Britain's Post Office pays millions for a faulty system
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Britain's post office pays millions more to stay shackled to a faulty system. Live from the UK, this is the Marketplace Morning Report from the BBC World Service. Hello, I'm Nick Koreshi in Fort Leanneburn. You might remember the UK post office scandal where hundreds of post office managers were accused of fraud because they couldn't balance the books. Some were even sent to jail, but they were innocent. It was all down to a faulty IT system developed by computer giant Fujitsu.

Well, now the BBC's calculated the Post Office has spent more than $800 million to continue using the faulty Horizon system since attempting to end its contract more than a decade ago. The BBC's Peter Ruddick has been following this for us. Hello, Peter. Hi, Nick. Just remind us of the role this system has still to

to this day. Absolutely. It might be a real surprise for people that the IT system, essentially partly responsible for the wrongful prosecution of hundreds of sub-postmasters and many more who were pursued wrongly for money they were told they owed, is actually still in place in the post office. To understand this, you have to rewind back a bit to the turn of the millennium when the post office in the UK started doing more and more things

than just sending letters. You could absolutely buy stamps from the post office, but you would also go there to get your welfare benefits, or you might be managing your bank account from in store. And that meant that a system was needed to deal with all of these transactions, to log them, a point of sale and an accounting system. And that's where Horizon came in. The trouble is, as soon as it was introduced,

it came with issues and Fujitsu, its owners, because it just rented the system to the post office, they never bought it outright, Fujitsu didn't fix the bugs or weren't quick enough in identifying issues and

and that's when the wrongful data was used to pursue people. The problem is that fixing it is quite expensive, and there isn't sort of an automatic system out there that you could just go to and buy. You would either have to kind of develop one in-house...

or find another computer maker to make another massive system, which again would come at a really big cost. So that possibly explains why these amounts have totaled up over the years, because as I say, the post office rents the system, and so it's had to keep paying it until an alternative is found.

So where's this £600 million of public money gone? So it's gone essentially to maintaining the system, to trying to fix the bugs and also the rental costs because as I say the post office never owned the system. In 2012 they did look at buying the system code so they would take everything in-house but at the time that was judged to just be not a good use of public money. So this kind of piecemeal system of rental costs carried on

And unfortunately, the post office leadership was really too busy dealing with the scandal itself and changing leadership quite a bit to get a proper replacement for the systems. That's what's going on at the moment. They're trying to find a new system to replace Horizon. But until then, the rental costs, the maintenance costs just keep racking up.

Has the post office had anything to say? So the post office themselves have apologised to the victims and they say they are working on a replacement. Of course, the post office is owned by the government. The government say that as part of their plan, ministers will find a replacement for Horizon. It's just not going to be straight away. All right. Thank you, Peter. Absolute pleasure. Thank you. On to the numbers.

California has overtaken Japan to become the world's fourth largest economy. Growth domestic product reached $4.1 trillion last year, according to preliminary data. And in the UK, retail sales rose for the third month in a row in March, up four tenths of a percent, all boosted by some warm weather.

India and Pakistan have announced measures halting trade after a deadly attack in Indian-administered Kashmir. The Prime Minister Narendra Modi has blamed Islamabad for killing 26 tourists and warned of retaliation. Cross-border visas have already been suspended and critical water-sharing agreements put on hold. Authorities in Pakistan deny involvement and say any attempt to divert or stop waters would be seen as an act of war.

Gold hit $3,500 an ounce for the first time this week. Before slipping back, it's up about 30% this year. That's on top of a 25% rise in 2024. So then, what is the outlook for this classic safe haven asset? Olly Hansen is Head of Commodity Strategy at Saxo Bank in Denmark. Morning, Olly.

Hi, Nick. So what's happened to gold this week? Well, gold is actually having a little bit of a retracement after hitting another fresh record high earlier in the week. $3,500 was reached just after Easter when the market worried that Trump was going to sack the head of the Federal Reserve. That was since later rolled back somewhat. And now we're just seeing the market running through a bit of consolidation. But that will happen and that needs to happen.

considering gold is trading up almost around 30% already this year. One factor you mentioned there, that's surely not the only one. No, absolutely. And probably the main two reasons we've seen now for the past couple of years is a very, very strong demand from central banks around the world buying more than 1,000 tons on an annual basis now for the past three years. We have the debt situation around the world, which is also raising some concerns.

And then in China, we're seeing investors continue to buy into gold. Perhaps they're worried about the local economic outlook, but also perhaps worried about the devaluation of the renminbi as a defense against the terrorist war against the US. So there are plenty of drivers right now. How significant, Olli, is this benchmark $3,500 an ounce figure? It's massive. Considering how far we traveled in a relatively short period of time, it clearly does indicate that the world is in a bit of a flux right now because

why would you otherwise buy an asset that doesn't give you any return no yield no dividend no coupon it costs money to to store and you have to worry about someone coming and stealing it from you and nevertheless investors still piling into gold and that clearly indicates that they are worried about the world as it is right now so where is this all heading ollie well i think

We had a 3,300 call for the year, which was then lifted to 3,500 just before Easter, which we then actually reached within a week. So it's very difficult to say where this is going to end. Again, just using the round numbers, if we see a renewed deterioration of the current situation, which has eased a little bit, there are some talks now on the terrorist front between

The Trump administration and China, there's focus on Japan, Korea as well, potentially getting some deals done. That has just eased the pressure somewhat. But the risk of something blowing up again could take it to above 3,500. And then the market will start to focus on 4,000 as the next level. It's great to talk to you. Thanks, Olli. Thank you very much, Nick.

Finally, a Dutch mayor has apologised after it emerged a valuable print by the artist Andy Warhol was probably taken out with the trash during renovations to a town hall. The rare silk screen portrait of Queen Beatrix from Warhol's Reigning Queens series was among dozens of valuable artworks which have gone missing. This has been the Marketplace Morning Report from the BBC World Service. I'm Nick Creation. Thanks for listening.

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