Source · Select Committees · Public Accounts Committee
Recommendation 19
19
In December 2020 the Department wrote to the Post Office, noting that the number of...
Conclusion
In December 2020 the Department wrote to the Post Office, noting that the number of applications to the Scheme was ‘…materially higher than expected resulting in a corresponding increase in possible scheme claims and costs…’ and that the Post Office considered ‘…any amount in excess of the original budget will be unaffordable…’. With the Secretary of State as sole shareholder of the Post Office, the Department determined that it would apply to HM Treasury for future funding so the Post Office could meet its obligations for payments under the scheme (providing so-called ‘comfort’ to the Post Office that it would be able to meet its liabilities as and when they fall due).64
Government Response
Not Addressed
HM Government
Not Addressed
6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 Over the past decade, the government has provided over £2.5 billion in funding to support the Post Office network. The government is providing a further £335 million for the Post Office over the next three years. The government is confident that with this funding, Post Office remains a viable company and can continue to meet the core requirements for the network, including maintaining a network of at least 11,500 branches and ensuring that 99% of the UK population lives within three miles of their nearest branch. 6.3 Post Office Ltd published its annual report and accounts for 2020–21 in May 2022, which, while highlighting a number of risks and uncertainties, was prepared on a going concern basis. Post Office’s independent auditors concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements was appropriate. 6.4 The Horizon scandal has had a devastating impact on postmasters and their families. It is right that affected postmasters are properly compensated and, without government funding, the compensation would have been unaffordable to Post Office. To form part of the going concern assessment for Post Office’s financial statements, BEIS issued letters of comfort to assist the Post Office Board in maintaining its view that the company continues to be able to meet its liabilities. The government will share letters with the Committee from BEIS to Post Office, providing assurances for the Historical Shortfall Scheme, interim and full payments for those with overturned criminal convictions. Further letters will be shared with the Committee at the earliest opportunity.