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Controversial Fujitsu contract with Post Office extended after technical challenges moving to cloud

The Post Office has extended a contract with Fujitsu after being unable to resolve technical issues related to migrating its IT to the cloud

Karl Flinders
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Published: 11 Apr 2023 11:32

The Post Office will pay £16.5m to extend a contract with Fujitsu after fundamental technical challenges meant its planned migration to the cloud could not be completed in time.

In 2021, the Post Office extended its IT services contract with Fujitsu while it prepared to migrate IT from the supplier to another, as yet unspecified, supplier or bring it in-house.

While this extension took the contract, which began in 1999, to March 2024, the datacentre operations and central network services part of the contract was expected to expire at the end of last month – a year earlier.

But technical challenges in moving to a cloud service provider have forced the Post Office to delay until the end of March 2024.

The contract award notice said: “The programme to transfer the services to a new cloud provider created fundamental technical challenges that [the Post Office] could not economically and technically overcome, and the business has taken the decision to pivot back to the Fujitsu provided Horizon datacentres until the successful transfer of services out of Horizon and into its replacement New Branch IT (NBIT).”

A Post Office spokesperson added: “We are continuing to make improvements to Horizon and our current systems, as well as ensuring safeguards and stability for the significant planned changes ahead. We have therefore made contract changes with Fujitsu which will apply to 31st March 2024.”

The Horizon contract – and the retail and accounting system at its core – led to hundreds of subpostmasters being prosecuted for financial crimes, such as theft and false accounting, based on evidence from the IT system. In what has been called one of the biggest miscarriages of justice in UK history, more than 700 subpostmasters were prosecuted for crimes including theft and false accounting, based on evidence from the flawed Horizon system.

Some subpostmasters were sent to jail and many were made bankrupt after being blamed for unexplained losses. A High Court case in 2019 proved that the Horizon system contained errors that could have caused unexplained losses.

A total of 86 convicted former subpostmasters have had their convictions overturned so far, with more expected.

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 since 2009).

The controversy is set to cost UK taxpayers more than £1bn after the government agreed to bail the Post Office out and pay compensation to victims of the scandal. No senior officials at the Post Office have been held to account.

Fujitsu has so far avoided any sanctions for its part in covering up IT problems that caused phantom losses that subpostmasters were blamed and published for.

On the contrary, the Japanese IT giant has continued to be awarded lucrative contracts by the UK government.

Last year, Fujitsu was awarded IT services contracts by the Home Office, 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 it to provide networking and communications services in a deal worth £184m, and the Home Office is paying Fujitsu £48m to support the technology underpinning the Police National Database.

Read all Computer Weekly articles about the scandal since 2009

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