IT firm in British post office scandal benefitting from outsourcing in Canada

group of post office workers in the UK

January 29 2024

Last week, a senior executive from IT outsourcing company Fujitsu admitted that the company had a “moral obligation” to help compensate victims of the Post Office IT scandal in the United Kingdom. Fujitsu was responsible for Horizon, the IT system at the centre of the scandal. But at the same time Fujitsu’s role in this appalling scandal is being exposed, the company is continuing to profit from governments outsourcing IT services, including governments in Canada.

Thousands wrongly accused of fraud due to flaws in Horizon system

In the 1990s, a decision was taken to use a P3 privatization scheme to develop a new IT system for the post offices in the UK. A Fujitsu subsidiary that was then known as ICL received the P3 contract to develop the system known as Horizon.

Serious problems with Horizon meant that many sub-postmasters were shown as having cash shortfalls when in fact their books were balanced. Neither the Post Office or Fujitsu acknowledged that there were problems with Horizon. Instead, over 3,500 sub-postmasters were wrongfully accused of fraud. Over 900 faced criminal prosecutions, with many being jailed and some committing suicide. Even those who didn’t face criminal prosecution were often left with huge debts as a result of errors made by Horizon.

Federal and provincial governments have given Fujitsu contracts for outsourced IT services

Problems continue for Fijitsu. The contracts Fujitsu has received from governments in Canada include a controversial contract for a student information system in British Columbia. Fujitsu was given an exemption from one of the requirements the system was supposed to meet. But a school district that was in the process of developing a public alternative to the Fujitsu system was told that the requirement was mandatory.

Currently Fujitsu is one of IT outsourcing companies involved in the federal government’s Benefits Delivery Modernization programme (BDM). This program is supposed to create a new system to be used for Canada Pension Plan, Old Age Security and Employment Insurance payments. Canadians, particularly seniors, depend on income from these programs.

A big question for Canadians is are we going to trust a company that has already created an IT system that was so flawed that it left thousands of people being falsely accused of fraud and then the company helped cover up what had happened?