In his second annual report, Sir Geoffrey Clifton-Brown said AI is approaching government "like a tsunami" and he remains sceptical that ministers are prepared for the enormity of the challenge. The Conservative MP noted that announced reforms to improve digital capability have not been backed by a plan to close the civil service's skills gap.
Just six per cent of civil servants work in digital and data roles, well short of the government's ten per cent target, and the report warns that senior specialists are particularly scarce. The committee said meeting the target will require significant recruitment and retention.
The report highlights the risk posed by legacy IT systems, calling the government's lack of urgency "worrying." It states that these aging systems create cybersecurity risks and prevent departments from reaping the benefits of new technologies, including AI.
Fraud and error already cost taxpayers an estimated £55 billion to £81 billion annually, according to figures cited by the PAC. The Department for Work and Pensions overpaid £9.9 billion in benefits through fraud and error in 2025-26, equivalent to 3.2 per cent of its spending. Its plan is to reduce that to 2.8 per cent by 2028-29, but Clifton-Brown noted that even then billions would still be lost.
At the Home Office, years of asylum backlogs and mounting costs have prompted what the report calls "counterproductive quick fixes." The Home Office and Ministry of Justice spent around £4.9 billion on asylum in 2024-25, and ministers have promised an entirely new system without explaining how it will work. Digital rights campaigners at Open Rights Group have called for the Home Office to scrap its AI asylum tools over concerns about accuracy, transparency and human oversight.
The report also points to a troubled IT modernisation project at National Savings & Investments (NS&I). Begun in 2020, the project's price tag had reached £3 billion by December 2024 — £1.3 billion more than first expected. The project has been rated red since 2022-23, meaning successful delivery is unlikely, and NS&I could not provide MPs with an up-to-date spending figure or a realistic completion date.
By contrast, the Bank of England successfully overhauled its Real-Time Gross Settlement system for £431 million, completing the work in April 2025. The PAC directed its recommendations at Whitehall, suggesting ministers could learn from the Bank's approach.