Unearthed report reveals source of Post Office’s tenuous Capture sales pitch
An internal Post Office report has been unearthed that reveals the organisation was targeting sales of its flawed Capture system to thousands of branches with misleading claims on error reduction.
The 13-page report from July 1993, which has been disclosed to Computer Weekly by a source, was titled: Capture: An investigation into changes in cash account errors.
Like the Horizon system, which was introduced later and is today at the heart of the Post Office scandal, the Capture software used in Post Office branches was proven to have caused accounting discrepancies, for which subpostmasters were blamed and punished.
Information from the 1993 report was used in sales pitches for Capture, whereby subpostmasters were led to believe that the floppy disk-based software would reduce errors in their accounting returns. But the report did not take into account potential software-generated errors, only errors spotted at its checking centre in Chesterfield, where paper cash accounts were sent.
There is no suggestion that the report was ever supposed to look at software errors, but the Post Office sales pitch used a figure from it suggesting accounting errors were reduced, without considering software-generated errors. It has since admitted they could have caused accounting discrepancies.
The internal report analysed accounting errors at branches before and after the software was installed, and advised the Post Office on its Capture sales strategy. But according to an expert, it ignored software-generated errors in its research.
• Read the unearthed report here: Capture: An investigation into changes in cash account errors •
In a June 1994 newsletter from “the Capture team” to subpostmasters, the Post Office revealed that branches using the Capture system had 55% fewer accounting errors than those that had not installed the software.
“Did you know? Capture Offices make 55% fewer cash account errors than non-automated offices,” said the newsletter. It also revealed that, by then, the software was used in 1,300 branches.
But one former Post Office worker with expert knowledge, who has studied the report, said: “The author seems to have relied wholly on ‘reported errors’ information, coming from a Post Office checking team in Chesterfield.
“Those teams wouldn’t have had any way of knowing whether the errors were system-generated or user-generated. They would almost certainly not have suspected the software, and so would probably have thought the subpostmasters made the errors.”
The Post Office did not comment on the report, citing that it did not believe it had been made aware of the document it commissioned. But a spokesperson said: “We have been very concerned about the reported problems relating to the use of the Capture software and are sincerely sorry for past failings that have caused suffering to postmasters.”
The Criminal Cases Review Commission is currently reviewing about 30 Capture-based cases of potential wrongful conviction and has already referred one to the Court of Appeal.
A 2024 report by investigation firm Kroll, instigated by the fallout of the Horizon scandal, concluded there is a “reasonable likelihood” that the Post Office’s Capture software caused the accounting shortfalls subpostmasters were blamed for.
The former Post Office worker added: “This [1993] report was probably commissioned by the Post Office Capture team seeking to provide a positive ‘error reduction’ message about Capture, and trying to boost sales, a year after its launch.”
The report came at a time when the Post Office was trying to compete with accounting systems from third-party suppliers used in branches, such as an MS-DOS-based system created by subpostmaster Richard Jackson.
The Post Office was eyeing major sales of the software, which cost subpostmasters over £1,000 initially. The report advised the Post Office that Capture sales had so far been more successful in small offices than competing software, and that it should target larger branches, where it believed thousands still had no “balancing software”.
The unearthed report said: “Up until 1993, Capture had been sold to 823 subpostmasters and competing software to 911. This is less than 10% of the network of [branches]. Thus, the potential market for the product is still very large.”
The Post Office eradicated all competition in 2000, when it mandated that all branches to move to the Horizon system from Fujitsu.
Quick to point the finger
Capture cost some subpostmasters much more than the price of the software. It was around the time of the report that subpostmasters who had unexplained account shortfalls while using the system were targeted by the Post Office.
Over the remainder of the decade, the Post Office blamed Capture users for unexplained accounting shortfalls. It made them cover the shortfalls and prosecuted many for financial crimes.
For example, former Capture user Peter Lloyd-Holt, who died aged 75 in 2021, was sacked in 1994 from his role as a subpostmaster in Bolton, after accounts at his branch showed unexplained shortfalls.
Speaking earlier this year, his wife Agnes, who worked as an investigator for the Department for Work and Pensions at the time he was sacked, said life was never the same again. “That was the beginning of the end. He was interviewed under caution without representation. I was contacted but not allowed to attend,” she said.
“He was eventually told in March 1995 that he wasn’t going to be prosecuted, but he was still held responsible for the shortfalls, and we were made to pay back a considerable sum.”
Former subpostmaster June Tooby, who died in 2020, began being hounded by the Post Office in 1994 and spent years challenging the Post Office over alleged shortfalls in the accounts at her branch in County Durham.
She was sued for more than £55,000 and taken to court in 2003, leading to her being declared bankrupt. In February this year, the Post Office apologised “sincerely and unreservedly” to Tooby’s husband Ken for the “failings and impact” on his late wife.
After Capture was replaced, the Post Office went on to use its private prosecution powers to gain convictions of more than 900 people for financial crimes based on data from the Horizon system. It also ruined the lives of many more who suffered unexplained shortfalls.
The controversy over the Capture system emerged in January 2024, after the ITV drama Mr Bates vs the Post Office told the stories of subpostmasters who had suffered at the hands of the Horizon system.
It was the same month that Kevan Jones, an MP at the time who now sits in the House of Lords, highlighted evidence of injustices triggered by Capture losses.
Diffrent tech, same approach
While Capture was described by some users as “a glorified spreadsheet”, Horizon was a huge enterprise system used by nearly 20,000 branches initially, connecting them with Post Office systems. It was the largest non-military software system in Europe at the time it was rolled out.
Back then, the Post Office ignored warnings about serious concerns over the software, which was causing “difficulties and trauma” for subpostmasters struggling to balance their accounts.
During a public inquiry hearing into the Post Office Horizon scandal, in October 2022, it emerged that live trials of the Horizon computer system in Post Office branches in 1999 led to a warning from subpostmasters that software problems meant “a tragedy was not far away”.
A National Federation of Subpostmasters executive council meeting, held over two days in June 1999, was referred to during the inquiry. The minutes of that meeting said: “There was general discussion on the severe difficulties being experienced by subpostmasters who are already running [Horizon].”
It said that seven sheets of comments from North-East England-based subpostmasters with serious concerns had been passed to David Miller, the then Post Office Horizon programme director.
The meeting report added: “The difficulties and trauma being experienced by some subpostmasters were giving rise to concerns for their health and emotional well-being. It was felt by some that a tragedy was not far away if something is not altered soon.”
The Post Office called for people with any information about Capture, like the report revealed by Computer Weekly, to come forward with it in support of investigations. “[We have] limited records relating to this system and we encourage anyone who has Capture-related material to share it with the Post Office and the CCRC,” it said.
Computer Weekly first exposed the Post Office scandal in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to Horizon accounting software.
• Read more: Everything you need to know about the Post Office scandal •
