Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Acknowledged
Set out key milestones and contingency plans to prevent further Rainbow Programme delays.
Recommendation
We are concerned that significant problems with NS&I’s procurement of its Rainbow Programme could leave limited flexibility or room for further delays. During the COVID-19 pandemic, the Treasury required NS&I to raise £35 billion from retail savers – more than three times the previous year’s requirement. While unable to deliver this, NS&I managed to raise a record £23.8 billion. One of the challenges NS&I faced during the pandemic was its inability to scale up its customer facing operations owing to its reliance on a single service provider, Atos. NS&I is undertaking a modernisation programme, which it calls its Rainbow Managing government borrowing 7 Programme, to move away from Atos to a multi-provider model. This project is already significantly delayed owing to bidders for one of the contracts submitting proposals that did not meet NS&I’s requirements. The Atos contract, due to expire in 2024, has been extended to March 2025 as a result. Following a lesson-learned exercise, NS&I redesigned the procurement process for this contract and eventually secured a successful bid in December 2023. NS&I aim to complete the Rainbow Programme in 2024–25 but this remains a complex project since the three winning bidders developed their plans in isolation, and they now need to be integrated. NS&I asserts that it can extend the Atos contract for an additional 12 months, which may not be enough contingency should NS&I experience further delays. Recommendation 4: NS&I should set out, as part of its Treasury Minute response, the following: • A list of the key project milestone between now and the Rainbow Programme launch date (thereafter NS&I should provide 6 monthly progress updates against these milestones); • The expected costs of extending the Atos contract beyond March 2025 and the contingency plans should Atos not wish to extend contract; and • Details on how it will avoid further delays to Rainbow Programme.
Government Response Summary
The government agreed, stating NS&I is working to formulate an integrated transition plan with key project milestones for its Rainbow Programme, which will be shared with the Committee when finalised. Expected costs for extending the Atos contract would be agreed upon extension, and contingency plans are commercially sensitive.
Government Response
Acknowledged
HM Government
Acknowledged
The government agrees with the Committee’s recommendation. Recommendation implemented Developing a transition plan is a complex process reflecting the technical and cultural complexity of changing a structure that has been in place for 25 years. This involves NS&I balancing a range of factors, some of which stem from the historical structure of NS&I. Others relate to commercially sensitive matters (relating to providers) that add complexity to the development of the integrated plan. NS&I is currently working with Atos, NS&I’s incumbent provider and preferred bidder for its core banking system, along with IBM and Sopra Steria, as the providers of its new service packages, to formulate an integrated transition plan. The plan will provide key project milestones (e.g. the launch of a transactional customer mobile app), ensuring that the transition is orderly and does not disrupt services to customers. NS&I will share this integrated transition plan with the Committee when it is finalised. As requested by the Committee, NS&I will also share updated plans on a six-monthly basis. Transforming NS&I is a £2.2 billion programme. As set out in evidence to the Committee, an additional 12 months of termination assistance services was agreed with Atos to March 2025, the cost of which is encompassed in the total cost of the programme. The contract enables NS&I to utilise this provision for a further 12 months beyond March 2025 if needed. Commercial terms, which would then determine the subsequent costs, would be agreed at point of extension with Atos. Should Atos not agree to extend, NS&I would seek to ensure an orderly transition to a new supplier in a manner that does not disrupt services to customers. There are a range of approaches NS&I could take, all of which at this time are commercially sensitive. NS&I’s programme governance has been audited and assured by the Government Internal Audit Agency (GIAA) over the last year. A representative from GIAA’s Project and Programme Management Assurance practice and a representative of the Infrastructure and Projects Authority are standing attendees at the Transformation Programme Board. NS&I is also in the process of adding a member of the executive team of another government department to the programme board to provide additional insights and experience from another public body. It is also working with the Cabinet Office’s complex transaction team to provide additional expert support.