Baroness Ludford
To ask His Majesty’s Government what procurement criteria they used in awarding Fujitsu a £48 million contract to upgrade the Police National Computer; and whether their decision to award that contract took into account that company’s role in developing the Horizon software for the Post Office.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, every contract award is considered on its own merit and in line with procurement regulations and evidence of historic supply and delivery. The police national computer is a critical service used by UK policing and other agencies to maintain public safety and security. The contract to replace PNC mainframe hardware technology, ensuring the future of the service, was awarded following market engagement on grounds of time, cost and risk to continuity of service.
Baroness Ludford (LD)
My Lords, the Government have awarded contracts to Fujitsu of over £3.5 billion since 2013, including nearly £500 million this year, of which £48 million was on the police national computer. Considering that Fujitsu’s Horizon software was at the heart of the Post Office sub-postmaster scandal, why do the Government believe that Fujitsu software has the necessary integrity for the critical data in the PNC? How is a business-as-usual approach on the award of contracts before the official Post Office inquiry concludes prudent? Lastly, how does this government largesse give Fujitsu any incentive to contribute to the massive compensation cost for sub-postmasters, which is set to fall on the taxpayer?
Lord Sharpe of Epsom (Con)
I thank the noble Baroness for her questions. The police national computer has been hosted on Fujitsu mainframe technology for over 30 years, and existing Fujitsu-leased hardware technology would not have been viable to use beyond March 2022. It required urgent replacement, which is why Fujitsu was selected. The market engagement exercise held in 2020 to review options to replace the Fujitsu hardware and support found no viable alternative solutions, and that is why Fujitsu received this contract—which, I should also stress, is making up the difference between now and when the new police national computer comes into operation. I could go on, but there was basically no alternative.
Lord Harris of Haringey (Lab)
My Lords, the Minister has given us a very interesting answer. Basically, he said that it came as a big shock to the Home Office that this equipment had expired. Can he tell us what confidence he has in the Home Office’s management of IT contracts of various sizes—bearing in mind, for example, the grotesque overspending on the replacement of the Airwave system for emergency services communication, and the fact that that contract has overrun by five or six years already, with no sign that the costs are going to be met?
Lord Sharpe of Epsom (Con)
I am afraid that that is not what I said to the noble Baroness or to the House at all. I have confidence that Fujitsu will deliver on this.
Lord Hogan-Howe (CB)
My Lords, I declare my interests, and I support the noble Lord, Lord Harris. The emergency services network is technology rather than IT. Not only is it five years delayed, but I think the costs have risen by five times, from around £2 billion to over £10 billion. As yet, I am afraid that the Government are trapped in a terrible contract with Motorola, which is delivering a legacy solution but is also charged with delivering the new one. Unfortunately, it is being paid £250 million more for the old system per year, so there is no great incentive. It is a great worry, not only for the Government but for the police, that this system is not yet delivered.
Lord Sharpe of Epsom (Con)
I understand where the noble Lord is coming from, and I commend him for his work on this and other matters. Obviously, I am here more to talk about the subject of the Question, but I will take his concerns back, find out more information and write to him.
Lord Polak (Con)
My Lords, to return to the question asked by the noble Baroness, Lady Ludford, about Horizon, the words that come to my mind are: “scandalous”, “miscarriage of justice”, “broken lives”, “families financially ruined”—and yet Fujitsu has paid nothing. Talking has gone on long enough. I know there are legal cases, but should not the Government stop any contracts to Fujitsu? It is just morally wrong.
Lord Sharpe of Epsom (Con)
My noble friend is right to point out that we are trying to get to the bottom of the Horizon issue. That is why Sir Wyn Williams has been tasked to hold his statutory inquiry. Fujitsu is a core participant and is co-operating fully. Accountability depends on evidence, so I think it is proper to let Sir Wyn hear it before judging any possible consequences.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, was any consideration given by the Government to the public perception of awarding such a vital contract to a company with such a shocking record? Can the Minister confirm clearly whether Fujitsu was the only company that actually bid for this contract? If that is the case, how can we be assured of a genuinely competitive process? How will this improve standards? How do we get good value for money and end up with results which, when you consider the role of this company, is truly shocking? I endorse all the words of the noble Lord, Lord Polak: it is appalling that this company can get anywhere near another government contract.
