Malicious, incompetent or misunderstood? As the UK’s Post Office inquiry enters its final stage, former CEO Paula Vennells faces a reckoning. Oliver Shah speaks to her former colleagues to work out how she became the face of a scandal.
It is a little-known fact that Paula Vennells suffers from claustrophobia. When I interviewed her for this paper’s Business section a decade ago, she told me it first came on during a trip with the Girl Guides to Speedwell Cavern, a flooded 18th-century lead mine in the Peak District. “Ugh,” she thought. “I can’t do this.”
It was bad enough to stop her getting the Tube to work. So how must the former Post Office boss have felt, trapped in a packed room at a grand office block in central London, as she was poked and probed over her role in a scandal that saw more than 4000 lives ruined based on flaws in the taxpayer-owned company’s software?
While the rest of Britain watched Rishi Sunak deliver his sodden election announcement on May 22, followers of the Post Office saga were rapt as Vennells was sworn in for three days of evidence at the Horizon IT inquiry. Vennells, who was ordained as a priest in 2006, started brightly, smiling co-operatively, widening her eyes like — in the words of a former colleague — “someone talking to a sick dog”. But she quickly turned defensive, harried, as she denied having known about serious problems with the Horizon system and tried to blame others, not least her own lawyers. Barely an hour in, the tears came. “I’m incredibly sorry,” Vennells sobbed.
The Post Office scandal has been called the worst miscarriage of justice in British history. Between 1999 and 2015, more than 900 sub-postmasters and others were wrongly prosecuted on charges including false accounting and theft, based on glitches in the Horizon system, which had been brought in to digitise transactions. Several thousand more were sacked or ordered to hand over money they hadn’t taken. Many were ostracised by the communities they had served. At least five committed suicide. Hundreds died before they could see justice done.
Like the Grenfell Tower tragedy, it is a complex story of institutional failure. At various points, myriad limbs of the state fumbled their duties to sub-postmasters and the public: the broader Royal Mail Group, run by Adam Crozier, now chairman of BT, and then the Canadian Moya Greene; postal affairs ministers including the future Liberal Democrat leaders Ed Davey and Jo Swinson; a succession of knighted Whitehall mandarins; and UK Government Investments, the Treasury-owned body previously known as the Shareholder Executive. Unlike Grenfell, however, this story — fairly or not — offers a central villain. Among the 267 individuals interviewed so far by the Post Office inquiry, which has also reviewed almost 250,000 documents totalling two million pages, Vennells is first among equals.
Now aged 65, Vennells was head of the Post Office from 2012 to 2019. She has been a hate figure since her icy portrayal by Lia Williams in Mr Bates vs The Post Office, the ITV drama that unleashed a tidal wave of outrage when it aired in January. The fallen establishment favourite, once shortlisted to be the Bishop of London and appointed to the board of the Cabinet Office on retiring from the Post Office, was forced to hand back her CBE. She now lives as a near-recluse in her rambling cottage near Bedford. Lawyers at Mishcon de Reya act as her emissaries to the outside world. She no longer takes Sunday church services.
She met her husband, John, at Bradford University’s dinghy club. Their two sons are adults. Neighbours speak highly of Vennells; one says the cleaners who look after her house remark that she is “such a nice lady” and “can’t understand how any of this has come about”.
At the inquiry Vennells was shown an email from Tim McCormack, a former sub-postmaster who was radicalised into campaigning after reading about the wrongful prosecution of Seema Misra, who had been jailed for theft while eight weeks pregnant. In October 2015 McCormack contacted the chief executive and told her he had “clear and unquestionable evidence of an intermittent bug in Horizon” that could cause thousands of pounds of fictional losses. He warned Vennells of an “inevitable judicial review where you will personally be exposed” if she failed to investigate. Under the subject line “It had to happen sooner or later”, he said this “could happen sooner than you think”.
In fact, it took almost a decade. But in late May, Jason Beer KC, the inquiry’s lead counsel and McCormack’s prediction made flesh, asked a blinking Vennells what she had done in response to such a worrying message. There was a suspenseful pause.
