The government has handed the Post Office £136m more in taxpayer’s money towards its core technology transformation project. This is part of a total of £277m in “further” funding which the government said will also go towards ensuring the Post Office has the resources needed to administer financial redress payments to subpostmasters affected by Horizon scandal.

The additional tech funding comes as just 11 months remains on its contract with Fujitsu, which supplies its controversial core branch accounting system.

Horizon, as the system is known, is at the heart of a national scandal but looks set to stay for years to come while the Post Office makes changes to its IT gradually, rather than in a “big bang”.

The government said the funding for the Post Office will help to support the breadth of the network. “This will enable Post Office to deliver technology transformation and give them the resources to continue administering redress payments to postmasters,” said a statement from Post Office owner, the Department of Business and Trade.

Post Office minister Gareth Thomas announced the funding as he outlined a new appeals process for scandal victims unhappy that financial redress settlements did not reflect their losses and suffering.

The Post Office has stalled in its attempts to replace Horizon, which became necessary following the 2018 group litigation order, when 555 subpostmasters led by Sir Alan Bates proved that the Post Offices Horizon system caused errors they were blamed and punished for. The Post Office later embarked on its New Branch IT (NBIT) project. It promised in-house developed software to replace Horizon.

But the programme ran into serious problems. Computer Weekly revealed in May last year that a review by government project management experts at the Infrastructure and Projects Authority (IPA) rated the project as “currently unachievable”, with budgets ballooning from £180m to £1.1bn and implementation being delayed by as much as five years.

In October, Computer Weekly revealed that the NBIT system was set to be dumped in favour of an off-the-shelf electronic point of sale (EPOS) alternative.

The Post Office scrapped its NBIT project and has now replaced it with Future Technology Portfolio (FTP). The Post Office said FTP “is a five-year plan to transform technology and data across Post Office. It is our aim that FTP will address technology needs strategically and holistically across the business, so it goes beyond just replacing Horizon.”

A Post Office spokesperson said: “We welcome the government’s announcement today on funding, which includes up to £136m for our Future Technology Portfolio in 2025/26. We are looking at Post Office’s technology and data strategically to ensure that we reduce central costs and provide postmasters with the tools they need to serve their customers and run profitable businesses into the future.”

In December, Computer Weekly revealed Post Office plans to use a combination of existing Horizon functionality, in-house software and off-the-shelf platforms as part of a tech fusion. This would see Horizon retained under the control of the Post Office, with software developed in-house, some of which was done under NBIT, and off-the-shelf software from suppliers used. 

Post Office said it is moving to new technology service partners as part of the FTP and is using software developed in the NBIT project. It has also confirmed it is working with the Horizon system. Sources told Computer Weekly the Post Office is currently installing new hardware in branches which will be used with Horizon.

“This is a five-year plan, and postmasters who are currently using Horizon need a system that is stable and reliable,” said the Post Office. “So, in the short term, we are investing in software and hardware to make sure [Horizon] is fit for purpose and we will continue to refresh and enhance the technology that is available for postmasters and their customers.”

The Horizon contract with Fujitsu has been renewed several times over the past couple of years, but the Post Office will have to take it in-house if it remains after March 2026, when its contract with the Japanese supplier finally ends

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 the accounting software (see timeline of Computer Weekly articles about the scandal below).

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