Post Office Horizon replacement undertaking labelled ‘unachievable’ as taxpayer bill reaches £1bn
Taxpayers are going through a £1bn bill for the Post Office to change its controversial Horizon IT device, Computer Weekly has learned – however authorities consultants despatched in to evaluate the funding depend on possess reported that the serious undertaking is at the 2nd unachievable.
The opinion to create a replacement for Horizon and bag its vendor, Fujitsu, is working expressionless, is lacking quality, and is over funds, in response to auditors despatched in on behalf of the Division for Industrial and Commerce (DBT).
And yet, no topic the total issues within the undertaking, Post Office management final yr lower its funds and diminished the change of folks working on it by 70% – and it now desires to recruit hundreds of IT mavens to enhance the in-condominium pattern, an just which consultants tell is unrealistic within the timescale they’re required.
The Post Office has asked HM Treasury for nearly £1bn in extra money to total the undertaking. Its present funding runs out next month, however Computer Weekly understands that approvals are in pronounce to stare the undertaking during the duration leading as much as the regular election on 4 July.
The Treasury on the total would not approve extra spending for tasks that, just like the Horizon replacement, possess been given a “red” ranking by authorities auditors – which technique the Post Office ought to persuade the following authorities it is going to come by the original device relieve heading within the accurate direction if it is to get the funding it requires.
A Post Office spokesperson acknowledged: “We are at the 2nd working closely with postmasters to point out the invent, possess, coaching, discovering out, and piloting of a brand original IT device to change Horizon and are showcasing the device straight to postmasters in their native quandary in a series of pilots.
“Post Office received a £103m funding commitment from the Division for Industrial and Commerce for its Horizon replacement programme in expressionless 2023. In step with plans agreed at the 2nd it has also now submitted a brand original lengthy-term depend on to have an effect on definite funding is on hand for it to continue this investment. Post Office and the Division for Industrial and Commerce are working on this most contemporary depend on, and we can verify that no extra funding is required within the pre-election duration.”
Industrial case
Horizon used to be responsible for phantom accounting losses that led to hundreds of innocent subpostmasters being wrongly blamed and prosecuted in what became known as the Post Office scandal.
Work to change the 25-yr-dilapidated Horizon device began in 2021. The original platform being developed in-condominium by the Post Office is named Unusual Industrial IT (NBIT), and the broader undertaking is named the Strategic Platform Modernisation Programme (SPMP).
In 2023, 10% of the bonuses payable to Post Office govt directors beneath their non permanent incentive opinion had been basically basically based on reaching a goal of SPMP being 80% delivered – a reflection of the importance of the success of the programme.
While the board used to be assessing its choices final yr on how finest to transfer forward as soon as the issues within the undertaking became definite, they chose to lower spending to manipulate non permanent payments, and as a result 70% of the oldsters working on the undertaking had been let journey – largely contractors, in preference to workers. This also led to a bargain in expertise and data among the undertaking crew, and hit morale among folks who remained. A recruitment course of for label original IT crew is already underway.
Sources tell there has also been a crumple in trust between the Post Office change groups and the modernisation programme, which has been working largely in a silo. Key roles within the programme are now being stuffed by gift workers from at some level of the change.
In consequence, the Post Office approached DBT – which owns the authorities relationship with the publicly owned organisation – requesting honest about £1bn in extra funding, having spent £187m on the programme already.
DBT knowledgeable the Post Office that level of investment would require a full change case and Treasury approval. An initial tranche of £184m used to be urgently requested to stare the undertaking through from July 2024 to March 2026, which the Treasury has been asked to approve in June.
The total bill for changing Horizon will doubtless be £1.1bn – a mountainous elevate on the £180m that had first and important been forecast when the undertaking kicked off in 2021.
The authorities has beforehand dedicated £1bn to pay for compensation for victims of the Post Office Horizon scandal. Fujitsu is believed to possess made £2.5bn from working Horizon for the previous 25 years.
Serious tasks
Following the funding depend on, DBT and the Treasury contacted the Infrastructure and Initiatives Authority (IPA) – a specialist crew within the Cabinet Office that audits and shows important Whitehall tasks considered serious to the functioning of public companies and products.