“I don’t recall,” Vennells said, to a murmur of amusement and disbelief from the public gallery.
After I met Vennells all those years ago, I described her as having “an aura of Radio 4 respectability”. The essential mystery of her part in the Post Office scandal is how her wholesome appearance and backstory squares with the horrific output of her actions, or lack of them. The woman who emerged from the hearings seemed not so much straightforwardly malevolent as complicatedly incompetent — out of her depth and unwilling to confront the truth. This was someone who had glided upwards, despite her limitations, into the rarefied top atmosphere of business and government. Combined with the malfunctioning of the organisational machinery around her, Vennells’s unfitness for the job had devastating consequences for those below.
The Horizon inquiry has entered its final phase, looking at recommendations for the future. But the story of Vennells’s involvement remains an unsatisfying one. This is an attempt to unravel it.
‘She deludes herself’
Former colleagues’ phones lit up as they exchanged messages while Vennells gave evidence. These included people from before her time at the Post Office, when she was in high street retail and leisure. Some remembered a particular incident. Preparing to recount the anecdote, one remarks that he never received requests for references from prospective employers later in Vennells’s career — “because if I had, I’d have been able to tell them that she wasn’t someone I thought worked with integrity”.
The tale dates to 2001. Vennells was marketing director of the catalogue retailer Argos, which had recently been taken over in a hostile deal by Great Universal Stores. Vennells was offered a promotion, which she accepted. She then changed her mind and told her boss that, actually, she wanted to leave the world of Mammon and dedicate her life to the church. Taking her explanation at face value, he smoothed things over with his higher-ups. So he was “completely incandescent” when, shortly afterwards, Vennells popped up as marketing director at Whitbread, which then owned Costa Coffee. Allegedly, Argos, which had paid Vennells redundancy money, engaged lawyers and clawed it back. ”I found it hard to believe of her,” the former colleague says. “It’s wrong for me to say she’s slightly Walter Mitty — that’s probably a bit of an exaggeration — but I think she deludes herself, she’s weak and she’s unable to face up to being wrong.”
The great-great-granddaughter of Sir James Watts, mayor of Manchester in the 1850s, Vennells grew up in Denton, a town eight kilometres to the east of the city centre. Her father was an industrial chemist who later became a research fellow at Manchester University. Her mother was a bookkeeper who volunteered with Citizens Advice — the one who “kept it all together and made sure the children did their homework”, Vennells told me in 2014. The family was “probably lower middle class — not lots of money” but Vennells won a funded place at a local private school, Manchester High School for Girls, and studied French, Russian and economics at Bradford University. Along the way, any trace of a Mancunian accent was ironed flat into BBC tones.
She considered a career as an interpreter but instead joined the Unilever graduate trainee scheme, then held roles at the travel agency Lunn Poly, the electronics chain Dixons and the retail group Sears. Asked for vignettes about her time at Dixons, a former colleague says: “She was a studiedly vignette-less individual. She would sit with her computer, work out her presentation plan, go off and talk to the buyers, and occasionally they’d batter her around and she would stolidly go soldiering on.” An ex-colleague from her time at Whitbread describes her as a “diligent, hard-working professional” who was “not somebody that was just commercially driven”. Another, from her time at Sears, says that Vennells was “drunk with ambition” and “highly political” but “just wasn’t very good”. “She didn’t understand the most rudimentary aspects — things like consumer behaviour, market segmentation — that you need to at a senior level.” When he heard she had been put in charge of the Post Office, “I was just knocked for six.”
Vennells arrived in 2007 as network director, responsible for about 15,000 post offices. She later told The Daily Telegraph she “felt I’d done the rounds in terms of big corporate jobs and saw something in the Post Office that was bigger and deeper — maybe it was something about giving back”. From the get-go, she was central to cost-cutting efforts at the loss-making business. In her first few years she had to shut 2500 branches, a deal agreed by the Post Office in exchange for £1.7 billion of government subsidy.
After being promoted to managing director, with a seat on the Royal Mail board, Vennells was made chief executive in 2012, in the early years of the Conservative-Lib Dem coalition government. Alice Perkins, a former head of HR for the civil service, was the chairwoman who oversaw her elevation. Vince Cable was the Lib Dem business secretary and Jo Swinson the postal affairs minister.
