1 Friday, 28 October 2022 2 (10.05) 3 SIR WYN WILLIAMS: Morning everyone. Morning, Mr Blake. 4 MR BLAKE: Morning, sir. Today's witness is David Miller. 5 DAVID MILLER (affirmed) 6 Questioned by MR BLAKE 7 MR BLAKE: Thank you. Can you give your full name please? 8 A. David William Miller. 9 Q. Mr Miller, in front of you should have a witness 10 statement in a bundle. Is that witness statement dated 11 20 September of this year? 12 A. It is. 13 Q. On the final page, or page 18, is that your signature? 14 A. It is. 15 Q. Is that statement true to the best of your knowledge and 16 belief? 17 A. There is one point, if I may, in -- I think it's 18 paragraph 24 -- 19 Q. Perhaps we could bring it on screen. It's WITN03470100. 20 A. Where I have said "I was not aware of any issue with 21 ICL's ability to assist with the automation process", 22 that should have been "I was not aware of any overriding 23 issue". Clearly there are lots of issues that are in 24 the bundle. 25 Q. Thank you. Mr Miller, we have all day. We will 1 1 probably finish around 3 o'clock at the latest, but -- 2 so I will take you through relatively slowly today, 3 perhaps slower than those witnesses who were on 4 yesterday, because we do have time, and if you need any 5 time to look at any documents that are on screen, please 6 do say. 7 Your witness statement and exhibits are now in 8 evidence, so the areas that I will be covering will be 9 supplementary largely, although I will start with your 10 background. 11 You joined the Post Office in 1970 as a management 12 trainee; is that right? 13 A. That's correct. 14 Q. What was your academic background: was it technical, 15 managerial or ...? 16 A. It was academic. 17 Q. Academic. You moved to Post Office Counters Limited in 18 1983? 19 A. Correct. 20 Q. In 1994 to 1995 you were senior line manager for post 21 offices in South West England. 22 A. That's correct. 23 Q. In 1995 you moved to the Horizon project in what we know 24 is the Programme Development Authority, that's the joint 25 programme between the Benefits Agency and Post Office 2 1 Counters Limited, and you were a deputy director in that 2 position; is that right? 3 A. Yes. 4 Q. In 1998, you took over as Horizon programme director. 5 Your witness statement says it was at short notice. Are 6 we to read anything into that in particular? 7 A. No. It was -- but it was at short notice. 8 Q. Do you know why that was? 9 A. I think there was a view taken about the right people to 10 do the right jobs and the person who was doing it at 11 that point, I think, had other skills and therefore 12 I was drafted in. 13 Q. So you were considered to be better skilled for the job? 14 A. I believe so. 15 Q. Did you feel qualified for that role? 16 A. I was conscious that I did not have a technical 17 background, but I did have a background in delivering, 18 nothing of this size, but a significantly sized 19 nationwide project for the Post Office a few years 20 before. 21 Q. Do you remember how you were selected for the role: was 22 there an interview process, was it a competitive process 23 or were you handpicked for the role? 24 A. I was -- no, there was no selection process. I was 25 contacted and there was a brief discussion. 3 1 Q. Sorry, I believe there may be an issue with the 2 transcript? No? No, that's fine, thank you. 3 You have acknowledged in your statement -- it is 4 paragraph 51(c) of your statement, if it assists -- that 5 Post Office Counters Limited lacked experience in really 6 big IT projects at the time. Were you aware of any 7 attempt to recruit people at managerial level with those 8 kinds of expertise? 9 A. No. I think there was a tendency to look for -- when 10 you say "recruit", I'm sorry, there was a tendency to 11 use people from other organisations who would be moved 12 in to do specific roles and functions. 13 Q. But at managerial level -- I mean, we have heard from 14 some witnesses who spent a long time in the Post Office 15 and worked their way up. Did you feel that there was 16 a sufficient attempt to build technical expertise, for 17 example, at a higher level in the organisation? 18 A. That was -- that sort of expertise was held in Group, 19 who had a IT director and a IT function, and, in fact, 20 a number of people came to work on the programme 21 eventually from that area, so IT resource tended to be 22 recruited centrally into Group. 23 Q. When you say "Group", that's the Post Office Group that 24 included Royal Mail, at the time -- 25 A. Yes. 4 1 Q. -- Post Office Counters Limited -- 2 A. There was an overarching organisation, which I'm 3 referring to as "Group", which sat above the constituent 4 businesses. 5 Q. Would you rely on them to provide that expertise or 6 provide the people who had those expertise? 7 A. Yes. There was some -- in the programme phase, there 8 was some bringing in of expertise from outside, but that 9 would have been coordinated with Group IT. 10 Q. We have heard that it was the Post Office board, not the 11 Post Office Counters Limited board, that took -- where 12 the real decisions were made -- 13 A. Yes. 14 Q. -- would you agree with that? Yes. 15 You have said at paragraph 41 of your statement that 16 the board did not involve itself in day-to-day Horizon 17 matters, only the bigger picture. Was that something 18 you knew at the time? 19 A. Yes. 20 Q. Did it concern you at all? 21 A. The sponsor of the project was my immediate boss and he 22 sat on that board. 23 Q. Who was that, sorry? 24 A. Stuart Sweetman. 25 Q. Yes. 5 1 A. So it didn't concern me at that time. 2 Q. Was that because you had faith in Mr Sweetman to tell 3 the board what they needed to know? 4 A. Yes. 5 Q. You said "at the time", is that no longer the case? 6 A. No -- sorry, I thought we were talking about events at 7 this particular time and that was the case. 8 Q. And is it still the case? 9 A. Yes. 10 Q. Did, in your opinion, the board place a lot of faith 11 then in what they were told? 12 A. Yes. 13 Q. John Roberts has given evidence about the commercial 14 importance of the Horizon project. Is that something 15 that you were aware of at the time? 16 A. Very much. 17 Q. Did you see it as vital to the survival of the Post 18 Office? 19 A. I did. 20 Q. I'm going to take you through chronologically today -- 21 I'm going to go far back, I'm going to start in 1995 but 22 I won't stay on those early years for too long. But 23 let's start in 1995 and let's look at DWP00000006, 24 please. 25 That is a programme management board meeting of 6 1 9 May. Could we go over the page to page 3. So this is 2 a meeting, 9 May 1995, and you are listed there as 3 present as a representative of -- as a representative of 4 the Benefits Agency and Post Office Counters Limited, or 5 representing -- 6 A. "BA/POCL" was a term that was used for the PDA, for the 7 delivery organisation. 8 Q. Can you very briefly remind us what the programme 9 management board was? 10 A. It was looking at progress on what was happening in the 11 PDA. 12 Q. Can we turn over the page to page 4 and look at 13 paragraphs 2.5 and 2.6. I don't think I need to read 14 them out aloud, but perhaps you can just briefly look at 15 2.5 and 2.6. There's an update there that PA 16 consultancy have been constructed to study the wider 17 Benefits Agency programme, and there were two further 18 pieces of work. Then at 2.6, it says: 19 "David Miller was concerned that this would result 20 in a delay to the programme." 21 1995, it's quite early in the story, but were there 22 time pressures at that stage? 23 A. I think in any programme of this sort there are time 24 pressures. Time pressures intensified as the time 25 period went on. 7 1 Q. But this is quite early on? 2 A. Yes. 3 Q. Were those time pressures felt from the moment you 4 joined in your role? 5 A. Because it was a programme I was aware that things 6 should be done to time, but there wasn't inordinate 7 pressure at this stage. 8 Q. Can we look at 2.9, please. Again, I don't think the 9 detail of this particular paragraph is all that 10 relevant. It's the final sentence which says: 11 "David Miller had staff come in to these areas 12 shortly." 13 It looks from that paragraph as though you were 14 building up a technical team of some sort; would that be 15 right? 16 A. Yes, that would be right. 17 Q. Again, I think you told us just earlier, that the 18 managerial technical team had come from the board, but 19 how would you find these staff? 20 A. Well, there would be discussions with the central IT 21 function about what the roles required and they would 22 aim to fill those. 23 Q. Can we move on to 1996, please, and look at POL00028451. 24 Now, this is a meeting of the Major Project Expenditure 25 Committee. I don't think you attended that committee, 8 1 did you? 2 A. No. 3 Q. Certainly not on this occasion. Can we look at page 3, 4 please. I don't know if you have been following 5 previous hearings, but we have looked at this document 6 before and we have looked at the procurement exercise 7 and the Tom, Dick and Harry exercise. Do you remember 8 that? 9 A. Yes, I'm familiar with it. 10 Q. Can we look at (xxi) on that page, so it's at the 11 bottom, and it says there -- this is just really for 12 clarification. 13 In your statement, it is paragraph 26, you said that 14 Pathway wasn't awarded the contract because it was the 15 cheapest option. Just, I think for clarification, you 16 are aware that it was, in fact, the cheapest option? 17 A. It was. Having reviewed the paperwork, at the end of 18 the day, it was the cheapest option. 19 Q. "Harry", which is Cardlink, was eliminated because, 20 amongst other things, it had been the most expensive. 21 Do you remember that? 22 A. I do and -- yes, I do. 23 Q. Can we look at page 4, please, and can we look at (xxvi) 24 so it is: 25 "As a technical solution 'Dick' was the least 9 1 preferred bidder providing a higher risk to delivering 2 the programme." 3 Were you aware at the time that ICL Pathway was the 4 least preferred when it came to the technical solution? 5 A. I think there were concerns at the time about the 6 technical solution, particularly in relation to the use 7 of the product Riposte, but what -- in reviewing the 8 papers, which I have been, what was interesting is that 9 Riposte appeared to offer, particularly to the BA, 10 distributed functionality, so that data could be passed 11 down and held at post offices. And this was, to the BA, 12 as I recall at the time, a significant matter. 13 Q. Thank you. If we look at the paragraph below it says: 14 "The preferred supplier [that's ICL] ... proposed 15 a technical solution for which the architecture was 16 unusual (complex design not proven on a large scale 17 deployment using bespoke code which then had to be 18 modified). Initially 'Dick' did not have the technical 19 or project management expertise within their project 20 team, as compared to the other bidders who had proposed 21 off-the-shelf solutions to be then modified. This had 22 now been addressed by the computer supplier." 23 Were you aware of those concerns at the time? 24 A. I was and the process that we went through, in terms of 25 tendering, the initial bids were then reviewed in great 10 1 detail and then there was a further round of discussions 2 and negotiations to try and remedy some of the 3 deficiencies of the first round. 4 Q. Yes. At the bottom of this page, it highlights some of 5 those risks: 6 "The risks associated with 'Dick' were both 7 short-term: liable to be late; pressure to accept 8 incomplete functionality; premature rollout could prove 9 unreliable; and long-term: fragile software system; 10 difficult to enhance; if Dick lost money it would be 11 difficult to do future changes ..." 12 Again, you were aware of those risks at the time? 13 A. I haven't seen them put in that way before. 14 Q. But were those risks familiar to you at the time, those 15 kinds of risks? 16 A. Yes, I think so. 17 Q. Then the paragraph below talks about how the risks could 18 be managed. Were you aware from the Major Project 19 Expenditure Committee -- which included John Roberts, 20 and which heard, we know, from Stuart Sweetman -- were 21 you aware that they considered that risks needed to be 22 managed in this way? 23 A. Yes, I think I was. 24 Q. That included what we see there: 25 "rigorous user and system testing prior to rollout 11 1 to be built into the contract." 2 A. Yes. 3 Q. Then can we look at that final paragraph, to the bottom 4 of the page -- 5 Sorry, can we scroll down a little bit. Thank you. 6 Those final paragraphs there effectively stress the 7 importance of making the system work. 8 A. Yes. 9 Q. Were those messages passed back to you by Stuart 10 Sweetman or John Roberts or somebody else? 11 A. I don't remember precisely how that happened at the 12 time. 13 Q. That's fine. The fact that things like this -- the need 14 for rigorous testing prior to rollout -- were being 15 emphasised as a way of meeting the higher technical 16 risks, that was all something that you were aware of at 17 the time? 18 A. It was. 19 Q. Can we move on another year now to 1997 and can we go to 20 POL00031231, please. This was an internal review in 21 October 1997. Is that something that you remember? 22 A. I don't remember it, but I have read the document. 23 Q. Can we look at the third page, please, and it is 24 paragraph 1.3. It seems that you were part of the team 25 at that time. I appreciate it's a long time ago. 12 1 A. Yes, indeed, I contributed to it but I -- you know, when 2 I read this document, I remembered it, but I previously 3 hadn't. 4 Q. No. It says there that: 5 "Extensive interviews were held with a wide range of 6 managers spanning the commercial, financial and 7 technical aspects of the programme." 8 Can we look at the management summary, that's 9 paragraph 2 on the same page, please. It says: 10 "Horizon remains crucial to POCL's commercial 11 strategy. It is needed as soon as possible and requires 12 the full functionality as currently defined, or improved 13 within acceptable time limits, and is needed throughout 14 the network." 15 Now, again, that reference to "as soon as possible", 16 echoes of what we heard from 1995: was there some time 17 pressure at that stage? 18 A. Yes, in the sense that, in a programme like this, 19 I believe there is always time pressure, but this was 20 Post Office reaffirming that Horizon was crucial to its 21 strategy and it wanted the full functionality and it 22 wanted it throughout the network because there are 23 questions as to whether the functionality could be 24 descoped and there was the questions as to whether the 25 whole network needed the same product. So this was 13 1 a significant set of conclusions. 2 Q. Can we go over the page to paragraph 2.4. We read 3 earlier the reference to PA Consulting undertaking their 4 investigations and it says that: 5 "PA Consultants ... indicates that much improvement 6 is needed", but it is not "fatally flawed"; do you 7 remember that? 8 A. Yes. Just -- I wasn't actually on the programme at this 9 point. I contributed to this report. 10 Q. When you say you weren't on the programme at this point 11 was that because you were on the development board at 12 this point or because you were -- 13 A. No, I had -- between the development board and becoming 14 Horizon programme director, I went back to Bristol and 15 managed the line for South Wales and South West. 16 Q. But you kept an eye on what was going on with the 17 Horizon programme? 18 A. And my advice was sought in certain matters regarding 19 this report. 20 Q. Now, that term "fatally flawed", I have suggested to 21 other witnesses that that seems like a low baseline for 22 Horizon to satisfy; would you agree with that? 23 A. Sorry, can you just point me -- 24 Q. Paragraph 2.4, it is PA consultants' conclusions that 25 they don't suggest the programme is "fatally flawed". 14 1 A. Yes, I -- I think that they were asked the question 2 "Should this programme continue?" and that was what they 3 said. 4 Q. Is your view that "fatally flawed" is too low a baseline 5 for consideration of whether to proceed with 6 a significant IT project? 7 A. I think, looking at it now, it does rather come off the 8 page. 9 Q. Paragraph 2.5: 10 "Delay to the completion of Horizon certainly 11 enables competitors to attack POCL's share and continued 12 erosion of income and market share is inevitable. 13 However, there has been no evidence that delays within 14 the broad timescales under review present any market 15 'show stoppers'." 16 So, again, delays impacting business potentially, 17 was that something that you remember? 18 A. Yes, there was activity in the bill payment market, 19 particularly, from a company called PayPoint, which was 20 of concern to the marketing department. 21 Q. Can we scroll down to paragraph 2.8. We don't 22 necessarily need to read that paragraph, but it talks 23 about an opportunity, potentially, given by delay, which 24 is that it may be possible to find something more 25 reliable than EPOSS. Do you remember that at all? 15 1 A. No. 2 Q. Do you remember early problems with EPOSS? 3 A. Not at this time because I wasn't involved with the 4 programme. The EPOSS product was very much behind the 5 work -- the massive amount of work that went on with 6 regard to the Benefits Agency, so I'm aware of that 7 order of things. 8 Q. Can you remember discussions in 1997 that it may be 9 possible to revisit the EPOSS system, given that there 10 were delays at that time? 11 A. I don't. 12 Q. Can we please look at page 15. There's a section there 13 on replacing the manual cash account. I'll read that 14 paragraph, it says: 15 "It will always be difficult to get a definitive 16 statement on this but there appears sufficient evidence 17 that POCL's current accounting system is not fully fit 18 for purpose. Current systems are error prone and incur 19 significant costs to clean up the data before it becomes 20 management information, or used for settlement with 21 clients. The parallel automation projects, TIP/TMS, 22 SAPCON, SAPADS ..." 23 Do you remember those at all? 24 A. I remember some of them. 25 Q. Can you briefly tell us what they were? 16 1 A. I remember most of all TIP, which was a backend system 2 that was about communicating information to clients in 3 particular. 4 Q. "... [they] all need a sort of transaction data to 5 enable them to operate effectively and deliver the 6 benefits in their individual business cases. This is 7 not to say that there might not be alternative routes to 8 achieving these functionalities but, given the need for 9 the platform for BA it remains logical to use that same 10 platform for EPOSS. This functionality appears to 11 duplicate part of that of TIP/TMS and there is a need to 12 review that to see if better value for money is 13 achievable. 