Fujitsu loses £50m in sales after Post Office scandal furore

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https://www.computerweekly.com/news/366 ... dal-furore

Fujitsu’s UK public sector business has lost over £50m in sales this year as a result of the Horizon supplier’s involvement in the Post Office scandal.

Speaking during a company conference call, Dave Riley, head of public sector at the Japanese-owned IT giant, told staff that media coverage of the scandal has cost Fujitsu’s UK public sector operation £50m-£60m in lost potential revenue this year so far.

Riley said that in January, after heightened media coverage of the Post Office scandal following broadcast of the ITV drama, Mr Bates vs the Post Office, Fujitsu’s UK subsidiary “agreed with Japan a different profile of the business than we had anticipated for this year”.

He said his revenue budget for the public sector business is £399m this year, compared to £450m-£460m forecast last year.

“Let’s call that gap of £50m to £60m the cost to the business of the media coverage and what’s happening in the public debate,” he said.

Riley added that Fujitsu headquarters in Japan has injected £200m into the UK business to help it deal with these challenges: “There is that moral obligation to look after the business and to make sure we can continue to bid for public sector work,” he said.

In January, Fujitsu’s European CEO Paul Patterson told MPs and the Post Office public inquiry that the company was “morally obligated” to contribute to the £1bn-plus costs faced by UK taxpayers as a result of the Horizon scandal.

Eight months later Fujitsu has not committed anything to alleviate the bill for taxpayers, but is likely to receive as much as £180m from a contract extension with the Post Office, which is needed to extend support for Horizon for up to five years due to the failure of a project to replace the controversial IT system.

Riley also reacted to anger among employees following the company’s decision not to give staff a pay rise this year: “People are disappointed by the pay pot as a whole and that is understandable, but it is what the business can afford at this time given everything else going on.”

One angry Fujitsu employee, who asked not to be identified, said: “Their priority is Fujitsu’s shareholders, not the subpostmasters, not employees and not customers.”

Computer Weekly asked Fujitsu to provide a comment on this story, but the company declined to do so.

Criticism and scrutiny of Fujitsu has been heightened following the ITV drama, which aired at the beginning of the year.

The supplier has developed and provided Horizon software and support to the Post Office and subpostmasters since 1999. The software had defects that caused accounting shortfalls, for which subpostmasters were blamed, with many wrongly prosecuted as a result. Fujitsu played a role in helping the Post Office hide knowledge of errors from subpostmasters, blaming the users instead.

Between 1999 and 2015, hundreds of subpostmasters and branch staff were prosecuted by the Post Office and convicted for accounting shortfalls, based on evidence from Fujitsu’s flawed Horizon system. Fujitsu supported the Post Office in prosecuting subpostmasters and gave evidence in court claiming the system did not cause unexplained account shortfalls, despite knowing this could be the case.

In the UK, Fujitsu relies heavily on its large public sector business, which is a legacy of ICL, which Fujitsu acquired in the late 1990s. But since the Post Office scandal hit the headlines in January, Fujitsu’s public sector deals began to dry up, partly down to a self-imposed bidding ban and organisations distancing themselves from the supplier.

Fujitsu has nonetheless continued to look for ways to win public sector business in the UK.