The £1.15 billion earmarked to address the expenses arising from the Post Office Horizon scandal is woefully insufficient, prompting scrutiny over Fujitsu’s potential financial responsibility.
At least £1.15 billion of taxpayer money is allocated to tackle the fallout from this scandal, which saw subpostmasters and their staff wrongfully blamed for unexplained financial discrepancies attributed to computer malfunctions. Beyond the three financial compensation schemes established for impacted subpostmasters, additional costs related to legal fees, the public inquiry, and the replacement of the Horizon system make it clear that this amount is merely an initial installment.
In January 2022, Computer Weekly reported that the government had allocated £1 billion to resolve financial claims from affected subpostmasters. Later, in October 2023, an additional £150 million was added. However, this commitment came before ITV’s dramatization of the scandal, which galvanized public support and encouraged more subpostmasters to share their experiences and financial claims. New legislation has also been introduced to collectively exonerate 900 subpostmasters who were wrongfully convicted.
Fujitsu, the supplier of the Horizon software, has recently acknowledged its “moral obligation” to assist with the expenses related to the scandal. Nevertheless, it appears that the only funds changing hands between the government and Fujitsu could end up benefiting the Japan-based IT firm.
During a public inquiry hearing into the scandal, Fujitsu’s UK head, Paul Patterson, conceded that the company failed to act to prevent the wrongful convictions of subpostmasters when its software indicated unexplained discrepancies in branch accounts.
Evaluating financial compensation alone makes it evident that the £1.15 billion fund will quickly be depleted. One compensation scheme for subpostmasters with overturned convictions estimates about 900 individuals could each receive a minimum payment of £600,000, totaling around £540 million if all claims are accepted.
To date, the average settlement for these wrongfully convicted individuals has exceeded £600,000, though only a small number of claims have been resolved. Post Office statistics indicate that 55 claims from individuals wrongfully convicted have been settled for a cumulative cost of £35.43 million, averaging around £644,000 each. Many others, particularly those with longer claims, stand to receive significantly higher compensation.
The total funds are diminishing fast, and this is only one category of compensation. The Horizon Shortfalls Scheme (HSS), established in 2019 following a High Court ruling in favor of subpostmasters, has already processed 3,930 applications. Out of these, 2,262 (57%) have accepted final payments amounting to over £90 million collectively.
There is also a separate compensation scheme for subpostmasters involved in the High Court Group Litigation Order (GLO). Excluding the 63 wrongfully convicted individuals, 492 potential claimants remain, with only 238 submitting claims to date. Among these, 195 accepted offers, and 190 have received full and final payments. However, 32 individuals, including Sir Alan Bates, turned down offers they felt were grossly inadequate.
One former subpostmaster, Michael Rudkin, has yet to receive a formal offer and has been asked to prepare a business plan to evaluate the worth of his business 16 years after he and his wife’s lives were turned upside down due to the scandal. Rudkin experienced a £44,000 shortfall at his Ibstock, Leicestershire branch, resulting in his suspension. Although reinstated three months later, issues with account balancing persisted. His wife, Susan, was later prosecuted for theft based on these unexplained discrepancies and subsequently had her wrongful conviction overturned.
Rudkin expressed frustration over the ongoing negotiations, stating that simply accounting for his salary since his contract termination in 2008 would exceed a million pounds. “The negotiations are a shambles, and that’s putting it politely,” he remarked.
In addition to financial reparations, there are substantial costs related to legal counsel advising the government in its negotiations and litigation, the public inquiry, and the imperative to replace the Horizon system. Over the past decade, the Post Office has spent £256.9 million on legal fees from 15 law firms and two barristers’ chambers, as disclosed in a freedom of information request by The Lawyer.
The statutory public inquiry into the scandal has also incurred significant costs to taxpayers, tallying over £44 million between April 1, 2020, and March 31, 2024. The inquiry’s final phase is scheduled to begin in September and conclude in November, after which chair Wynn Williams will release a report.
Additionally, the endeavor to replace the Horizon system, referred to as New Branch IT (NBIT), has faced serious challenges, leading the Post Office to request an additional £1 billion in public funding from HM Treasury to overcome these setbacks. The project’s budget has ballooned from £180 million to £1.1 billion, with the rollout pushed back from 2025 to 2030. Moreover, ongoing negotiations to extend the contract with Fujitsu may incur another £180 million in costs.
The financial burden for taxpayers won’t stop there. Since the scandal emerged, former subpostmasters have shared experiences of their lives being disrupted while using Horizon’s predecessor, the Capture system, which operated from the early 1990s until Horizon’s introduction in 1999. The government is currently exploring the Capture system’s implications, and substantial claims from subpostmasters are expected, with nearly 50 prosecuted due to unexplained shortfalls.
Lastly, we must consider the exorbitant expenses incurred by taxpayers during the group litigation proceedings in the High Court from 2018 to 2019, which totaled over £100 million.
While the £1.15 billion may represent an initial payment from taxpayers, the question remains: how much financial reparations will Fujitsu provide? The Post Office scandal first came to light through Computer Weekly in 2009, detailing the experiences of seven subpostmasters, including Alan Bates, and highlighting the profound consequences of flawed accounting software—marking it as one of the most significant miscarriages of justice in British history.