Fujitsu should pay half of Post Office scandal costs, says select committee chair

The government’s starting point for negotiating Fujitsu’s contribution to the costs of the Post Office scandal should be a 50:50 split, according to the chair of a Parliamentary select committee.

Fujitsu stood by and watched as the Post Office used data from its error-prone computer system as evidence to prosecute subpostmasters.

Liam Byrne, chair of the Business and Trade Committee, told Computer Weekly that the starting point of government negotiations with Fujitsu should be an equal share of costs.

“When it comes to Fujitsu, the government’s starting point has to be 50:50,” he said. “Fujitsu’s share price on the day of its appearance in the select committee hearing went down about £1bn, so the market’s initial response is that it may be on the hook for that amount.”

He added that Fujitsu’s business future in the UK is heavily dependent on public sector sales.

Although not currently bidding for government/public sector deals, as a result of the Post Office scandal, Fujitsu has a huge footprint of existing deals.

According to figures from Tussell, Fujitsu has active contracts with the UK government and public sector worth over £4bn. The biggest of this, worth nearly £2.4bn, is the supplier’s deal to supply and support the Post Office’s Horizon system. This contract is being phased out with the Post Office’s ongoing project to replace the controversial system.

Fujitsu also has various large contracts with HM Revenue and Customs, worth nearly £500m, and Northern Ireland’s education authority, with £484m.

In the 1990s, Fujitsu took over UK computer company ICL, which had significant contracts with the government, including the Post Office. The lure of the huge Post Office contract was an incentive for Fujitsu to take over ICL.

Computer Weekly revealed over two years ago that the government had set aside £1bn to cover the costs of the scandal, but this figure has risen.

Fujitsu, an IT giant worth about £20bn in annual global revenue, has until recently escaped any interrogation or direct costs from the fallout of a scandal triggered by its faulty computer system.

But during a Business and Trade Committee hearing in January this year, Fujitsu’s European boss, Paul Patterson, said the Japanese supplier was “morally obligated” to contribute to the costs related to the Post Office Horizon scandal faced by UK taxpayers.

Patterson owned up to Fujitsu’s part in the scandal, telling MPs and victims: “We were involved from the start; we did have bugs and errors in the system, and we did help the Post Office in their prosecutions of subpostmasters. For that, we are truly sorry.”

In a later hearing at the Post Office scandal statutory public inquiry, he admitted Fujitsu missed opportunities to stop the Post Office from wrongly prosecuting subpostmasters.

Patterson told the inquiry that the withholding of evidence was “shameful” behaviour by the Post Office. “[This is] shameful and appalling. All of the evidence should have been put in front of subpostmasters,” he said. But Fujitsu stood by and did nothing.

MPs in a more recent Business and Trade Committee hearing said they wanted firm commitments on how much Fujitsu should pay.

Questioning Carl Cresswell, director of business resilience at the Department for Business and Trade, Andy McDonald MP demanded the government go back to Fujitsu and get some “hard edges” to the promise. He asked what was being done to “nail [Fujitsu] down” on its contribution.

Computer Weekly first exposed the scandal in 2009, revealing the stories of seven subpostmasters and the problems they suffered as a result of the Horizon system (see below timeline of all Computer Weekly articles about the scandal).

• Also read: What you need to know about the Horizon scandal •

• Also watch: ITV’s documentary – Mr Bates vs The Post Office: The real story •