Peston
And here is sacked Post Office chair Henry Staunton’s rebuttal of Munby’s rebuttal!
Statement regarding the Sarah Munby Memo
Mr Staunton’s recollection of the conversation was very clear. It was precisely because he felt what
he was being told about the government’s view of the issues was so surprising, that he needed to
take a note of the conversation immediately afterwards and share it with his chief executive.
The clear message he took away from that conversation was that rather than tackling head on the
two key issues which the Post Office faced, namely the cost of replacement of the Horizon IT system
and the cost of meeting the compensation for the wrongly convicted postmasters, which would have
been his preferred course of action, and would have allowed the Post Office to draw a line under the
issues and move on, some way needed to be found of avoiding any additional call on the Treasury
this side of the election. It was clearly understood that these were the two key levers over spending
over which the Post Office had control, and were what was being referred to when Sarah Munby said
that “we needed to know that in the run up to the election there was no appetite to “ rip off the
band aid “, “ that now was not the time for dealing with long term issues “ and that “we” needed a
plan to “ hobble “ up to the election.
While it is true that the sums allocated by the Treasury for payment of compensation to postmasters
are ringfenced for that purpose alone, the money remains with the Treasury until required to fund
specific payouts, and the fact remains that insofar as they are unspent, the money would still be
available to the Treasury for other purposes, and would reduce the overall deficit which the Treasury
needed to fund.
It should be noted that according to the Post Office accounts for 2022/23 the amount provisioned for
postmaster compensation was reduced to £244m from £487m the previous year. This was a not
insignificant benefit to the Treasury. As the accounts point out on page 78, the Shareholders Letter
of Support does not constitute a financial guarantee, however, and includes certain caveats, making
it clear than any funding is subject to His Majesty’s Treasury’s consent.
It also makes clear on page 79, that the funding is not yet contractually committed by the
Shareholder and required covenant waivers beyond July 2024 are not guaranteed. As the accounts
point out this is a material uncertainty. Accordingly, the safest route for guaranteed compensation is
to have the money transferred to the Post Office, which the Government has so far refused to do.
Mr Staunton cannot himself explain why Ms Munby appears now to have a different recollection of
the context of the conversation. However, we would point out that the note of the conversation that
is appended to her letter to the Secretary of State was written over a year after the conversation it
relates to took place and cannot be considered a contemporaneous note.
Following that conversation, and having shared his account of the meeting with Nick Read, the CEO,
Mr Staunton, made it clear that he did not believe that the Post Office should do anything to delay
either the payment of compensation to postmasters or the implementation of the Horizon
replacement. He told Mr Read that he should press on with both and that he, Mr Staunton, would
bear any consequences.
One further point which should not be forgotten, is that the real tragedy is the plight of the
wrongfully convicted postmasters and their families and that this is what we should be focusing on
rather than the unseemly political spat which Mr Staunton was not seeking but which this seems to
have degenerated into.
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Robert Peston@Peston
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