According to Computer Weekly, taxpayers may be facing a £1bn bill for the Post Office to replace its problematic Horizon IT system. However, government experts reviewing the funding request have determined that the project is currently not feasible.
The plan to develop a new system to replace Horizon and replace its supplier, Fujitsu, is behind schedule, lacks quality, and is over budget, as per auditors representing the Department for Business and Trade (DBT).
Despite the challenges faced by the project, Post Office management decided to cut its budget and reduce the workforce by 70% last year. Now, they are in need of recruiting hundreds of IT professionals to support the in-house development, a goal deemed unrealistic within the required timeframe.
The Post Office has requested nearly £1bn in additional funding from HM Treasury to complete the project as its current funding is set to run out next month. The funding approvals are in place to see the project through until the general election on 4 July.
The Treasury typically does not approve additional funds for projects given a “red” rating by government auditors, like the Horizon replacement. Therefore, the Post Office will need to demonstrate to the upcoming government that they can get the new system back on track to receive the necessary funding.
A Post Office spokesperson stated that they are currently working closely with postmasters to develop a new IT system to replace Horizon and are conducting pilots in local regions. They received a £103m commitment from the Department for Business and Trade in late 2023 for the Horizon replacement program and have submitted a new funding request to continue the investment.
The Horizon system was associated with accounting errors that led to innocent subpostmasters being wrongly prosecuted in what became known as the Post Office scandal. Replacement work for the Horizon system began in 2021 under the Strategic Platform Modernisation Programme (SPMP), with the new platform known as New Business IT (NBIT). Last year, bonuses for Post Office executive directors were linked to achieving SPMP targets, highlighting the importance of the program’s success.
Amidst challenges faced by the project, including a decrease in workforce and issues with quality and budget, the Post Office has requested additional funding of nearly £1bn. An IPA review concluded that the successful delivery of the Horizon replacement project seems unachievable at its current state. As a result, the project will be overseen by the Government Major Projects Portfolio for the first time in its history.
The Post Office has acknowledged the issues highlighted in the IPA review and has committed to addressing them. The NBIT system is being developed to run on Amazon Web Services cloud and has been trialled at select branches. Fujitsu’s contract to support the Horizon system is set to expire in March 2025, but it is anticipated that an extension will be necessary.