How is Fujitsu involved in the Post Office IT scandal?

Fujitsu has apologised to postmasters wrongfully convicted due to flaws in its Horizon IT software and admitted it has a “moral obligation” to contribute to compensation.

More than 700 Post Office branch managers were convicted after Fujitsu’s faulty accounting software Horizon made it look like money was missing from their shops.

On Tuesday, the boss of the company addressed its involvement in the scandal directly and answered a number of key questions for the first time, around 25 years after issues first affected Post Office workers.

– What is Fujitsu?

Fujitsu is one of the world’s oldest technology equipment companies, having been founded in Japan in 1935 as Fuji Telecommunications Equipment Manufacturing.

The company is now listed on the Tokyo Stock Exchange and employs more than 120,000 people.

It has grown across the globe through a number of acquisitions over the years, including snapping up control of UK software business ICL in the 1980s.

– Why is the firm important to the subpostmasters scandal?

The scandal, which was at the centre of ITV’s recent drama Mr Bates Vs The Post Office, is specifically around failures related to accounting software Horizon being blamed on subpostmasters at the Post Office.

The Horizon software had first been developed by Fujitsu’s ICL business.

In 1999, the software was installed by the Post Office in its thousands of sites across the country after Fujitsu won a contract.

However, the Post Office ultimately prosecuted hundreds of subpostmasters between 1999 and 2015 after it blamed them for financial discrepancies.

On Tuesday, Fujitsu’s European boss Paul Patterson admitted there were “bugs and errors” when the software was rolled out.

– What did the company know?

Mr Patterson said the company passed on information about bugs and errors in the system to the Post Office.

However, the boss said he could not “answer a month or year” when management first knew of issues specifically related to flaws in Horizon which could impact the Post Office.

At the time, both Fujitsu and the Post Office maintained that the Horizon system was robust.

Bosses at both companies frustrated members of the Business and Trade Committee on Tuesday by failing to directly say when errors were first recognised.

– What is next for Fujitsu and its response?

On Tuesday, Fujitsu indicated for the first time that it will help to finance the redress scheme for wrongfully convicted subpostmasters.

The public inquiry into the scandal is currently ongoing.

On Tuesday, a Fujitsu employee, Rajbinder Sangha, gave evidence at the Post Office Horizon IT Inquiry and admitted data from the scandal-hit Horizon system is still used in court proceedings.

The company has said it will engage further with the inquiry led by the retired judge Sir Wyn Williams.

It has also come under criticism from some MPs who are keen for the UK Government to drop a number of major outsourced contracts with the Japanese firm due to the scandal.

– How is Fujitsu involved with the UK Government?

The scale of the Government’s involvement with Fujitsu is significant. Since 2012, the public sector as a whole has awarded the company almost 200 contracts worth a combined total of £6.8 billion, according to analysts Tussell.

Around 43 of those contracts are still in operation, worth a total of £3.6 billion, including the contract for the Post Office Horizon system.

In addition to Horizon, Fujitsu provides IT services to multiple Government departments including the Home Office, the Foreign Office, Defra and the Ministry of Defence.

These services include providing the Police National Computer, which stores individuals’ criminal records, the Government’s flood warning system, and the national emergency alerts system launched in March 2023.

The company also has contracts with devolved and local government.

– Could the Government get rid of Fujitsu?

It would be extremely challenging for the Government to completely end its involvement with Fujitsu.

Partly, this is due to the legal risk of ending contracts with major suppliers, who have previously sued the Government successfully after deals were terminated.

For example, Fujitsu was involved with the £12 billion NHS national programme for IT (NPfIT) that was largely abandoned in 2011 amid spiralling costs, technical difficulties, delays and contractual disputes.

Prior to that, the Government had terminated Fujitsu’s contract to digitise patient records in the south of England in 2008 after a dispute over changes.

Fujitsu then sued the Government for £700 million, leading to a long-running lawsuit, arbitration and a significant award to the company in 2018, although the total amount remains confidential.