Government has much to learn from Bank of England’s success in modernisation scheme - PAC

• PAC calls on govt to incorporate lessons from modernisation of critical payment systems infrastructure 

There is much that government can learn from the Bank of England's (BoE) successful modernisation of a critical part of the UK's payment infrastructure. The PAC has scrutinised the BoE's modernisation of the Real-Time Gross Settlement System (RTGS), which underpins all sterling payment systems in the UK, settling around £790bn in transactions per day.

Given the modernisation of this system represents an all-too-rare positive example of public sector digital transformation, the Public Accounts Committee (PAC) is taking the unusual step in its report of making recommendations based on its findings for government, rather than the BoE, in order that lessons can be learned from it. These findings are as follows:

Strong leadership

Non-executive directors with relevant expertise led the programme's initial governance, and kept a clear view of the programme throughout. It also benefited from a Senior Responsible Officer with a background in payments operations, and stability of staff in senior roles.

Clear objectives

The BoE invested significant time and resources over years in planning, analysis and design of the project. This included input from specialists and industry consultation, ensuring that what was involved in implementing the project could be calculated with a greater level of confidence.

Procurement approach

A ‘competitive dialogue' procurement was used to allow bidders to develop proposals for the system as part of a consultation, prior to a contract being awarded. This unusually included a trial build of a simplified system, for which two unsuccessful bidders were paid.

Modernising early

The BoE acted early. It moved away from its old (but not obsolete) legacy systems to more modern technology, rather than just patch up its existing systems. This avoided a situation where ageing systems became a ‘burning platform' dictating the timetable and scope.

Flexible approach

Good practice was demonstrated in adapting its approach for different stages of the programme and the inevitable challenges that arose. Four ‘replans' were executed in response to circumstance, involving a review of scope, timelines, and costs, to strengthen focus on delivery.

No surprises

The programme's ‘no surprises' culture encouraged staff to raise concerns early, and escalate issues through a ‘transparency channel' to share concerns anonymously. Senior leaders reinforced this culture, and milestones were celebrated to maintain morale.

The PAC recommends that the government work to learn these lessons. For the BoE, it must make good on its plans for maintenance and further enhancement of this foundational system. Delivering long-term value from the RTGS (estimated annual running costs for which have now almost doubled to £41m), depends on the BoE sustaining and adapting the system as the payment landscape evolves.

Sir Geoffrey Clifton-Brown, Chair of the Public Accounts Committee, said: “We commend the BoE for its successful modernisation of this critical piece of the UK's payment infrastructure, ensuring the smooth flow of hundreds of billions in sterling transactions every day. For the government, we simply say: this is how you do it. Our scrutiny over many years could give the public the impression that public sector digital reform and transformation is an endless litany of failure. Our report today demonstrates to the government and the taxpayer that success is possible. In the competitive tension that the process of having a collaborative procurement approach provided, such was the degree of cooperation that the Bank was able to procure a fixed-price contract, retain all the intellectual property, and eventually take over the entire management of the scheme from Accenture.

“We have provided here for the government a guide informed by the Bank's success to avoid a repetition of the failures of the past; for instance, the disastrous handling of NS&I's transformation programme exposing the public purse to unacceptable risk. The contrast is undeniable – the BoE scheme was procured at £347m largely on time and budget, while NS&I's scheme is estimated to cost over £3bn and counting, and is a long way from being completed. There is a better way, laid out in our report. We urge the government to take our report as a manifesto for action if it is to improve the public sector's overall reputation for successfully modernising the services on which we all rely.”

PAC report conclusions

The Bank developed strong business leadership for the RTGS transformation programme, drawing effectively on non-executive expertise. The programme's initial governance was led by non-executive directors (NEDs) with a track record in digital payments and commercial expertise. Through the Bank's board of directors (known as the 'Court'), NEDs retained a clear view of the programme throughout, providing direction and support. The Senior Responsible Officer (SRO) for the programme had a background in payments operations, with specialist payment staff also brought on to the programme at an early stage. The SRO and the programme's technical owner jointly held the final responsibility to decide when the new system was ready to go live. The mix of operational and technical leadership and skills on the programme meant that decisions were well informed. We also note the benefits of having stability of staff in senior roles, with the Bank also freeing up the SRO from some other responsibilities to ensure sufficient time to lead the programme.

The Bank invested time and effort up-front to identify clear scope and objectives for the new RTGS, engaging effectively with internal and external stakeholders. From 2016 to 2018, the Bank invested significant time and resources in planning, analysis and design, with a 2017 'blueprint' setting out five key priorities for the new RTGS. The Bank drew on input from payments, technical and procurement specialists to set out clear requirements for the new system. It consulted with industry to identify priority areas for development, engaged with other central banks and commissioned independent external assessments. The Bank deliberately took time to 'stop and think' on the programme strategy and approach, for example, deciding early to build a new system rather than buy an 'off-the-shelf' product. This up-front effort helped ensure the time and effort for implementation could be calculated with a greater level of confidence.   

