MPs brand NS&I’s £3B IT overhaul a ‘full-spectrum disaster’

Summary

Parliament’s Public Accounts Committee (PAC) has delivered a blistering assessment of National Savings & Investments’ (NS&I) long-running digital modernisation — once called “Project Rainbow” — calling the roughly £3 billion programme a “full-spectrum disaster.” The PAC says the overhaul has failed to deliver promised services, remains deeply delayed, and continues to expose taxpayers to unacceptable risks while legacy systems and extended contracts remain in place.

Key Points

The PAC report brands NS&I’s digital transformation (Project Rainbow) a “full-spectrum disaster” and warns taxpayers remain exposed.
Estimated total cost reached roughly £3 billion as of 2024, with legacy systems still in operation and supporting contracts extended to 2028.
NS&I could not provide a clear figure for how much has already been spent, blaming difficulties extracting data from its systems.
Staffing and skills gaps led to around £43 million spent on consultants, highlighting weak in-house expertise early in the programme.
Internal culture described as “can-do” and “bullishly confident,” but delivery record does not support those claims.
The PAC demands a credible recovery plan built from scratch: realistic timelines, clear cost reporting and demonstrable risk management before further taxpayer exposure.

Content summary

Project Rainbow aimed to replace NS&I’s ageing, interconnected banking systems to reduce operating costs and improve services for millions of savers. Instead, complexity was underestimated, integration with legacy platforms has proved far harder than expected, and the project ran into chronic delays and budget overruns. By 2024 the overhaul was estimated at about £3 billion, yet NS&I still runs parts of the old estate and cannot state conclusively how much has been spent so far.

The PAC contrasts NS&I’s failure with better-executed public-sector IT projects — noting, for example, the Bank of England delivered a major payments renewal on time for £431 million. The committee has ordered NS&I to produce a credible recovery plan with realistic cost and timeline estimates and evidence of effective risk tracking; until then it warns taxpayers remain at risk.

Context and relevance

This is a high-profile example of how government IT modernisation can go wrong: misjudged complexity, poor cost controls, reliance on external consultants, and weak oversight. It matters to anyone tracking public procurement, digital transformation best practice, and fiscal accountability because it underlines the political and financial consequences when major public-sector IT projects fail to deliver.

For practitioners, suppliers and policy-makers, the report is a prompt to reassess risk, capability and governance in large-scale modernisation programmes — especially where legacy estates are deeply entwined with day-to-day operations.

Why should I read this?

Fancy a cautionary tale about how a supposedly modernising IT project balloons into a multi‑billion pound mess? This one shows what breaks when complexity, oversight and in-house skills don’t line up — and why taxpayers might end up clearing the tab. Short, sharp and worth your five minutes if you care about public money or running big tech programmes.

Author style

Punchy: this report is not just another sobering audit — it’s a red flag for anyone involved in large public IT programmes. If you’re responsible for transformation, procurement or oversight, read the full PAC findings: the detail matters and the lessons are immediate.

Source

Source: https://go.theregister.com/feed/www.theregister.com/2026/02/13/nsandi_pac_latest/