publicity or credit,” said Recaldin.

He added that the announcement of the £600,000 payment caused problems for those affected. “We had contact from very distressed former subpostmasters in that cohort and we had reports of people knocking on their door about [the payments], and that was quite distressing.”

During Recaldin’s testimony it was also revealed that some former subpostmasters have been in dispute with the Post Office over their financial redress for four years and that initial offers are often increased dramatically when challenged by victims’ legal representatives.

The Post Office scandal was first exposed by Computer Weekly in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to Horizon accounting software, which led to the most widespread miscarriage of justice in British history (see below timeline of Computer Weekly articles about the scandal since 2009).