The Post Office used to be knowledgeable that an IPA overview would be required earlier than any change case would be authorized. The overview used to be performed in April and gave SPMP its highest “red” warning ranking – which technique “a success offer of the programmes to carry the Horizon replacement to time, fee and quality appears to be unachievable”.
The overview concluded that, “There are important points which, at this stage, originate not look like manageable or resolvable entirely within POL [Post Office Limited]. The programme/undertaking would per chance well honest need re-baselining and/or its total viability reassessed.”
The Treasury would not on the total approve extra funding for a change case given a red ranking by the IPA except it is confident the undertaking will toughen.
The IPA reviewers acknowledged they had been “supportive of the initiatives that programme leadership has prioritised,” however added it is too early to “stare the evidence that SPMP has been became spherical”.
In consequence, SPMP is being brought into the Govt Predominant Initiatives Portfolio – the self-discipline of excessive-profile tasks self-discipline to ongoing monitoring by the IPA. It is the fundamental time within the 25-yr historical previous of Horizon that the Post Office has been forced to possess its IT pattern overseen by Whitehall.
Governance and stages of expertise inquisitive concerning the undertaking had been identified as a key quandary for improvement, and Computer Weekly understands that DBT intends to fee external consultants to behavior extra opinions of the Horizon replacement programme and what’s vital to bring it relieve heading within the accurate direction.
The IPA reviewers reported “unique undertaking that the rising numbers of folks interested by governing these programmes weren’t sufficiently skilled in technical matters to make your mind up on selections and impact judgements on threat.”
Board-level points
The IPA also identified wider board-level points that, while exterior of the scope of its monitoring, will would per chance well honest peaceable be addressed if the undertaking is to do success.
“Programme leadership is taking fearless selections and spearheading POL into very original areas of digital change which it is not definite has been fully understood or supported by the POL board, and at a time the board will possess been preoccupied on other matters,” acknowledged the IPA overview crew.
“To decide to alter accurate into a digital-first retail organisation is a vital undertaking and requires a metamorphosis of the organisation and the method it operates. Right here’s not in scope for any of the Horizon replacement programmes however will would per chance well honest peaceable be addressed by the POL board.”
The Post Office is understood to possess fully permitted the findings of the IPA overview, and knowledgeable the IPA that “the points raised will doubtless be addressed fully”.
Computer Weekly reported in December final yr that rising payments and a lengthening timeline had forced the authorities to hand the Post Office an additional £103m in direction of its undertaking to change Horizon, which used to be ensuing from be performed in 2025.
The NBIT device is being developed to proceed within the Amazon Web Companies and products cloud atmosphere. It has been trialled at two Post Office branches, one in Leeds and one in Aldwych, London – a division that is next door to the constructing that hosts the general public inquiry into the Post Office scandal. Extra pilot branches are ensuing from be rolled out initiating in expressionless 2024.
Hardware for the roll-out has already been bought and is sitting in a warehouse.
Fujitsu is at the 2nd diminished in dimension till March 2025 to enhance the Horizon device that it developed. Computer Weekly reported final month that an additional extension to that contract with Fujitsu is “inevitable”.
Now not the fundamental time
Right here’s not the fundamental time the Post Office has tried to transfer a ways off from Horizon. IBM began work on a £100m undertaking for a replacement device in 2015, however the complexity fervent forced the Post Office relieve to Fujitsu.
Horizon is a retail and accounting device venerable in Post Office branches, which used to be offered in 1999 to change basically manual accounting practices. First and important from ICL, which used to be bought by Fujitsu in 2002, it used to be rolled out at some level of the Post Office division network from 1999.
Horizon’s introduction led to a sudden elevate in subpostmasters reporting unexplained shortfalls in their accounts, for which they had been blamed. The Post Office knowledgeable every of them that no person else used to be experiencing issues and covered up the pc errors. A High Court docket case in 2019 proved that bugs in Horizon brought about the phantom accounting losses for which hundreds of subpostmasters had been wrongfully prosecuted.
The Post Office scandal used to be first exposed by Computer Weekly in 2009, revealing the reports of seven subpostmasters and the issues they suffered ensuing from the accounting application (stare timeline of Computer Weekly articles concerning the scandal below).
• Also be taught: What you possess to know concerning the Horizon scandal •
• Also stare: ITV’s documentary – Mr Bates vs The Post Office: The valid epic •
