HM Revenue and Customs (HMRC) has replaced a consortium led by Fujitsu on its post-Brexit trading service for Northern Ireland, worth hundreds of millions of pounds.
When news broke in February that HMRC was looking to replace Fujitsu on the Trader Support Services (TSS) contract, a senior figure at the supplier reassured colleagues that it “was bidding to win”.
But according to Politico, Fujitsu has not succeeded in retaining the lucrative contract, as pressure builds on the supplier’s UK business in the wake of the Post Office scandal.
It is not the first major HMRC contract lost by Fujitsu in the aftermath of the ITV dramatisation of the Post Office scandal. HMRC, which is described as Fujitsu’s “UK government cash cow”, dropped the supplier from a datacentre services contract through a tender worth £500m designed to exit its services.
Peer James Arbuthnot, who has campaigned for Post Office scandal victims for over 15 years, said: “It’s about time it lost contracts. Seventy-six members of the House of Lords wrote to complain about the way Fujitsu was still winning hundreds of millions of pounds worth of contracts. So, it’s high time we broke our dependency on a company which clearly does not share our values. Maybe this is [another] crack in the dyke. I do hope so.”
Read more: Fujitsu’s role in the Post Office scandal – everything you need to know
The loss comes despite earlier confidence within the supplier that it could retain the work. In February, Dave Riley, who was Fujitsu’s UK public sector head at the time, was confident it could keep the contract.
He told colleagues in an internal meeting: “Government are aware that we are going to bid for this work, and I think we have a unique point of view, given that we’re the current incumbent, in how we approach the next generation.”
This confidence in Fujitsu’s ability to continue to scrape up large government contracts was repeated in October when, despite public and political anger at Fujitsu, its then private sector boss Ronnie Abraham told colleagues that the business was “built for the public sector”. He explained to them that because Fujitsu had been winning business in the UK public sector for a long time, it knew a lot of people and understood the domain.
In a recording heard by Computer Weekly, he also told staff that the supplier could get around its self-imposed public sector bidding pause by working as a subcontractor, with other suppliers fronting the bids.
He said other suppliers, including BT and Vodafone, were “very keen” to work with Fujitsu as prime contractors, with the Japanese supplier a subcontractor, which would enable it to take government work without bidding itself. Both suppliers refuted this statement.
Abraham, who has now left Fujitsu, apologised to scandal victims for his comments when contacted. Computer Weekly can reveal that Abraham has since joined BT in a senior role.
HMRC would not comment directly on the contract award, but a spokesperson said: “We follow government procurement rules when awarding contracts, ensuring value for money for taxpayers. All bids underwent a robust evaluation and assurance process, and we will confirm the award in due course.”
According to government figures, between the beginning of April and the end of September this year, Fujitsu received £110m from HMRC in return for IT services.
The figure for six months is more than double the total £48m cost of the Post Office scandal public inquiry between 2000 and 2024, and twice the estimated £50m cost of Operation Olympos, the national police investigation into the scandal. Invoices for desktop services, physical hosting and infrastructure, tablet computers and software licences are included.
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 the accounting software (see timeline of Computer Weekly articles about the scandal below).
