Post Office Scandal in the UK: How the giant machinery of government and administration can crush lay people

Usually, we have a passing reference to such scandals in our newspapers ( The facts and information are fortunately available on social platforms). Along with the Grooming Gangs scandal, this scandal too caught my attention. Once I started reading about it in detail, I developed a feeling that was a mix of anxiety, frustration, and anger. The British ruled our country for more than a century; it was claimed that they introduced democracy to us. The UK has always been described to be a very mature democracy; it was always held that we would need a long time to reach their level. As I gathered the elaborate information about the scandal, these assertions sounded hollow. It raised many questions that hardly had satisfactory answers.

The scale of the scandal and the role of the state shocked me. I couldn't believe that the administrative system of a mature democracy can be so ruthless, stubborn, and insensitive to its citizens. The people who were made to suffer had no criminal background, and their number was as big as one thousand (1000). All repeatedly stated that they were not responsible for the losses, but the administration disregarded their pleas, reiterated its stand. It took more than two decades for the government to acknowledge the existence of the problem in the system and think of redressal. No one was ready to see what was so obvious. When everyone stated that the problem lies with the system, why could it not be validated before handing over the punishment to so many? Frequently the similar cases appeared, but no one thought that the system may have a problem or glitch.

It is always stated that the work of any institution should be system-driven; there should not be discretionary powers to the people who run it. An institution can work objectively in this situation, but at the same time, it should not lose its humane face. The interest, reputation of the institution, or the financial needs cannot be prioritised over the well-being of people and the rights of the employees. This leads to a devastating miscarriage of Justice.

The post office is an institution that is closely related to our lives. In 2024, it was reported that there were 11,805 post office branches in the UK, out of which 11,690 were run by independent Post Masters and companies. In 1999, Horizon Computer Systems’ (HCS) Legacy Horizon version was introduced in the postal branches for accounting purposes and was in use till 2010. It was developed for accounting, stock-taking tasks, and managing branch sales. It replaced the old paper-based system to save time and effort, allowing accounts to be managed simply at the push of a button. It networked together the entire post office system. It was installed to seriously modernise the almost outdated system, which would record transactions in branches. In the new system, sub-postmasters and operators had to count the cash and enter the information. The system was supposed to manage branch sales and accounts, which were automated in the background.

This was the Horizon system, which was owned and maintained completely by the Fujitsu company from 2001 (Instead of using the word software, the word legacy system was used, so the word system is used to indicate software). It was introduced in the post offices in 1999. The pilots were run from 1996 for tasks like accounting and recording transactions (Pilots are run to identify the challenges people or systems may face and help in gathering information about the software to refine the strategies). The problems started to appear right from the beginning, and concerns were raised by many sub-postmasters.

Many branches had the problem of discrepancy between the Cash on hand and the figures generated by the Horizon system. There was no way to make up the difference. The Sub Postmasters had no access to system information, and had no chain of evidence as they had with the paper-based method. The variance could not be corrected. Thus, the figures generated by the system were to be accepted as final and official. The shortfalls in the accounts showed in the individual branches. It was the result of the false or incorrect accounting in the system. The accounting software incorrectly made it appear that money was not credited into the accounts it belonged to. Obviously, the Sub Postmasters were held accountable for the discrepancy.

Per the UK Post Office contract, the Sub Postmasters were supposed to be held responsible for any financial shortfalls, even though the issue was being caused by system errors. The system generated unexplained shortfalls, and Sub Postmasters were liable for any such losses unless they were proved to be innocent. The system made it difficult ( almost impossible ) to trace the source of errors to prove innocence. It was labelled as theft and false accounting. The system was inaccurately recording the losses and showed that money was missing from branches, even though it was recording some accounts with unfounded shortfalls.

Approximately one thousand (1000) people were prosecuted between 1999 & 2015 for this issue. Sub Postmasters were forced to cover the shortfall, which did not exist. According to one estimate, the amount paid by Sub Postmasters can be as big as £ 36 million, which they paid from their own pockets. Some are believed to be still paying to cover unexplained shortfalls.

According to one survey by an organisation, 57% of current Sub Postmasters experienced unexplained shortfalls; 19% reported such transactions, and 69% of those surveyed experienced such discrepancies on the Horizon system even in January 2020, where sub postmasters and others in the post office used their own money to cover up the losses.

The money was not in the branches or the respective accounts, but it was in the system somewhere. This fact was ignored. Where did it go? The answer to this question became clear, probably during the cross-examination of the CEO of the Post Office. The money that was to be credited into the individual accounts disappeared and went to the suspense accounts. What he did not say was that if the entries in the suspense accounts were not identified or claimed, then they were swept into the Post Office profit and loss account and treated as profit.
The credit entries into the suspense accounts were not investigated, and thus were never credited into the individual accounts they belonged to.

Suspense accounts were and are, even today, a place that temporarily holds unclassified funds. When the system faced any doubt in placing the fund, it would temporarily park such amount into a suspense account, which is generally to be cleared (credited/debited to intended accounts) regularly. They are used provisionally to carry the doubtful entries and resolve discrepancies that appear until the analysis is pending. Reconciliation is completed by analysing the individual transactions carefully. Money is then transferred into the respective accounts to achieve a zero-suspense balance.

How did the money end up in such suspense accounts, and many more flags must have been raised in the minds of readers. The next write-up is dedicated to explaining most of them.