Allegation of huge IT project overspend at Transport for Wales
Martin Shipton
A whistleblower has alleged that an IT system being installed to manage Transport for Wales’ financial transactions is on course for a huge overspend.
Transport for Wales – which is wholly owned by the Welsh Government, runs train services and oversees bus services denies the allegation, saying the additional cost in fact represents investment in extra features introduced as the project progressed.
Concerns
The following concerns have been raised with Nation.Cymru in relation to Transport for Wales:
Serious cost overruns on programmes and projects.
Bullying and intimidation within the organisation, affecting staff wellbeing and culture.
Lack of meaningful internal action despite these issues being raised.
Welsh Government assurances that matters are being “handled internally”, which does not reflect the reality.
These issues are said to point to systemic failures with direct implications for both public finances and the safety and wellbeing of staff.
Budget
The whistleblower, who does not wish to be named, made the following claims:
A programme budget originally set at less than £1m has already almost doubled. They now face a change request of £1.5m+ just to begin with, with further overruns expected. The software will eventually be delivered as a SaaS [Software as a Service] programme, but only on the back of significant cost escalation.
Hidden costs have not been disclosed and are being kept under wraps, leaving stakeholders without a full picture of the financial exposure.
Contracts have been awarded through favoured agents, under the claim roles cannot be recruited directly. These agents are charging 10–15% fees per role, adding unnecessary cost.
A toxic culture, with a senior manager repeatedly protected despite bullying complaints and bypassing agreed processes.
Escalations have been ignored. The Welsh Government has been made aware of the concerns but they seem to say that this should be dealt with internally — which does not reflect the reality.
Contracts: A £1m contract has been signed with PwC to update the ERP [Enterprise Resource Planning] system ahead of a future migration to Microsoft D365. A further contract is in place with SA Global for the housing element.
Leadership: A senior manager has had prior escalations against them for bullying, and staff have already departed under their management.
Governance and Finance: There is no governance in place. Budget control is weak, with a senior manager repeatedly stating that they can access more funding from the Welsh Government “as if it were an open chequebook.” This allegation is vehemently denied by the manager concerned.
Key Resources Lost: A key official was, in the view of the whistleblower, pushed out, and another official’s contract was not renewed properly. Both were critical resources and their loss has undermined delivery.
Recruitment Practices: Instead of using proper internal processes, roles are being sourced largely through recruitment agencies, each charging around a 15% fee per hire. This unnecessarily inflates costs and raises suspicion as to why these roles cannot be filled directly.
Scope and Planning: While the system integrators have delivered much of what was within their remit, the bulk of issues stem from poor internal planning — adding too much scope, failing to make timely decisions, and stretching the programme beyond capacity.
Timeline Claims: When challenged, management insists they will go live by April 2026. This appears to be a politically motivated target date, one they are clinging to regardless of cost or delivery quality. The real question is not whether they can hit the date, but at what cost to the taxpayer.
Oversight: The whistleblower names those individuals said to be tied into the programme.
Financial Overrun: With poor resourcing, uncontrolled scope, and weak decision-making, the programme is already heading for an overrun in the region of £1.5–2m.
‘Poorly governed’
The whistleblower said: In summary, this is a poorly governed, under-resourced programme, with spiralling costs being treated by senior leadership as if there were no financial limits. Given this is ultimately public money, the risks and misuse are of clear public interest.
A Transport for Wales spokesperson responded: “At Transport for Wales we take our responsibilities around transparency, effective governance and organisation culture incredibly seriously with clear procedures around all forms of financial expenditure, project and people management.
“The project remains on track within our overall governance and financial framework.
“The costs alleged are wholly inaccurate. Any changes associated with the cost compared to the original project are a result of choices to invest in additional benefits and do not resemble in any form the level of costs alleged in the statement.
“Any behavioural allegations have been robustly investigated through our internal people processes.”
The spokesperson added: “The budget for the project was £1.5m as part of a wider transformation project to modernise finance systems within Transport for Wales, aiming to improve efficiency and effectiveness.
“The scope of the project has been expanded in a controlled way following the identification of new opportunities to drive further efficiency and benefits. Any decisions will be made within appropriate governance arrangements.
“We are choosing to invest approximately £470,000 for additional enhancements for the wider organisation outside of the original scope such as further automation. This will help further reduce long term operational costs.
“Therefore the allegation of an overspend of £1.5-£2m is wholly inaccurate.”
