The system, which was installed by the Post Office and supplied by Fujitsu, falsely suggested there were cash shortfalls, leading to 736 unsafe convictions for theft, fraud and false accounting in what is one of the biggest miscarriages of justice in British legal history.
The Post Office has said it cannot afford to foot the huge cleanup bill for the scandal and last month the government, the service’s only shareholder, confirmed the taxpayer would step in.
This weekend new details of the potential magnitude of the compensation programme emerged.
The Post Office Scandal blog by the journalist Nick Wallis, who has written a book on the fiasco, reported that the Department for Business, Energy and Industrial Strategy (BEIS) has now made three grants available to the Post Office that total just over £1bn.
The most recent grant, made last month, was for £686m, and came on top of previous awards of £94m and £233m. In his post, first reported by the Sunday Times, Wallis said the figures involved meant the Post office Horizon IT disaster was now a “fully fledged £1bn scandal”.
Between 2000 and 2014, the Post Office prosecuted 736 post office operators based on information from a recently installed computer system called Horizon. Some of the workers were jailed following convictions for false accounting and theft, and many were financially ruined.
However, it was the software, which contained bugs, errors and defects, that had caused the problems, according to the high court judgment that quashed many of the convictions.
So far, the Post Office has offered compensation to 777 of the 2,500 subpostmasters who have applied. Those who had convictions overturned have been offered interim payments of £100,000 while their claims are assessed.
A spokesperson for BEIS said the subsidy figures were a “top estimate of what could be needed. It has not been spent and will only be given to the Post Office in arrears if and when required.”