Written evidence submitted by Dr Anthony Fraser (NTP0001)

1. Summary

This submission responds to the PAC’s inquiry into NS&I’s Business Transformation Programme (Project Rainbow). While the programme's aims are strategically sound—addressing legacy risks, reducing costs, and improving flexibility—the execution to date raises serious concerns. In particular, the continued dependence on Atos, whose performance over the past decade has been mixed, presents a critical risk to transformation outcomes.

The programme also faces major challenges in supplier integration, knowledge transfer, and legacy disentanglement. Stronger governance, clearer contingency planning, and public-facing accountability mechanisms are essential.

In my personal experience of major transformation programmes involving complex legacy systems, these require frequent and transparent (objective) progress reporting and granular hands-on focus from senior management to ensure they remain on track. In multi-vendor situations like this one, especially where the incumbent provider is involved, it is key that all parties are aligned around the overall objectives and not just ‘their part’.

2. Key observations and concerns

A. Ongoing reliance on Atos despite historical performance

• In my opinion, NS&I and its primary contractor, Atos, have consistently failed to deliver expected digital transformation since as ago as 2014.
• The £474m direct extension to March 2025, with no open competition, exacerbates vendor lock-in and limits commercial leverage.
• Atos’s current corporate instability adds risk to contract continuity and handover quality.

B. Procurement delays and re-baselining

• The programme has already been delayed by several years, in part due to failed procurement processes (notably for Package B).
• While a revised approach has been outlined, there is limited evidence that contingency options (including alternative delivery models) are mature or tested.

C. Supplier integration and orchestration risk

• Transitioning from a single outsourcer to a multi-supplier model introduces integration complexity.
• There is limited public assurance that a functioning end-to-end technical architecture or governance framework is yet in place.
• Without a fully empowered system integrator (Package A), handoffs between suppliers risk delay, duplication, or failure.

D. Programme governance and transparency

• NS&I has rightly established a transformation sub-committee of its board and enhanced internal staffing.
• However, clear public milestones, performance indicators, and third-party assurance mechanisms appear underdeveloped.
• It is unclear whether risk escalation pathways (especially in the event of Atos handover failure) have been codified or tested.

3. Recommendations

To ensure programme success and protect public value, I would recommend the following actions at a minimum:

1. Treat Atos exit as a programme in its own right

• Appoint a dedicated exit programme lead, with clear authority and reporting to NS&I’s executive committee and board.
• Publish monthly progress updates on key Atos disengagement metrics, including knowledge transfer, data ownership, and system transition deliverables.

2. Establish stronger technical assurance and supplier integration oversight

• Ensure the Package A integrator (IBM) is empowered not only contractually, but operationally—with the ability to arbitrate between supplier interfaces and delivery risks.
• Commission an independent assurance partner to validate interoperability and end-to-end business continuity prior to go-live.
• Consider appointing an independent technical assessor to the BTP committee, dedicated to supplier output and code quality.

3. Increase transparency and stakeholder communication

• Provide PAC and the public with quarterly updates on transformation progress, risks, and mitigations.
• Publicly commit to milestone-based reporting, particularly for:
• Core banking migration readiness,
• Supplier handover completeness,
• User experience improvements and access for vulnerable customers.

4. Rehearse contingency and rollback scenarios

• Plan and simulate failure scenarios, including:
• Atos withdrawal or service degradation,
• Integration breakdown between suppliers,
• Data loss or misalignment during handover.
• Establish escalation routes with HM Treasury and Cabinet Office for emergency procurement if required.

5. Alignment of interests

• Successful delivery of the transformation programme should form a significant part of the performance assessment for NS&I senior management.
• Component providers should have an element of their return tied to the successful of the whole programme.

4. Closing remarks

NS&I’s ambition to modernise its operations through this transformation programme is both timely and necessary. However, the PAC is right to scrutinise the risks. Without a more aggressive approach to supplier dependency, programme assurance, and public accountability, there is a danger that the original objectives—cost savings, resilience, and digital customer experience—will be undermined by legacy entanglements and delivery drift.

I would also make the point that, in my experience, NS&I lacks a culture of candid transparency around its performance. Historically, this has typically related to its customer service failings (call centre wait times and abandoned calls, resolution of customer complaints etc). Even in its most recent annual report it refers to the fact that its Trustpilot score has improved. However, what it fails to point out is that the underlying negative experience of customers is broadly unchanged (with some shocking experiences detailed) and the change in the Trustpilot score has been driven by more ‘invited’ reviews from NS&I in effect ‘drowning out’ the still overwhelmingly negative unsolicited (‘organic’) feedback from customers.  I find this tendency to “massage the metric” rather than address the underlying issue troubling and, in my view, it betrays a lack of ruthless objectivity around performance. This is concerning not only in the context of the day-to-day service but also in the face of a challenging transformation programme.

Therefore, the Committee’s continued oversight, particularly over key aspects like Atos-related exit performance and multi-supplier integration, is essential to safeguarding value for money and service continuity for millions of savers.