Post Office scandal bombshell as confidential deal struck 19 years ago to fix errors

The Post Office made a deal with Fujitsu 19 years ago to fix errors in subpostmasters' accounts (Image: Getty)

The Post Office agreed a confidential deal with Fujitsu 19 years ago to fix errors in sub-postmasters' accounts, a document has revealed. An agreement in 2006 suggests both companies were aware of bugs in the Horizon IT system, with Fujitsu liable for a £100-£150 penalty for each faulty transaction.

The document indicates the Post Office and Fujitsu had authorisation to alter accounts, despite claims it was not possible to do so remotely and that there were no bugs in the system. About 1,000 people were wrongly prosecuted and convicted in the UK between 1999 and 2015 as a result of Horizon, which mistakenly showed shortfalls in accounts.

It led to a significant number of sub-postmasters contemplating self-harm and some even taking their own lives.

The long-running battle for justice accelerated dramatically after ITV broadcast the drama Mr Bates Vs The Post Office, which highlighted the shocking scandal.

The 26-page contract, marked "commercial in confidence", was first revealed by Channel 4 News on Monday, after being posted on the Post Office Horizon IT Inquiry's website.

The contract said: "If the reconciliation service identifies that transaction data held on the 'central database' located at the data centre is found to be inconsistent when compared to the records of the transaction that was completed at the branch, eg a receipt, a transaction log or a branch accounting discrepancy, the reconciliation service shall obtain authorisation from Post Office prior to amending the centrally held transaction data."

Lee Castleton, who was wrongly accused of false accounting, told Channel 4: "It just makes me feel physically sick. Really, you've got a group of people in two companies that wrote a contract for something that they've said repeatedly was never required.

"And it's just sickening for all the distress and victimisation of the group, of all of our group. They've had this document in their possession that they've never revealed."

Mr Castleton said disclosure of the document "absolutely" would have made a difference to his case.

He said: "This makes it a completely different question. We're now talking about accounts that can be adjusted remotely, but also a contract in place for how that should be done.

"You know, 13 people potentially have taken their lives because of the treatment at the hands of these companies.

"It's disgusting to think that even now, two decades on, we're finding new documents, new documents that are intrinsic to what was going on. You know, it's absolutely abhorrent. It's disgusting."

Lee Castleton says news of the agreement is 'sickening' (Image: PA)

Paul Marshall, a senior barrister for sub-postmasters, told the BBC the document shows that in 2006 there was "a very big, recognised problem with Horizon maintaining data integrity".

He said: "The Post Office, for 20 years, was saying the only explanation for shortfalls in branch accounts was postmaster incompetence or dishonesty.

"But the maintenance of data integrity was fundamental to the Post Office-Fujitsu contract - Fujitsu were unable to provide or assure this."

A Post Office spokesperson said: "We apologise unequivocally for the hurt and suffering which the Post Office caused to so many people during the Horizon IT Scandal.

"Today, our organisation is focused on working transparently with the ongoing public inquiry, paying full and fair financial redress to those impacted, and establishing a meaningful restorative justice programme, all of which are important elements of the ongoing transformation of the Post Office."

A Fujitsu spokesperson said: "These matters are the subject of forensic investigation by the Post Office Horizon IT Inquiry and it's not appropriate for us to comment while that process is ongoing."