Post Office scandal latest: Ex-boss Paula Vennells breaks down in ...

Jason Beer KC draws the inquiry's attention to Paula Vennells's witness statement, in particular a section regarding a letter from services firm Ernst & Young, which carried out a management audit.

They identified a risk that unrestricted access to privileged IT functions "increased the risk of unauthorised/inappropriate access which could lead to the processing of unauthorised or erroneous transactions".

Mr Beer says it is implicit in the statement that Fujitsu had remote access to Horizon - meaning individual post office accounting systems could be accessed.

"I don't believe that I understood that degree of detail," she says.

"At the time, I had been promoted to managing director just a few months previously, and this was the first time I had come across an IT audit.

"I accept fully that this is what the document said, how much of that I really understood at the time, I'm not sure."

The inquiry is shown an email sent to Paula Vennells in 2011 by the Royal Mail boss Donald Brydon, which raises questions about the Horizon system. 

The Post Office and Royal Mail used to be part of the same company but split into separate organisations in 2012. 

In the email, Mr Brydon said he was surprised to read an article about a class action by sub-postmasters and asking if there had ever been an independent audit of Horizon. 

You can see the email below...

Ms Vennells replied, saying the issued had "reared its head before" and she would get a brief circulated to new board members. 

She also reiterated a sentiment we have seen several times already, that all cases that had been taken to court had seen the Post Office's position upheld. 

We now know that this was incorrect, and several sub-postmasters had been acquitted of charges. 

You can see her reply below...

Jason Beer KC questions Ms Vennells about the emails, saying there were "pieces of folklore" that seem to have been circulated around the Post Office, including that it won every court case, there were no issues with Horizon and remote access to the IT system was not possible. 

"How is it that on all of these critical issues, so many false statements were circulating within the Post Office?" he asks. 

Ms Vennells explains that, at the time, they were "not considered to be false statements". 

While she says she "can't recall clearly" where the information came from, she adds: "The only possible source of this statement would have been through the Post Office legal team." 

Our team is working through Paula Vennells's lengthy witness statements to bring you the key lines.

She discusses the case of Martin Griffiths, a sub-postmaster who took his own life after being wrongly accused of stealing £60,000.

Ms Vennells defends her decision to request someone to look into Martin Griffith's background, including his mental health, saying she "wanted to support Mr Griffiths and his family and offer what possible care we could".

"When I received the sad news of Mr Griffiths' passing on 11 October 2013, his family were my first thought," she adds.

"As my email shows, I wanted to offer my personal assistance in any way which would be helpful. I offered to speak to or meet with Mr Griffiths' family," she explains. "This was something I had done in other cases where SPMs or their families had lost loved ones and I offered to do it here if it was something that would help them. "

She cites the "duty of care" she owed to her colleagues at the Post Office, saying she was "aware of the toll that this incident had taken" on Angela van den Bogerd and that she "did not want to put further strain on her when deciding who would undertake which tasks going forward".

"Throughout my involvement, I tried to offer care and support to those involved in this deeply sad event before looking to the needs of the business," she writes.

She explains that she had previously been given information suggesting that there were pre-existing mental health and family issues but that she could not recall who told her this.

She says she now recognises that such "rumours" about Mr Griffith's personal situation were "unhelpful" and apologises to his family.

"I am so sorry, especially to Mr Griffiths' family, because reading this now it seems a very intrusive.

"I was clumsily trying to establish the facts and, although this did need to be done, I should have waited."

Sub-postmasters watching the inquiry from Fenny Compton moan or laugh at a response from Paula Vennells.

She was just shown an email sent to her from sub-postmaster Tim McCormack in October 2015, which said the "farce" could be stopped.

He told her to "wake up and realise that the people you rely on to tell you the truth about what's happening don't have the ability to do so".

Mr McCormack warned her that a judicial review would be inevitable if she did not take action.

At the inquiry, Jason Beer KC asks what action Ms Vennells took after reading the letter.

"I don't recall. Genuinely, I don't recall," she says.

For the first time today, the inquiry has been shown a letter sent to Paula Vennells by an MP, in 2015. 