Lord Sharpe of Epsom (Con)
As I said earlier in answer to another question, it was the only viable alternative. Other companies were invited in and, for reasons most of which were around the time it would take to implement new systems, Fujitsu offered the only solution. Of course, I agree with the public perception argument; however, I do not think we had any alternative.
Baroness Jones of Moulsecoomb (GP)
My Lords, given that the flaws in Horizon software by Fujitsu were the cause of an awful lot of distress and misspent money, are the Government confident that so far there have been no similar mistakes on the police national computer?
Lord Sharpe of Epsom (Con)
The Government are confident. There has been one incident of data loss, but it was a human error, as opposed to a software error and all that data has been recovered. So, yes, the Government are confident.
Baroness Randerson (LD)
My Lords, the Horizon scandal involved 736 innocent sub-postmasters being prosecuted; four suicides; many more individuals and families torn apart by the prolonged cover-up of technical problems; and a cost to taxpayers of more than £1 billion so far. I know this Government’s reputation for financial probity is at a very low ebb, but can the Minister explain how Fujitsu was able to land this complex and sensitive contract when the Government had removed it from the list of preferred suppliers in the last year?
Lord Sharpe of Epsom (Con)
I have to say again that I think I have answered most of the noble Baroness’s question already. Fujitsu is not a preferred supplier, but it is able to enter open competitions for government business. Fujitsu has not been found guilty of any fraud or other crime related to Horizon and is complying with all inquiries. There was no viable alternative.
Baroness Berridge (Con)
My Lords, I am grateful that my noble friend accepts the public perception point, because more taxpayers’ money is going into this company at the moment. Inquiries take a long time, but in relation to other inquiries, such as contaminated blood, there has been a process to expedite payments and, as the noble Baroness has outlined, some people have taken their own lives. Surely, we should expedite the public funds that need to be in the pockets of those people harmed by Post Office and potentially Fujitsu.
Lord Sharpe of Epsom (Con)
I agree with my noble friend. So far, to date, the Government and Post Office have made good progress on delivering compensation to postmasters through the scheme fairly and quickly—82% of eligible claimants have now received an offer, and £52 million has been offered in total. I accept that it is not enough, but it is being done.
Baroness Chakrabarti (Lab)
My Lords, the Government have presided over the economy and vital sensitive infrastructure, including tech infrastructure, for 12 years. If, as the Minister suggests, there was no viable alternative, why not?
Lord Sharpe of Epsom (Con)
Unfortunately, as I said, this relates to the delay in the rollout of the new system. The new system was delayed because of unforeseen complexity. I should state for the record that statistics around the police national computer are mind-boggling in their complexity: 30 million people’s information; 68 million vehicle records; 61 million driving licence holder records; 1.34 million daily transactions; 114 million checks per annum. It has to work; therefore, there was no viable alternative.
Baroness Wheatcroft (CB)
My Lords, could the Minister tell the House whether external consultants were involved in deciding that this contract should go to Fujitsu and, if so, how much were they paid for coming to the rather defeatist conclusion that there was no alternative?
Lord Sharpe of Epsom (Con)
The process was subject to all the usual Cabinet Office rules. I do not know how much external consultants were paid; I will find out.
Lord Cromwell (CB)
My Lords, will the Minister confirm—I think he has been trying to tell us—that Fujitsu has an unassailable monopoly on this contract?
Lord Sharpe of Epsom (Con)
No, it does not have an unassailable monopoly. It obviously has a long history with the police national computer. When the police national computer finally breathes its last, its monopoly effectively does the same.
Lord Sterling of Plaistow (Con)
Will the noble Lord agree that over the last century pretty well every government contract that has been put out becomes a monopoly? Is it not time that we had a new approach to how such contracts are handed out?
Lord Sharpe of Epsom (Con)
That sounds like a very sensible suggestion, and I will take it back to the department. I have not necessarily been around for as long as the noble Lord described.