Why the Post Office paid £600m to stay shackled to the faulty Horizon system

The Post Office has paid more than 600 million public money to continue using the defective horizon IT system despite deciding to pass it more than a decade, the BBC can reveal.

The terms of the original 1999 agreement with the Fujitsu computer giant mean that the Post Office has been trapped with the system and has not been able to build a replacement so far, a little after it contributed to one of the greatest abortions of justice in the United Kingdom.

Former Prime Minister Sir Tony Blair and other high -level figures from the Labor Government were warned about potential problems with the terms of the agreement before signing it, according to the BBC.

The Post Office said that “it apologizes without reselling to the victims of the Horizon It scandal” and said it was committed to moving away from Fujitsu and the Horizon software.

According to the terms of the original agreement of £ 548 million, beaten under the government of the government of then work, the post office did not possess the computer code for the central part of the horizon system.

Althegh, the Post Office has wanted to change the supplier since 2012, buy the rights of the Fujitsu Code or build a new complete system from scratch was considered too expensive, even when the amount is paid to Fujitsu to retain the system.

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The Post Office, which is owned by the Government, processed about 700 subpostmasters between 1999 and 2015 for theft, fraud and false accounting in alleged cash deficit in the branches reported by the Horizon system, depending on these guarantees. The convictions were exaggerated by Parliament last year.

Earl this year, Minister of Business Whitchource’s Baroness told the House of Lores that the post office “unfortunately, still depends on the horizon system”, and the only way Fujitsu could be “out of the image” would immediately mean closing the local post office offices.

An attempt to replace the system with an IBM construction failed in 2016, at a cost of £ 40 million, and the post office extended its contract With Fujitsu for four more years at a cost of £ 107 million.

The Post Office told the BBC that it finally forced the rights related to The software and horizon code in 2023, although it is not known whether this includes the central system that processes transactions.

The price of £ 10 million for the license was “cheap, because who else buys it?” According to Ti Jason Coyne, one of the first people to identify system failures.

The BBC understands that the Post Office can try to use this license for Horizon replacement. But while this is being built, IT experts believe that the Post Office contract with Fujitsu must extend beyond March 2026, when it is currently due to the end.

Problems about who would be the owner of the Horizon software were negotiated, when the contract was negotiated to inform the network of post branch, which was then numbered 18,000, between the post office, Fujitsu and its subsidiary ICL Pathway and the government.

In May 1999, Sir Tony Blair received an update of the Treasury, in a document that warns that discussions with ICL on the terms of an agreement “have founded.”

One of the conflict points was around intellectual property rights (DPI) – which included the property of the code within the Horizon software.

The document says that ICL “was not prepared for … Give perpetual licenses for all DPI. “

He continues to say that if the Post Office ever wants to change the supplier, the owner of the DPI “would be in a solid position to promote an expensive agreement with the post office.”

The BBC also obtained a document of May 20 the same year, which was sent to the then chancellor of Treasury Gordon Brown and other government officials, warning about the issue of who the owner of the Code was.

In it, a treasure officer establishes that one of the “main problems” with the terms of an ICL proposition agreement for Horizon software was he “Problems related to the property of assets and DPI of the kit acquired by” the post office.

Mr. Coyne, the IT expert, said it was “absolute madness” that the agreement continued in July 1999 because Mean that the post office became “horizon -dependent operation”, even thought he did not possess the rights to use the system with Fujitsu.

A Sir Tony Blair spokesman did not address the BBC questions about his knowledge of DPI’s problems, but said “he touched very seriously the problems posed on the horizon contract” at that time.

“The final decision was the tasks after an investigation carried out by an independent panel that recommends that it be viable.

“It is now clear that the Horizon product was seriously fluid, which caused tragic and unacceptable consequences, and blair sympathy with all those affected.”

A Gordon Brown spokesman said that “he would not have a leg program” of May 20, 1999 and would have copied as a “formality.”

“He did not participate in any work related to the purchase, award or administration of the Horizon contract.”

Warnings on the property of the DPI came true more than a decade later when the Post Office decided to invite other companies to take care of the horizon contract.

The former executives told the investigation of the Post Office, which he is examining the decisions prior to the unfair sentences of hundreds of sub-poses, how the company had found that it was hidden to replace Fujitsu.

Alisdair Cameron, former financial director of the Post Office, said Fujitsu He had been “difficult colleagues” and “it was accepted that Horizon, and the infrastructure in which he bent, was vulnerable.”

But Mike Young, director of Operations of the Post Office between October 2010 and April 2012, told the investigation that Fujitsu’s management said: “The code is ours. [for] The code “.

Documents published by the post office consultation show that the “DPI number” was discussed by the higher level Correos office executives.

“There is a risk that we cannot agree on an IP license with Fujitsu in reasonable terms,” ​​said an agenda for a meeting of the Post Office Board in July 2013, while other doctors descend on costs.

The acquisition specialist Ian Makgill told us that he believes that he does not possess the DPI software to the horizon would have been a factor in the collapse of the IBM 2016 agreement to replace the system.

He said that if IBM had tried to build a new software without or the DPI from Horizon, it would have needed to “start from scratch, which would have cost the post office hundreds of millions of pounds.”

“The IPR is the reason why the Post Office has been able to move away from Fujitsu and the Horizon software,” he said.

Since 1999, the Post Office has spent £ 2.5 billion in contracts with Fujitsu. This figure includes more than £ 600 million spent on bridges or extension contracts to continue the horizon contract since the Post Office began to look for new suppliers in 2012, according to the analysis of the data firm Tussell and the BBC.

Many of the subpostmasters mistakenly accused by the Post Office maintained that it was not missing money and the weak were Even errors in the Horizon system.

But with the post office unable to directly inspect the system that processed the transactions, it accepted Fujitsu guarantees that the system worked properly.

“Fujitsu was fighting all the time to protect his investment and intellectual property, instead of taking care of the interests of sub-poses,” said Mr. Makgill.

Fujitsu did not answer the specific questions of the BBC, but declared that he was “focused on supporting the post office in her plans for a new model of service provision” so that branches can continue to operate.

Makgill said the Post Office has the “final responsibility” on the fate of the sub-postmakers erroneously accused.

“They did not have to take those prosecutions, they did not have to take people to court.”

Sub-postmasters that currently use Horizon IT software continue to inform it with it. Seven out of 10 said they had experienced an “inexplicable discrepancy” in the system since January 2020, according to a Yougov survey with 1,015 respondents in charge of the investigation of the Post Office in 2024.

The Post Office has said that it has not undertaken any prosecution related to Horizon since 2015 and “has no intention of doing so.”

He told the BBC that he is “implementing changes throughout the organization” to be “adequate for the future, changed fundamentally and with postmasters in his heart.”

He said that this includes working with Fujitsu to correct the discrepancies and review the current version of Horizon, replacing it in stages, under a five -year plan called “future technology portfolio.”

The president of the Post Office, Nigel Rilton, has said that a new IT system would not be introduced into a “Big Bang”, but there would be gradual changes.

The Post Office did not respond to the specific BBC The questions about the DPI are the reason why the company could not pass by Fujitsu, and they said it would not be appropriate To comment before the final report of the post office consultation.

The Business and Commerce Department told the BBC that it was providing £ 136 million funds in the next five years to the future technology portfolio, and that it was “working in PACE” to ensure that the post office had the technology it needed, including the replacement of the horizon system.