The UK Post Office is set to extend its contract with Fujitsu for the controversial Horizon IT system for a further five years, and £180 million ($230m).
First reported by Computer Weekly, the Post Office has requested £1bn ($1.3bn) of extra public funding to get the program to replace Horizon running again.
In addition to the budget increasing yet again, the planned implementation date has been moved from 2025 to 2030.
According to Computer Weekly, this is due to the replacement system New Branch IT (NBIT) not being ready, along with delays, cost overruns, and a lack of quality in the software being developed in-house.
Additionally, Fujitsu has told the government that it will not support Horizon after March 2025 unless the Post Office has a "credible plan" to leave the contract.
Should Fujitsu exit the deal, the Post Office will either need a new supplier or to manage Horizon itself, which it claims is not "economically viable." There is currently no contingency plan in place.
Auditors were sent in to look at the situation on behalf of the Department of Business and Trade (DBT). While the Post Office has requested £1bn, the DBT has said that this will require a full business case and Treasury approval. An initial amount of £184m ($235m) has been requested to see the project through from July 2024 to March 2026, which the Treasury has been asked to approve in June.
The plan to replace Horizon has been ongoing since 2021 at which point it was expected to cost £180m. In 2023, around 70 percent of the people working on the move were let go to help cut costs - mostly contractors - however this means that a new recruitment process for IT staff is underway.
A Post Office spokesperson said: “Working in collaboration with postmasters, we are continuing to drive forward development and expand our pilots for the introduction of a new system that is fit for the future across our 11,500 branches. We are determined to get this right and with such a large network, careful planning and extensive testing are of overriding importance ahead of full roll-out.
"We are also investing to ensure the successful operation of our existing technology, including extending commercial relationships with suppliers where this is required, as this will ensure postmasters and customers have continuity whilst we develop the new system.”
The Horizon system has been fraught with controversy, reiterated with the release of an ITV drama series Mr Bates vs the Post Office earlier this year which detailed how hundreds of postal workers between 1999 and 2015 were prosecuted due to the Horizon accounting software incorrectly reporting shortfalls in accounts.
The Horizon software was first delivered by ICL and then Fujitsu. Around 900 post office branch managers were prosecuted during the 1999-2015 period, with at least 102 of those convictions overturned by March 2024. The Post Office has thus far paid out £86m ($109.4m) in compensation.
Despite these issues, the Post Office has continued to renew expensive contracts with Fujitsu for Horizon after it has failed to produce a new solution. Fujitsu is estimated to have earned over £2.5 billion ($3.2bn) from the Horizon contract over its lifetime.
In January of this year, it was estimated that the Post Office lost £31 million ($39.43m) in 2023 to failed cloud migration efforts.
Following the release of the ITV series, Fujitsu announced that it was "voluntarily" not bidding for UK government contracts for the foreseeable future.
