Recommendations & Conclusions
12 items
2
Recommendation
67th Report - NS&I’s transformation pro…
Accepted
NS&I’s positive news culture has meant it has not learned lessons, which has affected its ability to deliver the programme. NS&I told us that that it promotes a “can do” attitude and culture; while this has benefits in encouraging commitment to NS&I and to transformation, NS&I acknowledges that it has …
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NS&I’s positive news culture has meant it has not learned lessons, which has affected its ability to deliver the programme. NS&I told us that that it promotes a “can do” attitude and culture; while this has benefits in encouraging commitment to NS&I and to transformation, NS&I acknowledges that it has been over-confident about its ability to deliver 3 the Programme. The Government Internal Audit Agency’s December 2024 review of NS&I’s culture found that its leaders were not taking responsibility for taking action to address issues raised. NS&I says it understands that its transformation will require a change in mindset and accountability, but it was not able to tell us how it would do this. Instead, when asked about a “positive news culture” which can result in decisions not made and disagreements not resolved, NS&I’s leadership continued to emphasize positive scores from staff engagement surveys. As these surveys only capture employees’ views, it does not give it an external perspective. The external organisations that have reviewed the programme told the NAO that NS&I was often slow to act on advice, or did not act. recommendation NS&I should seek positive attestation from NS&I non-executive directors and from the Treasury, that: • NS&I has implemented recommendations from the culture review and other recent reviews; and that • NS&I’s leadership has demonstrably learned lessons as the Programme has progressed
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Government response AI summary
The government agrees and commits to presenting an initial plan for business-wide cultural change, addressing review findings, to the Board/Treasury in early Summer 2026 for implementation over 12-18 months. It also notes ongoing governance revisions to incorporate feedback and challenge.
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HM Treasury
3
Recommendation
67th Report - NS&I’s transformation pro…
Accepted
It has taken NS&I far too long to develop a risk management framework, which has left the taxpayer exposed to unacceptable risks. NS&I launched multiple procurements and planned to deliver four transitions in parallel with no understanding of the risks this was exposing the organisation and its customers to. The …
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It has taken NS&I far too long to develop a risk management framework, which has left the taxpayer exposed to unacceptable risks. NS&I launched multiple procurements and planned to deliver four transitions in parallel with no understanding of the risks this was exposing the organisation and its customers to. The programme was rated high- risk by external reviews on several occasions, but NS&I has not shown it can manage the risks effectively. In 2025, NS&I implemented a new Risk Management Framework, but it is not yet fully embedded. There are still many risks for the Programme to manage, for example the replacement of core banking engine is extremely high risk, but the main work has yet to start. NS&I is bringing in skills through its new System Integrator (CapGemini), but it is not yet clear that NS&I is listening to what it has to say about the realism of the timetable and the delivery risks. Programme governance has been strengthened, with the Treasury instigating the main changes by appointing new non-executive directors to NS&I, establishing a new committee to scrutinise the programme and by appointing David Goldstone in an advisory capacity. recommendation a. NS&I should ask Mr Goldstone to review how the Programme is applying the new risk management framework, and identify what additional support is needed. 4 b. By June 2026, NS&I should write to the Committee setting out the progress implementing its risk management framework, and how NS&I will strengthen and fully embed the framework in its operations.
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Government response AI summary
The government agrees with both recommendations, committing to Mr Goldstone reviewing the application of the new risk management framework and NS&I writing to the Committee by June 2026 on its progress in implementing and embedding the framework.
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HM Treasury
4
Recommendation
67th Report - NS&I’s transformation pro…
Accepted
NS&I has failed to support the Programme with the skills and expertise it needs to deliver successfully. As an organisation with most of its operations contracted out to Atos, it is not surprising that NS&I had limited experience of digital transformation when starting the Programme. NS&I told us it has …
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NS&I has failed to support the Programme with the skills and expertise it needs to deliver successfully. As an organisation with most of its operations contracted out to Atos, it is not surprising that NS&I had limited experience of digital transformation when starting the Programme. NS&I told us it has found it difficult to recruit the additional skills and capability the Programme needs. Since 2024, NS&I has added capability at senior levels, for example, by appointing a new commercial director, but it still relies on consultants to fill skills gaps. NS&I has made very substantial (£43 million) use of consultants in the Programme, but was vague about how it holds consultants to account. NS&I said it has more staff now, but it still does not have a resource management strategy in place. NS&I will continue to rely on Atos, which suffered financial distress in 2024, until at least 2028. NS&I told us it now has a contract management framework to manage Atos and the contracts with new suppliers, but it will need to be much better at managing supplier contracts to maximise the benefits of transformation. recommendation Within six months, NS&I should write to the Committee setting out its resource management strategy, including use of consultants, and how it will ensure that it manages consultants effectively. NS&I should also set out more clearly how it will manage suppliers and contracts, to manage risks in moving to the multi-supplier model.
