End of the road for Post Office IT system that destroyed lives

Following news that Fujitsu’s 20-year contract with the Post Office is coming to an end, so too is the use of the controversial Horizon IT system.

The system is at the core of a scandal involving subpostmasters, who run branches, being blamed and punished for accounting shortfalls, which were actually the result of computer errors.

The scandal-ridden Post Office will replace the Horizon retail and accounting software with an easier-to-use cloud-based system in its 11,500 branches, according to CEO Nick Read.

Read took the Post Office helm at the end of 2019 after disgraced former CEO Paula Vennells was forced out when the Post Office’s mistreatment of the people who run its branches became public during a High Court litigation.

In a speech to Post Office executives, Read revealed plans to move from the controversial Horizon system from Fujitsu to a cloud-based retail and accounting system for its 11,500 branches. He said it would be replaced “in favour of a modern, cloud-based system which postmasters will find more intuitive and easier to operate”.

Read added: “Migrating safely to a new platform at this scale will inevitably take time since we must ensure that our services continue to be available without interruption. But let’s be clear: the direction is set.”

The Horizon system, originally from ICL, which was acquired by Fujitsu, was introduced in 1999/2000 to automate many previously manual processes in branches. It was intended to revolutionise Post Office branch operations, but the combination of its faults and the government-owned Post Office’s oppressive management of subpostmasters saw it destroy the lives of hundreds of subpostmasters.

In 2009, Computer Weekly told the stories of seven subpostmasters affected by the losses, which led to many more who had suffered losses coming forward (see timeline below for Computer Weekly coverage of the scandal).

Soon after the system was introduced in 1999, subpostmasters began experiencing unexplained accounting shortfalls, which the Post Office forced them to repay under the threat of prosecution for crimes such as theft and false accounting.

For two decades, subpostmasters suspected that the losses were caused by the Horizon system, but the Post Office would not listen and forced them to repay money. Those who refused were taken to court and prosecuted using data from the Horizon system. A total of 736 subpostmasters were prosecuted between 2000 and 2013, with some sent to prison. The have all lived with criminal records ever since.

They were prosecuted by the Post Office using its private prosecution powers, and it took a High Court group litigation, brought by 550 subpostmasters at a huge financial cost, to prove that it was the system’s faults that were causing the unexplained shortfalls.

The judge, Peter Fraser, said the Post Office’s claims that the Horizon system had no errors was “the 21st century equivalent of maintaining that the Earth is flat”.

Former Fujitsu workers are currently under investigation by the Metropolitan Police over potentially committing perjury during the prosecution of subpostmasters.

About 50 subpostmasters who were found guilty in court have appealed to have their convictions quashed. Six have already succeeded in doing so at Southwark Crown Court and 42 more will hear the outcome of their appeals in the Court of Appeal on 23 April. The Post Office is not contesting 39 of these cases.

The Post Office has already said it will end its contract with Fujitsu, the supplier of Horizon, in 2024 and move the work in-house. It issued a notification of the award of an additional year of its contract with Fujitsu as part of the process of transitioning away from it.

In his speech, Read said: “We will invest in new branch technology for postmasters and online for their customers.

“It will come as a surprise to no one that a cornerstone of my plans to unlock the Post Office’s potential will be to invest in new technology for our postmasters. Setting aside issues around the robustness or otherwise of older versions, the simple fact is that huge strides have been made in IT in recent years and the age and relative inflexibility of Horizon is brought into sharper relief.

“And so our new ways of working with postmasters will be underpinned by a new IT system which will be more user-friendly, easier to adapt for new products and services, and cloud-based to ensure easy maintenance and ready interoperability with other systems.”

There was talk years ago of IBM replacing the Horizon IT system, but six years on, it remains.

In his speech, Read said that Horizon, originally designed to automate benefit payments made by the government, “had a difficult introduction”.

He added: “It was likely not as well adapted to the broader use to which it was ultimately put as it might have been. This was exacerbated by a relative lack, historically, of sufficient in-house know-how and capability to manage the contract effectively.

“The net result was an over-reliance being placed on third-party assurances about its performance. On my watch, this is changing.”

Read also said the Post Office’s management of subpostmasters was central to causing the Horizon scandal.

“There has been a pronounced imbalance of power in the relationship between us, creating a situation in which the company has felt that it has all the answers, and has expected postmasters to follow its lead unquestioningly,” he said.

“The Post Office thought it was always ‘right’ and behaved accordingly. The reasons for this are complex.

“I think that they date back to being an executive arm of the government providing wide-ranging services to citizens as a custodian of very significant amounts of public money. For those then in charge, accounting for every penny of this came above all else.”

In 2019, Paula Vennells, CEO at the Post Office from 2012 to 2019, was awarded a CBE for services to the Post Office and charity.

According to Read the Post Office must accept that it “caused what for some has been very deep pain”.

He added: “Absent the possibility of turning the clock back, compensation appropriate to that pain must follow.

“I am urging government to work with us to find a way of ensuring that the funding needed for such compensation, along with the means to get it to those to whom it may become owed, is arranged as quickly and efficiently as possible.”

However, the government and the Post Office are refusing to properly compensate the 550 subpostmasters who defeated the Post Office in court. Because of this action, the truth has come out and the huge extent of the Horizon scandal is being exposed.

The subpostmasters are being denied the compensation they deserve. When the Post Office conceded defeat in the Horizon case in December 2019, it agreed to pay £57.75m compensation, but because the subpostmasters were forced to use litigation funding for their case, they had to pay their own costs. This left them with £11m compensation in total, which doesn’t go anywhere near covering their losses, let alone other suffering.

Some went to prison, others suffered stress-related illness as a result of the problems caused by the Post Office, there is at least one suicide linked to the scandal, and many families were financially ruined.

One of the claimants, who was sent to prison and lost her livelihood, received just £8,000 in compensation.

The Post Office set up a historical shortfalls scheme to compensate the subpostmasters affected. It has had 2,400 applicants, but has disqualified any of the claimants from the group litigation from applying.