14 "POCL has always suffered from slow, sometimes 15 inaccurate management information of inadequate 16 granularity. The need to squeeze out operational 17 improvements both at outlet level and within the 18 Business' logistics requires a consistent, once only 19 capture of transactional data from outlets. The need to 20 avoid the complexities of dual information streams both 21 for POCL and its clients drives the conclusion that 22 EPOSS is inescapable, albeit further refinements might 23 be possible if time permits." 24 Do you understand that to mean that, for it to work, 25 all of the parts, including those other automation 17 1 projects, would need to work effectively together? 2 A. I think that's what it says. 3 Q. And the Horizon System should be used for EPOSS because 4 it is being used for the Benefits Agency part of the 5 project as well; is that your recollection? Sorry? 6 A. Yes, I'm sorry. 7 Q. By logical extension, if Horizon wasn't being used for 8 the Benefits Agency project, a simpler solution might 9 have been sufficient; would you agree with that? 10 A. Yes. 11 Q. Was that something that was being considered at the 12 time? 13 A. I don't -- I'm not sure it was being considered at this 14 time. 15 Q. Can we move on to 1998, please, and look at POL00028597. 16 Now, that is report that you were sent -- we can see 17 there that you were on the distribution list -- and it 18 covers the period February 1998. Do you remember this 19 document at all? 20 A. I think I have seen it subsequently and I would have 21 seen it at the time, I was on the distribution list. 22 Q. Can we look at page 3, please. It is the bottom half of 23 page 3, "End to End Business Continuity", and it says: 24 "Overall there are no major threats to business 25 continuity, however there are still growing concerns 18 1 regarding the continuation of lost transactions, it was 2 anticipated that lost transactions would decline after 3 the software fix dated 16 February 1998. Continuation 4 of this trend will seriously undermine the credibility 5 of the system." 6 Over the page, the bottom of page 4, please, it 7 talks about the Benefit Payment System and it talks 8 about lost transactions, and it says: 9 "ICL Pathway are continuing their investigation 10 concerning the four categories of lost transactions 11 identified in the last interim report. The objective is 12 to ascertain the root cause at the POCL customer 13 interface. Service Management has escalated the 14 aforementioned problems to Product Management for action 15 to facilitate a solution within the ICL Pathway domain." 16 Now, this is very early on, it's 1998, and I think 17 it all relates to the Benefits Agency part of the 18 system, but were you aware, in that period, of concerns 19 relating to lost transactions? 20 A. It would be something I would have picked up as I was 21 getting into the project or programme. 22 Q. So you were aware of it in 1998? 23 A. Yes. 24 Q. Do you know if they found the root cause of the problems 25 in this particular document? 19 1 A. There was a lot of work that went into lost 2 transactions, which was then turned into the term 3 "incomplete transactions", and there was a huge amount 4 of work that went on to analyse what was causing this 5 and solutions. 6 Q. Was the seriousness of those kinds of issues appreciated 7 at the Post Office in 1998. 8 (Pause) 9 I'm not asking you about the document itself but 10 just -- 11 A. No. I'm sorry, but I am really trying to think about 12 what -- not entirely related to the document. 13 I certainly think that people in the programme 14 understood it. 15 Q. Can we look at another document, POL00069096. This is 16 a document from March/April of the same year, 1998. You 17 can see there, at the bottom, that you are a recipient 18 of notes from a meeting. Can we go over the page, 19 please. It's the Counter Automation Steering Group and, 20 again, you are named as having been present on 21 27 March 1998. 22 Can we look at page 2, please -- sorry, we're on 23 page 2 -- the second half of that page. If you look at 24 the top of the page now, it says: 25 "The Committee noted the update by Dave Miller", 20 1 et cetera. 2 So it seems as though you provided an update to that 3 meeting. Do you remember that at all? 4 A. I don't -- my -- no, I don't remember it but I was 5 clearly there. 6 SIR WYN WILLIAMS: As I understand it, by this time you had 7 become the programme director. 8 A. Yes. 9 SIR WYN WILLIAMS: Yes, fine. 10 A. There was a handover period, sir, of three months, 11 I think, between -- as the PDA was wound down and the 12 Horizon programme took over. 13 MR BLAKE: We can see from the first bullet point there: 14 "The PDA would cease to exist on 31 March which 15 control passing to POCL who intended working more 16 closely with Pathway to develop integrated plans with 17 clear interdependencies, particularly with regard to 18 POCL feeder systems and implementation", et cetera. 19 Can we go over the page, please, to point 4. 20 I think I have put this to other witnesses, you may have 21 seen it before, it says: 22 "Work on EPOSS was continuing and Pathway had 23 indicated that whilst it could provide a system which 24 met the contract, its lack of robustness could generate 25 high level of errors within POCL. This was being 21 1 investigated although it was difficult to quantify how 2 the system would work until after it had been installed 3 and was operational." 4 Did you understand from that that live testing was 5 therefore important and perhaps more important than it 6 had seemed at the procurement stage? 7 A. Certainly live testing was going to be important. It's 8 the -- there are words here about "its lack of 9 robustness could generate high level errors within 10 POCL". There was some discussion yesterday of this 11 issue and the depth of knowledge in the two 12 organisations about it. So I'm -- I was clearly aware 13 of it, but I wasn't aware of the detail that was 14 revealed yesterday in the first document I believe you 15 discussed. 16 Q. Can you give us an indication of what kind of detail 17 that you weren't aware of? 18 A. There was a lot of detail about how ICL Pathway had 19 produced the system and ICL Pathway expressing serious 20 concerns about what had gone on. 21 Q. Absolutely, so it's around this period -- it's August 22 and September 1998 -- that ICL was carrying out what we 23 know was the EPOSS PinICL task force. Is that something 24 that you were aware of at the time? 25 A. I would have been aware at the time, yes. 22 1 Q. So you were certainly aware that there were significant 2 concerns about the EPOSS product? 3 A. Yes. 4 Q. Can we go to another document, a bit later in 1998, and 5 the reference is POL00028320. It's a document of 6 23 November 1998 and it's the Transformation Steering 7 Group. Was this something that you would have received? 8 A. Yes, I think I would. 9 Q. I don't know if you are able to assist with any of the 10 handwriting that's on it? 11 A. June Lilley was my secretary at the time. 12 Q. So it definitely went to your secretary and presumably 13 would have been passed to you? 14 A. Yes. 15 Q. Can we please look at page 6, "Red Light Issues": 16 "There are major concerns about the test results 17 emanating from Model Office and End to End. 18 "The results indicate that cash accounts and 19 transaction data delivered to POCL's downstream systems 20 lack accounting integrity, all of which raises serious 21 doubt about Pathway's ability to enter into the next 22 phase of Model Office and End to End testing without 23 some form of remedial action." 24 What did you understand by a "red light issue"? 25 A. A serious issue that the Automation Steering Group 23 1 needed to take note of. 2 Q. And accounting integrity, presumably, was pretty central 3 to the overall project at that stage, or at any stage? 4 A. Yes. 5 Q. There's some handwriting at the bottom. From what it 6 sounds like, it may be either your secretary's or your 7 own. Do you recognise that? 8 A. Yes, I do. 9 Q. Whose handwriting is that? 10 A. That's my handwriting. 11 Q. Perhaps could you read that to us? 12 A. "Remedial analysis has taken place fully involving TIP 13 and Reference Data personnel. Remedial action is now 14 underway. The point must be made that we will not enter 15 the final phase of testing until we are content that we 16 have a robust set of code. The criteria for entering 17 the final stage of testing being complied by the testing 18 manager for review by interested parties this week." 19 Q. Thank you very much. So you're saying there that you 20 won't enter the final phase of testing until you are 21 confident that you have a robust set of data and that 22 was seen by you as the solution to what was then a red 23 light issue. Would you agree with that? 24 A. From the documentation, yes. 25 Q. Thank you. Can we go over the page to page 7, please. 24 1 Thank you very much. There is a list of existing issues 2 and the second one "Horizon testing": 3 "The testing strategy is not being deployed as 4 originally planned. There is evidence that the early 5 phases of testing are not covering the scope that they 6 should, and there is a danger that the true purpose of 7 MOT testing will be lost, that major faults will be 8 detected during it, and that this will result either in 9 delay or workarounds." 10 You are named as the owner of that particular issue. 11 What do you understand by "owner"? 12 A. That it was for me to deal with. 13 Q. And it mentions the red light programme issues there as 14 well. 15 A. Yes. 16 Q. Now, there's a date there when it was raised. This 17 seems to be not just an existing issue, but it seems to 18 be an issue that was raised on 24 July 1998, four months 19 before; would you agree with that? 20 A. From the date when it was raised, yes. 21 Q. Now, who should have been testing? 22 A. I'm sorry? 23 Q. It says the testing strategy isn't being deployed as 24 originally planned; whose fault is all of this? 25 A. Well, as I was in charge of the programme it was down to 25 1 me to do something about it. 2 Q. But it says it's not covering the scope that it should. 3 What was going on there? 4 A. I'm sorry but I do not recall. 5 Q. Were you aware that that same month ICL were seeking to 6 amend the acceptance procedures which took some emphasis 7 off live testing? I don't need to go to the document, 8 but the relevant document is POL00031119 and it is 9 page 13, for the purpose of the transcript. 10 A. I don't have a memory of that but I would have known at 11 the time, I think. 12 Q. Do you have a memory of late 1998, some emphasis being 13 taken off live testing at all? 14 A. No, I don't. 15 Q. Now, the previous document that I took you to showed 16 that, for example, EPOSS problems would be difficult to 17 quantify until it was operational. So how important was 18 testing at this time? 19 A. I still think it was important to do the testing, to get 20 some indication of what issues might be arising as the 21 thing progressed. 22 Q. Knowing that there were previous errors or concerns 23 going back quite a few years by this stage, would it 24 have been important to live test the system? 25 A. Yes, I think it would. 26 1 Q. Can we move on to December 1998 and it is POL00038829. 2 Now, on this document I think Paul Rich suggested that 3 he thought "Dave" was you there. Might that be right? 4 A. I don't know, but ... 5 Q. This is the Project Mentors' report being sent? 6 A. Yes. 7 Q. Is that Mena Rego? 8 A. That's Mena Rego, so I think it is likely it was me. 9 I can't say definitely. 10 Q. Can we look at page 5 of this document, please. Now, is 11 this something you remember at all, the Project Mentors' 12 report being received from Bird & Bird? 13 A. I was aware of it. It became a lot clearer to me having 14 read this documentation again. 15 Q. An important passage which I have taken previous 16 witnesses to is slightly further down -- sorry, can we 17 just scroll slightly -- there it is. 18 It is the quote from Andrew Davies of Project 19 Mentors and it says that his team are: 20 "... deeply concerned that their findings show 21 a serious problem with the way in which ICL Pathway have 22 developed the system. The impact of this is likely to 23 be that there will be failures to meet essential user 24 requirements, causing the need for extensive rework 25 before the system can be accepted and potentially 27 1 operational problems if the system is rolled out." 2 Is that something that you remember? 3 A. I do, having read the documentation. 4 Q. Can we please go to page 9. This is the paper itself 5 and, over two pages to page 11, please, and it is 6 paragraph 1.3 I would like to look at. This outlines 7 the scope of that Project Mentors' report and the second 8 paragraph at the bottom, it says: 9 "We have to date considered only the BPS system 10 [that's the Benefit Payment System]. Further work has 11 recently started to perform a similar assessment of the 12 approach adopted for other elements of the system, such 13 as EPOSS. Nevertheless our findings are, in our view, 14 sufficiently serious to bring into question the whole of 15 Pathway's design process." 16 Again, presumably something you would have read at 17 the time? 18 A. Yes. 19 Q. Can we look at page 14 of that document, please, and the 20 bottom of that page. So the very final paragraph on 21 that page: 22 "Of particular concern is the EPOSS system. We are 23 informed that at a relatively early stage Pathway wanted 24 the authorities, principally POCL, to be involved with 25 the design of this element. The plan was to use the 28 1 Rapid Application Development ('RAD') methodology to 2 design this system. This approach was started, but 3 discontinued after some months, when the Pathway staff 4 member involved left the project. The suggestion to use 5 RAD leads us to believe that more traditional methods 6 have not been used, and since the RAD experiment was 7 abandoned, we have doubts whether any proper 8 requirements analysis has been performed." 9 Onto the next paragraph, please: 10 "Impacts on the Programme in the Future 11 "Our experience of systems where requirements have 12 not been analysed satisfactorily is that the system 13 fails to meet the users' needs. An effective acceptance 14 test will identify many such failings necessitating 15 considerable rework. The result is a significant 16 extension of the time and cost required to complete the 17 system and roll it out. The alternative is to allow 18 unacceptable processing in the operational environment, 19 with unpredictable and potentially damaging results." 20 Now, we know that this document was passed to you by 21 Mena Rego. Are you able to tell us who else would have 22 seen this document? Perhaps we can look at page 3. 23 There are obviously some direct recipients but who, 24 within your organisation, would have seen or at least 25 known about the contents of this report? 29 1 A. I honestly don't know. 2 Q. Do you think -- I mean, Stuart Sweetman, would he have 3 known about the report? 4 A. I don't know. 5 Q. Why would it have been passed to you in particular? If 6 we look at page 1 -- 7 A. Because it had suggestions that there were issues with 8 EPOSS. 9 Q. Do you remember discussing it with anybody? 10 A. I'm sure I would, but I have no recollection. 11 Q. Do you remember discussing it with ICL at all? 12 A. No. 13 Q. Do you think you would have discussed it with ICL? 14 A. I would have expected to have got their views on it. 15 The question was: this was a report commissioned by 16 Bird & Bird for the Benefits Agency, so there might have 17 been issues about content, and so on. 18 Q. We have heard suggestion that it may not have been 19 totally partial. Is that something that you know about 20 or shared at the time? 21 A. I mean, the -- can I just remind on the context of this. 22 This was, at the time, a few months before BA pulled out 23 of the project. I think there was concern within the 24 Post Office that this exercise by project manager -- 25 Project Mentors, I'm sorry -- was part of an exercise to 30 1 contribute to an understanding of the situation with 2 regard to BA pulling out of the programme. 3 Q. Do you think it wasn't taken seriously enough for that 4 reason? 5 A. I think it's not right to say it wasn't taken seriously, 6 but I think there was a different angle of viewing it 7 than just simply: this is a report that's been produced 8 by Project Mentors. 9 Q. I mean, the concerns raised about EPOSS, for example, 10 were consistent with those raised in 1997, for example, 11 weren't they? 12 A. Yes. 13 Q. So there are certainly consistencies with -- 14 A. I was unaware -- there was an earlier Project Mentors 15 report and I was unaware of this featuring strongly in 16 that, in that report. 17 Q. But the concerns about EPOSS were consistent, for 18 example, with concerns raised at the Counter Automation 19 Steering Group on 27 March 1998 that we have already 20 looked at? 21 A. Yes. 22 Q. Do you agree with that? 23 A. Yes. 24 Q. Were you aware, at the time, that ICL internal audits 25 had suggested a redesign and a rewrite of EPOSS? 31 1 A. I wasn't at the time. 2 Q. Did you share the kinds of concerns that we have seen in 3 this Project Mentors report about the system? 4 A. It would have been discussed, definitely. 5 Q. Certainly from the evidence that we have heard, it looks 6 like both Post Office Counters Limited and Pathway had 7 serious concerns about EPOSS at that stage. Were those 8 concerns shared with one another? 9 A. There would certainly have been discussion about EPOSS 10 and what was going on and what needed to be done. 11 Q. Do you think that the two organisations were being open 12 with one another at that stage? 13 A. There was a document that I may already have alluded to 14 that was discussed yesterday morning about -- which was 15 an ICL Pathway internal document, which I was personally 16 unaware of, and was, in my view, a very significant 17 document. 18 Q. You may not be able to give us the title of that 19 document, but can you tell us, in particular, what 20 information was significant to you? 21 A. What was significant was the degree of -- from within 22 ICL Pathway -- was the degree of discussion and going 23 into details about how the thing had been produced from 24 day one and there were significant criticisms in there 25 about the approach. 