Try to modernise NS&I has been a ‘full-spectrum catastrophe’, MPs discover | Banks and constructing societies

[ad_1] An try to modernise the state-owned financial savings financial institution NS&I has been a “full-spectrum catastrophe”, parliament’s spending watchdog has concluded in a damning report.

NS&I (Nationwide Financial savings & Investments), which runs a well-liked month-to-month cash-prize draw for premium bond holders, has been criticised by a committee of MPs for exposing the taxpayer to “unacceptable threat” owing to the spiralling prices of its £3bn modernisation programme.

The Treasury-backed financial institution, which additionally gives a spread of financial savings accounts, launched a enterprise transformation programme – initially known as Mission Rainbow – in 2020 that was designed to scale back its operating prices and modernise its operations.

This included changing Atos, a French firm that had run NS&I’s banking companies and IT infrastructure for 27 years, with a number of smaller contracts.

Nevertheless, the prices concerned within the modernisation programme have since risen dramatically, from £1.3bn to £3bn, with “little transformation” delivered up to now, in accordance with the general public accounts committee (PAC).

NS&I now additionally believes it could want to increase its contract with Atos, which itself suffered monetary misery in 2024, till 2031.

The report mentioned the substitute of NS&I’s core banking engine was “extraordinarily excessive threat” due to the client knowledge concerned, however the principle work had but to start out.

It added that NS&I bosses knew this course of would should be managed “in minute element”, however had given no particulars of how they'd do that.

NS&I is among the largest financial savings organisations within the UK, holding extra £240bn for about 25 million prospects. First established in 1861, it makes use of the cash raised from savers to fund public spending, however all deposits are 100% assured by the federal government.

The PAC report mentioned leaders at NS&I failed to know how complicated the financial institution’s modernisation programme could be and have been overambitious in plans to complete it by March 2024.

The financial institution additionally relied too closely on consultants – spending £43m on recommendation – and had no agreed and accredited built-in plan, nor the precise expertise and experience in place, the report added.

The Treasury introduced final month it could be giving one other £109m to the programme, pending parliamentary approval, regardless of NS&I being unable to say how a lot cash had been spent up to now.

Conservative MP Geoffrey Clifton-Brown, the chair of PAC, mentioned: “It's deeply worrying to see a mission in such an vital organisation so off-track that neither this committee, or at occasions the Treasury itself, may achieve an correct sounding on prices and progress.”

He added: “Till NS&I lays out a practical plan for its transformation, our committee is worried that the taxpayer is at critical threat of throwing good cash after dangerous in bringing this programme to land.”

NS&I mentioned it welcomed the PAC report and its suggestions. It added: “Our enterprise transformation programme is essential to NS&I persevering with to ship cost-effective finance for presidency and the companies prospects need. We're engaged on choices to enhance programme supply and can present an replace on this in the end.”