Taxpayers are going through a £1bn invoice for the Submit Workplace to interchange its controversial Horizon IT system, Pc Weekly has discovered – however authorities specialists despatched in to evaluate the funding request have reported that the vital mission is at the moment unachievable.
The plan to develop a alternative for Horizon and take away its provider, Fujitsu, is working late, is missing high quality, and is over finances, in response to auditors despatched in on behalf of the Division for Enterprise and Commerce (DBT).
And but, regardless of all the issues within the mission, Submit Workplace administration final yr minimize its finances and lowered the variety of folks engaged on it by 70% – and it now must recruit a whole bunch of IT professionals to help the in-house growth, an goal which specialists say is unrealistic within the timescale they’re required.
The Submit Workplace has requested HM Treasury for practically £1bn in additional money to finish the mission. Its present funding runs out subsequent month, however Pc Weekly understands that approvals are in place to see the mission by way of the interval main as much as the overall election on 4 July.
The Treasury usually doesn’t approve extra spending for tasks that, just like the Horizon alternative, have been given a “pink” ranking by authorities auditors – which suggests the Submit Workplace must persuade the subsequent authorities it could actually get the brand new system again on observe whether it is to obtain the funding it requires.
A Submit Workplace spokesperson mentioned: “We’re at the moment working carefully with postmasters to tell the design, construct, coaching, testing, and piloting of a brand new IT system to interchange Horizon and are showcasing the system on to postmasters of their native area in a collection of pilots.
“Submit Workplace acquired a £103m funding dedication from the Division for Enterprise and Commerce for its Horizon alternative programme in late 2023. Consistent with plans agreed at the moment it has additionally now submitted a brand new long-term request to make sure funding is offered for it to proceed this funding. Submit Workplace and the Division for Enterprise and Commerce are engaged on this latest request, and we will affirm that no extra funding is required within the pre-election interval.”
Enterprise case
Horizon was accountable for phantom accounting losses that led to a whole bunch of harmless subpostmasters being wrongly blamed and prosecuted in what turned often called the Submit Workplace scandal.
Work to interchange the 25-year-old Horizon system started in 2021. The brand new platform being developed in-house by the Submit Workplace is named New Enterprise IT (NBIT), and the broader mission is named the Strategic Platform Modernisation Programme (SPMP).
In 2023, 10% of the bonuses payable to Submit Workplace government administrators beneath their short-term incentive plan have been primarily based on reaching a goal of SPMP being 80% delivered – a mirrored image of the significance of the success of the programme.
Whereas the board was assessing its choices final yr on how finest to maneuver ahead as soon as the issues within the mission turned clear, they selected to chop spending to regulate short-term prices, and consequently 70% of the folks engaged on the mission have been let go – principally contractors, fairly than staff. This additionally led to a discount in expertise and information among the many mission workforce, and hit morale amongst those that remained. A recruitment course of for brand spanking new IT employees is already underway.
Sources say there has additionally been a collapse in belief between the Submit Workplace enterprise groups and the modernisation programme, which has been working largely in a silo. Key roles within the programme are actually being stuffed by current staff from throughout the enterprise.
In consequence, the Submit Workplace approached DBT – which owns the federal government relationship with the publicly owned organisation – requesting practically £1bn in additional funding, having spent £187m on the programme already.
DBT informed the Submit Workplace that degree of funding would require a full enterprise case and Treasury approval. An preliminary tranche of £184m was urgently requested to see the mission by way of from July 2024 to March 2026, which the Treasury has been requested to approve in June.
The whole invoice for changing Horizon will probably be £1.1bn – an enormous improve on the £180m that had initially been forecast when the mission kicked off in 2021.
The federal government has beforehand dedicated £1bn to pay for compensation for victims of the Submit Workplace Horizon scandal. Fujitsu is believed to have made £2.5bn from working Horizon for the previous 25 years.
Vital tasks
Following the funding request, DBT and the Treasury contacted the Infrastructure and Initiatives Authority (IPA) – a specialist workforce within the Cupboard Workplace that audits and displays main Whitehall tasks thought of vital to the functioning of public companies.
