Tony Blair was warned about ‘flawed’ Horizon system before Post Office rollout

He was told the IT system was 'hugely expensive, inflexible, inappropriate and possibly unreliable'

Tony Blair was warned the Horizon IT system was ‘flawed’ before it was rolled out across Post Offices, documents reveal.

The then prime minister was told by special adviser Geoff Mulgan in 1998 that the problems with the system, which were already apparent, ‘may well continue’.

In a memo, released by the public inquiry into the scandal, Mr Mulgan said signing Horizon off could leave ‘what many see as a flawed system’ in place for more than a decade.

He said scrapping it would allow the Post Office to take advantage of ‘newer, cheaper and more flexible’ technology instead.

Moving ahead with Horizon would be ‘unsatisfactory’ and leave the government ‘dependent on a hugely expensive, inflexible, inappropriate and possibly unreliable system’, the adviser warned.

However, ‘short-term considerations and expediency’ pointed towards the deal going ahead, he added.

After the system was installed in 1999 and up until as recently as 2015, the Post Office accused up to 3,500 operators of sub-post offices of theft and false accounting. More than 700 were convicted, many jailed.

It demanded the sub-postmasters pay back cash shortfalls that, it turned out, were caused by faulty Horizon software and not by wrongdoing on the sub-postmasters’ part.

Several people went bankrupt, lost their businesses, homes, partners and saw their health suffer. Some even took their own lives.

In his memo to Sir Tony, Mr Mulgan said then-work and pensions secretary Alistair Darling was against the deal, but the department for trade and industry was more supportive.

Although Mr Mulgan warned the system was flawed, he did not suggest the software could lead to subpostmasters being accused of crimes and wrongfully prosecuted.

In response to the memo, the Sir Tony said: ‘I would favour Option 1 (pressing ahead with Horizon) but for Geoff’s statement that the system itself is flawed.

‘Surely there must be a clear view on this. Speak to me on that: ie reading the enclosed paper, it all focuses on the financial deal.

‘But there the risks are pretty even, probably coming down on the side of continuing. The real heart of it is the system itself.’

In a separate letter released by the inquiry, then-trade and industry secretary Lord Mandelson told then chief secretary to the Treasury Stephen Byers he believed proceeding with Horizon was the ‘only sensible choice’ available.

He said the system had been ‘thoroughly evaluated by independent experts’ who pronounced it ‘viable, robust and of a design which should accommodate future technological developments’.

Lord Mandelson added that not going forward with Horizon could lead to the closure of post offices, damage the confidence of subpostmasters in the government and ‘produce political fallout, no matter how carefully we try to handle it’.

He said the system had been evaluated in depth by independent experts and was deemed to be ‘viable, robust and of a design which should accommodate future technological developments’.

A spokesperson for Sir Tony said: ‘As the documents show, and make completely clear, Mr Blair took the issue very seriously.

‘His response to the Mulgan note, and in other interactions, was to raise the issue of the viability and reliability of the end project as this was his overarching concern. He subsequently received these reassurances.

‘It is now clear that the Horizon product was seriously flawed, leading to tragic and completely unacceptable consequences, and he has deep sympathy with all those affected.’

Only 93 of the 700 plus subpostmasters convicted have had their convictions quashed and several have still not received any compensation.

The scandal was dramatised in ITV’s four-part series Mr Bates vs The Post Office and has been watched by more than 14 million people since it was first released on nine days ago.

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