32 1 Q. Might that have been the report that was produced by Jan 2 Holmes and Mr McDonnell, which, towards the end, 3 I think, was very critical of, for example, the way the 4 code was built? 5 A. Yes. 6 Q. Thank you. Do you think that ICL was being honest with 7 the Post Office at this stage? 8 A. I don't know to what extent the sort of very honest 9 appraisal of what had happened in EPOSS was being shared 10 with the Post Office. 11 Q. Can we look at POL00039891, please, and can we go 12 straight to page 37, because it's a packet of documents, 13 so a lot of the pages are not relevant. This is 14 a letter from yourself to Mike Coombs at ICL on 15 17 August 1998 and it encloses a document which is over 16 the page. Do you remember this at all? 17 (Pause) 18 Perhaps I will read from the -- 19 A. No, sorry, I'm reading it because I'm not that familiar 20 with it. 21 Q. I will read it for the purpose of the record as well, 22 the first half of that first paragraph. It says: 23 "The Sponsors wish to make clear that the approach 24 they have proposed in the Replan takes into account 25 Pathway's previous track record, for example in terms of 33 1 failure to meet planned dates, and in particular the 2 5th October 1998 software delivery date for Nile Release 3 2.0 despite all milestones having been hit or on target 4 for delivery of components from CAPS." 5 It looks as though it is being critical of ICL's 6 track record. 7 A. I think it was. I -- 8 Q. In fact, we can see a response from ICL at page 45 of 9 the same document, it's a response from Tony Oppenheim 10 and dated 18 September and it begins, in the second 11 paragraph: 12 "We were surprised and disappointed at the 13 aggressive tone of the letter and by the number of 14 gratuitous and unjustified allegations of fault on the 15 part of ICL Pathway." 16 Do you remember -- 17 A. I -- sorry, I remember having read the documentation. 18 Q. Yes. We see quite a lot of letters in this period 19 marked as "Without Prejudice". Was there distrust 20 between the parties? 21 A. No, but there was a behind-the-scenes level of legal 22 activity going on with regard to the possibility of 23 whether this contract would continue. 24 Q. I mean, reference to "aggressive tone", was there some 25 hostility between the two parties? 34 1 A. No. I mean, I was representing BA's honest views at 2 that time. 3 Q. At that time, did you have faith in ICL's performance? 4 A. I had concerns about ICL's performance. 5 Q. How long did this state of affairs last? 6 A. Which state of affairs? I'm sorry. 7 Q. The confrontation between the two parties of this 8 nature. 9 A. If I remember correctly, at this stage, we were trying 10 to work a lot more closely and a lot more constructively 11 with ICL Pathway and there's some reference, I believe, 12 to that in some of this correspondence, so we were 13 deliberately trying not to have -- I hesitate to use the 14 term "Punch and Judy", but, you know, there was a degree 15 at some times, in the early parts of this programme, of 16 that and we were trying to say "We really need to work 17 with the ICL Pathway, we need to get close to them and 18 closer to them to understand what is going on". 19 Q. I think in a document we saw just a few moments ago, 20 there was some concern about the sharing of information 21 there or a lack of sharing of information from ICL. Do 22 you agree with that at around that time? 23 A. Yes. I mean, remember that we are still in the PFI era 24 here and remember I have certainly heard, over the past 25 couple of weeks, a number of references to how 35 1 ICL Pathway reacted to others, particularly the Benefits 2 Agency, trying to get close to the precise nature of the 3 solution. And there was a feeling in BA that they 4 needed to because of the nature of the product, and 5 I think there was a feeling in ICL Pathway that BA, 6 having defined what they wanted, should let ICL Pathway 7 go and provide it under PFI rules. 8 Q. Can we move to the spring of 1999 and look at 9 POL00028370. This is a meeting of the Horizon 10 management team and at page 3 are the actions from 11 an earlier meeting of 3 March 1999. You are the top 12 attendee there. Does that mean -- were you the chair at 13 that stage of the Horizon management team? 14 A. Yes. 15 Q. Can we go to page 6, please, and that is the agenda for 16 a meeting on 10 March 1999 and you are listed there as 17 chair, and the "Purpose" is: 18 "To ensure the HORIZON Programme is fully scoped, 19 planned and managed to deliver in all areas. To monitor 20 the delivery of HORIZON within the agreed Programme 21 timescales and ensure that issues are resolved and risks 22 are managed." 23 At the bottom of the page: 24 "For this meeting, the emphasis is on ensuring 25 action is being taken to manage the key issues and risks 36 1 and agreeing those that should be escalated to the next 2 Horizon and CAPS and Cards Programme Boards." 3 Can we look at page 7, please. There, if you look 4 at the top of the page, those are what are called 5 "Horizon Programme Significant Issues" and then, over to 6 page 9, we have there "Programme Risk Status Report, 7 Most Significant Risks", and I'm going to take you to 8 the top box, so that's number 5. It says there: 9 "Due to a lack of adequate visibility of the 10 ICL Pathway design, and the lack of support from the 11 contract to leverage this visibility, we have been 12 unable to gain a high level of assurance in the adequacy 13 or suitability of the service to support the POCL 14 business. POCL therefore risks the implementation of 15 a service in Live Trial and beyond which will have 16 negative operational impacts, resulting either in 17 a level of service degradation or delay to the start of 18 National Rollout." 19 So "Due to a lack of adequate visibility", that, 20 again, implies that there was some lack of sharing of 21 information; is that your recollection or not? 22 A. I think this refers back to the problem that I was 23 talking about a minute ago, which is ICL Pathway were 24 still saying this is a PFI contract and that was 25 a continual problem I think. 37 1 Q. Yes, and let's look on the right-hand side, red, amber 2 green status: red. So this is seen as a serious issue? 3 A. Yes. 4 Q. There were various actions there. Can we look perhaps 5 at the second one: 6 "Mike Coombs pressed (by DWM) ..." 7 Are you "DWM" there? 8 A. I am. 9 Q. "... to respond to earlier letters regarding the need 10 for ICL Pathway to cooperate ... 11 "... No risk reduction possible whilst ICL Pathway 12 continues to use the terms and conditions of the 13 contract to deny Horizon access to the information 14 necessary for technical assurance of NR2." 15 And you are listed there as the person who is 16 responsible for action there. Is it the case that in 17 March 1999 POCL was concerned that it didn't have enough 18 information to adequately address the adequacy or 19 suitability of Horizon? 20 A. I think it was. I'm clearly going by the written record 21 before me, yes. 22 Q. Let's stay in the same month and look at POL00028419. 23 This is an "End to End Testing" report. Can we look at 24 the second page. You are listed there in about the 25 middle of the page, "Dave Miller Horizon" you were 38 1 a recipient -- do you remember receiving this kind of 2 document, even if you don't remember the specific one? 3 A. I certainly received documents of this kind. 4 Q. Can we look at page 6, please. It is the second 5 paragraph there: 6 "The final pass of End to End was the culmination of 7 earlier passes, which achieved their test objectives to 8 an extent. However, throughout the earlier passes some 9 areas of functionality were not available in the build 10 being used for the test, and other areas fell short of 11 the expected functionality." 12 Slightly lower down on this page, it says: 13 "Lessons learnt from previous passes of End to End 14 were implemented prior to the commencement of the final 15 pass. These were ..." 16 The first one there: 17 "A reduction in the volume of transactions entered 18 onto the Horizon counter throughout the cycle." 19 Can we look over the page, please, thank you very 20 much. The first major paragraph there: 21 "Throughout the final pass issues were identified by 22 all parties. Some issues were remedied and retested 23 within the cycle, ie POCL reference data drop to change 24 the Cash Account type from London to Provincial. It was 25 necessary to apply fixes to the counter environment to 39 1 either move forward, or to improve the quality of the 2 test results, ie the incorrect cash account mapping for 3 a stock item would have caused misbalancing Cash 4 Accounts in all offices." 5 Can we scroll down. There are conclusions there and 6 it says, for example: 7 "The ability to maintain day for day running was 8 achieved by careful management and communication between 9 all parties." 10 Then, at the bottom it says, the final sentence: 11 "Outstanding incidents are under discussion for 12 inclusion on the Known Problem Register ..." 13 Is a fair reading of those points that I have just 14 taken you to that earlier tests had fallen short of 15 their expected functionality? I think that was page 6, 16 sorry, the page before. It's that part beginning "The 17 final pass", really, and there's reference on that page 18 then to carefully managing testing, such as -- 19 Sorry, can we go one page back. Thank you: 20 "A reduction in the volume of transactions entered 21 onto the Horizon counter throughout the cycle." 22 Do you remember that? It appears to be some sort of 23 need to quite carefully manage the testing at that 24 stage? 25 A. I think -- I'm sorry, I don't recall this level of 40 1 detail. 2 Q. Do you perhaps -- if we can over the page, again, to 3 that paragraph that started "Throughout", that's the 4 first major paragraph. Do you remember -- it's the 5 final sentence there -- some issues with cash accounts 6 that needed fixes, for example? 7 A. I mean, I was aware of issues with cash accounts at this 8 time, yes. 9 Q. So this is March 1999 and there were outstanding -- and 10 the very bottom of that page, it's that there are 11 outstanding incidents which need to be included on 12 a known problem register. 13 Can I just ask you, in that paragraph -- sorry, if 14 we go slightly up again to "Throughout" -- I don't know 15 the answer to this at all, it says "apply fixes to the 16 counter environment"; do you know what that meant at 17 all? 18 A. I could think of a few things it could well mean but I'm 19 afraid I can't give you a definitive answer to that. 20 Q. Did you see misbalancing cash accounts as a serious 21 issue at that stage? 22 A. Yes, it was an issue that was being dealt with. 23 MR BLAKE: I have quite a few more questions on this 24 particular topic. This might be, sir, a convenient 25 moment for a break for as long as you would like, 10 or 41 1 15 minutes? 2 SIR WYN WILLIAMS: Yes, okay. Well, by that clock, it's 3 about 12 minutes past, isn't it. So can we start at 4 25 past, is that all right? 5 MR BLAKE: Absolutely. Thank you very much. 6 SIR WYN WILLIAMS: Thank you. 7 (11.12 am) 8 (Short Break) 9 (11.26 am) 10 MR BLAKE: Mr Miller, before the break we were going over 11 concerns with EPOSS, Project Mentors' concerns, 12 visibility issues, cash account issues and that was 13 1997/1998 and we're into 1999 now. 14 Can we go to NSFP000084, please. This is a report 15 of the special meeting of the national executive council 16 of the NFSP on 11 June 1999. Can we go over the page, 17 please. The second substantive paragraph there, you're 18 not listed as present, although you clearly were, 19 present because it says: 20 "Executive council members had submitted questions 21 which they wanted to be put to Mr Sweetman and 22 Mr Miller." 23 I think you came in halfway through that meeting. 24 A. That's correct, yes. 25 Q. Can we look at page 6, please, and that's the point at 42 1 which you joined the meeting, so there, just below 2 question 9, it says: 3 "Mr Sweetman & Mr Miller joined the meeting." 4 Do you remember that meeting? 5 A. I don't have a very good recollection of it but I have 6 read this document and I'm reasonably content with what 7 I see there. 8 Q. Page 9 of this document, please. There are plenty of 9 issues that seem to have been covered by Mr Sweetman, 10 but page 9 is the significant part where your name is 11 mentioned. I'm going to read those three paragraphs for 12 the purposes of the record. It says: 13 "Mr Miller further explained that they were in the 14 process of a 'live trial' running the software in 15 300 offices. If that was done successfully by the end 16 of July they would be looking to start the national 17 rollout in the third week in August. This would be 18 built up at a relatively low rate to Christmas, when 19 they would review how the offices on the system were 20 working. It was probable that there would be around 21 2,000 offices operation by Christmas and it was 22 estimated that by around 10th January 2000 they would 23 start the rollout at the full rate of ..." 24 It says "£300", it must be "300 per week": 25 "Present indications were that this timescale to be 43 1 achieved. 2 "Mr Butlin ..." 3 Who was Mr Butlin, do you remember? 4 A. Yes, I knew Mr Butlin. He was the lead man for the 5 National Federation of SubPostmasters in the South West 6 and he was a subpostmaster in Torquay. 7 Q. Thank you: 8 "Mr Butlin referred to the serious problems that the 9 South West was having with the software, especially with 10 the balance, and asked Mr Miller whether any changes 11 were to be made in that respect. An assurance was 12 sought by the Committee that the balance would become 13 more user-friendly, more logical and easier for 14 subpostmasters to use. Would it be possible for 15 subpostmasters to have more input into the way the 16 balance was done. The North East was facing similar 17 problems, subpostmasters were incurring additional staff 18 costs, an example being around £350 in the four weeks 19 that his office had been up and running. 20 "Mr Miller acknowledged that there was a problem and 21 said that there would be a software change to improve 22 the situation. If there were serious problems that 23 could not be overcome in the timescale the rollout would 24 be delayed." 25 So what's going on there is subpostmasters seem to 44 1 be experiencing issues including balancing problems. Do 2 you agree with that? 3 A. Yes, I think Alan was particularly concerned about the 4 time it was taking to balance and I think there was 5 an issue of, because it was taking longer time to 6 balance, they felt they ought to be given some money to 7 support that. 8 Q. But on the second line of that second paragraph from 9 Mr Butlin, it does seem to include some problems with 10 the software and I think your response acknowledged that 11 there was going to be changes to the software. Were you 12 aware, at that stage, that the subpostmasters were 13 experiencing software problems? 14 A. At the time I simply cannot remember but it does say 15 that here. 16 Q. Part of your response was that if there were serious 17 problems that could not be overcome in the timescale, 18 the rollout would be delayed? 19 A. Yes. 20 Q. Yes. Then if we scroll down, more questions in this 21 document were answered by Mr Sweetman, but this 22 particular one was answered by you. Was that because 23 you were the technical representative, between the two 24 of you at that meeting, or because you were more hands 25 on with the Horizon project or ...? 45 1 A. Yes, and I think also because Alan was known to me, 2 I think. 3 Q. At that stage, given the evidence that you have already 4 given today, you would have been aware of, for example, 5 the concerns about EPOSS that we have already discussed. 6 Do you agree with that? 7 A. Yes. 8 Q. Can we go to another NFSP meeting, this time on 21 to 9 23 June 1999 and that's NFSP00000471, please. Thank you 10 very much. This is a meeting of the national executive 11 council on those three days. 12 I don't think you attended this particular meeting 13 but you're mentioned in it and that's why I'm going to 14 take you to the relevant pages, and it is page 15, 15 please. Thank you very much. 16 So these are the minutes, or this is the report of 17 the meeting and it's at page 22 where there's discussion 18 of counter automation. It's the bottom of the page. 19 It's at 9(c) where there is discussion of counter 20 automation begins and can we go over the page, please, 21 and it's the bottom half of page 23 that I would like to 22 look at. Again, I'm going to read the relevant passages 23 for the transcript. It says: 24 "There was general discussion on the severe 25 difficulties being experienced by subpostmasters who are 46 1 already running an automated system. Seven sheets of 2 comments from the North East had been passed to Mr Dave 3 Miller. The difficulties and trauma being experienced 4 by some subpostmasters were giving rise to concerns for 5 their health and emotional wellbeing. It was felt by 6 some that a tragedy was not far away if something was 7 not altered soon. The software was considered to be 8 poor quality and not intended to run such a huge 9 network. The system is based on ECCO which was 10 originally written for a network of 700 -- not 15,500. 11 "Although there may be improvements to the general 12 system, most members present wanted to know if the 13 committee had the power to say that the current system 14 is obviously not working and instruct ICL and the Post 15 Office to review or restart with more 'subpostmaster 16 friendly' software." 17 So, at that stage, at that meeting -- I appreciate 18 you weren't present -- but it appears as though serious 19 problems were being raised by subpostmasters about 20 software issues; would you agree with that? 21 A. Yes, and I personally attended a meeting in the North 22 East -- a large number of subpostmasters. 23 Q. Do you remember receiving those seven sheets of 24 comments? 25 A. Well, I think actually one of my members of staff was at 47 1 the meeting with me in Newcastle and produced that 2 document. 3 Q. Does that passage reflect the kinds of concerns that you 4 heard at your meeting? 5 A. Well, that meeting was a very lively meeting. It was 6 held at Newcastle Rugby Club. It -- there was a recital 7 of concerns and problems, quite genuinely from the 8 subpostmasters and, towards the end of the meeting, 9 I actually said "If any subpostmaster here does not want 10 this in their offices, if they can't cope with it or 11 whatever, please say so and it will be removed in the 12 next fortnight". There was one person in the room, one 13 subpostmaster who said they wanted the equipment 14 removed. 