There can be fewer – if any – initiatives more crucial to the future of the Post Office than the replacement of the controversial Horizon IT strategy at the heart of the scandal that led to the UK’s most widespread miscarriage of justice.
And yet fresh revelations at the public enquiry into the scandal show that the replacement task is riven with problems – a task squad that distrusts company leaders and is in return distrusted by those leaders; mediocre governance; a deficiency of suitable method and agile improvement skills; limited knowing of modern software improvement practices; and insufficient clarity of intent beyond that of simply “replacing Horizon”.
As such, it is possibly unsurprising that the programme is moving many years and hundreds of millions of pounds over budget.
As Computer Weekly revealed in May this year, a review by government task management experts at the Infrastructure and Projects Authority (IPA) rated the task as “currently unachievable”, with budgets ballooning from £180m to £1.1bn, and implementation being delayed by as much as 5 years.
Computer Weekly understands that the Post Office announced internally last week that it is reassessing its approach to the Horizon replacement project, and plans further engagement with government and another external experts – but there are tremendous challenges ahead to get the task back on track.
Catastrophic consequences
As things stand, the Post Office contract with IT supplier Fujitsu to support Horizon ends in March 2025, and if that’s not extended, the consequences could be catastrophic for the branch network. Even Fujitsu is cautious about continuing, and has said it will only do so if convinced the Post Office has a viable replacement plan in place.
The Post Office has asked for a five-year extension, with a three-year break point. The full 5 years could see up to £180m of additional payer money go to the IT supplier.
But, according to witnesses at the public enquiry into the Post Office scandal, the 2 companies have yet to agree a fresh contract, with little than six months to go.
Former Post Office chief transformation officer Chris Brocklesby told the inquiry that, if everything went according to plan, the earliest that the Horizon replacement – dubbed fresh Branch IT (NBIT) – would begin roll-out is June 2026, with Horizon yet switched off at the end of 2028.
Even those timescales seem ambitious given the apparent chaos within the Post Office around specified a vital project.
Board meeting
Minutes from 4 July 2024 Post Office board meeting rise questions over how seriously its leadership is taking the highly critical IPA report.
The minutes mention Brocklesby as saying, “The IPA squad were not strategy building experts”, and that the IPA giving its highest “red” informing rating for the NBIT programme was “due to the profile of the company and the complexity of the programme”.
This view came despite the IPA squad concluding that, “There are major issues which, at this stage, do not appear to be manageable or resolvable entirely within POL [Post Office Limited].” The IPA made 7 recommendations, including improving governance, expanding digital expertise in the organisation, better engagement with HM Treasury, and clarity around hazard appetite.
However, Brocklesby told the Post Office board gathering that, in terms of the 7 IPA recommendations, there were only 2 that the Post Office “could do something about”. He described the 32-page, in-depth IPA study as “very top down”.
The IPA is the government’s highest authority for monitoring the advancement of critical public sector programmes, overseeing projects from HS2 to defence procurement as well as large-scale Whitehall IT implementations. It was brought in to review NBIT by the Treasury as a condition of providing the close £1bn of additional funds needed to meet the revised budget for the programme as a consequence of all the ongoing problems.
Damning review
The July board gathering minutes besides referenced a separate review conducted by consultancy Public Digital, which specialises in major public sector digital transformation projects.
Computer Weekly has now seen a copy of the review, and its findings are as damning as those from the IPA.
The report, produced in May following interviews with 47 Post Office employees, including board members and CEO Nick Read, describes the NBIT task as “not presently in a healthy place”, while acknowledging “pockets of excellent work and profoundly expert people”.
However, “throwing always more resources at the programme will not solve its problems”, said the review.
Core to the problems on NBIT, says the report, is simply a view within Post Office that is simply an “IT replatforming” – effectively, replicating Horizon in a fresh system. However, it found that, “replacing Horizon is not simply an IT project. It is simply a massive business change activity affecting all single 1 of its employees and franchisees.”
It said: “The historical framing of [the project] as ‘exiting Horizon’ has meant that the programme has become disconnected from a set of programme outcomes which is rooted in rebuilding trust with enabling postmasters and helping them do their jobs.”
Lack of skills
Achieving that goal is hindered by the deficiency of applicable skills and cognition at all levels of the Post Office.
“From the board level through to the programme, there are insufficient elder leaders with experience of digital transformation at this scale,” said the report.
In particular, the review found a deficiency of modern, agile improvement experience: “Although we have met any experienced and highly capable agile transportation people, and improvements have been made, it was widely acknowledged that this approach is brand fresh for the programme.”
For example, the study highlighted gaps in resources around user experience plan – a formerly 20-strong squad had been reduced to 4 in 2023, erstwhile large numbers of contractors were let go due to the delays in the project. The knock-on effect could have a direct impact on the subpostmasters who will yet usage NBIT.
“For this scale of delivery, this is simply a skeletal squad which is not large adequate to embed within the product teams, or undertake the scale of investigation with users that is required for product decisions to be genuinely informed by user insight and to balance the hazard attached to building the incorrect thing by not engaging straight and regularly with postmasters,” said the report.
Furthermore, improvement and investigating to date has been focused on users in Crown branches – those which are straight managed by the Post Office – alternatively than the more typical agrarian branches owned and run by self-employed subpostmasters.
The experts at Public Digital proposed this should be reversed: “We would propose the agrarian franchise branch archetype should be the precedence for investigation and design, as designing for the most hard set up makes the remainder easier.”
But the NBIT improvement squad had so far only limited discussions with branch operators, they said: “Current engagement with postmasters is considered inadequate and engagement besides late, which creates a hazard that the programme will not meet user needs and will require crucial remediation. The focus of replicating what already exists within Horizon is limiting.”
