Politics
The House | The Bank of England shows that not all public sector projects are doomed to fail
(Martyn Goddard/Alamy)
4 min read
Anyone following the Public Accounts Committee (PAC) would be forgiven for thinking that, if PAC is scrutinising something, it has gone wrong or is in danger of doing so.
Further, that attempts to update government services on which we all rely have had, to date, a history of failure – with PAC a chronicler of that history.
The evidence is compelling. Technical problems making the lives of court staff, already hit by backlogs, even harder; significant costs for emergency services from a delayed communications network; unacceptable risk for taxpayers stemming from National Savings & Investment’s (NS&I) modernisation programme – the list goes on.
But it is important to take lessons from success, as well as failure. A modernising government does not need to look far for a model to emulate – they just need to ring up the bank.
The PAC has scrutinised the Bank of England’s (BoE) renewal of the Real-Time Gross Settlement System (RTGS), and we were impressed. Few will have heard of RTGS – all of us would notice if it failed. It is a critical piece of infrastructure, underpinning all electronic sterling payment systems, settling around £790bn in transactions daily.
The nine-year RTGS renewal programme was implemented for £431m, launching in April 2025. Compare this to NS&I’s own programme, at £3bn+ and counting. The programme was reset in 2024 and rated as apparently unachievable, when it was supposed to have been largely delivered. Instead, it is a long way from completion, with core elements nowhere near ready.
What went right, and what went wrong? One way the BoE’s project stands out is its procurement, through a ‘competitive dialogue’. The BoE only established its preferred contractor having paid for advice from bidders. This allowed for system designs to be developed in consultation with the BoE as ‘intelligent customer’, and it proceeded with a fixed-price contract. This is perhaps a mechanism that the House of Commons’ authorities should consider in the Restoration and Renewal programme.
Compare this to NS&I’s poorly executed procurement. It split up its programme into multiple packages, awarding contracts without a good understanding of their interdependencies. Delays resulted in millions being paid in settlement agreements for cancelled contracts and additional payments to existing suppliers for work needed.
Another problem for NS&I was a lack of skills needed for such complex programmes. Most of its operations had been contracted out when the project began, so it had limited digital transformation experience going in. Finding recruitment difficult, it leant on consultants to fill the gaps, costing £43m.
One single thing that would help departments enjoy the BoE’s success is the breaking open of stifling hierarchies
In contrast, the BoE empowered skilled digital professionals to support well-informed decisions. Initial governance drew on non-executive directors’ expertise with track records in digital payments. Responsibility for when the new system went live rested jointly with senior delivery and technical leaders. The old system had to be switched off before the new came into operation, and these two people had to make the vital decision whether it would definitely work. We have long called for digital specialists to be at the decision making top table – this high-stakes moment demonstrates why that is.
One single thing that would help departments enjoy the BoE’s success is the breaking open of stifling hierarchies. The BoE set a clear tone for a ‘no surprises’ culture – staff were encouraged to raise concerns early, and anonymously, through a ‘transparency channel’. It is painful comparing this to NS&I’s mindset, which it characterised as a ‘can-do’ attitude. This kind of ‘good news’ culture can prevent lessons being learnt. We heard staff felt decision making was slow and hierarchical, with decision making processes opaque and not understood.
Our committee will continue acting as the watchdog for the taxpayer’s pound, rooting out waste wherever we find it. But in the RTGS, we hope all can see that public sector delivery is not simply a depressing landscape of decline and failure. Hard-working public servants are out there demonstrating best practice. The BoE is lighting the way for the rest of government to follow.
Geoffrey Clifton-Brown is Conservative MP for the North Cotswolds and chair of the Public Accounts Committee
You must be logged in to post a comment Login