It was known that the software was shitty and buggy before it was foisted on the Post Office, having been rejected by DWP (and the Post Office right up until they were given no choice). It was Blair’s decision, he didn’t want to upset Fujitsu or discourage investment from Japan.
Short and long versions of a report into that on the JFSA website.
Pressure from govt to pretend that it worked, and to make the business profitable for privatisation, caused this inhuman clusterfuck.