The programme's procurement approach allowed the Bank to access a breadth of technical expertise to refine the design for the new RTGS. Following market engagement, the Bank used a 'competitive dialogue' procurement process which allowed potential bidders to develop their proposed designs for the system in consultation with the Bank, prior to it awarding the contract to Accenture. The Bank felt its procurement approach helped it to develop as an 'intelligent customer'. It was also able to draw on all the ideas proposed by bidders to set the design awarded in the contract. The process included a practical exercise - unusual for the public sector - to design and build a simplified payment system, for which the two unsuccessful bidders were also paid. The Bank felt this reduced any risks that bidders would drop out of the procurement. The Bank did not feel that existing legislation had restricted its procurement approach. The programme had a dedicated procurement team which supported compliance and best practice. The up-front attention to requirements and design allowed the Bank to sign a fixed-price contract with Accenture, with the final system design closely matching the initial design.

The Bank took the strategic opportunity to move the RTGS to a new technology structure which better supports innovation, rather than patch up the existing legacy system. The Bank made an early strategic decision to move away from its old, existing (but not obsolete) legacy system to a more modern modular technology, one of the first central Banks to adopt this approach. It realised it needed a new technical solution to accommodate future capabilities and requirements, such as extended operating hours. By acting early, the Bank avoided a situation where the ageing legacy system became a 'burning platform' dictating the programme's scope and timetable. The programme also included a major upgrade to payment messaging standards, improving interoperability through a consistent data structure, and enabling more detailed analysis. The Bank's understanding that it could not indefinitely defer technology investment informed its early decision to replace the legacy system. It told us that lessons learned from the programme are now influencing how it approaches wider IT modernisation and its management of technology obsolescence.

The Bank adopted good practice programme management, adapting its approach for different stages and implementation challenges.  To reduce delivery risk, implementation was organised as a sequence of 'transition' states, each capable of delivering benefits and operating independently in the longer term if required. As the programme moved into delivery, oversight shifted from the NED-led RTGS Renewal Committee to an executive-led Renewal Executive Board, which included the Chief Operating Officer to support commercial management. The programme underwent four 'replans' in response to internal and external circumstances, involving a review of programme scope, timelines and costs, and consultation with industry for each. The Bank used these replans to strengthen its focus on delivery. For example, during the first replan, the Bank revised the programme's scope to focus on delivery of the core new system, moving some planned enhancements to after the launch for further industry consultation. The Bank assigned a high priority to the programme, recognising that it could affect its other work, and had to actively manage dependencies throughout delivery. A mix of internal assurance from the programme and the Bank's risk directorate, alongside external assurance, helped it to identify and manage risks and interdependencies.

The Bank created an open 'no surprises' culture within the programme, with strong collaboration between business, technology and external specialists. The Bank acknowledges that it is traditionally a hierarchical organisation. For the RTGS modernisation programme, it set a clear tone from the top to encourage an open 'no surprises' culture and foster a sense of team working. Staff were encouraged to raise concerns early and escalate issues through a range of mechanisms, including a 'transparency channel' that allowed them to share concerns anonymously. Senior leaders reinforced the team culture of everyone playing their part, for example, by attending weekend dress rehearsals for the launch of the new system. The programme also made a point of celebrating milestones to maintain morale and reinforce a shared sense of progress. The Bank recognised the importance of business and technology specialists working together and co-located them alongside Accenture staff to help break down potential silos. Partnership working with Accenture was further supported through the contract, which set out agreed ways of working, with key programme roles having both Bank and Accenture representation.

To secure the anticipated benefits from the new system, the Bank must make good on its plans for maintenance and further enhancement of the RTGS. Delivering long-term value from the new RTGS depends on the Bank's ability to sustain and adapt the system as the payment landscape evolves. To maintain security, the Bank operates, maintains and updates the new RTGS in-house and also owns the intellectual property for the system design. It adopted a new target operating model, creating joint teams of payments and technical specialists, building internal technical expertise and establishing teams responsible for system oversight and managing change. As a result, estimated annual running costs have increased from £21 million to £41 million, with ongoing improvement built into business-as-usual funding. Since the new RTGS was launched in April 2025, the Bank has implemented more than 1,000 improvements, demonstrating the system's flexibility. Knowledge and experience transfer formed an important part of the programme, with the last Accenture staff completing their work as planned shortly before we took evidence in March. The Bank is now working closely with industry to deliver three priority enhancements: extended operating hours; synchronisation (which enables coordination between the transfer of RTGS funds with the exchange of assets on other systems); and development of an alternative payment messaging network.