It is easy to forget the political mood of the time. George Osborne, the chancellor, was pushing through an austerity programme after the 2008 financial crisis. After 13 years of Labour government, privatisation was back on the agenda. The year after Vennells’s elevation, Royal Mail, the Post Office’s former parent company, was floated on the stock market. The plan for the Post Office, which remained in public hands, was to wean it off government subsidy. “This is really about taking something that is so important to every community and trying to transform it,” Vennells told me. “That’s the tension: can you be public sector and commercially successful? I believe you can.”
She didn’t understand the most rudimentary aspects — things like consumer behaviour, market segmentation — that you need to at a senior level.
Someone who worked with her at the Post Office says she was initially liked by government, being a high-profile female boss who talked about social purpose. But documents released to the Horizon inquiry show that within two years of appointing her, ministers were discussing firing her. A 2014 briefing paper compiled by the business department said there was “a general consensus that Paula is no longer the right person to lead [the Post Office] … Paula has not shown an understanding of political considerations … or of the detail of the [company’s] plan, and she has been unable to work with personalities that provide robust challenge to her.”
Vennells entered an environment where the management often held sub-postmasters — who run the branches in the communities the Post Office claimed to care about — in contempt. It had an internal investigations team of 100 and regularly brought private prosecutions.
In October 2009, after a smattering of press articles — including the now-famous Computer Weekly report that sub-postmasters were being blamed for accounting shortfalls — Alan Cook, the Post Office’s managing director, emailed colleagues, in a chain that was forwarded to Vennells: “My instincts tell me that, in a recession, subbies with their hand in the till choose to blame the technology when they are found to be short of cash.”
Asked at the inquiry whether she agreed with this sentiment, Vennells said she would never have used the word “subbies”. Amid tittering from the audience, Beer pointed out that “hands in the till” was the more important part. She said: “I beg your pardon — I wasn’t avoiding answering that question. Neither [was appropriate] — either calling them subbies or people with their hands in the till.”
Horizon, touted as “the largest non-military IT system in Europe”, was supplied by the Japanese tech giant Fujitsu. David McDonnell, an engineer who worked on early versions, described it as “a bag of s***”. The month before Vennells took the top job, an outage paralysed the network for hours.
In May 2012 Vennells and her chairwoman, Alice Perkins, agreed to meet two Tory MPs at the Post Office’s premises at Old Street in London. James Arbuthnot was the member for North East Hampshire. One of his constituents was Jo Hamilton, who was prosecuted for a shortfall of £36,000 at her post office in the village of South Warnborough and persuaded to plead guilty to false accounting. Oliver Letwin was the MP for West Dorset. One of his constituents, Tracey Merritt, was sacked for losses of £12,000 and prosecuted for theft, but the charges against her were dropped.
That summit led the Post Office to call in a forensic accounting firm, Second Sight, which by July 2013 found that bugs in Horizon had caused incorrect balances or transactions at tens of branches, but “so far found no evidence of system-wide” problems. The Post Office then sought advice from the barrister Simon Clarke, who recommended a review of all prosecutions. The Post Office’s response was to bury Clarke’s advice and, eventually, to fire Second Sight — although not before enduring an embarrassing select committee hearing in February 2015. One of the firm’s two investigators flatly contradicted Vennells over whether she knew that Second Sight had been denied access to sensitive files — prompting Nadhim Zahawi, one of the committee members, to call the Post Office team’s performance a “shambles”. The Labour MP Liam Byrne, chairman of the business and trade select committee, has said Vennells could be pursued for contempt of parliament based on her evidence.
Whether Horizon accounts could be remotely accessed by operators at Fujitsu’s UK headquarters in Bracknell was a crucial question. If so, any prosecution reliant on Horizon evidence would be unsound. One sub-postmaster claimed he had witnessed such a thing in 2008. The Post Office denied it was possible. But recordings of calls between Second Sight and Post Office executives from 2013 show the investigators warned that Fujitsu could indeed “change the balances”.
