Ministers sign off compensation for postmasters hit by IT scandal

Ministers have signed off on a compensation scheme for postmasters who were wrongfully convicted of theft and fraud in one of Britain’s biggest miscarriages of justice.

Sky News has learnt that the government will confirm as soon as Tuesday that it has agreed the terms of a programme to award financial payouts to hundreds of Post Office managers who were caught up in the Horizon IT scandal.

One source said a written ministerial statement would be made to confirm that a compensation scheme for overturned convictions had been agreed.

Although a final sum remained unclear on Monday, insiders expect it to require hundreds of millions of pounds of funding from taxpayers.

Initial test cases are expected to establish the parameters for a swathe of payouts, according to one person close to the process.


The latest move from ministers follows an announcement in July that postmasters who had had their convictions overturned would be offered interim compensation payments of up to £100,000.

Image: Former sub-postmasters were wrongly convicted of theft, fraud and false accounting

Those payments were in addition to sums paid out under the Historical Shortfall Scheme, which was established by the Post Office to compensate those who were forced to cover Horizon-related shortfalls in their accounts but were not prosecuted.

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A government inquiry into the scandal was placed on a statutory footing in May.

Tuesday’s parliamentary statement, which is likely to be made by the business minister Paul Scully, will come on the same day that the business, energy and industrial strategy select committee hears evidence from prominent sub-postmasters including Jo Hamilton and Paul Harry.

That session is expected to focus on the group of sub-postmasters who brought the original litigation against the Post Office, but saw the vast majority of the settlement swallowed by up litigation funders and legal advisers.

“This session is likely to cover issues including the obstacles facing former sub-postmasters seeking financial compensation and how these might be addressed,” according to a notice of the committee’s hearing.

“MPs are also likely to ask questions around how effective the Post Office and the Government have been in attempting to address the financial loss suffered by sub-postmasters affected by the Horizon IT scandal.”

Nick Read, the chief executive of Post Office Limited – which is wholly owned by the government – has said that the company does not have the financial resources required to cover the compensation programme and would need Treasury funding to deliver it.

Mr Scully has also acknowledged that the costs of the scheme “is beyond what the Post Office can afford”.

Dozens of postmasters have seen their names cleared, including a landmark ruling at the Court of Appeal this year which saw 39 former branch managers’ convictions overturned.

The Post Office has said it is seeking to contact around 540 people with potentially relevant convictions.

A BEIS spokesperson said: “The impact the longstanding Horizon saga has had on postmasters’ lives and livelihoods cannot be overstated.

“Government is committed to seeing these long-standing Horizon issues resolved, providing financial support for the Historical Shortfall Scheme and for interim compensation payments for postmasters with overturned convictions.

“We are also learning what went wrong through the Post Office Horizon IT Inquiry, and ensuring something like this cannot happen again.”

The Post Office declined to comment.