3 SBS is modernising the business to focus on customers and improving customer service by streamlining processes across the business at its three sites, Blackpool, Durham and Glasgow. SBS's work on identifying the holdings of each customer, a single customer view, will allow NS&I to better understand and target its customers and thus improve its cost effectiveness. The measure of NS&I's cost effectiveness is demonstrated by how much it adds value for the taxpayer. In 2001/02 NS&I saved the taxpayer £176 million, meeting its annual target of at least £120 million. Value Added will also be increased in the future as a consequence of cost reductions being delivered by SBS today.
4 NS&I could not have achieved as much without SBS. The latter's bid offered savings to the taxpayer of £158 million (net present cost) compared to NS&I's Public Sector Comparator. SBS has benchmarked aspects of NS&I's operations, such as its call centre and its automated processes, which compared favourably to leading edge organisations in similar areas of service provision. But SBS will need to continue to benchmark NS&I's operations and take action to ensure benchmarking provides the potential for a reduction in SBS's and NS&I's costs and improvements in service delivery despite those reductions in cost.
5 SBS has significantly increased productivity without compulsory redundancies through reducing the number of staff transferred to it from 4,100 to some 2,000, although the volume of work has remained the same. It has reduced the level of absenteeism to close to the national average of 3.1 per cent, compared to eight per cent when it took over the business. SBS has re-deployed 650 of the 2,100 staff, no longer required for NS&I work, on third party work. Of the remainder no longer employed on NS&I work, 1,200 took Voluntary Early Release and 250 were released through natural wastage.
6 Despite SBS not reducing the costs of running NS&I's operations as much and as quickly as it planned, for example through not achieving the early launch of low cost sales channels, there has been no or little short term impact on NS&I or its customers. The earlier launch of low cost sales channels could have benefited NS&I by increasing its ability to add value and save the taxpayer money and benefited its customers by enhancing their options, but late delivery has otherwise had little or no impact.