Fujitsu is ready to obtain an extra £180m in taxpayers’ money to increase its contract to run the controversial Put up Workplace Horizon IT system for an extra 5 years.
As revealed by Pc Weekly yesterday (30 Could), the mission to switch Horizon has hit main issues, and the Put up Workplace has requested £1bn of additional public funding from the Treasury to get the programme again on observe. The finances has spiralled from £180m to £1.1bn, and the implementation has slipped from 2025 to 2030.
The prevailing contract with Fujitsu to run Horizon is because of conclude in March 2025, and the goal was to have a substitute system, known as New Department IT (NBIT), in place by that point. Nevertheless, delays, price over-runs and an absence of high quality within the software program being developed in-house by the Put up Workplace means Horizon shouldn’t be more likely to be absolutely shut down till 2030.
An extra complication has arisen in that Fujitsu has advised the federal government it’s not prepared to proceed supporting Horizon after March 2025 until the Put up Workplace has a “credible plan” to exit the association.
If Fujitsu had been to withdraw its companies after March 2025, the Put up Workplace must both discover one other provider to handle the Horizon system on which its enterprise and earnings relies upon, or carry its administration in-house.
In accordance with authorities auditors from the Infrastructure and Tasks Authority (IPA) who had been despatched in to evaluation the programme in April, the Put up Workplace doesn’t contemplate both of these two fallback choices to be “economically viable”.
The provider has advised the federal government that, if each events agree to increase the contract, it’s prepared to take action on the identical foundation as a earlier one-year extension, which price the Put up Workplace £36m.
An extra 5 years on the identical phrases and circumstances implies one other £180m going to Fujitsu, which might be funded by taxpayers as a part of the £1bn requested from the Treasury.
Nevertheless, sources near the mission say that Fujitsu could favor to resume on the premise of a 12-month extension that’s renewed yearly, relatively than an upfront five-year dedication.
A Put up Workplace spokesperson mentioned: “Working in collaboration with postmasters, we’re persevering with to drive ahead growth and broaden our pilots for the introduction of a brand new system that’s match for the long run throughout our 11,500 branches. We’re decided to get this proper and with such a big community, cautious planning and in depth testing are of overriding significance forward of full roll-out.
“We’re additionally investing to make sure the profitable operation of our current expertise, together with extending business relationships with suppliers the place that is required, as this can guarantee postmasters and prospects have continuity while we develop the brand new system.”
Fujitsu declined to remark when requested by Pc Weekly.
Considerably cheaper
The Put up Workplace expects that when NBIT is rolled out, will probably be considerably cheaper to run than Horizon – its estimates recommend NBIT will price £18m-£25m a yr to run, in comparison with £60m-£70m predicted for Horizon.
The IPA warned that had been the substitute programme to fail or to not make adequate progress, “there could be vital operational and monetary threat in trying to insource Horizon” – and that the following dangers might result in a failure of the companies supplied by the Put up Workplace, which might “straight affect prospects”.
As such, it’s possible the Put up Workplace may have little alternative however to steer Fujitsu to increase the contract. For the time being, there is no such thing as a contingency plan in place ought to Fujitsu step away on the finish of the present deal.
“Detailed planning for the occasion that an extension contract shouldn’t be achieved, is simply simply underway and this might turn into very difficult ought to the provider not want to enter right into a contract extension after March 2025,” mentioned the IPA evaluation workforce, including that they’ve “questions on whether or not a Plan B is sufficiently mature at this stage”.
Voice of the Postmaster, a consultant group for Put up Workplace department employees, has printed a letter to Put up Workplace CEO Nick Learn, following Pc Weekly’s revelation of the problens with NBIT. The group claimed that it met with Learn On Wednesday (29 Could) and he “expressed satisfaction with the progress and testing of the NBIT mission”.
“This example evokes recollections of previous points associated to info withholding from postmasters. It’s crucial that we keep away from repeating such historical past,” the letter mentioned.
Issues constructing
Issues have been constructing with the Horizon substitute mission for a while. IBM began work on a £100m mission for a substitute system in 2015, however the complexity concerned pressured the Put up Workplace again to Fujitsu.
Pc Weekly reported in December final yr that rising prices and a lengthening timeline had already pressured the federal government at hand the Put up Workplace an additional £103m in direction of the mission.
Fujitsu is believed to have earned over £2.5bn from its Horizon contract throughout the 25 years the system has been in use by the Put up Workplace.
Horizon is a retail and accounting system utilized in Put up Workplace branches, which was launched in 1999 to switch primarily guide accounting practices. Initially from ICL, which was acquired by Fujitsu in 2002, it was rolled out throughout the Put up Workplace department community from 1999.
Horizon’s introduction led to a sudden enhance in subpostmasters reporting unexplained shortfalls of their accounts, for which they had been blamed. The Put up Workplace advised every of them that no one else was experiencing issues and lined up the pc errors. A Excessive Courtroom case in 2019 proved that bugs in Horizon prompted the phantom accounting losses for which a whole bunch of subpostmasters had been wrongfully prosecuted.
The Put up Workplace scandal was first uncovered by Pc Weekly in 2009, revealing the tales of seven subpostmasters and the issues they suffered as a result of accounting software program (see timeline of Pc Weekly articles concerning the scandal beneath).
• Additionally learn: What you should know concerning the Horizon scandal •
• Additionally watch: ITV’s documentary – Mr Bates vs The Put up Workplace: The true story •
