After the debacle of the Horizon Post Office scandal, the government now says it will have to pay compensation to postmasters over problems with earlier Capture accounting software
The Capture system was used by some postmasters during the 1990s and was developed by an in-house team at the Post Office Ltd, but this software was also dogged by errors which created financial shortfalls at branches.
Following an independent Kroll report which found that the Capture software could have created shortfalls, the government plans to pay financial redress to postmasters who suffered losses and financial shortfalls as a result of errors created by the accounting software. Capture was used in some Post Offices before the introduction of Fujitsu’s Horizon software.
Business secretary Jonathan Reynolds said the government will work swiftly with victims to determine its form and scope, alongside eligibility criteria, by spring 2025.
The government has asked the Post Office to urgently review its files and evidence so the Criminal Cases Review Commission in England and Scotland can ensure no one was wrongfully convicted of a Horizon-style injustice.
The Capture accounting system was developed in-house by the Post Office’s internal information technology team. It was rolled out across some Post Office branches from 1992 and was in operation for seven years, before it was replaced by Horizon software in 1999.
Capture was essentially a back-office processing software that automated certain calculations, with functionality similar to an Excel spreadsheet. When it came in, post office branches were highly cash intensive businesses and this was meant to reduce the time spent producing weekly cash and stock summaries sent to the Post Office.
However, the issue with faulty accounting software was not as widespread as with Horizon as most branches were still using manual ledgers during the 1990s with only 13% using Capture software out of a total of 18,407 branches. Kroll estimated that 2,500 copies of the software were produced.
The government commissioned Kroll to investigate the Capture system after postmasters came forward publicly in January indicating they had faced financial losses due to the Capture system. In its independent report, Kroll concluded Capture could have created these shortfalls.
Kroll found that despite various control functions being in place at the Post Office, there was an acknowledgement both in internal and external communications during the 1990s that Capture had bugs and errors that varied in severity.
It is important to note that Capture was not networked to a central IT network or system like Horizon. This meant the data could not be accessed or manipulated from elsewhere.
The investigators from Kroll were able to replicate three of the bugs finding that they would have resulted in variance between cash or stock on hand, and the cash or stock balance in the summary reported in the software.
Kroll also heard testimony that suggests that ‘the Post Office behaved in a heavy-handed manner towards postmasters who used Capture’.
Due to the length of time which has passed since the Capture system was in use several issues have complicated the investigation including the 24-year time elapse means that a greater population of the users may have sadly died, the government said.
In addition, it is likely that relevant evidence relating to shortfalls, suspensions, terminations, prosecutions, and convictions has been lost or destroyed, and unbelievably, there were at least 19 different operational versions of the Capture software used during the period. It is not even clear how many postmasters even used the system, with the government saying there was an ‘ambiguous number of users during this period’.
Unlike Horizon, it is currently uncertain how many criminal prosecutions were based on Capture evidence. These challenges also mean it will be difficult for claimants to corroborate their claims with evidence.
The Post Office has indicated it holds further information on convictions and prosecutions during the Capture period. The government has asked them to carry out a review of these records urgently.
The final form of redress will need to take account of the very low levels of contemporaneous records and evidence from this period, and also put in safeguards to manage the risk of fraudulent claims.
Eligibility will be a key question, and the government will carefully consider this point through engagement with postmasters and others.
Post office minister Gareth Thomas said: ‘I would encourage all postmasters who may have used Capture and experienced shortfalls during their time at the Post Office, to please come forward and make themselves known. They can do so by emailing: capture@businessandtrade.gov.uk.’
The announcement of the Capture compensation package came on the day the Horizon enquiry ends, marking nearly three years of hearings and investigations. It is not expected to report until mid to late 2025. So far the government has paid £500m to 3,300 Horizon victims, but still has to resolve 1,620 outstanding claims by postmasters.
Useful links
Kroll investigation into Capture: government response
Kroll report of independent investigation into Capture accounting software
Story by Sara White of Business & Accountancy Daily
