Imagine you run a small shop for a big reputable company. One day, the company tells you cash is missing from the till and you have to pay it back. The problem is, you haven't stolen the cash and have no idea what happened. You tell them you're innocent but they ignore you. The missing cash claims keeps on happening and goes up to tens of thousands of GBP. Eventually you're forced to dig into your personal savings to pay back the missing cash, otherwise they will take you to court and send you to prison. After that, they terminate your contract, and you're left with nothing. No job. No money. No future.
The Background
This is the Post Office Scandal and has dominated the UK news in recent weeks.
In UK, there are over 11 thousand post offices. Most are run by small independent business owners on a franchise from the Post Office, a government owned organisation. These owners are called sub postermasters (mistresses). Often the post office may be located inside a general store and is an important part of the community particularly in rural areas.
In 1999, the Post Office installed a new accounting system called Horizon in all the post offices. Shortly after, sub postmasters found that Horizon kept on flagging up cash discrepancies ie cash was missing from the business. When the sub postmasters called the Horizon helpline, they were told no one else had reported that problem. That they must have done something wrong, and they have to make good the missing cash.
In reality, over 3500 sub postmasters had the same problem over a 15 year period but they were all told they were the only one. The Post Office accused all these people of fraud and false accounting even though they all said they were innocent.
Based on the sub postmaster's contract with the Post Office, they are responsible for any losses or missing cash. The sub postmasters had no option and had to pay back the missing cash from their savings, retirement pensions or even sell their home. Some stood their ground and refused to pay back the missing cash, the Post Office prosecuted 983 sub postmasters. Some of them were given suspended sentences or community services, and some were sent to jail, including one who was pregnant at that time. This ruined the lives of over 3500 families - prison sentences, criminal records, contract termination, loss of savings, loss of home, bankruptcy, PTSD, divorce, ill health, and even suicide.
Exactly what happened?
Incompetence
Greed
Corporate cover up
Incompetence - Horizon
The Horizon accounting system was developed by a UK computer firm called ICL in 1999. They were a subsidiary of the Japanese technology firm Fujitsu. In fact, in my last job, my old firm always came up against Fujitsu when bidding for IT outsourcing contracts. This is one of the reasons why this scandal frustrates me so much. Not only because it wrecked so many people's lives, but also because it's due to an IT outsourcing system, an industry that I used to work in.
The Horizon contract cost the Post Office, and therefore the UK government, and hence the taxpayers nearly £1 billion over its lifetime, and it is still ongoing. It was such a massive high profile contract back in 1999 and was described as the "largest non military IT system in Europe".
Unfortunately, on the technical level, Horizon just wasn't fit for purpose. Put simply, it was a shit system from the onset. The ICL software team found a lot of bugs and they were firefighting to fix things even after the system was rolled out into the post offices. In particular, they found serious issues with the cash account which generated wrong figures. It would show a sub postmaster's account to be short of cash when it wasn't. These issues were the first of the underlying causes of the sub postmaster's ill fate and eventual downfall for many of them.
Greed - ICL and Fujitsu
ICL in UK were a bit like IBM in USA. They were a strong reliable computer firm trusted by the government to deliver big IT services. In the 80s, they were acquired by Fujitsu a major IT company in Japan.
At around the same time as winning the Horizon contract, Fujitsu wanted to float ICL on the UK stock market. The listing was worth £5bn and it's fair to say that the floatation's success hinged on the Horizon contract's success. Everyone from ICL and Fujitsu, particularly the senior executives were determined that the Horizon project could not fail.
By 2000 the dot com bubble happened, and many IT companies went bust. The ICL stock floatation was canceled. Things were not looking good for the company and the success of Horizon was even more important now to keep the company alive. This meant delivering the project on time and budget. Anybody that works on large scale projects will know this never happens.
Some of the ICL technical team suggested to senior management that Horizon should be rewritten because there were too many bugs and errors. Rewriting the software would cost more money and time and ICL could not let this happen. They continued to roll out Horizon to the post offices knowing the problems existed. This is no different from a restaurant continuing to serve food to customers knowing it will poison them.
Cover up - Post Office
The Post Office always had a culture of mistrusting their sub postmasters, that the latter were stealing from the Post Office. Before the computerised Horizon system was installed, transactions were done on paper making it difficult for the Post Office to prove their case.
