Calls for ‘massive cultural change’ at Post Office after chairman’s exit

A minister has denied a “falling out” caused the exit of the Post Office’s chairman, amid calls for a “massive cultural change” in the company’s management.

Business minister Kevin Hollinrake said “very serious governance issues” led to the departure of Henry Staunton, adding he did not receive a severance payment.

An interim chairman is expected to be appointed “shortly” while the permanent replacement needs to be the “right leader” to be able to implement further change, Mr Hollinrake told MPs.

Mr Staunton stepped down as chairman of the state-owned business, having only been appointed in December 2022 following nine years as chairman of WH Smith.

He had been tasked with leading the board of directors as the business reels from the fallout of what has been described as the UK’s biggest miscarriage of justice.

More than 700 branch managers were prosecuted by the Post Office between 1999 and 2015 after faulty Horizon accounting software made it look as though money was missing from their branches.

Mr Hollinrake, replying to an urgent question, told the Commons: “The current chairmanship wasn’t proving effective and we had a difficult decision over changing course or waiting and hoping until he improves.

“Given the challenging context of the Post Office and the importance of the role of the chair, the Business Secretary took decisive action.

“I understand members would like more details around the decision, especially considering the Post Office is rightly under heightened scrutiny of this time, I can confirm that there were issues beyond the handling of the Horizon scandal, but as you’d expect I’m not able to comment on the specifics of individual HR cases.”

For Labour, shadow business minister Rushanara Ali said the Government’s decision to announce Mr Staunton stepping down over the weekend was “unusual”.

She continued: “Can the minister assure us that this decision was indeed substantive and not just as a result of a personal falling out between Mr Staunton and the Secretary of State (Kemi Badenoch)?”

Kemi Badenoch
Business Secretary Kemi Badenoch ‘took decisive action’, minister Kevin Hollinrake said (Liam McBurney/PA)

Mr Hollinrake replied: “I don’t know why she would feel or have any evidence that this was some kind of falling out, as she put it.

“This was about governance issues, very serious governance issues … which are confidential and HR issues.”

He added: “This wasn’t about holding somebody responsible for past problems in the Post Office. This is about the governance of the Post Office going forward, which is why the mutual agreement took place for Mr Staunton to step down.”

Conservative MP Bob Blackman (Harrow East) said: “Clearly in the wake of the Horizon scandal there’s a need for a massive cultural change that drives Post Office management, particularly in their relationship with the subpostmasters.”

He added to the minister: “Will he make sure that whoever is appointed to this job as chairman commits themselves thoroughly to this need to change the culture and, if necessary, change other board members to make sure that we get the change we all want to see?”

Mr Hollinrake highlighted work to improve relations between the Post Office and subpostmasters, adding: “I think some of the past conduct and culture of the Post Office has changed but we know it needs to change further, that’s the job of the board, we need the right leader of that board to be able to do that, hence the action we’ve taken over the weekend.”

Hundreds of subpostmasters and subpostmistresses are still awaiting compensation despite the Government announcing that those who have had convictions quashed are eligible for £600,000 payouts.

A statutory inquiry into the saga is ongoing and renewed public anger emerged following its dramatisation in ITV’s Mr Bates Vs The Post Office earlier this month.

Conservative former minister Ranil Jayawardena asked for confirmation that Mr Staunton did not receive or accept any severance payment.

Mr Hollinrake replied: “Yes, I can confirm that, there was no payment, no severance payment.”

SNP business spokesman Richard Thomson said: “I think people will be forgiven for having the suspicion that ministers, when it comes to Horizon, are a bit like the Japanese Moon lander – suddenly bursting into life as soon as a little bit of light is shone on them, in this case by an ITV programme.”

Labour MP Liam Byrne, who chairs the Business and Trade Committee, said: “Leaving the Post Office rudderless right now when people are literally dying before they get their redress is not a situation we can put up with.”

Mr Hollinrake replied: “I don’t accept the premise that it’s rudderless, the chief executive is still there, I’ve spoken to the chief executive a few moments ago prior to this urgent question.

“We’re looking to appoint an interim as soon as possible and a permanent replacement shortly after that, and the daily work of the board will continue.”