15 Q. Reference here to concerns about their health and 16 emotional wellbeing at this stage, in the summer of 17 1999. Presumably, it wasn't an all or nothing. They 18 could have had an improved version, couldn't they? 19 A. Well, I mean, there was a huge amount of work going on 20 on the products to try and get them into shape, so 21 I think that was a given. 22 What I was trying to find out, given the words you 23 have quoted to me here, is whether it was as extreme as 24 it may appear here and I'm only saying that, when given 25 the opportunity not to have the equipment in the office, 48 1 only one subpostmaster took up that option. 2 Q. Would you accept that, from the information that you 3 were told, you were aware that there were, nevertheless, 4 significant concerns with the existing system? 5 A. I think they -- what came over was their concern with 6 it. It was a new system -- just, if you remind me, is 7 the date of this -- 8 Q. 21 to 23 June 1999. 9 A. Yes, and they had also just been told, remember, that 10 the BA product was not going to be there and available 11 for them. 12 Q. In fact, one attendee makes very much that point. Can 13 we go over the page to page 24, please. It is 14 Mr Jannetta. Do you know Mr Jannetta at all? 15 A. I don't. 16 Q. So: 17 "Mr Jannetta said that he and others of his 18 colleagues would have to rely on those subpostmasters in 19 the North East and South West who currently have this 20 system in place, to make sure their voices are heard 21 with their problems and to ensure that all the 22 difficulties encountered are satisfactorily overcome. 23 The point must clearly be made to the Business that this 24 automation is not going to do the job, that 25 subpostmasters have learned enough to know that it will 49 1 not work satisfactorily and that it must not be rolled 2 out to an excess of [15,000] sub post offices until all 3 the problems had been overcome." 4 It says: 5 "The Richard Jackson automated system ..." 6 Were you aware of something called the Richard 7 Jackson automated system? 8 A. I believe so, yes. 9 Q. Is that an alternative system of some -- 10 A. I think it was something that some -- a few 11 subpostmasters were interested in, maybe commercially, 12 but I couldn't substantiate that. 13 Q. So: 14 "The Richard Jackson automated system was considered 15 by both Mr Marshall and Mr Darvill to be an easier to 16 use, preferable, alternative to the present system. 17 Mr Darvill wanted to know if the lawyers had some hold 18 on the Horizon system for some reason, that it could not 19 be changed." 20 Just pausing there, you have said that you offered 21 them "system or no system"; did you, at any stage in 22 this period, offer them an improved system, a different 23 system? 24 A. Sorry, what I meant to convey was that, besides what is 25 said here, we were working hard on the programme with 50 1 ICL Pathway to improve these systems, so that was going 2 on all the time, constantly, and -- so, in response to 3 part of your question, the thing was being improved, as 4 far as I was concerned. 5 Q. The next passage: 6 "The General Secretary assured the meeting that 7 Mr David Miller had been informed of the difficulties in 8 no uncertain terms. Mr Butlin said we must insist 9 access to ICL Pathway so that we can tell them what we 10 would like to see. It is not difficult and does not 11 take long to rewrite software. The problems must be 12 resolved with Pathway and they must sort it out with 13 POCL. We cannot continue to have experienced 14 subpostmasters/mistresses in distress on the telephone, 15 struggling until all hours to balance. These situations 16 must not be permitted to arise. It was pointed out that 17 if the Lottery offices had to deal with this situation 18 it would not be tolerated." 19 A. Can I just -- with reference to Mr Butlin, he was 20 concerned, and because I knew him, I made a special 21 point of keeping in touch with him, to the point where 22 he had it installed, we had a conversation about his 23 experience there. When he did his first balance and we 24 had a conversation there, and the conversations 25 continued, to a point where he was able to say to me 51 1 that, in fact, the system was speeding up his balance 2 and that he was content with it. 3 Now, that's a -- you know, not a documented 4 conversation but, as I say, Alan was known to me very 5 well, I visited his office on two or three occasions and 6 I was concerned to maintain contact to see how things 7 were going. 8 Q. The feedback that's being revealed there, though, isn't 9 just about his personal experience, is it? 10 A. No, no, it's not. I agree. 11 Q. Yes. Did the general secretary -- I think that's Colin 12 Baker at that time -- did he inform you "in no uncertain 13 terms" as it says there? 14 A. He was certainly expressing concerns through the piece, 15 so whatever his members were saying to him would be fed 16 back to me. 17 This is, of course, a report of a general debate at 18 this meeting, an internal debate in the National 19 Federation of SubPostmasters, and I can't -- I was just 20 aware of fairly continuous feedback from the NFSP, 21 negative and positive, throughout this piece. 22 Q. I'm not sure we can see positive feedback in this 23 particular -- 24 A. No, I agree, I'm sorry, I wasn't suggesting that. 25 Q. Knowing what we know happened to subpostmasters, would 52 1 you accept that this kind of information is highly 2 relevant information? 3 A. Yes, I do. 4 Q. The next page, Miss Lindon -- do you know Miss Lindon at 5 all? 6 A. I'm not sure I do. 7 Q. Miss Lindon makes some comments, and it's the second 8 half of that, it says: 9 "Pointing out that it is now three years since the 10 project was first mooted, which is a very long time in 11 the technological world, she suggested that a different 12 system be tried, smaller and less complicated, which 13 would be of greater benefit to the smaller offices and 14 probably be a good deal cheaper and easier to operate. 15 POCL seem to be attempting to build an audit system into 16 the project, making the whole thing far too big, too 17 cumbersome and too complicated." 18 Was that a view that you were aware of at the time, 19 not necessarily from this particular -- 20 A. I wasn't aware of this particular view, no. 21 Q. Not from that individual, but were you aware of views 22 that a simpler system could be adopted if the Benefits 23 Agency project was not going to be going ahead? 24 A. There was an option, which was to say "Stop all work on 25 what's going on in this contract", and to redefine and 53 1 to retender and to have a system that was, as it were, 2 direct for POCL, not one that had been adopted from the 3 BA/POCL routes. 4 Q. Do you think the suggestion that's being made here might 5 have been a sensible suggestion? 6 A. Well, I think we -- we looked in various parts of the 7 business, when BA unilaterally pulled out, about going 8 forward and, certainly, the advice I was getting was "We 9 need to go forward, and ICL Pathway, because they're 10 there and they have a large degree of experience, are 11 still the best option". 12 Q. The final paragraph on the page, currently: 13 "As no one appeared to be listening to, or acting 14 upon, the problems being experienced by subpostmasters, 15 Mr Ingham suggested the Federation take the bull by the 16 horns and write to whoever is Bruce McNiven's 17 senior ..." 18 Who was Bruce McNiven's senior? 19 A. Me. 20 Q. "... stating that we have lost confidence in the system. 21 The national president confirmed that this provide test 22 had already been made to David Miller and we must now 23 wait to see what they come back with." 24 Can we keep on scrolling -- 25 A. Sorry, could I comment on that? 54 1 Q. Absolutely. 2 A. I was never aware of a communication from the 3 National Federation, a formal communication or informal, 4 that said they had lost confidence in the system. 5 Q. I will very shortly take you to correspondence between 6 yourself and the NFSP. 7 A. Okay, all right. 8 Q. Let's just finish with this document by reading that 9 final passage that's on the screen: 10 "Mr Peberdy thanked the Council for their 11 information. These were exactly the problems expressed 12 to Dave Miller at their meeting on 11th June. The 13 National President had taken 7 pages of faults and other 14 things the Federation knew to be wrong, including the 15 fact that some faults dated back to January 18997, since 16 when POCL have not addressed the problems, only been 17 fire-fighting. Clearly we cannot accept something which 18 keeps people at work until after 10.00 pm at night." 19 Do you remember those conversations with Mr Baker? 20 A. I know they reflected to me there was concern from their 21 members about how long it was taking to balance. 22 Q. Can we go to NFSP00000073, please. This is the 23 correspondence that I mentioned. 24 Now, this covering letter is dated 24 June but, if 25 we go over the page, it's a letter from you to Colin 55 1 Baker, it's dated 22 June, so actually it seems to have 2 been at least sent during that meeting of the NFSP. Do 3 you remember that at all? 4 A. I remember writing to Colin. 5 Q. Paragraph 1, it refers to dealing with problems and it 6 talks about the meetings: 7 "Through these meetings we were able to identify the 8 same items that you have raised and these are now all in 9 the process of being dealt with through our negotiations 10 with ICL Pathway. However, it is also the case that we 11 have some very tight timescales in which to convert the 12 Heads of Agreement drawn up by the Treasury and the DTI 13 into a revised contract structure. Unfortunately, our 14 room for manoeuvre has been constrained and we are 15 working extremely hard to ensure all the key issues are 16 identified as part of the acceptance process." 17 Now, something we discussed at the very beginning of 18 today was tight timescales, time pressures. A that 19 point in time, June 1999, were you feeling some time 20 pressure to get on with the system? 21 A. Absolutely. 22 Q. Now, the explanation starts by talking about surveys. 23 Could we scroll over the page, please. Thank you very 24 much. "Modifications" -- I want to look at "Training". 25 It says there: 56 1 "Training 2 "This is probably our greatest area of concern and 3 is being pursued vigorously with ICL Pathway. The areas 4 you have identified such as balancing and cash account 5 are part of the redesign which is currently taking place 6 and is based on subpostmasters ... experience." 7 The next paragraph responds to a suggestion that 8 there be office-by-office training and the response 9 there is "we can't provide that because that is too 10 expensive". 11 Over the page, please, to "Balancing". It says: 12 "Your concerns about printing, redeclaration of 13 stocks, the identification of First and Second Class 14 stamps and postal orders are already in the process of 15 resolution and a software drop in July will deal with 16 them. However, there are issues around the balancing 17 process which are part of the training response and have 18 yet to be satisfactorily addressed by Pathway. Clearly, 19 this is something on which we will base our decisions 20 about acceptance and rollout". 21 Now, it looks very much, by this stage and in this 22 correspondence, that by that time the blame had shifted 23 to focus on training issues. Do you agree with that? 24 A. I think there were training issues and we ploughed money 25 in -- I think we ploughed more money in and we had our 57 1 own resource supporting subpostmasters during this 2 process. So I think we were pressuring Pathway but we 3 were also prepared to put our hand in our pocket to 4 actually support subpostmasters through the early stages 5 of this process. 6 Q. I think hand in your pocket only to some extent because, 7 under the training, it said that you couldn't do 8 office-by-office training? 9 A. No, and I think that would have been prohibitively 10 expensive. 11 Q. Looking back at the first paragraph on the first page, 12 so that's page 2 of this particular document, do you 13 remember I took you to this paragraph where it mentions 14 working up against tight timescales. Do you think it 15 was convenient, at that stage, to be focusing on 16 training issues and for it to be seen as an issue with 17 training because of the tight timescales? 18 A. I think training was genuinely an issue at that time. 19 Q. But what we don't see in this document is an explanation 20 such as "We're going to rewrite EPOSS", or any kind of 21 software-type issues that we had previously been 22 discussing and had been raised, for example, by 23 subpostmasters. 24 I mean, earlier in June, for example, you seemed to 25 accept that balancing was a software issue. Do you 58 1 think the perception had changed within POCL, by this 2 stage, and the focus had shifted to training? 3 A. I don't think the software issues had, in any way, gone 4 away and they were still being worked on, but the 5 pressure on -- to get the training right was very 6 strong, not just from the National Federation, but from 7 people within the programme. 8 Q. I mean, let's look at page 4 of this document. It is 9 the final paragraph on page 4. It says: 10 "I am keenly aware of the pressures and concerns 11 experienced by the subpostmasters at the front end of 12 automation. Subpostmasters feelings of incompetence and 13 abandonment really do hit us hard and understanding 14 their experiences at first hand has been the single most 15 important lesson we have all learned." 16 Now, "feelings of incompetence" doesn't sound really 17 like the kind of feelings we heard about being expressed 18 at that NFSP meeting. They sounded less of competence 19 and more of concerns with the actual system. Do you 20 think things have shifted here to blaming 21 subpostmasters? 22 A. Well, I think this -- I think this relates to 23 an increasing understanding that the introduction of 24 this system into a population of very varied IT 25 experience could provoke feelings of incompetence 59 1 amongst some individuals and we were trying to support 2 that and get through that stage where then they then 3 felt competent. 4 Q. But do you accept that, at that stage, it wasn't just 5 feelings of incompetence but feelings of stress and 6 health concerns dealing with a system that wasn't 7 working, rather than a person who couldn't work 8 a system? 9 A. Judging by what I was -- was being fed to me and what 10 I learned at Newcastle, I would say yes. I would also 11 take you back to the question I asked them and the fact 12 that only one of them said "I don't want this system". 13 If I -- I asked that question in the real knowledge 14 that, if a significant number of those people in the 15 room had said "Take it out", that would have stopped me 16 and the programme in my tracks. 17 Q. Well, would that be offering them the system or no 18 system, rather than an improved system? 19 A. Well, it was -- the system, I think I have said to you, 20 was being improved constantly. What I was trying to get 21 to was, if a significant number of people who had been 22 taking part in the trial simply didn't want to do it, 23 didn't want the system, then that would have given me 24 a signal in one direction. 25 The signal I got was that, whilst they were very 60 1 conscious of being guinea pigs, of having had to work 2 hard, of having to put up with frustrations and all the 3 things associated with a live trial, that actually they 4 still thought it was worth carrying on with it. 5 Q. Do you think the word "incompetence" there might be 6 problematic? 7 A. On reflection, with the benefit of hindsight, possibly. 8 Q. Because it wasn't just incompetence at that stage, or 9 even incompetence: there were significant problems with 10 the software, weren't there? 11 A. Yes, but the Federation were representing to me a -- 12 what their members were feeling and the balance -- just 13 to go back, the balancing issue, at that time, was very 14 much one of how long is it taking us to do this and is 15 it going to improve the time that it takes us to do it, 16 or is it going to go on being a long time. 17 Q. Were those higher up the chain in the Post Office aware 18 of those kinds of concerns that we have heard today that 19 were being expressed at those NFSP meetings? 20 A. You mean above me? 21 Q. Yes. 22 A. I don't know, is the honest answer. That doesn't mean 23 to say -- I mean, Stewart and I discussed the programme 24 fairly frequently and I'm sure you will have the 25 opportunity to find that out. 61 1 Q. I don't know if you saw the evidence of John Roberts, 2 but he seemed to suggest, in his evidence, that there 3 weren't significant complaints from the NFSP at this 4 time. Do you think he was being kept sufficiently 5 informed? 6 A. Well, if that -- I don't recall that, but if that's what 7 was being said then, clearly, that was not right. 8 Q. Do you think it was well-known amongst those at POCL 9 that there were these kinds of complaints from members 10 of the NFSP? 11 A. I think -- I mean, there wasn't a general briefing note 12 issued on the matter, as far as I remember. I would 13 certainly have communicated my experience in Newcastle 14 to my colleagues on the programme. 15 Q. So this is June 1999 and I want to take you to one month 16 later, 20 July 1999 and can we look at POL00000352 17 please. This is the Post Office board meeting on 18 20 July and you are listed there as "Others attending". 19 I think you were attending for matters PO99/78 and 79. 20 Do you remember that? 21 A. I don't actually remember it but it is quite clear I was 22 there. 23 Q. Can we look at page 8, please. This is where discussion 24 of Horizon begins and that's the PO99/78. Can we go 25 over the page, please, at the bottom of this page 62 1 "Implication on the Post Office of the 24 May 1999 2 Horizon Agreement" and you can see there it says 3 "PO99/79", so that's the second of those items. 4 Can we just have a look at what it says at the 5 bottom of that page. So those board minutes, in 6 relation to the implication on the Post Office of 7 24 May 1999 begin by saying: 8 "The Board has considered the Horizon contract in 9 detail ..." 10 Over the page please. It talks about an awayday 11 discussion. Do you remember the awayday discussion? 12 Were you present? 