The Post Office will receive nearly half a billion pounds of taxpayer money over the next two years to support its technology transformation as it ends its relationship with Fujitsu.
The UK government has announced it will provide £483m in funding towards the state-owned organisation’s project to replace Fujitsu’s Horizon system and transform in-branch technology. This is in addition to funds previously provided for the project, including aborted attempts to replace Horizon.
Taxpayers are on the hook for potentially billions of pounds in Post Office scandal costs because Fujitsu has yet contribute to addressing the fallout from the scandal it played a role in causing.
“To support the transformation of the Post Office into a modern, efficient business, the government will be making a significant investment of £483m over the next two years,” said the Department for Business and Trade (DBT).
It said it will fund new in-branch technology, such as self-service devices, but the majority will go towards replacing the Horizon system. “[It] will also enable a major technology transformation programme that will transition operations away from Fujitsu and ultimately assist with the long overdue replacement of the Horizon system,” said the DBT.
The Post Office scandal was first exposed by Computer Weekly in 2009, when it revealed the stories of seven subpostmasters and the problems they suffered due to Horizon accounting software, which led to the most widespread miscarriage of justice in British history (see below timeline of Computer Weekly articles about the scandal since 2009).
Earlier this month, Computer Weekly revealed detailed plans for the Horizon replacement project, in an interview with Post Office IT boss Paul Anastassi.
The funding over the next two years will cover the cost of the two contracts tendered by the Post Office as part of the Horizon replacement programme.
The contracts are priced at a total of £492m in the government tender. This includes Lot 1, which will see a supplier take over the existing Horizon services in a £323m deal, and Lot 2, which seeks a supplier to provide an off-the-shelf electronic point of sale (EPOS) system, through a £169m contract.
Anastassi told Computer Weekly that the two deals will be signed by this summer, and its relationship with Fujitsu will be over by the middle of 2027.
He said money will be saved in the long run, but could not give a final project cost because the best and final offers from suppliers won’t be known until later this year. “All I can tell you at the moment is, based on the questions we’ve been asked, it’s a considerable cost saving over what we currently pay for Fujitsu,” he told Computer Weekly.
But this is not the first time the Post Office has attempted to end its reliance on the Horizon system, and huge sums have previously been wasted trying to do so.
In 2015, the Post Office began a project to replace Fujitsu and Horizon with IBM and its technology, but when things got complex, Post Office directors went crawling back to Fujitsu.
Then, after Horizon was proved in the High Court to be at fault for the account shortfalls that subpostmasters were blamed and punished for, the Post Office recognised that it had to change the system. This culminated in the New Branch IT (NBIT) project. This, too, ran into trouble, and was eventually axed. That was before Anastassi’s time, and before that of its new top team of executives.
Post Office minister Blair McDougall also announced that the government will maintain the minimum branch requirement of 11,500 Post Office branches.
Post Office CEO Neil Brocklehurst said: “The government’s investment is also a vote of confidence in the Post Office’s transformation. It means we can continue to upgrade branches and their technology to provide the modern and efficient retail experience which our customers expect from their local post office.
Additionally, the government said it will provide just over £37m to help the Post Office offer financial redress to victims of the scandal.
