Kemi Badenoch said Civil Service 'bureaucracy' led to delays in getting compensation to sub post-masters wrongly accused of wrongdoing in the Horizon scandal.
The new Conservative Party leader told an inquiry into the miscarriage of justice that she had raised concerns that the 'government machine' was being allowed to 'get in the way of redress' when she was business secretary.
The inquiry was shown a letter she sent to former chancellor Jeremy Hunt in August 2023, raising concerns about the slow pace of handouts due to Treasury processes.
In it, she said she and Post Office minister Kevin Hollinrake had been 'looking at the ways in which we could radically speed up the processes'.
And in her witness statement she said she had been willing to issue a ministerial direction - officially over-ruling recalcitrant civil servants - to get things moving more quickly.
'I feel that there is often too much bureaucracy in the way of getting things done, because people are worried about process,' she told the inquiry.
'They are worried about if things go wrong, then being on the hook for that. And so they carry out lots of checks and balances, well beyond what I think is required in order to deliver the right outcome.
'I remember asking a question like, ''Why can't we just give them the money?'' … And then I'd be told, well, there could be judicial review, and the Treasury has these value for money requirements, and if we don't meet them, then we might end up having to go to court …
'I would be told that, there's still an inquiry going on, and if you make a decision like this without going through all the checks and balances, or without waiting for the inquiry to complete to conclude, then you might have a problem later.
'But I thought that it was better to err on the side of ensuring that people got their compensation quickly, rather than making sure that we didn't get into any trouble for not doing it in the perfect way.'
More than 900 sub-postmasters were prosecuted between 1999 and 2015 after faulty Horizon accounting software made it look as though money was missing from their accounts.
Hundreds are still awaiting compensation despite the previous government announcing that those who have had convictions quashed are eligible for £600,000 payouts.
This morning, Ms Badenoch's Labour successor as Business Secretary said the Post Office's corporate culture is at the root of the Horizon scandal, but insisted the organisation is still 'an incredibly important institution in national life'.
Jonathan Reynolds told the inquiry he takes 'ultimate responsibility' at governmental level for full, fair and prompt redress.
He said there had been a 'significant increase in the pace at which compensation has been paid' since the general election, and told the probe he did not believe it had been 'at the cost of fair or accurate compensation being made.'
Giving evidence on Monday, Mr Reynolds said sub-postmasters do not make 'sufficient remuneration from what the public want from the Post Office', adding that increases to their pay will require 'very significant changes to the overall business model'.
Commenting on the culture within the Post Office in his witness statement to the inquiry, he said: 'It is clear that the Post Office's corporate culture is at the root of this scandal, and I want to make sure the system works for sub-postmasters.
'I am supportive of a reform agenda which seeks to turn this ambition into reality.'
-Lead campaigner and former subpostmaster Sir Alan Bates previously told MPs he wanted the Department for Business and Trade (DBT) to set a deadline of March next year for redress payments for claimants who took the Post Office to the High Court between 2017 and 2019 – also known as the GLO scheme.
Asked if he could commit to the deadline set by Sir Alan, Mr Reynolds said: 'I've thought about this a great deal and obviously anything put forward by Sir Alan in particular is something I'll consider to a significant degree.
'The position I'm in is I'm trying to make sure people get redress for a horrendous scandal … at a minimum, I don't want to do anything that makes that injustice even worse.
'And the worry about a deadline – can you imagine a situation where, for whatever reason, a claim has not come in?
'I think it will be unconscionable to say that that is not going to be considered.'