The Post Office has extended its deal with the Horizon IT system for another year.
It will pay £47m to the Japanese-owned company Fujitsu to use the controversial system until March 2027.
This is despite the accounting system having been at the centre of the Post Office scandal, which saw more than 900 sub-postmasters wrongly prosecuted after faulty Horizon software made it look like money was missing from their branch accounts.
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In a statement, a Post Office spokesperson said it was “committed to moving away from Fujitsu and off the Horizon system as soon as possible”.
“We are bringing in a different supplier to take over Horizon whilst a new system is developed, and this process is well under way.
“We expect to award a contract for a new supplier to manage Horizon by July 2026, according to current timelines.”
But the BBC reports that sources have said the deal could be extended to 2028 while the new supplier takes over the running of Horizon, and that the replacement of the software itself is still a “long way off.”
This is after the Post Office’s project to build an in-house alternative was ditched last year after soaring costs and complexity.
Fujitsu executives have previously apologised for the company’s role in the Post Office scandal.
A government spokesperson said: “We are working as quickly as possible to ensure the Post Office has the technology it needs, including replacing Horizon, as a vital part of the company’s wider transformation.
“The fact they still use the Horizon system indicates past under-investment, which can’t be rectified overnight, so we need to ensure postmasters have the tools they need to continue serving their customers in the interim.”
Hundreds of Post Office branch managers were convicted of swindling money on the basis of evidence from Fujitsu’s flawed Horizon accounting system.
The Horizon software started to be rolled out in Post Office branches across the UK in 1999 and over the subsequent years hundreds of subpostmasters were prosecuted by the Post Office over missing funds.
In 2019 the High Court ruled that Horizon contained a number of “bugs, errors and defects” and there was a “material risk” that shortfalls in Post Office branch accounts were caused by the system.
The scandal reached national attention following the broadcast of the ITV drama Mr Bates vs Post Office at the start of 2024.