Besides the £1 billion allocated to pay compensation to sub-postmasters, the Post Office has asked for £1 billion to replace the 25 year old Horizon system. This project was originally supposed to cost £180,000, and has already used up an additional £130,000 of Government funding. It is late, over budget and its resources have been reduced by 70% to save costs. It has lost most of its experienced contractors and Government experts now view the project as unachievable. Now Horizon only has funding up to the 4th July election, making it a political time-bomb.
ICL originally developed Horizon for the Post Office in 1999. Fujitsu took them over in 2002.
Fujitsu highlighted Horizon in the EMEA section of its 2013 annual report. They wrote that they had provided the Post Office, the UK’s biggest cash handler and heart of many communities, with a new real time system connecting 11,700 branches and 29,000 counters, a new datacentre, new interfaces displaying the Post Office’s products and services and 99.8% availability guaranteed. They boasted halved support and development costs by outsourcing to India.
Software bugs emerge
Horizon was an extremely complex bespoke accounting system built by the government’s major supplier. However, it had bugs. Fujitsu whistle-blowers have revealed that they couldn’t fix these faults due to the cost and time needed to fix them.
Serious issues were already appearing in 2004, when the Post Office’s lawyers decided to sue and ruin the sub postmaster Lee Castleton. They pressed for confidentiality agreements to try to prevent other sub postmasters from coming forwards. We now know that the Post Office deliberately suppressed the fact that they had found flaws in Horizon and lied about the reasons why the system would not balance. Fujitsu knew of issues with the Audit Record Query that led to balancing errors in the accounts and knew that it was possible to access the system and amend data remotely.
Computer Weekly exposed this major scandal in 2009.
In 2015 the Post Office had talked to IBM about replacing Horizon, but they couldn’t progress due to doubts about the cost and feasibility of the project.
Eventually, after campaigning by Alan Bates and the group of 555 sub-postmasters, the Post Office finally acknowledged the faults in Horizon in 2019. It took time, but in 2021 they agreed an initial sum of £233 million to pay compensation to the sub-postmasters.
A crisis and a cover-up
The Post Office Horizon scandal goes off the scale of normal corporate crisis management. A Government-owned organisation the size of the Post Office decided it could not admit that its financial system was flawed. We now know that 700 branch managers were convicted of fraud and 200 went to prison. It has taken 15 years to discover the truth, and even now Post Office witnesses in the ongoing enquiry are unable or unwilling to say who in the organisation was responsible.
Fujitsu’s PR and IR in Tokyo offered an apology on 18th January 2024 after ITV’s ‘Mr Bates’ drama aired. They have promised to support the enquiry and contribute to the compensation fund. This seems reasonable since Computer Weekly writes that Fujitsu may have made £25 billion from Horizon during their 24 years of providing the system.
This leaves the Post Office in a situation it cannot resolve. For now Whitehall is overseeing the Post Office’s IT systems.
If you enjoyed this article, click below to view more: