NS&I Digital Overhaul Delayed and Overspent, Report Reveals
Challenges in NS&I's Digital Transformation
National Savings and Investments (NS&I), a state-backed institution that plays a crucial role in supporting the UK government by borrowing from savers, has faced significant challenges in its digital transformation programme. A recent report by the National Audit Office (NAO) has highlighted serious issues with the project, which was initially expected to be completed years ago but is now facing substantial delays and cost overruns.
The NAO found that NS&I underestimated the complexity of its digital transformation, leading to significant cost increases, delays, and procurement problems. The project, which aimed to replace an outdated supplier contract with Atos (previously Siemens) that had been in place since 1999, was launched in 2020. The goal was to create a more efficient "self-service digital business" that would reduce operational costs and improve service delivery.
As part of this initiative, NS&I also pledged to provide additional support for vulnerable and elderly customers. The organisation believed that the digital revamp would enable it to deliver services faster, with lower risk and greater flexibility. However, the project has fallen significantly behind schedule. Originally planned for completion in 2024, it is now expected to be finalized in March 2028, four years later than initially anticipated.
The financial implications have also been severe. The total cost of the project has risen from £1.7 billion in 2020 to £3 billion, marking a 76% increase. This massive budget overrun has raised concerns about the effectiveness of NS&I’s planning and execution.
According to the NAO, one of the key factors contributing to these challenges was the overly ambitious timetable set by NS&I. The report emphasized the need for the organisation to develop a more realistic plan to ensure that the digital transformation delivers the intended benefits for both customers and taxpayers. It also recommended improvements in contract management and the system used to monitor programme costs and risks.
Gareth Davies, head of the NAO, stated that while NS&I faced complex technology challenges, the decision to end the contract with its external supplier was seen as an opportunity to address these issues and transform its operations. However, the organisation underestimated the scale of the challenge and overestimated its ability to deliver the project on time and within budget.
Since the programme was reset in 2024, NS&I has made progress in identifying key issues to address. However, the NAO stressed that the organisation must now focus on developing a realistic integrated plan to deliver its new operating model and achieve the intended benefits for the business, customers, and taxpayers.
An NS&I spokesman welcomed the NAO’s report and accepted its recommendations. He noted that the organisation is on track to raise £12 billion this year to support public services across the UK while maintaining operational performance and customer satisfaction for its 24 million customers.
The business transformation programme is considered essential for delivering cost-effective finance for the government and ensuring that customers receive the services they want. The organisation has also welcomed the additional support of David Goldstone, who has been asked by the economic secretary and chair of NS&I’s board to help address the issues highlighted in the report.
