It has been revealed that the UK Post Office has spent more than £600 million of public money to continue using a flawed IT system at the centre of one of the country’s worst miscarriages of justice.
The Horizon system, developed by Fujitsu, was introduced in 1999 to computerise transactions across Post Office branches.
However, software faults led to false accounting discrepancies. Between 1999 and 2015, nearly 700 sub-postmasters were wrongfully prosecuted for theft and fraud based on data from the system. Most have since been exonerated, and Parliament has recognised the injustice.
A report by BBC News Investigations has revealed that despite deciding to move away from Horizon over a decade ago, the Post Office remained trapped by its original contract, which did not grant ownership of the core software code.
This meant it could not inspect or alter the system without Fujitsu’s approval. Efforts to replace Horizon — including a £40 million attempt with IBM in 2016 — failed, partly due to these intellectual property restrictions.
The BBC has discovered that senior figures in the then-Labour government, including Prime Minister Tony Blair and Chancellor Gordon Brown, were warned before the 1999 deal was signed. Treasury memos cautioned that the lack of software ownership could leave the Post Office vulnerable to expensive settlements if it ever wanted to switch suppliers.
Since 2012, the Post Office has paid over £600 million in extensions to continue using Horizon, and experts believe Fujitsu may still be needed beyond 2026.
The Post Office told the BBC that it finally obtained rights related to the Horizon software and code in 2023, although it is not known if this includes the core system that processes transactions.
The £10m price for the licence was “cheap – because who else would buy it?” according to IT expert Jason Coyne, one of the first people to identify flaws in the system.
Jason Coyne and Nick Wallis at Tech Show London 2024, on Post Office/Horizon Scandal
The Post Office says it is committed to reform, apologising unreservedly to the victims and promising to put postmasters “at the heart” of its future. A government-backed five-year programme is now underway to replace Horizon gradually.
Many sub-postmasters continue to report issues with the existing system, and the final report of the ongoing public inquiry into the scandal is still pending.
