Fujitsu has £1.4bn in HMRC IT contracts

Fujitsu has £1.4bn in HMRC IT contracts

Feb 16, 2024

HMRC is one of the main government users of Fujitsu IT services despite shift to Amazon, reports Will Drysdale

HMRC still has £1.4bn worth of active contracts with Fujitsu, but the company has written to the Cabinet saying it will not voluntarily bid for government contracts unless the government asks it to.

In December 2023 alone HMRC spent £14.48m on contracts with Fujitsu Services, 16% of the total amount spent for the month, which was £89.9m.

The largest individual spend out of the 64 contracts with Fujitsu was £1,413,029, spent on IT hardware maintenance. Overall, the largest spend was on physical and virtual hosting infrastructure, which had 28 separate payments totalling £7,031,899.72.

Desktop services was also a significant chunk of the 64 contracts with 12 payments totalling £1.69m.

There is also a monthly cost which is consistently over half a million pounds every month towards ‘management of agreement & admin costs’.

Amazon Web Services looks to be taking some contracts from Fujitsu for virtual hosting and infrastructure contracts. In December 2023 HMRC spent £13.32m with the majority being spent on virtual hosting and infrastructure contracts, this could be an attempt to split the services between the two companies and reduce the reliance on Fujitsu.

Amazon Web Services has been contracted with HMRC since 2020, which saw the company gain £3m worth of contracts.

In 2019, £1.4bn of contracts were granted to Fujitsu after the court case revealing the extent of the Horizon Post Office accounting scandal.

Before the scandal was revealed in full, over £2bn of contracts were given to Fujitsu which are still running today.

Additionally, the Financial Conduct Authority (FCA) has spent £630m with Fujitsu since 2007. The last contract was signed in 2018 and is winding down.

The Bank of England has also had contracts with the technology company, running up a bill of £417,000.

According to the Treasury Committee, the FCA was the only organisation to consider terminating a contract with Fujitsu because of ‘poor performance’ but decided against it.

Harriett Baldwin, chair of the Treasury Committee said: ‘We have unearthed some information which, I believe, goes beyond what is known by the Cabinet Office. I hope this will aid transparency and scrutiny around the role of Fujitsu as a public sector supplier.

‘As set out in some of the letters we received, Fujitsu was often accessed through pre-approved government frameworks run by the Crown Commercial Service.

‘The inquiry will run its course and it is welcome news that Fujitsu has agreed to pay towards the compensation that wrongly convicted postmasters are receiving.’