Fujitsu could land over half a billion pounds in contracts from HMRC alone this year as the UK public sector continues to reward the supplier, despite its role in the Post Office scandal.
HMRC is the biggest source of Fujitsu’s UK government income, but there are hundreds of millions of pounds more contracts across the public sector, which Fujitsu has or is bidding for.
The huge numbers come despite Fujitsu’s self-imposed pause on bidding for government contracts being in place and as it continues to refuse to fully commit its contribution towards repairing some of the damage it caused. Fujitsu supported the Post Office when it blamed and prosecuted subpostmasters for unexplained account shortfalls, which were due to software errors that it was aware of.
Peer James Arbuthnot, a long-time campaigner for Post Office scandal victims, called for “expunging Fujitsu from British influence”.
“If Fujitsu was not a company but an individual, it would by now be facing years, possibly decades, in prison,” he said.
“It did more than stand by as the subpostmasters were maliciously prosecuted – it was an active, knowing and essential participant in the whole ghastly fraud,” he added. “And yet it is a company, and one on which the government has become unacceptably dependent.”
According to government figures on spending, which take into account all deals worth over £25,000, HMRC spent more than £240m with Fujitsu last year. This year’s spending could be double that.
The figures raise accusations that HMRC has become Fujitsu’s UK “cash cow”.
His Majesty’s ‘cash cow’
As revealed by Computer Weekly, despite reports suggesting Fujitsu will be replaced on HMRC’s Traders Support Service, an internal meeting revealed Fujitsu is, in fact, bidding for the new £370m contract and is confident of a renewal of its contract, which was worth £240m when the last contract was signed in 2020.
If Fujitsu was not a company but an individual, it would be facing years, possibly decades, in prison Peer James Arbuthnot
Computer Weekly also revealed a direct deal between HMRC and Fujitsu for hardware and cloud procurement, worth over £200m and known as North Star, where there is no competitive tender.
HMRC is also extending its Computer Environment for Self-Assessment (CESA) contract worth just shy of £60m, where Fujitsu is the incumbent.
For the wider public sector, the figure is substantially bigger. For example, in December 2024, Fujitsu won a one-year extension to its Horizon contract with the government-owned Post Office, worth £40m. According to a source, there could also be up to a dozen more potential HMRC deals in the pipeline, as well as several Home Office contracts and deals with the Ministry of Defence, to name a few.
‘Hollow’ gesture
The contracts come during the Japanese supplier’s self-imposed pause on bidding for new contracts, which was announced in January last year, soon after the broadcast of ITV’s dramatisation of the Post Office scandal put it at the centre of national debate. At the time, the pause was described as “hollow” by former MP, now peer, Kevan Jones. It only included new contracts, when Fujitsu already worked with a huge volume of public sector organisations.
Jones, who, like Arbuthnot, has campaigned for subpostmasters for over a decade, reiterated his comments: “These revelations show how hollow Fujitsu’s public statements not to bid for new government contracts are.
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
“Having admitted its central role in the Horizon scandal, it is hiding behind the outcome of the inquiry to continue making multimillion-pound profits from government contracts. The victims of the scandal and taxpayers will be rightly angry that Fujitsu has contributed nothing to the billion-pound-plus compensation scheme, while still reaping in profits from its contracts with government.”
He said the government should immediately put a stop on all new contracts and extensions of contracts with Fujitsu until the supplier makes a substantial contribution to the compensation of victims.
Computer Weekly asked Fujitsu whether the bidding pause was still in place. It said: “We are working with the UK government to ensure we adhere to the voluntary restrictions we put in place regarding bidding for new contracts while the Post Office inquiry is ongoing.”
The three-year inquiry is expected to report its findings later this year.
The supplier is also playing a waiting game when it comes to contributing to the costs of the Horizon scandal. In response to a Computer Weekly question, Fujitsu said: “Based on the findings of the inquiry, we will work with the UK government on the appropriate actions, including contribution to compensation. We continue to offer our deepest apologies to the subpostmasters and their families.”
Heavy reliance
Computer Weekly asked the government whether it is fair to taxpayers that Fujitsu is rewarded with lucrative government contracts before it commits to its contribution towards Post Office scandal costs?
The government was also asked whether it thinks the awarding of these contracts is fair to victims of the scandal who are still waiting for fair compensation, and if it is too reliant on Fujitsu for public services IT?
A government spokesperson said: “We have been clear that those responsible for the Horizon scandal must be held accountable, but before any further action can be taken, we must wait for the Horizon inquiry to conclude.
“Fujitsu sets its own boundaries for bidding on public contracts. As with all companies, we are keeping Fujitsu’s conduct and commercial performance under review.”
Arbuthnot told Computer Weekly: “The work to start expunging Fujitsu from British influence needs to start now and be completed within months, not years. Anything else sends a message that we don’t mind about unethical behaviour and suggests this will carry on for years. Why would Fujitsu feel any pressure to make a substantial contribution to the cost of the Horizon scandal if it can foresee hundreds of millions of profits flowing in without such a contribution?”
He added: “Each year, the government, saying there is no alternative, extends some contract or other with Fujitsu. The government should be asking itself, ‘If this were prisoner Smith in cell block J4, would I really be giving him a contract worth tens of millions of pounds?’”
Computer Weekly first exposed the scandal in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to Horizon accounting software, which led to the most widespread miscarriage of justice in British history (see below timeline of Computer Weekly articles about the scandal since 2009).