Originally launched in 2020 as Project Rainbow to modernise the bank’s operations and reduce running costs, the programme has instead been marred by spiralling expenses and significant delays. Total costs were estimated at £3.0 billion in 2024, representing a £1.3bn increase from original estimates, with the committee warning that further taxpayer exposure is likely as the project undergoes a substantial reset.

The report identifies a profound lack of technical expertise within NS&I, an organisation that has historically outsourced most of its operations to the French supplier Atos. This lack of internal capability led to a heavy and poorly managed reliance on consultants, costing the taxpayer £43 million. Despite this expenditure, the bank remains unable to provide an accurate figure for its total spend to date, a failure the committee described as “deeply concerning”.

While NS&I leadership claimed to possess the necessary data, they admitted to finding it challenging to extract and present it from legacy systems.

A central theme of the committee’s criticism is the “good news culture” persisting within NS&I. This “can-do” attitude reportedly masked serious risks, discouraged the resolution of disagreements, and prevented the organisation from learning from its failures.

Five years into the programme, the bank still lacks an agreed, integrated plan. Although the original completion date was set for March 2024, the programme was rated “red” for two consecutive years, indicating that successful delivery appeared unachievable.

The committee also highlighted the “unacceptable risk” surrounding the replacement of the core banking engine, a critical piece of infrastructure that manages data for 25 million customers and over £240bn in investments. Main work on this high-risk transition has yet to begin, and there are growing concerns that the programme will not be completed before the extended Atos contract expires in 2028.

HM Treasury, as the sponsor department, was also criticised for being too slow to intervene. While the Treasury has recently appointed senior advisers like David Goldstone to provide oversight, the committee remains sceptical that NS&I’s current management will heed external advice.

Sir Geoffrey Clifton-Brown, chair of the committee, noted that while the bank remains “bullishly confident”, this over-optimism is a fundamental part of the problem. The Committee has now called for a realistic, bottom-up plan and greater transparency before any further funding is approved.