NS&I’s Tech Troubles: A Warning for Public Sector Modernisation?
A damning report has revealed that the attempt to modernise National Savings & Investments (NS&I) has grow a “full-spectrum disaster,” with costs spiralling to £3 billion. The findings, delivered by parliament’s spending watchdog, raise serious questions about the management of large-scale IT projects within the UK public sector.
The Rainbow That Didn’t Appear
Launched in 2020 as ‘Project Rainbow,’ the business transformation programme aimed to reduce NS&I’s running costs and update its operations. A key component was replacing Atos, the long-term provider of NS&I’s banking services and IT infrastructure, with a network of smaller contracts. However, the project has faced significant hurdles, with costs more than doubling from an initial £1.3 billion. Despite the massive investment, the Public Accounts Committee (PAC) reports “little transformation” has been delivered.
Atos: A Potential Return?
Ironically, NS&I now considers extending its contract with Atos – the very company it sought to replace – until 2031. This comes after Atos experienced financial difficulties in 2024, adding another layer of complexity to the situation. The core banking engine replacement is deemed “extremely high risk” due to the sensitive customer data involved, yet the crucial work hasn’t even begun.
A Lack of Planning and Expertise
The PAC report highlights a critical failure in planning. NS&I leaders underestimated the complexity of the modernisation programme and were overly optimistic about the original March 2024 completion date. The bank relied heavily on consultants – spending £43 million on advice – while lacking a clear, approved plan and the necessary in-house skills.
What Does This Mean for Savers?
NS&I, backed by HM Treasury, remains a secure option for savers, holding over £240 billion for approximately 25 million customers. All deposits are 100% guaranteed by the government. However, the ongoing tech issues could potentially impact the efficiency of services and the development of new savings products. While existing savings are protected, the modernisation delays raise concerns about NS&I’s ability to compete effectively in the long term.
The Wider Implications for Public Sector IT
The NS&I debacle serves as a cautionary tale for other public sector organisations undertaking large-scale IT modernisation projects. The report underscores the importance of realistic planning, robust risk management, and the development of internal expertise. Simply outsourcing complex projects doesn’t guarantee success, and can, in fact, lead to increased costs and delays.
The Treasury recently approved an additional £109 million for the programme, pending parliamentary approval, despite NS&I being unable to provide a comprehensive accounting of funds already spent. This lack of transparency further fuels concerns about the project’s management.
FAQ
What is NS&I? NS&I (National Savings and Investments) is a state-owned savings bank in the UK, offering products like Premium Bonds and Direct Saver.
Are my savings with NS&I safe? Yes, all deposits with NS&I are 100% guaranteed by the government.
What went wrong with the NS&I modernisation project? The project faced escalating costs, delays, a lack of clear planning, and over-reliance on external consultants.
Will the issues affect my Premium Bonds? NS&I has stated it is working to improve programme delivery, but the delays could potentially impact future service improvements.
What is Project Rainbow? Project Rainbow was the original name for NS&I’s business transformation programme, launched in 2020.
Did you know? NS&I has been helping people save for over 160 years.
Pro Tip: Regularly check the NS&I website (https://www.nsandi.com/) for updates on their products and services.
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