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Sunak urged to suspend Fujitsu contracts after IT giant won billions despite Post Office scandal

PM under pressure to end ‘VIP’ treatment for IT giant – with almost £5bn handed over in deals since landmark court ruling on software scandal

Adam Forrest
Political Correspondent
Wednesday 10 January 2024 09:14 GMT
Fujitsu will 'possibly' have to pay compensation for Post Office Horizon victims, minister says

Rishi Sunak is facing calls to suspend new public contracts with Fujitsu, after it emerged that the IT giant has won billions in deals with the government despite knowing about its involvement in the Horizon scandal.

Postal minister Kevin Hollinrake said the government believes it has a “solution” to overturn the wrongful convictions of Post Office staff – promising an “imminent” announcement.

It comes as the spotlight turns on the company at the centre of the scandal, after Fujitsu’s faulty accounting software Horizon helped lead to the conviction of more than 700 Post Office branch managers.

Former Tory cabinet minister Nadhim Zahawi said Fujitsu should no longer get “VIP” treatment for contracts, amid growing questions about why the government has not severed ties with the firm.

And senior Labour and Lib Dem MPs have called for a “moratorium” on all new contracts with Fujitsu until the company is held accountable for its role in the scandal.

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

And Fujitsu has won £4.9bn in public-sector deals since a 2019 court ruling which found its Horizon system was badly flawed, according to the Financial Times.

ITV drama thrust Post Office scandal back in spotlight (ITV)

Around 43 contracts are still in operation – worth a total of £3.6bn – including the contract for the Post Office Horizon system and the government’s flood warning system.

Fujitsu was given contracts through “VIP” priority lanes, the so-called “framework agreements”, which help government sign deals with preferred suppliers, the i reported.

Mr Zahawi said that the company should be suspended from any priority lanes. “Fujitsu has not been properly held to account for this major scandal. They need to bear their part of the responsibility for this debacle,” he told the newspaper.

Senior Labour MP Liam Byrne, chair of the business select committee, said ministers “must not reward failure any further”. He added: “It’s vital there’s now a moratorium on new contracts for Fujitsu until we’ve got to the bottom of this terrible miscarriage of justice.”

Bosses at Fujitsu have been called to answer questions from the business committee next week – but have not yet said whether they will attend. Mr Byrne said it was “vital that Fujitsu confess how they got it so wrong”.

Labour MP Kevan Jones, a leading campaigner on the issue, said Fujitsu should not be allowed to win new contracts until it properly explained “its role and responsibilities” in the scandal.

Sarah Olney, the Liberal Democrats’ spokesperson for the Treasury, said suspending contracts until the end of the public inquiry was the “very least” the government could do.

Sunak is under pressure to help overturn Post Office convictions (PA / PA Archive)

It would be very difficult for the government to end its involvement with Fujistu. The company provides IT services to multiple government departments including the Home Office, the Foreign Office, Defra and the Ministry of Defence.

These services include providing the Police National Computer – which stores individuals’ criminal records – and the government’s flood warning system, as well as the national emergency alerts system launched in March 2023.

Fujitsu does significant work with HMRC, with contracts worth more than £1bn including a deal awarded in February 2022.

No 10 said on Tuesday that Fujitsu would be “held accountable”, legally or financially, if the public inquiry finds that the company blundered in the Horizon scandal.

But the PM’s spokesperson did not say the government would stop awarding contracts to the company if it was found to be at fault – saying only that the conduct of companies “in general” would be considered as part of the procurement process.

Asked if Fujitsu should be prosecuted, postal minister Mr Hollinrake said it was important to establish “exactly who is responsible, individuals or organisations” at the public inquiry before any action could be taken – including possible prosecutions or “financial sanctions”.

Mr Hollinrake told Sky News on Wednesday that “we’re very, very close” to an announcement on overturning Horizon convictions – saying the government had arrived at a solution.

It comes after justice secretary Alex Chalk on Tuesday said “active consideration” was being given to bringing forward legislation aimed at overturning at least 700 convictions en masse.

Justice secretary Alex Chalk has been in talks to overturn convictions (PA Wire)

Mr Hollinkrake insisted that the government had been considering such an approach before the ITV drama thrust the issue back into the spotlight. Asked whether there is evidence of that, Mr Hollinrake said: “It’s not something we’d put in public,” he told BBC Radio 4.

The independent Horizon Compensation Advisory Board will also meet later. The advisory board, whose members include long-time campaigners Kevan Jones and Tory peer Lord Arbuthnot, have called for Post Office convictions to be “overturned”.

Mr Hollinrake could join the lunchtime meeting – with attendees likely expecting an update on any plans to quash convictions and efforts to accelerate compensation payments.

The Criminal Cases Review Commission (CCRC) would normally look at the individual convictions and potentially send them to the Court of Appeal. But the unprecedented scale of the Horizon scandal could require the extraordinary step of blanket legislation.

A Fujitsu spokesman said: “The current Post Office Horizon IT statutory inquiry is examining complex events stretching back over 20 years to understand who knew what, when, and what they did with that knowledge.

“The inquiry has reinforced the devastating impact on postmasters’ lives and that of their families, and Fujitsu has apologised for its role in their suffering.”

They added: “Fujitsu is fully committed to supporting the inquiry in order to understand what happened and to learn from it. Out of respect for the inquiry process, it would be inappropriate for Fujitsu to comment further at this time.”

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