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Post Office and Fujitsu had tense relationship, but were joined at hip when protecting their brands

Problems in the roll-out of Horizon Online in 2010 created a tense relationship between the Post Office and Fujitsu

Karl Flinders
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Published: 20 Jun 2024 8:45

The Post Office’s relationship with IT supplier Fujitsu was “tense” in 2010 amid major problems rolling out the online version of the controversial Horizon computer system used in branches, the public inquiry has been told.

The tensions mirrored those between the two organisations when legacy Horizon was first rolled out in 2000, which even saw UK relations with Japan strained.

The frayed mood continues to this day, as the Post Office struggles to move on from the long relationship, but despite the evident longstanding tensions, the two companies coordinated efforts when it came to protecting their brands amid challenges over the Horizon system’s integrity, and in doing so they deepened the Post Office Horizon scandal.

During the latest public inquiry hearing, former Fujitsu UK boss Duncan Tait was asked about the period in 2010 when Horizon Online was being rolled out in a pilot as part of a plan to cut Post Office operating costs. At the time, subpostmasters using it were experiencing serious problems, and “major incidents” had occurred, including transactions being duplicated and outages.

The Post Office didn’t want to move forward with the pilot until problems were fixed. In an email from Gavin Bounds – the Fujitsu executive in charge of the Post Office account – to Tait, a list of issues in the roll-out were listed. In the email, Bounds wrote: “The above reflects the significant issues we have experienced over a short time span. Relationships with the Post Office leadership are tense and we are clearly on the back foot.”

Tait was asked by inquiry barrister Julia Blake whether relationships with the Post Office leadership were tense. He said: “I think that is about right. We were in the middle of a major roll-out, and that roll-out was already significantly delayed, and then we have all these technical issues.

“The early part of 2010 was difficult for both companies,” Tait admitted to the inquiry.

History repeating itself

But this was just another episode in a difficult long-term relationship that started badly. When the Horizon project was first agreed and rolled out in the late 1990s, there were already major tensions.

In 1998, following a meeting between the British ambassador to Japan and Fujitsu executives, the British embassy in Tokyo wrote to the UK government warning it of serious economic repercussions, including UK job losses and reductions in trade, if Fujitsu/ICL’s software contract with the Post Office was cancelled, something that was being considered at the time.

Live trials of the original Horizon computer system in Post Office branches in 1999 led to a warning from subpostmasters that software problems being experienced meant “a tragedy was not far away”.

The following year, a report from a National Federation of Subpostmasters (NFSP) executive council meeting in June 1999 said: “There was general discussion on the severe difficulties being experienced by subpostmasters who are already running an automated system.

“The difficulties and trauma being experienced by some subpostmasters were giving rise to concerns for their health and emotional wellbeing. It was felt by some that a tragedy was not far away if something is not altered soon.”

The tension remains today. The Post Office has announced it is ending its contract with Fujitsu, replacing it with an in-house system, but the complexity of the project has already seen costs rise dramatically, and the project delayed way beyond its target go-live date in 2025. It’s even been given a “red” rating by government auditors, which means the Post Office will have to convince the next government it can get the new system back on track if it’s to receive the funding it requires.

The Post Office now wants to extend its contract with Fujitsu for another five years, but the Japanese supplier is reluctant, and has told the government that if both parties agree to extend the contract, it’s willing to do so on the same basis as a previous one-year extension, which cost the Post Office £36m.

Joined at the hip

But despite the tensions between the Post Office and Fujitsu over the past quarter of a century, they have been there for each other when it mattered to them. They jointly conspired to mislead journalists, politicians, campaigners and courts, telling them that the Horizon system was “robust” and problems suffered by subpostmasters were not the fault of the system.

Fujitsu offered up evidence and expert witness statements in court that were misleading and led to innocent subpostmasters being prosecuted for financial crimes. The press offices of both companies conspired to mislead journalists with collusion on their responses to questions about Horizon. Fujitsu then refused to answer any questions until it was forced to by a statutory public inquiry.

In January, Fujitsu’s UK boss, Paul Patterson, apologised during a Parliamentary select committee hearing, and said Fujitsu is “morally obligated” to contribute to the costs related to the Post Office Horizon scandal faced by UK taxpayers. He also admitted that the IT company helped the Post Office wrongly prosecute subpostmasters. “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,” he said. “For that, we are truly sorry.”

The public inquiry continues.

The Post Office scandal was first exposed by Computer Weekly in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to accounting software. It is one of the biggest miscarriages of justice in British history (see below for timeline of Computer Weekly articles about the scandal, since 2009).

• 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 •

Timeline: Computer Weekly articles about the scandal since 2009

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