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NS&I’s digital overhaul £1.3bn over budget
NAO calls on the government-owned savings bank to come up with ‘realistic plan’ as digital transformation programme runs four years behind, and total costs rise to £3bn
Costs for the UK government-owned National Savings & Investments’ (NS&I) digital transformation programme have increased by £1.3bn since the project began, according to a National Audit Office (NAO) report.
The bank began its digital overhaul in 2020, aiming to reduce running costs and make NS&I a self-service digital business. However, progress was slow and in 2024, when none of the new services planned had gone live, the programme went through a reset. Despite this, an NAO report on the programme found there is still no realistic delivery plan for its digital transformation.
The digital transformation programme began as NS&I, which is 160 years old and has around 24 million customers, outsourced its back-office operations to Siemens IT Solutions and Services, now Atos, in 1999, a contract which originally was due to expire in 2024.
The original business case estimated the programme delivery costs to sit at around £400m, but those figures have now increased to £841m. These figures do not include running costs and contract extensions, which take the total increase to £1.3bn. According to NS&I’s own 2024 data on the programme from 2020-21 to 2030-31, the total cost will sit at £3bn. However, according to the NAO, whether these figures are correct is unsure.
“Given the way NS&I report programme performance, we found it challenging to identify spend to date, and forecast spend for the remainder of the programme,” the report said. “NS&I only recently began to produce financial reports that isolate programme‑specific spend to date. This has, historically, made it difficult for NS&I to monitor what is being spent and for what purpose, and to estimate the whole life cost of the programme.”
Procurement issues
At the core of the transformation programme sat the outgoing outsourcing arrangement with Atos, which NS&I planned to replace by running competitions for five different contracts, which would all be transitioned by the end of the Atos agreement in March 2024.
It ran procurements for all five contracts, aiming to move to a multi-supplier model. However, the majority of the procurement was unsuccessful, with only two contracts being awarded in the end, one which was originally unsuccessful but then had a rerun and a contract awarded. The other one resulted in a contract award but was subsequently terminated and another was abandoned because of a disagreement over contract terms.
“Following the initially unsuccessful procurement for one package in late 2022, NS&I extended the procurement processes for two other packages. It also extended its contract with Atos by one year beyond the original March 2024 timeline, to March 2025,” the NAO report said.
“For the two procurements where it has not appointed new suppliers, NS&I has extended its contract with Atos to March 2028, via an extension whose value NS&I estimated at £530m.”
The NAO report added that NS&I awarded contracts without understanding the dependencies between different contracts, and how they would work together.
“NS&I did not have an integrated plan or end-to-end solution. This made it difficult for NS&I to accurately track performance and spending, and measure the impact of risks,” the report said.
Programme reset
In 2024, following the failed procurements, NS&I changed its own programme rating from “amber” to “red”, in line with the Infrastructure and Projects Authority’s (IPA’s) own assessment on the programme, which indicated that delivery looked unachievable.
The reset has included a phased approach to transitioning services from Atos to new suppliers. The first of these was transferring call centre staff from Atos to Sopra Steria in April 2025. In August 2025, NS&I announced it will replace its legacy Atos banking platform with SBS’s SBP Digital Core platform in 2028. It has also appointed Capgemini as its systems integrator and is working with consultancy firm EY to resolve design issues on the end-to-end design of the programme.
However, the NAO report pointed out that as of October 2025, there was still no “complete and agreed integrated plan” with an end date or contingency plans for delays or cost pressures.
NAO boss Gareth Davis said that the NS&I faced “complex long-term technology challenges” and saw the end of the Atos contract as an opportunity to transform the business. “But it underestimated the scale of this challenge and overestimated its ability to deliver its digital transformation programme, which led to significant cost and time increases,” he said.
“Since resetting the programme in 2024, NS&I has made progress by identifying the key issues to address. It must now develop a realistic integrated plan to deliver its new operating model and achieve intended benefits for the business, customers and the taxpayer.”
The NAO has called on the bank to improve its approach to contract management and review its governance structure for implementation.
“It should also prepare for the Atos contract’s expiry in March 2028. This preparation work should form part of the wider commercial strategy. As part of this process, NS&I should undertake a ‘lessons learned’ exercise drawing experiences from competitions it has run to date,” the report said.
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