Recommendation 4

Government bodies too often lack the necessary financial management skills to support digital transformation effectively. There are potentially huge gains to be had in government from successfully leveraging new technologies and digital opportunities, in terms of both better services for citizens and savings or efficiencies for the public purse. However, while business as usual IT change is generally reasonably managed by government, it frequently finds applying appropriate skills, financial controls and governance to major IT change or digital transformation projects more challenging. Managing such changes poorly can lead to serious and ongoing impacts for the running of an organisation. In its digital transformation programme for its settlement system, the Bank of England managed costs carefully: it delivered the programme largely on time and at an estimated cost of £431mn, and avoided costs creeping up in an unplanned way. Whereas in contrast, total costs of National Savings 4 and Investment (NS&I) transformation programme, including running costs, were estimated in 2024 at £3.0 billion, an increase of £1.3 billion from 2020, with further increases likely. recommendation The Government Finance Function should set out how it will ensure government finance teams have the necessary skills to apply appropriate financial controls and governance to digital transformation projects.