A dose of realism
The study cites a Post Office plan to increase the number of people working on NBIT from 327 to 526 by March 2025, but adds that “the recruitment profile for the programme requires a dense dose of realism”, and that the plan was “unachievable” – “a view commonly shared by interviewees”.
The reviewers note that the kind of skills required are in advanced demand, typically take 3 to six months to recruit, and that Post Office salaries are not competitive.
“The required velocity of hiring is incredibly ambitious, and POL have a track evidence of failing to meet ambitious recruitment targets. respective people inside the business have raised this as a risk,” said the report.
The consultants who reviewed NBIT found low morale within the team, a common deficiency of trust between the NBIT squad and Post Office leadership, and a negative culture.
“The low levels of trust between the [NBIT] programme and POL business functions was a very common subject in interviews,” said the report.
“The disconnect and breakdown in trust between the programme and wider POL business functions is impacting delivery,” it added.
“We have observed a reluctance for individuals to take accountability, and decisions being unnecessarily escalated or taken by committee. Delays are frequently caused by process dysfunction and an inherent deficiency of trust between the business and the programme.”
John Doe letter
This deficiency of trust was reinforced by a letter revealed to the inquiry, sent anonymously to then Post Office chair Henry Staunton as long ago as June 2023. The letter appears to have been sent by individual working in the NBIT team.
“The disaster of NBIT is well known across different levels within the business,” the “John Doe” letter begins.
The message cites “secretive” teams working in silos and “told not to share updates or information with anyone from the wider business”.
“Anyone who questions the CIO or programme manager are badged as hard and troublemakers”, even though they are only trying to do the right thing and point out mistakes being made, said the anonymous author.
“The treatment of any of the people that have tried to step up to resolve the situation is besides nothing short of disgraceful, most of whom are looking to leave due to the fact that they don’t want to be part of past repeating itself.”
The letter claimed that the CIO, who was not named by the author, “is open about misleading the board with inaccurate dates and costs for NBIT.” It added: “The culture in the business is disgusting and this starts at the top.”
Staunton said during his enquiry session that it was only after this letter that the board was informed that budgets had ballooned. “You can’t have a task go from over £300m to over £800m without any intention to hold back that information,” he said.
Code quality issues
The John Doe letter besides said defects in NBIT were “not under control” at the time of writing last year. The Public Digital study suggested that this problem has not been resolved.
“Historic code quality issues stay widespread,” it said. “Good software improvement practices do not appear to have been in place during [the] early build, which is evidenced by the low level of test coverage, incomplete integration and deployment pipeline, and patchy consideration for non-functional requirements specified as security, performance, scalability, operability and thoughtful plan patterns.”
The study quotes 1 unnamed interviewee during the review, who said: “In an urgency to show to paymasters that we can do this, we’ve rushed to show you a beautiful red car, but under the bonnet there’s quite a few method debt.”
The study partially attributes method problems to the Post Office decision to mostly make NBIT in-house, alternatively than looking to buy in existing software. “More consideration should have been given to usage of commodity technology – e.g. it is not clear why the [Post Office] would want to build an electronic point of sale strategy from scratch,” it said.
As previously revealed by Computer Weekly, the NBIT task has already bought crucial amounts of hardware and equipment, even though it cannot yet be rolled out to branches and the kit remains sitting in a warehouse.
More worryingly, the study suggested that IT safety is not being given suitable precedence – the deficiency of safety functionality to date was besides referenced by Brocklesby during his enquiry session as a origin of delays.
The Public Digital study said: “Secure-by-design principles and assurance processes are in place but culturally POL struggles to embed cyber safety practices into digital transportation as a ‘delivery first, safety later’ practice seems to be the prevailing approach, despite best efforts of safety professionals.”
A troubling picture
Taken together, the IPA report, the latest evidence to the inquiry, the Public Digital review and the John Doe letter present a damaging and highly troubling image of the Post Office’s attempts to replace Horizon. Short-term backing for the NBIT task has been rubber-stamped by the Treasury, but the full £1.1bn cost has yet to be approved.
A Post Office spokesperson said: “Today’s Post Office is working to guarantee that the mistakes of the past can never be repeated and getting the right IT solution is crucial to that. We have been working with Public Digital since April for external input to our work on the improvement of our fresh branch IT solution. We are exploring all options, working with a scope of stakeholders, to guarantee a better digital infrastructure for our branches.”
However, if the findings of the consultants at Public Digital are not addressed, subpostmasters will proceed to be worried about always getting off the hated Horizon system.
“The goal of ‘getting off Horizon’, i.e. as an IT replatforming seen purely through a technology lens, will never engage the wider organisation sufficiently in the request to work together towards circumstantial outcomes: e.g. rebuild trust with postmasters, and supply excellent services to postmasters and their customers,” said the report.
“In any case, moving off the existing technology platform is, in and of itself, a false Nirvana, peculiarly erstwhile the current programme mostly mirrors the Horizon scope. Even having exited Horizon the organisation will proceed to face changing needs and will require the ongoing muscle, and will, to do so.”
The Post Office scandal was first exposed by Computer Weekly in 2009, revealing the stories of 7 subpostmasters and the problems they suffered due to Horizon accounting software, which led to the most widespread miscarriage of justice in British past (see below timeline of Computer Weekly articles about the scandal since 2009).
• besides read: What you request to know about the Horizon scandal •
• besides watch: ITV’s documentary – Mr Bates vs The Post Office: The real story •
• besides read: Post Office and Fujitsu malevolence and incompetence means immense taxpayers’ bill •
