A £3 billion digital overhaul at the UK’s National Savings and Investments (NS&I) bank is exposing taxpayers to “unacceptable risk,” according to a new report, as the organization struggles to grasp the true cost of the project.
Digital Disaster: Taxpayers on the Hook for Billions
A modernization effort at NS&I has spiraled out of control, with costs soaring and a clear plan for completion remaining elusive.
- The project’s costs have increased by £1.3 billion since its inception.
- NS&I lacks a “workable plan” and doesn’t know the ultimate cost.
- £43 million has been spent on consultants, but accountability is unclear.
- The replacement of the core banking engine is considered “extremely high-risk.”
The Public Accounts Committee (PAC) delivered a scathing assessment, stating that NS&I has failed to learn from its mistakes during the modernization effort. “What is the total cost of the NS&I digital transformation?” The PAC report reveals NS&I was unable to provide a definitive answer, even as the estimated price tag reached £3 billion by the end of 2024.
Geoffrey Clifton-Brown, chair of the PAC, bluntly called the project “a full-spectrum disaster.” In a report released this week, the committee of MPs stated: “NS&I has no workable plan, lacked the skills to deliver it, and has no idea of eventual cost of the project.”
Last month, the government confirmed £109 million in additional funding, pending parliamentary approval. The PAC expressed deep concern that taxpayers’ money could continue to flow into the project without any guarantee of success. “Deeply concerningly, NS&I were unable to tell the PAC how much had been spent on the programme to date,” the committee noted.
The report highlighted a troubling lack of oversight regarding the £43 million spent on consultants. NS&I’s methods for holding these consultants accountable were described as “vague,” raising questions about the value received for the substantial investment.
Risky Replacement on the Horizon
A particularly precarious element of the transformation involves replacing NS&I’s core banking engine, a task that hasn’t even begun. The report labeled this as “an extremely high-risk element of the programme” and is demanding clarification on how NS&I intends to strengthen its risk management framework.
Since 1999, NS&I, which serves approximately 24 million customers and boasts a 160-year history, has relied on Atos (formerly Siemens IT Solutions and Services) for its back-office operations. The plan is to replace this legacy system with a cloud-native platform, SBP Digital Core, from software supplier SBS (formerly Sopra Banking Software), with a planned introduction in 2028.
The PAC also criticized NS&I for being “over-confident” about its ability to deliver the project, citing a lack of supporting evidence. The committee found a “good news” culture within the organization, hindering honest assessments and effective decision-making.
HM Treasury also came under fire, with the PAC suggesting it should have intervened sooner after recognizing the project’s mounting setbacks. Clifton-Brown remarked, “NS&I’s original name for its troubled digital modernisation effort was Project Rainbow. It is perhaps unsurprising that this upbeat name for the scheme was retired, as aptly, our report finds it has been a full-spectrum disaster.”
“It is deeply worrying to see a project in such an important organisation so off-track that neither this committee, or at times the Treasury itself, could gain an accurate sounding on costs and progress,” Clifton-Brown added. “Until NS&I lays out a realistic plan for its transformation, our committee is concerned that the taxpayer is at serious risk of throwing good money after bad in bringing this programme to land.”
