Digital overhaul at UK’s NS&I bank is £1.3B over budget and 4 years late

Steven

Digital overhaul at UK’s NS&I bank is £1.3B over budget and 4 years late

Summary

The National Audit Office (NAO) has found that National Savings & Investments’ (NS&I) business transformation programme, Project Rainbow, is around £1.3 billion over its 2020 business case and four years behind schedule. The total expected cost to 2030–31 is roughly £3.0 billion. The watchdog blames optimistic timetables, underestimated technical complexity, procurement failures and weak commercial and programme management capability.

Key Points

  1. Project Rainbow is now about £1.3bn over the original 2020 business case and delayed by four years.
  2. Total expected cost to 2030–31 is roughly £3.0bn, including legacy contracts such as Atos.
  3. NAO cites overly optimistic timetables and a poor understanding of complex system interdependencies.
  4. Procurement stumbles: several competitions failed, one contract was terminated and another abandoned.
  5. NS&I lacked sufficient digital, commercial and programme management expertise and no systems integrator function.
  6. The programme was reset in July 2024 and a Recovery Plan from PA Consulting was commissioned.
  7. Major suppliers involved include Atos, Capgemini, EY, PA Consulting, Actica, IBM and Sopra Steria.

Content summary

NS&I began Project Rainbow in 2020 to cut running costs, move to self-service digital channels and replace a long Atos outsourcing deal with multiple contracts. The NAO found the bank set an ambitious scope and timetable without enough contingency or detailed understanding of its 20‑year legacy environment. Procurement processes frequently failed to deliver and NS&I often lacked the skills to manage complex supplier arrangements and integration tasks. A programme reset was initiated in 2024 and external help engaged to stabilise delivery.

Context and relevance

This is a high‑profile example of public sector digital transformation going wrong: large, legacy IT estates, ambitious ambitions and weak procurement/commercial capability. The case highlights wider trends — the difficulty of unpicking long outsourcing deals, the rising cost of integration, and the need for strong systems integration and contingency planning in major IT programmes. For CIOs, procurement leads and ministers, the NAO’s findings are a cautionary tale about governance and capability when planning expensive, multi‑supplier transformations.

Why should I read this?

Short and blunt: it’s a spectacular overspend and delay on a taxpayer‑funded tech programme. If you work in public sector IT, procurement, or run legacy modernisation projects, the NAO’s findings are packed with practical warnings — from underestimating interdependencies to not having the right commercial skills. Read it to avoid making the same expensive mistakes.

Source

Source: https://go.theregister.com/feed/www.theregister.com/2025/11/14/nsandi_nao_report/