The Post Office is recruiting a board member to oversee the potentially vast compensation scheme resulting from the IT scandal which led to the prosecution of hundreds of sub-postmasters.

Sky News has learnt that the government has authorised the appointment of a new non-executive director to chair a committee that will oversee the management of the company’s Historical Shortfalls Scheme – with the cost potentially running to hundreds of millions of pounds.

A deadline for applicants for the role is understood to have expired in recent days, and Whitehall insiders said on Thursday that they expected the appointment process to conclude swiftly.

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The decision to hire a new director has emerged in the same week that the government confirmed a Sky News report that it was amending the terms of an inquiry into the Post Office’s Horizon IT scandal to place it on a statutory footing.

That will give Sir Wyn Williams, the inquiry chairman, powers to compel witnesses to appear, and to hand over documents related to the probe.

The Post Office’s Historical Shortfalls Scheme launched last year to enable applications from current and former postmasters who believe they suffered as a consequence of the Horizon system.

It followed a group litigation settlement between the company and 555 – mainly retired – postmasters.

Nick Read, the Post Office chief executive, has urged the government to provide funding for compensation.

“The Post Office simply does not have the financial resources to provide meaningful compensation,” he said in a recent speech.

“I completely understand that government is keen that Post Office should be seen to be fixing its own mess – and through the work being undertaken across the business every day to place the needs and interests of postmasters first, we are doing just that.

“But financial compensation commensurate with wrongful conviction is a different matter.

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“I am urging government to work with us to find a way of ensuring that the funding needed for such compensation, along with the means to get it to those to whom it may become owed, is arranged as quickly and efficiently as possible.”

A Post Office spokesman declined to comment.

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