Post Office chiefs ‘must not get away with it’ insists CWUPostal, Post Office (PO) August 17 2023
Union demands ‘real change’ after publication of review into bosses’ bonuses…
Yesterday’s release of an Independent Report into the Post Office’s Remuneration Committee has sparked renewed calls for heads to roll at the top of the organisation. The review had been ordered by the Government’s Business & Trade (formerly Business, Energy & Industrial Strategy) Department in response to controversy over the criteria – linked to the Horizon Scandal Inquiry – used for large bonus payouts made to senior executives and the recording of those criteria in the Post Office’s Annual Report earlier this year.
International law firm Simmons & Simmons was commissioned by the Department to ‘conduct an independent review into the governance practices of, and decisions made by, the Post Office Limited’s Remuneration Committee in relation to a remuneration metric known as the Inquiry Support Target which comprised part of POL’s executive Transformation Incentive Scheme.’
The Simmons & Simmons Report, published on Wednesday, concluded that there had been ‘clear failings’ (P4, 1.16) and ‘inadequate’ (P4, 1.19) governance. And the first of its 10 key recommendations (P4, 1.20, A) was that ‘POL should undertake a review of its governance structures, processes and systems in relation to remuneration…’, findings which led MP Kevan Jones to repeat his May 2023 demand that the Post Office chief executive and the Post Office Board must go.
“It was obvious from the outset that these extortionate bonuses were unjustified,” he said, adding that the failings cited by the Review had “caused anguish amongst all those wronged by the Horizon Scandal.”
If the chief executive and Board refused to resign, the North Durham MP continued, “then it falls to the Government, as the Post Office’s single shareholder, to act.”
The Chair of the Business & Trade Select Committee (BTC) Darren Jones added to the mounting pressure for action when he also spoke out on the matter, saying that “there are still questions to be answered about what led to false accounts being presented to Parliament, and bonus payments being made to executives based on false information.
“The BTC will consider the report closely and follow up in due course.”
In his reaction to developments, CWU acting deputy general secretary postal Andy Furey said: “We fully agree with MP Kevan Jones that there must be full and complete accountability for this bonus scandal. If this means resignations then so be it, and if this means direct Government intervention, then that needs to happen too.”
Andy continued: “We also share Darren Jones’s concerns over the Simmons & Simmons Review and we’re glad to hear that he and the BTC will be looking into this matter further. While the Report does make significant criticisms of the Post Office leadership, there are also areas in the document which, sadly, those at the top of the Post Office could seize on to excuse their behaviour and, as our own Postmaster Branch secretary Sean Hudson has warned, unless there is real action by the Government, the danger is that this Report could be seen as a ‘whitewash’.
The CWU is calling on Kevin Hollinrake, the Minister of State with specific responsibility for the Post Office and postal affairs and the Secretary of State for Business & Trade Kemi Badenoch to act now and to act decisively.
“Let’s all remind ourselves of what happened here,” our acting DGSP explained. “The people at the very top of the Post Office decided to introduce an executive bonus criterion related to its ‘performance’ in assisting with the Horizon Inquiry and in its Annual Report, it was claimed that these ‘Inquiry performance targets’ had been achieved, that the Inquiry had ‘finished’ and that Sir Wyn Williams – the retired judge leading the Horizon Inquiry – had approved all of this.
“It is not acceptable for the Post Office to reward its own senior executives for their participation in the Horizon Inquiry – they were ordered to do so – or for the Post Office to falsely claim that Horizon Inquiry lead Sir Wyn Williams had somehow approved their claims.”
“There must be no ‘whitewash’ here,” insists Andy. There has to be real change – the current Post Office leadership must not be allowed to get away with this.”
Times Newspaper correspondent Tom Witherow has written on this matter, see his article below:
Wednesday August 16 2023, 5.45pm, The Times
‘Clear failings’ at Post Office over ‘grubby’ bonus scheme
Bosses were paid tens of thousands based on a false claim over the inquiry into the postmasters IT scandal, a report has found…
The Post Office board was guilty of “clear failings” when it paid out tens of thousands of pounds to executives based on a false claim, a report says.
The company, which is owned by the government, had been accused by MPs of handing out payouts to Nick Read, the chief executive, and 32 other senior managers in a “grubby backroom financial deal” after claiming it had helped the inquiry into the postmasters IT scandal finish on time.
When the error was pointed out Read apologised and promised to hand back £13,600, equivalent to 3 per cent of his £455,000 bonus.
On Wednesday an independent report, commissioned by Kemi Badenoch, the business and trade secretary, found the board failed to keep adequate records about how pay decisions were made and had “inadequate” governance procedures.
Simmons & Simmons, the law firm which produced the report, said there was a justifiable basis on which to make the award but that the wording was ambiguous, calling for the process to be tightened up in future. It found the awarding of bonuses “did not align with best practice for a private corporation.”
The report said “[the] Post Office’s governance in relation to the ‘inquiry support target’ was inadequate,” adding: “The fact that the remuneration committee’s decision making was not better recorded is a clear failing, including on the part of the committee members who should have identified that the minutes were deficient.”
It is the second report into the scandal. The first, by a non-executive director, found there was “a clear failing of everyone involved” but no one has been sacked for the errors, which came as hundreds of postmasters struggle to get compensation. Read has resisted calls from Darren Jones, the chair of the Commons business committee, to pay back an additional £30,000.
Kevan Jones, a Labour MP and longtime campaigner for postmasters, said: “It was obvious from the outset that these extortionate bonuses were unjustified. These failings have caused anguish amongst all those wronged by the Horizon scandal. The chief executive and board should therefore take responsibility and resign.”
The row emerged in May, when a postmaster highlighted the error to the public inquiry, leading its chairman, Sir Wyn Williams, to challenge the “misleading and inaccurate statement”.
Read accepted the payouts, to him and 32 other managers, was partly based on a claim that the company’s support for the inquiry had helped it to “finish in line with expectations”, when it was not expected to finish until 2024.
Henry Staunton, the chairman of the Post Office, reiterated the company’s apology and confirmed improvements will be led by Amanda Burton, the new chairwoman of the remuneration committee.