UK

UK Post Office scandal: Fujitsu agrees to contribute to compensation of sub-postmasters

Company says it has ‘moral obligation’ to share in redress costs over Horizon scandal

Fujitsu director Paul Patterson leaves the Houses of Parliament after giving evidence to the Business and Trade Committee about the Post Office scandal. Photograph: Tolga Akmen/EPA

Rafe Uddin in London
Tue Jan 16 2024 - 18:28

Fujitsu has agreed to contribute to the compensation of sub-postmasters convicted in the Post Office Horizon scandal, as the Japanese company apologised to British MPs for its role in the affair.

Paul Patterson, Fujitsu’s Europe chief executive, said the company was “truly sorry” and acknowledged a “moral obligation” to help fund redress for sub-postmasters convicted using data from its Horizon IT system.

“We were involved from the very start, we did have bugs and errors in the system and we did help the Post Office in the prosecution of sub-postmasters,” he told MPs on Tuesday.

“We have a part to play and to contribute to the redress fund for sub-postmasters,” he added. “We don’t have a number yet.”

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The UK government has set aside £1 billion (€1.2 billion) in compensation for the more than 4,000 people affected by the scandal, including at least 700 prosecuted by the Post Office between 2000 and 2014 using Horizon data.

Last week, prime minister Rishi Sunak announced unprecedented legislation to exonerate the convicted sub-postmasters en masse.

Takahito Tokita, Fujitsu’s global chief executive, also apologised for the affair. He told the BBC on the sidelines of the World Economic Forum in Davos the matter was a “big issue” that the company “takes very seriously”.

Kevin Hollinrake, the postal affairs minister, said negotiations with Fujitsu over compensation would take place following the conclusion of a public inquiry into the scandal.

He added that it was a matter of timing and “maximising the contribution to the taxpayer”.

“It’s a very significant bill, it may end up north of £1 billion, our suspicion is it will. We should expect people who contributed to this scandal to contribute financially,” Mr Hollinrake said.

Fujitsu developed the accounting software at the heart of the Horizon affair and its staff acted as expert witnesses in Post Office prosecutions. Two Fujitsu employees who acted as witnesses have been interviewed under caution by the Metropolitan Police. Neither have been arrested.

The Post Office has spent more than £2.9 billion on the Horizon system since its inception, including £95.6 million since 2021 to extend a contract with Fujitsu until April 2025, according to its annual accounts.

The High Court ruled in 2019 that several “bugs, errors and defects” had meant there was a “material risk” that Horizon was to blame for the faulty data used in the Post Office prosecutions.

Fujitsu has remained a leading software supplier to the UK government despite the Post Office scandal. The Financial Times revealed this month that Fujitsu was involved in solo and joint public-sector contracts worth £4.9 billion, even after the December 2019 High Court decision.

Mr Patterson told MPs on the House of Commons business and trade select committee that Horizon code was not in other software it supplied to the government.

He said that Fujitsu would continue to submit bids for public contracts, though he acknowledged the affair had affected the brand’s reputation.

“It is very clear that our brand and our value in the UK and to the government is under question ... we will look at all of those opportunities on the open market,” Mr Patterson said.

Mr Patterson is scheduled to give evidence to the public inquiry into the affair later this week.

Earlier on Tuesday, Lord James Arbuthnot, a member of the Horizon Compensation Advisory Board, told MPs he hoped Fujitsu would “accept that they have played a part in the devastation that has been visited on the sub-postmasters”.

He added: “I do think that Fujitsu’s reputation has been seriously damaged by this and that will play a major part in future procurement issues.”

Nick Read, chief executive of the Post Office, told the committee the state-owned business still needed to change its culture to recognise the impact of the affair on sub-postmasters.

Mr Read also confirmed that the Post Office was in discussions with HM Revenue & Customs over the tax treatment of compensation payments. He said the state-owned business had written to the chief secretary to the Treasury about the issue 18 months ago.

The Financial Times reported last week that the Post Office had claimed tax deductions on compensation payments, and was at risk of insolvency if HMRC clawed back funds.

Mr Read, who joined the Post Office in 2019, was among several senior executives to receive unauthorised bonuses for supporting the public inquiry into the scandal.

He returned £54,400 of his £455,000 bonus from 2021-22 after Post Office management were reprimanded by the inquiry chairman Sir Wyn Williams.

— Copyright The Financial Times Limited 2024

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