A former chairman of the Post Office has told the Horizon IT inquiry that the institution was “very badly run” when he joined it in 2011, describing the IT infrastructure as “old and creaky”.

More than 700 subpostmasters were prosecuted by the Post Office and handed criminal convictions between 1999 and 2015 as Fujitsu’s faulty Horizon system made it appear as though money was missing at their branches.

Neil McCausland, who between 2011 and 2016 was a senior independent director and then interim chair of the Post Office, told the inquiry on Monday that he joined the company after it had experienced a 10-year-long decline in profitability.

“The Post Office that I went into was a very badly run, very messy, business,” he said.

“For the 10 years previous it had had a very sharp decline in profitability.

“The year before I joined it it had lost £120 million in a year.”

He said the service was getting “steadily worse”.

“It had been getting steadily worse, the network had been shrinking.

“The infrastructure was old and creaky and it was separating out from Royal Mail, it did not have its own infrastructure.”

“Basically every IT infrastructure we knew was old, underinvested, and creaky,” he said.

He was asked if he included the Horizon IT infrastructure within that.

“Absolutely,” he said.

“The Horizon system we knew was near end of life. It was 15 years old by that stage, most IT systems don’t last more than 10 years.”

However, he said he did not know back then that the data integrity of the Horizon IT system was an issue.

He said the first time the issue was raised in front of him was at a board meeting before the Post Office’s independence from Royal Mail in 2013.

He said he was assured that legal claims about the integrity of the system were “weak”, and that an audit of the system had been “very positive”.

He added that he had also been assured that “in all previous prosecutions where Horizon data had been used, we have been successful”.

“So that was probably the first time that Horizon issues really came into my mind, but after that exchange, I had the impression that they were strong,” he said.