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Post Office wants to get to bottom of IT system allegations

Karl Flinders

A troublesome IT system that set out to modernise the Post Office in 1996 is under the spotlight as the Post Office investigates claims that its Horizon accounting system is error prone.

Over the years, dozens of postmasters have been charged and even jailed for accounting shortfalls, while others have had to make up cash discrepancies following prosecutions (see case studies below).

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Despite years of allegations that the Horizon system – which was developed by ICL/Fujitsu Services – is at fault for many accounting shortfalls, the Post Office has unrelentingly defended it.

In October 2011, 85 sub-postmasters sought legal support in claims against the Post Office computer system

And following pressure from organisations, including the Justice for Sub-postmasters Alliance (JFSA), the Post Office is now calling for evidence from people that have worked with the Horizon accounting system. This will support its investigation into claims that agents have been wrongly accused of false accounting. Independent forensics expert 2nd Sight is carrying out the investigation.

The Post Office wants people to come forward without fear of reprisal.

History of Horizon

  • May 1996: ICL/Fujitsu services beats off competition and lands the £1bn contract to modernise benefits systems and automate 18,500 post offices, known as Pathway.
  • August 1997: DSS ministers tell Treasury they are “extremely concerned” about delays.
  • September 1997: PA Consulting commissioned to review project after “consistent and chronic slippage in delivery dates.”
  • March 1998: Ministers call for second independent report on project, led by Adrian Montague.
  • April 1998: Department of Trade & Industry denies problems and says “subject to successful completion” of trials, “national roll-out would start in April 1999 and be completed before the end of 2000”. Post Office takes over line management.
  • October 1998: Deadline for live trial of system is passed.
  • November 1998: Secretary of state, DTI, Peter Mandelson, admits delays. He says he is “confident deadlines would be met.”
  • December 1998: Post Office counters and ICL/Fujitsu Services agree restructuring of project with both sharing losses.
  • September 1999: A Commons committee report concludes the project was “blighted from the outset.”
  • 2000: Pathway project renamed Horizon.

Earlier this month, Computer Weekly reported that the Post Office had reconsidered its stance on the Horizon system and is working with the JFSA to look closer at the allegations.

In its Branch Focus internal update to branches on Friday, 11 January, the Post Office called on people to come forward with information.

“The Post Office is working with independent forensic experts 2nd Sight and JFSA to review reported concerns that have been raised about the Horizon system," said the Post Office.

"The Post Office and JFSA have signed an agreement to ensure that any agent, contractor or employee with any evidence can feel free to report their observations,” it added.

The agreement ensures evidence can be given without fear of any comeback from the Post Office, said Alan Bates, chairman of the JFSA. Bates previously worked at a post office in Llandudno, north Wales.

“Since the publicity, Post Office published its call for evidence in Branch Focus, we have had a steady stream of calls from people with information,” said Bates. He estimates that a couple of dozen people have contacted the JFSA.

The Post Office has asked for submissions before 28 February this year.

In 2009, Computer Weekly spoke to some of the people at the heart of the alleged problems caused by the Horizon system. 

Case study 1: Lee Castleton

Lee Castleton was postmaster at the Bridlington Post Office in east Yorkshire. His problems started in January 2004, and he claimed he could not get help from the Post Office.

“Mis-balances continued for 12 weeks. I spent hours going through accounts, trying to find out what had happened. It was baffling,” he said.

Castleton rang the Horizon helpdesk, which is run by the Post Office, and asked repeatedly for help and a system check, but he said they did very little.

After 12 weeks, Castleton was suspended and the Post Office told him he had to pay for the losses. “I decided to contest my obligation to pay the money in the civil court, because I hadn’t done anything wrong,” he said.

Castleton could not afford lawyers in the High Court, or pay an IT expert witness to look at the system logs for him. He argued that the discrepancy in his accounts had been created by the computer. But the judge said that the deficiencies were real, not illusory, and, as such, were evidence that the branch had not been managed properly. 

“The losses must have been caused by his own error or that of his assistants,” the judgment said.

Under their contract with the Post Office, postmasters are liable for any losses that are due to carelessness, negligence or error. Castleton was also liable for the company’s legal costs.

“The Post Office really put me through the mangle,” he said. “I owed £27,000 for the deficits, and £321,000 altogether. I was in too deep – I see that now. The whole thing has been heartbreaking.”

Case study 2: Jo Hamilton

Jo Hamilton was a postmistress in South Warnborough in Hampshire between 2003 and 2005.

Hamilton started experiencing problems in October 2003. She entered every transaction into the system via the touchscreen Horizon till and, at the end of the week, the computer would tell her how much money she should have.

“One time, it said I was down £2,000, so I rang the Horizon helpdesk. The supervisor told me to do various things, and three minutes later I was £4,000 down. Whatever I did after that, I couldn’t get it to come up any different,” she said.

The Post Office told her she owed the money, and took repayments out of her monthly wages. 

“It made me reluctant to phone them, because it was just crazy – when I asked for help, it just doubled the amount and said I owed it money.”

Hamilton’s problems worsened: “Every week the system would come up telling me how much I should have in there. I knew it wasn’t the right amount, but I didn’t know what to do. I couldn’t ring them up, because I just didn’t have the money to pay it all back. So I signed the accounts each week, saying there was a certain amount in there when I knew there wasn’t. I know it was dishonest, but I didn’t steal any money. It got worse and worse.”

Post Office auditors visited the branch in March 2005 and told Hamilton she owed £36,000. They prosecuted her for theft and 14 counts of false accounting, but later dropped the theft charge.

Hamilton said the case did not deal with the issue of IT. She pleaded guilty and was given a year’s probation. Her house was remortgaged to pay the money, and the villagers in South Warnborough collected £9,000 between them to help.

Hamilton said at the time: “In 18 months, I will have finished paying back the villagers, but won’t have paid off our mortgage.”


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