DBT seeks watchdog's advice on £136m Post Office subsidy to replace Horizon IT system

Department has proposed giving the public corporation significant funding to deliver ongoing tech upgrade work this year in support of eventual migration from Fujitsu platform
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By Sam Trendall

01 May 2025

The Department for Business and Trade has sought advice from competition regulators on a proposed £100m-plus subsidy for the Post Office to support the replacement for the troubled Horizon IT system.

The DBT, which is the parent agency of the Post Office, recently asked the Subsidy Advice Unit of the Competition and Markets Authority to compile a report on government’s proposed 2025-26 funding for the public corporation’s Future Technology Portfolio (FTP).

PublicTechnology.net logoThat report – which assesses the subsidy plans and rationale and provides government with “non-binding advice” – has now been published, outlining that the DBT is intending to hand the Post Office £136m to support delivery of FTP in the 2025/26 year.

“DBT is proposing to award POL (Post Office Limited) a grant of £136m, to allow POL to ensure that the current IT system remains functional and continue to develop the longer-term transition away from Horizon,” the report says. “The subsidy will enable POL to enact the first year of the FTP for financial year 2025/26, and will facilitate further activities in subsequent financial years as part of following phases of the FTP.”

SAU’s evaluation of the funding packages include four defined stages, covering assessment of: policy objectives; incentives for subsidy recipients; possible distortive impacts; and a concluding balancing exercise.

The regulatory unit found that the DBT’s proposal clearly sets out the policy objective for the proposed subsidy, and also proves that the department “has considered other ways of achieving its policy objective and explains why the subsidy was the most appropriate option”.

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