An independent review commissioned by the government has asked Post Office to undertake a review of its governance structures, processes and systems in relation to remuneration after the company paid tens of thousands of pounds to its senior executives based on a false claim over the Post Office Horizon IT Inquiry.
The report by the international law firm Simmons & Simmons said the approval of bonuses by the Post Office board’s remuneration committee has a ‘justifiable basis’ as there was ‘more than one way’ to interpret the remuneration metric known as the Inquiry Support Target.
But the review added that the Post Office has not been able to evidence the basis on which the committed awarded bonuses under the metric as “there are no written records of the rationale for its decision and the recollections of those involved are inconclusive,” making it “practically impossible to ascertain the basis” for the committee’s decision in respect of the Inquiry Support Target.
“The fact that [the committee’s] decision-making was not better recorded is a clear governance failing, including on the part of [the committee] members who should have identified that the minutes were deficient,” the review noted.
Post Affairs Minister Kevin Hollinrake announced the review on May 10, days after Sir Wyn Williams, chair of the Post Office Horizon IT Inquiry, published a statement seeking clarification on the Inquiry Support Target which he considered to be ‘misleading and inaccurate’ because its presentation suggested that a ‘metric had been set and achieved with confirmation given from him and his team, which was not in fact the case’.
Post Office, in its Annual Report and Accounts for the financial year 2021-2022, published on 1 March, stated that the Inquiry Support Target, part of the executive transformation incentive scheme, has been achieved. But the metric required ‘all required evidence and information supplied on time, with confirmation from Sir Wyn Williams and team that Post Office’s performance supported and enabled the inquiry to finish in line with expectations’.
Following Sir Wyn’s intervention, Post Office has issued an apology and the Post Office chief executive and chief finance officer have returned the remuneration associated with the Inquiry Support metric.
The findings of the report have sparked renewed calls for heads to roll at the top of the organisation, with Kevan Jones MP demanding that the Post Office board and chief executive ‘should take responsibility and resign’.
“It was obvious from the outset that these extortionate bonuses were unjustified,” he said, adding that the failings cited by the review had “caused anguish amongst all those wronged by the Horizon Scandal.”
If the chief executive and Board refused to resign, the North Durham MP continued, “then it falls to the Government, as the Post Office’s single shareholder, to act.”
Darren Jones MP, the chair of the Business & Trade Select Committee said “there are still questions to be answered about what led to false accounts being presented to Parliament, and bonus payments being made to executives based on false information.”
“It is unacceptable that the independent review was unable to conclude what had happened, based on a lack of documentary evidence and board members not remembering clearly what they discussed.”
He added that the committee will consider the report closely and follow up in due course.
The Communication Workers Union (CWU) has written to Kevin Hollinrake, terming the report a whitewash.
“This report and its findings is yet another in a long line of monumental insults to subpostmasters who strive daily to fulfill their obligations and social purpose,” Sean Hudson, CWU Subpostmasters Branch Secretary, wrote in the letter.
“Postmasters who are required to keep accurate records of all their actions in business and face heavy consequences for any failure to do so - the complete opposite of what appears to be the culture within POL.”
Post Office has welcomed the ‘comprehensive’ report, adding that it has already put in place significant steps to improve its governance mechanisms surrounding the remunerations further.
“I am writing to the board today to recommend that Post Office approves all of the recommendations in the report and that Post Office incorporates their implementation into further improvements we are making to our governance structures, processes and systems in relation to remuneration,” Henry Staunton, the new chairman of Post Office Limited, said.
“I want to reiterate the apology we made when the error in the Annual Report & Accounts for 2021-2022 first came to light.”
Post Office said it will update on the progress of the implementation of the recommendations, which be led by Amanda Burton, the new chair of the remuneration committee, at the release of the 2022-23 Annual Report and Accounts.
The company added that it will soon appoint a new chief people officer to ensure the timely and effective implementation of further improvements to its remuneration governance and structures.
Unilever said on Thursday its ice cream business will be separated by way of demerger, through listing of the business in Amsterdam, London and New York.
"This decision follows a full review by the Board of separation options," the company said.
The owner of the popular Magnum and Wall's brands had announced plans last year to separate the ice cream division to win back investor confidence after years of underperformance.
Unilever reported underlying sales growth of 4 per cent for its 2024 financial year, led by 2.9 per cent volume growth.
Turnover increased 1.9 per cent to €60.8 billion (£50.7) with -0.7 per cent impact from currency and -1.5 per cent from net disposals. Underlying operating profit was €11.2bn, up 12.6 per cent versus the prior year.
However, the British consumer goods giant announced falling net profits for 2024, hit by exiting Russia and other restructuring costs. Profit after tax dropped 11 per cent to €5.7bn compared with 2023.
The company’s power brands, which accounts for over 75 per cent of turnover, saw underlying sales growth of 5.3 per cent and volumes rising by 3.8 per cent. with particularly strong performances from Dove, Comfort, Vaseline and Liquid I.V. Fewer.