13 A. I'm not sure I was. 14 Q. I think this took place in a -- is this the meeting in 15 the manor house in Gloucestershire? Do you remember 16 that at all? 17 A. I don't. I'm not in any way saying it didn't happen and 18 what's here is not a record of it, but I just don't 19 remember it. 20 Q. "(ii) The Board had to decide by 31 July 1999 whether 21 it wanted to terminate or sign the revised contract with 22 ICL for the automation of post offices. Key elements of 23 the new contract were ..." 24 For example: 25 "Electronic Point of Sale functionality, automated 63 1 payments, local feeder systems and Order Book Control 2 Systems ..." 3 Now, was this, therefore, a, if not the, key 4 decision-making moment in respect of the Horizon 5 programme? 6 A. This was taking place on the -- please remind me, was it 7 19 July? 8 Q. 20 July. In fact, it was an away weekend, so I think it 9 was a weekend. But, anyway, these minutes are from 10 20 July. 11 A. Whether it was "the", it was clearly "a" key decision 12 point. 13 Q. I think in May the heads of agreement had been signed 14 but here the board are saying "We need to decide whether 15 we want to terminate or sign a revised contract". 16 I mean, that must have been a pretty significant moment 17 in the life of the Horizon programme. 18 A. Yes. 19 Q. Can we go over the page, please, and look at point (v): 20 "System rollout was scheduled for 23 August 1999 21 with acceptance needed by 18 August. There were three 22 categories of acceptance each with a threshold which 23 would determine whether or not rollout could proceed: 24 high, medium and low. 25 "One incident within the high category, or more than 64 1 20 incidents within the medium category, would result in 2 the system not being accepted. Currently there were 270 3 incidents of which 1 was high and 29 were medium. Of 4 greatest concern was the inadequate training of 5 employees although a new package had been produced and 6 work on the other incidents was underway. At this stage 7 it was expected that there would be no reason for not 8 accepting the system by 18 August." 9 Now, was your impression that those who attended 10 that meeting did or did not understand what an incident 11 was? We know they had read the contract. 12 A. I honestly don't know. 13 Q. Now, looking at point (vi): 14 "Excluding the concerns over training, David Miller 15 considered the system robust and fit for service. 16 "(vii) A number of subpostmasters were experiencing 17 difficulties operating the system and in particular with 18 balancing." 19 Now, "robust and fit for service", that all sounds 20 quite different to all those documents that we have been 21 looking at this morning; would you agree with that? 22 A. Yes, and I have read this document and I agree with you. 23 Q. This is only a month after the NFSP meeting -- 24 A. Yes. 25 Q. -- where concern was being raised about the trauma and 65 1 health and wellbeing of subpostmasters. What's your 2 view on this now then? 3 A. That if that is -- if I went in there and said "David 4 Miller considered the system robust and fit for 5 service", that wasn't correct. 6 Q. Do you remember, did the board question you on that at 7 all? 8 A. I'm sorry, and this is genuine, I have no recollection 9 of this. 10 Q. If you made that statement do you regret it now? 11 A. If I made that statement, I do regret it. 12 Q. Let's look at what, in fact, unraveled after that 13 statement that it was "robust and fit for service" and 14 then let's look at August 1999 and that's POL00028363. 15 This is 10 August, so not long after, and I think there 16 is an email from Chris French. Who was Chris French, do 17 you remember? 18 A. Chris French was a contractor. He ran a company called 19 French Thornton which advised various levels of the Post 20 Office about IT and he was involved with the Horizon 21 programme. 22 Q. That's an email sent to you on 10 August: 23 "From yesterday's wrap up meeting, you were 24 considering whether or not ... it was in POCL's 25 interests to declare to ICL Pathway that acceptance 66 1 could not be given on 16th." 2 We see there reference to Acceptance Incident 376. 3 Do you remember that Acceptance Incident? 4 A. I'm aware of it having gone through all the paperwork, 5 yes. 6 Q. So that was high. It had not been retested 7 satisfactorily on time and the only plan seemed to be 8 a workaround. That seems to be the information that you 9 are being given by Chris French. 10 I'm going to go to another document that's two days 11 later, 12 August, it's POL00028362. This is a meeting 12 of the Management Resolution -- it's a pre-meeting. 13 Were you involved in this at all or would you have 14 been involved in this? 15 A. It says it's a Management Resolution Pre-Meeting. 16 I don't know. 17 Q. Let's have a look at the top. I think you presumably 18 would have been aware of this information, that, by 19 12 August, there was a clear failure to meet conditions. 20 Acceptance Incident 298 was "Definite high". Acceptance 21 Incident 376 was "high but may not be supported by 22 Copping given rectification plan". 23 If we look at "KB" -- do you know who "KB" was? 24 A. Keith Baines, the late Keith Baines. 25 Q. At the bottom of Keith Baines, it says: 67 1 "Therefore failure would require full retest -- do 2 we want this? Not in our interest to do everything 3 again. 4 "Stability issue 5 "Not an acceptable position 6 "Root and branch review required -- 2 months but the 7 solution is likely to be incremental." 8 Can we go down, "Proposed approach". It says 9 there -- it is the third bullet point: 10 "Also we need assurance that problem will not 11 recur -- we need to be convinced that there is 12 a solution that will allow monitoring of this 13 reconciliation and that there is a reporting that 14 demonstrates it is satisfactory 15 "External auditors say this problem could lead to 16 a qualification of the accounts -- although we do need 17 to reach a financial estimate of the likely scale of 18 errors." 19 What's being said there, do you remember? 20 A. Well, I think there was discussion on what we needed to 21 do to sort the issues out and the external auditor 22 problem, specifically, was that I think Stuart Sweetman 23 and I agreed of -- exposure of these issues to our 24 external auditors and I received, yesterday afternoon, 25 a copy of that letter, so we had made the external 68 1 auditors aware that there could be issues and they told 2 us what would happen if these issues weren't sorted. 3 Q. I'm going to take you to that letter in a moment. Let's 4 look at "Training issue" it says support was needed for 5 subpostmasters to produce their first balance. 6 Can we go over the page please, "View on NRO", so 7 that's the view on national rollout. 8 A. Yes. 9 Q. It says: 10 "The steer from the Board is not to accept 11 a sub-standard system." 12 But surely, by that stage, you had already told the 13 board that the system was not substandard; would you 14 accept that? 15 A. Well, you quoted from the board comments. You didn't go 16 over the page where I believe there is some reference to 17 board members being aware that there were issues. Am 18 I right? 19 Q. Well, I'm happy to look at that document again and 20 I think I know what you're talking about. Let's have 21 a quick look at POL00000352, and I think it's page 12 22 that you're talking about, which says: 23 "Members were concerned that a number of technical 24 issues remained unresolved and that the BA contract 25 position was still unclear." 69 1 So, certainly, I'm happy -- more than happy -- to 2 spend some time on that. You don't deny, though, having 3 said that it was "robust and fit for service"? 4 A. I -- that was the record of the meeting. Whether I was 5 given the minutes to agree or not, I don't know, but 6 that's the record of the meeting. 7 Q. So over, sorry, to the document that we were just on, 8 that's POL00028362, and the final page which was the 9 view on the national rollout, where it says: 10 "The steer from the Board is not to accept 11 a sub-standard system." 12 We have, at the bottom there, a long list of high 13 and medium severity incidents. I mean, this whole 14 meeting here seems to be about Pathway not meeting 15 conditions; would you accept that? 16 A. It's an analysis of where that was clearly correct. 17 Q. Were there concerns, at that stage, amongst those who 18 were working on the project? 19 A. Yes. There were also concerns, if you look at Pathway's 20 view and POCL's view, about the view of certain 21 incidents. 22 Q. It seems as though POCL's view was things were worse 23 than Pathway were accepting? 24 A. Yes. 25 Q. How did you feel at that stage, having told the board 70 1 a month earlier that it was "robust and fit for 2 service"? 3 A. I think I was -- the programme was concentrating on 4 sorting out the issues in front of us. 5 Q. So it was looking forward, rather than looking back? 6 A. Yes, it was. 7 Q. Let's look at a couple of incidents during this period. 8 Can we look at POL00028337, please, and that's 9 a document from 15 August 1999 and it looks at AI298 10 "System Stability". 11 Point 2: 12 "Evidence from the live trial shows that the counter 13 system is unstable and lacking the 'industrial strength' 14 necessary for a production environment." 15 Over the page, please -- sorry, if we could scroll 16 because I can tell you it looks at the business impact 17 at 3 and one of the business impacts -- or it is, in 18 fact, phrased as an "other impact", over the page, point 19 (v), it refers to: 20 "Risk of errors and impact on POCL transaction 21 processing due to increased errors in fall back." 22 Point 4 talks about a severity rating. POCL's 23 severely rating in relation to this issue is high, and 24 I'm going to read that paragraph below the rating of 25 high. It says: 71 1 "POCL assert that this Acceptance Incident is High 2 because it clearly comes under the contractual 3 beginnings of High 'Failure to meet an Acceptance 4 Criterion which would have a substantial impact on the 5 service received by the customer'. Pathway have advised 6 that their understanding of the rate of occurrence 7 constitutes a Low severity rating. However, the 8 statistics on which this conclusion was based has now 9 been proven to be incorrect. In fact, the rate of 10 occurrence has now been shown to be 48 times greater 11 than that on which ICL Pathway based their assessment. 12 In comparing the performance of Horizon with that of 13 POCL's legacy systems (ECCO and ALPS), it should be 14 noted that the reboot rate per terminal for Horizon is 15 35% compared with ECCO at 0.30% and ALPS at 0.75%." 16 So this was an Acceptance Incident where the main 17 problems were things like system freezes, non-visible 18 problems -- sorry, visible problems, rather than 19 necessarily -- 20 A. It was. 21 Q. -- invisible problems but, as we saw slightly above on 22 this page, at page 5, there was, nevertheless, included 23 in this Acceptance Incident a risk of errors and impact 24 on transaction processing. Do you remember that? 25 A. I -- in this detail at the time, I don't. 72 1 Q. At the time, would you have been aware of this detail? 2 This kind of document, would you have seen that? 3 A. I'm not aware of having seen this document before. I am 4 not saying that I didn't see it at the time. 5 Q. Do you remember issues of this nature being brought to 6 your attention? 7 A. I certainly remember issues of this nature. 8 Q. Over to page 5 and this looks at Acceptance 9 Incident 376, "Lack of data integrity on the data 10 stream(s) across the TIP interface". Can we look at 11 paragraph 2: 12 "Pathway claim that they have discovered all the 13 root causes ..." 14 Then, just while we are on this, sorry, it's still 15 15 August 1999, let's look at paragraph 3: 16 "However, Pathway's paper TIP Acceptance Incident 17 Clearance -- Update from Lorraine Holt (13/8/99) -- 18 provided to POCL on [13 August 1999] indicate that this 19 problem can be caused by a number of root causes, 20 including faults that do not have the same profile as 21 that described above and not all of which have been 22 fully analysed or fixed." 23 Can we look at paragraph 4: 24 "Furthermore, there has been an incident where 25 wholesale numbers of transactions were not sent to TIP 73 1 due to an (albeit unusual) internal processing error 2 within Pathway's central systems." 3 The final sentence in that paragraph is: 4 "Pathway have indicated that they would be willing 5 to discuss with POCL how they might do this (on 6 an ongoing basis) and admit that there may well be 7 future occurrences which they cannot predict." 8 Can we go over the page, please, to "Business 9 Impact", paragraph 1 -- I will, unfortunately, spend 10 a bit of time on this document, do let me know if you 11 need a break at any stage: 12 "The ICL Pathway service is an integral part of 13 POCL's client accounting system -- indeed the service is 14 an accounting service. As such it accounts for turnover 15 of £140 billion per annum involving some 3 billion 16 transactions. Given the scale of this system even 17 relatively small defects are capable of generating 18 errors within the accounts of very significant amounts. 19 POCL's existing manual and legacy automation systems, 20 which Pathway's service will replace, are designed to 21 minimise and correct such errors by incorporating 22 controls and appropriate validation procedures." 23 Can we go to paragraph 3, please: 24 "Pathway has not provided POCL with a complete 25 description of all the faults creating the missing data 74 1 and therefore POCL has not received any description of 2 how and when all these faults will be fixed. Pathway 3 has admitted that they do not yet fully understand the 4 root cause of all the problems. A 'workaround' has been 5 offered which attempts to trap and correct errors after 6 they have occurred but this cannot provide assurance of 7 a complete solution to the faults in the service, nor 8 has POCL had visibility of the testing plan to ensure 9 that the fix does not introduce further problems. 10 "It is a fundamental of any accounting system that 11 it provides a complete and accurate record of all 12 transactions." 13 It goes on to talk about the problems if there is 14 not a complete and accurate record of all transactions, 15 including, for example, if we look at paragraph 5, it 16 says: 17 "Given the nature of the errors concerned the 18 potential is for these write-offs to be significantly 19 threatening the business performance against shareholder 20 targets and potentially as a going concern." 21 I mean, it seems as though they had in mind at that 22 stage the errors being dealt with by way of write-offs, 23 rather than possibly prosecutions. 24 If we look at paragraph -- 25 A. Whether -- I -- I would be interested to know what -- 75 1 the accounts that they're talking about here because 2 this is reflected in the balance sheet accounts -- 3 Q. Yes. 4 A. -- and TIP was harvesting information on the front end 5 and was then settling with major clients. And I think 6 there was a serious concern if that was not happening 7 correctly. So -- and it is actually highlighted, 8 I believe, as one of the issues in the Deloittes letter. 9 Q. Absolutely, and I will, I promise you, get to that 10 letter. I think that's actually the next paragraph, 11 that's paragraph 6, where it talks about: 12 "These balances are also the basis of settlement 13 with clients." 14 Might that be the relevant paragraph about -- 15 A. Yes. 16 Q. It's the final sentence, or final sentences of that 17 paragraph, actually, that I wanted to draw to your 18 attention, which is: 19 "Integrity failures could thus become a matter of 20 public record damaging the reputation of POCL. 21 Integrity is one of the major attributes of the brand 22 such damage would, therefore, be substantial." 23 Over the page, paragraph 7: 24 "Finally this level of difference is operationally 25 unsustainable. The level of resource necessary to 76 1 investigate and resolve these differences is significant 2 at the 5,500 level and at the higher level the resource 3 requirements are impractical ..." 4 It says a little further on: 5 "... error levels are currently running at twice the 6 normal pre-Horizon baseline." 7 Can we go over the page, please. There's 8 a "Rectification Plan", and it is paragraph 3 of that 9 rectification plan, it says: 10 "POCL require a period of time with no incidents 11 being reported or identified by TIP this must, as 12 a minimum, cover two full consecutive cash account weeks 13 and include a cash account period end." 14 Now, would it be fair to say, it looks from this 15 document as though it is seen as a very significant 16 issue relating to accounting integrity and it seems to 17 be so serious that, at that stage, that is August 1999, 18 POCL would like a period of time with no incidents being 19 reported or identified by TIP? 20 A. That's what this says, yes. 21 Q. And, I think, even though it seems at this stage ICL are 22 saying that they can't guarantee that there wouldn't be 23 further incidents. Do you remember these kinds of 24 discussions about AI376? 25 A. I don't remember the discussions at that detail, the 77 1 level of detail being dealt with here, but clearly it 2 was -- it was in my view. 3 Q. The severity of the issues there presumably would have 4 been on your mind in August 1999? 5 A. Yes. 6 Q. Still in August 1999, can we look at POL00090839, 7 please. Now, this is the letter that we have been 8 talking about. I think you were originally provided 9 with an incomplete version of this letter and we have 10 now managed to obtain the entire letter. For the 11 record, the incomplete version was at POL00028439 but 12 this now is the complete version. 13 It is the second page here which is the letter to 14 you from Ernst & Young. "Horizon acceptance testing": 15 "As auditors of The Post Office we have been asked 16 by Post Office Counters Limited to provide you with our 17 views in respect of certain accounting integrity issues 18 arising from tests performed by POCL on Horizon data in 19 the live trial." 20 Can I just confirm, I think you have said that -- 21 did you request this specifically from Ernst & Young? 22 A. Somebody in the business did, quite possibly Stuart 23 Sweetman. 24 Q. Presumably because they were so concerned about the 25 impact on accounting integrity? 78 1 A. Yes, but I think as a general issue that we wanted to 2 keep our auditors informed of progress and possible 3 impacts. 