Post Office Appointments: Ministerial Responsibility

Lord Arbuthnot of Edrom Excerpts

Wednesday 7th February 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that. The whole House shares the noble Lord’s sentiments that this is a deeply shameful episode, which went on for over 20 years. It is quite incredible to think back on the scale of the failure here, both of governance and of corporate life. Since the Horizon scandal came to light, the Government have taken quite a lot of steps to strengthen the governance of the Post Office. However, there are a number of ongoing reviews, including one by Simmons & Simmons, to look at exactly how the appraisal system works. Once the Wyn Williams review—a statutory inquiry—has concluded, we will be able to take steps around corporate governance going forward.

[Lord Arbuthnot of Edrom (Con)]

My Lords, in an arm’s-length organisation, to whom in practice is the chief executive accountable? Is it the department’s Permanent Secretary?

[Lord Offord of Garvel (Con)]

I thank my noble friend for his question and for all his efforts on behalf of the postmasters. We have to realise that this is a limited company owned entirely by the Government, with one share owned by the Secretary of State. It separated from Royal Mail Group when that went private, but the Post Office is actually classified as a public non-financial corporation. Public corporations include, for example, Ordnance Survey, Royal Mint and British International Investment. They are typically owned by the appropriate Secretary of State in that department, the reason being that they are hybrid: the Post Office has commercial activity, it makes revenue through the post offices, but it also receives public money to support the network. As a result, the governance is such that the chief executive reports to the chair, the chair reports to the Secretary of State, and the chief executive also reports to the Permanent Secretary when it comes to public money.