Government would not have accepted ending Horizon software, ex-Post Office CEO says

The government would not have accepted faulty accounting software Horizon being phased out, a former Post Office chief executive told the inquiry into the wrongful prosecution of sub-postmasters.

David Mills, the former chief executive of Post Office Ltd, arrives to give evidence to the Post Office Horizon IT inquiry. Pic: Lucy North/PA Wire

The inquiry seeks to find out who knew what and when about the accounting computer programme that falsely generated financial losses at Post Office branches across the UK and led to the conviction of hundreds of sub-postmasters who ran branches for theft and false accounting.

As a result of Horizon’s errors, many other sub-postmasters lost homes, moved out of their communities, and became unwell having wracked up significant debts and had their reputations ruined.

‘Loosing £1m a day’

But it was the state of Post Office’s finances in the early to mid-2000s that was the focus for the company and government who owned it, former chief executive David Mills told the inquiry on Tuesday.

When he took on the job in 2002, “Post Office Limited was insolvent. It was a crisis”, he said.

“It didn’t take me very long to realise that we had a burning ship. It was losing £1m every single day it operated”.

As a result of the financial situation, there was no way Horizon would be phased out, despite it “not being fit for purpose”, Mr Mills said.

“It would have been a massive write-off for the government, just a huge hit on the bottom line of a company that was already insolvent.

“It was pretty obvious that Horizon was not going to be written off, nor was it going to be closed down. No one would have accepted that in government or indeed in the wider surroundings,” he added.

‘More focus on solvency than prosecutions’

Issues with Horizon were already being raised with shortfalls at the time.

The Post Office, however, “certainly had more focus on solvency than it did on prosecutions”, Mr Mills said.

“It took me at least six months to really understand what was going on… I didn’t have any briefing whatsoever about it. I had no papers, no people telling me what was going on. I had to try and discover all these things myself,” he said.

“Even the building security team was not expecting me. On my first day I arrived to an empty open plan office”.

By the time he exited in 2005, Mr Mills had received more than £2m in pay and bonuses.

It would be another 10 years before prosecutions based on Horizon data would end and another 14 before an apology came for sub-postmaster victims.