May 23, 2024
Fujitsu, facing heat over UK Post Office scandal, continues to rake in billions from government deals


Japanese tech giant Fujitsu is facing growing pressure from U.K. political quarters over its role in a scandal that saw hundreds of post office owners prosecuted for accounting discrepancies.

But as Fujitsu has emerged as a leading protagonist in a saga that has endured for nearly a quarter-of-a-century, the government has continued to give the Japanese tech giant contracts worth billions of pounds as one of its strategic suppliers, even after a U.K. court found Fujitsu’s accounting software to be faulty and unreliable.

The British Post Office Scandal was thrust back into the public consciousness last week following U.K. broadcaster ITV’s four-part serialization, Mr. Bates vs. The Post Office, which recounts how more than 700 sub-postmasters (Post Office franchisees) were wrongfully prosecuted for fraud, false accounting, and theft over a 15-year period, with many imprisoned, losing their livelihoods and facing bankruptcy.

As things eventually transpired, the “balancing” errors in the sub-postmasters’ books were due to a faulty IT system that had been introduced by the Government in 2000 to digitalize social benefit payments. The software, dubbed Horizon, was developed by International Computers Limited (ICL), a British company that came under full Fujitsu ownership in 1998, before being subsumed by the Fujitsu brand in 2001.

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A longstanding campaign to secure justice for sub-postmasters that had been convicted was established in 2009, with alliance members arguing that Horizon was to blame for the financial discrepancies. A long, controversy-strewn independent private inquiry closed in 2015 with the Post Office itself concluding that there was no system-wide IT problems, leading the Justice for Sub-postmasters Alliance to kick-off legal action, culminating with a £58 million settlement in December 2019 — and a High Court ruling that the Horizon system wasn’t robust or reliable.

Since the start of this year, the British Post Office Scandal has dominated headlines and public conversation in the U.K. That it has taken a television drama to generate this level of attention, when the whole episode has been covered extensively in the news media for many years, is perhaps a story in itself. But there are now renewed calls for Fujitsu to face justice, with Member of Parliament (MP) and former Home Secretary Priti Patel publicly calling for Fujitsu — and the Post Office — to be “held to account.”

Politicians have also asked company officials to participate in an evidence session in Parliament next week, with the chair of the Commons Business and Trade Select Committee, Liam Byrne MP, saying that it’s “vital that Fujitsu confess how they got it so wrong,” questioning how the company has been able to continue taking public sector contracts.

Indeed, despite all the furore in recent years, the Government awarded 107 contracts worth £4.5 billion to Fujitsu between January 2020 — after a U.K. court had already conveyed its misgivings over Fujitsu’s software — and the end of 2023, according to data provided to TechCrunch by public sector market intelligence company Tussell. The most recent contract was for a Northern Ireland Education Authority, which inked a £485 million deal just 3 weeks ago for Fujitsu to support a new School Management System (SMS).

But incredibly, £2.4 billion of these funds were awarded for the Post Office’s Horizon system itself, with a £36 million extension signed just two months ago to keep things running until March, 2025. The Post Office says it had planned to transition to a new cloud-based infrastructure, but that it had met significant technical challenges and has had to remain with Fujitsu to manage its on-premises infrastructure.

Some 24 years after the first Post Office convictions that relied on Horizon software data, nobody from Fujitsu has been held to account. Police have interviewed former Fujitsu employees over possible perjury at the original sub-postmaster trials, while a statutory public inquiry into the Horizon IT system has also been ongoing since 2021.

What’s clear from these past 10 days is that whatever investigations were already ongoing into the scandal, Fujitsu now will come under greater scrutiny — and all it took was a TV dramatization to get the public and politicians to really care.

“It is clear that Fujitsu faces serious questions that demand a response,” Jonathan Reynolds, Labour MP and Shadow Secretary of State for Business and Trade, said in Parliament this week. “If it is found that Fujitsu knew the extent of what was occurring, there will have to be consequences that match the scale of the injustice.”

TechCrunch has contacted Fujitsu to comment for the story. It will be updated when and if the company replies.





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