Fujitsu’s grip on HMRC loosening but bags of taxpayer cash still to be made

HM Revenue & Customs (HMRC) has signed off two contracts worth a total of £280m with Fujitsu as the government department makes “bridging” arrangements while it decouples from Fujitsu datacentres and self-assessment system hosting.

A £220m deal with Fujitsu will be in place until 2028, as HMRC moves to a hyperscale cloud provider to manage the migration from the controversial Japanese supplier’s datacentres and provide cloud hosting going forward. The Fujitsu bridging contract will run alongside the £500m contract with the chosen hyperscaler.

Meanwhile, the department has confirmed it will pay Fujitsu £60m to host its Computer Environment for Self-Assessment (CESA) service for another three years. As revealed by Computer Weekly in February, HMRC was set to extend this, where Fujitsu was the incumbent.

On the datacentre extension, the government tender notice said: “The authority has a requirement for a bridging contract to ensure continuity of essential services as we migrate to new arrangements.”

HMRC also described the CESA extension as a “bridging” contract, revealing its intention to move away from Fujitsu, with “new arrangements” planned. “HMRC requires the secure and uninterrupted delivery of support to the application and considers the award of the new contract to be the only option for ensuring delivery of CESA until the migration to new arrangements,” said the tender.

After the national outrage sparked by ITV’s drama about the Post Office scandal, Fujitsu, which supplied the faulty software at the centre of the scandal, said it would pause bidding for lucrative government contracts.

But the bidding pause was described as a “hollow” gesture by peer and long-time campaigner for subpostmasters Kevan Jones, with Fujitsu continuing to cash in on government work, using workarounds.

The Post Office scandal saw hundreds of subpostmasters wrongfully prosecuted due to unexplained account shortfalls that were caused by errors in Fujitsu’s Horizon system. Thousands lost their livelihoods and had their lives turned upside down after repaying the unexplained losses. Around 900 were wrongfully convicted of financial crimes, and many were jailed as a result. It is described as the widest miscarriage of justice in UK history.

HMRC is often described as Fujitsu’s UK public sector “cash cow”, with huge contracts involved.

Last month, when asked about Fujitsu’s work for HMRC, peer James Arbuthnot, a campaigner for justice for subpostmasters for a decade and a half, said: “Why on earth is the government undermining its own bargaining position with Fujitsu, a company that has yet to pay a penny towards the carnage it helped cause in the Post Office?”

But “a slow cancellation” of Fujitsu by the government has begun, according to sources. 

Fujitsu has finally agreed to negotiate its contribution towards the huge costs of the scandal. In March, the government announced there was an agreement to begin talks on compensation. Fujitsu has previously stated it would wait until the public inquiry’s conclusion before committing to talks. The public inquiry has finished its public hearings, and there is no date for the publication of the report from chair Wynn Williams.

Computer Weekly first exposed the scandal in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to the 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).