Post Office paid £600m to continue using Horizon

The Post Office has paid more than £600m of public money to continue using the faulty Horizon IT system despite deciding to ditch it more than a decade ago, the BBC can reveal.

The of the original 1999 deal with computer giant Fujitsu mean the Post Office has been stuck with the system and unable to build a replacement so far, even after it contributed to one of the UK's biggest miscarriages of justice.

Former Prime Minister Sir Tony Blair and other senior Labour government figures were warned about potential problems with the of the deal before it was signed, the BBC has learned.

The Post Office said it "apologises unreservedly to victims of the Horizon IT scandal" and said it was committed to moving away from Fujitsu and the Horizon software.

Under the of the original £548m deal, struck under pressure from the then-Labour government, the Post Office did not own the computer code for the core part of the Horizon system.

Although the Post Office has wanted to switch suppliers since 2012, buying the rights to the code from Fujitsu or building a completely new system from scratch was considered too expensive - even as the amounts paid to Fujitsu to retain the Horizon system grew and grew.

Because it did not own the code, the Post Office was also unable to inspect the part of the software that processed transactions, and had to rely on assurances from Fujitsu that it was functioning correctly.

The Post Office, which is owned by the government, prosecuted about 700 sub-postmasters between 1999 and 2015 for theft, fraud and false ing over supposed cash shortfalls in branches reported by the Horizon system, based on these assurances. The convictions were overturned by Parliament last year.

Earlier this year, Business Minister Baroness Jones of Whitchurch told the House of Lords that the Post Office is "unfortunately, still dependent on the Horizon system", and the only way Fujitsu could be "out of the picture" immediately would mean shutting down all local post offices.

An attempt to replace the system with one built by IBM failed in 2016, at a cost of £40m, and the Post Office extended its contract with Fujitsu for at least four more years at a cost of £107m.

The Post Office told the BBC that it finally obtained rights related to the Horizon software and code in 2023, although it is not known if this includes the core system that processes transactions.

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