Why the Post Office paid £600m to stick shackled to the inaccurate Horizon device

The Post Office has paid greater than £600m of public cash to proceed the use of the inaccurate Horizon IT device regardless of deciding to ditch it greater than a decade in the past, the BBC can disclose.

The phrases of the unique 1999 take care of laptop massive Fujitsu imply the Post Office has been caught with the device and not able to construct a substitute to this point, even after it contributed to one of the most UK’s largest miscarriages of justice.

Former Prime Minister Sir Tony Blair and different senior Labour govt figures have been warned about possible issues of the phrases of the deal earlier than it was once signed, the BBC has discovered.

The Post Office mentioned it “apologises unreservedly to victims of the Horizon IT scandal” and mentioned it was once dedicated to shifting clear of Fujitsu and the Horizon device.

Under the phrases of the unique £548m deal, struck underneath power from the then-Labour govt, the Post Office didn’t personal the pc code for the core a part of the Horizon device.

Although the Post Office has sought after to change providers since 2012, purchasing the rights to the code from Fujitsu or development a fully new device from scratch was once thought to be too pricey – even because the quantities paid to Fujitsu to retain the Horizon device grew and grew.

Because it didn’t personal the code, the Post Office was once additionally not able to check out the a part of the device that processed transactions, and needed to depend on assurances from Fujitsu that it was once functioning accurately.

The Post Office, which is owned by way of the federal government, prosecuted about 700 sub-postmasters between 1999 and 2015 for robbery, fraud and false accounting over meant money shortfalls in branches reported by way of the Horizon device, according to those assurances. The convictions have been overturned by way of Parliament final yr.

Earlier this yr, Business Minister Baroness Jones of Whitchurch informed the House of Lords that the Post Office is “unfortunately, still dependent on the Horizon system”, and the one manner Fujitsu might be “out of the picture” in an instant would imply shutting down all native put up places of work.

An try to exchange the device with one constructed by way of IBM failed in 2016, at a value of £40m, and the Post Office prolonged its contract with Fujitsu for no less than 4 extra years at a value of £107m.

The Post Office informed the BBC that it after all bought rights similar to the Horizon device and code in 2023, despite the fact that it isn’t identified if this contains the core device that processes transactions.

The £10m value for the licence was once “cheap – because who else would buy it?” in line with IT professional Jason Coyne, one of the most first other people to spot flaws within the device.

The BBC understands that the Post Office would possibly attempt to use this licence for Horizon’s substitute. But whilst that is being constructed, IT professionals imagine the Post Office’s contract with Fujitsu will wish to be prolonged past March 2026 – when it’s recently because of finish.

Issues over who would personal the Horizon device started when the contract to computerise the community of Post Office branches – then numbering 18,000 – was once negotiated between the Post Office, Fujitsu and its subsidiary ICL Pathway, and the federal government.

In May 1999, Sir Tony Blair won an replace from the Treasury, in a file caution that discussions with ICL over the phrases of a deal “have foundered”.

One of the sticking issues was once round highbrow belongings rights (IPR) – which integrated possession of the code throughout the Horizon device.

The file says that ICL was once “not prepared to… give perpetual licences for all the IPR”.

It is going on to mention that if the Post Office ever sought after to modify providers, the landlord of the IPR “would be in a strong position to drive a costly settlement with the Post Office”.

The BBC has additionally bought a file from 20 May the similar yr, which was once despatched to then-Chancellor of the Exchequer Gordon Brown and different govt officers, caution about the problem of who owned the code.

In it, a Treasury civil servant states that one of the most “main problems” with the phrases of a proposed take care of ICL for the Horizon device was once the “issues surrounding ownership of assets and IPR of the kit acquired by” the Post Office.

Mr Coyne, the IT professional, mentioned it was once “utter madness” that the deal went forward in July 1999 as it supposed that the Post Office was “operationally reliant on Horizon”, despite the fact that it didn’t personal the rights to make use of the device with out Fujitsu.

A spokesperson for Sir Tony Blair didn’t cope with the BBC’s questions round his wisdom of the IPR problems however mentioned he “took very seriously the issues raised about the Horizon contract” on the time.

“The final decision was taken after an investigation by an independent panel recommended it was viable.

“It is now transparent that the Horizon product was once significantly improper, resulting in tragic and entirely unacceptable penalties, and Mr Blair has deep sympathy with all the ones affected.”

A spokesperson for Gordon Brown said he “shouldn’t have been proven the memo” from 20 May 1999 and he would have been copied in as a “formality”.

“He was once now not interested by any paintings associated with the buying, award or control of the Horizon contract.”