In April 2014, confidential documents obtained by the BBC reveal that Post Office officials made a covert decision to dismiss forensic accountants who had uncovered glitches in their IT system. The revelation, part of a classified initiative codenamed “Project Sparrow,” also discloses that the government was aware of this move, intensifying allegations of a comprehensive cover-up, according to former sub-postmaster Alan Bates.

The forensic accountants, Second Sight, played a crucial role in exposing flaws in the Horizon computer system. This system produced erroneous evidence of financial shortfalls in sub-post offices, leading to the unjust prosecution of sub-postmasters. Despite Post Office executives repeatedly asserting the robustness of their systems, they eventually conceded, under pressure from MPs, to establish a mediation scheme to address a purportedly small number of cases.

Project Sparrow documents reveal that in 2014, the Post Office intended to offer only £1 million in “token payments” as compensation to sub-postmasters, downplaying evidence of computer bugs. This estimate vastly underestimated the scandal’s eventual cost, now projected to exceed £1 billion.

The unredacted minutes from Project Sparrow meetings in April 2014 expose a clandestine plan to terminate Second Sight’s involvement. The sub-committee, led by Post Office Chair Alice Perkins and including CEO Paula Vennells, decided to bring the investigation of sub-postmasters’ cases under Post Office control, concealing this decision from Parliament and the public.

Despite Second Sight’s earlier report in July 2013 identifying computer bugs in the Horizon system, the Post Office proceeded with Project Sparrow’s plan. The minutes from April 2014 show discussions about minimising compensation to sub-postmasters, accelerating the mediation scheme, and avoiding “ex gratia” payments to struggling sub-postmasters.

In March 2015, almost a year after the decision, Second Sight’s contract was terminated, and the Post Office assumed control of investigating sub-postmasters’ cases. Lord Arbuthnot, a vocal critic, argues that the government must take responsibility for the scandal’s mishandling, describing it as a corrupt and murky story that extends into the government.

The Prime Minister’s spokesperson acknowledged an ongoing inquiry and emphasised the government’s cooperation. Post Office officials, including Alice Perkins and Paula Vennells, declined to comment. Legal firm Linklaters, along with Chris Aujard and Richard Callard, opted not to comment during the ongoing inquiry. UK Government Investments declined to provide a statement.

A Post Office spokesperson stated that discussions on individuals would be inappropriate and refrained from commenting on allegations outside the ongoing inquiry. The Post Office expressed full support for the Public Inquiry objectives to uncover the truth and ensure accountability.