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Audit Wales exists. But they might determine the extra spend is value for money which isn’t politically useful to those seeking a waste narrative.
doesn’t change the reality – you can audit a pig, but it’s still a pig. Overspend, weak governance, and bullying behaviour are not what taxpayers expect or deserve.
A damning report from Audit Wales is far more effective than an anonymous letter. Because it might not be overspend, there are legitimate reasons to change the scope and budget of projects.
Well, colour me shocked, ERP transformation programme, managed by big four consultancy, overspend!!!
A tale as old as time. Not sure I’ve ever seen such a programme run to time and/or budget. Like Thanos, its inevitable.
1999 Lufthansa created the world’s largest procurement organisation – Star Alliance. Electronic Data Services (now Hewlett Packard Enterprises) was paid zero upfront, but from cost savings of merging IT systems.
We need simpler procurement approaches.
Sounds like the usual ‘mission-creep’ problems.
Anybody know of a corporate-level software project that didn’t overrun its budget?
Answers on a post card please.
This sounds like a disgruntled employee having a rant. Projects like this all go the same way especially with IT . Big 4 scope creep is how they make their money. Hardly even news worthy
Very accepting of you. It’s about time we were far more critical of all sorts of wasteful practices that lead in the end to overcharging the customer/user.
I support hdavies. This is not a “disgruntled employee” rant — it’s a call for accountability. When public money is at stake we should not shrug and normalise overruns., sure the answer won’t be the same if it were your own money,
The scattergun nature of the complaint is a red flag. A genuine complaintant is either worried about taxpayer money or their working conditions. Not both.
That’s a lazy dismissal. Raising multiple issues doesn’t make a complaint scattergun — it makes it thorough. People don’t live in neat boxes where they can only be worried about one thing at a time. Mismanagement of taxpayer money and poor working conditions often go hand-in-hand, because the same culture that wastes resources usually mistreats staff. Waving that away as a “red flag” isn’t objective analysis, it’s an excuse to ignore uncomfortable truths.
As we’ve seen with Natural Resources Wales any body created under the tutelage of the Welsh labour govt tends to be a disaster, so is sadly not surprising to see these claims being levied at TFW. That said with the ‘source’ being unwilling – or maybe unable – to present more specific details to back up their claims its difficult to know how much truth there is to these charges?
Cardiffs rugby stadium in 1990s build on time and to budget – fixed design and contractor appointed who was paid at cost plus 5%.
Cardiff University economics department oversight.
Wales is no different to lots of other regions and for TfW this was a one off project – they do not have the skills to manage.
Audit Wales should appoint one of the Welsh Unis economics departments to analyse all project delivery costs and publish online every month for all to see – ie use peer pressure to monitor performance.
The only reason why we have to spaff millions re-inventing the wheel is because Wales is part of the United Kingdom. Our other closest neighbour, Ireland, already has installed an IT system which include all our required features such as electronic fares and discounts and stuff like the Leap card in metro catchments. Also, the train disposition, signalling system, control and trackside stuff is Thales ERTMS compliant systems from France. Off the shelf software, and integrated with CAF and Hitachi rolling stock. PwC need to be given a rail ticket, 10h00am service from Cardiff Central back to London. We could then… Read more »
Well what a surprise… Precisely the sort of behaviour and reaction from a nationalised industry which is unaccountable to anyone, not even the Welsh government that owns it!
Perhaps those people who wish for nationalisation have very short memories of British Rail’s often high-handed approach to industrial relations and ability to waste money. At least with a private company you can get rid of them if they fail.
“At least with a private company you can get rid of them if they fail”
Are you referring to the train operating company or PwC?
Because under the old model failure for passengers was guaranteed because success was only measured by how much cash could be extracted for shareholders. The essential element of the private sector that drives innovation and improves customer service – competition – was excluded by John Major who instead created a series of govern mandated private sector monopolies that, surprise surprise, did exactly what monopolies do and created one of the worst railways in Europe.
I’ve personally heard rumours about TfW for a while and always hoped they were unfounded – but this is still shocking to see. Any loss of public money must be reported. You can paint the pig however you want, but bullying and wasting funds is not what we pay for. That money could have gone into services people actually need. Ultimately, it’s a loss to Wales – so where’s the accountability? And let’s not forget, the Big 4 keep getting away with this because there’s no real governance or control, which is exactly why these overruns keep happening.