National Savings & Investments (NS&I) is weighing options to extend the timeline for its digital transformation program, which is already four years behind schedule and £1.3 billion over budget.
The UK state-backed savings bank is reviewing several paths forward following a scathing report from a parliamentary watchdog. The Public Accounts Committee (PAC) previously described the long-running digital overhaul as a "full-spectrum disaster."
HM Treasury stated it will decide the project's future in the second quarter of this year via a Full Business Case. The government's decision will determine if the bank can meet its current March 2028 deadline or if it requires a longer delivery window and additional funding.
A project in crisis
Launched in 2020 under the name Project Rainbow, the initiative aimed to reduce running costs and transition NS&I into a self-service digital business. The plan also intended to replace a 20-year outsourcing agreement with Atos with five separate contracts.
However, the National Audit Office reported in November that the program's total cost is expected to hit £3 billion by 2030-31. This represents a £1.3 billion increase compared to the original 2020 business case.
In February, the PAC criticized NS&I for a lack of transparency and planning. The committee noted that consultants' work suggests the program cannot be completed by the time the Atos contract ends in 2028.
"We are not convinced that even now NS&I has the realism needed for the Program, and we are not confident that NS&I will deliver the Program successfully," the PAC stated in its report.
The committee recommended that the bank abandon attempts to compress the schedule and instead provide a "realistic bottom-up integrated plan."
Leadership changes have also marked the project's turbulence. NS&I chief Dax Harkins resigned last month following delays in processing £476 million in bonds belonging to deceased relatives. Sir Jim Harra, the former chief executive of HMRC, is set to replace him.
HM Treasury is currently considering two primary options. One involves delivering the full scope as quickly as possible, which would likely require more budget. The second option involves an "elongated delivery timeline" to minimize increases to the Spending Review settlement.
An NS&I spokesperson noted that the bank has the option to extend its existing contract with Atos until March 2029.
