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Post Office changed view of Horizon problems before roll-out, because of a ‘sunk cost fallacy’

Insider tells public inquiry that the Post Office continued to roll out the controversial Horizon system despite a ‘considerable’ number of errors, because it was too committed

Karl Flinders
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Published: 15 Nov 2022 17:45

The Post Office dramatically changed its view on Horizon in the lead up to the IT system's roll-out in 2000 because it could not face dropping a project in which it had invested so heavily, the public inquiry into the scandal has been told.

In the latest Post Office scandal inquiry hearing, a former Post Office executive said everyone working on the project knew there were problems, but despite not being fixed, Post Office staff seemed to change their view on them as the roll-out approached.

The Horizon software from ICL/Fujitsu was introduced in Post Office branches to automate accounting. Subpostmasters experienced huge difficulties and their claims that problems with the software were causing unexplained accounting shortfalls were ignored by the Post Office.

John Meagher, who worked in project management for Horizon at the Post Office, said that during his time on the programme, in the years leading up to 2000 before he left, “there were a considerable number of [Horizon] errors.”

Meagher said problems with Horizon had been raised and some team members, including himself, preferred to drop the project, which was then being undertaken with ICL Pathway - later Fujitsu. He said the Post Office decision to continue with Horizon despite its problems was due to a “sunk cost fallacy” whereby the Post Office had invested so heavily in the project, senior executives would not abandon it even though this would be the best course of action.

He said Horizon was viewed internally as “delicate” and “it did not present itself as a stable system.” He added: “There may have been three high-level acceptance instances, but they had multiple, multiple causes.”

Meagher continued: “When I learned that Post Office had prosecuted multiple subpostmasters [for fraud and theft] based on assurances from Fujitsu that no explanation other than fraud was possible, I was shocked. Shocked among other things as the Post Office would appear to have completely changed its view of Horizon since the time leading up to 2000 while I worked on the project.”

Asked by inquiry barrister Sam Stevens who he was referring to when he said, “Post Office” had changed its view, Meagher said, “Everyone I worked with from [Post Office Horizon programme director] Dave Miller down in the Chesterfield site, everyone in the programme who was involved at a working level.”

When giving evidence to the inquiry on 28 October, Miller said he “bitterly regretted what had happened [to subpostmasters]”, but said he only became aware of the issue during the 2018/19 High Court trial, when subpostmasters sued the Post Office for their losses and suffering as the result of Horizon problems.

Public inquiry chair Wyn Williams asked Meagher for clarification: “My understanding is that your evidence is that everyone you were engaged with on a day-to-day basis working in Horizon, may not have used the word ‘delicate’ but essentially had the same view of Horizon that you did at the time you left?”

Meagher confirmed that is what he said. Williams then asked for information about views on Horizon expressed by senior executives from David Miller up - Meagher said he could not give any information about this.

The inquiry barrister asked Meagher what he would have thought if he learned that the Post Office investigated subpostmasters for fraud and false accounting based on data from Horizon. He said the truth was even more shocking because the Post Office did not even do that, but investigated “based on assurances from Fujitsu staff.”

Sam Stein, KC, representing Horizon scandal victims, asked Meagher whether he thought in 2000 that subpostmasters should be investigated based on data from Horizon - he said, “Certainly not.”

Stein asked Meagher why he never came forward to say there is something wrong with people being prosecuted. He said he “wasn’t aware he could help, and he didn’t think he had anything to offer.”

The scandal saw hundreds of subpostmasters' lives ruined after being blamed for losses, which were proved in court to have been caused by computer errors. Thousands had to repay unexplained shortfalls and over 700 were convicted of financial crimes.

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

Read more on IT project management