Savings bank blasted over "full-spectrum" IT disaster
Over-confidence and unrealistic delivery plans mean project has little to show for after five years.
Government
Updated 17:00 GMT 13 February 2026 with NS&I comment.
National Savings and Investments has dug a £3 billion hole trying to replace its front and back-end IT systems in a "full spectrum disaster" of a digital transformation programme that began in 2020.
The transformation, which was meant move the UK's savings bank away from its single long-time IT supplier to a new multi-supplier model, is estimated to run £1.3 billion over its £1.7 billion budget set in 2020.
The programme was marked as "red" – not likely to be achievable – in the Infrastructure and Project Authority’s (IPA) annual reports in 2023 and 2024.
Among other contractors, NS&I has been flinging money at IBM ('nobody got fired for...) which landed £100 million in December 2023 for “Digital Experience and Digital Enablement” and £34 million in 2022 to "implement the required system interfaces, and to undertake operational monitoring, management and maintenance of the system integrations.”
The most recent Public Accounts Committee (PAC) report, published Friday, said the transformation was a “full-spectrum disaster” for the £240 billion state-owned savings bank.
Committee Chair Geoffrey Clifton-Brown said: “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.”
An NS&I spokesperson told The Stack: "We recognise that separating and rebuilding 25 years of complex IT infrastructure has been more difficult than we originally envisaged, and that we underestimated the scale and complexity of the challenge.”
Costs, delays balloon
The ‘Business Transformation Programme’ began in 2020 as “Project Rainbow" with a £1.7 billion budget for replacing the single outsourcing contract with Atos, in place since 1999, with multiple suppliers.
Roadblocks with procurement was an early problem. One package in late 2022 fell through and NS&I extended the procurement processes for two other packages, according to an NAO report.
Contracts began with a £34.2 million deal for IBM covering “digital integration and service operations” and the NS&I had spent £111 million by 31 March 2024, mostly with IBM, only to deliver no “meaningful benefits,” said the PAC.
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The Atos contract was expected to end in 2024 but has since been extended to March 2028. Evidence given to the PAC by NS&I in December 2025 said the deal could be extended until 2031 to ensure continuity.
A separate report by the National Audit Office (NAO) in November 2025 found 2024 projected total costs, including Atos extensions and running costs, to reach £3 billion by 2031. NS&I would not provide fresh projections during testimony to the PAC.
A replanning process to turn the transformation around that began in 2024 will deliver a new plan by March 2026, the bank said.
NS&I also told The Stack it had transferred around 750 customer service agents and 350 back-office staff to a new supplier in 2025, begun the rollout of its mobile app to a new partner, and launched technical architecture to link its new multi-supplier model.
Over confident approach
The committee MPs said the flaws in NS&I’s overly ambitious plan to complete four transition stages at the same time should have been flagged earlier.
"When asked whether a 'good news' culture had been allowed to persist, NS&I's leadership told us of a 'can do' attitude promoted in the organisation. The results so far would very much demonstrate that the reality is closer to 'can't do,'" Clifton-Brown said.
The Treasury has increased scrutiny of the project since 2024, appointing new non-executive directors and the Chair of the Office for Value for Money as a programme advisor.
But, MPs said they were "not confident that NS&I’s current management will listen to advice from Treasury appointees.”
In the report, they said recent consultancy work suggested the programme would not conclude by March 2028, with “high-risk work on replacing the core banking engine still at an early stage.”