The UK’s National Savings and Investments (NS&I) bank is exposing taxpayers to “unacceptable risk” because it lacks understanding of the cost of a digital project that had already hit £3bn.
The Public Accounts Committee (PAC) said NS&I has not accepted what went wrong with the project, which was designed to modernise its operations.
Costs have increased by £1.3bn since the project started, according to a National Audit Office (NAO) report.
Geoffrey Clifton-Brown, chair of the PAC, said the NS&I project “has been a full-spectrum disaster”. In a report, the committee of MPs said: “NS&I has no workable plan, lacked the skills to deliver it, and has no idea of eventual cost of the project.”
The project cost “an estimated” £3bn by the end of 2024, but the PAC warned that taxpayers’ money could continue to be channelled into the project without assurance that it will be delivered.
Last month, the government confirmed £109m in additional funding, pending parliamentary approval. “Deeply concerningly, NS&I were unable to tell the PAC how much had been spent on the programme to date,” said the PAC.
The committee warned that while £43m of taxpayers’ funds has been spent on consultants for the project, the NS&I “is vague on how it holds them to account”. It added that there are further risks to NS&I’s whole business, and especially its customers, if the programme is unsuccessful.
The report labelled the replacement of NS&I’s core banking engine, on which main work is yet to start, as “an extremely high-risk element of the programme”. It is seeking confirmation on how NS&I will strengthen and embed a risk management framework.
The legacy core banking platform, which has been provided through an outsourcing contract with Atos since 1999, will be replaced with a cloud-native platform from software supplier SBS, formerly Sopra Banking Software.
SBS’s SBP Digital Core platform is planned to be introduced in 2028.
NS&I, which is 160 years old and has about 24 million customers, outsourced its back-office operations to Siemens IT Solutions and Services, now Atos, in 1999.
Over-confident
The PAC accused the NS&I of being “over-confident” about delivery capabilities with little evidence to support this. “It has no workable plan for it after five years, and no idea of its eventual cost,” it said.
The PAC said the bank has a “good news” culture which means decisions are not being made and disagreements not resolved.
HM Treasury said it should have intervened after several serious setbacks before it gave the matter the attention it deserved.
Clifton-Brown, said: “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,” he 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.”
