Ex-Post Office boss ‘was told to stall on finances’ in unearthed memo

Sarah Munby is challenging a note by former chairman Henry Staunton in which he claims she told him to stall compensation to sub-postmasters

A senior civil servant in the Post Office row has said a memo published by its former chairman on Tuesday night is a “misrepresentation” of their conversation.
Henry Staunton released a note he claims proves he was told to stall compensation payments to sub-postmasters.
His memo records Sarah Munby, then permanent secretary at the business department, saying “now was not the time for dealing with long-term issues” and they should “hobble” up to the election.
But it is understood that Ms Munby is challenging the memo, believing that “separate conversations are being misrepresented”.A Whitehall source told the Telegraph she was referring to the state of the Post Office finances, not payouts for postmasters.
“Funding for Horizon compensation was ringfenced – that is just a matter of fact,” the source said.
“It was an introductory meeting about turning round a business which is funded by the taxpayer and is loss-making.”
But sources close to Mr Staunton said he understood from the conversation that “long-term issues” included the compensation payments to victims of the scandal.
Kemi Badenoch, the Business Secretary, has written to Ms Munby to ask her to outline her recollection of the conversation.
The Liberal Democrats called for a Cabinet Office investigation into whether Ms Badenoch broke the Ministerial Code by claiming in Parliament on Monday that Mr Staunton’s comments were “completely false”.
According to a note written down after the January 2023 meeting by Mr Staunton and shared with The Times, the businessman alleges that Ms Munby, who is now permanent secretary at the Department for Science, Innovation and Technology, told him she understood the “huge commercial challenge” of the financial position facing the Post Office.
Ms Munby warned him that “politicians do not necessarily like to confront reality”.
His memo recorded Ms Munby saying that the Post Office needed to know that in the run-up to the election there was no appetite to “rip off the band-aid”.
“Now was not the time for dealing with long-term issues,” the memo said, and that the Post Office needed a plan to “hobble” up to the election.
A government source dismissed the memo.
“The long-standing issues around Post Office finances are a matter of public record and do not include postmaster compensation which is being fully-funded by the Government,” the source said. “Henry Staunton is either confused or deliberately mixing up the two issues.
“Even if we trust the veracity of a memo he wrote himself, and there’s not much to suggest we can, given the false accusations he made about the Secretary of State in his original interview, it’s time for Henry Staunton to admit his interview on Sunday was a misrepresentation of his conversations with ministers and officials and to apologise to the government and the postmasters.”
The source said Horizon compensation was coming from the Treasury Reserve. The Post Office does not receive an allocation for compensation that they could use for anything else, because it is ring-fenced under separate funding agreements.
Mr Staunton’s memo indicates the conversation appears to have been broader than merely discussing compensation for the sub-postmasters.
On Monday, Ms Badenoch denied he had been told to stall payments, saying there was “no evidence” to support the claim and accused him of spreading “made-up anecdotes”.
She insisted the government had done “everything it can” to speed up payments to those wrongfully prosecuted.
This morning the Lib Dems demanded an investigation by the ethics adviser into whether Ms Badenoch broke the ministerial code, over her claims that Henry Staunton’s allegations the government had stalled compensation payments were “completely false”.
Deputy leader Daisy Cooper said the Business Secretary could have potentially broken the Ministerial Code in article 1.3c which sets out that “Ministers who knowingly mislead Parliament will be expected to offer their resignation to the Prime Minister”.
“Time and again Conservative ministers have undermined the integrity of our politics,” said Ms Cooper. “Now, this row embroiling Kemi Badenoch raises a whole series of new questions to which we urgently need answers.
“If Badenoch misled Parliament then she clearly breached the Ministerial Code.
“Sub-postmasters – who are at the heart of this whole scandal – deserve justice, financial redress and the truth.”