The Submit Workplace was informed that an IPA assessment could be required earlier than any enterprise case could be accepted. The assessment was accomplished in April and gave SPMP its highest “pink” warning ranking – which suggests “profitable supply of the programmes to ship the Horizon alternative to time, price and high quality seems to be unachievable”.
The assessment concluded that, “There are main points which, at this stage, don’t seem like manageable or resolvable fully inside POL [Post Office Limited]. The programme/mission might have re-baselining and/or its total viability reassessed.”
The Treasury doesn’t usually approve extra funding for a enterprise case given a pink ranking by the IPA until it’s assured the mission will enhance.
The IPA reviewers mentioned they have been “supportive of the initiatives that programme management has prioritised,” however added it’s too early to “see the proof that SPMP has been circled”.
In consequence, SPMP is being introduced into the Authorities Main Initiatives Portfolio – the set of high-profile tasks topic to ongoing monitoring by the IPA. It’s the first time within the 25-year historical past of Horizon that the Submit Workplace has been compelled to have its IT growth overseen by Whitehall.
Governance and ranges of experience concerned within the mission have been recognized as a key space for enchancment, and Pc Weekly understands that DBT intends to fee exterior specialists to conduct additional opinions of the Horizon alternative programme and what’s wanted to deliver it again on observe.
The IPA reviewers reported “widespread concern that the rising numbers of individuals concerned in governing these programmes weren’t sufficiently skilled in technical issues to take selections and make judgements on threat.”
Board-level points
The IPA additionally recognized wider board-level points that, whereas exterior of the scope of its monitoring, will should be addressed if the mission is to achieve success.
“Programme management is taking courageous selections and spearheading POL into very new areas of digital enterprise which it’s not clear has been totally understood or supported by the POL board, and at a time the board could have been preoccupied on different issues,” mentioned the IPA assessment workforce.
“To determine to grow to be a digital-first retail organisation is a serious enterprise and requires a metamorphosis of the organisation and the way in which it operates. This isn’t in scope for any of the Horizon alternative programmes however will should be addressed by the POL board.”
The Submit Workplace is known to have totally accepted the findings of the IPA assessment, and informed the IPA that “the problems raised will probably be addressed totally”.
Pc Weekly reported in December final yr that rising prices and a lengthening timeline had compelled the federal government handy the Submit Workplace an additional £103m in direction of its mission to interchange Horizon, which was because of be accomplished in 2025.
The NBIT system is being developed to run within the Amazon Internet Providers cloud atmosphere. It has been trialled at two Submit Workplace branches, one in Leeds and one in Aldwych, London – a department that’s subsequent door to the constructing that hosts the general public inquiry into the Submit Workplace scandal. Additional pilot branches are because of be rolled out beginning in late 2024.
{Hardware} for the roll-out has already been bought and is sitting in a warehouse.
Fujitsu is at the moment contracted till March 2025 to help the Horizon system that it developed. Pc Weekly reported final month {that a} additional extension to that contract with Fujitsu is “inevitable”.
Not the primary time
This isn’t the primary time the Submit Workplace has tried to maneuver away from Horizon. IBM began work on a £100m mission for a alternative system in 2015, however the complexity concerned compelled the Submit Workplace again to Fujitsu.
Horizon is a retail and accounting system utilized in Submit Workplace branches, which was launched in 1999 to interchange primarily handbook accounting practices. Initially from ICL, which was acquired by Fujitsu in 2002, it was rolled out throughout the Submit Workplace department community from 1999.
Horizon’s introduction led to a sudden improve in subpostmasters reporting unexplained shortfalls of their accounts, for which they have been blamed. The Submit Workplace informed every of them that no person else was experiencing issues and coated up the pc errors. A Excessive Court docket case in 2019 proved that bugs in Horizon brought about the phantom accounting losses for which a whole bunch of subpostmasters have been wrongfully prosecuted.
The Submit Workplace scandal was first uncovered by Pc Weekly in 2009, revealing the tales of seven subpostmasters and the issues they suffered because of the accounting software program (see timeline of Pc Weekly articles concerning the scandal beneath).
• Additionally learn: What you want to know concerning the Horizon scandal •
• Additionally watch: ITV’s documentary – Mr Bates vs The Submit Workplace: The actual story •