Underlying earnings per share (EPS) increased 14.7 per cent, while diluted EPS decreased 10.6 per cent due to loss on disposals and accelerated productivity programme spend.
“Today’s results reflect a year of significant activity as we focused on transforming Unilever into a consistently higher performing business,” Hein Schumacher, chief executive, commented.
“Under the Growth Action Plan, we committed to doing fewer things, better and with greater impact. We executed the plan at pace and made progress in 2024.”
The fall in profits reflected the sale of assets and “higher restructuring costs as a result of accelerating the productivity programme,” the company said in its earnings statement.
Unilever at the end of last year sold its Russian subsidiary to Arnest Group, finally joining other multinationals in exiting the country following its invasion of Ukraine in February 2022.
The company expects underlying sales growth for full year 2025 to be within its multi-year range of 3 to 5 per cent. It hinted at price increases during the year on account of higher commodity costs, but said it expects a more balanced split between volume and price.
“Market growth, which slowed throughout 2024, is expected to remain soft in the first half of 2025. The steps we have taken in 2024, including the launch of our refreshed GAP2030 strategy, further reinvestment in our brands and strong innovation pipelines leave us better positioned to deliver on our ambitions in the years ahead,” Schumacher said.
Unilever has appointed Jean-Francois van Boxmeer, former boss of Heineken, as chair designate for the separated ice cream business. Currently serving as chair of Vodafone Group Plc and non-executive director of Heineken Holding, he has been the chief executive of Heineken for 15 years.
The separation of Ice Cream, expected to be completed by the end of 2025, will cost thousands of jobs as the group seeks to save €800m by 2026.
The closure of one of Britain's oldest department stores due to recent tax rises signals a "devastating new chapter" for Britain's high streets, the country's leading retail body has warned.
Beales, a 143-year-old retail institution that opened its doors in Bournemouth in 1881, has announced the closure of its final remaining store in Poole's Dolphin Centre by the end of May, blaming increased tax burdens introduced in last October's Budget for making the business unviable.
"We are deeply saddened to learn of Beales' closure. This is not just the loss of another shop – it represents the end of a retail institution that has served communities for nearly one and a half centuries," said Jeff Moody, Commercial Director of the British Independent Retailers Association(Bira). "This closure starkly illustrates the devastating impact that recent tax increases are having on our retail sector."
Beales' announcement follows the Chancellor Rachel Reeves's October 2024 Budget, which introduced significant increases in employers' National Insurance contributions from 13.5 per cent to 15 per cent, alongside a rise in the minimum wage to £12.21 per hour for workers aged 21 and over.
Tony Brown, Beales' chief executive, confirmed that these tax rises, combined with the uncertainty of future increases, have made the business "unviable". The closure will be managed to ensure no suppliers face financial losses, though it marks the end of an era for British retail.
Bira, which represents 6,000 independent traders across the UK, has warned that this closure could be the first of many as retailers struggle with mounting costs.
Recent Bira survey data shows that 46 per cent of retailers reported worse trading conditions in early 2024 compared to the previous year, with confidence levels remaining low for the second quarter.
Mr Moody added: "The closure of Beales is, tragically, unlikely to be an isolated incident. With the reduction in business rates relief from 75 per cent to 40 per cent set for April 2025, alongside these other tax increases, many of our members are facing impossible decisions about their future. This is a critical moment for British retail, and we urgently need policy makers to recognise the devastating impact their decisions are having on our high streets."
Bira is currently in discussions with government departments to address the impact of these changes and develop a fairer business rates structure.
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Distributor fined after failing to ensure essential safety checks on potentially toxic food items.
A food importer and distributor has been fined after failing to ensure essential safety checks on potentially toxic foods it brought into the country.
Uxbridge Magistrates’ Court heard that Southall-based Al Noor Ltd failed to notify port authorities in Suffolk about a shipment of spice mixes from Pakistan it received in May 2022. In the absence of a proper declaration, it did not undergo the necessary checks.
The court heard that Al Noor Ltd, in Johnson Street, had intentionally obstructed authorised officers carrying out compliance checks. The company and its director Ahmed Akhlaq, of Parlaunt Road, Slough, pleaded guilty to the unauthorised removal of goods, and failing to comply with an official notice.
Al Noor Ltd was ordered to pay a fine, victim surcharge, and costs totalling £9,424, while Akhlaq was ordered to pay a total of £3,285, for the two offences, at the court hearing on Jan 3.
The magistrates heard that the shipment contained various spice mixes from Pakistan, classified as high risk because of potential contamination with aflatoxins – carcinogens linked to liver cancer, which are commonly associated with such products. Ingesting aflatoxins can be poisonous and life threatening.
As a result, shipments containing these imported spices must be sampled, and importers are required to notify ports of any incoming shipments. Al Noor Ltd, which regularly imports similar goods, failed to do so.
After the shipment was removed from the port without checks taking place, it officially became an illegally imported consignment of food, and therefore should have been destroyed.
After being notified by Suffolk Coastal Port Health Authority, Ealing Council’s food safety team ordered the business to destroy the products within 60 days.