4 Q. It's the third paragraph down, it talks about the live 5 trial at that stage being limited to 323 outlets, and it 6 now goes on to talk about incident 376. It says: 7 "The following issue, as described to us by POCL 8 gives us concern as to the ability of POCL to produce 9 statutory accounts to a suitable degree of integrity. 10 We understand that POCL has attributed a severity rating 11 of 'High' to this matter. 12 "Incident 376. Data Integrity -- In order to test 13 the integrity of weekly polling of Horizon cash account 14 transactions, POCL are reconstructing a weekly total by 15 outlet from daily Horizon pollings. At present this 16 control test is showing discrepancies in that certain 17 transactions do not record the full set of attributes 18 and this results in the whole transaction being lost 19 from the daily polling." 20 So that's talking about in branch, isn't it? 21 A. Yes, it's talking about information in the branch that 22 has not got the attributes that it should have. 23 Q. It says: 24 "We are informed that an incident has also occurred 25 where transactional data committed at the counter has 79 1 been lost by the Pathway system during the creation of 2 the outlet cash account and has not therefore been 3 passed to TIP in the weekly cash account sub [figures]. 4 "Both types of incident result in a lack of 5 integrity on each of the two data streams used by POCL 6 to populate its central accounting systems. We 7 understand that the cash account data stream is the 8 primary feed for POCL's main ledgers and client 9 reconciliation processes." 10 Can we go over the page, please. Let's look at the 11 second paragraph, it says: 12 "It is a fundamental of any accounting system that 13 it provides a complete and accurate record of all 14 transactions. These discrepancies suggest that the 15 ICL Pathway system is currently not supporting this 16 fundamental. 17 "POCL have informed us that these items have 18 resulted in difficulties substantiating the cash account 19 balances which form the basis of certain items in the 20 balance sheet. We understand that the issues are not 21 attributable to specific outlets or to specific products 22 on a continuing basis. It is not therefore possible to 23 quantify the likely impact on client balances, or the 24 resulting implications for POCL's financial statements, 25 as the incidents cannot be forecast." 80 1 Looking at one more paragraph just above "Impact" it 2 says: 3 "We also understand that POCL have identified 4 a number of other incidents which also impact on the 5 accounts. These may also be relevant to us in reaching 6 our audit opinion, as they may be indicative of further 7 uncertainties." 8 Now, accountants telling a company that its 9 statutory accounts are at risk is very serious indeed, 10 isn't it? 11 A. Yes. 12 Q. Did you understand the term "fundamental uncertainty"? 13 A. Yes. 14 Q. If we go over the page, it is explained there. What did 15 you understand by that? 16 A. That was a qualification on the account. 17 Q. Now, surely this was something to bring to the attention 18 of the board, wasn't it? 19 A. Yes. 20 Q. If we look at the first -- 21 A. Sorry, I think what this was saying is, if these things 22 aren't sorted, this will what will happen when we do 23 your next audit. 24 Q. Yes, and if we look at page 2 of this document, is that 25 your writing at the top? 81 1 A. It is. 2 Q. So I think you are bringing it to Bruce McNiven and 3 Keith Baines' attention -- 4 A. Yes. 5 Q. -- and saying: 6 "Please ensure that these issues are fully addressed 7 during the remaining acceptance process. Keep me in 8 touch." 9 Do you know if there was follow up from that? 10 A. I'm sure there would have been. 11 Q. How well-known would this issue have been within the 12 organisation? 13 A. I don't think it was generally known but I think it was 14 known by the people who ought to have known about it. 15 Certainly, Stuart Sweetman would have been aware of 16 this. 17 Q. Do you remember discussing it with Stuart Sweetman? 18 A. I don't remember but, given what it's about, I find it 19 very difficult to think it wasn't discussed with him. 20 Q. Wasn't this the time to go back to the board and say 21 "I made a mistake with the assurance I previously gave 22 you"? 23 A. I'm not sure. I was -- I was, again, looking to solve 24 the problem. You have pointed out very clearly what was 25 said in the board minutes to me. Whether my awareness 82 1 of that was sufficiently strong at that time, I really 2 can't remember. In reviewing all this, I admit to 3 a certain unease. 4 Q. So are you saying that, looking back, things should have 5 been done differently? 6 A. Possibly, but I would point out that this -- Stuart 7 Sweetman was the managing director and he was a member 8 of the board that we have been discussing. So there was 9 an assumption, I think, on my part that, as a member of 10 that board, he would be taking forward key issues. 11 Q. It was you at that original board meeting though who was 12 the technical man? 13 A. Yes. 14 Q. It lay on your shoulders, at least at that meeting, to 15 assure them in terms of the robustness of the system? 16 A. Yes. 17 Q. So do you think, looking back now, that, having received 18 a pretty significant letter from Ernst & Young about 19 accounting integrity, that might have been the moment to 20 go back to the board? 21 A. I'm -- the route back to the board was through Stuart 22 Sweetman, as far as I was concerned. 23 Q. Were there high-level meetings taking place within Post 24 Office Counters Limited about the significance of this 25 document? 83 1 A. I think there was an awareness amongst the people who 2 should have known about it. 3 SIR WYN WILLIAMS: When you say "the people who should have 4 known about it", can you actually tell me their names, 5 so I've got them on my radar, so to speak? 6 A. Well, certainly, the finance director, people preparing 7 the accounts. And I'm sorry, sir, I cannot tell you the 8 names. 9 SIR WYN WILLIAMS: No, no, all right. I follow you might 10 not remember precisely their names, but you started with 11 the finance director. Are there any other particular 12 directors or senior managers that you think should have 13 been aware of this at the time? 14 A. Well, certainly the managing director, sir. 15 SIR WYN WILLIAMS: So finance director, managing director. 16 A. Yes. 17 SIR WYN WILLIAMS: And you knew, obviously. 18 A. Yes. 19 SIR WYN WILLIAMS: All right. 20 MR BLAKE: We know that the route to the Post Office board 21 was through the managing director but also -- who would 22 have been the route to the Post Office board, the 23 overall board for this kind of information. 24 A. Stuart Sweetman, the managing director. He was on that 25 board. 84 1 Q. I think he wasn't technically a member but he attended 2 the board; is that correct? 3 A. Yes, he did. 4 Q. While we're on Acceptance Incident 376, can we look at 5 FUJ00079178, please. Now, this was a resolution plan at 6 September 1999. You may well not have seen this 7 document. I don't think you are named on the document. 8 I'm just going to take you to a couple of points there 9 and you can tell me if you do or don't recall anything. 10 Can we go to page 5, please. This sets out the 11 "Purpose", and it says: 12 "This document sets out ICL Pathway's proposal that 13 Acceptance Incident 376, currently categorised as Medium 14 by Pathway and High by POCL, should be recategorised by 15 POCL as Medium, and that the Resolution Plan is 16 satisfactory and should be agreed." 17 Do you remember that, ICL wanting this particular 18 incident -- 19 A. I don't, I'm afraid. But it wouldn't be uncommon for 20 there to be debate at this time across a range of issues 21 about their severity. 22 Q. Let's have a look at page 9 and see if it assists at 23 all. It discusses "Closure Criteria" there. It's the 24 bottom of page 9, please. Thank you. We see there the 25 third point, "Closure criteria", that's being agreed 85 1 between ICL Pathway and POCL is that: 2 "During the Observation Period not more than 0.6% of 3 cash accounts sent to TIP will be found by TIP not to 4 reconcile to the Cash Account derived by TIP from the 5 transaction stream due to Pathway processing error." 6 Now, we saw earlier the document that I took you to. 7 It seemed as though POCL originally wanted no errors 8 relating to this particular Acceptance Incident. Do you 9 recall a move over this period where, in essence, it was 10 accepted that a degree of error was inevitable? 11 A. I don't recall directly, but I'm not surprised that 12 there was a move away from zero. 13 Q. Would you, at that period, August 1999, or September 14 1999, have been well aware that there would, inevitably, 15 be issues that arose and therefore a degree of 16 acceptance would be required? 17 A. Yes. 18 Q. Essentially, a degree of error is inevitable? 19 A. Yes. 20 Q. Can we look at POL00028338, please. This is a different 21 Acceptance Incident. It is Acceptance Incident 211, 22 what we know as the receipts and payments mismatch. 23 Now, let's look at the first paragraph: 24 "A large number of incidents have been reported 25 during the live trial period whereby the receipts and 86 1 payments totals do not balance on the outlet weekly Cash 2 Account. This exposes a lack of integrity in the double 3 entry accounting functions of the Horizon System, 4 contrary to requirement 803." 5 Can we turn over the page, please. About halfway 6 down that page, it begins "Prior": 7 "Prior to the introduction of LT2 ..." 8 I think is LT2 is a fix of some sort; do you 9 remember? 10 A. I don't, I'm afraid. 11 Q. Do you at least remember that kind of terminology 12 related to a fix, LT? 13 A. Yes, I think so. 14 Q. I think, in fact, the paragraph before says: 15 "Fixes were introduced into the LT1 system to 16 correct the single sided sales problem and the print 17 preview corruption. The revised balancing process 18 introduced at LT2 addressed the two other identified 19 causes. 20 "Prior to the introduction of LT2 incidents were 21 occurring at a rate of around 30-50 outlets per week. 22 Following LT2 it was anticipated no further incidents 23 would arise, other than the accepted migration problem. 24 "Since the introduction of LT2 there have been some 25 recurrences of the incident although at a much reduced 87 1 rate (less than 10 in three weeks). Some of these have 2 been attributed to migration errors which are accepted", 3 et cetera. 4 So even in this incident, when Pathway had closed, 5 fixes LT1 and LT2 had been introduced, there were still, 6 it seems, at least some problems occurring; would you 7 accept that? 8 A. Yes, but the sense of this is that those are at a very 9 much reduced level. 10 Q. Absolutely but, again, it couldn't possibly be zero, 11 could it? It seems to be an acceptance that there 12 would, nevertheless, still be some problems? 13 A. But they were still working on the problem. 14 Q. Yes, but the impression you get here is that there are 15 fixes applied but, even where there are purported fixes, 16 you need to be careful. Would you agree with that? 17 A. Yes. I think it's saying that, whilst this has had 18 a good impact, it's not yet a complete impact. 19 Q. Let's look at November 1999, POL00028550. So this is 20 now November 1999, very late in the day, quite close to 21 the national rollout. There is an email that is from 22 Keith Baines to yourself and others. 23 Can we go over the page, please -- actually, sorry, 24 if we could stay with that page, I think it explains 25 that Keith Baines has written you some speaking notes. 88 1 Do you remember this? 2 A. I don't, but if Keith wrote that then I accept it. 3 Q. I think it's called "Negotiation Brief". 4 A. Mm-hm. 5 Q. Then we look over the page, and there's the briefing. 6 Let's look at paragraph 3, it says: 7 "It is now clear that some of the criteria will not 8 be met. This is serious cause for concern." 9 It goes on to list the various key issues and, at 10 paragraph 7, it talks about the first issue: 11 "The first of these, system stability, has been 12 a success. The level of incidents has reduced and the 13 target level has been met -- though only just. The one 14 remaining concern is that there have been a number of 15 one-off events that have resulted in 'spikes' and 16 clearly we need you to continue making progress, both 17 the make [or 'to make'] the further level in overall 18 incidents, in line with the rectification plan, and to 19 eliminate the occurrence of 'spikes' which would be 20 increasingly disruptive as the automated estate 21 increases." 22 Can we go over the page, please, to paragraph 9. 23 Paragraph 9 talks about area of concern about the 24 helpdesk. 25 Paragraph 11 is a third area, and that says: 89 1 "The third area was the reduction in errors in 2 accounting data passed from your systems into TIP, and 3 the development of appropriate integrity controls for 4 that interface. Progress in this area had not been 5 encouraging. The overall level of errors has greatly 6 exceeded the 0.6% target level -- by an order of 7 magnitude or more." 8 What does that mean, "an order of magnitude or 9 more"? 10 A. I don't know. 11 Q. Does it mean significantly over that -- 12 A. Yes, it does, sorry. I don't know precisely. 13 Q. "Other criteria have also not been met. Analysis of the 14 causes of in you incidents has not met the 10 day 15 turnaround target." 16 It says: 17 "DN John Meagher to confirm if this is correct. 18 Also, there have been new incidents that it seems would 19 not have been trapped by the integrity control you are 20 developing." 21 So potential new incidents that won't be met by 22 an integrity control: 23 "Thus there is cause for concern, both at the level 24 of work that will be required to manage errors, and that 25 some errors may 'slip through the net' and cause errors 90 1 in POCL's or even worse our Client's systems." 2 Can we scroll down -- sorry, who would it mean when 3 it says the "Client's systems"? Is that talking 4 about -- 5 A. Yes, this is -- what the TIP system was doing, as 6 I understand it and understood it, was that it was 7 taking certain data from the data available in the 8 branch. It identified -- there were parts of the system 9 that -- front and back of those pieces of data, that 10 should have identified it to the harvester, it would 11 then be taken to TIP. 12 TIP would then assemble a set of accounts and the 13 clients, that is the -- from us -- not customers who 14 came in off the street, but the clients were the big 15 people like Benefits Agency, and so on, and would settle 16 with them. And I think this is expressing a concern 17 about whether we'd be accurately charging our large 18 clients. 19 Q. Yes, so it seems to be an acknowledgement that some 20 errors may slip through the net but the concern seems to 21 be focused on POCL's clients rather than, for example, 22 on subpostmasters and the effect on them? 23 A. Because I think, in this respect, that was probably 24 true. 25 Q. What do you mean, sorry? 91 1 A. Well, in what I have read, it was -- the issue was not 2 about the information that was produced in the branch 3 and being produced in the branch, it was how the 4 relevant bits of that information, that had to go 5 forward to settle with the client, were being taken out 6 and was this being done completely and properly. So 7 I don't think it was interfering with the accounts in 8 the branch but it was meaning that we wouldn't be 9 billing our major clients properly if this was 10 happening. That is my understanding. 11 Q. Would you accept that, at that particular time, there 12 were incidents that were affecting the cash accounting 13 of individual subpostmasters? 14 A. Yes, I think so, but my point is we spent, 15 understandably, quite a bit of time on this. But it was 16 looking at our clients, as opposed to our subpostmasters 17 and customers. 18 Q. The focus is certainly on the clients, would you accept 19 that? 20 A. Absolutely, yes. 21 Q. Paragraph 12: 22 "We also have some concerns about progress with the 23 new integrity control. While Pathway have been 24 reporting satisfactory progress against plans, our 25 people on the ground perceive that there has been 92 1 a reversion to the old ways of working with the shutters 2 being brought down." 3 Do you know what that means there? 4 A. It means that, under PFI and the contract which involved 5 the Benefits Agency, there was a Pathway way of working, 6 which was not to encourage close involvement from either 7 BA or POCL. We had worked very hard to try and break 8 that down. There is a lot of evidence in the bundle 9 about the workshops that were going on, the intense 10 activity which was focusing on the key problems. This 11 is saying that -- "reversion to old ways of working with 12 the shutters being brought down" means that we were not 13 being allowed in so we could satisfy ourselves what was 14 happening. 15 Q. It continues: 16 "We have seen no progress on development of the 17 joint processes that will be needed to manage the errors 18 trapped by the control, and on this, and on the 19 specification of interface processes, we have found 20 Pathway unwilling to engage in meaningful discussions." 21 Perhaps we can briefly look over the next page, so 22 this goes on to talk about reference data and it says: 23 "The prime responsibility under the contract is 24 Pathway's. The requirement ... is for Pathway to 25 provide a robust service that checks the consistency of 93 1 reference data. POCL does not have access to Pathway's 2 reference data design, and so it is Pathway's 3 responsibility to ensure that any reference data that 4 complies with the interface specification is implemented 5 safely and with the expressed effect." 6 Now, I mean, this is all, as I say, late on -- we're 7 in November 1999 -- four months on from the board 8 meeting where it was described as "robust and fit for 9 service"; were you not, at that stage, banging on the 10 doors of the board and saying "Hang on a minute"? 11 A. No. 12 Q. Do you think you should have been? 13 A. I'm afraid I will go back to what I was saying to you 14 before. The project sponsor was a member who attended 15 that board and my view was the route back to the board 16 was through Stuart Sweetman. I -- in retrospect, 17 thinking about it now, should I have looped and gone 18 directly to the board? The organisation and the way 19 that was deployed certainly didn't encourage that. 20 Q. In what way? 21 A. Well, because we were given responsibilities at 22 a certain level. Those -- and the targets to meet. The 23 targets to meet would be monitored, sometimes more 24 intensely than others. But looping back up and down the 25 organisation was not encouraged because you were seen to 94 1 have a role and you were meant to fulfil that role at 2 that level. 