Fujitsu bags £430m government contracts despite rising cost of Post Office Horizon scandal

The government faces more criticism from MPs and peers after awarding Fujitsu new contracts worth over £400m, but so far has not called on the IT supplier to help pay the huge financial costs of the Post Office scandal in which its error-prone software played a central part.

Taxpayers face footing the bill to compensate subpostmasters who had their lives ruined by the faulty Horizon IT system and the Post Office and government’s mishandling of the problems experienced by the subpostmasters as a result.

In January, Computer Weekly revealed that the Post Office has received more than £1bn in taxpayer subsidies for its Horizon scandal compensation scheme.

But Fujitsu has not been asked for a penny, despite its retail and accounting software being at the centre of the scandal. In fact, in the past week, the Japanese IT supplier has been awarded huge IT services contracts by HM Revenue & Customs (HMRC) and the Foreign, Commonwealth & Development Office (FCDO). It will be paid £250m by HMRC to replace an in-house service, while the FCDO has contracted Fujitsu to provide networking and communications services in a deal worth £184m.

Over two decades, thousands of subpostmasters were wrongly blamed and punished for accounting shortfalls at their branches, which were later proved to have been caused by errors in the Fujitsu software. Subpostmasters lost their businesses and homes, many were prosecuted and sent to prison, and suicides have been linked to the scandal. In 2009, Computer Weekly told the stories of seven subpostmasters affected by the problems (see timeline of Computer Weekly articles below).

Conservative peer James Arbuthnot, who has campaigned for subpostmasters for more than a decade, said: “It’s long past the time when the government should be taking seriously Fujitsu’s contribution to the Horizon scandal. This is thought to be the largest miscarriage of justice in British legal history.

“The government wants to act as if it’s ‘business as usual’ with Fujitsu. What is the incentive on Fujitsu to contribute to the massive compensation cost about to fall on the taxpayer? And for HMRC, of all organisations, part of the Treasury, to take such a cavalier attitude to taxpayers’ money is setting a strange example.”

Karl Turner, Labour MP for Kingston upon Hull East, said the government should not be contracting Fujitsu until the supplier commits to funding towards compensation.

“The government should not be procuring any contracts from that business until we have a cast-iron guarantee that every bean required to pay compensation is received from Fujitsu,” he said. “Anything else would be utterly contemptible from Fujitsu and would also show the government has contempt for the victims.”

Alan Bates, founder and chairman of the Justice for Subpostmasters Alliance campaign group, said it was “astonishing that the government is still handing out these huge contracts to a company that made such a mess of the Post Office contract”.

Bates said he expects the government to eventually demand that Fujitsu pays towards the costs of the scandal.

Fujitsu declined to comment when contacted by Computer Weekly.

The latest contract awards take government spending with Fujitsu to over £3.5bn since 2013.

According to figures from Tussell, put together for Computer Weekly in May, Fujitsu was awarded £3.1bn worth of contracts with the UK public sector between 2013 and 2021. In the last five years, without the two latest contracts being taken into account, Fujitsu has signed deals worth £673m with HMRC, £456m with the Home Office and £572m with the Ministry of Defence.

Separately, the Criminal Cases Review Commission (CCRC) has written to about 170 former subpostmasters and Post Office workers convicted of fraud, theft or false accounting to offer help for those wanting to challenge their convictions.

These people have not responded to the Post Office after it contacted them, and the CCRC obtained the list of names from the Post Office last month under its Section 17 powers.

A total of 73 former subpostmasters and Post Office branch staff have had criminal convictions overturned and 53 of these were referred to the Appeal Court by the CCRC, which is currently reviewing 31 further applications.

The letter to former Post Office staff gives then details of how to apply to the CCRC to have their conviction reviewed.

Helen Pitcher, chairman of the CCRC, said: “Recent testimonies at the independent public inquiry into the Post Office Horizon system showed the devastating impact these convictions have had on people’s lives.

“It is completely understandable that many former subpostmasters might therefore not want anything further to do with the Post Office. They may see challenging their conviction as difficult, time-consuming, expensive, or they no longer trust ‘the system’.

“The CCRC is here to help put that right. We are making it clear that we are independent, that applying to us is free and that individuals do not need a lawyer to do so. There is also no time limit on applying to us.” The CCRC plans to contact 100 more former Post Office staff soon. 

A total of 736 former subpostmasters were convicted based on evidence from the Horizon accounting system used in branches, which was later proved to be error-prone.