The Post Office Horizon IT Inquiry Says Horizon Could Show Illusory Gains and Losses

A computer system showed losses in branch accounts. Its data was relied on to prosecute people and to hold them liable for losses. Some of those losses were illusory, a UK statutory inquiry says.

The inquiry is the Post Office Horizon IT Inquiry. Volume 1 of its report was ordered to be printed by the House of Commons on July 8, 2025. The Chair writes that the human impact should be placed at the forefront of the report. This volume combines a description of the suffering endured with the Chair's conclusions on redress. Parts of its introduction follow, not the whole.

A System Capable of Producing False Data

The Post Office began rolling out the Horizon IT System to branches and Crown Offices in about September 1999, the report says. The first version is now usually known as Legacy Horizon. It was in use until 2010.

Before the roll out, the report says, some employees of the system's supplier had discovered that Legacy Horizon was "capable of producing data which was false." It could produce losses or gains in branch or Crown Office accounts that were "illusory rather than real." That came about because, from time to time, the system would be afflicted by what have come to be known as "bugs, errors and defects."

In 2010 a second version replaced the first. Like its predecessor, the report says, it was from time to time afflicted by bugs, errors and defects. They had the effect of showing gains and losses in branch and Crown Office accounts that were illusory. The Chair is satisfied that a number of employees of the supplier and of the Post Office knew that this was so. A footnote says the evidence that justifies that statement will be summarized and explained in a later volume.

The Claim That the Data Was Wholly Reliable

The Chair is satisfied about what was known inside the Post Office. A number of senior, and not so senior, employees knew or, at the very least, should have known that Legacy Horizon was capable of error. Yet for all practical purposes, the report says, throughout the lifetime of Legacy Horizon the Post Office "maintained the fiction that its data was always accurate." The evidence for both statements is also left to a later volume.

Between 2000 and the autumn of 2013, the Post Office prosecuted postmasters and others in England and Wales, the report says. It did so in reliance upon accounting data produced by Horizon. The data was relied upon to prove actual losses that could only be explained by theft, false accounting or fraud. In Northern Ireland and Scotland, the prosecuting authorities brought prosecutions during the same period and for some years beyond 2013. In each such case in the United Kingdom, an assertion was made, expressly or by implication. The Post Office, the prosecuting authorities or both asserted that the data was "wholly reliable."

The Post Office also relied on Horizon's data to hold postmasters liable under their contracts for apparent losses, the report says. In each case it asserted that the losses were real and the data wholly reliable.

Postmasters began to complain almost as soon as Legacy Horizon had been rolled out. Their complaint was that Horizon was, on occasions, producing false data which affected branch accounts. The complaints continued throughout the life span of both versions. Still the Post Office "trenchantly resisted" the contention, the report says.

Who is listened to when the people using a system say its numbers are wrong, and the organization that relies on it says they are wholly reliable?

Convictions, Liability and the Version in Use

As a consequence, the report says, many hundreds of people have been convicted, wrongly, of criminal offenses. Many thousands have been held responsible, wrongly, for losses which were illusory. The report calls these people victims of "wholly unacceptable behaviour." It attributes that behavior to a number of individuals employed by or associated with the Post Office and the supplier, and to both as institutions. Later volumes will demonstrate this, it says.

A footnote says the phrase does not necessarily mean that persons or the Post Office committed crimes or would be liable in civil proceedings. The Chair is precluded by section 2 of the Inquiries Act 2005 from determining criminal or civil liability, it says.

In 2017 a third version replaced the second. On the Chair's understanding it was in current use when the report was written, with some modifications since 2017. The Chair began hearing evidence with a working assumption about this version. It was "far more robust than Horizon in earlier times," or at least "different and more robust." Those assumptions "may no longer be wholly justified," the report says. It points to evidence provided on behalf of the supplier and from postmasters who use the version. A later volume is to explain why.

A newer version is not proof of a sounder one.