Post Office to deliver postmaster board seat after IT scandal


The Post Office is to appoint one of its army of postmasters to its board for the first time as part of its bid to move on from the multi-million pound scandal which left some of its managers wrongly sent to prison.

Sky News has learnt that the government-owned company will announce on Monday that it is to hand a non-executive board seat to one of its 8,000 postmasters in the coming months.

The newly appointed director will have a remit to represent the interests of postmasters, who manage individual branches or small groups of them.

Executives at the company which installed a faulty IT system for the Post Office - which caused thousands of accounting errors -  could now face criminal prosecution.
Executives at the company which installed a faulty IT system for the Post Office – which caused thousands of accounting errors – could now face criminal prosecution

The decision to create the new board role has been approved by UK Government Investments (UKGI), the agency which oversees taxpayer-owned companies such as Channel 4 and the Ordnance Survey.

It comes in the wake of a requirement for major listed companies to have ordinary workers’ voices represented at board level, although few have chosen to do so by putting an employee on the board.

One source said the move was “an olive branch” from Nick Read, who took over as the Post Office’s chief executive last year.

Relations between the company and its postmasters were strained for years by a scandal involving the use of a faulty IT system called Horizon, which led to some branch managers being wrongly accused of theft, fraud and false accounting.

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A small number of sub-postmasters were sent to prison, while others were declared bankrupt over the affair.

Last December, the Post Office agreed to pay nearly £58m to settle a legal claim brought by 550 sub-postmasters.

At the time, the network, which has around 11,500 branches across Britain, apologised, with Mr Read’s predecessor, Paula Vennells, targeted by particularly fierce criticism over her handling of the scandal.

In May, it launched a scheme to provide redress to current and former postmasters who were not part of the litigation settlement but who believe they were adversely affected by earlier versions of the Horizon computer system.

Last week, the company said it was appointing a new director, Declan Salter, to implement the claims scheme.

An insider said the creation of the boardroom role for one of its sub-postmasters was aimed at resetting the relationship between the company’s franchisees and those in charge of the company.

The process for selecting the occupant of the new directorship was unclear this weekend.

A separate consultation examining the future involvement of postmasters in business decisions is expected to launch in the autumn.

A post office sign
The new boardroom role is an attempt to reset the Post Office’s relationship with its postmasters

Mr Read, who previously ran the Nisa convenience store group, joined the Post Office nearly a year ago.

In recent months he has met hundreds of postmasters at a series of virtual events as part of his attempt to rebuild relationships.

The Post Office is an entirely separate company from Royal Mail Group, which was privatised in 2013 and floated on the London Stock Exchange.

The two businesses have a close commercial relationship, however, with negotiating a new ten-year agreement between them among Mr Read’s priorities.

Some Victorian-era post boxes are still around in Britain
Most Post Office’s have remained open during lockdown

As with other physical retailers, the coronavirus pandemic has provided a stiff test for the Post Office’s management.

More than 90% of its branches remained open during the crisis, and the network made a number of guaranteed hardship payments to postmasters during April and May.

The Post Office also repurposed part of its foreign exchange cash delivery business to enable the overnight delivery of sterling cash to meet demand.

Mr Read’s other main focuses over the next year will include the delivery of a renewed partnership with Britain’s major banks and building societies, while travel and bill payment services are also expected to receive substantial investment.

The Post Office declined to comment on Sunday.

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