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Government response AI summary
The government agrees and commits to NS&I setting out its resource management strategy, including consultant and supplier contract management, to the Committee within six months.
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HM Treasury
5
Recommendation
67th Report - NS&I’s transformation pro…
Accepted
NS&I’s governance structures still do not have the performance metrics and information needed to hold the Programme to account. It is difficult to establish the cost of the Programme from the information provided by NS&I. The Treasury told us that, outside the times where it was being asked to approve …
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NS&I’s governance structures still do not have the performance metrics and information needed to hold the Programme to account. It is difficult to establish the cost of the Programme from the information provided by NS&I. The Treasury told us that, outside the times where it was being asked to approve a formal business case, it found it challenging to understand the cost and progress being made by the Programme. The NS&I witnesses could not tell us how much had been spent on the Programme to date, which is deeply concerning. NS&I said it had improved its financial reporting and had ‘the right data’, but was finding it challenging to take the data from its system and to ‘present’ it. NS&I’s annual report and accounts state that it is meeting its overarching corporate metrics, including the important measure of how much finance it raises for government; but those metrics do not cover Programme progress. There are risks to NS&I’s whole business—and especially to customers—if the Programme is unsuccessful, and NS&I needs to show greater transparency in how the Programme is progressing. 5 recommendation NS&I should set out how it will amend its overall reporting, both internally and externally, to include additional metrics around the Programme including its cost and progress.
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Government response AI summary
The government agrees, stating that NS&I has already implemented new monthly reporting metrics for delivery progress and spend, will complete a full spend audit by Q1 2026-27, and is working to enhance financial reporting across governance forums.
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HM Treasury
6
Recommendation
67th Report - NS&I’s transformation pro…
Accepted
The programme had suffered several serious setbacks before the Treasury gave it the attention it deserved. While NS&I is responsible for the Programme, the Treasury is NS&I’s sponsor department and, given its wider role in promoting good practice in managing major programmes and the high risk that the Programme delivery …
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The programme had suffered several serious setbacks before the Treasury gave it the attention it deserved. While NS&I is responsible for the Programme, the Treasury is NS&I’s sponsor department and, given its wider role in promoting good practice in managing major programmes and the high risk that the Programme delivery carried, we would have expected the Treasury to have been more heavily involved from the start. The Treasury had applied its usual scrutiny to the Programme’s Outline Business Case in 2020 and Full Business Case in 2023, approving each subject to conditions, but there were no consequences for not delivering. The Treasury that has been more interventionist since 2024, and told us it acknowledged that it should have intervened much earlier in the Programme. The Treasury expects NS&I to say whether it can deliver within budget when it has an agreed integrated plan, but was vague on how it would assess requests for more funding. We are concerned if further funding were to be approved without real assurance that NS&I can demonstrate it has a realistic plan. recommendation a. The Treasury should report to the Committee setting out more clearly how it will assess NS&I agreed integrated plan, including the sufficiency of its budget for the Programme. b. The Treasury should set out what it has learned from its oversight of NS&I’s Programme, and examples of what it has changed in how it looks at government activities more generally. 6 1 Causes of failure to deliver the Programme Introduction
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Government response AI summary
The government agrees, stating the Treasury will assess NS&I's integrated plan through a new Full Business Case via the Treasury Approval Panel process, requiring external assurance and considering David Goldstone's advice. It also highlights actions already taken, such as bolstered Board representation and engaged skilled …
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HM Treasury
8
Recommendation
67th Report - NS&I’s transformation pro…
Accepted
In December 2025, after five years, NS&I still has no agreed and approved integrated plan to indicate a Programme end date and milestones. NS&I has repeatedly failed to deliver such a plan.12 At our session in December 2025, NS&I said its system integrator Capgemini had now developed a draft plan, …
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In December 2025, after five years, NS&I still has no agreed and approved integrated plan to indicate a Programme end date and milestones. NS&I has repeatedly failed to deliver such a plan.12 At our session in December 2025, NS&I said its system integrator Capgemini had now developed a draft plan, which showed that the Programme would run beyond March 2028. NS&I is now doing a re-planning exercise to try and compress the work and bring this end date forward. NS&I said it would take advice from David Goldstone on this work.13 NS&I could not tell us how much the plan would need to be adjusted, but claimed this would add months not years, and said it was aiming to finish its replanning by March 2026.14 This would leave just two years to complete the Programme before the Atos contract is due to end in March 2028.15 When pressed for whether it could deliver before the Atos contract ends, NS&I acknowledged it would look at extending the Atos contract, potentially to 2031, which would imply a further delay of 3 years and additional cost from the longer timeframe.16
