Computer system that saw innocent Post Office staff jailed is renewed for £42million

The disastrous computer ­system that caused dozens of postmasters to be wrongly jailed has been extended for use by the Post Office.

Tech giant Fujitsu has been handed a deal of up to £42million for its Horizon accounting software.

The sum is more than three times as much as postmasters received in settlement for having their lives blighted by the bug-ridden system.

It was blamed for innocent postmasters being jailed or made bankrupt by creating shortfalls in branch accounts.

Between 2000 and 2014, the Post Office prosecuted 736 postmasters.

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Former post office worker Tom Hedges (centre) holds up a bottle and glass of champagne in celebration outside the Royal Courts of Justice, London, after having his conviction overturned by the Court of Appeal (PA)

Following an historic day at the Appeal Court last month, some 45 postmasters have had their names cleared, and dozens more are lining up to ­challenge their convictions.

Horizon – which the Post Office introduced in 1999 and spent 15 years insisting was ­incapable of errors – was found to be riven with glitches by the High Court.

In an out-of-court settlement in 2019, the Post Office agreed to pay £58m to 555 ­claimants.

Former Post Office chief executive Paula Vennells (PA)

But after legal costs, they had to share £12m, getting only £20,000 each on average.

Earlier that year Paula Vennells stepped down as chief executive of the Post Office, a position she held since 2012.

The deal with Fujitsu is endorsed by the Government which owns the Post Office.

The Horizon contract was due to expire in 2022 but this has been put back to 2023, at an additional cost of £21m.

There is a further option to extend it to 2024, which would add another £21m on top.

Japanese firm Fujitsu has billions of pounds worth of contracts with the Government.

Thirty-nine former subpostmasters who were convicted of theft, fraud and false accounting because of the Post Office's defective Horizon accounting system have had their names cleared by the Court of Appeal (PA)

These include a five-year deal with HMRC worth £168.8m, a £29m contract with the Department for Work and Pensions and it heads a consortium with a £200m contract to implement Brexit checks in the Irish Sea.

Two retired Fujitsu experts are being investigated by the Metropolitan Police over evidence they gave in courts that helped convict postmasters.

The Post Office is believed to be trying to replace Horizon with a different “more user-friendly” IT system, but it is not ready yet.

A spokesman said: “We have recently taken steps to protect our business by extending our agreement with Fujitsu for the provision of Horizon IT services for a further year, with an option to extend for a further, final year.

“It is not possible to replace all these services by the current expiry date of April 2023 without introducing significant operational risk into our network.

“We’ve taken several important steps to modernise our IT services including signing an agreement with Amazon Web Services to host our legacy Horizon application services in their Cloud, due to become operational this year.”