The chair of the Post Office has told a public inquiry that the state-owned body has a “strained” relationship with Fujitsu, the company that supplied the faulty Horizon system at the centre of the IT scandal.
Nigel Railton, the interim chair of the Post Office, said it was “possible” that post office operatives could still be using the Horizon IT system in 2030 despite efforts to replace it.
He said: “It is possible … I don’t think it’s likely and certainly it is our intention and the intention of the new team is to move away from Horizon to a new system that can deliver a system that is fit for the future as soon as possible in a way that doesn’t disrupt postmasters’ activities.”
Railton, the ex-boss of the former national lottery operator Camelot, was being questioned at the inquiry which is looking into the scandal that led to hundreds of post office operatives being wrongly prosecuted for financial discrepancies.
It has since emerged that the shortfalls were caused by IT bugs within the Horizon computer system developed by Fujitsu.
The public inquiry was told that the Post Office board had proposed earlier this year to extend the Horizon support contract with Fujitsu for a further five years from April 2025 to March 2030, subject to seeking a break clause.
Railton said talks with Fujitsu were “ongoing” and described the relationship as “strained”.
He told the inquiry: “We need optionality to be able to get out of the Fujitsu agreement at the appropriate time for both parties. We are looking at all options in terms of how to bring the functionality that we currently have by using the Fujitsu system within our control.
“The wrong description is to bring it in-house … A better description is developing something that we can use ourselves.”
Separately, Karen McEwan, the Post Office’s group chief people officer, told the inquiry that the state-owned body’s former chair Henry Staunton, who was sacked in January by the then business secretary, Kemi Badenoch, had asked her to “close down” a barrister-led investigation into the conduct of the outgoing chief executive, Nick Read.
The investigation was launched after Jane Davies, a former human resources executive, accused Read of bullying. Read was later cleared of bullying allegations by the review in April.
Davies is now bringing an employment tribunal case against the Post Office, the inquiry heard on Tuesday.
McEwan told the hearing that Staunton had asked her to “close down” the investigation, citing concern for Read’s wellbeing, and had likened internal investigations to a “cancer”, she said.
She testified that she later realised that the barrister-led review was also investigating comments by Staunton after Davies filed her employment lawsuit against the Post Office last year.
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In her written witness statement McEwan said: “I considered that to some extent that Henry’s view was self-serving, as I understand that he was aware that he had been named in the complaint made by Jane Davies and this appeared to exacerbate his view that investigations should be closed down.”
Julian Blake, the counsel to the public inquiry, asked her: “Were you aware that he understood the investigation was also into his own conduct?”
She replied: “So certainly after November when the employment tribunal claim was particularised then, yes, I was of that belief.”
She added: “Mr Staunton did not refer to his own investigation that extended to him specifically but he did persist in asking me to close down the investigation and it was my belief at the time that the motivation to do that was not as I had been told by Mr Staunton.”
Staunton has previously claimed he was the victim of a “smear campaign” led by Badenoch. Last week, at the inquiry, he warned of another Horizon-style scandal if “untouchable” investigators and executives involved in the prosecution of post office operatives were not fired before the organisation rolled out its new IT system.
He told the inquiry that he was not aware until December that allegations had been made against him. “I deny those allegations completely, and felt deeply stung by them,” Staunton said.
The inquiry continues.