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Government response AI summary
The Treasury accepts the recommendation, confirming that NS&I is now working to an agreed and approved integrated Programme plan, with detailed Cost Management, Programme, and Benefits Realisation plans approved in March 2024. These plans define scope, costs, and ensure delivery against milestones, with ongoing monthly …
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HM Treasury
9
Conclusion
67th Report - NS&I’s transformation pro…
Accepted
In the absence of a complete and approved integrated plan, NS&I was unable to provide us with an updated estimate of Programme costs. It had spent £111 million on the Programme by March 2024, but could not give us a newer spend-to-date figure in our December 2025 evidence session, despite …
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In the absence of a complete and approved integrated plan, NS&I was unable to provide us with an updated estimate of Programme costs. It had spent £111 million on the Programme by March 2024, but could not give us a newer spend-to-date figure in our December 2025 evidence session, despite telling us it had the financial data to “make the right decisions at the right point”.17 It claimed to have the “routes, mechanisms and people” to deliver the Programme to the plan that it has not yet finalised, but also told us that it had not yet completed a “reset” of the commercial contracts so there is not yet “real solidity” of the milestones and deliverables; this means costs could increase further.18 NS&I agreed that the Programme cost would likely exceed the available budget, and expects to discuss this with the Treasury.19 The Treasury was clear that there would need to be further discussions with Ministers should NS&I require additional budget to that agreed in the spending review.20 This means NS&I could not give us any confidence that it yet has reliable estimates of how much the programme would cost. It could only point to the work in progress on the integrated plan, that might allow it to do so by March 2026.21 12 C&AG’s Report, paras 14 and 3.15 13 Qq 19-20 14 Qq 12, 74-75 15 Qq 12-13; C&AG Report para 10 16 Qq 76-77 17 Qq 18, 56, 79 18 Qq 23-25 19 Qq 13, 25 20 Q 27 21 Q 12 9
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Government response AI summary
The Treasury confirms that NS&I is now working to an agreed and approved integrated Programme plan, with detailed Cost Management and Benefits Realisation plans approved in March 2024, defining scope and costs. NS&I has also significantly improved financial data quality with robust controls and is …
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HM Treasury
25
Conclusion
67th Report - NS&I’s transformation pro…
Accepted
The NAO reported that it was challenging to establish the cost of the Programme from the information NS&I provided. NS&I said it was working on improvements to its cost data for its next business case this.72 The Treasury said it had been satisfied by the spend data in each business …
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The NAO reported that it was challenging to establish the cost of the Programme from the information NS&I provided. NS&I said it was working on improvements to its cost data for its next business case this.72 The Treasury said it had been satisfied by the spend data in each business case it approved, but there was a lack of clarity at other times.73 When challenged on its understanding of cost data, NS&I said it had “access to the information”, but that legacy systems meant it still has “”some more work to do in terms of how we how we present that information”, and that it was “working through” these issues as it developed the new Programme plan.74 It considered that it had made “significant changes” over the last six to eight months, and said it was “good” that GIAA had rated its financial controls as “moderate”.75 GIAA defines “moderate” as meaning “some improvements are required to enhance the adequacy and effectiveness of the framework of governance, risk management and control”.76
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Government response AI summary
The Treasury notes the challenges in establishing programme costs, confirming NS&I's Cost Management and Benefits Realisation plans were completed and approved in March 2024, which define scope and costs. The response states NS&I has significantly improved financial data quality, implemented robust financial controls, and is …
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HM Treasury
26
Conclusion
67th Report - NS&I’s transformation pro…
Accepted
The Treasury told us that the lack of transparency from NS&I had made it difficult for the Treasury to understand the reasons for the cost increases, saying it was not always clear whether the funding NS&I received was being used on the Programme or running NS&I. It also said NS&I …
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The Treasury told us that the lack of transparency from NS&I had made it difficult for the Treasury to understand the reasons for the cost increases, saying it was not always clear whether the funding NS&I received was being used on the Programme or running NS&I. It also said NS&I had been “sluggish” to respond to conditions that the Treasury had set as part of the business case approval.77 NS&I told us that the transformation programme affects its whole business, including all its IT, operations, customer services and products. It claimed it was able to give the information on cost to the NAO, but the NAO report says it had proved “challenging to identify spend to date, and forecast spend for the remainder of the Programme”, and the cost estimates should be “treated with caution”.78
