“Step change” in capability comes at a much higher price than anticipated
The Bank of England’s project to migrate its core business systems to Oracle Cloud has seen its cost more than triple from an initial £7 million to £21.5 million due to expanded scope and changes in delivery approach.
The cost of a long-running project to move the Bank of England’s core business systems to the cloud has more than tripled from its original estimate, according to procurement documents.
The UK’s central bank has increased spending on its Oracle cloud migration programme to £21.5m, up from an initial forecast of £7m when the work was first put out to tender.
The contract, awarded to Oracle implementation partner Version 1, is intended to support the technical delivery and organisational change required to move key applications onto Oracle Cloud.
The Bank has been planning the migration since 2020, with the aim of consolidating multiple internal systems and modernising functions such as finance, procurement and recruitment.
A recent procurement notice showing the latest increase follows an amendment to the Bank’s Application Management Service contract, citing the need for additional work that was not included in the original procurement.
The document states that appointing a different supplier was not considered viable for “economic or technical reasons”, including the need for interoperability with existing systems. It adds that changing supplier could result in significant inconvenience and a significant duplication of costs.
The project has already undergone several revisions. After being advertised in 2022 with a £7m budget, the contract was awarded to Version 1 for £8.7m in September 2023.
That figure rose to £13.8m in February 2025 after the Bank changed its delivery approach from a two-phase rollout to a multi-phase programme, allowing Oracle modules to go live in line with internal priorities.
At the time, a Bank of England spokesperson said the organisation was adopting Oracle Cloud to bring together multiple systems and that it was seeking to ensure value for money across all its procurement.
The BoE generates income through activities such as banking services, regulatory fees and investments, and typically returns surplus funds to the Treasury.
According to training provider Fudgelearn, the Bank is deploying Oracle Cloud Fusion applications covering finance, procurement, projects, expenses, enterprise performance management and reporting. The contract is intended to deliver what the Bank describes as a “step change” in capability across its corporate functions.
The latest disclosure comes amid a broader expansion of technology spending at the institution.
This week, the Bank awarded Oracle a separate £13m contract to provide technical support for Oracle software delivered through software-, platform- and infrastructure-as-a-service.
In addition, a framework agreement covering services such as SAP support and interoperability between multi-cloud and on-premises environments was increased from £60m to £86.7m in a non-competitive award earlier this year.
In its 2024 annual report, the chair of the Bank’s board, David Roberts, said the organisation was in the midst of modernising its data and technology estate.
He said revised technology and data strategies would have “far-reaching impacts on the way the Bank works”.
Those responsible for managing the costs of this project are no doubt keen to avoid replicating the fate of Birmingham City Council. The Council’s botched migration to Oracle Fusion played a key role in driving it into bankruptcy. The project was expected to cost less than £19 million and ended up coming in at around £171 million.