image: ©cemagraphics | iStock
The Public Accounts Committee has praised the Bank of England’s successful £431m modernisation of the UK’s payment infrastructure as a model for government IT projects
By prioritising early modernisation, stable leadership, and a “competitive dialogue” procurement process, the Bank avoided the massive cost overruns seen in other public sector digital transformations.
A report from the Public Accounts Committee (PAC), released on April 29, 2026, highlights a rare triumph in public sector digital transformation: the modernisation of the Real-Time Gross Settlement (RTGS) system. This critical infrastructure settles approximately £790 billion in transactions every single day.
The PAC is taking the unusual step of using the Bank of England’s (BoE) success as a “manifesto for action” for the rest of the UK government, contrasting it against disastrous failures like the NS&I transformation, which has ballooned to over £3 billion.
The blueprint for success
The BoE managed to deliver its £431 million project largely on time and on budget by following several key principles that the PAC urges the government to adopt:
Modernising early:
Instead of waiting for a “burning platform” where systems fail and force a panicked response, the BoE moved away from legacy systems while they were still functional.
A “No Surprises” culture:
Staff were encouraged to raise concerns early via a “transparency channel” that allowed for anonymous escalation of issues.
Stability of leadership:
The project benefited from senior officers with deep operational backgrounds and a lack of the “revolving door” staff turnover that plagues other government projects.
Procurement: The competitive dialogue
The Bank’s approach to hiring contractors was a major factor in its success. They used a “competitive dialogue” process, which allowed bidders to develop proposals as part of a consultation before the contract was even awarded.
Notably, the Bank paid two unsuccessful bidders to perform a trial build of a simplified system. This “competitive tension” allowed the BoE to secure a fixed-price contract, retain all intellectual property, and eventually take over the management of the scheme from the lead contractor, Accenture.
The cost of excellence
While the project was a success, the PAC noted that the long-term value depends on constant adaptation. The annual running costs for the RTGS system have nearly doubled to £41 million.
The Chair of the PAC, Sir Geoffrey Clifton-Brown, stated that this report serves as a guide for the government to avoid repeating past failures, providing a rare example that public sector digital reform doesn’t have to be an “endless litany of failure”.