After Horizon, the system flagged up all these cash shortfalls, confirming the Post Office's suspicions. They were right all along, the sub postmasters were stealing. The computer said so, and the computer is always right. And thus began the endless and ruthless prosecutions
The Post Office relied on data from Horizon to prosecute the sub postmasters. Data was provided by Fujitsu, who knew there were bugs in the system but nevertheless insisted that Horizon was correct. The Post Office turned a blind eye to this as Fujitsu told them what they wanted to hear. They used evidence that would help their case, and held back information that didn't. Over the 15 year period, the Post Office prosecuted on average one sub postmaster every week.
By 2009, many sub postmasters realised something was very wrong and created a Justice for Subpostmasters Alliance (JFSA). By this time, the Post Office also knew Horizon wasn't as robust as Fujitsu claimed to be. But they were too deep into the fallacy. The cover up and lies continued even when they were forced to call in independent forensic accountants in 2012.
What happened next?
In 2017 the JFSA took the Post Office to court. The Post Office continued to be very difficult but in the end agreed to an out of court settlement of £58m. That sounds like a lot of money for the 555 sub postmasters who took part in the legal action. But once you take away the legal fees, each sub postmaster pocketed about £20k. That's hardly enough to cover the cash shortfall that the Post Office hounded them for years, let alone the consequently loss they suffered. The main point was that the Post Office still did not admit to any liability.
The upside of the court case, was that it was now demonstrated Horizon was faulty. And despite the Post Office not admitting it, they were wrong to accuse the sub postmasters.
In 2021 a public statutory inquiry was set up. They are independent from the government but have legal powers to call people to give evidence. The other week, I watched as the European head of Fujitsu sat in front of the inquiry. He admitted that they, and the Post Office knew about all the bugs from day one, and the Post Office had removed them from the information used to prosecute the sub postmasters.
As of Fujitsu's last year annual report, there was no mention of their involvement in the Post Office scandal as a business risk, and they had made no financial provisions for it. This showed that they didn't think they were responsible at all. During the inquiry, Fujitsu finally apologised, and acknowledged they had a moral obligation to contribute to the sub postmasters' compensation. Note he said 'moral' and not legal here. I wouldn't be surprised if somewhere down the line, they have a legal responsibility as well. I hope that day will come.
During the public inquiry, we found out how the Post Office tried to cover up everything. How they continued to prosecute sub postmasters knowing the evidence they used were flawed. That they tried to sack the independent forensic accountants in 2014 to protect themselves when the accountants uncovered issues with Horizon. Then they set up a mediation scheme to make it look like they were making an effort to make good things with the sub postmasters. Yet all along, they continued lying to everyone, include the government.
Did the sum postmasters get justice in the end?
25 years is a long time to be accused of something you didn't do and not getting justice. Out of those 3500 accused, some has since died, taking their shame, grief, anger, trauma to grave.
So far, 95 sub postmasters had their convictions over turned and were exonerated. Getting your conviction overturned is a long process and one has to take their case to the court and go through the whole trial again. It can only be done on a case by case basis.
The government has now said they will pass new laws where those convicted will have their crimes overturned and compensated. It will be much quicker than going through the courts. £1bn has been set aside to compensate all the sub postmasters who were effected. So far £138m compensation has been paid to more than 2700 sub postmasters.
After thought
I first became aware of the Post Office scandal around 2022 when the public inquiry started. It caught my attention because it was was related to my previous line of work - IT outsourcing. Back then, I remember there were scant information about who the IT provider was, something that I was particularly interested to find out. It took me a while until I found Fujitsu's name, they was barely in the media. In fact the whole case was still quite low profile.
That was until the beginning of this year, when a TV drama called Mr Bates vs The Post Office was broadcast in UK. This was when the whole scandal was propelled to the limelight. Everybody in the UK became aware of it.
It has taken me a good few weeks to finish writing this post because so much has happened since the TV drama. I did a lot of research, read a lot of reports and followed many of the public inquiry questioning to make sure I fully understood the whole situation. It has been mentally and emotionally draining as the more you read the more heartbreaking it is. It has ended up as the longest post I have written on Hive. Despite that, and despite the fact not many people may read to the end (thanks if you are still here), I feel compelled to spread the story so you know how the lives of so many people were wrecked unjustly.
If you're interested to find out more, the following are very good summaries of the scandal Post Office Scandal Explained and The scandal that has rocked the UK Post Office
This is the trailer for Mr Bates vs The Post Office. I would highly recommended to watch the series if you can find it.
You can also watch how the Post Office is lying and the Director of Fujitsu for Europe being grilled by the Parliament and the public statutory inquiry