Fujitsu put pressure on UK government to sign off troubled Horizon project, public inquiry hears
Pressure was put on the UK government by IT provider Fujitsu to sign off the contract to roll out error-ridden software program to automate accounting at 18,000 Post Office branches, the public inquiry has heard.
In 1998, following a gathering between the British ambassador to Japan and Fujitsu executives, the British embassy in Tokyo wrote to the UK government warning it of great financial repercussions, together with UK job losses and reductions in commerce, if Fujitsu/ICL’s software program contract with the Post Office was cancelled.
At this time, within the lead-up to its deliberate roll-out, the Horizon accounting and retail system from Fujitsu-owned ICL was beset with technical issues.
In what has turn into often known as the Post Office Horizon scandal, these technical issues continued after the system was rolled out, and subpostmasters had been blamed for unexplained losses that had been attributable to its errors.
More than 700 had been prosecuted for monetary crimes because of this, and lots of had been despatched to jail. Thousands extra skilled life-changing struggling after the unexplained losses, together with chapter, and lots of had been compelled to use financial savings, promote possessions and borrow to cowl the unexplained shortfalls. More than 80 former subpostmasters have thus far had legal convictions, primarily based on proof from the Horizon system, overturned.
During the Post Office Horizon scandal inquiry this week (23 November), proof has emerged of the pressure the UK government was beneath to get the software program mission accomplished.
Implications on jobs
The telegram from the embassy in Tokyo adopted a gathering between David Wright, British ambassador in Japan on the time, and senior Fujitsu/ICL executives, together with vice-chairman of Fujitsu and chairman of ICL UK, Naruto. It warned there can be “profound implications on jobs and bilateral ties” if Fujitsu/ICL had been to lose the Post Office contract. “Mr Naruto stressed the difficult and serious crisis Project Horizon faced,” the telegram stated.
It revealed the price of the mission had already elevated from £185m to £600m. “To date, ICL, supported by Fujitsu, had spent over £200m on the project,” it stated. “ICL and Fujitsu would have to raise the remaining funds through bank loans. Due to delays setting up the project, ICL risks losing £500m by the year 2000. Loss of this scale against an outlay of £600m was unsustainable.”
The telegram acknowledged that Naruto and Fujitsu had been frightened the British government didn’t perceive the seriousness of the state of affairs.
“Naruto repeatedly stressed that the failure of the project will have serious repercussions for Fujitsu’s international standing … [leading] to major internal difficulties within Fujitsu and the collapse of ICL,” it added.
“The tone of Mr Naruto’s approach makes it quite clear that we have a major and potentially damaging problem on our hands. I do not think he was simply trying to make our flesh creep, by warning of the threat to ICL’s future viability. Fujitsu and Naruto in particular have worked for 18 years to prop up and then put ICL on a healthy footing. Naruto certainly meant what he said when he warned this now being under threat.”
At the time, there have been main doubts within the government, Post Office and subpostmaster neighborhood over the Horizon mission. The government was contemplating varied choices for the troubled mission, together with ending the contract with Fujitsu/ICL.
“We have to expect that ICL and Fujitsu would publicise their criticism of the project’s management,” the telegram stated. “That would be damaging to the hitherto benign and mutually supportive style of relationship between the British government and Japanese companies invested in Britain.”
During the public inquiry listening to, former civil servant Sibbick was requested about time pressure coming from Fujitsu to get the contract executed.
“Quite a lot,” he stated. “As we understood it, there was a lot of pressure on [Fujitsu] to get this sorted out so that they could sign off their accounts, as I understand it, for that year, and a lot hinged on this as to whether Fujitsu would have no alternative but to kind of cut ICL loose, disband it, whatever they were going to do with it.”
“I think it was, from the very beginning, seen within the Department of Trade and Industry as very important indeed, that it would have been a major blow, as I think I’ve already described, to the whole public finance initiative concept if a project of this importance and this stature, if you like, failed,” Sibbick advised the inquiry.
“The other was the damage to the network of post offices up and down the country if the thing failed, so we had these twin objectives, as it were, to keep on trying to press ministers into a solution that dealt with these two issues, and I think it was the combination of them, the industrial one and the purely political one, the subpostmasters and the network, and so on, that, in the end, the force of those arguments were what prevailed.”
Nobody at Fujitsu has been held to account for the struggling endured by subpostmasters wrongly blamed for losses attributable to errors in its system. The firm has additionally escaped monetary penalty and has continued to win massive IT companies contracts with the UK government.
Computer Weekly first reported on issues with the Horizon system in 2009, when it made public the tales of a bunch of subpostmasters (see timeline of articles beneath).
