Fujitsu’s public sector operations in the UK have experienced losses exceeding £50 million in sales this year, largely due to the company’s involvement in the Post Office scandal surrounding the Horizon IT system.
During a recent company conference call, Dave Riley, the head of Fujitsu’s UK public sector division, informed employees that the media’s focus on the scandal has resulted in a loss of potential revenue ranging from £50 to £60 million for the current year. Following intensified media attention in January, particularly after the premiere of the ITV drama “Mr Bates vs the Post Office,” Fujitsu’s UK subsidiary adjusted its business outlook for the year, a decision made in collaboration with its headquarters in Japan.
Riley mentioned that the revenue target for the UK public sector is now set at £399 million, a decline from the previous year’s estimate of £450 million to £460 million. “Let’s attribute that £50 million to £60 million gap to the impact of media coverage and the ongoing public debate,” he stated.
To tackle these challenges, Fujitsu’s Japanese headquarters has provided £200 million to the UK branch. Riley emphasized the company’s responsibility to maintain operations and continue pursuing public sector contracts. In January, Paul Patterson, Fujitsu’s European CEO, communicated to MPs and the Post Office public inquiry that the company felt a “moral obligation” to help with the over £1 billion costs incurred by UK taxpayers due to the Horizon scandal.
Despite this acknowledgment, almost eight months later, Fujitsu has yet to contribute any funds to mitigate the taxpayer burden but may benefit from an approximately £180 million contract extension with the Post Office. This extension is necessary to maintain support for the Horizon system for up to five additional years, as efforts to replace the controversial IT solution have faltered.
Riley also addressed employee dissatisfaction regarding the company’s decision not to implement a pay increase this year, stating, “While it’s understandable for employees to feel disappointed about the pay situation, we have to consider what the business can afford amid the current circumstances.”
An anonymous Fujitsu employee expressed frustration, saying, “The company’s priorities seem to favor shareholders over subpostmasters, employees, and customers.”
When asked for a comment, Fujitsu declined to provide any response to the media inquiry. Following the airing of the ITV drama, scrutiny of Fujitsu has intensified. The company has been supplying the Horizon software to the Post Office and subpostmasters since 1999, a system that contained significant defects leading to numerous accounting discrepancies. These errors resulted in subpostmasters being unjustly blamed, with many facing wrongful prosecution. Fujitsu assisted the Post Office in concealing knowledge of these errors and instead placed the blame on the users.
From 1999 to 2015, hundreds of subpostmasters and branch staff were prosecuted based on evidence from Fujitsu’s faulty Horizon system, with the company supporting the Post Office’s actions and claiming in court that the system was not responsible for the discrepancies, despite being aware of potential flaws.
Fujitsu’s public sector operations in the UK, a legacy from its acquisition of ICL in the late 1990s, have seen a significant downturn since the Post Office scandal came to light in January. This decline is attributed partly to a voluntary bidding ban and organizations distancing themselves from Fujitsu. Despite these challenges, the company continues to seek opportunities to secure public sector contracts in the UK.
The scandals surrounding the Post Office were initially uncovered by Computer Weekly in 2009, highlighting the struggles of seven subpostmasters and the consequences they faced due to the Horizon software, marking one of the most significant miscarriages of justice in British history.
– Additional Reading: Learn more about the Horizon scandal.
– Watch ITV’s documentary “Mr Bates vs The Post Office: The Real Story.”
– Explore the implications of the Post Office and Fujitsu’s actions leading to a massive taxpayer bill.