Readying herself for the 2015 select committee grilling, Vennells wrote what has become an infamous note. She emailed Mark Davies, the Post Office’s director of communications, and Lesley Sewell, its chief information officer, asking how she could reply if MPs pressed her on the issue of remote access to Horizon. “I need to say no it is not possible and that we are sure of this because of xxx,” she wrote.
Jason Beer KC brought this up on the first day of her inquiry interrogation. “My understanding was that it was not possible, and so I wanted to say that,” Vennells replied. She said she had phrased her message the way she did because Perkins once advised her: “Paula, if you want to get the truth and a really clear answer from somebody, you should tell them what it is you want to say very clearly and then ask for the information that backs that up.”
“That’s an odd way of going about things, isn’t it?” Beer pondered, to laughter from the gallery. " ‘I want to know the answer to the question; here’s the answer to the question.’ " Perkins denied giving Vennells the advice.
I was told multiple times … that there had been no evidence found. You can’t be a chief executive and rely solely on your emotions.
Alan Bates, a stubborn character who had his contract to run a post office in Llandudno terminated after he refused to take responsibility for Horizon shortfalls, established the Justice for Subpostmasters Alliance campaign group in 2009. Bates — immortalised by Toby Jones in the ITV drama — gathered 544 other claimants, secured litigation funding and sued the Post Office in 2016. Despite knowing what they knew by that time — and despite the delivery of a draft Deloitte report the following year confirming that accounts could be changed remotely — Vennells and the Post Office spent three years and an estimated £100 million fighting it.
The initial High Court judgment in March 2019 accused the Post Office of “oppressive behaviour” and censured half its witnesses for being less than honest — including Angela van den Bogerd, one of Vennells’s closest lieutenants, whom Mr Justice Fraser said had “sought to obfuscate matters, and mislead me”. In an extraordinary move, the Post Office and its legal team then tried to make Fraser recuse himself. That bid failed in the Court of Appeal. Five days before Fraser handed down his damning final judgment in December 2019, the Post Office apologised and settled with Bates and friends for just under £57.8 million. Most of it was eaten up by litigation funding and legal fees.
By then, though, Vennells had glided off to a non-executive career. In October 2018, the Theresa May government’s honours committee agreed to make her a CBE, despite at least one member raising concerns. Her name was put forward by officials in the business department, led by Alex Chisholm, permanent secretary at the Cabinet Office, and recommended by a subcommittee led by Sir Ian Cheshire, now chairman of Channel 4. Cheshire, who had worked with Vennells at Sears, was also lead non-executive director at the Cabinet Office, which hired Vennells in February 2019.
That April she was made chairwoman of Imperial College Healthcare NHS Trust. In September 2019 she joined the board of the homeware retailer Dunelm, having already been a director of the supermarket Morrisons for several years. Andy Harrison, Dunelm’s chairman, said Vennells’s “experience of successfully leading the Post Office, a large and complex consumer business, through a period of significant change is extremely valuable”.
Pariah status
If Vennells’s inexorable rise in the face of reality showed the establishment embracing one of its own in the most shameless way, her precipitous fall demonstrated its willingness to cut ties ruthlessly when a scandal strikes. Her non-executive portfolio crumbled as the Court of Appeal quashed the convictions of 39 sub-postmasters in April 2021, saying the Post Office knew there were faults in Horizon but pursued them anyway. After she was rendered as the mastermind of a cover-up in this year’s ITV drama, her pariah status was complete. Having previously sounded supportive, Moya Greene, who ran the Royal Mail Group when Vennells was rising up the ranks to become chief executive, texted her: “I don’t know what to say. I think you knew.”
One of the most shocking moments in this year’s inquiry came when Tim Moloney KC, barrister for the wronged sub-postmaster Jo Hamilton, called up an email Vennells sent to her PR director after an episode of The One Show on the BBC in 2014 on which his client appeared. In the email, Vennells had praised her media man for “achieving a balance of reporting” and then said: “The rest was hype and human interest. Not easy for me to be objective but I was more bored than outraged. The MP quoted (who?) was full of bluster, and inaccurate. Jo Hamilton lacked passion and admitted false accounting … And the bulletin was too long.” (The MP was Kevan Jones, the member for North Durham.)
