ALEX BRUMMER: Fujitsu takeover led to Post Office Horizon scandal

Back in 1968, Britain on the cusp of a computing revolution. Some 56 years later, it’s onerous to credit score, however the British firm on the core of what’s now Fujitsu – whose Horizon system sparked the Post Office scandal – was a contender to develop into the world powerhouse in computing.

Britain’s ICL, which was later swallowed by the Japanese large, was again then a severe potential rival to IBM of the US.

Instead, it turned a textbook case of failed industrial coverage. Rather than making the UK a worldwide know-how chief, Fujitsu’s Horizon has develop into a byword for defective, bug-infested techniques with a horrible toll of human tragedy.

In the late Nineteen Sixties, it was all very totally different.

Prime Minister Harold Wilson’s imaginative and prescient of a nation solid within the ‘white coronary heart of know-how’ was not only a eye-catching rhetorical flourish. As a gifted mathematician, Wilson was greater than conscious of pioneering work in computing by Alan Turing and the early adoption of the brand new applied sciences by industrial companies corresponding to High Street caterer J Lyons.

At the Ministry of Technology, the Secretary Of State in cost, Left-winger Tony Benn, steered by way of the Industrial Expansion Act.

Using his new powers, International Computing Ltd, (ICL) was born out of a mega-merger of a number of smaller companies.

After a starry begin, it spluttered and struggled. Meanwhile, within the United States, IBM went on to develop into a £126 billion colossus – the forerunner of the multi-trillion Silicon Valley giants it later helped spawn.

ICL, the pin-up for Labour’s new industrial coverage, turned synonymous with weak administration, poor monetary controls and failure.

Aa has been the case with so many nice British innovations – Arm Holdings is the modern equal – command and management ended up in abroad fingers.

The story of ICL and the way it was swallowed by Fujitsu is a major instance of the low worth successive British governments have positioned on supporting UK science.

Short-term pondering, flaccid boards, ineffectual bosses, unthinking asset managers and neglectful mandarins and ministers have allowed numerous applied sciences to slide into international fingers.

Recent years have seen helpful aerospace, satellite tv for pc, sonar, software program and defence improvements – managed by corporations corresponding to Ultra Electronics, Inmarsat and Aveva – fall underneath abroad management, not all of it pleasant, with barely a purple flag raised. No different G7 nation has been so careless.

Anyone puzzling as to how Fujitsu turned the go-to know-how agency for Whitehall panjandrums solely has to look at its historical past. Its DNA and techniques are uniquely British.

There needs to be no shock that Fujitsu was firm of selection when the concept of the trendy, Horizon monetary computing system for the Post Office was rolled out in 1999. Around 6,000 individuals are deployed within the UK.

In spite of Fujitsu’s position within the Horizon scandal system it has continued to land £4.9 billion of taxpayer contracts.

Some £3.6 billion of those offers had been signed after a 2019 ruling which discovered the Japanese firm’s software program culpable within the sub-postmasters and mistresses scandal. These embrace with HMRC and the Treasury.

In its earliest days, ICL seemed to be a uncommon success for government-encouraged company engineering.

Its proprietary tech included the primary transistor machines, the primary computer systems to make use of core reminiscence (now within the Cloud!) and the breakthrough 1300 sequence of computer systems. In 1981, as a part of the hassle to go international, it linked up for the primary time with Fujitsu.

The Japanese relationship was seen as a less expensive path to buying parts, together with entry to Fujitsu’s massive scale integration applied sciences of the type later to be deployed on the Post Office.

ICL initially thrived as a standalone pc champion profitable early contracts with the Post Office, the Inland Revenue, the Department of Work & Pensions and the Ministry of Defence. It was thought to be uniquely succesful due to its skill to accommodate new software program with out the necessity for intensive re-investment.

In 1984, it was acquired by the UK’s Standard Telephones and Cables (STC).

It remained on the forefront of innovation and was a pioneer in small enterprise techniques.

But STC stumbled, capital was briefly provide and regardless of a number of injections of taxpayer funds it discovered it ever tougher to compete with IBM and US rivals.

Stealthily, as ICL wanted extra sources, Fujitsu turned the principle funder. The Japanese purchased an 80 per cent stake for the cut price basement worth of £740 million in 1990.

U nder the management of Sir Peter Bonfield (who went on to develop into chief government of a privatised BT) ICL solid on, turning into the largest techniques, pc producer and software program developer outdoors the United States.

By 1998, Fujitsu had gained full management. There was widespread expectation that it could return ICL to the London inventory market with a bumper £5billion preliminary public providing. That by no means occurred.

By 2001, it discarded the pioneering ICL computing and IT model and subsumed it underneath the Fujitsu identify. Barely a protest was raised.

Fujitsu went onto win numerous UK authorities contracts.

But as is the case with all international possession the transparency, accountability, governance and fiduciary obligation which comes with UK public possession merely was not there.

The Japanese agency might properly face ‘monetary sanctions’.

But no UK plc presumably might have ridden out such a scandal for thus lengthy, and not using a punishing fall within the share worth, heads rolling, full disclosure and retribution.