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Witness Name: Geoffrey Mulgan
Statement No.: WITN0351_01
Exhibits: None
Dated: 21 September 2022
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF GEOFFREY MULGAN
I, Mr Geoffrey Mulgan, will say as follows:
INTRODUCTION
1. I was in 1998-9 a special adviser in 10 Downing Street. A year later I became
a civil servant in the Cabinet Office.
2. This witness statement is made to assist the Post Office Horizon IT Inquiry
(the “Inquiry”) with the matters set out in the Rule 9 Request dated 13 June
2022 (the “Request’).
BACKGROUND
3. In late 1998 I was asked to sit on the Horizon Working Group as a
representative of No 10. It was already clear that the project was fraught with
problems that cut across DTI and DSS. Like so many IT projects at the time it
had slipped badly in terms of costs and deadlines. The Working Group was
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meant to find a solution at a reasonable cost and to reconcile a series of
conflicting objectives - rapid move to automated benefits payments;
maintaining viable relations with Fujitsu, the most important Japanese investor
in the UK; not undermining the financial sustainability of the Post Office; and
contributing to digitising various other government services.
. The position was a mess and government did not have a coherent overall view.
Treasury tried to provide one.
. My recommendations were summed up in a note to the Prime Minister in
February 1999 and a further note in April to Lord Falconer. At that point the
approach recommended appeared the least worst option, with the potential to
break even, albeit with a lot of risk and uncertainty. I will leave to others to
assess whether my judgements then — of a very messy situation — were sound.
. Later in the summer, May 1999, I wrote an internal note on some of the longer-
term lessons of the situation, and how to avoid a similar one reoccurring,
emphasising clear leadership, ensuring fallback options; the lack of clear
authority over digital projects and commissioning at the time; and avoiding the
risk of ministers trying to assess commercial options that were certainly not their
competence (nor that of their senior civil servants)
. Although prompted by the papers I’ve seen, my memory of the details remains
hazy. I was covering a very wide range of briefs at the time (mainly on social
policy) and was much less directly involved in this topic than others, particularly
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the Treasury representatives, and Steve Robson who was brought in to achieve
amore viable option. This was also a particularly complex issue with constantly
shifting assessments.
8. I had no involvement in the issue later on, after I took up a role running the
Performance and Innovation Unit and Strategy Unit. As a result, I don’t have
a good perspective on what happened subsequently.
9. I don’t recall much discussion of technical integrity and robustness. Instead,
the main focus was on NPVs of different options (although I have a PhD in
telecommunications the technological issues were not discussed in this working
group). This included weighing up various options against the option of
termination. The various papers and minutes confirm just how much the
valuation of options varied over time, making it hard for ministers to make
decisions. A key part of the problem was the lack of a sufficiently clear
business strategy in the Post Office at the time, and a leadership who were not
quite equipped to lead on this major transformation of their work.
10.The Prime Minister briefly became involved, having been lobbied by the key
departments and by ICL and Fujitsu, and I attempted to provide advice, also
linking in Jeremy Heywood and the then Cabinet Secretary, Sir Richard Wilson.
But at the Chancellor's request, essentially pushed it back to Treasury to
resolve, as the Chancellor was concerned at the potential extra cost of the
option (B1) being proposed by some ministers and which for a time appeared
the best option for reconciling divergent priorities.
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11.1 had no one to one meetings with Fujitsu and ICL in this period. The Prime
Minister did have meetings with Fujitsu and ICL on a range of matters, and
during at least one of these the POCL issues were raised
Statement of Truth
I believe the content of this statement to be true
Dated:
21/9/2022
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