The Home Office is ending an IT services contract with Fujitsu and moving to an in-house one, with the organisations currently working on an exit plan.

The contract, known as ITNow Service Desk, was originally signed in 2021 and was worth £21m over three years. It was due for renewal, but the Home Office decided to move the service in-house during the re-tendering process.

The current contract was due to end in January next year but will now stop in October.

A Home Office spokesperson said the  IT Service Desk is being brought in-house to cut costs and “strengthen control over critical services in the government.”

Staff working on the contract at Fujitsu have been informed of their transfer to the Home Office under TUPE regulations. One source said there are more than 50 staff affected. The services are delivered in the East Midlands, East of England, London, the North East and the North West.

Government contracts with Fujitsu are controversial given Fujitsu’s role in the Post Office scandal, which destroyed the lives of thousands of people and ultimately cost billions of pounds to UK taxpayers.

Peer James Arbuthnot, a campaigner for justice for the subpostmasters affected by the scandal, said public sector organisations must begin to cut ties with Fujitsu. “It is essential that the government should wean itself off Fujitsu contracts,” he told Computer Weekly. “We must not be held over a barrel by a company that behaved so badly to the subpostmasters. If we continue to employ them, we are sending the message that bad behaviour doesn’t matter – but it does, it really does.

“So far, the Horizon scandal has cost the taxpayers over £1bn, and still Fujitsu has contributed not one penny towards their victims. They don’t deserve, and shouldn’t get, one more bit of work.”

Last week, the Post Office Horizon scandal public inquiry published its first report following three years of detailed examination. Part one looked at the human impact of the scandal and the current progress of compensation for victims. Inquiry chair Wynn Williams said in his report that he said he could not rule out the “real possibility” that 13 people took their own lives as a result of their treatment by the Post Office after they suffered unexplained shortfalls in their branches, which was caused by faults in Fujitsu’s software.

In January last year, Fujitsu’s head of Europe Paul Patterson promised to pause bidding for new government work until after the completion of the public inquiry. But the supplier has such a large existing customer base that pausing bids for new work would not end hundreds of millions of pounds of taxpayers’ money being spent with the supplier. Fujitsu earned £450m from UK public sector contracts in its most recent financial year, with more than £300m of this with HMRC. In the year ending March 2025, the Home Office spent around £10m with Fujitsu.

Then, in April last year, Computer Weekly revealed an internal instruction to Fujitsu staff on how to get around its self-imposed pause on bidding. In a flow diagram sent to staff, instructions advised that if a public sector body is not an existing customer, they could look to see if they have a unique selling point rather than pull out of the bidding. Failing that, staff were told to ascertain whether there is potential for a failed procurement if they pull out, and if so, they should “escalate to Fujitsu’s head of public sector to raise with the Crown Representative”.

Computer Weekly has also seen a staff forum answer about the ban on bidding. In response to a question in the forum, Dave Riley, then head of public sector at Fujitsu UK, wrote: “I have outlined our current thinking, but I do need to be clear that we have over £650m of backlog to be delivered, so we need to keep focused on that. Also, it is not a blanket ban on bidding, but is an extra gateway check we need to go through.”

He also opened up the possibility of using other suppliers as partners to get around the restrictions. At the time, he wrote that he engaged in these discussions and that “the current Cabinet Office position is: where we bid with a partner, it is up to the partner to decide if they are comfortable to work with them, so not currently subject to the gateway checks of us bidding”.

Computer Weekly is aware that Fujitsu is approaching other suppliers as a way to avoid its own restrictions and public criticism.

The Post Office scandal was first exposed by Computer Weekly 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).

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