Hamilton was sitting at Moloney’s side as he read it out. The audience booed. Vennells said she was “deeply sorry”.
Some of the more telling exchanges were the smaller ones. Beer put it to Vennells that she “could not get there emotionally” on the idea that the Post Office had been responsible for miscarriages of justice.
“I was told multiple times … that there had been no evidence found,” she replied. “You can’t be a chief executive and rely solely on your emotions.” She said she was “sometimes criticised in team development events for being too curious” and that at one point she ran an internal campaign called “Bad News Is Good News” to encourage staff to come forward with difficult information. She said she always believed she was being given the truth by the Post Office’s in-house lawyers because “one assumes that lawyers work to a professional code”, and repeatedly said she was “too trusting of people”. “From what I know now, maybe other people knew more than I did.”
But Beer read out emails from 2013 and 2015 in which Vennells said she would take her PR man’s “steer” on avoiding making “front page news” by announcing a review of past convictions, and that “our priority is to protect the business”. Vennells was jeered when confronted with the “front page news” messages. “I understand how this reads but I don’t recall making any conscious decision not to go back and put in place a review of all past criminal cases,” she said. Of the second email about protecting the business, she said: “I’m sorry, first of all, because this reads badly today … What I was trying to say … is that we needed to make sure that the business, as it was operating, remained a priority.”
It’s an open question as to how you equate evil with a failure to do stuff.
Nick Wallis, the freelance journalist who produced that One Show report and wrote The Great Post Office Scandal, ends his book with a poignant story. One evening after Vennells was exiled from polite society he drove to her home, hoping to persuade her to give an interview. There was a room with a light on; Vennells was standing in the kitchen. They made eye contact through the glass. Wallis jogged to the front door and knocked. No answer. He walked to the kitchen window and the light had been switched off. “Two untouched plates of what looked like pork chops and hot veg were steaming away in the semi-dark,” Wallis wrote.
Somehow, it sums Vennells up: there and not there, powerful yet pathetic, responsible but not in control. The woman whose mental and reputational armour enabled her to ride through the Post Office scandal until the very end was reduced to hiding from a journalist.
Vennells and the Post Office top brass very nearly avoided even the partial reckoning they have endured so far. Paul Marshall, a barrister for some of the victims, says of the High Court case that broke the dam: “It was sheer bad luck for the Post Office that they got a highly technically experienced judge. There’s probably not one in 25 judges who could have given the judgment that Peter Fraser gave. If they’d had a backwoodsman from the Queen’s Bench Division who’d studied classics at Oxbridge, they could have very well got away with it. It was a damn near-run thing.”
The true extent of Vennells’s culpability may prove elusive — although there are some clues. In 2013 the Post Office quietly notified its insurers of Second Sight’s interim report and an alert by Simon Clarke over holes in expert witness testimony. In January 2014 it abruptly decided to stop routinely prosecuting sub-postmasters. Vennells sat on the Project Sparrow Post Office subcommittee that dealt with Horizon-related issues from 2013 to 2015. “It stretches credulity to think that the chief executive didn’t know about these things,” Marshall says.
Someone who worked closely with Vennells at the Post Office gives the following verdict. “There are two types of malevolence, aren’t there?” he says. “One is what you might call active malevolence, where you do something deliberately to hurt people. The other is more passive — people get hurt because of things you didn’t do. That is probably the camp she falls into. It’s an open question as to how you equate evil with a failure to do stuff.”
There was a pitiful scene at the end of the first day of the inquiry in May, when Sir Wyn Williams, the avuncular Welsh judge, asked Vennells why the Praetorian Guard that surrounded her had wanted her to be “very circumspect” in the way she dealt with questions about Horizon. As she gingerly essayed an answer, he cut her off. “No, no — that’s enough now.” The kindly undertone to his curtness was humiliating. Vennells’s face contorted into an expression of childlike anguish. For a fleeting moment, she was an overwhelmed Girl Guide again.
Written by: Oliver Shah
© The Times of London