3 Q. Was it difficult in the organisation to speak up? 4 A. No. I'm just saying there were channels through which 5 things went. 6 Q. So it was too hierarchical or ...? 7 We're interested from a governance perspective. 8 A. Absolutely, and I understand that. The business had 9 been through a process which it called "Customer First", 10 the whole corporation had, where there was a lot of 11 emphasis on being quite clear what people were meant to 12 do and deliver, and letting them get on with it and 13 making appropriate checks at the appropriate time. And 14 the idea that -- I think, John Roberts alluded to this 15 when he spoke -- that he would constantly be diving into 16 the organisation and interfering was something he 17 resisted, so -- and I think most of the organisation -- 18 well, probably all the organisation understood that. 19 Q. I don't want to put words into your mouth, but is it the 20 left hand not speaking to the right hand? 21 A. No, it's: there is a defined channel for doing it and 22 that needs to happen. 23 SIR WYN WILLIAMS: I follow that you may have thought it 24 appropriate to raise these issues -- those are my words, 25 not yours -- with Mr Sweetman, as a means of taking it 95 1 to the board, but, having raised them with him, was 2 there any kind of discourse between you as to what would 3 happen and, if so, what was the result of what was to 4 happen, if I can put it in that way. 5 A. I'm sorry, sir, but I genuinely can't remember, but 6 I would be meeting with Stuart Sweetman and being in 7 contact with him on a regular basis, very regular basis. 8 SIR WYN WILLIAMS: All right. 9 MR BLAKE: Thank you. I only have very few matters now to 10 deal with before lunch, and I may not be on after lunch, 11 I may hand over to others. 12 Can we go to FUJ00118186, please. This is the third 13 supplemental agreement. Is this something that you 14 remember at all? 15 A. Yes, I do. 16 Q. Can we look at page 5, please, and it is 5.3, so it's at 17 the bottom of 5. This is something that some other 18 witnesses have been asked about. I will just read that 19 out, it says: 20 "The Contractor shall from the date of this 21 Agreement until the end of the TIP Integrity Checking 22 Period make available to POCL promptly upon request 23 appropriate experts to explain to POCL the Contractor's 24 analysis of all root causes of Cash Account 25 Discrepancies and the measures which the Contractor 96 1 shall have implemented in order to prevent the 2 recurrence of any Cash Account Discrepancies which would 3 not have been detected by the Accounting Integrity 4 Control Release." 5 I think we have heard from some witnesses, and tell 6 me if you agree with this, that this provision was 7 an acknowledgement that it was not always possible to 8 get to the root cause of an imbalance or to make the 9 appropriate correction? 10 A. I think that's correct. 11 Q. Thank you. I'm going to move to January 2000. Can we 12 look at POL00028507. Now, this is a document -- you 13 don't seem to be a recipient of this document, so 14 I won't go into it in any detail? 15 A. Possibly because I was on my way out of the programme at 16 that point. 17 Q. Absolutely. There is a discussion in this document 18 about receipts and payments still not matching. Perhaps 19 we can go to page 4, it's the final page, and it is 20 paragraph (d), and the final sentence: 21 "Even if in the future we have an increased number 22 of these errors, posting them to a discrete line will 23 not help TP to manage them." 24 The point is very simple but, in that period, so at 25 the time when you were on your way out, were you aware 97 1 that it may be possible that errors could even increase 2 after the time that you were there? It doesn't have to 3 be in relation to this -- 4 A. Sorry, I had a view at the time that we had done our 5 very best to tie ICL Pathway down to an increasingly 6 improving system and that was what we planned to do, 7 from the point where it was clear that Benefits Agency 8 were getting out, that a deal was done by the Group 9 board, the DTI, permanent secretary, and so on, and 10 a set of criteria were handed down about how this thing 11 was going to be going forward. 12 It was clear to us that we needed to get as close as 13 we possibly could to ICL Pathway, so I -- so that was my 14 view. 15 How that stands up to a reading of the Horizon 16 judgment is something, as you can imagine, I have been 17 grappling with for a while. 18 Q. Yes. One very final document, and it may be that this 19 is after your time. Can we look at POL00029221, please. 20 So this is an ICL management monthly incident review, 21 covering the period 1 to 30 November 2000. Were you 22 still in post at that point? 23 A. Oh, no. I was -- by then, I was away. 24 Q. I think the point that's made in this -- and I don't 25 need to take you to the page because it wasn't when you 98 1 were around -- was that there were, during that period 2 it seems, an increase in incidents. 3 Would it surprise you that there were an increase of 4 incidents after you left? We can look at page 6, if it 5 assists. It probably won't. I mean, this wasn't 6 a document that you would ever have seen anyway, but it 7 says: 8 "During November the number of incidents received by 9 MSU increased to 109, in comparison to October where 10 91 received and resolved by MSU." 11 A. I'm sorry, I just wasn't there -- 12 Q. No. 13 A. -- and this is actually some time after I -- a number of 14 months after I departed. 15 Q. Yes, but when you departed, would it have been in your 16 contemplation that things might get worse, not better? 17 A. I would have been very disappointed. 18 Q. In terms of handover, how did you hand over the 19 knowledge that you had gained over those years? 20 A. Well, I handed over to David Smith, who is known to this 21 Inquiry, who was the Automation Steering Group project 22 manager -- sorry, the broad Automation Steering Group, 23 who was heavily involved with TIP, and we would -- we 24 would have discussed things, he would have been aware of 25 issues. So it wasn't as though somebody who was 99 1 completely fresh to all this was moved in to replace me. 2 It was somebody who was part of the programme, 3 a qualified accountant who had significant experience in 4 all the systems that were going on in the business. 5 MR BLAKE: Thank you very much, Mr Miller. It is now 6 approaching lunchtime. There are some questions from 7 other Core Participants. 8 Is there anything before they speak that you would 9 like to say at all? 10 A. No, I don't think at this stage. 11 MR BLAKE: Very good. 12 Sir, did you have any questions at this stage? 13 SIR WYN WILLIAMS: No. Let me ascertain how we should best 14 proceed. 15 First of all, it became clear to me that some people 16 were cold, not least because extra clothing was being 17 put on, but I also saw the usher attempting to fix it, 18 to use the word "fix", as we often do. Have we 19 succeeded in fixing it? 20 NEW SPEAKER: Very much so, sir, we're very grateful. 21 SIR WYN WILLIAMS: Right, well, I'm glad of that. 22 MR BLAKE: Sir, may I say, it may be fixed for some but not 23 others. It's a problem with this room and the problem 24 is some of us are under the lights and Mr Stein also 25 seems to be -- 100 1 MR STEIN: Quite comfortable. 2 MR BLAKE: So, unfortunately, in this building we will never 3 satisfy everyone. 4 SIR WYN WILLIAMS: The consensus appears to be that things 5 did get better after the usher's intervention. So thank 6 you very much. 7 Secondly, I make no secret of the fact that I have 8 an important legal meeting with my team this afternoon, 9 some of whose members are joining by video, and so 10 I would like to do it -- you know, I would like to have 11 some idea where we're going from here. So what is the 12 consensus view about how much longer we need for 13 additional questions? 14 MR JACOBS: Sir, if it assists, I'm not going to be very 15 long, probably five minutes at the most. 16 SIR WYN WILLIAMS: Right. Mr Henry or Ms Page? 17 MR HENRY: Forgive me, sir, may I ask for 20 minutes. 18 SIR WYN WILLIAMS: So if we say 30 minutes, is that 19 reasonable, do you think? Then I'm going to ask the 20 witness something now. 21 If we were to break for say ten minutes to stretch 22 our legs, would you prefer to do that 30 minutes and get 23 it out of the way, or would you prefer to have a normal 24 lunch break? 25 A. I would prefer to do the first thing, sir. 101 1 SIR WYN WILLIAMS: Fine, then that's what we will do. We 2 will break for ten minutes and then we will complete the 3 witness. 4 MR BLAKE: Thank you. 5 (1.00 pm) 6 (Short Break) 7 (1.10 pm) 8 Questioned by MR JACOBS 9 MR JACOBS: Thank you, sir. 10 I ask questions on behalf of 153 subpostmasters and 11 mistresses who are represented by Howe+Co and, Mr Blake, 12 we are grateful for him dealing with many of the 13 questions we would raise, so I only have a couple of 14 points for you, Mr Miller. 15 I want to ask you about Post Office IT capabilities. 16 Can we perhaps turn up paragraph 21 of your witness 17 statement, and I think Frankie has the reference for 18 that. 19 It is WITN03470100, and we can see that there. 20 You say in your statement that there were 21 differences in the organisations' approach to major IT 22 projects and the Benefits Agency had a well-established 23 process for undertaking large computer projects but POCL 24 did not and this did not assist smooth working. 25 Now, do you accept that the Post Office lacked 102 1 technical competence to fully understand all the 2 complexities of the Horizon System? 3 A. Yes, but I would caveat that by saying it wasn't just 4 the Post Office. 5 Q. Right. Who else was it then? 6 A. Well, all three parties. 7 Q. But you do accept that the Post Office were lacking in 8 technical competencies in this regard? 9 A. I think we learned about it as time went on but it was 10 a huge and extremely complex system. 11 Q. Now, we know that subpostmasters were in court in 2001 12 and, therefore, they were being investigated by the Post 13 Office in 2000; you accept that? 14 A. Yes. 15 Q. Our clients say, and they have given evidence between 16 February and May of this year, that the Post Office 17 auditors and investigators who investigated them and 18 suspended them on the basis of apparent shortfalls, 19 appeared to know very little, if anything at all, about 20 the Horizon System. 21 My question for you is: do you agree that when the 22 Post Office started to pursue subpostmasters, very 23 shortly after rollout, when you were still in post, that 24 those auditors and investigators who pursued them for 25 these shortfalls didn't have the necessary technical 103 1 knowledge to understand the errors within the Horizon 2 that were causing the shortfalls? 3 A. I'm pausing -- 4 Q. It's a long question, I'm sorry. 5 A. No, I understand exactly. There was, for instance, 6 training courses for auditors as part of the Horizon 7 programme, so I couldn't say I couldn't agree with you. 8 What I'm not sure about is what training the 9 investigators got but there was certainly a package for 10 training auditors. 11 Q. If we turn to investigators then, did you hear the 12 evidence that was given between February and May of this 13 year by the subpostmasters? 14 A. I have heard a number of those sessions, yes. 15 Q. The evidence that was largely given was that the 16 investigators -- and the auditors -- did not appear to 17 be interested in what the subpostmasters were saying 18 about problems with the system. Do you accept that from 19 what you heard? 20 A. Oh certainly, they were saying that, yes. 21 Q. What you say in your statement is that Post Office 22 didn't have well-established processes for undertaking 23 projects of this kind? 24 A. In the statement, I think what I'm saying is that the 25 Benefits Agency had very well-established processes. It 104 1 had done a number and was doing an number of significant 2 major programmes in this area, and Post Office Counters 3 didn't. So the Benefits Agency took the lead, the 4 Benefits Agency was saying, basically, "This is how we 5 do it", and there was a certain tension there, I think, 6 but ... 7 Q. When you say "this didn't assist smooth working", what 8 do you mean by that? 9 A. Well, there was a lot of work that went on to try and 10 ensure smooth working with the original development 11 agency and the guy who ran that was from Benefits 12 Agency, but he really tried -- and I think the Post 13 Office tried to get that going. 14 What happened in the -- and this may sound too 15 convenient, if so I apologise, but what happened in the 16 period when I had left that original and before I came 17 back, I can't comment on. I'm just aware that, when 18 I came back, I said "Where's the spend been on this 19 programme?" and over 80 per cent of it, at the time 20 I came back in 1998, was on the Benefits Agency part. 21 Q. Are you able to say anything more about the training 22 that the auditors received? 23 A. I don't, I'm sorry. 24 Q. But you're not aware of any training that investigators 25 received on the IT system? 105 1 A. I'm not. That doesn't mean to say they weren't trained 2 but I'm not aware of it. 3 MR JACOBS: I'm not sure I have any further questions for 4 you but I will just check with Mr Enright. 5 I don't have anything else for you. Thank you very 6 much, Mr Miller. 7 MR HENRY: Sir, could Mr Maloney go before me, at his own 8 request? 9 SIR WYN WILLIAMS: Certainly. 10 MR MALONEY: Thank you, and thank you to Mr Henry. 11 Questioned by MR MALONEY 12 MR MALONEY: My name is Tim Maloney and I represent a number 13 of subpostmasters. 14 We have seen from various documents this morning 15 that there were, if I could use this generic term, 16 problems with acceptance, and, in fact, it's probably 17 now beyond dispute within the Inquiry that there were 18 problems with acceptance. 19 There are board minutes that suggest that you, if 20 I could paraphrase, said to the board that Horizon was 21 "robust and fit for service" and I acknowledge that you 22 may or may not have seen the minutes, Mr Miller, and 23 that -- but, firstly, is there any reason you might wish 24 to convey to the Inquiry as to why the minutes might be 25 inaccurate? 106 1 A. No. 2 Q. Then, whatever the case, you certainly did not tell the 3 board that it was not "robust and fit for service"? 4 A. That's correct. 5 Q. Now, subsequent to that board meeting matters developed 6 which Mr Blake has asked you about this morning: the 7 Ernst & Young letter and things of that nature. You 8 have acknowledged that, in the wake of your -- if 9 I could describe it as a clean bill of health for 10 Horizon, your character reference for Horizon perhaps, 11 it would be better if the board knew about those things, 12 yes? I see you nodding and I don't -- 13 A. I'm sorry. 14 Q. Absolutely. 15 A. Yes. 16 Q. Now, you have said that Mr Sweetman was the person best 17 placed to bring those matters to the attention of the 18 board for the reasons that you have explained. 19 A. Yes. 20 Q. When you left the project where did you go? 21 A. I went to set up a business unit called Post Office 22 Network, which was a proportion of the old Post Office 23 Limited. 24 Q. Right. When did you leave? 25 A. 2006. 107 1 Q. Right. When did you leave this project? 2 A. I can't remember exactly, but working back from -- it 3 would have been early 2000. 4 Q. Early 2000. When did you find out that you were going 5 to be leaving the project? How many months notice, 6 effectively, did you have before -- 7 A. I didn't have "months" notice. 8 Q. Sorry? 9 A. There wasn't a month in it, it was -- 10 Q. "You're going"? 11 A. -- days. 12 Q. Right. You now know that many subpostmasters were 13 unjustly convicted -- 14 A. I do. 15 Q. -- and their lives have been ruined, in many cases. 16 A. I do. 17 Q. Many of the difficulties that you saw in the testing of 18 Horizon were the problems that those subpostmasters 19 suffered before they were prosecuted. So if I may just 20 give an example, that it took them many hours to 21 balance -- we have seen that in documents this morning, 22 the feedback from the NFSP -- and that it was causing 23 them real upset, and those were the problems that they 24 experienced before they were prosecuted, ultimately. 25 Has it ever crossed your mind, Mr Miller, that, 108 1 well, "Is there anything I personally could have done 2 but didn't" to try and prevent that? 3 A. Yes, it has. Just for the record, I bitterly regret 4 what's happened to the subpostmasters. 5 Q. No, of course. 6 A. Sorry, I -- 7 Q. No, no, of course. But you, no doubt, would have asked 8 yourself "Right, well, here I am in this position of 9 responsibility, I'm seeing these problems when we are 10 live testing Horizon. Actually, as it turns out, the 11 problems that were suffered by subpostmasters ultimately 12 were the very same problems that were experienced during 13 live testing. I was in this position, is there anything 14 I could have done?" 15 Have you asked yourself that question and have you 16 ever asked yourself the question "Could I've got this 17 information to the board?" 18 A. No on the latter, although I have been forced by the 19 questioning to think should I have looped around. 20 Q. Yes. 21 A. I only became aware of this problem, I regret to say, 22 well into the period when the trial, Bates v, were going 23 on and I'm, you know -- sorry, I -- you know, I'm not 24 proud of that, but that's true. 25 Q. You only became aware of it as a problem -- would you 109 1 mean as a continuing problem -- after you had left the 2 project, because you were aware of the problems that 3 subpostmasters were facing in the feedback that you 4 received from the NFSP and, indeed, we see it in that 5 crucial document of the audit qualification that would 6 be necessary that you received that letter, so you were 7 aware of problems with the operation of Horizon at the 8 time that you were in post, weren't you? 9 A. Yes. 10 Q. Yes. But essentially the full extent of the problem you 11 weren't aware of, you say, until the Bates litigation? 12 A. Of -- I'm sorry? 13 Q. Until the Bates litigation. 14 A. Yes. 15 Q. What I was asking you about -- you have talked about 16 looping around, "Could I have looped around?" Your 17 point of contact was Mr Sweetman, yes? 18 A. Correct, sorry. 