Gloria De Piero, the MP for Ashfield at the time, flagged an email she received from sub-postmaster William Banville. 

In the email, Mr Banville said he was told his branch was the "only office in the country" experiencing problems with Horizon. 

Ms De Piero asked Ms Vennells to "investigate the matter" and advise her on the outcome. 

Jason Beer KC asks Ms Vennells if she employed a strategy to "divide and conquer" sub-postmasters by telling each of them they were the only people experiencing issues. 

"No. No. I never came across that at all," she says. 

Paula Vennells says she regrets calling sub-postmaster's complaints "noise" in an email sent in March 2015.

"I understood there was an urgent/escalation process in place, so that we avoided any unnecessary additional noise or references to Horizon," the email read.

Jason Beer KC asks: "Why was [the word noise] used? Does it in fact reflect the workings of the minds of those at the top end of the Post Office, that sub-postmaster complaints about Horizon are in fact just 'noise'?"

Ms Vennells replies: "I think it reflects a wrong understanding, yes; that people believed that Horizon worked, and this is me deploying a word that was unwise.

"It did not mean in any way that I personally did not take issues  seriously when they got to me.

"I regret this here, but there was an understanding that the system worked."

Jason Beer KC turns his questioning to how Paula Vennells was kept up to date with the issues sub-postmasters were facing. 

"Was there a way of keeping you informed essentially of the temperature of the business in relation to this issue?" he asks. 

Ms Vennells says there wasn't. 

"This could have been done much better. There wasn't a regular report in it," she adds. 

She explains that the Post Office didn't keep a "good enough record" of the issue. 

"In the context of the timescale that this spans, and the numbers coming through, it may not have seemed to people that there were that many [complaints]," she says. 

"When you put them together like this, it clearly paints a very, very different picture and one that we should have been looking at," she adds. 

Paula Vennells says there was not a good enough system to deal with complaints from sub-postmasters during her time at the Post Office.

Jason Beer KC has, in our last few posts, highlighted complaints sent by sub-postmasters to the chief executive's office about the Horizon IT system.

He asks whether there was a system to identify trends or links among them.

"I don't think there was a good enough system in place, if I'm honest," says Ms Vennells.

Two were in place, she says. In one, the executive correspondence team who would speak to the organisation's expert on a particular subject raised. In another, there was a "hub" set up.

An email sent to Paula Vennnels in 2014 has been shown to the inquiry. 

It was sent to her by former sub-postmaster Tim McCormack, who was raising concerns about a "catalogue of systemic errors" with Horizon. 

In the email he says: "Paula, as I keep saying, you are surrounded by people in your office that tell you all is well. 

"You have no personal knowledge of operating Horizon nor probably any in depth technical knowledge. What if the people that are telling you all is well have the same attributes?"

You can see the email below... 

After going through the email, Jason Beer KC asks her what steps she personally took in response to the email. 

Ms Vennells says that she doesn't remember. 

"I can't remember in terms of this particular email, but I'm aware that there are others that I responded to from Tim personally," she says. 

She goes on to apologise, saying she is "very sorry" and Mr McCormack had an insight into her being "too trusting". 

"The comments he makes in this with hindsight ring true and are hard to see again," she adds. 

Our previous post featured a letter shown to the inquiry in which a former sub-postmaster complains about having to "make good" for financial losses supposedly incurred at their post office.

Paula Vennells is asked: "Where did you get the understanding from that sub-postmasters had to make good the losses?"

There is a long pause, before she replies: "I'm not sure I had that understanding."

She is asked what her understanding was in September 2013.

The former Post Office boss pauses for approximately 15 seconds before answering: "I'm not sure that I can recall now what I knew the contract said at the time."

Jason Beer KC asks: "If the contract said sub-postmasters were responsible for all losses, what was the point of an investigation?"

Ms Vennells said it would be to find the cause of the loss, but Mr Beer interrupts: "Why was the cause of the loss relevant if the sub-postmaster had to make good all losses?"

She replies: "Because it would be highly irresponsible for an organisation to be, as we will come on to discuss, I'm sure, to be prosecuting and finding people guilty of things that they were not guilty of, and vice versa."