Game of ‘hardball’ in Horizon negotiations left subpostmasters exposed to tragedy

‘Hardball’ negotiations between the government, the Post Office and ICL meant subpostmasters were ignored and thrown into a tragedy that could have been averted

The government, the Post Office and ICL played “hardball” when negotiating the roll-out of Horizon software in Post Office branches, leaving subpostmasters to pay the price for a system that was not ready.

During the latest Horizon scandal public inquiry hearing, former Post Office Counters managing director Stuart Sweetman was asked about a Horizon Working Group meeting in June 1999 when it was said that despite serious problems being experienced by subpostmasters using Horizon in a trial, there was no question of postponing or delaying the project. 

Horizon software from ICL – later acquired by Fujitsu – was being rolled out across the entire Post Office branch network to automate previously manual accounting practices. In the meeting, it was revealed that any postponement or delay would cost £8m a week and if the Post Office pulled out of the project, a cost of £150m would be incurred. 

A report of the Horizon Working Group meeting, completed by John Peberdy, a member of the National Federation of Subpostmasters negotiating committee, read: “There were some very serious issues still to confront, including training and systems difficulties which must be ironed out, but there is no question of postponement or delay, which would cost approximately £8m per week.

“So far as termination of the automation project was concerned, the Post Office would not consider this an option. They could only exit the agreement if there are material issues which render the project totally impractical. If the Post Office pull out, it will cost £150m.”

The report added: “Unless something very, very serious occurs, the agreement will be signed.”

It was stated that the roll-out of Horizon would start as planned in late August 1999, with 300 branches moved to the system every week by January 2000.

During the public inquiry hearing, Sweetman said he didn’t remember the detail of the meeting with the Post Office, ICL and the government, but remembered that all parties were “playing hardball with each other”. 

He told the inquiry: “The government were playing hardball with us because we had extracted quite a good deal from them, although it cost us millions. ICL had been put on the line to deliver and it was very serious. There were issues at the front end with the roll-out and they needed to be addressed and they needed to be overcome. You can see the sort of materiality we are talking about there, the size and numbers involved, and that made it very serious.”

The public inquiry heard that Ian McCartney, then minister for trade and industry, “was emphatic that rewriting the roll-out programme would not be contemplated” and told Post Office delegates at the meeting: “You will make it work.”

As reported by Computer Weekly, documents referred to in the public inquiry last week revealed feedback from live trials running Horizon in 300 post offices in 1999. There were serious concerns over the software, which was causing “difficulties and trauma” for subpostmasters struggling to balance their accounts. 

The trials were being run in preparation for the Horizon system’s roll-out in 18,000 branches. If they were a success, the Post Office planned to start rolling the system out nationally in August that year.

The roll-out of Horizon went ahead in 1999 and almost immediately subpostmasters began reporting problems in balancing accounts. In what has become known as the Post Office Horizon scandal, hundreds of branch owners, managers and workers were prosecuted for financial crimes as a result of unexplained losses. Many more were forced to pay back huge sums of money to cover shortfalls, which were later proved in the High Court to have bee caused by computer errors.

So far, more than 80 former subpostmasters have had criminal convictions overturned and many more are expected.

The government has set aside £1bn of taxpayers’ money to compensate subpostmasters who were wrongly blamed for losses.

Computer Weekly first reported on problems with the Horizon system in 2009, when it made public the stories of a group of subpostmasters (see timeline of articles below).

Read all Computer Weekly’s articles about the scandal since 2009

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