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The Post Office is still spending millions with Fujitsu

How much does a UK government strategic supplier have to screw up before it’s cut off?

Scott Bicheno

January 15, 2024

4 Min Read
source: fujitsu

One of the biggest questions being asked across the country in the wake of the recently broadcast ITV drama: Mr Bates vs The Post Office concerns supplier accountability. In a nutshell, a new computer system called Horizon logged financial losses at village post offices a couple of decades ago. The blameless subpostmasters running them were subsequently blamed, sacked, and prosecuted with only the presumed infallibility of Horizon presented as evidence.

The best place to go for a deep dive into the scandal seems to be Computer Weekly, which has been reporting on the matter for almost 15 years. As it details in this summary, Horizon was supplied by Japanese IT giant Fujitsu (which inherited a raft of legacy UK government contracts and entrenched relationships when it acquired ICL in 1998) and was rolled out from 1999. Due to the accounting discrepancies identified only by Horizon soon after, the Post Office privately prosecuted over 700 subpostmasters.

Such a miscarriage of justice would be bad enough by itself but the main reason it has taken so long to come to light is the apparent deliberate concealment of the truth by the PO and Fujitsu. According to CW reporting, the PO lied to subpostmasters about the extent of the problem, as well as journalists and politicians, and used aggressive legal action to silence subpostmasters. Including the imprisonment of an innocent pregnant woman.

In a landmark 2019 judgment in favour of the subpostmasters, Justice Fraser was critical of Fujitsu. “…Fujitsu had powers which, until shortly before the trial started, Fujitsu sought to keep from the court, and may not even have fully disclosed to the Post Office,” he wrote. “Because the extent of these powers was kept secret in this way, the Post Office finds itself now having made misleading public statements previously.

“The Post Office’s approach to evidence, even despite their considerable resources which are being liberally deployed at considerable cost, amounts to attack and disparagement of the claimants individually and collectively, together with the wholly unsatisfactory evidence of Fujitsu personnel such as Mr Parker.”

You would think that, if not before, the government might have taken criticism of Fujitsu from such an impeccable source to be grounds for a scaling back of its supplier relationship with the company. But the reality seems quite the opposite, with Fujitsu remaining one of a small number of government ‘strategic suppliers’. The table below, taken from Tussell’s 2023 Strategic Suppliers Report, shows Fujitsu steadily gaining ground to become the 16th biggest UK government supplier last year, ahead of giants such as IBM and Oracle.

Tussell_UK_strategic_suppliers.jpg

Perhaps the Horizon affair is being discounted as a freak aberration, but to do that you would have to ignore Fujitsu’s involvement in the UK’s two most catastrophic government procurement failures: the NHS National Programme for IT and the Defence Information Infrastructure. And, incredibly, the UK government is still paying Fujitsu millions specifically for the Horizon project, bringing the total cost for a project described by one of its own developers as “a bag of shit”, to £2.38 billion.

Apparently there have been attempts to block Fujitsu from UK government projects but they clearly failed. The ITV drama has inevitably led to renewed calls to drop Fujitsu but even the government can’t just exit contracts without major penalties. Meanwhile, one of the most senior politicians in office when the legal action that culminated in the 2019 judgment started, turns out to have worked for one of the law firms helping the PO in its defence between 2015 and 2022, despite being a serving MP for much of that time.

While Fujitsu is a significant part of the growing Open RAN market, this isn’t really a telecoms story. But the public sector is a major player in nearly all industries and its important for everyone that the processes are robust and failure not rewarded. Thanks to a handful of journalists and ITV’s investment in dramatizing the affair, justice is likely to be very belatedly served in this case. But the UK’s continued reliance on a discredited contractor makes it hard to believe that any permanent lessons have been learned.

You can hear us discuss the matter in this week’s Telecoms.com podcast.

About the Author(s)

Scott Bicheno

As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno

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