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The Bank of England has been hauled over the coals by a Common Select Committee in a searing critique of its outmoded technology estate, culture and procurement activities.

The Parliamentary Select Committee says the Bank's practices offer a glimpse into the past, and calls for further action on staff diversity, outdated processes and the overall vision for modernisation.

"The Bank's ICT systems are expensive and need updating, its procurement systems are not fit for purpose, there are too many job titles creating complexity and cost, and the estate is too large for its needs," the report notes. "The Bank has not routinely and systematically benchmarked the costs of its central services with the public and private sectors."

On IT, the Committee finds that many of the Bank's processes are "overly complicated, inefficient and very costly to administer".

The Bank’s technology operations and HR cost £101.4 million and £15.8 million respectively in 2017-18. These costs are 33.6% more expensive than the central government benchmark for public sector organisations.

In response, the Bank concedes that the extent of legacy systems and manual processing means that there is significant potential for it to make savings in its technology systems and support. It is currently undertaking a 'One Bank Services Transformation' project, which will entail the move to a roles-based structure, and the replacement of 25 central services systems with a single cloud-based system. This is expected to save £15 million a year in running costs from 2021-22.

It also pointed to problems incorporating the Prudential Regulation Authority's systems when it absorbed the body in 2014; this led to duplicated applications and the need to integrate large datasets.

"The Bank told us that the integration of these systems took a substantial amount of time to deal with, and that its data centre migration programme had been cleansing many of those systems and applications, which took additional time," the report says.

Looking ahead, the chair of the Commons Select Committee is particularly concerned about the apparent absence of a coherent vision, making it difficult for the Bank to make informed decisions about the people, technology and locations it needs.

"We would like clarity on the action it will take to meet its diversity targets, rationalise its property portfolio and modernise processes that are, in many cases, needlessly complex and costly.

“It was concerning to learn that staff had faced no disciplinary action for violating the Bank’s outmoded procurement policy some 200 times in a year.

“The Bank’s credibility is at risk if it is perceived as failing to keep its own house in order. As part of this transformation project, we urge it to aim for 100 per cent compliance with all its policies.”

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