National Savings (Hansard, 17 December 1998)

§ Ms Hewitt

National Savings has been carrying out a wide ranging programme to modernise the organisation against the background of a fast moving and highly competitive retail savings market. This has included the evaluation of a service contract in the form of a public private partnership for operational services delivery. After detailed consideration and discussion with those involved I can announce that I have accepted the recommendation of the National Savings Management Board and given it the authority to sign a contract with Siemens Business Services. The contract will be awarded for 15 years (with a break of 10 years) and there are considerable safeguards to ensure it will serve the public interest, including rigorous standards for customer service.

This contract between National Savings and Siemens Business Services is a milestone in the Government's policy of public private partnership. It will create a new Public Service Partnership, bringing together the strengths of the two organisations to deliver real benefits to all the stakeholders involved. The public interest will be served through better service to National Savings customers, savings to the taxpayer and wider opportunities for staff. And Siemens Business Services will benefit by taking on first-rate staff who will help them build their business in the growing field of business service.

Key features of the deal are the introduction of private sector capital and expertise which will help National Savings modernise its systems and processes, and so provide more choice to customers; a commitment by Siemens Business Services to a continual programme of customer improvements; a reduction in National Savings ongoing running costs. To offset the reduction in National Savings' operational jobs stemming from the Agency's ongoing programme of investment in new technology Siemens Business Services plans to introduce new work to each of the National Savings' sites in Blackpool, Durham and Glasgow. The outlook therefore is for a materially greater number of jobs than would have been the case without the appointment of a private sector partner. Amongst the safeguards we have negotiated are a significant commitment to job creation, with an undertaking in any event to maintain a National Savings presence in each of the three locations for at least the next five years.

National Savings staff, most of whom are employed in operational services, are being told of my decision today. The operational staff will transfer employment to Siemens 751W Business Services on 1 April 1999. Under TUPE, staff terms and conditions of employment are guaranteed and cannot be changed without negotiation between Siemens Business Services and the staff through their appointed Trade Unions.

National Savings' products will continue to be guaranteed by the Government who remain responsible for key decisions, including setting interest rates and terms and conditions of new products. National Savings remain in control over all key processes relating to the management of its market leading business—including policy, product design and delivering and pricing. The Chief Executive of the National Savings Executive Agency, who is also the Director of National Savings, will remain fully accountable to Ministers and to Parliament for National Savings.

This contract is in keeping with the Government's policy for public private partnerships and for modernising public services so they serve the interests of all stakeholders. This Public Service Partnership offers significant benefits to National Savings' customers and staff, and to the taxpayer, as well as to the local economies concerned.