1.21 SBS's bid offered savings of £158 million in net present costs to the taxpayer. There were a number of reasons why SBS could run the operations at a lower cost than NS&I. Compared to NS&I, SBS expected to employ fewer staff through the increased use of technology and to minimise redundancies through the creation of new jobs on third party business. SBS also had the capability to release staff more easily than NS&I as it was not as constrained by annual budgets and could release surplus staff through redundancy or early retirement.
1.22 Although SBS was subject to budgetary constraints, it could invest where a strong business case existed and hence incur financial losses on the deal in the early years. Investment in the short term was seen as the means to delivering a lower cost business to NS&I and a financial return for SBS in the longer term.