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Call out failure, get Fujitsued

The IT firm that sued the government for its own poor work also supplied the faulty equipment that saw innocent workers jailed for theft. How were they rewarded? With more state contracts, explains SOLOMON HUGHES

COMPUTER corporation Fujitsu are involved in one of the worst miscarriages of justice of our times — the persecution of innocent subpostmasters, wrongly accused of theft.

This is not the only public scandal that which has involved Fujitsu — but thanks to the ongoing enthusiasm for privatisation and their own political lobbying, Fujitsu is still a favourite supplier to the public sector.

This month 39 subpostmasters, who had been found guilty of fraud and theft, had their convictions overturned at the Court of Appeal. They are among more than 500 subpostmasters who were wrongly prosecuted for fraud in the local post offices they ran.

The Post Office persecuted these innocent women and men, accusing them of stealing tens of thousands from their branch accounts. The Post Office made the claims — which were completely false — because of their faulty computerised accounts system called Horizon, which was supplied by Fujitsu.

You can read the full story of this David v Goliath battle in Private Eye magazine’s report Justice, Lost in the Post by Richard Brooks and Nick Wallis which is available for free on the Private Eye website — they helped uncover this massive injustice.

Post Office management are facing some criticism for persecuting the subpostmasters, as have government ministers who backed them up. But I want to look at Fujitsu, who are also arguably partly responsible for this terrible injustice.

International Computers Limited (ICL) were a British computing “champion” set up by a Labour government in 1968. They began working on the Horizon system for the publicly owned Post Office in 1996. By the time Horizon was rolled out in 1999, ICL was part of computer multinational Fujitsu and the Post Office was being directed by New Labour and Tory governments to act more and more like a private corporation.

Fujitsu’s Horizon did not work. Immediately subpostmasters found errors in their computerised accounts. Post Office management insisted subpostmasters were stealing the “missing” money created by Horizon’s computer bugs.

Over decades the Post Office prosecuted over 500 innocent subpostmasters, humiliating these pillars of the community. Some went to prison. A few even took their lives.

The subpostmasters formed a campaign, fighting a long hard battle that is now bearing fruit.

Post Office top management are completely implicated in this disgraceful episode, as are a series of government ministers who ignored the campaigners and didn’t stop the publicly owned Post Office to stop acting like a cruel and crooked private corporation.

But arguably so too are Fujitsu: they supplied the big, bug-filled IT system — for around £1 billion. Their engineers worked closely with the Post Office management as they denied Horizon was responsible for errors and persecuted subpostmasters.

Fujitsu supplied “expert” witnesses to Court for the trials of the subpostmasters to claim — quite wrongly — that “Horizon will accurately record all data that is submitted to it and correctly account for it.”

Fujitsu had good reason to avoid admitting Horizon’s failures. They were getting lots of other big public-sector contracts, of which Horizon was one of the most profitable. Other big Fujitsu contracts were in trouble, so admitting Horizon was faulty could cause big problems for the firm.

Horizon had been conceived as a PFI scheme with the Department for Social Security to pay benefits via a swipe card in post offices called Pathway in 1996. The government cancelled the scheme in 1999 following “continual slippage” of timescales.

After £700m of government expenditure, ICL-Fujitsu’s benefits card failed — but Fujitsu were allowed to keep working on the linked computerisation of Post Office counters, which became Horizon.

So Horizon was born in one public-sector failure and became another.

Fujitsu, which fought hard to be a top public-sector supplier, also had another public-sector failure, which may have made the firm want to ignore problems with Horizon

In 2002 Fujitsu won big contracts on New Labour’s NHS National Programme for IT (NHSPfIT). This was supposed to digitise NHS communications and records. NHSPfIT largely failed and Fujitsu were kicked off the contract in 2009, as the government claimed their systems were not ready and working on time.

Fujitsu responded by suing the government.

A clause in the contract said that, in the event of disagreement, Fujitsu could ask the London Court of International Arbitration (LCIA) to decide who was right. The LCIA is not an actual court, but rather a secretive, privately run, business-friendly arbitrator.

It was a big mistake for the government to give the LCIA the final word. Unlike real courts the LCIA does not report its decisions, but Fujitsu reportedly won its claim against the government: company accounts suggest they got all but £71m of their £700m claim .

It looks like an ugly picture: a firm behind a series of public-sector failures, which is implicated, morally at least, in a major injustice that saw innocent people go to jail — and which sued the government for hundreds of millions of pounds, taking money out of the NHS budget for an IT system that failed.

And yet the government is still handing Fujitsu contracts worth hundreds of millions covering tax, post-Brexit customs, defence and more.

Mostly this is because the government is still heavily focused on privatising services and does not have the capacity for running its own IT systems. The government finds it easier to sign single deals with large contractors and there are not many IT companies with big capacity like Fujitsu.

As with all privatisation, there is also an element of lobbying. Until 2019, Fujitsu UK’s chairman was Simon Blagden, a major Tory donor who gave party around £200,000 — Fujitsu say this was his personal money and not connected to the firm.

More directly, for many years Fujtitsu has paid both Tory and Labour parties to have a Fujitsu Lounge slap bang in the middle of their party conferences. When party conferences resume this year, I hope any MP sitting comfortably in the Fujitsu lounge gives a thought to the subpostmasters.

I asked Fujitsu about their responsibility for the subpostmasters persecution. They told me: “Fujitsu was not a party to the recent Court of Appeal proceedings relating to subpostmasters’ criminal convictions and so is not in a position to comment. We are continuing to co-operate with the ongoing Post Office Horizon IT inquiry.”

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