Fujitsu is poised to secure contracts exceeding £500 million from HM Revenue and Customs (HMRC) this year, reflecting the company’s persistent influence in the UK public sector, despite its involvement in the Post Office scandal. HMRC represents a significant portion of Fujitsu’s UK government revenue, with additional contracts worth hundreds of millions in various public sector departments currently held or underbid by the company.
These substantial figures arise even as Fujitsu has implemented a voluntary pause on pursuing new government contracts, a decision made shortly after the airing of ITV’s dramatization of the scandal. The company has yet to fully acknowledge its role in addressing the reputational and financial damage caused by its technology, which led to wrongful prosecutions of subpostmasters due to software errors it had been aware of.
James Arbuthnot, a notable advocate for victims of the Post Office scandal, emphasized the need for Fujitsu to be eliminated from any influence within the UK. He argued that if Fujitsu were an individual, it would face severe legal consequences for its actions, which went far beyond mere negligence in the prosecution of subpostmasters.
Government statistics indicate that HMRC spent over £240 million on Fujitsu last year, with expectations for this year potentially doubling that amount. This trend has raised concerns regarding HMRC’s dependency on Fujitsu, prompting allegations of the company being effectively treated as a “cash cow” by the government.
His Majesty’s ‘cash cow’
Although reports suggested that Fujitsu would be replaced in HMRC’s Traders Support Service, internal discussions revealed that Fujitsu is actively bidding for a new £370 million contract and is optimistic about renewing its existing £240 million contract from 2020.
If Fujitsu was not a company but an individual, it would be facing years, possibly decades, in prison Peer James Arbuthnot
Additionally, a direct agreement for hardware and cloud procurement, known as North Star, valued at over £200 million, has emerged with no competitive tender process involved. HMRC is also extending its Computer Environment for Self-Assessment (CESA) contract, worth nearly £60 million, where Fujitsu remains the current provider.
The company’s influence extends beyond HMRC, with a notable example being a £40 million extension of its Horizon contract with the government-owned Post Office. Moreover, reports suggest that numerous potential contracts with HMRC, along with additional deals with the Home Office and the Ministry of Defence, are in the pipeline.
‘Hollow’ gesture
The ongoing contract negotiations occur despite Fujitsu’s self-imposed bidding pause, announced in January of the previous year after the Post Office scandal received extensive media attention. Critics, including former MP Kevan Jones, have labeled this pause as insincere, arguing that it only applies to new contracts while Fujitsu continues to secure extensive public sector work.
Having admitted its central role in the Horizon scandal, Fujitsu is hiding behind the outcome of the inquiry to continue making multimillion-pound profits from government contracts Peer Kevan Jones
Jones reiterated that the revelations highlight the superficiality of Fujitsu’s claims regarding its contract bidding. He contended that the company has profited immensely from government contracts while failing to contribute to the compensation fund for scandal victims. He advocates for a complete suspension of all Fujitsu contract negotiations until the company commits to compensating the victims of the Horizon error.
When questioned about the status of its bidding pause, Fujitsu stated it is collaborating with the UK government to ensure adherence to the voluntary restrictions placed during the ongoing inquiry. The inquiry is expected to yield findings later this year.
Fujitsu is also deferring discussions regarding its contributions to the Horizon scandal’s costs. In response to inquiries, the company indicated it would work with the UK government on appropriate actions tied to the inquiry’s findings and reiterated its apologies to affected subpostmasters and their families.
Heavy reliance
Questions have been raised regarding the fairness of awarding lucrative contracts to Fujitsu before the company has made a commitment regarding its financial responsibilities related to the Post Office scandal. Concerns have also been voiced regarding whether the government’s continued reliance on Fujitsu is detrimental to victims still awaiting fair compensation.
A government spokesperson noted that accountability for the Horizon scandal is essential and that actions will be based on the inquiry’s conclusions. The spokesperson highlighted that Fujitsu determines its own limits on public contract bidding, emphasizing that the government is monitoring the company’s conduct and performance.
Arbuthnot stressed the urgency of diminishing Fujitsu’s influence in the UK, criticizing the government’s habitual renewal of contracts with the company. He posed a rhetorical question, suggesting that if the roles were reversed, would the government still consider awarding substantial contracts to a company with such a controversial history?
The issue will be addressed during a debate in the House of Lords regarding the progress of the Post Office Horizon compensation scheme and Fujitsu’s involvement on Thursday, February 27.
The Post Office scandal was brought to light by Computer Weekly in 2009, detailing the experiences of multiple subpostmasters and the significant injustices caused by the Horizon accounting software, a situation that has since been recognized as one of the most egregious miscarriages of justice in British history.
