The Post Office faces a daunting task as the cost of replacing the Horizon system continues to soar, reaching an alarming £1 billion. Critics have labeled the project as ‘unattainable’, casting doubt on the future of the Post Office’s technological infrastructure. In this article, we will examine the obstacles confronting the Horizon replacement initiative and the potential repercussions for taxpayers and the postal service as a whole.
Escalating Costs and Feasibility Concerns
Taxpayers are set to foot a £1 billion bill for the Post Office to overhaul its contentious Horizon IT system, with auditors warning that the ambitious project is currently unfeasible. The plan to replace Horizon and part ways with its provider, Fujitsu, is plagued by delays, quality deficiencies, and budget overruns. Despite these challenges, the Post Office drastically reduced its funding and workforce dedicated to the project by 70% last year, now facing the unrealistic task of recruiting numerous IT professionals to bolster its in-house development efforts.
Funding Request and Budgetary Pressures
The Post Office has sought nearly £1 billion in additional funding from HM Treasury to complete the Horizon replacement project. With the current funding set to expire soon, the Post Office must secure approvals to sustain the project until the upcoming general election. Convincing the government of the project’s viability is crucial to obtaining the necessary funding, especially since the initiative has received a ‘red’ rating from government auditors, signaling significant challenges ahead.
Industrial Case and Strategic Platform Modernisation Programme
The Horizon system, infamous for its accounting errors that led to wrongful accusations against subpostmasters, prompted the Post Office to embark on the Strategic Platform Modernisation Programme (SPMP) in 2021. Despite initial optimism, the project has faced setbacks, including a significant reduction in workforce, a loss of expertise, and strained relationships between the Post Office teams and the modernization program. The total cost of replacing Horizon has ballooned to £1.1 billion, far exceeding the initial projections.
Critical Projects and Governance Issues
The Infrastructure and Projects Authority (IPA) raised red flags about the SPMP’s feasibility, citing unmanageable challenges and questioning the program’s viability. The IPA’s scrutiny has prompted external reviews of the Horizon replacement program and highlighted deficiencies in governance and technical expertise within the Post Office. Governance structures and board-level support for digital transformation are identified as crucial areas that need improvement for the project’s success.
Historical Context and Ongoing Efforts
The Post Office’s struggles to replace Horizon are not new, with previous attempts in 2015 failing to materialize due to the project’s complexity. Horizon, introduced in 1999 to modernize accounting practices, inadvertently led to a wave of accounting discrepancies and subpostmaster prosecutions. The ongoing saga of Horizon’s replacement underscores the challenges of transitioning to a digital-first retail organization and the imperative of addressing governance and operational shortcomings within the Post Office.
the Post Office’s Horizon replacement project faces significant hurdles, from escalating costs and funding uncertainties to governance deficiencies and technical challenges. The road ahead requires a concerted effort to address these issues and ensure the successful delivery of a new IT system that meets the demands of modern postal services.
