The Horizon scandal public inquiry has revealed that errors by the Post Office’s IT procurement team have resulted in multimillion-pound losses for taxpayers.
During the recent hearing, it was disclosed that a significant procurement error led to the cancellation of a planned cloud migration, a key element of the Post Office’s New Branch IT (NBIT) initiative, after millions had already been spent.
Saf Ismail, a subpostmaster and non-executive director at the Post Office, testified: “The current procurement situation at the Post Office is rather chaotic.” He pointed out that £35 million was wasted on an abandoned effort to transition from its data centre in Northern Ireland to the cloud, ultimately yielding only a new air conditioning system as a result.
Ismail explained that the complex nature of the cloud migration in Belfast led to its cancellation. Instead, funding was redirected to reinforce the existing data centre, a decision confirmed in a board meeting, according to his statement. He mentioned that the business plan for the 2024/25 financial year indicated that the costs for the Belfast Exit programme amounted to £19.7 million in 2021/22 and £15.1 million in the following year. He lamented: “That project was scrapped after a considerable amount of time and resources were wasted, and the Post Office’s data centres remain physically located in Belfast to this day. It’s a disaster. The business squandered nearly £35 million on the NBIT initiative aimed at transitioning to a cloud-based system, only to be informed by Amazon that it was unfeasible. The only tangible outcome from our expenditure, which was discontinued in January 2013, was a new air conditioning system for our Belfast data centre. This is truly disappointing and reflects a lack of accountability.”
Further procurement missteps included premature hardware purchases, as reported by Computer Weekly earlier this month. Consequently, the Post Office now possesses millions of unused hardware units in warehouses that may remain idle for years. Much of this equipment is unsuitable for its intended purposes, would necessitate unexpected renovations in branches for installation, and might become outdated before deployment. Testimony during the public inquiry confirmed that these errors stemmed from a hasty procurement process aimed at securing a 5% discount.
Ismail also criticized the procurement team for attempting to negotiate 10-year contracts, which deviates from standard practice, in an effort to “avoid doing procurement again.” He stated: “This procurement-driven approach is counterproductive and lacks commercial common sense. Unfortunately, it has resulted in wasted taxpayer funds on numerous occasions.”
The NBIT project, which was intended to replace Horizon by 2025, was announced in May 2022 but has since faced significant challenges. The Post Office has requested an additional £1 billion of public funding from HM Treasury to address these issues.
When Computer Weekly inquiries were made regarding the flawed hardware procurement, a Post Office spokesperson declined to comment, stating that individuals like IT staff Simon Oldnall and Chris Brocklesby would be providing evidence to the inquiry, which would be the appropriate forum for addressing these concerns.
The Post Office scandal was first uncovered by Computer Weekly in 2009, highlighting the experiences of seven subpostmasters affected by the Horizon accounting software issues, which contributed to one of the largest miscarriages of justice in British history.
For more detailed insights, you can read:
– What you need to know about the Horizon scandal
– ITV’s documentary – Mr Bates vs The Post Office: The real story
– Post Office and Fujitsu’s negligence and incompetence leading to a significant burden on taxpayers.