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

The UK's state-owned savings bank has blown past its budget by £1.3 billion on a digital transformation program beset by delays, according to the National Audit Office. National Savings & Investments (NS&I), which brings in government funding through the retail savings market, has pushed the project back by four years after …

[Anonymous Coward]

BAU

Atos, PA Consulting, Capgemini, EY, PA Consulting, IBM, and Sopra Steria all filled their boots at high margins largely because public pay restraints mean that the Civil Service and arms length bodies like NS&I are stopped from paying market rates to their staff and thus don't have many staff who understand how it all works. It's easy to blame poor management, but the main problem here is pay. A big shout out to the Tories who spent fourteen years reducing public sector pay, but Labour aren't much better.

Will this lesson be learned? Of course not, so the story will repeat an infinite number of times.

[Anonymous Coward]

Re: BAU

And I'll add this gem from NS&I's last annual report, attributed to Ed Anderson's NS&I's chair:

"I would like to thank my colleagues on the NS&I board, our partners at Atos and our new partners, IBM and Sopra Steria, colleagues at HM Treasury and the many people across NS&I who work tirelessly to serve our customers and the taxpayer with care and dedication"

Just imagine the outcome if these companies had not worked with such care and dedication.

[Anonymous Coward]

Re: BAU

FFS it doesn’t do anything sophisticated- Some savings, some ISA’s, Premium Bonds (and it’s draw) and loans tje money to the Government ??

An army of 100 Clerks, passbooks and a bingo machine from Argos would be enough to manage this at under £10m/year.

[Anonymous Coward]

Re: BAU

The staff that knew how this work will have been made redundant/outsourced/offshored.

[Andy The Hat]

From my experience, do they actually have a computer system?

[Anonymous Coward]

programme, not program

NS&I and the NAO might well lack IT clue. But I'm reasonably sure they can spell correctly.

[Zurich Gnome]

Déjà snafu all over again

... In 2020, NS&I began a business transformation program called Project Rainbow which aimed to reduce the bank's running costs, make NS&I a self-service digital business, and replace its 20-year outsourcing deal with Atos by splitting the work into five separate contracts.

Ah, the well-known "break up the current organisation for improved efficiency" paradigm. At least they got the name right: there'll be plenty of gold at the end of this rainbow for the usual leprechauns.

... Updated ...

... "We welcome the NAO's report and accept its recommendations. We are on track to raise £12 billion this year to ..."

I may be being unfair or taking something out of context here, but to me it sounds mightily as though they started the project without knowing how to manage it, didn't know they didn't know, and now instead of being punished for the project's failure are using it as grounds for getting yet more money from the public purse. Nice not-work if you can get it.

[Like a badger]

Re: Déjà snafu all over again

"now instead of being punished for the project's failure are using it as grounds for getting yet more money from the public purse"

When any big IT project has gone wrong it's an inevitability that the organisation has to fill the hole by pouring money in. This is a reality that few project risk analyses properly recognise - there will be a line that mumbles about "delays in completion may result in higher costs and deferral of benefits", but there won't be anything accompanied by tombstone icons, skulls and crossbones that says "This project is INHERENTLY VERY HIGH RISK. Delays or functional failures will result in dramatically higher costs, and once resources are mobilised there will be no option to stop the project and return to previous systems for anything other than for short term emergency use. The potential scale for very public failure creates a huge reputational risk." Yet EVERY major system change should have this.

Private sector business I worked for spent roughly £250m on a heavily customised SAP upgrade that didn't work, had to scrap it all and start again, and second time round total costs were just shy of £500m not including the first attempt but including the costs of extensive business activity for re-work and work-arounds, and regulatory fines for poor customer service. Even that grand total of circa £750m doesn't include around £500m of additional bad debt costs over both project's life, nor the impact on customer numbers of poor service. Unsurprisingly this business is no longer around.

[Zurich Gnome]

Re: Déjà snafu all over again

A fair point, as is AC's (BAU, above) about public service pay restraints.

I've subsequently read the summary in NAO's report (https://www.nao.org.uk/reports/national-savings-investments-business-transformation-programme/#downloads), whose recommendations end with one to HM Treasury (paragraph 26), which "should ensure it sets out clearly its expectations of the role of NS&I’s Board and its own role, in providing oversight of a complex programme of this nature." The report doesn't as far as I can see make any comments about responsibility for the funding of NS&I's (recommendations, paragraph 25 points e and g) planning for the skills and workforce needed for Programme delivery, or for NS&I's Finance function's envisaged stronger and more proactive role within the Programme.

ZG, signing off from this story.

[Anonymous Coward]

Re: Déjà snafu all over again

Some easy money for Rachel Reeves - not pissing it up the wall in the first place.

Radical cost savings, not impacting the well known Leeches on Government finances - vulnerable children, elderly or the disabled.

[Red Ted]

Project Rainbow

The title tells you everything you need to know about likely outcome of the project!

[TimMaher]

Re: Project Rainbow

Perhaps it’s somewhere over the Horizon?

[tiggity]

optional title

Some* may suggest it is not as technically difficult as has been made out, but the companies involved are delighting in making it as slow and expensive (profitable for them) as possible.,

.. the list of companies mentioned may feature "some"** with a reputation for overcharging & under-delivering (including paying special attention so that things taht shoudl be "obvious" to anyone are deemed not to be unless explicitly mentioned in the spec / contract somewhere, thus ensuring that unless customer produces a spec of mind boggling detail they will find enough "unspecified" but vital things to overcharge on that it is yachts all round for the C suite)

* Obviously I would not personally be suggesting those companies are anything other than squeaky clean, but others might.

** where, depending on your opinion "some" may range from 0 to 100% of the companies

[tiggity]

sluggish emails

As someone with premium bonds I have noticed that if you want to check if you have won after a monthly draw, then your winnings (or usually lack of) are available to check online not long after the draw is done.

But (in the rare event you win) it takes many, many days after the draw for you to receive a "winning bond" email, so that is certainly a bit of their system in need of improvement.

[Like a badger]

Re: sluggish emails

Well, like you I've got money parked there, but to be both honest and logical, I believe government should shut down NS&I.

NS&I raise trivial amounts compared to the government's Debt Management Office (like about 1% of DMO's gilt selling). NS&I borrowing isn't long term, so investors can claim it back when they like so that's a risk to government. And after operating costs are factored in I'm not persuaded that NS&I is a cheap way for government to borrow. Previous reports have shown that HMT haven't got a clue about what's going on at either DMO or NS&I, and there's no proper performance monitoring.

https://publications.parliament.uk/pa/cm5804/cmselect/cmpubacc/74/report.html

My view is that the only reason premium bonds still exist is because it's where cautious mostly older, wealthier people park their money as a risk free form of lottery, and government don't want to rile the pensioners. There are other products on offer from NS&I, but I'm not convinced their availability alters any of the points I've made.

[Anonymous Coward]

Re: sluggish emails

You can hold up to £1m in an NS&I Direct Saver account and it's 100% guaranteed by the Treasury, unlike most bank accounts which are limited to £85k. As such, it's a good place to park funds when buying/selling a house.

[Swb]

Atos also managed a massive snafu at the DWP