MPs Criticize NS&I’s £3B IT Overhaul as a ‘Total Disaster’
Parliament’s Public Accounts Committee (PAC) has strongly criticized the digital overhaul of National Savings & Investments (NS&I), dubbing it a £3 billion “total disaster.” The committee’s report, released recently, highlights significant shortcomings in the long-running project.
Overview of NS&I’s IT Overhaul
Initially titled “Project Rainbow,” the goal of the initiative was to modernize NS&I’s outdated infrastructure, reduce operational costs, and enhance customer services. However, it has transformed into a cautionary tale about government modernization efforts.
Key Findings from the PAC Report
- The PAC states that the project has exposed taxpayers to “unacceptable risks.”
- NS&I has yet to deliver the promised new services.
- There is no comprehensive, integrated plan with a clear timeline and costs.
- The estimated overall cost is projected at £3 billion by 2024, significantly exceeding initial projections due to delays.
NS&I continues to operate parts of its legacy systems, which undermines the goals of the modernization effort. As a result, contracts supporting these outdated systems have been extended to 2028.
Comparison with Other Projects
In stark contrast, the Bank of England completed its Real-Time Gross Settlement system on time for just £431 million. This disparity underscores the inefficiency of NS&I’s initiative.
Financial Oversight Issues
During questioning, NS&I struggled to provide an accurate expenditure figure for the overhaul. The PAC expressed deep concern, as it is unacceptable for a financial institution managing public savings to struggle with basic data reporting.
Challenges Faced by NS&I
The complications began when NS&I attempted to disentangle its banking systems, which have been integrated over decades. This foundational complexity has significantly hindered progress on the overhaul.
Consultant Expenditures and Internal Culture
- NS&I reportedly spent approximately £43 million on consultants, indicating a lack of in-house expertise.
- The internal culture was described as overly optimistic, with leadership maintaining a “can-do” attitude despite the project’s challenges.
Yet, the PAC chair observed that such confidence does not align with the project’s grim realities, suggesting a possible shift to a “can’t do” mentality.
The Path Forward
The PAC is urging NS&I to reassess its digital transformation strategy. They recommend developing a new, realistic plan with detailed cost reporting and evidence of risk management. Until then, taxpayers remain vulnerable to the failures of Project Rainbow.
