Britain’s state-backed savings bank has been dragged over the coals by Parliament’s spending watchdog, which has branded its long-running digital overhaul a £3 billion “full-spectrum disaster.”
In a report published on Friday, the Public Accounts Committee (PAC) delivered a scathing review of National Savings & Investments’ (NS&I) years-long digital transformation effort, saying the project continues to expose taxpayers to “unacceptable risks.”
The project, once cheerfully branded “Project Rainbow,” was intended to modernize NS&I’s aging infrastructure, reduce operational costs, and improve services for millions of customers. Instead, it has become a case study on how government modernization projects can spiral out of control when complexity is underestimated.
PAC chair Sir Geoffrey Clifton-Brown wasted little time setting the tone. “NS&I’s original name for its troubled digital modernization effort was Project Rainbow,” he said. “It is perhaps unsurprising that this upbeat name for the scheme was retired as aptly our report finds it has been a full-spectrum disaster.”
That tone continues throughout the report. MPs say the program has yet to deliver the promised new services and still lacks a fully integrated, credible plan outlining next steps, a timeline, and costs.
Estimates put the full cost of the overhaul at roughly £3 billion as of 2024, reflecting delays and the fact that NS&I is still running parts of the legacy infrastructure the project was meant to replace. Contracts supporting those systems have already been extended to 2028, underlining how far the transformation still has to go.
Clifton-Brown contrasted that figure with the Bank of England’s renewal of its Real-Time Gross Settlement system, delivered on schedule for £431 million. What’s more, when MPs asked how much had been spent on the transformation to date, NS&I couldn’t provide a figure.
The bank told the PAC it believed it had “the right data,” but was having difficulty extracting and presenting it from its own systems. Which is not the sort of answer you expect from a financial institution entrusted with managing tens of billions in public savings.
“It is deeply worrying to see a project in such an important organisation so off-track that neither this Committee, or at times the Treasury itself, could gain an accurate sounding on costs and progress,” Clifton-Brown said.
None of this fell apart overnight. The trouble started the moment NS&I tried to pry apart banking systems that have been glued together over decades. These systems sit underneath most of its day-to-day operations, including customer accounts, payments, and internal record-keeping, which has made the overhaul harder than originally expected.
Unsurprisingly, the vision of switching off the old platform and moving to something new has been deferred. In a letter to the PAC last month, NS&I said it is reassessing the program and considering scaling it back, including loosening how deeply new technology integrates with the legacy estate.
The shift highlights how difficult the transformation has been to execute, and staffing hasn’t helped matters, according to the PAC. MPs were told NS&I spent about £43 million on consultants while pushing the overhaul forward, which Clifton-Brown says was due to the bank lacking the in-house expertise needed when the program began.
Then there is the internal culture. When MPs asked whether people inside NS&I had been too positive about progress, leadership described a “can-do” environment. Clifton-Brown said the organization has remained “bullishly confident” amid scrutiny, but said its delivery record does not exactly back that up.
He summed it up with a line that is unlikely to disappear anytime soon, suggesting the program so far looks closer to “can’t do.”
Treasury oversight also gets a fairly sharp nudge in the report. MPs said that by the time the program was reset in 2024, delays were already entrenched and costs had well exceeded early projections.
The PAC now wants NS&I to produce what sounds like the government equivalent of going back to the drawing board. A proper plan, built from scratch rather than reverse-engineered around optimistic delivery dates, that includes clearer cost reporting and actual evidence that risks are being tracked and handled.
Until the organization produces a credible recovery plan with realistic timelines and cost controls, the PAC warned, taxpayers remain exposed to the risk that Project Rainbow’s pot of gold may never materialize. ®