Ryan FowlerThe National Audit Office (NAO) has issued a qualified opinion on the Department for Business and Trade’s (DBT) 2023-24 financial statements, highlighting a breach of authorised spending limits and concerns over a lack of reliable data for the Post Office Horizon compensation schemes.
DBT is responsible for overseeing the compensation process for former and current postmasters affected by the Horizon IT system failures and wrongful prosecutions. One such scheme, the Horizon Shortfall Scheme (HSS), allows eligible individuals to either accept a fixed sum of £75,000 or undergo a full assessment by an independent panel.
However, the Post Office has limited data on expected claims, making it difficult to estimate future liabilities accurately. While DBT anticipates a response rate of 25-30% from newly invited claimants and expects most to opt for the fixed sum, the lack of robust evidence means the actual take-up could differ significantly.
A similar issue has arisen with the Horizon Conviction Redress Scheme (HCRS), designed to compensate those who had wrongful convictions overturned. Given the scheme’s early stage, DBT has based its assumptions on trends seen in the Overturned Conviction (OC) scheme, estimating that settlement values will be lower for those who decline the fixed sum.
Gareth Davies, the head of the NAO, has limited the scope of his audit opinion due to the lack of reliable data underpinning these estimates.
In addition to concerns over forecasting, DBT breached its authorised departmental spending limit by £208m while preparing to settle claims under the HSS. The NAO considers such breaches to be irregular as they undermine parliamentary control over public spending. The overspend became apparent only after supplementary budget estimates had been submitted, meaning the department exceeded its allocated limit without prior authorisation.
