Referral of the proposed subsidy by the Department for Business and Trade for Post Office Process Review compensation
The Subsidy Advice Unit (SAU) has accepted a request from the Department for Business and Trade (DBT) for a report concerning its proposed restructuring subsidy for the Post Office Process Review compensation.
This subsidy is to support redress to impacted postmasters and is separate to the work of Post Office Limited in compensating postmasters for the Suspension Remuneration Review, Horizon-related shortfalls and for overturned convictions.
Administrative timetable
| Date | Action |
|---|---|
| 22 Feburary 2024 | SAU’s report published |
| 26 January 2024 | Deadline for receipt of any third party submissions (submissions after 5pm on this date cannot be taken into account) |
| 12 January 2024 | Beginning of reporting period |
Final report
22 February 2024: The SAU has published its report providing advice to DBT concerning the proposed subsidy for the Post Office Process Review compensation. The report sets out our evaluation of DBT’s Assessment of Compliance of its proposed subsidy with the requirements set out in the Subsidy Control Act 2022.
- (22.2.24)
Request from Department for Business and Trade
12 January 2024: The SAU has accepted a request from DBT for a report concerning its proposed restructuring subsidy for the Post Office Process Review compensation, concerning operational issues unrelated to compensating postmasters for the Suspension Remuneration Review, Horizon-related shortfalls and for overturned convictions.
This request relates to a Subsidy of Particular Interest.
The SAU will prepare a report, which will provide an evaluation of DBT’s assessment of whether the subsidy complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.
Information about the subsidy provided by DBT
Post Office Limited is a Public Non-Financial Corporation (Public Corporation) constituted under the Postal Services Acts 2000 and 2011, and is wholly owned by the Secretary of State for Business and Trade. The Department for Business and Trade (DBT) explained that through Post Office Limited, the government ensures the provision of a network of post office branches, delivering essential services to customers across the UK. It was also explained that the government provides Post Office Limited with subsidy and investment funding and has, since 2021, also provided funding to enable Post Office Limited to manage financial liabilities arising from issues relating to previous versions of the Horizon IT system.
DBT explained that, arising from findings of the Hon Mr Justice Fraser in the ‘Common Issues Judgment’, Post Office Limited has found previous operational issues unrelated to Horizon shortfalls such as processes and/or policies regarding certain services that impacted postmasters financially. DBT is now proposing to award Post Office Limited a grant of up to £81million to enable it to provide redress to postmasters who may have been impacted by the operational issues identified. This is separate to the work of Post Office Limited in compensating postmasters for the Suspension Remuneration Review, Horizon-related shortfalls and for overturned convictions.
DBT explained that the government ‘considers that it is important that Post Office Limited continues to implement improvements following the Common Issues Judgment, including through the delivery of compensation to affected postmasters. Government is therefore proposing to provide this additional subsidy to Post Office Limited to ensure it can carry out appropriate redress. By extension, it is intended that this investment will also support the provision of a stable post office network, providing essential services to customers across the UK’.
DBT further explained that, as the sole shareholder of Post Office Limited, it ‘will continue to provide oversight to ensure that compensation is delivered quickly and effectively to affected postmasters and that operational costs are well managed. The subsidy will be ringfenced for the purposes outlined above and may not be used for supporting other activities undertaken by Post Office Limited’.
DBT has stated that the grant funding will cover the period to the end of the 2025 to 2026 Financial Year and that grant payments will be released to Post Office Limited in arrears on evidence of expenditure and regular reporting. It was also explained that Post Office Limited will communicate with current and former postmasters to outline the scope of the remediation process in the coming months.
Information for third parties
If you wish to comment on matters relevant to the SAU’s evaluation of the Assessment of Compliance concerning proposed subsidy for Post Office Process Review compensation, please send your comments before 5pm on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, see the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Please send your submissions to us at SAU-PostOfficeCompensationSubsidy2024@cma.gov.uk, copying the public authority: glocompensation@beis.gov.uk.
Please also provide a contact address and explain in what capacity you are making the submission (for example, as an individual or a representative of a business or organisation).
Notes to third parties wishing to make a submission
The SAU will only take your submission into account if it can be shared with DBT. The SAU will send a copy of your submission to DBT together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to grant or modify the subsidy or its assessment. We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with DBT using the email address provided above.
The SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance.
For further details on confidentiality of third party submissions, see identifying confidential information in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Contact
- CMA press team: 020 3738 6460 or press@cma.gov.uk
Last updated 22 February 2024 + show all updates
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Final report published.
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First published.