Post Office awards new deal for IT system behind postmaster scandal

UK taxpayers could have to pay as much as £1bn in compensation to former Post Office workers wrongly convicted of theft due to the defective Horizon IT system.

The computer system that caused dozens of postmasters to be wrongly jailed has been extended for use by the Post Office.

The technology giant Fujitsu has been handed a deal worth £16.5 million to run the Horizon system until May 2025. The new contract, uncovered by the public sector contracts consultancy Tussell, follows a £42 million two-year deal signed in 2021.

The combined value of the contracts is more than five times larger than the compensation handed to dozens of former postmasters who were wrongly convicted of crimes.

Between 1999 and 2015, more than 3,500 postmasters were wrongly accused of thieving from their own tills, when errors in Horizon were to blame. More than 700 were wrongly convicted of crimes such as false accounting, theft and fraud, and the taxpayer is on notice for a compensation and legal bill running to £1 billion.

Two former Fujitsu staff are also being investigated for perjury after a High Court judge passed a dossier to prosecutors.

But far from being blacklisted, the Japanese giant has continued to win contracts worth hundreds of millions of pounds from the British state. This has included repeated business with the Post Office, which would have gone bust from the Horizon scandal without a government bailout.

The cash handed to Fujitsu for Horizon is several times more than the £10 million paid out to postmasters with overturned convictions. A further £62 million has been paid to former workers who lost out financially but did not face criminal action.

Andy Furey, of the Communications Workers’ Union, said: “Instead of being punished for playing a leading role in the biggest miscarriage of justice in British history, Fujitsu have time and again gained with lucrative contracts. It is insulting that they continue to cash in, running the very same technology that put postmasters in jail.”

Lee Castleton, who was bankrupted by the scandal, said: “I can’t believe that Fujitsu seems to constantly be rewarded and awarded more and more contracts. Victims, and the taxpayer, deserve so much better.”

Next week the Post Office and its owner, the government, will be dragged back to the public inquiry into the scandal to explain delays in the compensation schemes and address postmasters’ complaints.

The Post Office no longer prosecutes its postmasters but unions claim postmasters are still chased for “missing” cash on the basis of data from the Horizon system.

The deal has been agreed even as the Post Office prepares to sue the Japanese firm for its role in the scandal.

The two parties agreed to stay any action until the end of the public inquiry, which was expected to report this year.

The Post Office said it was “continuing to make improvements to Horizon and our current systems” and that its “contract changes” with Fujitsu would help to ensure “safeguards and stability for the significant planned changes ahead”.