The Post Office has paid an astonishing £600m-plus for its hopelessly flawed Horizon computer system - since deciding to get rid of it.
Fujitsu had won a £548m contract to provide the money-handling Information Technology system in 1999 in the first place. In total the Post Office has paid a mind-boggling £2.5bn for Horizon.
Consistent glitches in the software led to 700 postmasters being convicted of pocketing the money for themselves, from the launch of Horizon to 2015, with dozens jailed. Thousands more were forced to pay non-existent shortfalls
Yet the Government only finally got to grips with the scandal last year, following the broadcast of ITV drama Mr Bates vs The Post Office.
Disgraced former Post Office chief executive Paula Vennells was stripped of her CBE in the programme’s wake, her crocodile tears while giving evidence at the Post Office Inquiry drawing little sympathy.
A bill was finally fast-tracked through parliament to quash most of the convictions involving Horizon. Yet despite their exoneration, many postmasters still await compensation.
Meanwhile, the very firm behind Horizon has continued making a mint from its shoddy product.
According to the BBC, since the Post Office decided to replace Horizon in 2012, it has paid Japanese firm Fujitsu more than £600m, on top of the £548m agreed in the first place by Tony Blair’s Labour Government, and numerous other interim payments.
The Post Office has paid out £2.5bn to Fujitsu - including more than £600m since deciding to seek an alternative to his infamously flawed Horizon software
Then-Prime Minister Sir Tony Blair was warned in 1999 the Post Office's contract for Horizon involved Fujitsu retaining ownership - and massive bargaining power - over the software
The Government belatedly acted to exonerate wrongly convicted postmasters following the broadcast of ITV drama Mr Bates vs The Post Office, starring Toby Jones as victim Alan Bates
Horizon is still being used now, with no replacement ready – and it is claimed that Prime Minister Blair had been warned that the contract terms with Fujitsu would potentially make it difficult for the Post Office to break it off without huge expense.
And because Horizon is still in use, problems continue, with seven in ten sub-postmasters last year surveyed by the Post Office Inquiry saying it still produced ‘unexplained discrepancies’ in accounts.
The Post Office long accepted Fujitsu’s false assurances there were no problems with the IT system, despite mounting evidence, and ploughed on with wrongful private prosecutions, even when it did seek an improvement, the 1999 contract proved a problem.
Before the deal was signed, Premier Sir Tony Blair had been warned in May 1999 there was an issue over the fact that Fujitsu would retain ownership of Horizon software computer code.
As a result, a document reveals, the premier was advised that if the Post Office tried to switch to another IT firm, Fujitsu ‘would be in a strong position to drive a costly settlement’.
Then-chancellor Gordon Brown was also sent a document raising the issue over the ownership of the computer code, it is claimed.
Yet the then-Labour Government signed the contract regardless. It meant the Post Office did not own the key computer code at Horizon’s heart, and had 18,000 branches reliant upon it.
So when it wanted to switch to a different IT firm in 2012, it was left with a choice of paying a price for that code set by Fujitsu – or forking out for entirely new software, at vast cost.
Fujitsu - the Japanese firm's UK HQ in Bracknell pictured - has continued to reap billions from British taxpayers even as the scandal over its Horizon software for the Post Office unfolds
Former postmaster Alan Bates was rewarded with a knighthood last year for his campaigning with fellow victims of the Horizon scandal
Former Post Office CEP Paula Vennells' tears at the Post Office Inquiry last year drew little sympathy as she failed to explain why wrongful prosecutions of postmasters continued
Computing expert Jason Coyne, who was at the forefront of exposing flaws in the Post Office computer system, says it was ‘madness’ to take on Horizon while not owning its software programme.
The Post Office finally bought the rights to the by-then-infamous computer code in 2023, for a ‘cheap’ £10m, and it is understood it may be used as a basis for a replacement.
Even so, it is feared even more tens of millions will end up being handed over the Fujitsu after the current extension agreement with the firm expires next March.
A spokesman for Sir Tony Blair would not discuss the details of the Horizon contract discussions in 1999, but said everything was taken ‘very seriously’.
The spokesman added: ‘The final decision was taken after an investigation by an independent panel recommended it was viable.
‘It is now clear that the Horizon product was seriously flawed, leading to tragic and completely unacceptable consequences, and Mr Blair has deep sympathy with all those affected.’
A spokesman for Gordon Brown said he would not have seen the memo about the contract, with it only sent to his office as a ‘formality’.
The fact no-one had refused to accept Fujitsu retaining ownership of the software code meant that by 2013, according to documents unearthed in the Post Office Inquiry, executives were being warned it meant ‘we may be unable to agree…with Fujitsu on reasonable terms’.
And in 2016, a year after the last Horizon-based prosecution of a postmaster, Fujitsu’s ownership appears likely to have scuppered talks with the IBM computing giant over it being brought in instead.
Procurement contracts expert Ian Makgill said: ‘Fujitsu were fighting the whole time to protect their investment and their intellectual property, rather than looking after the interests of the sub-postmasters.’
Fujitsu has declined to discuss details of it control of Horizon, but said it is ‘focused on supporting the Post Office in their plans for a new service delivery model’.
Fujitsu’s total of some 200 contracts with the Government over the last decade alone amount to £6.7bn, and counting.
It means the creator of Horizon continues coining it in long since the Post Office scandal was becoming widely known, let alone to its postmaster victims including campaign leader Sir Alan Bates, knighted last year after the success of the drama in which he was played by actor Toby Jones.
A Post Office spokesperson told the Daily Mail a move away from Horizon and Fujitsu was ongoing, adding: ‘Post Office has a five-year plan to deliver a “new deal for postmasters” and put the organisation on a solid footing for future success.
‘We are looking at Post Office’s technology and data strategically, to ensure that we reduce central costs and provide postmasters with the tools they need to serve their customers and run profitable businesses into the future.’