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Government response AI summary
The Treasury acknowledges historic challenges in understanding cost increases but highlights that NS&I's Cost Management and Benefits Realisation plans were completed and approved in March 2024, providing clear definitions of scope and costs. The response confirms significant improvements in financial data quality, robust controls, and …
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HM Treasury
27
Recommendation
67th Report - NS&I’s transformation pro…
Accepted
NS&I’s annual report and accounts state that it is meeting its overarching corporate metrics, including the important measure of how much finance it raises for government. There are risks to NS&I’s whole business and to its customers if the Programme is unsuccessful. NS&I agreed that its overall corporate metrics did …
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NS&I’s annual report and accounts state that it is meeting its overarching corporate metrics, including the important measure of how much finance it raises for government. There are risks to NS&I’s whole business and to its customers if the Programme is unsuccessful. NS&I agreed that its overall corporate metrics did not measure progress on the Programme. This is despite the risks to customer data and NS&I operations. It accepted that disruption from the Programme could impact NS&I’s operations, but claimed that measuring progress might not “add anything”, despite the Programme taking a lot of senior management time, and suggested delays only impact the “perception” of performance.79 72 Q 57; C&AG’s Report, para 9 73 Q 17 74 Qq 56-57 75 Qq 18, 54-55 76 C&AG’s Report, Figure 9 77 Q 16 78 Q 18; C&AG’s Report, para 9 79 Qq 62-64 16 The role of the Treasury
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Government response AI summary
The Treasury accepts the recommendation, stating NS&I now tracks programme progress through internal metrics reported to committees and the Treasury, and has adopted revised objectives aligned with the latest plan. These new targets are incorporated into the 2024-25 Corporate Plan, with performance to be publicly …
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HM Treasury
28
Conclusion
67th Report - NS&I’s transformation pro…
Accepted
The Treasury had applied its usual scrutiny to the Programme’s Outline Business Case in 2020 and Full Business Case in 2023, approving each subject to conditions.80 The Treasury said it had been satisfied by the spend data in the business case it approved, but the NAO found that there were …
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The Treasury had applied its usual scrutiny to the Programme’s Outline Business Case in 2020 and Full Business Case in 2023, approving each subject to conditions.80 The Treasury said it had been satisfied by the spend data in the business case it approved, but the NAO found that there were errors in the spend reported.81 The Treasury told us it had thought it had clarity on the programme spend when approving the business case, but between business case approvals it had less clarity over spend, the Treasury agreed that money spent on the Programme is not available for other public service.82 The Treasury noted that determining whether the programme is within budget depends on the plan being developed by NS&I.83
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Government response AI summary
The Treasury notes the challenges in establishing spend data for the Programme and confirms that NS&I's Cost Management and Benefits Realisation plans, defining scope and costs, were completed and approved in March 2024. The response highlights significant improvements in financial data quality and robust financial …
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HM Treasury
29
Conclusion
67th Report - NS&I’s transformation pro…
Accepted
The Treasury said its spending review controls require the lead NED on the transformation committee to assure Ministers that the finances of the programme are under control.84, and it now seeks quarterly affirmation from NS&I NEDs on progress before releasing funds.85 We asked the Treasury how NS&I could deliver the …
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The Treasury said its spending review controls require the lead NED on the transformation committee to assure Ministers that the finances of the programme are under control.84, and it now seeks quarterly affirmation from NS&I NEDs on progress before releasing funds.85 We asked the Treasury how NS&I could deliver the programme if the budget had been fixed before the outcome was determined. The Treasury reiterated that the programme needed a plan first, and denied that if NS&I asked for more funding beyond agreed amounts it would automatically get it.86 It acknowledged that Ministers would need ultimately decide whether to increase the budget later, and would expect NS&I to present options for meeting the budget set at the spending review.87 80 Q 18; C&AG’s Report, Figure 9 81 Q 17; C&AG’s Report, para 9 82 Qq 18, 39, 42 83 Q 44 84 Q 16 85 Q 42 86 Q 26 87 Qq 27-31 17
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Government response AI summary
The Treasury confirms that processes for Lead NED assurance on programme finances have been strengthened, and NS&I's Cost Management and Benefits Realisation plans were approved in March 2024. It continues to scrutinise monthly spend and holds quarterly assurance meetings to manage programme costs effectively.
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HM Treasury