Thread by @rcolvile

Everyone is talking about Horizon/Fujitsu. But there are some key aspects everyone has missed - including the big reason Fujitsu kept getting contracts even after the scandal broke. Have done a deep dive for my column - thread below (1/?) thetimes.co.uk/article/the-vi…

The story starts in the 60s, when the Wilson govt hits on a new solution to Britain's lack of competitiveness - not nationalisation, but national direction. It forces private firms to merge (at gunpoint) to create 'national champions' which can export to the world.

One of these is British Leyland. Another - Tony Benn's brainchild - is International Computers Limited, or ICL. This is meant to be Britain's answer to IBM. Spoiler warning: it isn't.

In order to help ICL compete, Benn gives it first preference on any government computing contract. Even into the early 1980s, the public sector has to buy any computer above a certain size from ICL.

This is a problem, because ICL's computers aren't very good. Here's Sir Peter Gershon, who worked at the firm, on the new 2900 series. archivesit.org.uk/wp-content/upl…

Over the years, ICL has a complicated corporate history. It does some good stuff and some bad stuff. But since it's never good enough to match IBM etc, its main customer always ends up being the British state.

Gradually (simplifying the story massively), it pivots to being a pure public sector IT contractor. In the 1980s, for example, it gets the contract to build the state pension. That system is still paying out £90bn a year even into the 2020s! See here dwpdigital.blog.gov.uk/2021/04/28/com…

And of course because the state has always bought from ICL, and ICL have built so many the existing systems, it's in a privileged position to get more work. Like Pathway, the £1bn 1995 project to digitise/automate the entire benefit system.

Pathway (jointly awarded by DHSS and Post Office) is an utter bloody disaster, not least because no one can agree on whether to give benefit claimants swipe cards or smartcards. In 1999 it's cancelled, with vast write-offs. See NAO here nao.org.uk/reports/the-ca…

But! ICL strikes a new deal. To use the Pathway tech to automate Britain's post offices. It's called... Horizon. According to a whistleblower, everyone knows it's 'a bag of shit'. But the contract gets signed anyway. Why? computerweekly.com/news/252496560…

Let's go back to 1981. That year, ICL is going bankrupt. It doesn't have enough revenue to develop the new generation of computers it needs to compete with IBM. Thatcher, being Thatcher, wants to let it die.

The problem? Because it has been given this de facto monopoly of government IT, it has become too big to fail. If it falls over, so do all kinds of other bits of govt using its systems. Here's Gershon again.

(BTW, ICL was also meanwhile screwing up big projects for the MoD, at the height of the Cold War...)

This is also when the link with Fujitsu happens. As part of the 1981 bailout, ICL scrap their attempt to build their own architecture and buy in Fujitsu's. Which their customers love, because Fujitsu are actually good. Here's Sir Peter Bonfield, another ICL veteran.

Steadily, ICL become more and more dependent on Fujitsu's tech. And in the 1990s, it ends up buying first most and then all of the company - because it has this wonderfully lucrative captive market. One vet says Pathway/Horizon is the most profitable deal in ICL's history!

But again - why sign the deal? Partly because, as in 1981, ICL/Fujitsu was too big to fail. Fujitsu allegedly tell UK govt that if the Horizon deal isn't done, ICL will collapse. (Nice benefit system you have there, shame if anything happened to it...) telegraph.co.uk/news/2024/01/1…

This obviously isn't the full explanation for Horizon - it's still a big step from 'selling a broken system' to 'lying and jailing postmasters'. But you can't understand the story without it. And there's another big issue you need to understand, too.

A lot of people have asked: why did Fujitsu keep getting contracts even after Horizon? And a big part of the problem is that the people giving out those new contracts legally couldn't take Horizon into account.

.@DavidHalpernCBE tells the story here of being in the Cabinet Office. Fujitsu have built a system to work on highly classified material. It's fucking awful. Half an hour to boot up. The minister hates the software so much he won't use it. bi.team/blogs/learning…

They ditch the system. Fujitsu sues. But even as the decommissioning is going on, Fujitsu strike a deal to sell the same awful product to another bit of govt. What on earth?

The answer, as Halpern says, is that because of procurement rules (partly derived from EU) one bit of govt couldn't tell another about its experience of specific companies or products. Legally couldn't.

In the same vein, Halpern and co asked those using a public procurement platform to rate the suppliers. They couldn't display the ratings publicly. And there was a heated legal dispute about whether the minister could even see the firms' names civilservice.blog.gov.uk/2018/12/18/mak…

This isn't (quite) as stupid as it sounds. The idea is to prevent you buying from Smith because you've always bought from Smith, and he's done good work and is a great chap who buys you dinner on the regular, shutting out Jones who has a better/cheaper product but no track record

But the result was that the threshold for banning firms from further details for poor performance was insanely, insanely high. And that the actual quality/track record of suppliers was essentially not a factor in the procurement process! hughjames.com/blog/how-does-…

That particular issue has been fixed. But as I say in the column, there's so much more to do. In 2022/3, the British state bought £393 billion of stuff. That's basically income tax + VAT, or pretty damn close to it. And we really don't buy it very well.

In 2020, I reviewed a book called 'Bad Buying' by @gpetersmith. Some of the stories make your blood boil.

@gpetersmith The Horizon story has all sorts of awful lessons. But one of the simplest is that getting procurement right really, really matters. And that it deserves far, far more attention. Column here - please give it a read thetimes.co.uk/article/the-vi…

PS When I say Fujitsu's pension system was paying out £90bn a year, that's obviously processing the payments, not making it that amount!

Also, it was also one of the key contractors involved in the monumental NHS IT screw-up under Blair... bbc.co.uk/news/uk-politi…