The ongoing inquiry into the Post Office Horizon IT scandal has revealed fresh criticisms from an unlikely source – the new Conservative leader herself. Kemi Badenoch, who served as business secretary for 17 months before the recent general election, expressed disappointment at the pace of government compensation for sub-postmasters wrongfully prosecuted due to flaws in the Horizon accounting system.
Testifying before the public inquiry on Monday, Badenoch claimed that she and then-postal minister Kevin Hollinrake had been working behind the scenes to secure Treasury funding for more rapid and generous payouts. However, their efforts were initially rebuffed by then-Chancellor Jeremy Hunt, who rejected a request for additional funding in August 2023.
TV Drama Spurs Government Action
What finally broke the impasse? According to Badenoch, it was the airing of an ITV docudrama about the scandal, “Mr Bates vs the Post Office”, in January 2024. “It suddenly turned it from a value for money question to a public perception question,” she told the inquiry. “Many people had not known the arguments taking place behind the scenes at Whitehall. Work was being done but no one was seeing what was taking place.”
The TV drama, Badenoch said, “changed the priority of the [Horizon] issue, which was behind the NHS and security, to something we needed to solve now. It raised the prioritisation.”
‘Extremely Disappointing’
Jason Beer, counsel for the inquiry, called it “disappointing” that it took a TV program to spur the government to change course on such a serious miscarriage of justice. Badenoch concurred, calling it “extremely disappointing” and reflective of a broader problem in government decision-making.
If you look at it in the context of what is happening in government, there are a thousand things money is being requested for. After a while decision makers become very dispassionate, it becomes another line in the ledger.
– Kemi Badenoch, Conservative Leader
While calling this approach “not irrational,” Badenoch argued that “it has to change, it is not helpful either. There is an absence of common sense in a lot of Whitehall. They don’t trust their judgment. People want legal cover.”
Sacking of Post Office Chair
The Conservative leader also defended her decision, made while still serving as business secretary, to sack Post Office chair Henry Staunton over his handling of the Horizon affair. The move led to a public disagreement between Badenoch and Staunton at the time.
Badenoch’s testimony sheds new light on the internal government debates over how and when to compensate the hundreds of post office operators who were wrongfully accused of theft, fraud and false accounting due to problems with the Horizon IT system, which was developed by Fujitsu. Many were financially ruined, lost their livelihoods, and some were even imprisoned before the full scale of the scandal came to light.
Pushing for Expanded Eligibility
Current government ministers have indicated that compensation may be extended beyond those directly prosecuted. According to a source close to negotiations, the Post Office is considering making compensation available to affected individuals’ families as well.
Postal Affairs Minister Paul Scully recently told Parliament that the Government was looking at how the Post Office compensation scheme could provide redress to “the families of the impacted postmasters to see how we can work through that – to try to find a path that will work.”
The total compensation paid out over the scandal is expected to exceed £650 million by March of next year, the Post Office has said, with more than 1200 claims already received.
Pressure Mounts for Swift Resolution
But some impacted postmasters contend the payouts are still coming too slowly. According to an involved source, Alan Bates, founder of the Justice for Subpostmasters Alliance, has warned ministers that a key legal cap on additional damage claims expires in April 2024. If a solution cannot be found before then, Bates indicated they will “have no choice but to issue another group action.”
As the inquiry continues to expose new details about the institutional failures behind the Post Office Horizon scandal, pressure is growing on the government to ensure all victims and their families are fully compensated in a timely manner. For the new Conservative leader, it’s yet another challenge inherited from decisions made – or deferred – under the previous Tory Government.
