A former senior executive at the Post Office was told by auditors the Horizon IT system was “a real risk”, four years before sub-postmaster prosecutions stopped.

Post Office’s auditors Ernst and Young (now called EY) warned Alice Perkins, the company chair in 2011, that the accountancy software “is a real risk” and asked, “does it capture data accurately?”.

Despite this, the computer programme data was used to prosecute more than 700 people for theft and false accounting as it wrongly generated losses at Post Office branches across the UK.

Many other sub-postmasters incurred significant debts, lost homes, became unwell and left their communities as they fought to repay sums the Post Office said they owed.

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Ms Perkins is giving her first day of evidence to the independent statutory inquiry set up to establish a clear account of the introduction and failure of Horizon.

The inquiry presented documents that showed in the early days of her chairmanship, EY told Ms Perkins Horizon makers Fujistu “took back on quality/assurance” as the Post Office “drove a very hard bargain on price”.

System problem complaints four years before prosecutions stopped

Notes of the meeting with EY said sub-postmaster “suspects” – those thought to be stealing – had suggested there was “a systems problem” with Horizon.

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Despite the briefing Ms Perkins did not raise concerns internally nor did she mention the meeting when questions about Horizon’s functioning were continually raised in the years that followed.

No mention of any action taken on foot of the auditor’s information is contained in Ms Perkins’s witness statement though she denied consistently gladly accepting reassurance from people at the Post Office.

It would be another four years before the Post Office stopped prosecuting in 2015 and a further four years before an apology was issued to sub-postmaster victims in 2019.

How could she have believed in Horizon?

When asked by counsel for the inquiry Jason Beer KC (King’s counsel) how she could believe Horizon was not at fault Ms Perkins said Horizon was not the only issue on the table.

“What I’m wanting to try and explain is that I was, over that period, receiving the most enormous information about all kinds of very complex and fraught issues to do with separation from Royal Mail and the future strategy for the Post Office,” she said.

“I was not holding the strands at the same time in my mind and I’m bringing them all together in the way that I obviously now wish that I had.”

Evidence began on Wednesday morning with an apology from Ms Perkins.

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“I have some understanding of what people have been through and the different ways in which their lives were wrecked over so very, very many years. I’m more sorry than I can say, that despite serious efforts on my part to get to the bottom of what was going on, I did not succeed in doing so during my four years at the Post Office and therefore the suffering of those affected was prolonged,” she said.

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