Post Office directors went crawling back to Fujitsu when IBM project got complex, inquiry told

IBM came within a whisker of taking over from Fujitsu as the Post Office’s core system provider, until complexity forced an “anxious” Post Office into a u-turn, the public inquiry has heard.

During the latest Post Office Horizon scandal inquiry hearing, it emerged that although IBM had started work on the £100m project to replace Horizon, Post Office directors went back to Fujitsu for help when the complexities of the project became apparent.

The Horizon retail and accounting system is at the centre of a UK scandal, which includes hundreds of miscarriage of justice.

Alisdair Cameron, current chief financial officer at the Post Office, who joined the organisation in 2015, told the inquiry that at the time the Post Office was going through a series of IT procurements to put new support structures in place.

Cameron, who has held the chief operating officer and interim CEO roles in his time at the Post Office, said Fujitsu was considered most likely to win the front-office IT procurement, because it owned and ran Horizon, which “no one else understood”. But he said Fujitsu withdrew from the bidding process.

During Cameron’s questioning, barrister Jason Beer KC referred to an email where Cameron had described this as a “bluff exercise” by Fujitsu.

Cameron said: “Well, I didn’t know, obviously, but I asked myself the question as to whether they were authentically withdrawing or merely putting [us] in a position where we had to go back and ask them for more help.”

IBM won the contract and Cameron said the supplier was asked to build a new version of Horizon: “It would be more modern, it would be better digitally connected, but it would basically do exactly the same thing, and that was going to cost £100m or so.”

IBM started working on it in 2015, but there were problems understanding the Horizon system without Fujitsu’s support, with Cameron adding: “[We got] into difficulty relatively quickly because no one knew how Horizon worked … Recreating it without the help of Fujitsu was phenomenally difficult.

“We were really in doubt that it could be properly finished and rolled out by the date when Fujitsu’s contract ended, so we extended the support contract with Fujitsu to give us more time.”

Things escalated and Cameron said he was getting “really anxious” that the business wouldn’t be able to complete the IBM work. He said: “I asked Chris Broe, who was the interim CIO, to reach out to Fujitsu very quietly and say, ‘If we don’t do the IBM project, would you help and … ‘come back’, as it were.”

In April last year, Computer Weekly revealed that the Post Office had already paid millions to IBM when the Post Office scrapped the project and that Fujitsu had used its influence at the Post Office to plant seeds of doubt within management over the proposed contract with IBM.

The contract with IBM was reported by Computer Weekly in June 2015 after Andrew Bridgen, MP for North West Leicestershire, said he had an email that proved the Post Office was looking to replace Horizon. “It would appear to me that it is sunset for the Horizon system indeed,” he said at the time.

Nearly 10 years later, the Post Office is still trying to replace the Horizon system and Fujitsu contract with an in-house built platform, known as New Branch IT (NBIT). It has contracted support from suppliers including Accenture.

In April 2021, the Post Office announced that it was preparing for the end of the Horizon agreement with Fujitsu, adding an extra year to support its transition to a new system. In May last year, it set 2025 as the target date for the completion of the project.

In December 2023, increasing costs and a lengthening timeline forced the government to hand the Post Office an extra £103m towards its project to replace the controversial Horizon software still used by thousands of subpostmasters.

The Post Office Horizon scandal was first exposed by Computer Weekly in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to accounting software (see below for timeline of Computer Weekly articles about the scandal, since 2009).

Also read: What you need to know about the Horizon scandal.

Also watch: ITV’s documentary – Mr Bates vs The Post Office: The real story.