Fujitsu to pause government bids after making billions since Horizon scandal

Fujitsu, the firm behind the faulty Horizon IT system, has said it will pause bids for government contracts while an inquiry looks into how the software provided evidence to the Post Office which helped wrongfully convict more than 700 sub-postmasters.

Following pressure from several MPs, the Japanese technology firm told the government it would not bid for new contracts until the inquiry publishes its findings.

Cabinet Office minister Alex Burghart told the Commons: "This morning (the) Cabinet Office received a letter from Fujitsu voluntarily undertaking not to bid for government contracts whilst the inquiry is ongoing, unless of course the government ask them to.”

But the company has made several billion from government jobs since the Post Office stopped prosecuting sub-postmasters based on Horizon evidence in 2015.

Fujitsu is still one of the government's 'Strategic Suppliers', which typically means it receives more than £100 million in contracts per year, according to procurement analysts Tussell, and has made billions in the past decade.

That is despite it playing a key role in what has been described as the biggest miscarriage of justice in British legal history; a scandal which saw at least 736 sub-postmasters convicted of fraud and theft between 1999 and 2015.

A statutory inquiry, chaired by the retired high court judge Sir Wyn Williams, began taking evidence last year over what is considered one of the gravest miscarriages of justice in UK history.

That is expected to publish its findings late next year but a police investigation into potential criminal wrongdoing may not conclude until 2026, according to the chief of the Metropolitan Police.

So far, no-one at the Post Office or Fujitsu has been held accountable, even after it was confirmed the accounting errors were caused by the computer system.

Fujitsu apologises and agrees it should pay compensation to sub-postmasters

Downing Street has previously said Fujitsu will be “held accountable” legally or financially if the public inquiry finds it blundered in the Horizon scandal.

And the firm has agreed it should contribute to compensation after the government said all wrongly convicted sub-postmasters - of which it is thought there could be more than 900 in total - are entitled to compensation of at least £600,000 each.

In a statement on Thursday morning, it reiterated its apology to sub-postmasters and their families over the Horizon scandal and confirmed it would be working with the Government on a “contribution to compensation”.

“The Fujitsu Group regards this matter with the utmost seriousness and offers its deepest apologies to the sub-postmasters and their families.

“The UK statutory public inquiry, to which our UK subsidiary is providing full co-operation, is examining complex events that have unfolded over many years, and we remain steadfast in our commitment to this cooperation.

"Based on the findings of the inquiry, we will also be working with the UK government on the appropriate actions, including contribution to compensation. The Fujitsu Group hopes for a swift resolution that ensures a just outcome for the victims.”

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Which government contracts has Fujitsu won?

Since the scandal came to light, Fujitsu has continued to win government jobs worth millions, as recently as last month, despite calls for the firm to be frozen out of any new contracts.

Since 2012, the public sector as a whole has awarded Fujitsu almost 200 contracts worth a combined total of £6.8 billion, according to analysts Tussell.

About 43 of those contracts are still in operation, worth a total of £3.6 billion, including the contract for the Post Office Horizon system, and multiple government departments including the Home Office, the Foreign Office, Defra and the Ministry of Defence.

The Environment Agency extended its flood alerts contract with Fujitsu in December, spending an extra £2 million on the agreement to keep it in place to December 2025. It brings the total spend on the deal since 2016 to £19.5 million.

In November last year, the government even awarded Fujitsu another £36 million to keep the Horizon contract running until 2025 after initially spending £2.4 billion.

Fujitsu was also awarded a contract in 2022 to work on a new UK emergency alert system for mobile phones and tablets - a move peers in the House of Lords labelled “immoral”.

Conservative former cabinet minister Sir David Davis called for companies like Fujitsu to be blocked from bidding for future government contracts on the basis of having “terrible track records”.

Sir David told the Commons: “This week it’s been reported the government tried to block Fujitsu from bidding for future contracts on the basis of woeful performance in previous contracts.

“Government lawyers advised this could not be done. They are wrong. So, will the government give further serious thought to blocking large companies like Fujitsu with terrible track records from bidding for future contracts, and if absolutely necessary legislate accordingly?”

What is the Post Office Horizon scandal?

In 1999 the Post Office introduced digital accounting software named Horizon - created by Japanese tech firm Fujitsu - which replaced the paper-based process of the past.

But it soon became clear to some sub-postmasters that the software was creating discrepancies in their accounts, making it look like cash was missing.

A sub-postmaster is someone not directly employed by the Post Office, who runs a separate retail business which hosts a Post Office facility on their site. The idea is that an in-house Post Office would drive customers to their business.

But many didn't - and the Post Office, which has the power to run private prosecutions, sought to have many sub-postmasters convicted of fraud and theft.

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Between 1999 and 2015, 736 sub-postmasters were wrongfully convicted but concerns with the faulty Horizon system were raised in court as early as 2003.

By 2012, potential problems with Horizon were so apparent the Post Office launched a review to satisfy politicians who had been complaining on behalf of their aggrieved constituents.

The Post Office however continued prosecuting sub-postmasters until 2015 but the miscarriage of justice was confirmed in 2019 when the High Court ruled that Horizon was to blame.

A number of compensation schemes were introduced by the government and £87 million was eventually paid out through the Horizon Shortfall Scheme to more than 2,500 sub-postmasters who lost money but weren't convicted.

To date, just 93 convictions have been overturned but the government recently announced legislation which will give blanket exonerations to all those wrongfully convicted.