19 Q. Now, the chair has asked you this morning about the 20 conversations or any conversations that you may have had 21 with Mr Sweetman about this issue. If you have racked 22 your brain about what you might have done differently, 23 have you ever racked your brain about what it was that 24 you said to Mr Sweetman, if anything, about whether or 25 not what you were coming to know should go to the board? 110 1 A. I am sorry, but I honestly have no recollection of 2 20-odd years ago of those discussions. 3 Q. Have you thought about it? 4 A. I clearly have thought about it. 5 MR MALONEY: Thank you, sir, that's all I ask. 6 SIR WYN WILLIAMS: Mr Henry. 7 Questioned by MR HENRY 8 MR HENRY: Thank you so much. 9 Mr Miller, I suppose so much depends on who writes 10 the minutes and whether you were given an opportunity to 11 approve them? 12 A. Are we talking about the board minutes? 13 Q. Yes, 20 July at Charingworth Manor. It says that you 14 were present -- no need to pick it up, but it says that 15 you were present for item agendas 99/78 and 79. That's 16 on page 1. But I will come back to that. What I wanted 17 to really ask you, sir, is who appointed you in the 18 first place as Horizon programme director? 19 A. Stuart Sweetman. 20 Q. And did Mr John Roberts have anything to do with your 21 appointment? 22 A. I -- I assume that John would have had to approve it, 23 but I was appointed as a line reportee to Stuart 24 Sweetman, so I was unaware of who else in the 25 corporation had been part of that decision. 111 1 Q. Yes. We know, don't we, that this was a time that the 2 project was bedevilled by delay? 3 A. Yes. Sorry, yes. 4 Q. We also know that there were emerging very, very 5 considerable rifts between the DTI on the one hand and 6 the DSS on the other. The Benefits Agency on the one 7 hand and POCL on the other. 8 A. Are we talking -- sorry, can I be very clear about the 9 context that you're asking me about. Is this in 1998, 10 at the beginning of 1998 that you're asking me about? 11 Q. No, I'm talking now, moving on -- and I should have made 12 that clear to you, sir -- certainly by April 1999. 13 A. By April 1999 there had been a number of reviews, the 14 Corbett review, the Treasury review and so on, and there 15 was clearly work going on at the highest levels of 16 politics in this country to decide where this programme 17 was going. 18 Q. Yes, of course. I think I have been given permission to 19 put a document to you, but I will defer to Counsel to 20 the Inquiry, but it was a letter that you wrote to 21 a Mr Vince Gaskell, CAPS and cards programmes director 22 of the Benefits Agency dated 8 April 1999. Have you 23 seen it, sir? 24 A. I have. 25 Q. You have. Well, I'm going to take it that you have had 112 1 an opportunity to study it in some -- 2 A. Well, I haven't got it in front of me. 3 Q. You haven't got it in front of you. May it be shown -- 4 if it isn't possible to be shown I will then just 5 concentrate on the final paragraph. It is 00028406 but 6 obviously I will defer to Mr Blake if it isn't ready 7 then we will not -- 8 MR BLAKE: Sorry, what does it start with? 9 MR HENRY: It is POL00028406. 10 MR BLAKE: We can have a look. Mr Miller, if it's not 11 a document that you have seen before today please do let 12 us know. 13 A. Okay. Was Mr Henry indicating that he wished to talk 14 about the end of it or ...? 15 MR HENRY: I will take the letter really just to the 16 conclusion. May I read out the conclusion, sir, to you. 17 There are substantial points that have been dealt 18 with beforehand, so outstanding faults, factually there 19 are no known outstanding faults that prevent entry to 20 live trial. Can you remember how this conclusion was 21 reached? 22 A. This is talking about DSS and the CAPS, I believe, being 23 migrated onto the system and trialled. 24 Q. I see. So be it. "Additional testing", which is the 25 second page: 113 1 "We did not intend to suggest that the additional 2 testing that is due to take place will simply replace 3 the previous model office end to end cycles." 4 Changes during live trial, et cetera, et cetera, but 5 I really come to this, your conclusion: 6 "Both of our organisations have made their different 7 viewpoints clear to each other in recent months. We 8 have also sought to co-operate with each other in taking 9 the Programme forward. But it has been my role and 10 responsibility as the Horizon Programme Director to lead 11 in the delivery of this service. This has required me 12 to balance the interests of all parties, and to consider 13 both programme delivery and contractual implications." 14 Mr Miller, who gave you that task, that objective? 15 Was it Mr Roberts together with Mr Sweetman? 16 A. I worked with Stuart Sweetman. He was the sponsor of 17 the project. 18 Q. Of course, but I mean -- I'm not suggesting that you 19 remember the meeting, but in open source material, 20 Mr Roberts, Mr Sweetman and yourself attended the DTI 21 Select Committee. You weren't asked to give evidence, 22 but Mr Roberts, in June 1999, effectively answered 23 nearly every question that was put by that committee. 24 I mean he was really the dominant force, wasn't he? 25 A. He was called to the Select Committee and he was briefed 114 1 before he went to that Select Committee and -- I mean 2 I'm sorry, I cannot -- I cannot comment on what it was 3 appropriate -- which senior -- very senior person, it 4 was appropriate to go to a DTI Select Committee. I'm 5 sorry, Mr Henry, I can't. 6 Q. Of course, of course, Mr Miller, and I don't want to put 7 you in an invidious position at all, but you said to 8 Mr Blake this morning that you were aware of Mr Roberts' 9 view as to the commercial importance of Horizon, you 10 said in fact you were very much aware, and you seemed to 11 agree with his point of view that it was vital to the 12 survival of the Post Office. 13 A. Post Office Limited. 14 Q. Sorry? 15 A. Post Office Counters Limited. 16 Q. Post Office Counters, yes. That you concurred, in other 17 words, with that view. It is no secret that Mr Roberts 18 saw the future of the Post Office Counters Limited as 19 being wedded to automation. 20 A. Well, I think if you look at the documents in the 21 bundle, the work on strategy and so on, it was pretty 22 clear that the whole POCL organisation felt that. John 23 Roberts was the Group managing director, which was 24 a company -- letters, parcels and counters -- which was 25 about 7 or 8 billion quid, so there were many other 115 1 issues on his agenda than just the Horizon project. 2 Q. Mr Miller, are you trying to protect him? 3 A. I'm not trying to protect him at all. I'm trying to -- 4 I'm sorry, I do apologise. I am trying to get a sense 5 of perspective because it seems to me, from your line of 6 questioning, you are trying to say "Mr Roberts was 7 responsible for all this" and I don't -- I don't agree 8 with that. 9 Q. Well, I'm not saying solely responsible, sir, but what 10 about Mr Sweetman, because you said earlier to Mr Blake, 11 very close to the beginning of your evidence, that he 12 would tell the board what they needed to know -- not 13 your exact words but that was the essence. 14 A. Well, he was the project sponsor, Mr Henry, and he was 15 on that board, or he attended that board. 16 Q. Yes, of course. 17 Could I -- I mean surely in relation -- no need to 18 put it up on the screen, but a document you were taken 19 to this morning, POL00028451, talking about the 20 short-term and the long-term risks, short-term liable to 21 be late, incomplete functionality, premature rollout 22 could prove unreliable, long-term fragile software 23 system, difficult to enhance if TIP lost money, 24 difficult to do future changes. I mean surely 25 Mr Roberts, together with Mr Sweetman, would have been 116 1 sighted, fully sighted on that? 2 A. I'm sorry, I don't have this document in front of me. 3 Q. It was one that you were actually taken to, but it was 4 the Tom, Dick and Harry document where there was 5 an analysis of short-term and long-term risks associated 6 with this. If you would wish to see it, sir -- 7 A. The date would -- sorry, it would be 1996 perhaps? 8 Q. I believe it was. I believe it was. So in other words, 9 from a very early stage they were aware of potential 10 risks associated with Dick? 11 A. Yes, there was a whole raft of things that are 12 documented in the bundle about each of the suppliers, 13 so, Mr Henry, yes, you know, there was stuff in there 14 about ICL Pathway quite clearly. 15 Q. Well, it's up on the screen now. I don't need to take 16 you to it but I just want to concentrate on your 17 background very, very briefly because obviously you had 18 worked at the Post Office since 1970 and you had had 19 a distinguished career in management and you had, for 20 example, been the senior line manager for south west 21 England. We know as well that you were sent off to 22 Bristol to deal with Bristol and South Wales at one 23 point during the currency of this project and so 24 therefore you were, perhaps better than most, aware of 25 the problems and pressures that subpostmasters would 117 1 encounter. 2 A. Yes. 3 Q. Yes. I just want to bring this back to "fatally 4 flawed", which has been suggested to be a low baseline 5 and I think it is -- if I may respectfully submit -- ask 6 you to consider this, whether we should look at that in 7 two senses: from a commercial point of view "fatally 8 flawed", it would be a low baseline and there may have 9 been, I do not know, from the commercial perspective the 10 sense that "these are teething problems, we can work our 11 way through it". Do you follow? 12 A. Was the phrase, "not fatally flawed? 13 Q. Yes, exactly, "not fatally flawed", and that being, as 14 it were, too low a baseline. But from a commercial 15 point of view, eminently pragmatic it might be thought, 16 particularly if there were insuperable political 17 pressures from above, you would have to make it work. 18 But from the point of view of prosecuting people, from 19 the point of view of having unimpeachable and infallible 20 data for prosecutions, that would be a hopeless test, 21 wouldn't it? 22 A. I don't understand that, sir. 23 SIR WYN WILLIAMS: I don't think he needs to answer that, 24 Mr Henry, because it's obvious. 25 MR HENRY: It's obvious, yes. Thank you, sir. 118 1 The only reason I mention it is because, you see, 2 two of the clients I represent, Ms Felstead and Ms Arch, 3 were prosecuted very, very near the beginning, 4 Ms Felstead almost at the beginning of the rollout and 5 she went to prison, you see. Ms Arch was acquitted. 6 But can I ask you, was that ever considered, to your 7 knowledge, by anybody in the working group, as to how 8 the prosecution arm of the Post Office, with which you 9 must have been familiar, how they should treat this 10 data, how they should treat the product generated by 11 Horizon? 12 A. I am unaware of any such consideration, Mr Henry. 13 Q. Right. Could I ask you now to consider this. Would it 14 be fair to say, from the evidence that you have given, 15 that as far as compatibility issues and EPOSS, that you 16 were effectively saddled with Horizon because Horizon 17 had been very, very important, as perceived by the 18 Benefits Agency, because of the fact that there was 19 a way of getting functionality of data passed down to 20 post offices which was, as you said this morning, 21 a significant matter for the Benefits Agency? 22 A. I wouldn't say "saddle", but certainly a change of 23 direction would have involved significant and very 24 difficult changes for Post Office Counters Limited. 25 Q. I see, because obviously if you had had a free choice 119 1 you might not necessarily have gone for Horizon -- gone 2 to Horizon for the EPOSS function. 3 A. In an ideal world we would have -- we probably wouldn't 4 have started with a system that originated with the 5 Benefits Agency. 6 Q. Exactly. Could I also just ask you to consider now the 7 issue of rifts and the Project Mentors' report and you 8 talked about a different angle -- 9 MR BLAKE: Sorry, sir, I'm just rising. Mr Henry is 10 straying quite far outside, I think, of the -- 11 MR HENRY: So be it. I was given permission to deal with 12 this document though. 13 MR BLAKE: Is this the final issue? 14 MR HENRY: Yes. 15 SIR WYN WILLIAMS: I think I would just like to say 16 generally that I understand the temptation to pick up on 17 points -- 18 MR HENRY: I'm so sorry, sir. 19 SIR WYN WILLIAMS: -- that you think haven't been quite 20 pushed to their logical conclusion by Mr Blake, or for 21 that matter by me, but the idea is that you ask 22 additional and different points, not go for the jugular 23 so to speak. 24 MR HENRY: Oh, I'm sorry, sir. I hope I wasn't going for 25 the jugular. 120 1 SIR WYN WILLIAMS: No, no, I'm just being gentle at the 2 moment. 3 MR HENRY: Very sorry. 4 I will return to the board minutes, if I may, 5 because we can see from the documents that you were 6 shown this morning that you were also expressing views 7 around that time, for example an email that passed 8 between you and Mr Baines, as to whether Horizon should 9 be accepted at all. Do you recall that? 10 A. I don't recall it exactly, but I'm sure there were 11 conversations between me and Keith and other people 12 about whether we should be accepting. 13 Q. Exactly, which would be inconsistent with what you are 14 reported to have said at the board. 15 A. Yes. 16 Q. And you were present, weren't you, at that meeting with 17 the NFSP on 11 June? 18 A. I was. 19 Q. And wasn't it made clear by Mr Baker, Mr Colin Baker, at 20 that meeting that essentially government had given an 21 ultimatum and you had been told, "You have just got to 22 work with this, POCL have just got to get on and get it 23 done"? 24 A. I have read those lines in the -- in that report. 25 Q. Do you disagree with them? 121 1 A. Certainly there was a degree -- a very high degree of 2 pressure to get on with it. 3 Q. Yes. And do you think, sir, that as a result of that 4 pressure it may have clouded -- and you can only speak 5 for yourself, sir, but it may have clouded at times your 6 judgment? 7 A. I was balancing a number of pressures about getting this 8 done and a lot of people in various parts of the UK who 9 were very interested in getting it done, and what was 10 happening on the ground. 11 One of the problems I've got at the minute is there 12 is a raft of documents which will explain decisions that 13 took place between August and probably January, release 14 board papers, acceptance papers, which I have not had 15 sight of, and that would explain why we did what we did 16 in terms at the time and in detail and I have asked and 17 I think the Inquiry has asked on my behalf, but, so far, 18 I'm not aware of those documents being forthcoming. 19 So I would like to know, in detail, going over the 20 ground, the considerations that took place at the time. 21 I'm not denying that there was significant pressure to 22 be coped with. 23 Q. I hope it is apparent by the tone of my questioning that 24 one has sympathy for your position in respect of that 25 but, in conclusion, could I just ask -- 122 1 Sir, may I be permitted to ask, finally, some 2 questions in respect of POL00028419? 3 SIR WYN WILLIAMS: Well, you will forgive me for not having 4 that document at my fingertips, Mr Henry. Is this 5 a significant document, Mr Blake? 6 MR BLAKE: I don't have that document at my fingertips 7 either. 8 MR HENRY: Paragraph 2.1, sir: 9 "The incorrect cash account mapping for a stock item 10 would have caused misbalancing cash accounts in all 11 offices." 12 SIR WYN WILLIAMS: Well, we've got it up on the screen now, 13 so ask your question, Mr Henry. 14 MR HENRY: I'm very grateful. 15 The date of that document, sir, can you help? Is it 16 September -- 17 A. It is. 18 Q. -- or is it earlier? 19 A. Oh, no, sorry. Is it the 3rd -- March -- 20 Q. March. And so this would have been before the letter to 21 Mr Gaskell. Again, the rift with the Benefits Agency 22 would have been apparent by then, would it not? 23 A. The rift with the Benefits Agency, in my mind, is very 24 much when they -- when we were told that they were 25 leaving the project. 123 1 Q. Yes. 2 A. We were aware, because of the various reviews going on, 3 that they wanted to leave the project, but I think 4 that -- I mean, that was a fraught period. 5 Q. Of course, we know that they left the project in 6 May 1999? 7 A. Yes. 8 Q. Then, by June, agreements had been signed? 9 A. Yes. I mean, those agreements were quite heavily 10 prescribed in the agreement that was done by the 11 Treasury board, and so on. 12 Q. Thank you. Because at 2.1, we have -- you remember the 13 reduction in the number of transactions throughout the 14 cycle. Do you remember reference -- 15 MR BLAKE: Sorry, can I just ask Mr Henry which rule 10 16 question this relates to? 17 MR HENRY: Well, I'm afraid it doesn't and I was hoping for 18 a little bit of indulgence. 19 SIR WYN WILLIAMS: Well, I think -- just tell me what the 20 point is, Mr Henry, rather than -- is there a specific 21 point in this document that I should underline, so to 22 speak? 23 MR HENRY: I suppose it is the question about whether you 24 would want to do your driving test in London or whether 25 you would choose to do it in the Highlands, because it's 124 1 basically -- I wanted to take the witness, Mr Miller, if 2 he could, to help me about reading between the lines 3 about the reduction in the way in which testing was 4 managed by all parties. 5 SIR WYN WILLIAMS: Well, I think we will call it a day, if 6 we may, Mr Henry, and I think I would like to say -- 7 MR HENRY: I do apologise. 8 SIR WYN WILLIAMS: -- that as a result of the evidence that 9 I have heard in the last two weeks, I'm not suggesting 10 for a minute that what occurred in the run-up to the 11 Benefits Agency removing themselves from the contract is 12 irrelevant, but I'm becoming increasingly of the view 13 that what happened afterwards is much more significant, 14 as far as I'm concerned. All right? Just to give 15 everybody a broad hint. 16 On that happy hint we shall adjourn now and start 17 again at 10 o'clock on Tuesday. Thank you. 18 MR HENRY: Sir, thank you very much for your indulgence. 19 (1.49 pm) 20 (The Inquiry adjourned until 10.00 am on Tuesday, 21 1 November 2022) 22 23 24 25 125 1 2 INDEX 3 DAVID MILLER (affirmed) ..............................1 4 Questioned by MR BLAKE ...........................1 5 Questioned by MR JACOBS ........................102 6 Questioned by MR MALONEY .......................106 7 Questioned by MR HENRY .........................111 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 126