According to the reports, during a compliance check in July 2022, officers discovered that more than half of the shipment was missing and unaccounted for. The business was given 24 hours to locate and present the entire shipment.
A follow-up inspection days later revealed that boxes had been relabelled and repacked in what was considered to be an attempt to disguise the contents.
While the products were eventually disposed of, the business only did so 8 days after the 60-day deadline had expired.
Councillor Kamaljit Nagpal, the council’s cabinet member for decent living incomes, said, “Obstructing food safety officers is a very serious offence and is not taken lightly by the council.
"The consequences for the business’ customers in this case could have been grave if council officers had not stepped in to enforce the law."
Approximately £663 million has been paid to over 4,300 claimants across four schemes for the victims of Post Office Horizon scandal. This is up from £594 million figure reported last month.
Sharing the latest report, Department for Business and Trade (DBT) stated on Friday (7) that £315 million has been paid under Horizon Shortfall Scheme (HSS), including interim payments while £128 m has been paid under Group Litigation Order (GLO) Scheme.
£65 million has been paid under Overturned Convictions (OC) and £156 million has been paid under Horizon Convictions Redress Scheme (HCRS).
Initial interim payments are available to eligible postmasters upon getting their conviction overturned on the grounds that it was reliant on Horizon evidence, states the department.
As of 31 October 2024, all 111 eligible claimants have either reached full and final settlement or received a minimum of £200,000 through interim payments.
From these 111, Post Office Ltd has received 82 full and final claims.
Of these 82 claims, 66 have been paid and a further 7 have received offers. The remaining 9 are awaiting offers from Post Office Ltd.
"Post Office Ltd has been progressing non-pecuniary settlements first to get money to postmasters as quickly as possible, which means a number of partial settlements have been reached in addition to the full and final settlements published here. Post Office Ltd continues to work on finalising these outstanding claims," states the department.
Under GLO scheme, the department had received 408 completed claims from eligible GLO postmasters. 252 have been paid and a further five have accepted offers and are awaiting payment. Another 126 postmasters have received offers from DBT and the remaining 24 are awaiting offers.
In HSS, £315 million has been paid including £33.3 million in interim payments to original claimants and £7.9 million in interim payments to late applications.
DBT informs, "On 13 March 2024, the government announced that all eligible HSS claimants would be entitled to a fixed sum award of £75,000 to settle their claim.
Post Office Ltd continues to make top-up payments to claimants who had previously accepted a full and final offer below the value of £75,000, to bring their total redress to £75,000."
The Post Office Horizon scandal saw more than 900 sub postmasters being prosecuted between 1999 and 2015 after faulty Horizon accounting software made it appear that money was missing from their accounts.
Hundreds are still awaiting compensation despite the previous Conservative government announcing that those who have had convictions quashed are eligible for £600,000 payouts.Read more.
A former sub-postmaster who was wrongly convicted amid the Horizon scandal has recently received a £600,000 settlement.
Keith Bell, 76, was a sub-postmaster in Stockton, Teesside, between 1987 and 2002, when he was convicted of false accounting. He had to do 200 hours of community services when he was convicted.
Speaking to BBC, Bell stated that though he feel he could finally do the things he should have done for 20 years, he did not feel entirely vindicated.
"There's parts of my life I'll never be able to have over, but now I've got a chance to do things I haven't been able to do," he said.
"I decided that at my age I wanted to accept the offer that was given to me, I could have appealed for more, but that would have meant the process going on for years."
"Because of that conviction I lost jobs, I was unable to find work that could support my family, basically, and I became bankrupt," he said.
Bell added that he was inspired to fight for compensation by the ITV drama Mr Bates vs The Post Office.
He said, "I never, ever, thought I'd be in a position to challenge the Post Office, I didn't know enough about IT, I didn't have enough legal knowledge, nor did I have the funds to do it - I just decided I needed to put my weight behind the cause."
Last May, the government quashed all convictions which were part of the Post Office scandal.
Bell said the U-turn had been a "huge relief".
He added daily life had been a "struggle" over the past 20 years, but he was very lucky his customers and friends had been "very kind", while he was aware other sub-postmasters had a "terrible time".
Bell had spent years believing he had been at fault for the shortfalls which occurred at his Post Office branch in Stockton-on-Tees.
He had been a sub-postmaster from 1985, and like hundreds of others, began to experience unexplained shortfalls in his accounts after having the Horizon IT system installed in his branch.
He called Post Office helplines but was given little support, so when his books didn’t balance, he’d make up the shortfall himself. He did this firstly from his own savings, then from the proceeds of a house sale, before finally delaying some transactions in desperation to "make the books look right".
When auditors noticed discrepancies and wrongly told him other sub-postmasters had not had issues with Horizon.
He admitted to a charge of false accounting over a shortfall of £3,000 at Teesside Magistrates’ Court in 2002 and was handed a sentence of 200 hours community service. Unable to maintain mortgage payments on the business property, it was repossessed by the bank.